Title
Planning and Building Department, Affordable Housing Unit, and the Department of Transportation recommending the Board:
1) Receive presentation on Policy B-14, Traffic Impact Fee Offset Program for Development with Affordable Housing Units, including a discussion on additional modifications to the Policy as recommended by the Affordable Housing Task Force and County Departments;
2) Recommend the Board approve and adopt the discussed revisions and edits to Board Policy B-14;
3) Direct staff to return to the Board with final edits to the Policy; and
4) Direct staff to work with the Chief Administrative Office to revise the Policy B-14 Procedure Manual based on the adopted revised Policy.
FUNDING: Federal and State Transportation Grant Revenues - 100%.
Body
Discussion / Background
Traffic Impact Mitigation Fee Offset Program Policy B-14 Background
On December 11, 2007 (Legistar File 07-1822), the Board of Supervisors (Board) adopted Policy B-14 (Policy), establishing the Traffic Impact Mitigation Fee Offset Program - now known as the Traffic Impact Fee (TIF) Offset Program (Program). This Program was created to support the development of affordable housing by offering targeted fee offsets to eligible projects and ensuring that County resources are applied to the most effective efforts to meet local housing needs.
Under the current Policy, the Program allocates $1 million annually from Federal and State transportation grants to offset TIF costs for qualifying affordable housing developments of five (5) or more units where at least (20%) of the units will be affordable, as well as for homeowners building ADUs. This Program does not waive the TIF owed by approved projects but backfills the offset fees with Federal and State grant money. Importantly, the offsets are not cash subsidies. Currently, approved rental projects must enter into an Affordable Housing Agreement (AHA), which deed-restricts the units to ensure they remain income-restricted for a minimum of twenty (20) years and rents do not exceed program limits for the duration of the AHA.
Development Projects with five (5) or more units
Offset applications for developments with five (5) or more units are accepted by the Planning and Building Department, Affordable Housing Unit (Housing Unit) twice a year, in January and July, and are reviewed by an Advisory Committee made up of stakeholder County departments with recommendations forwarded to the CAO and Board in April and October each year. Eligible applicants may receive a TIF offset ranging from 25% to 100%, depending on the affordability period and income level of the deed-restricted units.
Accessory Dwelling Units
On December 17, 2013 (Legistar File 13-1516), the Board revised Policy B-14 to allow TIF Offset applications for secondary dwellings, now known as Accessory Dwelling Units (ADUs), to be submitted year-round with approval by the Chief Administrative Officer (CAO), rather than only during two (2) designated application rounds each year.
However, on April 19, 2016 (Legistar File 14-0245), the Board voted to provide all ADUs with 100% offset, thereby no longer requiring offset applications or approval through the offset program.
County Housing Element Policies and Goals
The County’s Housing Element, which was adopted and certified by the California Department of Housing and Community Development (HCD) in 2021, requires the County to implement measures that promote the development of affordable housing, including the use of fee incentives and offsets. In its May 10, 2022, compliance letter (Attachment D), HCD specifically identified Measures HO-5 (Incentives for Low-Income Housing Development) and HO-33 (Traffic Impact Fee [TIF] Program) as key actions that the County must continue to implement in a timely and effective manner. In addition, Government Code section 65585, subdivision (i), grants HCD authority to review any action or failure to act by a local government that HCD determines is inconsistent with an adopted housing element or with housing element law, including failure to carry out required program actions. HCD also retains the authority to revoke a jurisdiction’s housing element compliance status if the local government’s actions do not comply with state law.
To meet these statutory obligations and maintain Housing Element compliance, the County must not only continue to implement these programs, but also regularly evaluate their effectiveness. The Housing Element commits the County to monitoring available incentive programs and undertaking measures, as necessary, to add or revise programs that mitigate impact fees for transitional and supportive housing, employee housing, including agricultural worker housing, and housing for disabled or elderly persons.
Applicable Housing Element Goals, Policies, and Implementation Measures are below:
Housing Goal: HO - 1: To provide for housing that meets the needs of the existing and future residents in all income groups.
o Policy HO-1.18 The County shall develop incentive programs and housing partnerships to encourage private development of affordable housing.
o Policy HO-1.25 The County shall encourage programs that will result in improved levels of service on existing roadways and allow for focused reductions in the Traffic Impact Mitigation (TIM) Fee. Such programs may include, but not be limited to, analyzing the traffic benefits of mixed-use development.
