Chapter 18.32
Inclusionary Housing Requirements
Sections:
18.32.030 Inclusionary Housing Applicability and Exempt Projects
18.32.040 Inclusionary Housing Requirements
18.32.050 Alternative Equivalent Action
18.32.060 Inclusionary Housing Phasing, Agreements and Affordability
18.32.070 Inclusionary Housing Incentives
18.32.080 Inclusionary Housing Plan
18.32.085 Inclusionary Housing Regulatory Agreement
18.32.090 Inclusionary Housing Trust Fund
18.32.100 Enforcement of Affordable Housing Requirements
18.32.010 - Purpose
This Chapter requires the development of affordable housing in new development projects providing 5 or more housing units that are intended for sale or rent.
A. This Chapter establishes standards and procedures to implement the inclusionary housing requirements identified in § 18.32.040 (Inclusionary Housing Requirements).
B. This Chapter is intended to implement the requirements of Government Code Sections 65583 and 65913, and the Housing Element of the General Plan, by increasing the production of residential units affordable to low, moderate and median income households. This Chapter complements the density bonus provisions of Chapter 18.31 and assures that new housing development contributes to attaining the City’s housing goals.
(Ord. 930, § 2, passed 06-12-2017)
18.32.020 - Definitions
The specialized and technical terms and phrases used in this Chapter are defined in Article 10 (Definitions), under “Affordable and Inclusionary Housing Requirements.”
(Ord. 930, § 2, passed 06-12-2017)
18.32.030 - Inclusionary Housing Applicability and Exempt Projects
A. Applicability. The requirements of this Chapter apply to all housing developments proposed with 5 or more dwelling units or a subdivision proposing 5 or more lots, except as noted in Subsection (C) of this Section.
B. Conversion of rental project to for-sale project. Residential projects approved as rental developments after the effective date of this Chapter shall be subject to its inclusionary requirements if the project or any of the rental units therein are proposed to convert to for-sale units.
C. Exempt projects. The following residential projects are exempt from the inclusionary housing requirements of this Chapter:
1. Project with vested rights. A residential project for which the City has entered into a development agreement before the effective date of this Chapter, or which otherwise demonstrates a vested right to proceed without complying with this Chapter.
2. Involuntarily damaged or destroyed dwelling unit. Any dwelling unit(s) in existence prior to the effective date of this Chapter that is (are) damaged or destroyed by fire or natural catastrophe so long as the square footage and use of the replacement or repaired structure remain(s) the same.
3. Affordable housing units. All affordable units shall be exempt from the inclusionary housing requirement, including those in mixed-income developments, mixed-use developments, sweat equity projects, senior housing projects, housing projects for people with special needs, and other affordable housing units as determined by the Director. In order to be exempt from the inclusionary housing requirements the affordable housing units shall be affordable for a minimum of 15 years.
4. Small project. A residential development project with 4 of fewer dwelling units or a minor subdivision.
5. One-bedroom residential units. One-bedroom residential units that are less than 600 square feet shall be exempt from the inclusionary requirement in order to encourage the production of small units.
6. Other exemptions as approved by City Council.
(Ord. 930, § 2, passed 06-12-2017)
18.32.040 - Inclusionary Housing Requirements
A. Number of inclusionary housing units required for nonsubdivision projects with 5 or more residential units.
1. All developments that include 5 to 10 residential units. All rental and “for sale” developments of 5 to 10 units must construct 20% of residential units to be “affordable by design” as defined in Article 10 (Definitions).
2. Developments that include more than 10 residential units to be sold shall include inclusionary units as follows:
a. If 11 to 20 residential units, the applicant shall construct 10% of all new dwellings as inclusionary units, or complete an approved alternative equivalent action, subject to all requirements in compliance with this Chapter.
b. If 21 or more residential units, the applicant shall construct 15% of all new dwellings as inclusionary units, or complete an approved alternative equivalent action, subject to all requirements in compliance with this Chapter.
