Chapter 9-72
HOUSING DEVELOPMENT INCENTIVES
Sections:
9-72.020 Importance of adequate housing.
9-72.030 Housing development incentives enumerated.
9-72.010 Purpose and intent.
The purpose of this chapter is to define specific housing development incentives that the city has approved, to help implement general plan housing objectives, including incentives for the production of housing for very low, lower income, moderate income or senior citizens in accordance with California Law pertaining to density bonuses. (Ord. 2005-9 § 2: Ord. 98-8 § 2 (part): prior code § 9-54.010)
9-72.020 Importance of adequate housing.
The City Council recognizes the value of providing adequate housing opportunities for all segments of the community. The City Council, in adopting this chapter, reaffirms its commitment to provide incentives for housing development consistent with the community vision expressed in the general plan. (Ord. 2005-9 § 3: Ord. 98-8 § 2 (part): prior code § 9-54.020)
9-72.030 Housing development incentives enumerated.
The following incentives are provided as a means to implement general plan housing objectives.
A. Density Bonuses - Housing Development.
1. Definitions. Whenever the following terms are used in this subsection (A), they shall have the meanings established by this subsection (A)(1):
“Affordable housing cost” means as defined in Health and Safety Code Section 50052.5. The term applies to for-sale units. In the housing incentive agreement, in its sole discretion, the city shall exercise the options specified in Section 50052.5(b)(3) and/or (4), if the Department of Housing and Community Development adopts regulations pursuant to Section 50052.5(c), the city shall consider the regulations for purposes of determining affordable housing cost.
“Affordable rent” means as defined in Health and Safety Code Section 50053. The term applies to rental units.
“Applicant” means a developer or owner who desires to construct five or more dwelling units.
“Child care facility” means a child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and school age child care centers.
“Concession or incentive” means the concessions and incentives as specified in California Government Code Section 65915(l):
a. A reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards approved by the State Building Standards Commission as provided in Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code, including, but not limited to, a reduction in setback and square footage requirements and in the ratio of vehicular parking spaces that would otherwise be required that results in identifiable, financially sufficient, and actual cost reductions; or
b. Approval of mixed use zoning in conjunction with the housing project if commercial, office, industrial, or other land uses will reduce the cost of the housing development and if the commercial, office, industrial, or other land uses are compatible with the housing project and the existing or planned development in the area, including the city’s general plan, where the proposed housing project will be located; or
c. Other regulatory incentives or concessions proposed by the applicant or the city which result in identifiable, financially sufficient, and actual cost reductions.
“Density bonus” means a density increase of at least twenty (20) percent over the otherwise maximum allowable residential density, (unless the applicant elects a lower percentage) for housing developments meeting the criteria of subsection A(2)(a)(i)-(iii) of this section, of at least five percent, (unless the applicant elects a lower percentage); for housing developments meeting the criteria of subsection A(2)(a)(iv), and at least fifteen (15) percent (unless the applicant elects a lower percentage) for housing developments meeting the criteria of subsection A(2)(b). The amount of density bonus to which the applicant is entitled shall vary according to the amount by which the percentage of affordable housing units provided exceeds the percentage established in subsection A(2)(a) or by which the percentage of land donated exceeds the percentage established by subsection A(2)(b)(ii). For each one percent increase above ten (10) percent in the percentage of target units meeting the criteria of subsection A(2)(a)(i), the density bonus shall be increased by one point five (1.5) percent up to a maximum of thirty-five (35) percent. For each one percent increase above five percent in the percentage of target units meeting the criteria of subsection A(2)(a) (ii), the density bonus shall be increased by two point five (2.5) percent up to a maximum of thirty-five (35) percent. For each one percent increase above ten percent of the percentage of target units meeting the criteria of subsection A(2)(a)(iv), the density bonus shall be increased by one percent up to a maximum of thirty-five (35) percent. For each one percent increase above the minimum ten percent land donation described in A(2)(b)(ii), the density bonus shall be increased by one percent, up to a maximum of thirty-five (35) percent. This increase shall be in addition to any increase in density requested by the applicant for housing developments meeting the criteria of subsection A(2)(a)(i), (ii), (iii) or (iv), up to a maximum combined mandated density increase of thirty-five (35) percent if the applicant seeks both types of density increases. For purposes of calculating the number of density bonus units to be granted, the maximum allowable residential density for the site shall be multiplied by the applicable density bonus percentage. When calculating the number of permitted density bonus units, any fractions of units shall be rounded to the next larger integer.
