Construction Alternatives

• conversion to affordable housing
• credit transfer
• in-lieu fee
• land dedication
• off-site construction

In-Lieu Fee Structure: fixed per-unit fee

If the residential development contains four or fewer units, to pay a fee in lieu of

providing the otherwise required affordable units.

(1) Fees shall be paid upon issuance of building permits for market-rate units in a

residential project, or secured at that time by a contract pursuant to subsection

(4). The City Manager or the Manager’s designee shall determine which of these

forms of security is required. If building permits are issued for only part of a

residential project, the fee amount shall be based only on the number of permitted

market-rate units.

(2) The fee shall be a per square foot fee established by the Master Fee Schedule

and applied to the aggregate building area of all the market-rate homes in

question, including the building footprint, plus additional square footage

provided by additional stories and a porch/deck minus any garage or other

parking area. In the event the fee required by this provision has not been adopted,

a fee of $10.60 per square foot of such building area shall be required and

payable in the fashion set forth in Section 7b(4), below, and such fee shall be in

effect and applicable to development applications pending but not approved and

new applications.

(3) Where payment is delayed based on provision of security under subsection (4), in

the event of default, or for any other reason, the amount of the in-lieu fee payable

shall be based upon the fee schedule in effect at the time of the fee is paid.

(4) For all fees not paid upon issuance of building permits, the City Manager or the

Manager’s designee shall require the applicant, as a condition of issuance of the

building permit, to execute a contract to pay the fee in full to the City before any

temporary or permanent certificate of occupancy may be issued for any

corresponding market-rate unit in the residential project. The obligation to pay

the fee shall inure to the benefit of, and be enforceable by, the City. The contract

shall be recorded in the office of the County Recorder of San Mateo County and,

from the date of recordation, shall constitute a lien for the payment of the fee,

which shall be enforceable against successors in interest to the initial holder of

the building permit. The contract shall be recorded in the grantor-grantee index in

the name of the City as grantee and in the name of the record title holder at

building permit issuance as grantor. The contract may require appropriate

notification of the opening of any escrow for the sale of the property for which

the building permit was issued and that the fee be paid to the City from the sale

proceeds in escrow prior to disbursing proceeds to the seller.