3. Development projects that include more than 10 residential rental units shall comply with requirements below, only if the developer enters into a contract with the City of Fort Bragg and requests and receives 1 or more incentives or a density bonus:
a. If the project includes 11 to 20 residential rental units, the applicant shall construct 10% of all new dwellings as inclusionary units, or an approved alternative equivalent action, subject to all requirements in compliance with this Chapter.
b. If 21 or more residential units for sale, the applicant shall construct 15% of all new dwellings as inclusionary units, or an approved alternative equivalent action, subject to all requirements in compliance with this Chapter.
c. As an alternative to constructing inclusionary units, the developer may pay an in-lieu fee that is calculated based on the requirements outlined in Subsections (A)(1) and (2) of this Section.
4. Fractional units. If the calculation of the required number of units results in a fraction of units, the developer must construct the additional inclusionary unit, pay a proportional fraction of the in-lieu fee, or perform an alternative equivalent action approved by the Council in compliance with § 18.32.050 (Alternative Equivalent Action) for the fraction.
B. Inclusionary requirement for subdivision projects with 5 or more residential lots.
1. If a proposal involves the major subdivision of a residentially zoned parcel the inclusionary requirement shall be met either through: (a) the construction of inclusionary housing; (b) the donation of net land for the construction of inclusionary housing; or (c) an alternative equivalent action (§ 18.32.050).
a. All major subdivisions that result in the creation of 5 to 10 lots shall be deed restricted such that 20% of the lots must include residential units to be “affordable by design” as defined in Article 10 (Definitions).
b. All major subdivisions that result in the creation of 11 to 20 lots shall require: (i) that 10% of the net land be donated to the City or its designated agency for the construction of inclusionary units; (ii) the construction of 10% of the units as inclusionary units; or (iii) an approved alternative equivalent action. Land donations must have the appropriate General Plan designation, zoning, and development standards to permit the feasible development of inclusionary units and be served by adequate public facilities and infrastructure.
c. All major subdivisions that result in the creation of more than 20 lots shall require: (i) that 15% of the net land be donated to the City or its designated agency for the construction of inclusionary units; (ii) the construction of 15% of the units as inclusionary units; or (iii) an approved alternative equivalent action. Land donations must have the appropriate General Plan designation, zoning, and development standards to permit the feasible development of inclusionary units and be served by adequate public facilities and infrastructure.
2. The satisfaction of the inclusionary requirement for major subdivisions shall be included in and described on the tentative map at the time of application. The description shall include acreage and location of any proposed land donation.
(Ord. 930, § 2, passed 06-12-2017)
18.32.050 - Alternative Equivalent Action
A developer of a project with residential units may comply with the requirements of § 18.32.040 (Inclusionary Housing Requirements) above by an alternative equivalent action approved by the City Council in compliance with this Section.
A. Scope of alternative proposals. A proposal for an alternative equivalent action may include:
1. Construction of secondary units. For single-family subdivision projects of between 11 and 30 lots, a developer may build small secondary units in lieu of inclusionary units. Two “small secondary units” are equal to 1 inclusionary unit. Single-family subdivision projects with 30 lots or more may only utilize secondary units as an alternative equivalent action for the first 30 lots of the project; or
2. Donation of vacant land. Land donations for the construction of inclusionary units as part of a subdivision without development or as an alternative equivalent action must meet the following requirements:
a. Have the appropriate General Plan designation, zoning, and development standards to permit the feasible development of affordable units in an amount equal to at least 15% of the units in the residential development;
b. Be served by adequate public facilities and infrastructure; and
c. Be subject to an affordability covenant or deed restriction to ensure continued affordability; or
3. Construction of inclusionary units on another site subject to Council approval; or
4. Payment of an inclusionary housing in-lieu fee, in an amount as set forth in a resolution of the City Council, which may be amended from time to time to reflect inflation and changed conditions in the City and the region; or
5. Any on-site or off-site alternative equivalent action recommended by the Community Development Committee and approved by City Council; or
6. A combination of the above strategies, as approved by City Council.
B. Content of proposal. A proposal for an alternative equivalent action shall show how the alternative action proposed will further affordable housing opportunities in the City to an equal or greater extent than compliance with the requirements of § 18.32.040 (Inclusionary Housing Requirements). If required by the City, the applicant shall provide or pay for an independent third party review/analysis of the equivalence of the proposed alternative action.
