In March 1999, San Luis Obispo adopted the first inclusionary housing program in the County.  The new program was designed to expand the number and type of dwellings affordable to low- and moderate-income households in the City.  It requires most new residential and commercial development to contribute to affordable housing, either by constructing affordable housing with the project or by paying an “in-lieu” fee to the City’s Affordable Housing Fund to help affordable housing development throughout the City.  The program applies to both residential and commercial development.  In new residential subdivisions in expansion areas, 15% of the dwellings built must be sold at prices affordable to low- and moderate-income households.  Most new commercial projects must include affordable housing, build it offsite, or pay into a citywide affordable housing fund.  Affordable units must remain so for either 30 years or, for for-sale properties, the owner may chose to participate in the "shared equity program."  In this program, the owner may sell the affordable property within six years of initial sale by sharing the property's built up equity value with the City upon resale of the affordable unit.  Funds generated are then used to develop additional affordable housing.  So far, the program has produced about 103 affordable units and generated almost three and a half million dollars in in-lieu housing fees. 

On March 30, 2004, the City Council approved modifications to the Inclusionary Housing Requirements. These changes were necessary for the implementation of policies established in the recently approved Housing Element. For more information on this program, refer to the Inclusionary Housing Ordinance or contact the Community Development Department.