Chapter 8.51
COMMERCIAL LINKAGE FEES Revised 4/24
Sections:
8.51.030 Commercial linkage fees.
8.51.060 Alternatives. Revised 4/24
8.51.070 Below market rate fund.
8.51.080 Administrative relief/appeal.
8.51.010 Purpose.
The purpose of this chapter is to:
A. Encourage the development and availability of housing affordable to a broad range of households with varying income levels within the city as mandated by State law, California Government Code Section 65580 and following.
B. Offset the demand for affordable housing that is created by new development and mitigate environmental and other impacts that accompany new commercial development by protecting the economic diversity of the City’s housing stock; reducing traffic, transit and related air quality impacts; promoting jobs/housing balance; and reducing the demands placed on transportation infrastructure in the region.
C. Promote the City’s policy to provide an adequate number of affordable housing units to the City’s housing stock in proportion to the existing or projected need in the community, as identified by the Housing Element.
D. Support the Housing Element goal of assisting in the development of new housing that is affordable at all income levels and the policies and actions that support this goal.
E. Support the Housing Element goal of providing adequate, affordable housing.
F. Support the guiding principle of the Housing Element that housing in San Carlos supports an economically and socially diverse population.
G. Support the guiding principle of the Housing Element that housing in San Carlos creates and supports vibrant neighborhoods and a cohesive sense of community.
H. Meet the housing needs identified by the Housing Element of the General Plan.
I. Encourage the production of the very low, low, and moderate income units planned for in the Housing Element of the General Plan. (Ord. 1514 § 2 (part), 2016)
8.51.020 Definitions.
As used in this chapter, the following terms shall have the following meanings:
A. “Administrator” means the Housing Manager of the City or other person designated by the City Manager.
B. “Below market rate housing agreement” means a written agreement between a builder and the City as provided by Section 18.16.060(C).
C. “Below market rate housing plan” means a plan for a residential development project submitted by a builder as provided by Section 18.16.060(B).
D. “Builder” means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which seeks City approvals for all or part of a commercial development project.
E. “Building permit” includes full structural building permits as well as partial permits such as foundation-only permits.
F. “Commercial” use includes hotels, retail uses, restaurants, services, and offices.
G. “Commercial development project” means an application for a planning permit or building permit that includes the new construction of gross square feet of commercial space or the conversion of a residential use to a commercial use.
H. “Commercial linkage fee” means the fee paid by builders of commercial development projects to mitigate the impacts that such developments have on the demand for affordable housing in the City.
I. “First approval” means the first discretionary approval to occur with respect to a commercial development project or, for commercial development projects not requiring a discretionary approval, the issuance of a building permit.
J. “Planning permit” means any discretionary approval of a residential project, including but not limited to a comprehensive or specific plan adoption or amendment, rezoning, tentative map, parcel map, conditional use permit, variances, or architectural review. (Ord. 1514 § 2 (part), 2016)
8.51.030 Commercial linkage fees.
The City Council may from time to time adopt by resolution a commercial linkage fee to be imposed on builders of commercial development projects. Commercial linkage fees shall not exceed the cost of mitigating the impact of the commercial development projects on the need for affordable housing in the city. (Ord. 1514 § 2 (part), 2016)
8.51.040 Fee payment.
Any commercial linkage fee shall be paid in full prior to the issuance of the first building permit for the commercial development project subject to the fee or at a time otherwise specified by Council resolution. If no building permit is required, the fee shall be paid before a conversion of use may take place. The fee shall be calculated based on the fee schedule in effect at the time the building permit is issued. (Ord. 1514 § 2 (part), 2016)
8.51.050 Exemptions.
A. The following commercial development projects are exempt from the provisions of this chapter:
1. Projects adding less than five thousand square feet of net new square footage.
2. City buildings and facilities and those public facilities entitled to an exemption under law.
3. Projects that have established a vested right not to be subject to this chapter.
B. The City Council may elect to waive payment of the commercial linkage fee if it finds that: (1) the commercial development project is dedicated to a public use owned and operated by other public agencies or a nonprofit public benefit corporation; and (2) the benefits to the community provided by such public use exceed those that would be provided by the payment of the commercial linkage fee. If the City Council elects to waive commercial linkage fees pursuant to this provision, the public use of the site shall be guaranteed by a recorded document in a form acceptable to the City Attorney.
