Berkeley’s zoning commission approved a mixed-use residential development on Shattuck Avenue in an apprehensive vote last Thursday, rejecting the developer’s request to waive Berkeley’s affordable housing requirement.

Proposed by Berkeley-based Stackhouse De La Peña Trachtenberg Architects, the project will demolish two single-story commercial structures at 2700 Shattuck Ave. The buildings, currently vacant, will be replaced by an eight-story, mixed-use development with more than 350 residential units — including 38 affordable housing units.

Commissioners on the Zoning Adjustments Board, or ZAB, deliberated granting the developer’s request to waive a city fee for not providing enough affordable housing.

In Berkeley, developers are required to pay a fee if less than 20% of their units are affordable housing. The proposed Shattuck Avenue property includes 38 very low-income housing units, or 15% affordable housing.

Very low-income housing is dedicated to residents who earn up to 50% of the area median income, which in Berkeley is about $56,000 for a single person. Low-income housing is reserved for residents who make between 50% and 80% of the median income, or about $88,000.

Under state law, SDT Architects was granted incentives for providing affordable housing. For providing 15% very low-income housing, the company was allowed to add more than 100 extra units. In addition, the developer was entitled to three concessions, or requests to waive city regulations in ways that would make the project less expensive to build.

One of the concessions SDT Architects requested was to waive the city’s 20% affordable housing requirement. City law requires projects that don’t meet that threshold to pay an in-lieu fee — which would amount to more than $2 million for this project.

Legally, cities are not allowed to deny concessions unless they fail to reduce building costs or would negatively impact public health and safety or a historical resource. But city staff said the in-lieu fee was not eligible for a concession.

“Our position is that we’re not denying an eligible request,” said ZAB secretary Sarah Price in the meeting. “Concessions cannot be used to reduce the project’s obligation to provide deed-restricted affordable housing at the specified income levels because it’s contrary to legislative intent.”

After the concession was left out of the staff report, the attorney representing the developer wrote a letter to the ZAB warning that approving the permit without all three concessions would be illegal.

The board first voted on the project without the third concession. The commissioners, hesitant about the legality of denying the concession, voted 4-2 against the motion.

Both chairperson Kimberly Gaffney and commissioner Steven Cramer acknowledged that 15% very low-income housing was likely equivalent to Berkeley’s requirement — which requires developers to include 10% low-income housing and another 10% of very low-income housing.

“I just feel like they could have worked within our [system],” Gaffney said during the meeting. “It just is … making us … set a huge precedent that someone else could take advantage of, even if this project’s not taking as much advantage of it. It’s more about the precedent in my eyes.”

The board’s second vote on the project, this time including the developer’s third concession, resulted in a deadlock, failing again.

In their letter, the developer said they would appeal the decision to the city council if it passed without all three of their concessions.

ZAB commissioners, uneasy about making the decision themselves, ultimately decided to let the petition go to city council.

“(If) it does go to the council, and that is at a higher level … it is not as if the observance of the goings on of this project is being revoked,” said commissioner Peter Choi during the meeting. “It is actually taking it to a higher level for more inspection and more introspection and … for that I would approve.”

During the third and final vote, commissioners voted unanimously to approve the project without the concession for the in-lieu fee.