“Density bonus units” means those residential units granted pursuant to the provisions of this chapter which exceed the otherwise maximum allowable residential density for the development site.
“Development standards” means site or construction conditions that apply to a residential development pursuant to any ordinance, general plan element, specific plan, charter amendment, or other local condition, law, policy, resolution, or regulation, including minimum lot size, side yard setbacks, and placement of public improvements.
“Director” means the city’s Director of Community Development or designee.
“Housing development” means one or more groups of projects for residential units constructed in the planned development of the city. “Housing development” also includes a subdivision or a planned unit development or condominium project, as defined in Civil Code Section 1351, approved by the city and consists of residential units or unimproved residential lots and either (1) a project to substantially rehabilitate and convert an existing commercial building to residential use, or (2) the substantial rehabilitation of an existing multifamily dwelling, as defined in subdivision (d) of Government Code Section 65863.4, where the result of the rehabilitation would be a net increase in available residential units. For the purpose of calculating a density bonus, the residential units do not have to be based upon individual subdivision maps or parcels. The density bonus shall be permitted in geographic areas of the housing development other than the areas where the units for the lower income households are located. The location of units, whether target units or non-restricted units, shall be in conformance with the specific plan, or other zoning regulations, as applicable.
“Housing incentive agreement” means a legally binding agreement between an applicant and the city to ensure that the requirements of this chapter are satisfied. The agreement, among other things, shall establish the number of target units, size, location, terms and conditions of affordability, and production schedule and may be part of a larger disposition and development or regulatory agreement.
“Lower income household” means persons and families whose income does not exceed the qualifying limits for lower income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. The limits shall be published in the California Administrative Code as soon as possible after adoption by the Secretary of Housing and Urban Development (“HUD”) or, in the event such federal standards are discontinued, as established by regulation of the California Department of Housing and Community Development (“HCD”).
“Maximum allowable residential density” means the maximum number of residential units permitted by the land use element of the city’s general plan and zoning ordinance, as of the date of applicant’s application to the city, excluding the density bonus allowed by this subsection. If a range of density is permitted in a zone or planning area of a specific plan, the maximum allowable residential density is the maximum number of residential units for the specific zoning range or planning area applicable to the project.
“Non-restricted unit” means all units within a housing development excluding the target units
“Persons and families of moderate income” or “moderate income household” means persons and families of low or moderate income whose income exceeds the income limit for lower income households. “persons and families of low or moderate income” means persons and families whose income does not exceed one hundred twenty (120) percent of area median income, as defined in Health and Safety Code Section 50093, adjusted for family size by HCD in accordance with adjustment factors adopted and amended from time to time by HUD pursuant to Section 8 of the United States Housing Act of 1937.
“Senior citizen” means a person sixty-two (62) years of age or older, or fifty-five (55) years of age living in a senior citizen housing development.
“Senior citizen housing development” means, as more fully defined in Civil Code Section 51.3, a residential development that was or is proposed to be developed, substantially rehabilitated, or substantially renovated for senior citizens that has at least thirty-five (35) dwelling units and has applied for or has been issued a public report pursuant to Business and Professions Code Section 11010.05.
“Target unit” means a dwelling unit within a housing development which will be reserved for sale or rent to, and occupancy by, very low or lower income households or moderate income households, in the case of a condominium project or planned development.
“Very low income households” means persons and families whose incomes do not exceed the qualifying limits for very low income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. Such limits shall be published in the California Administrative Code as soon as possible after adoption by HUD, or in the event such federal standards are discontinued, as established by regulation of HCD.
