Vallejo Planning Commission advances inclusionary housing ordinance

VALLEJO – Vallejo’s Planning Commission voted unanimously Wednesday to recommend a structure for an inclusionary housing ordinance which would require developers to set aside a percentage of affordable homes when proposing development projects with at least 10 units. 

Commissioner Wanda Madeiros recommended a proposal which would require developers of rental properties to designate 4% of a project’s units as affordable: 2% affordable for very-low income households with a maximum income of $61,850, and 2% for low-income households with a maximum income of $98,950. 

Projects to build homes for purchase would also be required to build affordable units, with projects of 20-100 homes requiring 7% affordable units and projects with more than 100 units required to build 10% affordable units.

The commission also recommended that staff conduct an biannual feasibility study, with annual reporting requirements, once the ordinance is adopted.

Some projects may be exempt from the ordinance, such as those with accessory dwelling units and homes built following disasters, and any with applications approved before the ordinance is adopted. 

Developers could also choose to instead pay an in-lieu fee to the city. The fee scale proposed would depend on the type of housing project and square footage developed, and has not yet been settled as it requires a staff study before adoption. Revenue from that fee collection could then be used by the city toward other housing projects.

Hector Rojas, the city’s long-range planning manager, said many cities around the state and Bay Area already have an inclusionary housing and in-lieu fee ordinance. 

“This may be perceived as a drop in the bucket, but nevertheless, it’s a drop,” Rojas said.

City staff have said the ordinance 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. 

Rojas stressed the high need for affordable housing in a city with slow progress toward building homes for low-income people. He said the city must build 2,900 homes through 2031 under the state Regional Housing Needs Allocation, including 1,554 units for low- to moderate-income households. About 108 homes have been built so far, nearly all of which were for people with above-moderate income, but the city must build 1,446 more.

He also noted the Vallejo Housing Justice Coalition, while supporting the ordinance, recommended “substantially stronger requirements.” It disagreed with the original staff recommendation to apply the ordinance to projects with at least 20 units, saying it should apply to projects with 10 or more, and also recommended requiring developers to set aside 15-20% of units as affordable.

Commissioner Eric Blind said he didn't understand how the ordinance will significantly help with developing affordable units, saying he worries it may actually dissuade development. 

“It feels like the solution is to make housing more expensive to make it less expensive,” Blind said. “It feels like this has benefits if the market's right. The one thing we know will lower costs for renters and buyers is more housing.”

Commission Chair Anthony Taylor said property values will increase in coming years no matter what policy the city holds, and the ordinance will increase the chance that even small numbers of people get into more affordable homes.

“Even if we just went with market rate housing, if we look at data going backwards, property values still increase anyway,” Taylor said. “What we do have then is more expensive homes, and we have one less person [going] into affordable housing. I want to think about who’s in need here, and can we move something forward, even if it’s just 10 families at this point.”

During public comment, Paul Theiss with the Sierra Club Solano Group said the club found the ordinance flawed as it purportedly intends to create some homes for very-low income people, and is “likely to result in vanishingly few such units.” He suggested raising the requirement for such homes to 5% to improve the inventory for those “who face the greatest risk of displacement.”

Theiss also said the ordinance did not specify which department will enforce it, and if progress will be tracked. He asked for a public accessible dashboard so people can see how many affordable units are built over time and how much is collected from in lieu fees.

Cristal Gallegos, director of Vallejo Housing Justice Coalition, said the ordinance options didn’t sufficiently address the shortfall the city currently faces to meet its mandated housing goals, particularly for very-low income people. She said the in-lieu fee scale, ranging $8.64-$27.55 per square foot, must be raised, noting that developers in other cities opt to pay fees and such low rates won’t significantly improve the city’s funds for building more housing. 

The proposed ordinance is one of the city’s approaches as part of an overall package it will soon present to the City Council to improve affordable housing development and protections for tenants, among other housing goals. The council is expected to soon hold a study session to review this package, which staff have been crafting since 2025.