C. Review and approval. A proposal for an alternative equivalent action shall be specified in the inclusionary housing plan submitted with the applications for the residential development. The proposal shall be processed concurrently with the residential development applications except that the review authority for an alternative equivalent action shall be the Council.
D. Criteria for approval. A proposal for an alternative equivalent action to satisfy the requirements of this Chapter may be approved at the Council’s discretion, if the Council first determines that the alternative action will further affordable housing opportunities in the City to an equal or greater extent than compliance with the otherwise applicable requirements of § 18.32.040 (Inclusionary Housing Requirements).
(Ord. 930, § 2, passed 06-12-2017)
18.32.060 - Inclusionary Housing Phasing, Agreements and Affordability
A. Timing and phasing of unit construction. All inclusionary units within a residential project shall be constructed concurrent with, or before, the construction of the market rate dwelling units. If the City approves a phased project, the required inclusionary units shall be provided within each phase of the residential project with their number in proportion to the total number of units in the phase in relation to the total number of units in the project, or phased in another sequence acceptable to the City as approved by the review authority. Certificates of occupancy will be issued for increments of no more than 7 market rate units before certificates of occupancy are issued for the corresponding inclusionary unit(s).
B. Recordation of inclusionary housing agreement. The recordation of the inclusionary housing regulatory agreement, as described in § 18.32.085, shall take place at the same time as the final or parcel map or, where a map is not being processed, before issuance of any certificates of occupancy.
C. Affordability requirements.
1. For-sale units. One-half of the required inclusionary units shall be available at sales prices affordable to households whose annual household income does not exceed 100% of area median income as defined in Article 10 (Definitions). The remaining 1/2 of the required inclusionary units shall be available at sales prices affordable to moderate income households whose annual household income does not exceed 120% of area median income with priority given to essential public service employees within the City as defined in Article 10 (Definitions).
2. Rental units. One-half of the required units shall be available at rents affordable to low income households whose annual household income does not exceed 80% of area median income; and the remaining half of the inclusionary units shall be available at affordable rents to moderate income households whose annual household income does not exceed 120% of area median income, with priority for rental given to essential public service employees within the City as defined in Article 10 (Definitions), who meet income eligibility requirements.
D. Continued affordability. The procedures to maintain the continued affordability of the inclusionary units shall be included in the inclusionary housing plan submitted with the development project application and shall be subject to approval by the City as described in § 18.32.080.
1. Term of affordability.
a. For-sale inclusionary units shall be affordable for 15 years. If a “for sale” inclusionary unit is resold during this term, the equity accrued shall be apportioned as follows:
i) Equity accrual to the property owner during the first 5 years shall be limited to equity accrued through the mortgage and down payments (less all outstanding mortgage, taxes and liens); it shall not include market related appreciation. At the resale of an inclusionary unit within the first 5 years of the term, all market rate equity shall be paid to the City’s Housing Trust Fund.
ii) Equity accrual to the property owner who sells an inclusionary unit in years 6 through 15 shall include 10% of the market appreciation per year of ownership, after repayment of the mortgage, taxes and any outstanding liens. The remaining market rate equity shall be paid to the City’s Housing Trust Fund.
iii) After 15 years the unit will not be an inclusionary housing unit, and resale may proceed without a payment to the City’s Housing Trust Fund.
b. Inclusionary housing rental units shall be affordable for 25 years.
2. Resale restrictions. In order to maintain the availability of the for-sale inclusionary units constructed in compliance with this Chapter, resale of the units shall be restricted as follows:
a. Written notice of intent to sell, City option. Resale restrictions shall provide that, before offering an inclusionary unit for sale, the seller shall provide written notice to the Director, by certified mail, of their intent to sell. The City or its designee shall be granted an option to purchase the unit for sale, with a maximum of 60 days to exercise the option, and a maximum of 120 days to conclude the purchase, in addition to the time for exercising the option.
b. Payment of Inclusionary housing in-lieu fee. If the unit is sold prior to the 15-year term of affordability, the seller shall pay to the City’s Housing Trust Fund an inclusionary housing fee in the amount calculated according to Subsection (D)(1)(a) of this Section. This fee shall be paid as part of the escrow process for the resale of the unit.
