On January 10, 2023, the Rocklin City Council adopted Ordinance Number 1159, which established a program for development projects to receive a reduction in development impact fees for deed restrict affordable units in the project. 

• Ordinance No. 1159
• Fee Reduction Application

Approval of this fee reduction is subject to verification by the City. The reduction in fees shall only apply to those dwellings that qualify as an affordable unit as defined below. Dwellings in the affordable housing development which do not qualify as affordable housing units shall not qualify for the development impact fee reduction program. If approved, the fee reduction will apply only to the Park Improvement, Trail, Community and Recreation Facilities and Public Facilities Impact Fees. All other impact fees imposed by the City, and other entities or agencies shall be paid in accordance with applicable statutes, resolutions, ordinances and regulations.

To be eligible for this fee reduction, an “affordable housing development” means a development where any number of dwellings are sold at an affordable housing price or are rented at an affordable rent calculated as affordable for households earning 60% or less of the Area Median Income (AMI) for Placer County as determined by the California Department of Housing and Community Development.

The “affordable housing unit” or “affordable unit” means (a) rental dwelling unit to be occupied by low income at no greater than 60% AMI, very low and extremely low income households as defined in Health and Safety Code section 50079.5, and offered at an affordable rent for a period of at least (55) years; or (b) a dwelling unit sold at an affordable housing price for a period of at least thirty (30) years, and to be occupied by low income at no greater than 60% AMI, very low or extremely low income households as defined by Health and Safety Code section 50079.5

“Affordable rent” means: (1) for a unit whose occupancy is restricted to low income households, a monthly rent consisting of a maximum of one-twelfth of thirty (30) percent of sixty (60) percent of the median income applicable to the city; (2) for a unit whose occupancy is restricted to a very low income household, a monthly rent consisting of a maximum of one-twelfth of thirty (30)percent of fifty (50) percent of the median income applicable to the city; (3) for a unit whose occupancy is restricted to an extremely low income household, a monthly rent consisting of a maximum of one-twelfth of thirty (30) percent of thirty (30) percent of the median income applicable to the city. In all cases the median income applicable to city is as determined annually by the United States Department of Housing and Urban Development. Maximum rent is adjusted for household size appropriate to the unit, less a reasonable allowance for utilities, as published by the Roseville Housing Authority, or its successor agency.

“Affordable housing purchase price” means a sales price at which low income no greater than 60% AMI, very low income and extremely low income households can qualify for the purchase off or-sale affordable units. Qualification shall be based on no more than thirty five (35) percent of income at sixty (60) percent of the area median income, fifty (50) percent of the area median income or thirty (30) percent of area median income applicable to the City of Rocklin respectively, being applied to housing expenses, which shall include mortgage principal and interest, taxes, insurance, assessments, and homeowner fees, as applicable.

Approval of applications for development impact fee reduction shall be conditional and subject to the recordation, prior to the issuance of any building permits for the qualified residential project or within 60 days of approval, whichever is earlier, of the following documents:

1. A site and project specific reduction agreement
2. An affordability covenant

If Low and Moderate Income Housing Asset Fund (LMIHAF) dollars are available, private projects requesting a commitment of funding must first demonstrate a gap in funding by submitting pro-forma that is then verified by an independent third party selected by the City. Based on the analysis of the pro-forma, staff would recommend a dollar amount of $40,000 per EL or VL unit to be developed. Any investment of the City’s Low-Mod Fund would be in the form of a city loan, memorialized in an Affordable Housing Agreement between the developer and the City. The loan would be a residual receipts loan, which would carry an interest rate of 3% per year and would be repaid from 50% of the project’s net annual cash flow, with any remaining balance due and payable at the end of 30-year term.

Fee Deferral is a voluntary program provided by the City of Rocklin’s Affordable Housing Incentive Program to reduce cost barriers for eligible low and very low-income housing projects within the City. The program allows developers to enter into a formal agreement with the City to defer certain impact fees. 

• Fee Deferral Application

Eligibility Requirements

The housing development for which fee deferrals are requested under this program must be a “Qualified Residential Development Project”, including: (1) at least 10% of units with Affordable Rents or Affordable Housing Costs for Very Low-Income Households; or (2) at least 49% of units with Affordable Rents or Affordable Housing Costs for Low Income Households.

Any request for a Fee Deferral would require completing an application, preliminary title report, and execution of agreement, promissory note and deed of trust which may be subordinated to construction and acquisition financing. Fees become payable and interest penalties apply if the project does not provide the affordable housing units promised by Certificate of Occupancy, approximately 24-30 months after construction begins. This assumes the impact fee rates will be locked in at time of permit and not increase during the fee defer.  

To ensure compliance and payment of deferred fees, a deed of trust would be recorded against the property to secure the fee amount. Deferring payment of fees to allow for occupancy is a valuable incentive that offers significant savings, as developers would otherwise have to finance this expense, generally from equity, which requires a return once it is funded.

Eligible Fees

The following City of Rocklin Impact Fees may be deferred with an approved fee deferral agreement:

1. City Park Development Fee
2. City Traffic Fee
3. Community & Recreation Center Impact Fee
4. Construction Tax
5. Park Improvement Impact Fee
6. Public Facilities Impact Fee
7. Trails Impact Fee