Redwood City says any housing better than no housing

Under previous city policy, a residential development proposing 100 rental units must make at least 20 of those “affordable,” or deed restricted for moderate-, low- and very-low-income levels. The newly approved policy now requires only 15 to be affordable for applicable projects. 

The financial savings developers can expect from this updated policy is hoped by councilmembers to be enough to encourage moving forward on their projects, which may be stalled due to high inflation and interest rates, labor shortages and tariffs, Assistant City Manager Patrick Heisinger said at a council meeting Monday. 

There are seven developments in the city’s development pipeline that could likely benefit from the update in policy, Heisinger said. These seven developments account for 2,584 units, of which 954 are affordable. 

Redwood City is responsible for developing 4,588 units by 2030 as a part of its eight-year regional housing needs allocation, a number mandated by the state. Approximately a quarter of the way through this eight-year cycle, the city is only at 18% of its goal. Only development proposals where building permits have been pulled count toward this number. 

“If projects don’t move forward, we’re going to fall farther and farther behind,” Heisinger said. 

In addition to meeting housing production numbers, the stalled developments account for more than $25 million in total impact fees that would eventually go to the city. These impact fees are not paid until construction permits are issued. 

If the seven developments that could benefit from this policy update take advantage of the lighter requirements, there is a total potential loss of 47 affordable units and approximately $234,000 in impact fees, than previously anticipated. 

This loss can be offset in the long run, councilmembers believe. 

“If projects do not move forward, the city doesn’t get anything,” Heisinger said. 

The City Council has prided itself on its progressive housing policies, including its prioritization to address the housing affordability crisis, so the updated policy was approved reluctantly by most councilmembers. Ultimately, the council felt the net benefit to the city’s housing supply was worth the change. 

“We’ll produce less units, but we will produce units,” Councilmember Diane Howard said. 

The policy change, named the Affordable Housing Incentive Program, will amend the city’s current affordable housing ordinance only until June 30, 2027, unless otherwise decided upon by the council. The sunset date is included in assurance that the city hopes to return to its former requirements to produce affordable housing supply once the economy is less restrictive against development overall. 

The decision was one of two policies passed by councilmembers Monday to approve interim measures to promote development and activate the cities’ commercial space, which is demonstrating high vacancy rates. 

Councilmembers agreed to suspend the city’s current “green infrastructure” requirements for commercial remodels. The previous policy went above and beyond what is required regionally, and the requirement was one factor inhibiting companies from leasing space in Redwood City, Tanisha Warner, director of Engineering and Transportation, said.  

“It’s placing the city at a slight disadvantage at attracting employers to this area,” Warner said. 

“Green infrastructure” looks to reduce the impact that developments have on local waterways through stormwater treatment and improving water quality, Warner said. The regional standards are established and monitored by a regional water control board, but Redwood City had additional policies in place to promote even further sustainability efforts. Because of these extensive policies, the city has already far exceeded long-term goals set by the regional board. 

The city is experiencing approximately a 35% vacancy rate of its commercial and office spaces. By lessening the requirements for “green infrastructure” on remodeling projects, the city hopes to incentivize more companies to find a home in Redwood City and activate the underutilized space.