2. Required Incentives.
a. When an applicant agrees to provide:
i. At least ten percent of the total units (excluding the density bonus) of the housing development as target units affordable to lower income households; or
ii. At least five percent of the total units (excluding the density bonus) of the housing development as target units affordable to very low income households, or
iii. A senior citizen housing development, or
iv. At least ten percent of the total units (excluding the density bonus) in a condominium project as defined in Civil Code Section 1351, subdivision (f), or in a planned development as defined in Civil Code Section 1351, subdivision (k), as target units affordable to persons and families of moderate income; the city shall grant a density bonus, and the number of concessions or incentives specified in subsection A(2)(d) of this section.
b. When an applicant donates land to the city as provided for in this subsection, the city shall grant a density bonus. Nothing in this subsection shall be construed to enlarge or diminish the authority of the city to require a developer to donate land as a condition of development. An applicant shall be eligible for the increased density bonus described in this subsection if all of the following conditions are met:
i. The applicant donates and transfers the land no later than the date of approval of the final subdivision map, parcel map, or residential development application.
ii. The development acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households in an amount not less than ten percent of the number of residential units of the proposed development.
iii The transferred land is at least one acre in size or of sufficient size to permit development of at least forty (40) units, has the appropriate general plan designation, is appropriately zoned for development as affordable housing, and is or will be served by adequate public facilities and infrastructure. The land shall have appropriate zoning and development standards to make the development of the affordable units feasible. No later than the date of approval of the final subdivision map, parcel map, or of the residential development, the transferred land shall have all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land, except that the city may subject the proposed development to subsequent design review to the extent authorized by subdivision (i) of Government Code Section 65583.2 if the design is not reviewed by the city prior to the time of transfer.
iv The transferred land and the affordable units shall be subject to a deed restriction ensuring continued affordability of the units consistent with paragraphs (1) and (2) of subdivision (c) of Government Code Section 65915, which shall be recorded on the property at the time of dedication.
v. The land is transferred to the city or to a housing developer approved by the city. The city may require the applicant to identify and transfer the land to the developer.
vi. The transferred land shall be within the boundary of the proposed development or, if the city agrees, within one-quarter mile of the boundary of the proposed development.
c. i. When an applicant agrees to construct a housing development that conforms to the requirements of subsection A(2)(a) and includes a child care facility that will be located on the premises of, as part of, or adjacent to, the project, unless it finds, based upon substantial evidence, that the community has adequate child care facilities, the city shall grant either:
(A) An additional density bonus that is an amount of square feet of residential space. that is equal to or greater than the amount of square feet in the child care facility, or
(B) An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the child care facility.
ii. As a condition to approval of the housing development, the applicant shall ensure that the following occur:
(A) The child care facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the density bonus units are required to remain affordable pursuant to subsection A(3) (b) and (c).
(B) Of the children who attend the child care facility, the children of very low income households, lower income households, or families of moderate income shall equal a percentage that is equal to or greater than the percentage of dwelling units that are required for very low income households, lower income households, or families of moderate income pursuant to subsection A(2)(a).
d. i. An applicant may submit to the city a proposal for the specific incentives or concessions that the applicant requests pursuant to this subsection, and the applicant may request a meeting with the city The city must grant the concession or incentive requested by the applicant unless the city makes a written finding, based upon substantial evidence, of either of the following:
(A) The concession or incentive is not required in order to provide for affordable housing costs, as defined in Health and Safety Code Section 50052.5, or for rents for the targeted units to be set as specified in Government Code Section 65915, subdivision (c).
(B) The concession or incentive would have a specific adverse impact, as defined in Government Code Section 65589.5, subdivision (d), paragraph (2), upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low- and moderate-income households.
ii. In addition to any child care facility incentives or concessions granted pursuant to subsection A(2)(c), the city shall grant the following number of incentives or concessions:
(A) One incentive or concession for projects that include at least ten percent of the total units of the housing development as target units for lower income households, and/or at least five percent of the total housing units of the housing development as target units for very low income households, and/or a senior citizen housing development, and/or at least ten percent of the total units in a condominium project or planned development as target units for persons and families of moderate income.
