City leaders moving cautiously in consideration of additional requirements for housing, commercial developers

Inclusionary housing policies have been discussed in the city for years, but never implemented. Should Palm Springs officials approve them, some would be the first of their type in the Coachella Valley.
The supply of new housing in Palm Springs has increased in recent years, but very little has been sold or set aside to be sold below market rate.

Palm Springs officials discussing whether to place additional requirements on developers designed to bolster affordable housing stock in the city are moving forward with exploring the idea. However, they are doing so with extreme caution.

At its last regular meeting on July 24, the Palm Springs City Council unanimously directed city staff to begin drafting ordinances that would establish inclusionary housing policies here. Typically, those policies include the following:

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  • Housing developers would be required to set aside a percentage of their projects at a lower cost or pay in-lieu fees that go to help build affordable housing; and

  • Developers of new commercial properties would be charged commercial linkage fees that help fund affordable housing projects for workers who will be employed by the new businesses they are building.

The policies, which city leaders were told could amount to hundreds of thousands in additional revenue, have been discussed here for years, but never formally introduced. Should Palm Springs adopt all of them, it would be the first city in the Coachella Valley to do so.

That, combined with the fact some experts point out that more studies are needed to determine if the policies work, led city staff to issue a word of caution in April when the policies were first discussed by the city’s Planning Commission.

That review took place after months of discussions and public input meetings involving a five-person workgroup of housing advocates, builders, and one member of the Planning Commission, Lauri Aylaian. At the July City Council meeting, it was clear even more discussions will need to take place.

While Deputy City Manager explained the policies would receive public hearings in front of both the Planning Commission and City Council, councilmembers said discussions with key stakeholders, including developers, should come well before the policies reached that stage.

“I want to support what’s being brought forward here,” said Councilmember Lisa Middleton, “but what we have heard this evening is an incredibly intelligent, complicated discussion that simply leads to one question: How much more cost can we put on a builder before they walk away? And that’s the question that every builder that is considering building in Palm Springs is going to ask themselves.

“There’s no way to take and put this in place other than to admit that we are adding cost to building in Palm Springs and we are going to make it more difficult.”

Also at issue is the matter of timing. With thousands of homes already built or permitted on some of the last remaining large plots of land in the city — including the Escena and Miralon developments — the days of large housing projects may be over.

“We’ve been talking about this for a long time,” said Mayor Grace Garner. “It’s something I wish we had looked into 10 years ago to see what was possible.”

“I want it to work,” she added. “If we charge less in fees than what’s ideal in our minds, then that’s what it needs to be. We don’t have as much land as we once did. We are working with a very small number of opportunities and we want to get that right.”


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