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Page 5 of 11 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />1. Revised affordable housing obligation for commercial component. <br />The City’s Affordable Housing Ordinance (AHO) requires payment of an affordable housing impact <br />fee for nonresidential (i.e. commercial) development to mitigate a project’s impact on the need <br />for affordable housing. Alternatively, an applicant may provide affordable units on or offsite <br />instead of paying a fee if the proposal meets certain conditions. <br />In 2020, the entitled project provided affordable units instead of i paying an impact fee to satisfy <br />its commercial development obligation. These affordable units were approved on lots A, D, and <br />F. The 39-unit all-affordable housing development on lot F at 1304 El Camino Real (Miramontes) <br />has been completed and satisfied a portion of the commercial obligation (16 affordable units). As <br />described above, current market conditions have changed. Therefore, the applicant is requesting <br />to satisfy the affordable housing obligation for the commercial component of the project through <br />the following: <br />a. Provide 16 affordable units (already built on lot F); and <br />b. Pay an affordable housing impact fee for the remaining commercial component obligation, <br />totaling $5,822,001 <br />The affordable housing impact fee would be paid prior to the final certificate of occupancy on the <br />last commercial building (lot C), which is anticipated in February of 2026. The impact fee provides <br />the City with immediate resources to invest in other affordable housing initiatives, while still <br />complying with the City’s AHO. The City issued a Notice of Funding Availability (NOFA) for new <br />affordable housing construction in October 2025, and the City can allocate these funds (as soon <br />as they are paid) to affordable housing projects that have applied to this NOFA. These funds can <br />also be leveraged with other funding sources and tax credits. Based on prior City investments in <br />affordable housing projects, staff estimates that these funds could support approximately 29 to <br />116 affordable units, as the City typically invests $50,000 up to $200,00 per unit. <br />With the payment of the affordable housing impact fee for the commercial obligation, the <br />applicant is also relying on the City’s equivalency ratios1 in the Affordable Housing ordinance, <br />which allow developers to provide fewer units but at a deeper level of affordability. The affordable <br />unit count would therefore be changed to 36 affordable units on lot A (previously at 59), 45 <br />affordable units on lot D (previously at 50), and 38 affordable units on lot F (no change) for a total <br />of 119 affordable units. The changes are described in Table 2, which demonstrates that the <br />project will provide more affordable units in the very low and moderate income categories than <br />previously proposed. <br />1 The City uses an equivalency analysis to compare the value of providing units at different levels of affordability to <br />determine whether a proposed alternative meets the Ordinance standard. The equivalency ratios are provided for <br />in Chapter 1 of the City’s Affordable Housing Program Guidelines. <br />8.B. - Page 5 of 120 <br />168