(B) Two incentives or concessions for projects that include at least twenty (20) percent of the total units of the housing development as target units for lower income households, and/or at least ten percent of the total housing units of the housing development as target units for very low income households, and/or at least twenty (20) percent of the total units in a condominium project or planned development as target units for persons and families of moderate income.
(C) Three incentives or concessions for projects that include at least thirty (30) percent of the total units of the housing development as target units for lower income households, and/or at least fifteen (15) percent of the total housing units of the housing development as target units for very low income households, and/or at least thirty (30) percent of the total units in a condominium project or planned development as target units for persons and families of moderate income.
e. In cases where a density increase of less than twenty (20) percent for housing developments with very low or lower income households or of less than five percent for a condominium project or planned development, as defined in subsection A(2)(a)(iv), is requested, no reduction will be allowed in the number of target units required to be restricted pursuant to subsection A(3)(b) and (c) in order to obtain the authorized density bonus.
f. i. In addition to any incentives or concessions requested pursuant to subsection A(2)(c) or (d), an applicant may request a waiver or reduction of development standards that have the effect of precluding the construction of a housing development meeting the criteria of subsection A(2)(a) at the densities or with the concessions or incentives permitted by this section.
ii. The applicant shall show that the waiver or reduction is necessary to make the housing units economically feasible.
iii. Nothing in this subsection shall be interpreted to require the city to waive or reduce development standards that would have a specific adverse impact, as defined in Government Code Section 65589.5, subdivision (d), paragraph (2), upon public health, safety, or the physical environment, or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact.
3. Standard Development Requirements.
a. Target units shall be constructed concurrently with non-restricted units unless both the city and the applicant agree in the housing incentive agreement described in subsection A(6) to an alternative schedule for development.
b. An applicant shall agree to and the city shall ensure that lower income and very low income target units shall remain affordable to the designated group for a period of thirty (30) years, or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. Those units targeted for-sale shall be sold at and remain affordable at an affordable housing cost to the applicable group. Those units targeted for rent shall be rented at an affordable rent to the applicable group.
c. An applicant shall agree to and the city shall ensure that the initial occupant of any target units meeting the criteria of subsection A(2)(a)(iv) are persons and families of moderate income, as defined in Health and Safety Code Section 50093, and that the city is entitled to recapture its proportionate share of appreciation, as defined below. Upon resale, the seller of the unit shall retain the value of any improvements, the down payment, and the seller’s proportionate share of appreciation. The city shall recapture its proportionate share of appreciation, which shall then be used within three years for any of the purposes described in subdivision (e) of Health and Safety Code Section 33334.2 that promote homeownership. For purposes of this subdivision, the city’s proportionate share of appreciation shall be equal to the percentage by which the initial sale price to the moderate-income household was less than the fair market value of the home at the time of initial sale.
d. The design and appearance of the target units shall be consistent with the design of the total housing development. Housing developments shall comply with all development standards applicable to housing in the city except those which may be modified as provided by this chapter.
e A housing incentive agreement shall be entered into between the applicant and city to memorialize, among other things, the applicant’s commitment to provide target units in accordance with this chapter and other applicable provisions of state law. The agreement shall be made a condition of the development permits (e.g., tract maps, parcel maps, site plans, planned development or conditional use permits, etc ) for all housing developments pursuant to this chapter.
f. i. Notwithstanding any other site development standards or zoning code requirements set forth in this code, upon request of the applicant, the city shall grant an incentive or concession consisting of a reduction in the vehicular parking ratios, inclusive of handicapped and guest parking, to at least the following ratios:
(A) Zero to one bedrooms: one onsite parking space.
(B) Two to three bedrooms: two onsite parking spaces.
(C) Four or more bedrooms: two and one-half parking spaces.
ii. If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subsection, a development may provide “onsite parking” through tandem parking or uncovered parking, but not through on-street parking.
4. Location of Target Units. Target units shall be built on-site, and be integrated within the housing development. Except for a senior citizen housing development, the number of bedrooms of the target units shall be generally equivalent to the bedroom mix of the non-restricted units of the housing development, as determined by the Director and embodied in a housing incentive agreement. Notwithstanding the foregoing, the applicant may include a higher proportion of target units with more bedrooms than the non-restricted units.
