Chapter 18.13
INCLUSIONARY HOUSING AND DENSITY BONUSES
Sections:
18.13.040 Eligibility to rent or purchase an inclusionary or density bonus unit.
18.13.050 Inclusionary housing unit requirements.
18.13.060 Density bonus provisions.
18.13.070 Continued affordability.
18.13.080 Affordable housing fund.
18.13.090 Appeals, adjustments, waivers, enforcement and exemptions.
18.13.010 Purpose.
The purpose of this chapter is to implement the housing element and other related policies and programs of the general plan, California Government Code Section 65915 and following, and other applicable law. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.020 Definitions.
The following definitions apply to the provisions of this chapter in addition to the definitions in Chapter 18.14:
“Affordable unit” means a dwelling which is affordable to very low, lower, or moderate income households as defined by the U.S. Department of Housing and Urban Development (HUD) Sonoma County Median Income by Household Size report, using a presumed household size of one person in a studio unit; two persons in a one-bedroom unit; three persons in a two-bedroom unit; and one additional person for each additional bedroom thereafter. Adjustments to household size in relation to the number of bedrooms in an affordable unit to account for minor children may be made at the discretion of the city. Affordable units must satisfy the following affordable rent, affordable ownership payment, and maximum affordable sales price requirements, as applicable:
“Affordable rent” means the monthly rent, including tenant-paid utilities and insurance, not to exceed thirty percent of the gross monthly income for a qualified household.
“Affordable ownership payment” means monthly house payments, after a ten percent down payment but excluding taxes and homeowners’ association dues, if any, not to exceed thirty percent of the gross monthly income for a qualified household at the time the unit is purchased.
“Maximum affordable sales price” means the present value of a thirty-year loan at eight percent interest or prevailing mortgage interest rate, whichever is higher, in which monthly payments do not exceed thirty percent of one hundred twenty percent of the median income for moderate income households; thirty percent of eighty percent of the median income for low income households; and thirty percent of fifty percent of the median income for very low income households. The present value will not be adjusted for down payment, taxes, fees, etc.
“Density bonus unit” means an ownership or rental dwelling unit, as required and defined by this chapter, for occupancy by a very low or lower income household or qualifying residents as defined in California Health and Safety Code Sections 50079.5 and 50105 and California Civil Code Section 51.3 or successor statutes.
“Housing development” means any project or group of projects that results in construction of dwelling units intended for permanent occupancy, including, but not limited to, subdivision of property for residential purposes, single-family dwellings, apartments, townhomes, condominiums, mixed use development, accessory dwelling units, and any change in undeveloped or developed property which results in construction of dwelling units.
“Inclusionary unit” means an ownership or rental dwelling unit, as required and defined by this chapter, that is affordable to very low, low, median, or moderate income households as defined in California Health and Safety Code Sections 50079.5, 50093 and 50105 and California Civil Code Section 51.3 or successor statutes.
“In-lieu fee” means a fee paid to the city for deposit in the affordable housing fund in lieu of actual provision of inclusionary units.
“Life of the project” means the period for which the rental project or dwelling unit is used for housing in substantially the same manner as originally approved, without an end date except for the removal from residential use or demolition for replacement use.
“Lower income” or “lower income household” means persons and households whose gross annual income is between fifty-one percent and eighty percent inclusive of the Sonoma County median income, adjusted for family size, as defined by the Federal Department of Housing and Urban Development (HUD) pursuant to Section 8 of the United States Housing Act of 1937 or its successor in accordance with California Health and Safety Code Section 50079.5 or successor statutes.
“Median income” means the median income adjusted for family size, applicable to Sonoma County as published annually pursuant to Title 25 of the California Code of Regulations, Section 6932 (or successor statutes) by the United States Department of Housing and Urban Development or its successor in accordance with California Health and Safety Code Sections 50079.5, 50093 and 50105 or successor statutes.
