Vallejo introduces ordinance to require affordable units in new housing developments

VALLEJO - The city of Vallejo unveiled the first draft of its proposed inclusionary housing ordinance earlier this month, which would require developers to include a portion of affordable units in new large housing developments or pay a fee to the city.

The city published the draft ordinance for public review on May 7. City staff said the draft “represents a major step in the City’s ongoing work to expand affordable housing options.” It is also intended to fulfill part of the city’s Housing Element for 2023-2031, a state mandated plan to increase the city’s housing availability.

Multiple cities around the Bay Area already have similar policies to require development of long‑term affordable housing and generate local funding to help build it.

The draft ordinance would require that all projects of 20 or more residential units be designed and constructed to include a set number of affordable homes, unless a developer gets approval to pay an in lieu fee.

Exemptions to the rule would apply to homes reconstructed following fires, floods, earthquakes or other natural disasters, as well as residential care facilities, accessory dwelling units or a development application approved before the ordinance goes into effect.

The number of affordable units required in a residential rental project would depend on the size of the development. Any project with more than 20 homes would have to set aside 1% for people earning a “very low” income. Solano County’s 2025 income limits defines this as people making less than $48,000 per year, or couples making less than $54,950 together per year. 

The ordinance would require that projects with 20-100 homes for sale would have to set aside at least 3% for low-income households, earning about $87,000 for two people, and 2% for people earning moderate incomes, or no more than $119,600 for a couple.

Developments offering homes for sale with more than 100 units onsite would have to set aside 5% as affordable options for people earning less than low income, and 3% for sale for people making less than moderate income.

The ordinance also requires that, if a proposed residential project would result in existing deed-restricted homes being destroyed, those units must be replaced with the same number of equally or more affordable homes.

There are some alternatives developers can seek, such as mixing homes for rent with homes for sale. 

The draft ordinance also defines standards for all developments that include affordable housing. The homes must be comparable in construction quality and exterior design to all market-rate units even if their interior materials and appliances may be different.

Once built, all affordable homes in Vallejo will be legally restricted in price for at least 55 years, unless the requirements of California law require a shorter period.

Each developer will have to execute an agreement providing information such as whether the affordable units will be rented or owner-occupied, the number, size and location of homes,provisions for monitoring their ongoing affordability and the process for qualifying prospective resident households for income eligibility.

Applications will also need a plan that details the proposal’s location, structure, size of the proposed market rate and affordable units, income level targets and a marketing plan.

City staff said in the published draft ordinance that currently people earning moderate-, low-, and very-low incomes who work or live within the city “are unable to locate housing at prices they can afford and are increasingly excluded from living in the city.” They added that federal and state housing subsidy programs are not sufficient to satisfy the needs of these households. 

Staff found that continuing to build new developments which do not provide affordable housing while generating increased demand for lower wage service jobs, “will serve to further aggravate the current housing shortage by reducing the supply of developable land.”

While housing advocacy groups have called for the city to implement these kinds of policy changes to increase affordable housing, some say more must be done. 

Cristal Gallegos, director of the Vallejo Housing Justice Coalition, told the Vallejo Sun that she thinks the city must also enact rent control and tenant protection policies.

Gallegos said that the draft ordinance’s affordability requirements are currently “pretty low” and it was not clear how much in lieu fees would be.

“You can’t have inclusion without stability,” she said. “It’s not really going to lead to housing for the people who really need it. For the ones who are already on the edge of being unhoused, it’s not really changing anything.”

The city’s long range planning manager Hector Rojas said in an email that the draft ordinance comes “after the city evaluated multiple policy scenarios and reviewed comparable programs in other California jurisdictions.”

Rojas said the city is also working on other housing policy initiatives, “including work associated with renter protection and housing stability measures.” 

“Staff is currently preparing to begin drafting potential rent stabilization and just-cause eviction ordinances this month,” Rojas said. “At this time, staff anticipates releasing public review drafts for those potential ordinances in the fall.”

 He said the city is also preparing a commercial linkage fee program for consideration, following potential adoption of the inclusionary housing ordinance. These programs are intended to help support affordable housing funding opportunities associated with new commercial development. For example, the city of Walnut Creek charges commercial developments an affordable housing fee, currently $5 per square foot.

The draft Inclusionary Housing Ordinance is available for public review on the Planning Division's project page. Residents can provide feedback during the public comment period until May 27.