Chapter 16.96
BELOW MARKET RATE HOUSING PROGRAM
Sections:
16.96.020 Residential development projects.
16.96.030 Commercial development projects.
16.96.040 Development regulations for below market rate units.
16.96.050 Below market rate housing fund.
16.96.060 Below market rate housing program guidelines.
16.96.070 Rental housing alternative means of compliance.
16.96.072 Treatment of contiguous parcels.
16.96.080 Administrative relief.
16.96.010 Purpose.
The purpose of the below market rate (BMR) housing program is to increase the housing supply for households that have very low, low and moderate incomes compared to the median household income for San Mateo County. The primary objective is to create actual housing units, either "rental" or "for purchase" units, rather than equivalent cash. The below market rate requirements associated with residential development projects are a form of "inclusionary zoning." The below market rate requirements associated with commercial development projects are a form of "linkage." This chapter authorizes the below market rate housing program. The program is implemented through guidelines as adopted and amended from time to time by the city council. (Ord. 1045 § 2 (part), 2018: Ord. 905 § 2 (part), 2001).
16.96.020 Residential development projects.
(a) Applicability. This section shall apply to conditional use permits, conditional development permits, planned development permits, subdivision approvals, architectural control approvals, variance approvals, and building permits for any residential development project of five (5) or more units. This section also applies to condominium conversions.
(b) Requirements. For residential development projects of less than twenty (20) units, the developer shall provide not less than ten percent (10%) of the units at below market rates to very low-, low- and moderate-income households. For residential development projects of twenty (20) or more units, the developer shall provide not less than fifteen percent (15%) of the units at below market rates to very low-, low- and moderate-income households. If the number of units required for a residential development project includes a fraction of a unit, the developer shall provide either a whole unit or a prorata in lieu payment on account of such fraction as determined in the below market rate housing program guidelines. The requirements of this section may be met through the provision of on-site or off-site below market rate units as determined by the housing commission and the reviewing body (i.e., planning commission or city council).
(c) Review Process. As part of an application for an applicable residential development project, the developer shall submit a below market rate housing agreement. The agreement shall set forth the developer’s plan to meet the requirements of this section. The agreement shall be reviewed by the housing commission and forwarded with a recommendation to the reviewing body for the application request. The reviewing body shall act on the agreement prior to or concurrently with the action on the application request. No building permit or other land use authorization may be issued or approved unless the requirements of this section have been met. (Ord. 1045 § 2 (part), 2018: Ord. 905 § 2 (part), 2001).
16.96.030 Commercial development projects.
(a) Applicability. This section shall apply to conditional use permits, conditional development permits, planned development permits, subdivision approvals, architectural control approvals, variance approvals, and building permits for any commercial development project or the construction of such project or any portion thereof which includes any new square footage or any square footage that is converted from an exempt use to a non-exempt use or from a Group B (all other commercial/industrial uses) use to a Group A (office/R&D) use.
(b) Exemptions. The following uses are exempt from this section:
(1) Private schools and churches;
(2) Public facilities;
(3) Commercial development projects of less than ten thousand (10,000) square feet;
(4) Projects that generate few or no employees.
(c) Requirements. The developer shall mitigate the demand for affordable housing created by the commercial development project. The below market rate housing program guidelines provides various alternatives for mitigation. A commercial development project may be required to provide below market rate housing on site (if allowed by the zoning district) or off site. If it is not feasible to provide below market rate housing units, the developer shall pay an in-lieu fee prior to issuance of a building permit as follows:
(1) Group A use: Eleven dollars and eighty-nine cents ($11.89) per square foot of new gross floor area;
(2) Group B use: Six dollars and forty-eight cents ($6.48) per square foot of new gross floor area.
The in-lieu fee shall be adjusted annually on the first of July, in accordance with the guidelines.
(d) Review Process. As part of an application for a commercial development project, the developer shall submit a below market rate housing agreement. The agreement shall set forth the developer’s plan to meet the requirements of this section. The agreement shall be reviewed by the housing commission and forwarded with a recommendation to the reviewing body (i.e., planning commission or city council) for the application request. The reviewing body shall act on the agreement prior to or concurrently with the action on the application request. No building permit or other land use authorization may be issued or approved unless the requirements of this section have been met. (Ord. 1045 § 2 (part), 2018: Ord. 927 § 1 (part), 2003; Ord. 905 § 2 (part), 2001).
16.96.040 Development regulations for below market rate housing units.
(a) Generally. The provisions of this section shall apply only to housing developments and mixed-use developments that include housing that provide one (1) or more below market rate units in accordance with the provisions of this chapter. This section is intended as an alternative to the State Density Bonus Law, the enabling ordinance for which is set forth in Chapter 16.97 of the Menlo Park Municipal Code. Housing developments and mixed-use projects including housing may elect to utilize the bonuses and incentives under this chapter or Chapter 16.97, but not both.
