“I love it when we’re a test case”: Gainesville City Commission passes Inclusionary Zoning ordinance on first reading

BY JENNIFER CABRERA

GAINESVILLE, Fla. – Late in the evening of their July 18 meeting, the Gainesville City Commission passed an Inclusionary Ordinance on first reading, reducing the minimum threshold for mandatory affordable housing units from 50 to 10 units in the project.

The two Inclusionary Zoning ordinances, which were taken up at about 10:45 p.m. after a lengthy discussion about a minimum lot size ordinance, included a Comprehensive Plan amendment and text change to allow for density bonuses for affordable housing developments.

Mandatory affordable housing units in multi-family developments

Lead Planner Brittany McMullen said staff was “really excited” about the proposal, which applied only to multi-family developments. She defined inclusionary zoning (IZ) as “a process where developers provide affordable housing in exchange for offset incentives”; the proposal allows developers to build up to 50% more units than what the zoning would typically allow if they make 10% of the units “affordable.”

“Affordable” in this case means that no more than 30% of household income is spent on rent for households with an income for all members that does not exceed 80% of the most current Area Median Income (AMI). The proposed ordinance stated that if 50 or more new residential dwelling units are created in specific zoning districts (transect zones and downtown), a minimum of 10% of the total number of units must be reserved for renters at 80% AMI. 

In exchange for reserving 10% of the units as affordable housing at 80% AMI, the developer can receive a 30% density bonus. Staff recommended that if the development has fewer than 50 units, compliance would be voluntary in exchange for the density bonus. For developments for which the 10% is mandatory, the developer also has the option to pay a fee in lieu of providing affordable units.

Developers who provide units at 50% AMI can get a 40% density bonus, and 30% AMI leads to a 50% density bonus. Also, any 10-unit interval above the minimum can earn a 10% density bonus, but all bonuses are maxed out at 50%, including the existing tree preservation bonus. 

Affordable units must be comparable to market-rate units and should be dispersed throughout the development. The affordability period lasts until the building is demolished or converted to a non-residential use. Affordable units will also be offered expedited application processing, can have three additional stories above bonus height, have reduced fees, and have more flexibility with form and design standards.

According to McMullen, these offsets satisfy a requirement in Florida law that local governments seeking to use IZ policies must fully offset all costs to a developer.

The City Plan Board recommended approving the ordinances with a 10-unit threshold for mandatory inclusionary zoning.

Public comment

During public comment, Dillon Boatner said that making the threshold 50 units was a “slap in the face” to renters and also asked the Commission to apply it in every multi-family zoning district in the city. Bobby Mermer from the Alachua County Labor Coalition asked for the same changes, adding that making the threshold higher helps larger complexes “get around the requirement” by redeveloping smaller sections of the complex at a time. One other person made the same points, and Robert Mounts said Gainesville Neighborhood Voices had “no real objections” to the IZ proposals and encouraged the Commission to consider revisiting the minimum lot size ordinances they had just passed.

John Michael Fernandez, the Director of Local Government Affairs for the North Central Florida Apartment Association, said they had “significant concerns” about whether the ordinance met the requirements of Florida statutes and believed the ordinances could “stifle multifamily housing development construction”; the association asked the Commission to leave the threshold at 50 units.

Saco: “I was elected to take bold action to help move forward and create more housing”

Commissioner Reina Saco, who is a member of the Affordable Housing Advisory Committee, said the committee had “a lot” of meetings on the proposed ordinance, and “we peddled a plan of a 10-unit threshold, and there was no mention of transect zones.” She said the committee was “not happy” with the recent changes. She said she understood why staff was proposing a 50-unit threshold, given the relatively new statute that requires the City to offset the cost to developers.

Motion

Saco said she understands legal risk, but “I was elected to take bold action to help move forward and create more housing… Our job is to… weigh those risks and make a choice. The choice I’m going to make today… is staff recommendation, but with a 10-unit threshold, and that it be in all zones that allow multifamily zoning. That is my motion.” Commissioner Casey Willits seconded the motion.

Saco: “I love it when we’re a test case, but I’d rather try and have to try again later than go for something mediocre.”

Saco continued, “My understanding is – the laws on how to compensate are relatively new; there isn’t a lot of jurisprudence on it just yet. So we may be a test case – I love it when we’re a test case, but I’d rather try and have to try again later than go for something mediocre. And I wasn’t elected to do something mediocre. I was elected to try to do something good.”

Commissioner Bryan Eastman proposed making three other changes, and Saco and Willits accepted two of them: removing a height bonus for incorporating structured parking that is currently in the land development code and giving staff discretion to decide which compatibility requirements would need to be met. Eastman said that having a height bonus for a parking structure “significantly reduces the incentive to create affordable housing.”

Ordinance is “breaking new ground”

Senior Assistant City Attorney Sean McDermott said staff had recommended the 50-unit minimum and the transect/downtown zones because the height bonus must, by law, have value to a developer because the incentive must cover the developer’s extra costs for the affordable housing units, and that is less true for smaller projects and projects in lower-demand areas. He said, “There are legal risks inherent to this ordinance, maybe more than most land use ordinances that are before you… It is breaking new ground, and it will be complicated on a project-by-project basis.” He said staff would have a “lot on their plate” in negotiating with developers and getting the developers to “hopefully [agree] that their costs are fully covered by the City like they have to be.”

Commissioner Ed Book said he was afraid that the lower threshold might lead to developers choosing not to build at all, and “as a result, we may not get more affordable housing.” He also said that starting with transect zones was like a pilot project that would allow them to evaluate the policy before extending it to the whole city. 

Saco: “we’re going to get sued, regardless of what we do here today… So go for the big one”

Saco speculated that a developer would go to “the three highest bidders on purpose” to provide the costs of providing affordable housing units and asked how staff determines the value of flexibility to offset the developer’s costs; the answer was that it will be done on a case-by-case basis. Saco said she “heard [that] we’re going to get sued, regardless of what we do here today… So go for the big one – worst case they can do is hand it back,… [and] we get told to scale back. I’m willing to take that fight.”

Attorney: “I don’t want to say that’s necessarily the best way to go.”

McDermott said he didn’t want to use “scare tactics,” but if the City and a developer can’t agree on whether costs are covered, leading to a denial of the development, the developer will likely sue, and the City could be responsible for economic damages, potentially “a lot” of money, along with the risk that housing won’t be developed. McDermott concluded, “So it’s hard to thread the needle, which doesn’t necessarily lend itself to ‘Let’s just go huge and see what happens’… I don’t want to say that’s necessarily the best way to go.”

The motion passed 6-1, with Book in dissent.

The Commission then took up the text change portion with a similar motion, and the motion passed 6-1, with Book in dissent.