Sacramento City Council last July approved $3 million to support affordable housing development through its “Zero-Dollar Rate” program which waives fees for development and construction of affordable housing units.
To date, the program has successfully supported eight affordable housing projects, resulting in the construction of 313 deed-restricted units.
“The impact of these developments is tangible, contributing significantly to addressing the citywide need for affordable housing,” said the City’s Principal Planner Matt Hertel. “This initiative was designed to incentivize the construction of affordable and workforce housing throughout the city. Its effectiveness has been remarkable, with funds nearly depleted for the current fiscal year.”
Traditionally, the City collects development impact fees to finance the design, construction and installation of public infrastructure such as roads, lights, sewers and more.
While these fees are essential for supporting public infrastructure, Hertel emphasized that they can act as a significant barrier to the construction of affordable housing units.
Under the Zero-Dollar Rate program, the units developed are income-restricted, ensuring that they remain affordable for individuals earning up to 120% of the Area Median Income for a minimum of 30 years.
As of January, approximately $175,000 remains in the program’s budget for the remainder of the fiscal year, concluding on June 30, 2024.
Anticipating the continued success of the Zero-Dollar Rate Program, City staff are preparing to request a $3 million allocation from the City Council to replenish the program starting July.