Santa Rosa planning officials will begin waiving some of the fees developers charge in hopes of spurring critical housing construction in the city.

The move comes in response to calls from housing advocates for local governments to do more to ease the housing crisis that has trapped many residents.

The city will temporarily suspend all capital facilities fees for certain very low, low and moderate income housing projects under the new pilot program.

Toll revenue helps pay for road upgrades, bicycle and pedestrian infrastructure, storm drainage and public safety infrastructure.

Capital amenity fees are just one of so-called impact fees that developers must pay per housing unit they build — often tens of thousands of dollars per unit — to offset the development’s impact on infrastructure and services.

Housing advocates say the taxes, combined with other construction costs, prevent the development of affordable housing and have called on the region’s elected officials to cut them down drastically at the beginning of this year.

Since 2016, Santa Rosa has been working to streamline development processes, especially downtown. It created building incentives through density bonuses that allow developers to build higher, lower parking requirements and lower taxes.

But while dozens of projects are under construction in the city, requests for new projects, particularly affordable housing, have slowed, said Planning and Economic Development Director Gabe Osburn.

Osburn, who presented the proposal to council on Tuesday, said the waiver could be a “catalyst” to help affordable projects, which often face funding constraints, get off the ground more easily.

He projected that about 300 units in the city’s development pipeline could qualify for the waiver and provide a financial incentive for other projects to come forward.

The City Council approved the program 6-0, absent Council Member Jeff Okrepkie.

The nonprofit housing advocacy group Generation Housing, business groups and other community organizations that have supported the program applauded the move Tuesday.

Patrick McDonell, a legal aid attorney in Sonoma County, said many of his clients are being pushed out of the area by rising housing costs.

“It’s just too expensive here and being a low-income renter in Santa Rosa and Sonoma County in general is basically impossible right now,” he said.

He urged the council to do everything possible to boost housing construction, especially amid concerns that federal housing funding and equity-based programs could dry up under a second Trump administration.

How would the program work?

Capital facility tax exemptions will apply to new deed-restricted housing for residents earning 120% or below the area median income. The median income in Sonoma County for a four-person household in 2024 is $128,400, according to state figures.

Eligible projects will need to obtain a building permit to qualify for the waiver, to ensure that only projects ready to begin construction receive the incentive, Osburn said.

Housing projects that receive funding from the city or loans through the city’s Housing Authority do not qualify.

The fee schedule will be in effect until the city adopts a new impact fee study or for a maximum of three years.

Osburn said the city is initiating a study to update park impact and capital facilities fees to align with new state laws requiring fees to be based on a project’s square footage rather than unit. The study will help determine whether fees are levied in proportion to a project’s impact. The city may look at longer-term tax abatements as part of the study, which could take two years, he said.

Quitting can help ease financial challenges

Planning officials say the proposal could help provide a financial incentive for building very low- and moderate-income housing, particularly where the city has not met state-mandated housing goals.

Santa Rosa must plan 4,685 new units by 2031. Of that, 1,218 must be set aside for very low income, 701 must be designated as low income, 771 must be moderate and 1,995 must be above moderate income.

The city has already approved more than the required number of upper-moderate homes, but is seeing fewer requests for lower-income projects, Osburn said.

The city issued permits for 403 very low-income units available to people earning less than 50 percent of the area median income, about 33 percent of the total units needed in that category. Only 75 moderate-income units have been approved for households earning between 80 percent and 120 percent of the area median income, 10 percent of the state’s required goal.