Glossary of Key Terms

Policy and Jurisdiction Information

Population

Population as determined by the California Department of Finance, 2005 estimates.

Land Area

Land area of the jurisdiction; does not include water.

Year Adopted

Year the policy was adopted by the jurisdiction.

Compliance Type

Whether the policy is mandatory, negotiated, or voluntary:

• Mandatory: IH requirements are binding and prescribed
• Negotiated: IH requirements are determined through a process of negotiation between the developer and the jurisdiction
• Voluntary: Developer chooses whether or not to provide inclusionary housing, usually in return for a package of incentives

Policy Type

Whether the policy is codified in an ordinance, embedded in zoning laws, and/or part of a Housing Element

Developer Options

Construction Alternatives

Alternatives to on-site construction of new units by the developer

• Conversion to Affordable Housing: Developer converts existing units to affordable housing rather than building new ones
• Credit Transfer: Developer allowed to substitute or apply affordable units from a previous project to comply with IH requirements in a current project
• In-lieu Fee: Developer pays a fee to the local jurisdiction instead of building the IH units
• Land Dedication: Developer donates developable land to the jurisdiction or designated housing developer for future construction of affordable housing
• Off-site Construction: Construction of the required IH affordable units on a different site than the market-rate units.

In-Lieu Fee Structure

Method or process for determination of in-lieu fee amounts. Not all policies prescribe the specific method and, instead, delegate the responsibility to the appropriate governmental unit or body.

• Formula: Flexible fee paid per unit that is determined by computation typically based on such variables as unit size, subsidy needed to close the affordability gap for an equivalent market-rate unit, construction costs, and other factors. This is the most common method of setting fees.
  
• Fixed Per-Unit Fee: Flat fee paid per unit and applied to all units covered by the policy
  

Incentives

Resources and cost-reduction mechanisms to offset or lower the developer's cost of building the IH units

• Clustering of IH Units: Allows developer to concentrate IH units in fewer locations rather than disperse them throughout the project
• Delayed Building of IH Units: Allows developer to wait until the end of the project to build the IH units instead of concurrently and proportionally building them with the market-rate units
• Density Bonus: Increase in total number of units that can be built above existing, permissible density
• Design Flexibility: Waiver or relaxation of specified building and design requirements
• Fast-track processing: Expediting and granting priority for the review and approval of a new development by the local jurisdiction
• Fee Deferral: Postponing the date required fees are to be paid
• Fee Reduction: Discounting the normally required amounts of various development-related fees
• Fee Waiver: Elimination of required development-related fees
• Growth Control Expansion: Exemption from or relaxation of regulatory controls that limit the amount or pace of new residential development.
• Subsidies: Allocation of public funds to cover some of the development costs of the IH units
• Tax Abatement: Elimination or reduction of a required tax

Requirements

IH Requirement Threshold

Minimum number of units a project must have to trigger a policy's requirements

% Production Required

Percentage of total project units that must be affordable

• Fixed Formula: Pre-determined, constant percentage of total project units for each targeted group (e.g., 10% LI + 10% MI = 20%)
• Variable Formula: Pre-determined range of percentages of total project units depending on such factors as proposed number of units, total acreage, or location of project, or mix of targeted groups (e.g. if developer agrees to build 5% VLI units, 5% LI, and 5% MI, the total percentage of IH units required in the project may be reduced from 20% to 15%)
• Negotiated: Percentage(s) determined based on per-project negotiation between developer and local jurisdiction

Targeted Groups

Populations to benefit from production of IH units

• Extremely Low Income (ELI): Household income 30% or below the Area Median Income, adjusted for household size
• Very Low Income (VLI): Household income between 31% and 50% of the Area Median Income, adjusted for household size
• Low Income (LI): Household income between 51% and 80% of the Area Median Income, adjusted for household size
• Moderate Income (MI): Household income between 81% and 120% of the Area Median Income, adjusted for household size
• Above-Moderate Income: Variable by jurisdiction and IH policy, but generally households with incomes above 120% of the Area Median Income and below a locally determined ceiling income, adjusted for household size. Also referred to as "Middle Income" or "Workforce" in some policies.
• Senior: Variable by jurisdiction and IH policy, but generally households with head-of-household age 62 or above