An inclusionary housing fee is now on the table in Manteca.

And based on a previous inclusionary housing fee analysis that was presented Sept. 1, 2022 during a workshop for the Manteca Planning Commission, it  could be expensive.

The Manteca City Council when they meet tonight at 6 p.m. is being asked to approve a $76,700 contract with DeNovo Planning to conduct an update of the 2022 study. In doing so, it would give elected leaders the ability to impose an inclusionary housing fee.

It is part of a state-mandated update to city’s element.

The bottom line of the 2022 inclusionary housing fee analysis indicated the price of one of the least expensive new homes available at the time  in Manteca would have jumped $31,106 if the maximum proposed fee designed to promote affordable housing was in place.

The $31,106 fee — had it been in implemented and in effect at the time — would have added $557,990 to the base price of a 1,845 square-foot home with three bedrooms and two bathrooms being offered to buyers back in 2022 at 1486 Dorona Lane.

The new home was in  the North Main Commons neighborhood on the southeast corner of North Main Street and Northgate Drive.

It should be noted the City Council did not adopt the inclusionary housing fee at the time nor does one currently exist in Manteca.

Also that $31,106 fee was on the ultimate high end of the nexus study at the time justified charging.

The fee is based on the square footage of homes and multiple family projects that are built.

It is designed to generate money to somehow provide affordable housing  for very low-income , low-income and moderate income households in Manteca.

Those income levels are defined on a sliding scale based on the size of a household using the annual area median income  (AIM) .

For a family of four the 2022 AIM annual income for Manteca-Lathrop-Tracy-Mountain House-Ripon was $75,000. The four other nearby communities likely have somewhat higher annual median incomes based strictly on the incomes needed to buy new houses in those new communities

Based on the $75,000 AIM, it meant housing such a fee would fund via the city, non-profits or incentives for the private sector building  new homes would reflect annual incomes for households of four people as follows:

*$37,500 for very low income households that can afford a maximum monthly rent of $937.50 or a maximum home purchase of $129,280.

*$60,000 for moderate-income households that can afford a maximum monthly rent of $1,500 and a maximum home purchase of $217,630.

*$90,000 for moderate income households that can afford a maximum monthly rent of $2,430 and a maximum purchase price of $328,120.

The annual incomes were taken from a chart that is part of the previous study the city commissioned. They reflected, at the time, the maximum level that a buyer or renter the city might assist could make to qualify for the various assistance scenarios.

The 2022 analysis contended a maximum fee of $16.86 per square foot for a single family home and $21.08 per square foot for an apartment complex was justified in Manteca.

The translates, based on the previous study, to a maximum justifiable fee of:

* $16.5 million for a typical 404 home subdivision.

*$40,920 for a 2,427 square foot house.

*$2.898,420 for a 148-unit at-market multi-family development such as an apartment complex.

*$19,584 for an apartment that is built with 929 square feet.

The existing analysis offered four scenarios the city could consider implementing.

Using a single family home those scenarios reflect:

*$16.86 per square foot for a 100 percent maximum fee.

*$8.44 per square foot for 50 percent of the maximum fee.

*$4.21 per square foot for 25 percent of the maximum fee.

*$1.69 per square foot for 10 percent of the maximum fee.

Practically speaking, anything less than a 100 percent fee wouldn’t allow the city to do much of anything given inflation and rising construction and land costs.

And without maximum fees, the account for affordable housing could accumulate money for years as have some other of the city’s growth fee-related accounts without anything being  done. Meanwhile inflation, market forces, and the cost of construction is likely to eat away at whatever money the city has squirreled away.

An inclusionary housing fee is only one “tool” the city could employ to create more affordable housing opportunities.

Others include:

*Increasing the average housing density from 8 homes to 10 homes per acre.

*Requiring a set percentage of homes built to have smaller footprints of around 1,100 to 1,200 square feet as opposed to the 1,600 to 3,600 square foot tract homes that are now being built.

*Providing incentives for builders willing to develop entire neighborhoods aimed at the Northern San Joaquin Valley market as opposed to the Bay Area market.

*Devising requirements that at-market apartment complexes that are being built have a higher percentage of smaller units.

*Encouraging new tract homes to be built with smaller secondary units often called granny flats that could be rented.

*Requiring or incentivizing the building of some homes with secondary master-suites with small kitchenettes that would have separate exterior entrances.

It is clear homes being built in Manteca serve as the affordable housing solution for Bay Area communities where  families are being squeezed out of the housing market west of the Altamont Pass.

A previous council four years ago when they asked for the original study to be done of a possible affordable housing fee on new growth, indicated they were searching for a solution that would make rental and possibly owner occupied housing within the reach of those that work in Manteca and nearby cities that often do not get paid as much as those with Bay Area jobs.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com

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