Affordable Housing Requirements for Residential, Mixed-Use Residential, and Live/Work Development Projects

Developers of new housing, including most Group Living Accommodations or live/work development with over 5,000 square feet of residential unit floor area are subject to affordable housing requirements pursuant to Berkeley Municipal Code (BMC) Chapter 23.328 Inclusionary Housing and City of Berkeley Council Fee Resolution No. 70,698-N.S. Projects subject to the Inclusionary Housing requirements under this section must comply with affordable housing requirements through one of the options below: 

• Provide 20% of the units in your building as Below Market Rate units;
• Pay the In-Lieu Fee;
• Provide some Below Market Rate units and pay a prorated In-Lieu Fee; or
• Other options allowed by the chapter, such as an option provide a mix of affordable two- and three-bedroom units or to dedicate land, which will not be covered on this webpage.

Note: Projects that submitted a complete SB 330 Preliminary Housing Development Pre-Application on or before March 31, 2023, or any project that has a building permit issued on or before March 31, 2023 are subject to the City's affordable housing requirements in effect prior to this date.

Provide 20% of units as below market rate housing

For this option, 20 percent of the units in your development must be provided as Below Market Rate (BMR) units for the life of the project. The maximum rent or sales price will be set by the City of Berkeley using the method established by California Health and Safety Code sections 5002.5 and 5003. See BMC Section 23.328.030 Requirement to Construct Affordable Units for additional details.  

For Rental Housing:

• Half of the BMR units must be provided to Very Low-Income households (50 percent of Area Median Income). Very Low-Income units must first be offered to Section 8 and Shelter Plus Care voucher holders, with the allocation split evenly between the two. If there is an odd number of units, Shelter Plus Care voucher holders will be allocated 50 percent of units plus one. 
• Half of the BMR units must be provided to Low-Income households (80 percent of Area Median Income).  
• If an odd number of affordable units are provided, the majority must be Very Low-Income.  

For Ownership Units:

• All units must be sold at a price affordable to Low-Income households (up to 80 percent of Area Median Income). 

Pay the In-Lieu Fee 

If you do not include any BMR units in your project, then you must pay the In-Lieu Fee instead. The full fee must be paid prior to obtaining a Certificate of Occupancy, or, if a Certificate of Occupancy is not required, prior to the initial occupation of the project. The final fee will be determined prior to issuance of a Building Permit as part of the project’s required Affordable Housing Compliance Plan. The fee will be automatically adjusted every two years, based on changes to the California Construction Cost Index. Effective April 1, 2023, the fee for rental or ownership projects for new construction is set as follows: 

BMC Section 23.328.020(J) describes “Residential Unit Floor Area.”  

BMC Section 23.328.050(F)(2) defines exemption for projects with 5,000 square feet or less of Residential Unit Floor Area through April 1, 2025 (or at such time that the Council modifies or repeals this exemption, whichever is sooner).  

Provide some bmr units and pay a prorated in-lieu fee

You may choose to provide fewer than 20 percent of the units of your project as Below Market Rate units and pay a prorated In-Lieu Fee. You will still need to provide at least 50 percent of the Below Market Rate units for Very Low-Income households. The In-Lieu Fee can be calculated by the following formula: 

Fee per Square Foot of Residential Unit Floor Area (see table above)  
x Project Residential Unit Floor Area  
x Percentage of applicable requirement after accounting for any on-site BMR units provided

= In-Lieu Fee 

application requirements

Applicants must submit an Affordable Housing Compliance Plan, which shows how you will comply with affordability requirements, and Regulatory Agreement and Declaration of Restrictive Covenants, an agreement as to how you will manage units that needs to be signed before the City will issue your building permit. 

Affordable Housing Compliance Plan (Preliminary and Final) 

As part of your Use Permit or Zoning Certificate for your project, you are required to submit an Affordable Housing Compliance Plan [link to PDF: Affordable Housing Compliance Plan form] (ACHP). The ACHP outlines how you intend to comply with the City’s affordable housing requirements.  

• You must submit a preliminary ACHP at the time of application. The preliminary ACHP will be included as a Condition of Approval for any Use Permit or Zoning Certificate. 
• You must also submit a final AHCP, which the City of Berkeley must approve prior to the issuance of a building permit. The final ACHP will include the total fee amount due for projects electing to pay an In-Lieu Fee. The In-Lieu Fee can be paid any time prior to the issuance of the project’s Certificate of Occupancy or Temporary Certificate of Occupancy (as applicable). 

Regulatory Agreement and Declaration of Restrictive Covenants  

If you choose to provide Below Market Rate units as part of your project, you must sign and execute a Regulatory Agreement before the City will issue your building permit. You will need to follow City guidelines for managing these units. For more information and to obtain the agreement, please contact AffordableHousing@berkeleyca.gov. 

Related Links

• Resolution No. 70,698-N.S. Adopting Regulations for Voucher Program and Establishing an In-Lieu Fee to Support the Provision of Affordable Housing Pursuant to Berkeley Municipal Code Chapter 23.328 and Rescinding Resolution 70,668-N.S N.S.