Affordable Housing Development Incentives

The City of Pleasanton adopted an Inclusionary Zoning Ordinance (IZO) in November 2000. The purpose of the IZO is to enhance public welfare and assure that further housing development attains the City’s affordable housing goals by increasing the number of housing units that are affordable to Very Low, Low and Moderate Income households.

General Requirements

For residential developments (rental or ownership) consisting of 15 or more total units:

  • 15% of the units in multiple family developments (e.g., apartments and condominiums) must be affordable to Very Low and Low Income households (50% to 80% of the Area Median Income, or AMI).
  • 20% of the units in single family developments must be affordable to Very Low, Low and Moderate Income households (50% to 120% of AMI).

For commercial, office and industrial (non-residential) developments:

  • Non-residential developments are encouraged to provide affordable housing units as an alternative to paying the City’s Lower Income Housing Fee.

Incentives for On-Site Construction of Inclusionary Units

  • Fee Waiver or Deferral:The City may consider a deferral or waiver of certain development fees and/or building permit fees.
  • Design Modifications: The City may consider reduced setbacks, infrastructure requirements, open space requirements, landscaping requirements, interior or exterior amenities, and/or parking requirements as well as height restriction waivers.
  • Second Mortgages and Other Subsidies: The City may provide second mortgages through its Down Payment Assistant (DPA) program to prospective unit owners or may subsidize the cost of a unit to establish an affordable rent or sales price.
  • Priority Processing: Projects may be entitled to Priority processing of Building and Engineering approvals.

Alternatives to Constructing Inclusionary Units On-Site

When the construction of affordable housing units within the same project is found to be impractical or infeasible, the City may consider alternative means to comply with the IZO. Examples of alternate methods of compliance are listed below:

  • Off-Site Projects: Must be determined to be consistent with the City’s affordable housing goals.
  • Land Dedication:An applicant may dedicate land to the City or to a local nonprofit housing developer in lieu of actual construction of affordable units. Dedicated land must meet City requirements.
  • Credit Transfers: Project owners may request inclusionary unit credits in the event a project exceeds the total number of inclusionary units required on a site. These credits can then be used to meet the inclusionary requirement for another project.
  • Alternate Methods of Compliance: Applicants may propose creative concepts for meeting the requirements of the IZO in order to bring down the cost of providing inclusionary units on or off site.
  • Lower Income Housing Fee Option: In lieu of providing inclusionary units in a project, an applicant may pay the City’s Lower Income Housing Fee (subject to approval by the City Council).

Provisions and Specifications for Inclusionary Units

  • Units shall be dispersed throughout the project unless otherwise approved by the City.
  • Units shall be constructed with identical exterior materials and an exterior architectural design that is consistent with the market rate units in the project.
  • Units may be of smaller size and can also have fewer interior amenities than market rate units.
  • Units shall remain affordable according to the term established in the Affordable Housing Agreement.
  • All units in a project shall be constructed concurrently within or prior to the construction of the project’s market rate units.
  • The City’s adopted preference and priority system will be used to determine eligibility among prospective beneficiaries for affordable housing units created through the Inclusionary Zoning Ordinance.
  • For purposes of calculating the affordable rent or affordable sales price of an inclusionary unit, the following household size assumptions shall be used for each applicable dwelling unit type:
    Unit Size Household Size
    Studio Unit 1 Person
    1 Bedroom Unit 2 Persons
    2 Bedroom Unit 3 Persons
    3 Bedroom Unit 4 Persons
    4 Bedroom Unit 5+ Persons

    Application and Review Process

    • Applicants must submit an Affordable Housing Proposal (stating the method by which the project will meet IZO requirements) to the Planning Department as part of the City development application. The Affordable Housing Proposal will be reviewed by the City’s Housing Commission prior to final review by the City Council in conjunction with the overall development plan.
    • An Affordable Housing Agreement (AHA) establishes the method and terms by which a project will comply with the IZO requirements. The AHA states the methodology for determining a unit’s initial and ongoing rent or sales and resale price(s), resale restrictions, occupancy requirements, eligibility requirements, City incentives (including second mortgages), recapture mechanisms, the administrative process for monitoring unit management to assure going affordability and other matters related to the development and retention of inclusionary units. In addition, the AHA sets forth any waiver of the Lower Income Housing Fee and/or other City fees.

    For More Information

    Contact the City’s Housing Division at housing@cityofpleasantonca.gov or at (925) 931-5011.