Implementation Program Measures:
o HO 5 - develop and adopt an incentive-based policy that will encourage, assist, and annually monitor the development of housing that is affordable.
o HO 33 - reduce traffic impact fees for multi-family mixed-use development, housing for persons with disabilities, and increase the production of multifamily housing.
o HO 34 - incentive policy to encourage development of a variety of housing types for affordable housing.
Together, these policies support the County’s obligation to reduce cost and regulatory barriers to affordable housing and to implement meaningful incentives that enable development to occur under market conditions that would otherwise prevent it.
On May 12, 2026 (Legistar File 26-0743), the Board directed the Housing Unit to work with the Affordable Housing Task Force (AHTF) to review the Policy and obtain recommendations on revisions to the Policy and the Procedure Manual (Guidelines).
On June 10, 2026 (Legistar File 26-1032), the AHTF, Housing Unit, and the Department of Transportation (DOT) reviewed the Policy and discussed possible recommended changes, including the adjustments to the frequency of Program rounds, unit eligibility requirements, and affordability periods for deed-restricted units.
Provided below is a summary of the proposed Policy changes and discussion points, both from County staff and the AHTF, which are further detailed in Attachment B. As some of these potential Policy changes require further discussion, staff is requesting direction from the Board on additional changes beyond those proposed below.
Proposed Policy Changes:
1. Remove ADU Language, exempt following adoption of the 2016 Major TIM Fee Program Update.
2. Update all TIM references to TIF.
3. Define “developing” to indicate that a submitted application shall be an eligibility requirement to apply for an offset.
4. Add requirements of “any associated documents.”
AHTF Discussion Topics Determined Infeasible by Staff:
1. Increasing the amount of grant funding beyond $20M for offsets. Grant funding is becoming harder to obtain. Increasing the availability of offsets beyond the current $20M could result in a deficit in the TIF Program.
2. Exempt Single Family Dwellings of certain income levels from TIF, similar to ADUs.
AHTF Discussion Topics Requiring Further Discussion and Direction from the Board:
1. Extend Eligibility to income levels above moderate (120% AMI)? AHTF suggested extending eligibility to projects with income levels up to 150% AMI to make workforce and missing-middle housing projects more affordable to construct.
2. Extend 100% offset to “Low” income level applicants (low AMI currently gets 75% offset)
3. Authority to award offsets delegated to either the CAO or Director of the Planning and Building Department to expedite the award process, with the possible option to appeal to the Board.
4. Frequency of Application Rounds: Should it be increased due to streamlined housing and by-right projects?
5. Longer deed restrictions: The current program requires 20-year deed restrictions. State and federal funding requirements often require deed restrictions of 45 years for saleable units and 55 years for rental units.
As a result of this discussion, the Housing Unit and DOT will meet again to address any additional items raised by the Board, as those will require a larger effort and a higher level of collaboration between departments, as well as potential program updates.
Alternatives
The Board may choose not to update the Policy as recommended by staff, make additional modifications, or direct staff to further evaluate options and return to the Board at a future date for consideration.
Prior Board Action
See Discussion/Background above.
OTHER Department/Agency involvement
CAO; County Counsel; DOT
CAO Recommendation
Provide direction as recommended.
Financial Impact
There is no change to net County cost associated with this agenda item. The TIF Program currently assumes that over the next 20 years, $20 million in TIF offsets will be awarded to eligible affordable housing projects. These offsets are expected to be backfilled by State and Federal grant revenues applied to projects funded by the TIF Program.
Clerk of the board follow up actions
N/A
Strategic Plan Component
Safe and Healthy Communities
Priority: Develop a continuum of support and housing opportunities for unhoused individuals
Action Item: Develop a comprehensive plan for affordable housing opportunities
contact
Jennifer Morris, Sr. Administrative Analyst
Planning and Building Department
Zach Oates, Sr. Civil Engineer
Department of Transportation