Title
Planning and Building Department, Affordable Housing Unit, with concurrence from the Chief Administrative Office, in accordance with Board of Supervisors Policy B-14, Traffic Impact Fee (TIF) Offset Program for Developments with Affordable Housing Units, recommending the Board:
1) Find that the Racquet Way Apartment Complex Phase 2 project provides significant community benefit by providing housing that is affordable to low-income households;
2) Make a conditional award of a TIF Offset totaling $139,098 (per current TIF Program Fee schedule, but subject to change with each TIF schedule update), to offset 50 percent of the TIF for 24 units affordable at or below 80 percent of the area median income; and
3) Authorize the Planning and Building Department Director to execute all documents associated with the TIF Fee Offset Program, contingent upon approval by County Counsel and Risk Management.
(District 3)
FUNDING: Federal and State Transportation Revenues.
Body
DISCUSSION / BACKGROUND
The purpose of the Housing Element of the El Dorado County General Plan is to support and identify an adequate supply of housing affordable to lower-income Households by providing guidance in the development of future plans, procedures and programs, and by removing governmental constraints to housing production. The Board of Supervisors has long recognized that while Traffic Impact Fees (TIF) are necessary to mitigate development impacts, they have the potential to hinder the creation of housing affordable to low- to moderate-income households. To encourage such development, the Board adopted Policy B-14, TIF Offset Program for Affordable Housing, on December 11, 2007 (Legistar file 07-1822).
The TIF Offset Program is funded through the TIF Program, which provides $1 million of federal and state transportation revenues annually during each 20-Year Program cycle to be allocated to selected, eligible affordable housing projects that apply. Funds are cumulative, and any unused funds roll over into the following year. The first cycle of TIF Offsets was processed in December of 2007. TIF Offsets apply only to the affordable units within a project and do not constitute a cash subsidy to Developers.
The application period for Round 36 of the TIF Offset Program concluded on July 15, 2025. One (1) application was submitted; Racquet Way Apartment Complex Phase 2 (Project). On September 9, 2021 (Legistar file 21-1433), the Planning Commission approved a Senate Bill (SB) 35 project, Design Review Permit DR21-0006, for the construction and operation of Courtside Apartments Phase 2 (now identified as Racquet Way Apartment Complex Phase 2). The approved Project will provide six (6) multi-unit residential buildings with a total of twenty-four (24) two-bedroom rental units, targeting households earning up to 80 percent of the area median income (AMI). Of the twenty-four (24) units, twelve (12) will serve low-income seniors (55+).
At this time, the total TIF for the project is approximately $278,196 ($92,724 - Zone B Multifamily Age-Restricted and $185,472 - Zone B Multifamily, subject to change with TIF fee updates). The recommended offset of $139,098 reflects an offset of 50 percent of the total TIF fees for the twenty-four (24) units affordable to low-income households, those earning at or below 80 percent of the AMI, but is subject to change with each TIF update. If awarded, the TIF Offset would deed restrict the twenty-four (24) units for a period of fifty-five (55) years.
The TIF Advisory Committee (Committee), comprised of representatives from the Chief Administrative Office, Environmental Management, the Department of Transportation, and the Planning and Building Department, is responsible for evaluating each application based on the following criteria:
* Complete application packet
* Established site control
* Developer capacity
* Benefit to very low-, low-, and/or moderate-income households
* Alignment with County Housing Element goals
* Inclusion of mixed-income housing
* Geographic distribution of affordable housing units within the project
* Availability of services and infrastructure
* Likelihood of receiving approval and beginning construction within two (2) years of award
Based on the criteria above, the Committee agreed that the Project is eligible for a TIF Offset; however, the full eligible TIF Offset of 75 percent was not recommended. Instead, in their recommendation to the CAO (Attachment A), the Committee recommended a 50 percent TIF Offset, taking into account the following considerations:
1. The developer has not demonstrated sufficient experience in developing or managing deed-restricted affordable housing. County staff would likely need to provide substantial support to ensure compliance with long-term affordability obligations, particularly as the County is the sole entity overseeing these requirements.
2. The applicant did not fulfill all application requirements under the TIF Offset Agreement for a prior phase. While staff is currently working with the applicant to rectify these deficiencies, the situation further demonstrates the applicant’s limited experience in affordable housing development.
If the Board approves the recommendation and conditionally awards the TIF Offset, the developer must execute and record a TIF Offset Affordable Housing Agreement restricting the twenty-four (24) units for fifty-five (55) years.
Since implementation of the TIF Fee Offset Program in December 2007, and with approval of the recommendations herein, $4,688,884 in TIF Offsets have been awarded to support the construction of 344 affordable housing units in El Dorado County.
ALTERNATIVES
The Board may reject the CAO’s recommendation and deny the TIF Offset, which would require the developer to pay the full TIF amount of $278,196.
PRIOR BOARD ACTION
On December 11, 2007 (Legistar file 07-1822), the Board adopted Policy B-14.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
Chief Administrative Office, Department of Transportation, County Counsel, Risk Management
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
Upon approval of this item, the project will be granted an offset in the amount of $139,098. This offset will be allocated to the Traffic Impact Fee (TIF) program to ensure full funding. The project applicant will be responsible for remitting the remaining Traffic Impact Fee balance of $139,098 for the development of 24 low-income apartment units. Approximately $13 million in potential offsets would remain in the TIF Offset Program to assist future projects. Any balance remaining at the end of the year will be carried forward and added to the $1 million allocation for the next year. The TIF Offset Program allows for a reduction of TIF through federal and state transportation revenues and is not a cash subsidy.
Through development of this project, and if approved as recommended, the project will contribute the following in additional impact fees:
El Dorado County Office of Education: $87,360
Department of Transportation: $139,098
Diamond Springs-El Dorado Fire Department: $36,240
Additionally, the project is expected to generate property tax revenues, as the property does not currently qualify for a welfare tax exemption due to being developed by a market-rate developer rather than a non-profit organization. However, the developer may be able to request a restricted assessed value for property taxes in the future.
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: Develop a comprehensive plan for affordable housing opportunities
CONTACT
Robert Peters, Deputy Director of Planning
Planning and Building Department