Folsom, CA
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Background
The City of Folsom’s Inclusionary Housing Ordinance (Chapter 17.104 of the Municipal Code) is a key component of the City’s affordable housing strategy. First adopted in 2002 and amended in 2013, the ordinance ensures that new residential growth contributes to meeting the community’s lower-income housing needs.
Developer Compliance Options
Under the ordinance, developers of subdivisions with ten or more single family homes must comply by selecting one of several options:
- Build affordable units on site: At least 10% of homes must be reserved for lower income households, with 3% designated for very low income and 7% for low income families.
- Pay an in lieu fee: Instead of constructing deed restricted homes, developers may pay a fee equal to 1% of the lowest priced home in the subdivision multiplied by the total number of units. This option requires developers to submit architectural plans and anticipated sales prices before building permits are issued, and to enter into an inclusionary housing agreement to formalize the calculation.
- Other alternatives: Additional compliance options, such as land dedication or off site construction, are also available within the ordinance framework.
Program Impact
Because building deed restricted affordable homes can be complex and challenging, nearly all developers in Folsom choose the in lieu fee option. To date, this program has generated approximately $30.5 million, which has provided gap financing for multiple affordable housing projects and resulted in the creation of over 320 new affordable apartments in the city.