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REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br /> <br />April 11, 2016 <br /> <br />SUBJECT <br />Study Session to Discuss Affordable Housing Funding Options <br /> <br />RECOMMENDATION <br />Hold Study Session to Discuss Affordable Housing Funding Options <br /> <br />BACKGROUND <br /> <br />The purpose of the April 11, 2016 study session is to provide background information <br />about mechanisms for increasing housing affordability in general, and approaches for <br />increasing affordable housing in Downtown Redwood City in particular. At a future City <br />Council meeting, the Council will be asked to consider modifications to the Downtown <br />Precise Plan to mandate a specific number of affordable housing units in Downtown <br />Redwood City. <br />The Downtown Precise Plan (DTPP) was adopted in January 2011. At that time, <br />Redevelopment agencies were in existence, which had specific, positive implications for <br />affordable housing. Downtown Redwood City was a Redevelopment area. In <br />Redevelopment areas, 15% of the housing produced had to be affordable. Twenty <br />percent (20%) of the property tax increment received by the Redevelopment Agency <br />had to be dedicated to affordable housing. Statewide, this affordable housing funding <br />source equated to approximately $1 billion annually. Unfortunately, the State eliminated <br />all Redevelopment Agencies shortly after the DTPP was adopted. With that action, the <br />State took away the primary way cities regulate and fund affordable housing. <br />The DTPP allows for 2,500 housing units to be constructed. At the time of adoption, it <br />was expected that 375 of these units (15% of 2,500), would be affordable in accordance <br />with Redevelopment law. In an effort to meet this expectation despite the elimination of <br />Redevelopment-generated funds, in October 2015 the Council directed staff to initiate a <br />Downtown Precise Plan amendment. This amendment would require that 375 units <br />produced under the DTPP be affordable. The Council also directed that these units be <br />required at deeper affordability levels than what was required under Redevelopment <br />law. <br />8.A - Page 1