Salinas Inclusionary Housing Study and Ordinance
Salinas, California
Salinas, a growing community in central California, has experienced rising home prices as a result of its economic vitality. At the same time, Salinas is home to a deeply-rooted, upwardly-mobile immigrant community, with a strong commitment to home ownership as a key way to achieve wealth creation. BAE was commissioned to design and implement Salinas's first inclusionary housing ordinance, crafted on the heels of a major change to its footprint; the City had just adopted a Specific Plan which will add 50,000 residents in a New Urbanist form over the next 20 years.
With this rapid growth overlaid on rising home prices and rents, the City Council wanted to create an inclusionary requirement which met the needs of both low-income residents and builders of this essentially new community. Thus, the assignment for BAE was to create a set of financial feasible regulations which would not slow market-rate development, and at the same time would meet ambitious affordable ownership goals.
BAE structured a six-month process to create an ordinance that would be acceptable to the development community. The process included forming and facilitating a stakeholder advisory group consisting of local and regional housing developers, affordable housing organizations, and representatives of building industry groups. This Advisory Group met five times to review affordable and workforce housing needs, evaluate costs and rates of return that would result in feasible projects, review BAE-formulated pro formas showing how new prototype projects could mix market rate with inclusionary affordable units (both rental and for-sale), and to refine a series of density bonus and other regulatory incentives to achieve a relatively high inclusionary goal, up to 25 percent of a project's total units in certain conditions. The Ordinance was drafted by legal counsel, and BAE facilitated several large public meetings held in both Spanish and English. The City Council adopted the groundbreaking Inclusionary Ordinance.