To address housing affordability and supply, many jurisdictions are adopting inclusionary housing policies. An inclusionary housing policy requires developers to allocate a percentage of new market-rate housing developments for low- and moderate-income families. Inclusionary housing policies provide a wide range of community benefits, including:

- Increasing housing affordability and equity by giving lower-income households more choices on where to live. 

- Reducing housing segregation by spreading affordable housing throughout the community.

- Supporting the City’s efforts to implement the State-mandated RHNA targets.

During community workshops, participants voiced the need for more affordable housing and a diversity of housing options to accommodate current residents and future generations. Hollister’s existing housing stock is approximately 80 percent single-family residential, which limits the housing choices affordable to low-income residents.

However, developers and homebuilders often oppose inclusionary housing policies because it reduces the profit margin of the project. If an inclusionary housing policy does not include incentives to offset the cost, private developers and homebuilders could end up taking their housing development to an adjoining city or county without an inclusionary housing policy.  Incentives such as in-lieu housing fees, allowing off-site construction of affordable units, or accepting an equivalent land donation from the developer for future affordable housing can help offset costs associated with providing the affordable units. California State law requires jurisdictions provide alternative ways to comply with the inclusionary housing policy for rental inclusionary housing.

To ensure that the inclusionary housing policy reflects the local market demand, jurisdictions will often undertake a feasibility study to help determine the appropriate inclusionary housing targets. The feasibility study will assess local residential development conditions, the economic tradeoffs of the potential requirements, and whether the proposed ordinance will produce the housing stock needed by the community.

Over the last few years, the City of Hollister has been laying the groundwork to create an inclusionary housing policy. The 2016 Housing Element includes a policy that calls for the City to create an inclusionary housing strategy that identifies standards by which additional density can be allowed when projects provide a defined percentage of units as affordable to low- and moderate-income households. In 2007, the HMC incorporated an inclusionary housing requirement for conversions of multifamily rental units to market-rate multifamily units. However, the City could expand this policy to be applied to new multifamily residential projects.  

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* 1. Should Land Use and Community Design Element include an inclusionary housing requirement? (Choose one.)

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* 2. If an inclusionary program is to be created, what types of housing developments should it apply to? (Choose one.)

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* 3. If an inclusionary program is to be created, what should be the required percentage of low- and very low-income units? (Choose one.)

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* 4. If an inclusionary program is to be created, should it allow alternative compliance methods?  If so, which ones? (Choose one or more.)