C. The City Council by resolution may adopt additional exemptions from time to time. (Ord. 1514 § 2 (part), 2016)
8.51.060 Alternatives. Revised 4/24
A. A builder may propose the construction of affordable residential units as an alternative to the payment of the commercial linkage fee by submitting a below market housing plan in compliance with Sections 18.16.060 and 18.16.070.
B. The decision-making body for the first approval (either the Planning and Transportation Commission or the City Council) may approve or conditionally approve such an alternative if it finds that the purposes of this chapter, including the provision of affordable housing, would be better served by implementation of the proposed alternative and that the proposal meets the greatest affordable housing needs at the time the alternative is reviewed. As one of the factors determining whether the purposes of this chapter would be better served under the proposed alternative, the decision-making body shall consider whether implementation of an alternative would overly concentrate below market rate units within any specific area and, if so, shall reject the alternative unless the concentration of below market rate units will not tend to cause residential segregation and is offset by other identified benefits that flow from implementation of the alternative at issue.
C. If the alternative is approved, the builder shall enter into a below market rate affordable agreement with the City as required by Section 18.16.060(C). (Ord. 1612 § 1 (Exh. A), 2024; Ord. 1514 § 2 (part), 2016)
8.51.070 Below market rate fund.
A. Trust Fund. A fund for the deposit of fees established under this and similar prior municipal codes exists as Fund 29 (the “fund”). This fund shall receive all fees contributed under this chapter and may also receive monies from other sources.
B. Purpose and Limitations. Monies deposited in the fund shall be used to increase and improve the supply of housing affordable to moderate, low, very low, and extremely low income households. Monies may also be used to cover reasonable administrative or related expenses associated with the administration of this chapter.
C. Administration. The fund shall be administered by the Administrator, who may develop procedures to implement the purposes of the fund consistent with the requirements of this chapter and subject to any adopted budget of the City.
D. Expenditures. Fund monies shall be used in accordance with the City’s Housing Element, or subsequent plans adopted by the City Council to maintain or increase the quantity, quality, and variety of affordable housing units or assist other governmental entities, private organizations or individuals to do so. Permissible uses include, but are not limited to, land acquisition, debt service, parcel assemblage, gap financing, housing rehabilitation, grants, unit acquisition, new construction, and other pursuits associated with providing affordable housing. The fund may be used for the benefit of both rental and owner-occupied housing. (Ord. 1514 § 2 (part), 2016)
8.51.080 Administrative relief/appeal.
The builder of a project subject to this chapter may request that the requirements of this chapter be waived or modified by the City Council, as provided by Section 18.16.030. (Ord. 1514 § 2 (part), 2016)
8.51.090 Enforcement.
A. Payment of the commercial linkage fee is the obligation of the builder of a commercial development project. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance herewith, including, but not limited to, actions to revoke, deny, or suspend any permit or development approval.
B. The City Attorney shall be authorized to enforce the provisions of this chapter and all below market rate housing agreements, regulatory agreements, and all other covenants or restrictions placed on affordable units, by civil action and any other proceeding or method permitted by law.
C. Failure of any official or agency to fulfill the requirements of this chapter shall not excuse any builder or owner from the requirements of this chapter. No permit, license, map, or other approval or entitlement for a commercial development project shall be issued, including without limitation a final inspection or certificate of occupancy, until all applicable requirements of this chapter have been satisfied.
D. The remedies provided for in this chapter shall be cumulative and not exclusive and shall not preclude the City from any other remedy or relief to which it otherwise would be entitled under law or equity. (Ord. 1514 § 2 (part), 2016)