5. Application Requirements and Review.
a. An applicant proposing a housing development pursuant to this subsection may submit a preliminary application prior to the submittal of any formal request for approval of a permit for a housing development. Applicants are encouraged to schedule a pre-application conference with the Director to discuss and identify potential application issues. No charge will be required for the pre-application conference. A preliminary application shall include the following information:
i. A description of the proposed housing development including the total number of units, target units by income category, and density bonus units.
ii. The zoning and general plan designations and assessors parcel number(s) of the project site.
iii. The location of the target units within the housing development.
iv. The number of additional “housing units” requested as the “density bonus” for the housing development.
v. A vicinity map and preliminary site plan, drawn to scale, including building footprints, driveway, and parking layout.
vi. A description of any requested concession(s) or incentive(s), additional density bonuses, and/or modified parking standards. If a density bonus is requested for a land donation, the application shall show the location of the land to be dedicated and provide evidence that each of the conditions included in subsection 9121(b) can be met. If an additional density bonus or concession or incentive is requested for a child care facility, the application shall show the location and square footage of the child care facility and provide evidence that each of the conditions in subsection 9121(c)(2) can be met.
vii. A description of any development standards requested to be waived or reduced and an explanation of why they are needed. In requesting a waiver or reduction of development standards or zoning code requirements, the applicant shall provide substantial facts in the form of a development pro-forma that the waiver or modification is necessary to make the target units and other units in the housing development economically feasible. At a minimum, the development pro-forma shall include information identifying capital costs, equity investment, debt service, discount rate, revenues, vacancy allowance, operating expenses, net income or net operating income, pre-tax cash flow, after-tax cash flow, and return on investment.
viii. The applicant shall acknowledge in writing that a housing incentive agreement is required.
b. An application for a density bonus and/or concession or incentive pursuant to this subsection shall be processed concurrently with any other permit application(s) required for the housing development. At a minimum, the application shall contain all the information described in subsection A(5)(a), plus all other required information. Final approval or disapproval of an application shall be made by the City Council, except that no approval shall be effective until the city and applicant have executed a housing incentive agreement.
c. Within sixty (60) days of receipt of the preliminary application, the city shall provide the applicant with a letter which identifies project issues of concern and the proposed concessions or incentives that the Director would recommend to the City Council and the procedures for compliance with this chapter.
6. Housing Incentive Agreement.
a. Once an application for a density bonus and/or concession(s) or incentive(s) is approved pursuant to subsection A(5)(b), a housing incentive agreement shall be prepared consistent with any conditions of approval related thereto subject to review and approval as to form by the City Attorney. The city approval and execution responsibilities for such agreement shall be as identified in the approval of the housing development application pursuant to subsection A(5)(b). Where such identification is not made by the City Council, such agreement shall be subject to approval by the City Council.
b. The final approval of any documents as required by the agreement shall take place prior to final map approval, or, where a map is not being processed, prior to issuance of building permits for any parcels in the housing incentive agreement. The agreement shall be binding to all future owners and successors in interest.
c. The agreement shall include at least the following:
i. The total number of units approved for the housing development including the number of target units.
ii. A description of the household income group to be accommodated by the housing development, and the standards for determining the corresponding affordable rent or affordable housing cost.
iii. The location, unit sizes (square feet), and number of bedrooms of target units.
iv. Affordability restrictions for lower income and very low income target units of at least thirty (30) years.
v. A schedule for completion and occupancy of target units.
vi. A description of the concessions or incentives or optional additional assistance being provided by the city.
vii. A description of remedies for breach of the agreement by either party (the city may identify tenants or qualified purchasers as third party beneficiaries under the agreement).
viii. Other provisions to ensure implementation and compliance with this chapter and state law.
d. In the case of for-sale housing developments, the agreement shall provide for the following regarding the initial sale and use of target units during the applicable use restriction period and for the respective affordability period:
i. Target units shall, upon initial sale, be sold to eligible very low income households, lower income households or moderate income households consistent with this chapter or as approved by the City Council at an affordable housing cost or be made available to senior citizens in a senior citizen housing development.