“Moderate income” or “moderate income household” means a person or household whose gross annual income is between eighty percent and one hundred twenty percent inclusive of the Sonoma County median income, adjusted for family size, as defined by the Federal Department of Housing and Urban Development (HUD) pursuant to Section 8 of the United States Housing Act of 1937 or its successor in accordance with California Health and Safety Code Sections 50079.5, 50093 and 50105 or successor statutes.
“Qualified household” means a household meeting the income or other restrictions established in this chapter.
For inclusionary units, “qualified household” means very low, lower, or moderate income households.
For density bonus units, “qualified household” means a very low or lower income household or a household with qualifying residents as defined in California Government Code Section 69515 and California Health and Safety Code Sections 50079.5, 50093 and 50105 and California Civil Code Section 51.3 or successor statutes.
“Qualified household list” means a city-maintained list of qualified households eligible to own or rent inclusionary units or density bonus units under the provisions of this chapter. The qualified household list shall be nonexclusive, except for confirmation of eligibility, and shall remain open at all times for additional qualified households.
“Qualifying residents” or “senior citizens” means persons sixty-five years or older, or fifty-five years of age or older in a senior citizen housing development in accordance with California Civil Code Section 51.3 or successor statutes.
“Residential care facility” or “assisted living development” means a housing development for the long-term care of elderly or disabled people that provides meals/food service, transportation, twenty-four-hour supervision or monitoring for health or disabilities, and community activities; and/or permanent on-site staff for nursing, care, and medical emergencies.
“Very low income” or “very low income household” means persons and households whose gross annual income is fifty percent or less of the Sonoma County median income, adjusted for family size, as defined by the Federal Department of Housing and Urban Development (HUD) pursuant to Section 8 of the United States Housing Act of 1937 or its successor in accordance with California Health and Safety Code Section 5105 or successor statutes. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.030 Applicability.
This chapter applies to (A) all housing development in the city with tentative map approval or any other planning permit approval issued after November 13, 2002, or (B) all building permits issued after the effective date of the ordinance codified in this chapter, and binds the agents, successors and assigns of all applicants and developers of such housing development. No entitlements or planning permits may be issued after the effective date of the ordinance codified in this chapter for any housing development that does not meet the requirements of this chapter. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.040 Eligibility to rent or purchase an inclusionary or density bonus unit.
A. Only qualified households on the qualified household list will be eligible to rent or purchase an inclusionary or density bonus unit. The developer or property owner may only permit qualifying households to occupy or purchase inclusionary or density bonus units. Income or qualifications shall be reconfirmed prior to purchase or rental of units.
B. In accordance with California Government Code Section 65915 and following and other applicable law, the city may impose upon and collect from developers and owners of affordable and density bonus units a fee that does not exceed the reasonable estimated cost of qualified household list maintenance to recover the cost to the city of verifying household qualifications.
C. The planning commission shall, by resolution, adopt a list of income limits, maximum affordable housing costs, and utility allowances for rental units, and the Regional Housing Needs Assignment (RHNA) based on definitions from the Federal Department of Housing and Urban Development (HUD), the Sonoma County community development commission and the Association of Bay Area Governments. The resolution shall also establish in-lieu fees and maximum ownership in-lieu fees to implement this chapter. This list and fees shall be updated as needed and shall be used in the implementation of this chapter. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.050 Inclusionary housing unit requirements.
A. Fifteen percent of dwelling units in housing development comprising five or more new dwelling units must be affordable units.
1. In rental projects, affordable units must be rented to lower income households or below at affordable rents. In ownership projects, affordable units must be sold to moderate income households or below at affordable ownership payments and at a price not to exceed the maximum affordable sales price. Housing sold or rented to very low or lower income households also meets this standard.
2. Where city incentives or density bonuses are offered and/or requested, the city shall require that the inclusionary and density bonus housing units conform to the distribution of very low, lower, and moderate income housing in the AMBAG Regional Housing Needs Assignment (RHNA) to the maximum feasible extent based on the value of city incentives.
3. Where units are added to existing residential or nonresidential properties and the existing units are not demolished or removed from residential use, the inclusionary provisions shall apply to the net new units only. Where any project with rental units or any mobile home park is subdivided for ownership or for continued rental use, the inclusionary provisions shall apply to all units.
