CITY COUNCIL REGULAR MEETING AGENDA PACKET

Pleasanton Comprehensive Fee Update and Nexus Study November 2024 27 Commercial Linkage Fee The commercial linkage fee is charged to non-residential development, exclusively, in order to mitigate its impact on the need for affordable housing in the city. Development of nonresidential buildings in the city will attract tenants or businesses who, in turn, hire additional workers. The wages of a significant portion of the new workers will be inadequate to support sufficient rent prices to attract residential developers to provide housing opportunities without further subsidy. The fee will be used to help to fill the “affordability gap” for housing development and increase the number of homes available for the local workforce. As a development impact fee, this linkage fee can only be charged to new development and must be based on the impact of new development on the need for resources to subsidize the development of new affordable housing. Fee revenue may be collected by the City and used to subsidize the production or preservation of affordable units for lower-income households. Expenditures may include, but are not limited to, direct contributions to affordable housing developers, land acquisition, and funding local match requirements to leverage other funding opportunities. This use of funds is consistent with how the City has been using commercial linkage fee revenue collected since the fee’s adoption, and consistent with Chapter 17.40 of the Pleasanton Municipal Code, the enabling legislation for the City’s Affordable Housing Fee. Methodology Estimates for Level of Service The City of Pleasanton currently has over approximately 1,000 affordable (non-senior) housing units for an employment base of 41,319 workers.3 This represents a ratio of 0.024 affordable units per worker. The “adjusted maximum” linkage fee levels identified herein would allow the City to subsidize a greater number of affordable units per worker than the current ratio – 0.5 per Commercial worker, 0.2 per Office worker, 0.5 per Lodging worker, and 0.4 per Industrial worker.4 These higher proportions may be appropriate given the shortfall of such affordable units in the city, region, and state, and the impacts of new commercial development on the city’s need for affordable housing. 3 Assisted rental unit count is from the City of Pleasanton Community Development department as of 2024. The employment base is from the US Census Bureau, ACS, Five-Year Estimates, 2022. 4 Proportions are calculated as the number of affordable units that could be subsidized by the maximum fee on a 100,000 square foot space, divided by the total number of employees that would work in a given building type (as shown on Table 18). Page 88 of 893