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Planning and Building Department, Affordable Housing Unit, 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 Diamond Village Apartments Phase II development project provides a significant community benefit by delivering long-term, income-restricted rental housing to low-income households;
2) Make a conditional award of a TIF Offset totaling $436,632 (per current TIF Program Fee schedule, but subject to change with each TIF schedule update), to offset 94 percent of the TIF for the 30 income-restricted units affordable at or below 80 percent of the area median income;
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; and
4) Direct staff to work with the Affordable Housing Task Force to review Board of Supervisors Policy B-14, Traffic Impact Fee (TIF) Offset Program for Developments with Affordable Housing Units and provide recommendations on updating the Program and Guidelines.
(District 3)
FUNDING: Federal and State Transportation Grant Revenues.
Body
DISCUSSION / BACKGROUND
Project Background
On January 9, 2025 (Legistar file 25-0006), the Planning Commission approved Design Review Permit DR24-0008 for Diamond Village Apartments II (Project), an affordable housing development processed under Senate Bill 35 (SB 35). The Project is located at 750 Black Rice Road (Assessor’s Parcel Number 051-461-069) in Diamond Springs.
Project Details:
• Four (4) multi-unit residential buildings
• 30 rental units affordable to households earning 80% or less of the Area Median Income (AMI)
• One (1) manager’s unit
• Office and community room
• Supportive services - case management, public benefits enrollment, and life skills education
The Project will provide dedicated housing and supportive services for seniors, individuals with disabilities, and other vulnerable households, including 21 units specifically designated for people experiencing or at risk of homelessness. Comprehensive supportive services will be delivered by EA Family Services, offering case management, public benefits enrollment, life-skills education, and coordinated access to a wide range of off-site referral services such as healthcare, behavioral health, substance use disorder treatment, education, employment assistance, food resources, domestic violence support, legal services, and childcare. These services will be funded through a HOME-ARP (American Rescue Plan) Capitalized Operating Subsidy Reserve award of $3,560,000, supplemented by ongoing property cash flow, ensuring long-term stability and support for residents.
County Policies and Goals
On December 11, 2007 (Legistar file 07-1822), the Board of Supervisors adopted Board Policy B-14, establishing the Traffic Impact Mitigation Fee Offset Program-now known as the Traffic Impact Fee (TIF) Offset Program (Attachment B). 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 in meeting local housing needs.
Under this policy, the County allocates $1 million annually from federal and state transportation revenues to offset TIF costs for qualifying affordable housing developments. These offsets reduce the TIF owed by applicants while maintaining full funding for the TIF Program. Importantly, the offsets are not cash subsidies. Approved rental projects must enter into an Affordable Housing Agreement (AHA), which deed-restricts the units to ensure they remain income-restricted and that rents do not exceed program limits for the duration of the AHA.
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 such as 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 implementing 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. As part of this commitment, the Board of Supervisors will review requests for traffic impact fee offsets for affordable housing projects twice annually.
In addition to directly supporting the TIF Offset Program through Measures HO 5 and HO 33, this development project is assisting the County in advancing several Housing Element Objectives and Measures.
The current project supports the Housing Element in the following ways:
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-1.6 The County will encourage new or substantially rehabilitated discretionary residential developments to provide for housing that is affordable to very low-, low- and moderate-income households.
o Policy HO-1.7 The County shall give highest priority for permit processing to development projects that provide housing affordable to very low- or low-income households.
o Policy HO-1.8 The County shall encourage mixed-use projects where housing is provided in conjunction with compatible nonresidential uses. Such housing shall be allowed by right, subject to appropriate site development standards.
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.
Housing Goal HO-4: To recognize and meet the housing needs of special groups of county residents, including a growing senior population, the homeless, agricultural employees, and the disabled through a variety of programs.
o Policy HO - 4.2 County policies, programs, and ordinances shall provide opportunities for disabled persons, including developmentally disabled persons, to reside in all neighborhoods.
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 25 - encourage the creation of housing for persons with special needs, including seniors, persons with disabilities, female-headed households, persons with developmental disabilities.
o HO 33 - reduce traffic impact fees for multi-family mixed use development, housing for persons with disabilities, an increase in 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.
TIF Offset Request
The Project has requested an offset for the 30 income-restricted units, totaling $436,632 ($15,456 per unit for Zone B Multifamily, subject to change with future TIF updates), which is approximately 94 percent of the total TIF that would otherwise be owed for this project. The 30 income-restricted units will be affordable to low-income households-those earning at or below 80 percent of AMI. If awarded, the TIF Offset would require that the 30 income-restricted units be deed-restricted for 55 years. Below is a summary of the calculated offset for 30 income-restricted units and one (1) manager’s unit:
Zone B Multi-Family Dwelling: $15,456 per unit
One-Bedroom Apartments
• 8 at or below 30% AMI (extremely low-income households)
o Eligible Offset Amount: $123,648 (100% Offset)
Two-Bedroom Apartments
• 11 at or below 30% AMI (extremely low-income households)
o Eligible Offset Amount: $170,016 (100% Offset)
• 5 at or below 80% AMI (low-income households)
o Eligible Offset Amount: $57,960 (75% Offset)
Three-Bedroom Apartments
• 4 at or below 30% AMI (extremely low-income households)
o Eligible Offset Amount: $61,824 (100% Offset)
• 2 at or below 80% AMI (low-income households)
o Eligible Offset Amount: $23,184 (75% Offset)
Manager’s Unit
• 1 unit
o Eligible Offset Amount: $0 (0% Offset)
TIF Total: $479,136
Eligible TIF Offset Amount: $436,632
Total TIF Due: $42,504
TIF Advisory Committee
The TIF Advisory Committee (Committee), comprised of representatives from the Chief Administrative Office (CAO), Environmental Management, the Department of Transportation, Health and Human Services Agency (HHSA), 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
Following its review of all documentation, the Committee recommended to the CAO approval of the requested TIF Offset amount of $436,632. The Committee ranked the Project highly for its developer’s capacity and in its ability to benefit low-income households and advance Housing Element goals.
If the Board of Supervisors approves the recommendation and conditionally awards the TIF Offset, the developer must execute and record a TIF Offset Affordable Housing Agreement restricting the 30 units for 55 years.
Since implementation of the TIF Fee Offset Program in December 2007, and with approval of the recommendations herein, approximately $5,668,743 in TIF Offsets has been awarded to support the construction of 403 affordable housing units in El Dorado County.
ALTERNATIVES
The Board of Supervisors may choose to:
1) Reject the Department and CAO’s recommendation to approve the TIF Offset request for the Project, which would require the developer to pay the full TIF amount of $463,680 for the income-restricted units; or
2) Conditionally approve a different TIF Offset amount.
PRIOR BOARD ACTION
On December 11, 2007 (Legistar file 07-1822), the Board of Supervisors 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
Approval of this item will conditionally award $436,632 in total TIF Offset Program funding for the development of 30 low-income apartment units. The TIF Offset Program allows for a reduction of TIF through federal and state transportation grant revenues and is not a cash subsidy.
Through the development of this project, and if approved as recommended, the project may contribute the following in additional impact fees:
Department of Transportation: $42,504.00
Diamond Springs-El Dorado Fire Department: $45,303.02
El Dorado County Office of Education: $109,209.00
The Project may qualify for a tax exemption, which could reduce or eliminate property taxes.
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