B. If, in the application of the requirements of this section, a decimal fraction unit requirement results, the following requirements shall apply:
1. For ownership inclusionary units, an in-lieu fee must be paid equal to the applicable decimal fraction times the established in-lieu fee for one inclusionary unit (e.g., a fraction of one-fourth units would pay one-fourth times the inclusionary fee for the unit), or at the developer’s discretion an additional inclusionary unit may be provided instead of paying the fee.
2. For rental inclusionary units, an added inclusionary unit shall be provided if the decimal fraction is one-half or above, and no added inclusionary unit shall be required if the decimal fraction is less than one-half.
C. Inclusionary units must be constructed at the site of the housing development subject to inclusionary housing requirements, except that in-lieu fees may be paid or land for alternative affordable housing sites may be offered for dedication to meet the inclusionary requirement under the following circumstances:
1. Ownership projects with fifteen or less units and developments that have submitted a planning permit application prior to the effective date of the ordinance codified in this chapter may pay fees or offer alternative sites for dedication.
2. Ownership projects in hillside developments or developments with a density less than two units per acre may pay fees or offer alternative sites for dedication if the planning commission makes the finding that the alternative design provisions under subsection (E)(5) of this section are not feasible alternatives for provision of on-site inclusionary housing.
3. Land offered for dedication pursuant to this section must have a zoning designation that permits construction of affordable housing, must be determined by the city to be suitable for construction of affordable housing, and must have an appraised value that equals or exceeds the applicable in-lieu fees.
D. Where in-lieu fees apply, fees must be paid prior to issuance of a certificate of occupancy for the unit or project. For ownership units, in-lieu fees must be paid for each affordable unit otherwise required pursuant to this section at the rate of fifteen percent of the difference between the maximum affordable sales price as defined in this chapter and the lesser of the actual sales price of the unit or the median sales price of houses in Sonoma County, adjusted for household size.
E. The following development standards shall apply to projects subject to inclusionary housing requirements:
1. Inclusionary units must be constructed at the same time as the other units in a development project. The rate of completion of affordable and market rate units must be the same as the ratio of affordable and market rate units in the entire project.
2. Inclusionary units must be distributed throughout the development and may not be concentrated in one portion of the development.
3. The appearance of the inclusionary units must be substantially the same as the market rate units or buildings in exterior materials and finish. The developer may reduce either the size and/or provide less expensive interior amenities for the inclusionary units as long as there are not significant differences visible from the exterior of the units and the size, fixtures and design of the units are reasonably consistent with the market rate units in the project.
4. Inclusionary units provided must have a number of bedrooms proportional to the number of bedrooms in the market rate units in the project.
5. Notwithstanding subsections (E)(1) through (4) of this section, the inclusionary units in single-family ownership projects (a) with less than fifteen units, (b) in hillside areas generally over four hundred feet in elevation, or (c) in developments with less than two units per acre may provide inclusionary housing in small lot subdivision configuration, two attached ownership housing units on the land generally equal to a single-family lot, or with accessory dwelling units that meet all of the requirements for renter inclusionary housing units. Additionally, in hillside areas or developments with less than two units per acre, inclusionary units may be in ownership cluster housing such as townhouses or condominiums. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.060 Density bonus provisions.
A. Density bonuses and incentives shall be offered by the city pursuant to the provisions of Government Code Chapter 4.3.
B. Parking ratios shall be allowed for affordable housing pursuant to the provisions of Government Code Chapter 4.3.
C. These density bonus and incentive provisions shall be understood to be amended by operation of law in the event and to the extent the State Density Bonus Law is amended. (Ord. 754-2024 § 13, 2024; Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.070 Continued affordability.
A. The city will administer a program to assure the continued affordability and eligibility of inclusionary and density bonus units.
1. Inclusionary units will remain subject to the affordable unit requirements contained in this chapter for the life of the project.
2. Density bonus units will remain subject to the density bonus unit requirements contained in this chapter for the life of the project.
