Chapter 18.130
INCLUSIONARY HOUSING1
Sections:
18.130.010 Purpose and intent.
18.130.030 Inclusionary requirements.
18.130.050 Affordable housing standards.
18.130.060 Inclusionary housing plan.
18.130.070 Alternative means of compliance.
18.130.080 Inclusionary housing affordability covenant.
18.130.090 Eligibility for inclusionary units – Owner occupancy required.
18.130.100 Affordable sales price and long-term affordability restriction.
18.130.110 Adjustments and waivers.
18.130.120 General prohibitions and enforcement.
18.130.130 Temporary suspension.
18.130.010 Purpose and intent.
The purpose and intent of this chapter, which shall be known as the “Calimesa inclusionary housing ordinance,” are the following:
A. To encourage the development and availability of housing affordable within the city to a broad range of households with varying income levels;
B. To promote the city’s goal of adding affordable housing units to the city’s housing stock;
C. To increase the availability of housing opportunities for low and moderate income households within the city limits in order to protect the economic diversity of the city’s housing stock, and to ultimately reduce traffic, commuting and related air quality impacts within the region, and to encourage the quality of life unique to the city of Calimesa;
D. To implement policies of the housing element of the general plan, including:
1. Adopting an inclusionary housing program to meet the housing needs of those not currently served by other housing programs; and
2. Encouraging the development of housing for first-time home buyers, including low income households;
E. To mitigate the fact that new housing developments increase the local demand for services and thereby expand the need for new low wage jobs, increasing the demand for low income housing in the city; and
F. To ensure that the imposition of the inclusionary housing requirements occurs at a time when the housing market has improved to a level that the requirements do not unduly hinder or impede housing development projects in the city. [Ord. 320 § 2, 2012; Ord. 304 § 2, 2011.]
18.130.020 Definitions.
The terms used in this chapter shall have the meanings set forth below:
“Affordable sales price” means the maximum sales price to be paid by a low income household for an inclusionary unit, to be determined as follows:
A. Determine the “annual income for a lower income household” as follows:
1. Determine the average number of bedrooms per unit in the proposed residential development.
2. Round up the number of bedrooms from subsection (A)(1) of this defintion to the next whole number to determine the applicable household size.
3. Determine the area median income, as defined in this section, for a household of the size determined in subsection (A)(2) of this definition.
4. Multiply the area median income determined in subsection (A)(3) of this definition by 0.80 to determine the “annual income for a lower income household.”
B. Determine the “monthly household allowance available for a mortgage payment” as follows:
1. Multiply the “annual income for a lower income household” determined in subsection (A)(4) of this definition by 0.35 to determine the “annual housing allowance.”
2. Divide the “annual housing allowance” by 12 to determine the “monthly housing allowance.”
3. Multiply the “monthly housing allowance” by 0.80 to determine the “monthly household allowance available for a mortgage payment.”
C. Determine the “maximum mortgage” that can be financed as follows:
1. Find the “prevailing interest rate,” which shall be the historical daily required net yield for the prior month for a 30-year fully amortized fixed-rate single-family home mortgage, as identified by Fannie Mae;
2. Determine the “maximum mortgage” that can be financed at the “prevailing interest rate” determined in subsection (C)(1) of this definition based on the “monthly household allowance available for a mortgage payment” determined in subsection (B)(3) of this definition.
D. Determine the “affordable sales price” by dividing the “maximum mortgage” determined in subsection (C)(2) of this definition by 0.80.
“Applicant” means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities that seeks city approvals for all or part of a residential development.
“Area median income” means the median household income, provided in Section 50093(c) of the California Health and Safety Code, as amended, that is applicable to Riverside County and adjusted for family size as published and annually updated by the United States Department of Housing and Urban Development.
“CMC” means the Calimesa Municipal Code.
“Household” means one person living alone or two or more persons sharing a residency whose income is considered for housing payments.
“Inclusionary housing plan” means the applicant’s proposal for compliance with this chapter for a particular residential development.
“Inclusionary unit” means a dwelling unit that will be offered for sale to low-income households, at an affordable sales price, in compliance with this chapter.
“Low-income household” means a household whose income does not exceed 80 percent of area median income.
“Market-rate unit” means a dwelling unit in a residential development that is not an inclusionary unit.
“Residential development” means any of the following: (A) a subdivision resulting in the creation of 20 or more residential lots or residential units; (B) the new construction of a project consisting of 20 or more for-sale dwelling units, whether in a multifamily development or a development of single-family homes; or (C) the conversion of 20 or more rental units to condominium ownership.
“Unit size” means all of the usable floor area within the perimeter walls of a dwelling unit, exclusive of open porches, decks, balconies, garages, basements, cellars that extend no more than two feet above finished grade, and attics that do not exceed a floor-to-ceiling height of five feet. [Ord. 320 § 3, 2012; Ord. 304 § 2, 2011.]
