September 13, 2021

Submitted via email

RE: Monterey County’s Inclusionary Housing Ordinance (Agenda item #14)

Dear Chair Askew and Members of the Board of Supervisors:

We write in regards to Agenda Item 14:

a. Receive a progress report on potential revisions to the County’s Inclusionary Housing Ordinance (Chapter 18.40 of the Monterey County Code);
b. Provide direction regarding existing affordable housing policies in the 2010 General Plan;
c. Provide input and suggestions regarding the level of stakeholder involvement on potential revisions to County affordable housing policies and regulations; and
d. Provide direction on the potential Jobs-Housing Nexus Analysis

LandWatch supports consideration of a non-residential impact fee because the information you gather on alternative means of funding affordable housing is good regardless of the ultimate decision. We also endorse a high level of public participation (e.g., workshops, Planning Commission participation) because more information is better here, too, regardless of decisions ultimately.

Affordable, inclusionary housing (i.e., below-market rate housing) requires subsidies, either from government (such as free land, grants or loans), or from private developers. When private developers are required to provide inclusionary housing, they raise prices on market-rate homes. Such regulations can distort markets and make it more difficult to build housing generally.

As you consider whether to impose a housing fee on non-residential development on the basis of the jobs/housing nexus and what level of public involvement to pursue in updating the Inclusionary Housing Ordinance, we encourage you to obtain further details on the costs and effectiveness of the County’s current Inclusionary Housing Ordinance and its impact on housing supply, demand and equity. Specifically, we recommend you collect data and research the following questions:

  1. What have been the costs and benefits of the County’s current Inclusionary Housing Ordinance since its inception?

How many inclusionary units have been constructed by year? How many total units? How many residents have benefited?

Where are the inclusionary units?

What is the physical condition of the units?

When were the units last audited to ensure that existing owners or renters still qualify?

What does it cost annually to administer?

  1. What impact does the Inclusionary Housing Ordinance have on new housing construction and market absorption in different areas of the County? Should inclusionary housing requirements be the same in Pebble Beach and Big Sur, where high end, market rate units can more easily subsidize affordable units than in Castroville, Spreckels and Boronda?
  2. Should the County change the level imposed on residential development (it is currently 20%, but staff is suggesting you consider 15%)? Should higher and lower rates be also considered? What is the decision criteria for selecting that level: maximization of affordable unit production or maximization of all units production? Who will model the economic and equity impacts?
  3. Should the County modify the workforce housing mandates to reflect the fact that market prices are below the workforce levels?
  4. Should there be requirements regarding concurrency, that is, requirements that affordable and market rate housing be built at the same time?
  5. Should in lieu fees be restricted to maximize on-site, concurrent, integrated provision of lower income units?
  6. How about integration? How will the County comply with the new Affirmatively Further Fair Housing (AFFH) obligations in AB686? (See HCD’s guidelines for compliance at
  7. What incentives should the County adopt other than the Inclusionary Housing Ordinance to create affordable units? Increased density bonus rewards? Rezone areas in the IH overlay for minimum density? Water preferences?
  8. Should the County create zoning preferences for apartments, townhouses and other high density residential units, which by design are more affordable than single family homes?

Here are some recent article and research papers on this topic:

Thank you for your consideration.