Chapter 18.35
BELOW MARKET RATE HOUSING
Sections:
18.35.025 Affordable housing agreement.
18.35.030 Establishment of an affordable housing fund.
18.35.035 Affordable housing fund accumulation and disbursement.
18.35.040 Location of below market rate units.
18.35.045 Fee in lieu of providing below market rate housing.
18.35.050 Incentives for below market rate units.
18.35.055 Occupancy requirements.
18.35.060 Resale of below market rate units.
18.35.065 Notice of conversion.
18.35.010 Purpose and intent.
This purpose of this chapter is to ensure that housing opportunities are available for all economic segments of the population as identified in the housing element of the city general plan and that housing units for very low and low income households is a priority per Government Code Section 65589.7. The intent of the below market rate housing program established by this chapter is to require either the construction of dwellings that very low, low, and moderate income households can afford to rent or buy, or require the contribution of an in lieu fee to an affordable housing fund an amount sufficient to provide affordable housing opportunities for these income groups as a part of any new residential subdivision of ten or more lots or dwelling units or the conversion of ten or more rental units to condominiums. Identification of housing units for very low and low income households is considered a priority residential use; however, adequate infrastructure first must be reserved for all Coastal Act priority uses, as enumerated in LCP/LUP Tables 10.3 and 10.4. (Ord. C-2014-10 §7(A), 2014; Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part)).
18.35.015 Definitions.
A. “Below market rate dwelling unit” means a unit which is affordable, either by rental or purchase, to very low, low, or moderate income households as defined herein.
B. “Very low income household” means any household whose income, with adjustments for family size, is fifty percent or less of the median income for San Mateo County as established by the U.S. Department of Housing and Urban Development.
C. “Low income household” means any household whose income, with adjustments for family size, is between fifty and one-tenth percent and eighty percent of the median income for San Mateo County as established by the U.S. Department of Housing and Urban Development.
D. “Moderate income household” means any household whose income, with adjustments for family size, is between eighty and one-tenth percent and one hundred twenty percent of the median income for San Mateo County as established by the U.S. Department of Housing and Urban Development.
E. “Affordability” means having a monthly rental or purchase cost (including a thirty year mortgage based on twenty percent down payment, mortgage insurance, taxes, insurance, and homeowner association fees) of no more than thirty percent of monthly household income.
F. “Dwelling unit” means and includes any mobile home, manufactured housing unit, or any structure with water, sanitation, and utilities that has been designed, constructed, and used for purposes of habitation.
G. “Qualified buyer” means any potential purchaser whose gross annual income is less than or equal to the maximum annual income standards for a protected below market rate dwelling unit as provided for herein.
H. “Qualified renter” means any potential renter whose gross annual income is less than or equal to the maximum annual income standards for a protected below market rate dwelling unit as provided for herein. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part)).
18.35.020 Applicability.
This section applies to all new residential subdivisions of ten or more lots or dwelling units and condominium conversion projects of ten or more units approved in the city after the date of adoption. Every residential subdivision of ten or more lots or dwelling units and condominium conversion projects of ten or more units shall include one or more below market rate dwelling units according to the following general guidelines:
A. A minimum of twenty percent of the total number of dwelling units in all developments of ten or more units shall be priced at levels which are affordable to low and moderate income households as defined in this chapter and in the housing element.
B. At least twenty-five percent of all below market rate units (twenty-five percent of the twenty percent required) shall be priced at levels which are affordable to very low and low income households as defined in this chapter and the housing element.
C. To the extent practical and feasible, the targets for new below market rate housing units shall be as follows:
|
Target Income Group |
Target Housing Units |
|---|---|
|
Moderate Income |
7 percent of total |
|
Low Income |
7 percent of total |
|
Very Low Income |
6 percent of total |
|
TOTAL |
20 percent of total |
D. The planning commission and city council may modify these targets based upon the specifics of each new residential subdivision of ten or more lots or dwelling units or condominium conversion projects of ten or more units.
E. In those cases where strict adherence to the formula provided herein results in a fraction between one one-hundredth and forty-nine one-hundredths of a below market rate dwelling unit, the city council may approve a pro rata contribution to the affordable housing fund an amount equal to twenty percent of the building permit valuation for the market rate units to be built.
F. Where the fraction of a below market rate housing unit was between five-tenths and ninety-nine one-hundredths, an additional housing unit shall be required. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part)).
18.35.025 Affordable housing agreement.
The city and developer of the below market rate dwelling units shall enter into an affordable housing agreement governing the dwelling units and that agreement shall be recorded against the property. The agreement shall include a clause prohibiting illegal and discriminatory housing practices, as defined by the California Fair Employment and Housing Act (Government Code Section 12900 et seq.) in the marketing, rental, or sale of any below market rate unit. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part)).