18.130.030 Inclusionary requirements.
A. General Requirement. For all residential developments, as defined in CMC 18.130.020, at least five percent of the total lots or units created must be offered for sale as inclusionary units restricted for owner occupancy by low-income households.
B. Rounding. In determining the number of inclusionary units required by this section, any decimal fraction less than 0.5 shall be rounded down to the nearest whole number, and any decimal fraction of 0.5 or more shall be rounded up to the nearest whole number.
C. Affordable Sales Price. Inclusionary units must be sold at a price affordable to low-income households, calculated according to the definition in CMC 18.130.020, or as otherwise described in a city affordable housing policy effective on the date of the planning commission’s approval of the inclusionary housing plan. [Ord. 304 § 2, 2011.]
18.130.040 Exemptions.
The requirements of this chapter shall not apply to the following types of development projects:
A. Residential dwelling units that are offered for lease rather than for sale.
B. The reconstruction of any residential units or structures which have been destroyed by fire, flood, earthquake or other act of nature, which are being reconstructed in a manner consistent with the requirements of CMC Title 15.
C. Residential developments that comply with the density bonus ordinance pursuant to Chapter 18.125 CMC.
D. Applications deemed complete prior to the effective date of the ordinance codified in this chapter.
E. A residential project that is the subject of a development agreement or regulatory agreement that expressly provides for exemption from this chapter or provides for a different inclusionary requirement from that specified by this chapter. [Ord. 304 § 2, 2011.]
18.130.050 Affordable housing standards.
Inclusionary units must conform to the following standards:
A. Design. Inclusionary units must be comparable in construction quality and exterior design to the market-rate units. Inclusionary units may have different interior finishes and features than market-rate units so long as the interior features are durable, of good quality and consistent with contemporary standards for new housing.
B. Size. The average number of bedrooms in the inclusionary units must equal or exceed the average number of bedrooms in the market-rate units. Inclusionary units shall have the number of bathrooms equal to that of a market-rate unit of the same number of bedrooms. The average unit size of each inclusionary unit shall equal or exceed the average unit size of the market-rate units.
C. Timing. Inclusionary units shall be provided concurrently with or prior to the related market-rate units. In phased developments, inclusionary units shall be provided in proportion to the number of units in each phase of the residential development.
D. Duration of Affordability Requirement. As stated in the inclusionary housing affordability covenant, inclusionary units shall be restricted for a minimum of 55 years to ownership by low-income households.
E. Location. Except as otherwise provided in this chapter, inclusionary units shall be constructed on site and shall be reasonably dispersed throughout the residential development.
F. Access to Amenities. Households occupying inclusionary units shall have the same access to the amenities and recreational facilities in the residential development as households occupying the market-rate units. [Ord. 304 § 2, 2011.]
18.130.060 Inclusionary housing plan.
A. Every residential development to which this chapter applies shall include an inclusionary housing plan as part of the initial application for the development plan, tentative map, or other discretionary approval to which this chapter applies.
B. No application for a development plan, tentative map, or discretionary approval for a residential development to which this chapter applies may be deemed complete until the accompanying inclusionary housing plan, containing the requirements of this section, is received and deemed complete by the community development director.
C. At any time during the review process, the community development director may require from the applicant additional information reasonably necessary to clarify and supplement the inclusionary housing plan, or determine the consistency of the project’s proposed inclusionary housing plan with the requirements of this chapter.
D. An inclusionary housing plan must include the following:
1. The number, location, structure (attached, semi-attached, or detached), and size of the proposed market-rate and inclusionary units and the basis for calculating the number of inclusionary units;
2. A floor or site plan depicting the location of the inclusionary units and the market-rate units;
3. The income levels to which each inclusionary unit will be made affordable;
4. The methods to be used to advertise the availability of the inclusionary units and select the eligible purchasers;
5. For any phased development, a phasing plan that provides for the timely development of the number of inclusionary units proportionate to each proposed phase of development;
6. Any alternative means designated in CMC 18.130.070 proposed for the development along with information necessary to support the findings required by CMC 18.130.070 for approval of such alternatives; and
7. Any other information reasonably requested by the community development director to assist with evaluation of the plan under the standards of this chapter. [Ord. 304 § 2, 2011.]
18.130.070 Alternative means of compliance.
An applicant may submit an inclusionary housing plan that proposes one of the alternative methods of compliance described in this section. The city may approve, conditionally approve, or deny such a proposal in accordance with the findings described herein.
