HIP Tool: Development Agreements

Development agreements are contracts negotiated between a developer and a local jurisdiction to specify the terms by which a proposed project moves forward. Development agreements are often used to resolve or mitigate site-specific issues that are not well addressed by standard development regulations. These issues often arise from complex or unique projects. They can also be used to formalize an arrangement in which the developer provides certain public benefits (e.g., affordable housing) in exchange for certain concessions by the jurisdiction (e.g., regulatory flexibility, density bonuses).


Background

Development agreements are attractive to developers because they secure approvals at the outset of a project and assure that multi-phased projects will not be subject to regulations adopted after an initial application is approved. Such agreements are mutually beneficial because the jurisdiction can specify the inclusion of public benefits like affordable housing and provide an additional measure to ensure consistency of developments with planning goals.

Development agreements are voluntary for both parties. Agreements must be negotiated with final approval by the legislative body of the jurisdiction. Any development agreement the local government enters into must be consistent with the City’s development regulations. The agreement must be comprehensive and specific on the intent and connection of the public benefit to the development.

Negotiating the agreement may require intensive efforts on the part of local government staff, as well as elected officials. Some jurisdictions hire third parties to help them negotiate on the local government’s behalf.

Tool Profile

Focus Areas

  • Urban Centers
  • Transit Oriented Development
  • Expensive Housing Markets
  • Innovative Single Family Techniques
  • Citizen Education & Outreach

Project Types

  • Single Family
  • Multifamily
  • Ownership
  • Rental
  • Market Rate
  • Subsidized

Affordability Level

  • 80% to 120% AMI
  • Less than 80% AMI

Housing Goal

  • Affordability