3. Rental restrictions. An inclusionary unit may be leased or subleased to an income qualified eligible renter (per Subsection (C)(2) of this Section, Affordability requirements for rental units) upon review of the renter’s income qualifications by the Director.
E. Eligibility of households.
1. No household shall be allowed to purchase an inclusionary unit, unless the City or its designee has approved the household’s eligibility, or has failed to make a determination of eligibility within the time or other limits provided by an inclusionary housing agreement or resale restrictions.
2. The eligibility of potential occupants of inclusionary units shall be determined on the basis of household income at the time of purchase as defined in this Chapter, the relationship between household size and the size of the available units, and any further criteria required by law and/or established by the City Council. The housing developer shall use an equitable selection method established in conformance with the terms of this Chapter and in compliance with State and Federal law. Selection from eligible households shall be based on the affordable housing priorities established below:
a. Priority 1. Essential public service employees as defined in Article 10 (Definitions), City of Fort Bragg employees, or child care workers employed in Fort Bragg. If essential public service employees do not purchase the inclusionary units, the units shall be made available to other eligible Priority 1 applicants, prior to being made available to Priority 2 applicants.
b. Priority 2. Other eligible households who live in Fort Bragg and who are also employed within Fort Bragg City limits. When the list of Priority 2 applicants is exhausted, units may be sold to Priority 3 households.
c. Priority 3. Other eligible households.
F. Annual monitoring.
1. Inclusionary units shall be monitored on an annual basis by the City (or its designee) to ensure that units have not been resold to an unqualified owner (on the basis of income).
2. Monitoring may be achieved by a third party, may include self-certification, may involve review of utility records, or may include any other reasonable method of monitoring as approved by the Director.
3. All owners that initially qualified for inclusionary housing retain their right to inhabit their inclusionary housing unit should their income increase above qualifying levels.
G. Discretionary permit and map requirements for projects subject to this Chapter.
1. Discretionary permits. Each discretionary permit for a residential project that is subject to this Chapter and approved after the effective date of this Chapter shall contain a condition detailing the method of compliance with this Chapter.
2. Final or Parcel Maps. Each Final or Parcel Map shall have a written notation indicating that compliance with the requirements of this Chapter shall be met for each parcel created by the map, unless the requirements of this Chapter have been satisfied by an alternative equivalent action approved by the City.
H. Requirements for certificate of occupancy or final building inspection. A temporary or permanent certificate of occupancy shall not be issued, or a final building inspection approved, for any new residential project with more than 4 dwelling units of a major subdivision until:
1. The developer has satisfactorily completed the requirements of this Chapter (e.g., on-site construction of affordable units or alternative equivalent actions); or
2. The developer has demonstrated to the satisfaction of the Director that an exemption as described in § 18.32.030 (Inclusionary Housing Applicability and Exempt Projects) is applicable.
(Ord. 930, § 2, passed 06-12-2017)
18.32.070 - Inclusionary Housing Incentives
A. Authority for incentives. A residential development that complies with the inclusionary housing requirements in § 18.32.040, through the actual construction of inclusionary units, shall be entitled to the following procedures and incentives:
1. Voluntary pre-application review of requested incentives.
a. Before the submittal of any formal application for a housing development, the developer may request a pre-application review by the Director or the City Council of requested incentives.
b. Voluntary pre-application review shall not bind the Director or City Council, but rather shall be subject to the discretion of the review authority to accept, reject, or modify any preliminary recommendations based upon a full review of the formal application, including all pertinent project information and any CEQA analysis, presented at the public hearing on the application.
2. Priority processing of applications. Project applications that include the construction of inclusionary units shall be expedited by each City department involved with the application.