A. Off-Site Construction. The required inclusionary units may be constructed off-site if the planning commission (or the city council on appeal) finds as follows:
1. The unit size and number of bedrooms of the proposed off-site inclusionary units would be greater than that of the inclusionary units if they were built on site;
2. The off-site inclusionary units would allow for significantly reduced sales prices;
3. The off-site inclusionary units would be provided prior to the completion of the market-rate units;
4. The proposed location of the off-site inclusionary units would be accessible to public transit, commercial areas, or public services.
B. Dedication of Land. In lieu of building inclusionary units on site or off site, an applicant may dedicate land to the city (or a city-designated nonprofit housing developer) if the planning commission (or the city council on appeal) finds as follows:
1. The land to be dedicated is appropriately zoned and otherwise suitable for construction of the number and type of inclusionary units that would be required to be built on site; and
2. The value of the land to be dedicated is roughly equivalent to the value of the land and amount it would cost the applicant to construct the required number of inclusionary units on site; and
3. The city, or the city-designated nonprofit housing developer, has adequate funding sources to construct the required inclusionary units on the dedicated land; and
4. The proposed location of the off-site inclusionary units would be accessible to public transit, commercial areas, or public services; or
5. In the alternative, in the event that subsections (B)(1), (B)(2), (B)(3) and (B)(4) of this section, or any one of those, is not satisfied, the dedication of land would accomplish specific housing goals set forth in the city’s general plan. [Ord. 304 § 2, 2011.]
18.130.080 Inclusionary housing affordability covenant.
A. Prior to issuance of a grading permit or building permit, whichever is requested first, an inclusionary housing affordability covenant must be approved and executed by the community development director and the applicant/owners, and recorded against the title of each inclusionary unit.
B. If the residential development involves the subdivision of land or airspace into individual lots or units and a final map has not been approved and recorded at the time the applicant requests a grading permit or building permit, an interim inclusionary housing affordability covenant shall be recorded against the whole of the property to be subdivided, and shall be replaced by separate recorded inclusionary housing affordability covenants for each lot or unit prior to the sale of any lot, airspace or condominium unit. [Ord. 304 § 2, 2011.]
18.130.090 Eligibility for inclusionary units – Owner occupancy required.
A. Eligibility for Inclusionary Units. No household may purchase or occupy an inclusionary unit unless the city has approved the household’s eligibility as a “low-income household,” and the household and city have executed and recorded an inclusionary housing affordability covenant in the chain of title of the inclusionary unit, as required by CMC 18.130.080.
B. Owner Occupancy. A household that purchases an inclusionary unit must occupy that unit as its principal residence, as that term is defined for federal tax purposes by the United States Internal Revenue Service. [Ord. 304 § 2, 2011.]
18.130.100 Affordable sales price and long-term affordability restriction.
A. Initial Sales Price. The initial sales price of an inclusionary unit shall be set at the affordable sales price.
B. Transfers and Conveyances. A new inclusionary housing affordability covenant shall be executed upon each change of ownership of an inclusionary unit and upon any transfer or conveyance (whether voluntarily or by operation of law) of an inclusionary unit.
C. Resale Price. In order to maintain the availability of inclusionary units required by this chapter, the resale price of an inclusionary unit shall be limited to the lesser of the following:
1. The fair market value of the inclusionary unit, as established by a licensed real estate agent based upon three comparable properties;
2. The affordable sales price based on the area median income at the time of resale; or
3. The sum of:
a. The selling party’s initial purchase price;
b. Escrow costs, title insurance premiums paid, and other customary closing costs and fees;
c. The adjusted amount of any capital improvements for which a building permit has been issued by the city and a certification of occupancy or similar final certification has been filed, or other improvements which add assessed value to the inclusionary unit; and
d. Any applicable transaction fee charged by a real estate professional.
e. If the occupant has allowed the unit to deteriorate due to deferred maintenance, the restricted resale price shall be discounted in an amount equal to the costs necessary to bring the unit into conformity with the CMC.
D. Inheritance of Inclusionary Units. Upon the death of an owner of an owner-occupied inclusionary unit, title in the property may transfer to the surviving joint tenant without respect to the income-eligibility of the household. Upon the death of a sole owner or of all owners of an inclusionary unit and the inheritance of the property by one or more non-income-eligible persons, the property shall be sold to an income-eligible household within one year of the time when the deceased’s estate is settled.
E. Forfeiture. If an inclusionary unit is sold for an amount in excess of the resale price controls required by subsection (C) of this section, the buyer and the seller shall be jointly and severally liable to the city for the entire purchase price of the unit. Recovered funds shall be used by the city to accomplish its affordable housing goals. Notwithstanding the foregoing, it shall be within the discretion of the city manager to allow the buyer and seller 180 days to cure any violation of the resale price controls. [Ord. 304 § 2, 2011.]
