Chapter 18.05
AFFORDABLE HOUSING IMPACT FEES
Sections:
18.05.060 Establishment of affordable housing impact fees.
18.05.090 Determination of required fees.
18.05.100 Reductions, adjustments, or waivers.
18.05.010 Purpose.
The purpose of this chapter is to establish affordable housing impact fees in the city of Capitola to assure that housing development projects pay their fair share to compensate for the increased demand for affordable housing generated by such development projects within the city of Capitola. (Ord. 1047 § 1 (Att. A), 2021)
18.05.020 Findings.
A. The city of Capitola conducted nexus studies that examined the link between new market-rate housing development projects, the growth of employment associated with the consumer expenditures of new residents, and the demand for affordable housing to accommodate the new worker households in Capitola. According to the nexus studies, new development of market-rate housing development projects supports growth of consumer expenditures by new homebuyer and renter households.
B. Growth of household consumer expenditures supports job growth and new employment opportunities in Capitola.
C. New employment opportunities will attract new workers to Capitola.
D. Many of those new workers will seek housing and choose to live in Capitola.
E. Many of those new worker households will qualify as moderate, low, and very low income households and will increase the demand for affordable housing in Capitola, particularly since the increase in jobs is generally in the lower-wage-paying sectors such as retail trade and services.
F. Expansion of the supply of affordable housing will require funding to bridge the “gap” between the costs of developing new affordable housing and what new moderate and lower income households can afford to pay.
G. Through the payment of an affordable housing impact fee, developers of market-rate housing will address at least a portion of the impacts of their developments on the need for affordable housing. Revenue from the fees will be used to preserve and expand the supply of affordable housing in Capitola.
H. The affordable housing impact fee imposed under this chapter serves the public interest and is necessary to protect the health, safety and welfare of the residents of Capitola. (Ord. 1047 § 1 (Att. A), 2021)
18.05.030 Definitions.
For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:
A. “Housing development project” means any development project requiring a land use permit or approval from the city for: the construction of one or more new housing units including single-family residences, condominiums, townhouses and apartments; the division of land into one or more new residential parcels; the subdivision of mobile home parks; the conversion of one or more apartments to one or more condominiums; or a structural addition to an existing housing unit which will result in a fifty percent or greater increase in the housing unit’s square footage.
B. “Low income household” means a household whose income, with adjustment for household size, is between fifty percent and eighty percent of the Santa Cruz County areawide median income.
C. “Moderate income household” means a household whose income, with adjustment for household size, is between eighty percent and one hundred twenty percent of the Santa Cruz County areawide median income.
D. “Very low income household” means a household whose income, with adjustments for household size, is less than fifty percent of the Santa Cruz County area wide median income.
E. “Unit” means a single-family home, condominium, apartment, mobile home parcel, or residential parcel. (Ord. 1047 § 1 (Att. A), 2021)
18.05.040 Use of fees.
The revenues from the affordable housing impact fees shall be deposited into a segregated affordable housing impact fee fund and all such fees shall be used to provide assistance for production of affordable housing units, acquisition of at-risk units, or rehabilitation of affordable housing units in the city of Capitola for very low, low, and moderate income households. The affordable housing impact fee revenues may also fund the studies and administration to support the fee program. (Ord. 1047 § 1 (Att. A), 2021)
18.05.050 Applicability.
The regulations, requirements, and provisions of this chapter shall apply to any housing development project, unless exempt from this chapter. (Ord. 1047 § 1 (Att. A), 2021)
18.05.060 Establishment of affordable housing impact fees.
Except as otherwise provided in this chapter, applicants to develop a housing development project shall pay an affordable housing impact fee in an amount established by resolution of the city council in accordance with a nexus study that demonstrates the reasonable relationship between the fee’s use and the type of development project on which the fee will be imposed and demonstrates the reasonable relationship between the need for affordable housing and the type of development projects on which the fee will be imposed. (Ord. 1047 § 1 (Att. A), 2021)
18.05.070 Exemptions.
A. Housing development projects creating seven or more for-sale housing units, residential parcels, mobile home parcels, or converted condominium units shall be exempt from paying the affordable housing impact fee. Those projects, however, will be subject to the affordable housing inclusionary requirements set forth in Chapter 18.02.
B. Housing units that are designated as affordable to very low, low, or moderate income households, with a minimum of fifty-five-year term affordability restrictions, shall not be included in the calculation of the affordable housing impact fee.
C. New housing units that are constructed to replace housing units that were (1) demolished less than two years before the project developer applied for a permit to construct the housing development project; and (2) do not include a structural addition which will result in a fifty percent or greater increase in the housing unit’s square footage shall not be included in the calculation of the affordable housing impact fee. (Ord. 1047 § 1 (Att. A), 2021)
18.05.080 Payment of fee.
The fees required by this chapter from a housing development project developer shall be paid at the time of building permit issuance, unless the developer of a nonsubdivision housing development project enters into an agreement with the city to pay the fees at the time the certificate of occupancy is issued, pursuant to Government Code Section 66007(a). An agreement to defer payment until the issuance of a certificate of occupancy must be executed and recorded before the city will issue a building permit for the development project. (Ord. 1047 § 1 (Att. A), 2021)
18.05.090 Determination of required fees.
A. The community development director, or the director’s designee, shall be responsible for determining the fees required by this chapter. This determination shall be made at the time of application for the building permit for the new development.
B. The affordable housing impact fee may be modified automatically on an annual basis in accordance with the change in the Engineering News Record (“ENR”) Construction Cost Index for the San Francisco area. This adjustment shall not require any action of the city council. (Ord. 1047 § 1 (Att. A), 2021)
18.05.100 Reductions, adjustments, or waivers.
A. Any request for a waiver, adjustment, or reduction under this chapter shall be submitted to the city concurrently with an application for a first approval for a housing development project based upon a showing that applying the requirements of this chapter would result in an unconstitutional taking of property or would result in any other unconstitutional result. The request for a waiver, adjustment, or reduction shall set forth in detail the factual and legal basis for the claim.
B. The request for a waiver, adjustment, or reduction shall be processed concurrently with all other permits required for the housing development project. The body with the authority to approve the housing development project shall have the authority to act on the request for a waiver, adjustment, or reduction, subject to any appeals otherwise authorized for the housing development project.
C. The waiver or modification may be approved only to the extent necessary to avoid an unconstitutional result, based upon legal advice provided by or at the behest of the city attorney, after adoption of written findings, based on legal analysis and substantial evidence. If a waiver or modification is granted, any change in the project shall invalidate the waiver or modification, and a new application shall be required for a waiver or modification under this section. (Ord. 1047 § 1 (Att. A), 2021)