3. Units that are both inclusionary and density bonus units will remain subject to the affordable unit and density bonus unit requirements contained in this chapter for the life of the project.
B. A deed restriction must be recorded for each inclusionary and/or density bonus unit prior to issuance of certificate of occupancy and include the city as a party to the deed restriction. The deed restriction must set forth the applicable restrictions in this chapter.
C. All buyers of “for sale” inclusionary or density bonus units must enter into a resale agreement with the city prior to the close of escrow for such unit, using a standard form resale agreement provided by the community development department. The resale agreement will require the inclusionary unit to be sold to a qualified household from the qualified household list at a price not to exceed the affordable sales price for the life of the project. The resale agreement will further provide that if there are no qualified households or the property cannot be sold within six months of offering the unit for sale, the owner may offer to sell the unit to the city at the maximum affordable sales price or, upon receiving written approval of the city, sell the unit as a market rate unit and pay the city for deposit in the affordable housing fund the difference between the sales price of the unit and the maximum affordable sales price pursuant to this chapter.
D. The owners of inclusionary or density bonus rental units must enter into a rental agreement with the city prior to issuance of building permits for such units using a standard form rental agreement provided by the community development department. The rental agreement will specify the percentage of each type of unit in the project that will be provided as inclusionary units. The deed restriction for affordable rental units must specify that the affordability requirements of this chapter will be in effect for the life of the project but not less than thirty years.
E. Owners of rental inclusionary or density bonus units must submit an annual report to the community development department no later than March 1st identifying monthly rental rates, units
occupied by qualified households, income and qualifying status for each resident and any other related data deemed necessary by the city for the previous calendar year. If the income of any household in an inclusionary or density bonus unit set aside for very low or lower income has increased to exceed one hundred twenty percent of qualified household income, the next available comparable unit in the project must be made available to a qualifying household.
F. Owners of any ownership inclusionary or density bonus unit must submit an annual certification that they continue to occupy the unit as their primary residence. However, owners of ownership inclusionary or density bonus units may rent their units for a period or periods that total no more than six months in any twelve-month period to a qualified moderate income household. At the end of the six-month period, the owner must move back into the unit or the unit must be sold to a qualified household, pursuant to this chapter.
G. Transfer Fees. For each inclusionary or density bonus unit provided under this chapter, the city may impose upon and collect a transfer fee at time of sale. Such fees shall be established by resolution of the city council in accordance with California Government Code Section 65915 and following and other applicable law and may not exceed the reasonable estimated cost incurred by the city in monitoring affordability.
H. With prior city approval, alternative resale or long-term affordability mechanisms with city approval may be used when the requirements of the California Housing Finance Agency (CHFA) or other state or federal housing programs prohibit, in whole or in part, the affordability controls established in subsection A of this section. Such alternative resale or long-term affordability mechanisms may include, but are not limited to, silent second mortgages and deferred payment loans. In response to distressed housing markets, the city council may adopt a resolution allowing minor revisions to sales prices or rental rates for a period not to exceed one year. Such resolutions shall not last more than one year unless renewed by the city council.
I. Conversion of an inclusionary rental unit to a “for sale” unit, if otherwise permitted, will not void any applicable inclusionary housing agreements or requirements. Resale of said units will be subject to the requirements of subsection C of this section. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.080 Affordable housing fund.
A. The city of Cloverdale affordable housing fund is hereby established. All in-lieu fees paid pursuant to this chapter must be placed in the affordable housing fund.
B. Monies deposited in the affordable housing fund will be used solely to increase, improve, or maintain the supply of housing affordable to very low, lower, and moderate income households or to support the city council adopted essential employee programs for qualified very low, lower, and moderate income households. For the purposes of this subsection, increasing, improving, or maintaining the supply of housing affordable to very low, lower, and moderate income households includes, but is not limited to, acquisition of property, property administration and design, construction of affordable housing or site improvements, and any other costs associated with the construction or financing of affordable housing. Also included is reimbursement to the city for such costs if the city advanced funds from other sources and reimbursement to developers or property owners who are entitled to reimbursement pursuant to this chapter and/or other applicable law.