18.130.110 Adjustments and waivers.
A. The requirements of this chapter may be adjusted or waived (in whole or in part) by the city if the applicant demonstrates to the planning commission (or the city council on appeal) that applying the requirements of this chapter would constitute a taking of property without just compensation under the California or federal Constitutions.
B. The applicant has the burden of providing economic information and other evidence necessary to establish that application of this chapter to the specific residential development would constitute a taking of the property of the proposed residential development without just compensation.
C. Application for Adjustment or Waiver. An application for an adjustment or waiver shall be accompanied by all of the following information:
1. The estimated fair market value of the property prior to the application for a development plan, tentative map, or discretionary approval for a residential development to which this chapter applies.
2. The estimated fair market value of the property after completion of the residential development, including the reservation of five percent of the total units for sale to low-income households.
3. The estimated fair market value of the property after completion of the residential development without the reservation of five percent of the total units for sale to low-income households.
4. The estimated cost of any alteration, demolition, and construction required to complete the residential development.
5. The amount paid for the property if purchased within the previous 36 months, the date of purchase, and the party from whom purchased, including a description of the relationship, if any, between the owner of record or applicant and the person from whom the property was purchased, and any terms of financing between the seller and buyer.
6. Any listing of the property for sale, prices asked, and offers received within the two years prior to the application for a development plan, tentative map, or discretionary approval for a residential development to which this chapter applies.
D. Timing of Waiver Request. To receive an adjustment or waiver, the applicant shall make a request of the planning commission for such an adjustment or waiver and demonstrate the appropriateness of the adjustment or waiver when first applying to the planning commission for review and approval of the development plan, tentative tract map, or other discretionary approval triggering compliance with this chapter.
E. Assumptions. In making a determination on an application to adjust or waive the requirements of this chapter, the planning commission (or the city council on appeal) may assume each of the following when applicable:
1. That the applicant is subject to the inclusionary housing requirement;
2. That the applicant is obligated to provide the inclusionary units in only the most economical manner feasible in terms of construction, design, and location.
F. Written Determination. Within 60 days of the public hearing on the adjustment or waiver request, the planning commission (or the city council on appeal) shall deny the request unless it finds that:
1. Denial of the request would deny the applicant all economically viable use of the property; or
2. Denial of the request would substantially interfere with the applicant’s distinct investment-backed expectations, which expectations may be formulated in part based on land acquisition costs, construction costs, financing costs, or other costs of development; or
3. Denial of the request would otherwise constitute a taking pursuant to the federal or state Constitutions.
G. Modifications to Reduce Obligations. If it is determined that the application of the provisions of this chapter would constitute a taking, the inclusionary housing plan shall be modified to reduce the obligations of this chapter to the extent, and only to the extent, necessary to avoid a taking. If it is determined that no taking would occur, the requirements of this chapter shall apply.
H. Appeal to the City Council. Any action taken by the planning commission made pursuant to a request for an adjustment or waiver pursuant to this section may be appealed to the city council in accordance with the appeal procedures of CMC 18.15.080, Hearings and appeals. [Ord. 304 § 2, 2011.]
18.130.120 General prohibitions and enforcement.
A. No person shall sell an inclusionary unit at a price in excess of the maximum amount allowed by any restriction placed on the unit in accordance with this chapter.
B. No person shall sell an inclusionary unit to a person or persons that do not meet the income restrictions placed on the unit in accordance with this chapter.
C. No person shall provide false or materially incomplete information to the city or to a seller of an inclusionary unit to obtain occupancy of housing for which that person is not eligible.
D. Enforcement.
1. Any violation of this chapter constitutes a misdemeanor.
2. Forfeiture of Funds. Any individual who sells an inclusionary unit in violation of this chapter shall be required to forfeit all money so obtained. Recovered funds shall be relinquished to the city and used for the development of affordable housing in the city.
3. Legal Action. The city may institute any appropriate legal action or proceedings necessary to ensure compliance with this chapter, including actions:
a. To disapprove, revoke, or suspend any permit, including a building permit, certificate of occupancy, or discretionary approval; and
b. For injunctive relief or damages.
4. Recovery of Costs. In any action to enforce this chapter or an inclusionary housing affordability covenant recorded hereunder, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs. [Ord. 304 § 2, 2011.]
18.130.130 Temporary suspension.
The provisions of this chapter are temporarily suspended as of the effective date of Ordinance No. 304 and shall automatically become reinstituted and take effect on January 1, 2017. The city council may revise the effective date to be earlier or later based upon its determination that the real estate market has recovered sufficiently to allow the implementation of this chapter without unduly hindering or impeding the development of housing in the city. [Ord. 320 § 4, 2012.]
Code reviser’s note: See CMC 18.130.130, which temporarily suspends this chapter.