Affordable Housing Requirements for Developers

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. 71,674-N.S. Projects subject to Inclusionary Housing must comply with 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 and are approved at the City's discretion, such as an option to provide a mix of affordable two- and three-bedroom units or to dedicate land, which will not be covered on this webpage.

Provide 20% of units as below market rate housing

Twenty 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 required BMR units must be affordable to Very Low-Income households (50 percent of Area Median Income) and the remaining BMR units shall be affordable to Low-Income households. A portion of the Very Low-Income units must be designated for Section 8 and Shelter Plus Care voucher holders.

For Ownership Units:

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

Pay the FULL In-Lieu Fee 

If you do not include any BMR units in your project, then you must pay the In-Lieu Fee. 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 (AHCP). The fee will be automatically adjusted every two years, based on changes to the California Construction Cost Index. The in-lieu fee is calculated based on the fee amount that is current as of the time a project's building permit is issued.

Effective July 1, 2025, the rental or ownership projects fee for new construction is $62.83 per square foot.

Projects that pay the full in-lieu fee are eligible to deduct 5,000 square-foot from the Residential Unit Floor Area calculation.

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. A minimum of 50 percent of the required Below Market Rate units must be affordable to Very Low-Income households and the remaining BMR units shall be affordable to Low-Income households. The In-Lieu Fee can be calculated by the following formula: 

Note: Projects that apply for a Density Bonus will have the fee applied to the base project's RUFA. Projects that pay the full in-lieu fee are eligible for a 5,000 square-foot deduction in the RUFA calculation.

application requirements

Applicants must submit an Affordable Housing Compliance Plan (AHCP), which shows how you will comply with affordability requirements, and Regulatory Agreement and Declaration of Restrictive Covenants. These must be executed 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 AHCP. The AHCP outlines how you intend to comply with the City’s affordable housing requirements.  

• You must submit a preliminary AHCP at the time of application. The preliminary AHCP will be included as a Condition of Approval for any Use Permit or Zoning Certificate.
• You must also submit a final AHCP, including an AHCP plan sheet, which the City of Berkeley must approve prior to the issuance of a building permit. The final AHCP 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), or, if a Certificate of Occupancy is not required, prior to the final building permit inspection. 

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 BMR Administrative guidelines for managing these units. For more information and to initiate the regulatory agreement process, 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.