3. Pre-approved incentives. The Council has adopted by resolution a set of pre-approved incentives, which may be amended from time to time. Project applicants with projects that include inclusionary housing may select an incentive from this resolution without the need of further approval for the selected incentive.
(Ord. 930, § 2, passed 06-12-2017)
18.32.080 - Inclusionary Housing Plan
A. Inclusionary housing plan. The applicant for a residential project that is subject to this Chapter shall submit an inclusionary housing plan as part of the project application(s), detailing how the provisions of this Chapter will be implemented. The inclusionary housing plan shall include the number and income level of any required inclusionary units, any related occupancy restrictions, any resale or other controls to ensure continued affordability of the inclusionary units, a detailed pro forma if requested by the Director, any requested incentives or waivers, any proposed alternative equivalent action, and any other information necessary to review compliance with the requirements of this Chapter. The inclusionary housing plan shall be considered and acted upon by the review authority at the same time as the residential development that is the subject of the plan.
B. Conditions of approval. Any tentative map, use permit or other permit approving residential development projects subject to this Chapter shall contain conditions sufficient to ensure compliance with the provisions of this Chapter. Such conditions shall include but not be limited to the number of inclusionary units required, the schedule of construction for the inclusionary units, the applicant’s manner of compliance with this Chapter, and shall require the execution and recordation of an agreement imposing appropriate resale and other controls to maintain continued affordability of the inclusionary units for the required time.
(Ord. 930, § 2, passed 06-12-2017)
18.32.085 - Inclusionary Housing Regulatory Agreement
A. Inclusionary housing regulatory agreement. The applicant shall execute and cause to be recorded an affordable housing regulatory agreement (“agreement”) between the City and the developer to implement the provisions of this Chapter and any approved inclusionary housing plan. The agreement once approved and executed by the City Manager shall be recorded against the property containing the inclusionary units.
(Ord. 930, § 2, passed 06-12-2017)
18.32.090 - Inclusionary Housing Trust Fund
A. Inclusionary Housing Trust Fund established. There is hereby established the City of Fort Bragg Inclusionary Housing Trust Fund (the “Housing Fund”). Inclusionary housing in-lieu fees collected pursuant to this Chapter shall be deposited into the Housing Fund. Separate accounts within the Housing Fund may be created as necessary to avoid commingling as required by law, or as deemed appropriate to further the purposes of the Fund.
B. Use of funds. The City’s use of the Housing Fund shall comply with the following requirements:
1. Monies deposited in the Housing Fund along with any interest earnings shall be used solely to increase and improve the supply of affordable housing in the City, including:
a. The acquisition of property and property rights;
b. The cost of construction including costs associated with planning, administration, and design, actual building or installation, and any other costs associated with the construction or financing of affordable housing beyond that which is required by this Chapter for a specific development;
c. Reimbursement to the City for costs if funds were advanced by the City from other sources; and
d. Reimbursement of developers or property owners who have constructed affordable housing units beyond that which is required by this Chapter for a specific development.
2. To the maximum extent possible, all monies should be used to provide for additional affordable housing and services.
3. No portion of the Housing Fund may be diverted to other purposes by way of loan or otherwise.
(Ord. 930, § 2, passed 06-12-2017)
18.32.100 - Enforcement of Affordable Housing Requirements
A. Enforcement by City Manager. The City Manager shall enforce the provisions of this Chapter and may initiate revocation of any building permit or development approval in accordance with § 18.98.070. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this Chapter, including civil action, injunctive relief, and any other proceeding or method allowed by Chapter 18.98 or other law.
B. Remedies cumulative not exclusive. The remedies available to the City shall be cumulative and not exclusive and shall not preclude the City from any other remedy or relief to which it otherwise would be entitled under law or equity.
C. Recovery of costs. In any action to enforce this Chapter, or an affordable housing regulatory agreement recorded in compliance with this Chapter, the prevailing party in such action shall be entitled to recover its reasonable attorney’s fees and related costs.
(Ord. 930, § 2, passed 06-12-2017)