18.35.030 Establishment of an affordable housing fund.
The city council shall establish an affordable housing fund for purposes of accepting in-lieu contributions permitted by this chapter. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part)).
18.35.035 Affordable housing fund accumulation and disbursement.
Administration of the affordable housing fund shall be carried out by the planning department based on guidelines established by the city council. Priorities for disbursement of funds shall be established by the city council as part of the annual budget approval process. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part)).
18.35.040 Location of below market rate units.
A. Unless otherwise approved by the planning commission and city council, below market rate units created by this chapter shall be provided on site and integrated into the proposed residential subdivision.
B. In considering any proposal to construct or otherwise provide below market rate units off site from the proposed residential subdivision or condominium conversion, the planning commission and city council shall make the following findings:
1. That the proposed location of the below market rate units will not result in the clustering of said units within any neighborhood or geographical area of the city.
2. That an economic hardship would be created for either the qualified buyer or renter such as excessive homeowner association dues.
3. That an economic hardship would be created for either the developer or purchasers of the market rate units that could be mitigated by contributing to the affordable housing fund in lieu of providing the below market rate units.
4. That the proposed development site does not have sufficient land area to provide the affordable units without severely impacting the financial feasibility of the project. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part)).
18.35.045 Fee in lieu of providing below market rate housing.
A. Where an applicant requests relief from the requirement to construct below market rate units as required by this chapter, the city council may approve a contribution to the city’s affordable housing fund of an amount equal to twenty percent of the building permit valuation for the market rate units. The city council shall consider the following in approving any request to contribute to the affordable housing fund in lieu of providing the dwelling units:
1. That an economic hardship would be created for either the qualified buyer or renter such as excessive homeowner association dues.
2. That an economic hardship would be created for either the developer or purchasers of the market rate units that could be mitigated by contributing to the affordable housing fund in lieu of providing the below market rate units.
3. That the proposed development site does not have sufficient land area to provide the affordable units without severely impacting the financial feasibility of the project. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part)).
18.35.050 Incentives for below market rate units.
A. All projects providing below market rate units pursuant to the requirements of this chapter or providing housing affordable to extremely low, very low, or low income households shall be eligible for the following:
1. Development Standards. Reduction or waiver of development standards shall be provided consistent with the applicable provisions of Section 18.06.050(G) or Chapter 18.42.
2. Priority Use. The city shall provide notification to the applicable water and sewer agency identifying that the extremely low, very low, and low income housing units are considered a priority residential use; however, adequate infrastructure first must be reserved for all Coastal Act priority uses, as enumerated in LCP/LUP Tables 10.3 and 10.4.
3. Large Units. Incentives for large (three bedrooms or more) rental units shall be provided pursuant to Section 18.06.050(H) for projects that provide twenty-five percent or more of the below market rate units as three-bedroom units, with a minimum threshold of four below market rate units with three or more bedrooms. (Ord. C-2014-10 §7(B), 2014; Ord. C-15-10 §1(Exh. A(part)), 2010).
18.35.055 Occupancy requirements.
Any dwelling unit affordable to very low, low, or moderate income households created by this chapter shall be occupied by the qualified buyer or qualified tenant only. Ownership units shall be owner occupied. No subleasing or other transfer of tenancy of any ownership or rental unit created by this chapter is permitted. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part). Formerly 18.35.050).
18.35.060 Resale of below market rate units.
Below market rate dwelling units created by this chapter may be resold at any time on the open market to a qualified buyer as defined herein. Deed restrictions shall be recorded against the property and included within the affordable housing agreement establishing the standards and criteria for management and resale of each protected unit, including the specific criteria to define a qualified buyer for each protected unit. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part). Formerly 18.35.055).
18.35.065 Notice of conversion.
Owners of below market rate rental units must provide the city and each building tenant with a notice of a pending conversion of the unit from below market rate rent to market rent at least one year prior to the conversion. The notice shall be mailed by registered mail, return receipt requested. (Ord. C-15-10 §1(Exh. A(part)), 2010).
18.35.070 Enforcement.
The city planning department shall be responsible for enforcing the affordability provisions of this chapter. As part of an annual housing affordability report funded by the affordable housing fund, the department shall monitor the rental/resale of designated affordable units. Appropriate enforcement action will be taken in the event that violations of the chapter are revealed. (Ord. C-15-10 §1(Exh. A(part)), 2010: 1996 zoning code (part). Formerly 18.35.060).