(b) Density and FAR bonuses. For each below market rate unit provided under the below market rate housing program, a developer shall be permitted to build one (1) additional market rate unit and, in the case of a subdivision, to create a legal lot or condominium unit for such additional unit. In addition, a developer shall be permitted to increase the floor area associated with the residential development project by an amount that corresponds to the increase in allowable density. Requests for density bonuses of a maximum of fifteen percent (15%) are subject to approval of the reviewing body (i.e., planning commission or city council) associated with the required application.
(c) Incentives. The following incentives may be requested, if applicable:
(1) To accommodate the increase in allowable density and floor area ratio described in subsection (b) of this section, the developer may request exceptions from all development regulations of the applicable zoning district of a residential development project that includes below market rate units, except for floor area ratio and density.
(2) Development on a parcel of less than one (1) acre in area but greater than or equal to twenty thousand (20,000) square feet where the number of BMR units developed on the site exceeds the required number of BMR units by a fractional equivalent of more than one-half (0.5) of a unit may request exceptions from development regulations as specified in Sections 16.82.050 through 16.82.100, conditional development permits. (Ord. 1045 § 2 (part), 2018: Ord. 939 § 4, 2005; Ord. 905 § 2 (part), 2001).
16.96.050 Below market rate housing fund.
Fees paid pursuant to this chapter shall be deposited in the below market rate housing fund as described in the below market rate housing program guidelines. (Ord. 1045 § 2 (part), 2018: Ord. 905 § 2 (part), 2001).
16.96.060 Below market rate housing program guidelines.
The provisions of this chapter shall be implemented through the below market rate housing program guidelines as adopted by the city council on January 12, 1988, and subsequently amended. (Ord. 1045 § 2 (part), 2018: Ord. 905 § 2 (part), 2001).
16.96.070 Rental housing alternative means of compliance.
For any rental housing development subject to this chapter, the applicant may comply with the requirements of this chapter by providing in-lieu fees, land dedication, off-site construction, or acquisition and rehabilitation of existing units. Any alternative means of compliance shall be approved by the city council upon findings that the alternative is commensurate with the applicable on-site requirement and complies with applicable program guidelines. (Ord. 1045 § 2 (part), 2018).
16.96.072 Treatment of contiguous parcels
(a) For purposes of this chapter, new residential and commercial development projects on contiguous properties and that are submitted by the same applicant, are under common ownership, and/or under common control shall be treated as one (1) development project.
(1) "Common ownership" means two (2) or more legally created parcels that share an owner, are owned or controlled by an owner’s spouse, or are under the direct or indirect control of one (1) person or legal entity through ownership, management, contract, or otherwise.
(2) "Owner" means an owner of record or the holder of an equitable or legal interest in property. For purposes of this chapter, an owner shall include any person, persons, or entity with at least a ten percent (10%) interest in the property, either directly or by owning or controlling an entity with at least a ten percent (10%) interest in the property.
(3) "Common control" means two (2) or more owners that directly or indirectly (1) share a managing member or members in the case of a limited liability company; (2) share a managing general partner or partners in the case of a partnership; or (3) are under the management or control of boards of directors or officers that overlap by fifty percent (50%) or more in the case of a corporation.
(b) An applicant for a development project shall not avoid the BMR requirements of this chapter by submitting piecemeal applications. At the time of the application for first approval for a development project, the applicant shall identify all contiguous property under common ownership or common control. The applicant shall not be required to contribute BMR units or pay in-lieu fees based on common ownership or control of the contiguous property at the time of the application for first approval; however, the applicant shall be required to include the contiguous property under common ownership or control in its below market rate housing agreement. The agreement shall be recorded against the development project and all contiguous property under common ownership or control and shall require compliance with this chapter upon development of each contiguous property under common ownership or control at such time as there are development project applications on such properties that would authorize the application of the BMR requirements contained in this chapter to the initial development project and the subsequent development project on the contiguous property under common ownership or control. (Ord. 1045 § 2 (part), 2018).
16.96.080 Administrative relief.
(a) As part of the initial application submittal for a residential or nonresidential project to which this chapter is applicable, a developer may request that the requirements of this chapter be waived or modified by the city council, based upon a showing that applying the requirements of this chapter would result in an unconstitutional taking of property or would result in any other unconstitutional result.
(b) The request for a waiver or modification shall set forth in detail the factual and legal basis for the request.
(c) Any request for a waiver or modification shall be reviewed and considered at the same time as the project application.
(d) The waiver or modification may be approved only to the extent necessary to avoid an unconstitutional result, based upon legal advice provided by or at the behest of the city attorney, after adoption of written findings, based on legal analysis and substantial evidence. (Ord. 1045 § 2 (part), 2018).