C. Monies in the affordable housing fund will be used in accordance with the priorities identified in this chapter and the housing element of the general plan. Where feasible, inclusionary housing fees should be used to provide the same number of affordable units as would be required in the project providing those fees. Other fees and monies in the affordable housing fund should be focused on provision of housing for very low and lower income households, reducing homelessness, housing rehabilitation, and assisting other organizations in provision of housing and meeting housing needs. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.090 Appeals, adjustments, waivers, enforcement and exemptions.
A. The requirements of this chapter are minimum and maximum requirements; however, nothing in this chapter limits the right of any person to voluntarily undertake obligations in excess of those imposed by this chapter, and the city may adjust or waive the requirements of this chapter upon determining, pursuant to an appeal in accordance with this section based on particular circumstances as documented by the appellant, that:
1. The proposed housing development involves extraordinary circumstances that do not apply to other housing development in the city, applying the requirements of this chapter to the proposed housing development would result in an undue hardship, and alternative inclusionary housing requirements will appropriately implement the intent of this chapter; or
2. The proposed development has provided inclusionary housing equivalent to the requirements of this chapter; or
3. There is not a reasonable relationship between the impact of a particular proposed housing development and the requirements of this chapter and/or applying the requirements of this chapter to a particular proposed housing development would result in a taking under the California and/or United States Constitutions, and alternative inclusionary housing requirements will appropriately implement the intent of this chapter.
B. The requirements of this chapter and their application to particular housing developments are subject to appeal in accordance with this section. All appeals concerning the requirements of this chapter are subject to the appeals process established in Section 18.03.040. If a proposed housing development that is the subject of an appeal is not subject to discretionary approval of the planning commission, the initial appeal must be filed as an appeal of a planning director decision. Appellants pursuant to this section bear the burden of presenting substantial evidence to support findings that the proposed housing development qualifies under this section for adjustment or waiver of the inclusionary housing requirements that otherwise would apply pursuant to this chapter. Failure to file a timely appeal in accordance with Section 18.03.040 waives the right to appeal the application of the requirements of this chapter to a particular housing development or developments.
C. The appellate body, upon legal advice provided by the city attorney, will render its judgment concerning the appeal in accordance with Section 18.03.040 and other applicable law. If the appellate body finds that the proposed housing development qualifies for an adjustment or waiver of inclusionary housing requirements pursuant to this section, the appellate body will adjust or waive the inclusionary housing requirements that otherwise would apply to the extent necessary to avoid an undue hardship or an unconstitutional taking. If the appellate body finds that the proposed housing development does not qualify for an adjustment or waiver of inclusionary housing requirements pursuant to this section, the proposed housing development will be subject to the requirements of this chapter.
D. In addition to all other available legal remedies that the city may in its discretion pursue concerning violations of the requirements of this chapter, including, but not limited to, violations of annual reporting requirements, the city may:
1. Pursue any and all of the penalties enumerated in Section 18.02.080 concerning such violations.
2. Recover from any person that rents or sells an inclusionary unit at rental or sale prices that exceed the affordability requirements prescribed in this chapter all proceeds of such rents or sales that exceed the amounts permitted pursuant to this chapter. Such recovered proceeds will be deposited in the housing trust fund.
3. Institute appropriate legal proceedings necessary to ensure compliance with this chapter, including, but not limited to, actions to revoke, deny or suspend any permit, certificate of occupancy, discretionary approval or other entitlement, actions to recover civil fines, restitution to prevent unjust enrichment and/or recover enforcement costs, including staff costs and attorneys’ fees, eviction or foreclosure, and any other appropriate action for injunctive relief or damages.
E. Residential care facilities and similar assisted living developments, as defined in Section 18.13.020, are exempt from the inclusionary housing unit requirements. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)
18.13.100 Annual review.
The provisions of this chapter shall be reviewed annually in conjunction with the general plan and housing element annual review. (Ord. 714-2017 § 4 (Exh. K) (part), 2017: Ord. 698-2015 § 3 (Att. 1) (part), 2015)