ii. Target units shall be initially owner-occupied by eligible very low, lower income, or moderate income households, or by senior citizens in the case of a senior citizen housing development.
iii. The agreement shall provide for the continued affordability of the lower income and very low income target units for the applicable affordability period.
iv. The agreement shall provide for the recapture by the city of its proportionate share of appreciation upon the resale of moderate income target units in accordance with this chapter.
e. In the case of rental housing developments, the agreement shall provide for the following conditions governing the use of target units during the affordability period:
i. The rules and procedures for qualifying tenants, establishing affordable rent, filling vacancies, and maintaining target units for qualified tenants.
ii. Provisions requiring the owner to verify tenant incomes and maintain books and records to demonstrate compliance with this chapter.
B. Density Bonus - Condo Conversion. An applicant for approval to convert apartments to a condominium project, who agrees to provide at least thirty-three (33) percent of the total units of the proposed condominium project, to persons and families of low or moderate income as defined in Section 50093 of the Health and Safety Code, or fifteen (15) percent of the total units of the proposed condominium project to lower income households, as defined in Section 50079.5 of the Health and Safety Code, and agrees to pay for the reasonably necessary administrative costs incurred by city, county, or city and county pursuant to this section, the city shall either:
1. Grant a density bonus; or
2. Provide other incentives of equivalent financial value.
The city may place such reasonable conditions on the granting of a density bonus or other incentives of equivalent financial value as it finds appropriate, including, but not limited to, conditions which insure continued affordability of units to subsequent purchasers who are persons and families of low and moderate income, or lower income households. For the purposes of this subsection B, “density bonus” means an increase in units of twenty-five (25) percent over the number of apartments, to be provided within the existing structure or structures proposed for conversion. For purposes of this subsection B, “other incentives or equivalent financial value” shall not be construed to require the city to provide cash transfer payments, or other monetary incentives but may include waiver of requirements which the city might otherwise apply as conditions of the conversion approval.
C. Housing in Nonresidential Districts. The development code provides opportunities to develop housing within nonresidential districts as follows:
1. Allowance of boarding homes, community care facilities, transitional care facilities/emergency shelters and single room occupancy housing facilities within the village commercial district, subject to conditional use permits or site development permits. See Chapter 9-24 of this title.
2. Allowance of boarding homes, community care facilities, transitional care facilities/emergency shelters, and single room occupancy housing facilities within the freeway commercial district, subject to conditional use or site development permits. See Chapter 9-26 of this title.
3. Allowance of boarding homes, community care facilities, transitional care facilities/emergency shelters, and single room occupancy housing facilities within the general commercial district subject to a conditional use or site development permit. See Chapter 9-28 of this title.
4. Allowance of boarding homes, community care facilities, transitional care facilities/emergency shelters, multifamily dwelling units, mobilehome parks and single room occupancy housing facilities within the mixed use district, subject to a conditional use permit or site development permit. See Chapter 9-30 of this title.
5. Allowance of community care facilities, transitional care facilities/emergency shelters, and multifamily dwelling units within the community/private institution district subject to a conditional use permits or site development permit. See Chapter 9-32 of this title.
D. Fiscal Incentives. In addition to the density bonuses permitted by this code, the City Council may approve one or more of the following incentives to developers of affordable housing projects:
1. A maximum of fifty (50) percent reduction in fees for applications for any affordable housing project;
2. Waiver or reduction in fees for building permits equal to the value of the density bonus granted;
3. Financial assistance for the acquisition of property, mortgage assistance, sale of housing bonds, rent subsidies, or provision of improvements to serve a site;
4. Low interest loans or subsidies to promote rehabilitation or remodeling of housing units to serve very low or low income residents.
E. Procedural Incentives. The Planning Department is authorized to implement any of the following procedural incentives in support of an affordable housing development project.
1. Combine all required applications for consideration at one review hearing;
2. Fast track all housing development projects;
3. Provide priority processing, and scheduling for review of housing projects. (Ord. 2005-9 § 4: Ord. 98-8 § 2 (part): prior code § 9-54.030)