Chapter 24.16 AFFORDABLE HOUSING PROVISIONS

The purpose of the inclusionary housing requirements is to enhance the public welfare by adopting policies to utilize remaining developable land in the city in a manner consistent with state and local housing policies and needs, meet the city’s share of regional housing needs, implement the housing element’s goals and objectives, improve the feasibility of rental housing development, assure compatibility between market rate units and inclusionary units, and make housing available for households of all income levels.

(Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2006-16 § 2 (part), 2006).

24.16.015 DEFINITIONS.

For purposes of this part, the following definitions shall apply. Unless specifically defined below, words or phrases shall be interpreted as to give this part its most reasonable interpretation.

1. “Affordable ownership cost” for low income households means average monthly housing costs during the first calendar year of a household’s occupancy, including mortgage payments, property taxes, homeowner’s insurance, and homeowner’s association dues, if any, the sum of which does not exceed eighty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve. Affordable ownership cost for moderate and very low income households is defined at Section 24.16.205(1).

2. “Affordable rent” means the maximum monthly rent, including utilities and all fees for housing services, which does not exceed the following:

a. For moderate income households: one hundred ten percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

b. For payment standard units: either affordable rent for moderate income households, or the maximum Santa Cruz housing authority payment standard rent for tenant-based subsidy holders, as provided in Section 24.16.030(9)(c)(2).

c. For low income households: eighty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty-five percent and divided by twelve.

d. For very low income households: fifty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent, and divided by twelve.

e. For extremely low income households: thirty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

3. “Affordable units” are dwelling units which are affordable to extremely low, very low, low, median, or moderate income households as defined by this part or by any federal or state housing program and are subject to rental, sale, or resale provisions to maintain affordability.

4. “Approval body” means the body with the authority to approve the proposed residential development.

5. “Area median income” is area median income for Santa Cruz County as published and periodically updated by the state of California pursuant to California Code of Regulations, Title 25, Section 6932, or successor provision.

6. “Assisted living unit” is any dwelling unit in a facility licensed under Chapter 3.2 of the California Health and Safety Code as a residential care facility for the elderly, or an assisted living unit as defined in Section 1771(a)(6) of the California Health and Safety Code.

7. “Assumed household size based on unit size” is a household of one person in a studio apartment, two persons in a one-bedroom unit, three persons in a two-bedroom unit, and one additional person for each additional bedroom thereafter.

8. “Co-housing development” is an intentional community of private dwelling units clustered around shared space. Each attached or single-family home has traditional amenities, including a private kitchen. Shared spaces typically feature a common house, which may include a large kitchen and dining area, laundry, and recreational spaces. Households collaboratively plan and manage shared spaces. The legal structure is typically an HOA, condo association, or housing cooperative.

9. “Congregate living unit” is any dwelling unit in a senior housing development or senior citizen housing development, as defined in Section 51.3 of the California Civil Code, that provides private living quarters with centralized dining services and shared living spaces and may include access to social and recreational activities.

10. “Density bonus” is a density increase over the otherwise allowable maximum residential density on a site, granted pursuant to Part 3 of this chapter.

11. “Employer sponsored housing” means any rental residential development where an employer owns the land to be used in the development and at least seventy-five percent of the units in the development are used to house the employer’s employees.

12. “First approval” is the first of the following approvals to occur with respect to a residential development: development agreement, planned development permit, tentative map, minor land division, use permit, design permit, building permit, or any other permit listed in Section 24.04.030.

13. “Household income” is the combined adjusted gross household income for all adult persons living in a living unit as calculated for the purpose of the Housing Choice Voucher/ Section 8 program under the United States Housing Act of 1937, as amended, or its successor provision.

14. “Household, low income” is a household whose income does not exceed the low income limits applicable to Santa Cruz County, as published annually pursuant to Title 25 of the California Code of Regulations, Section 6932 (or its successor provision) by the California Department of Housing and Community Development.

15. “Household, median income” is a household whose income does not exceed area median income.

16. “Household, moderate income” is a household whose income does not exceed the moderate income limits applicable to Santa Cruz County, as published annually pursuant to Title 25 of the California Code of Regulations, Section 6932 (or its successor provision) by the California Department of Housing and Community Development.

17. “Household, very low income” is a household whose income does not exceed the very low income limits applicable to Santa Cruz County, as published annually pursuant to Title 25 of the California Code of Regulations, Section 6932 (or its successor provision) by the California Department of Housing and Community Development.

18. “Household, extremely low income” is a household whose income does not exceed the extremely low income limits applicable to Santa Cruz County, as published annually pursuant to Title 25 of the California Code of Regulations, Section 6932 (or its successor provision) by the California Department of Housing and Community Development.

19. “Inclusionary unit” is an ownership or rental dwelling unit, including flexible density units (FDU) and single-room occupancy (SRO) units, within a residential development which is required under this part to be rented at an affordable rent or sold at an affordable ownership cost to specified households.

20. “Live/work unit” is a dwelling unit, part of which is used as a business establishment and the dwelling unit is the principal residence of the business operator or an employee of the business establishment who works in the unit.

21. “Local public employee” means a household including an employee of a city, county, city and county, charter city, charter county, charter city and county, special district, or any combination thereof.

22. “Local public funds” means any discretionary local resources, including but not limited to general and special revenue funds as approved by the Santa Cruz city council, awarded to any residential development project for the purposes of developing affordable housing.

23. “Market rate unit” is a dwelling unit that is not an affordable unit or an inclusionary unit.

24. “Member of the public” means a household that does not include either a “local public employee” or a “teacher or school district employee” with a preference for persons living or working in the city or county of Santa Cruz.

25. “Ownership residential development” means any residential project that includes the creation of two or more new or additional dwelling units or live/work units that may be sold individually, including co-housing developments.

26. “Payment standard unit” means an inclusionary unit available to tenant-based subsidy holders, as provided in Section 24.16.030(9).

27. “Rental residential development” means any residential development that creates one or more additional dwelling units that cannot be lawfully sold individually in conformance with the California Subdivision Map Act.

28. “Residential development” is any project requiring any discretionary permit from the city, or a building permit, for which an application has been submitted to the city, and which would create two or more new or additional dwelling units or FDU or SRO units by construction or alteration of structures, or would create two or more lots through approval of a parcel map or tentative map.

29. “FDU” means a flexible density unit as defined at Section 24.12.1510.

30. “SRO” means a single-room occupancy residential unit that provides sleeping and living facilities in a single room but where sanitary or cooking facilities may be provided within the unit and/or shared within the housing project, or a rooming unit or efficiency unit located in a residential hotel, as that term is defined in accordance with California Health and Safety Code Section 50519, that is offered for occupancy by tenants for at least thirty consecutive days.

31. “Teacher or school district employee” means a household including any person employed by a unified school district maintaining prekindergarten, transitional kindergarten, and grades one to twelve, inclusive, an elementary school district maintaining prekindergarten, transitional kindergarten and grades one to eight, inclusive, or a high school district maintaining grades nine to twelve, inclusive, including but not limited to certified and classified staff.

32. “Tenant-based subsidy holder” (subsidy holder) is a household that holds a tenant-based voucher with the county of Santa Cruz housing authority.

(Ord. 2022-18 § 21, 2022; Ord. 2021-04 § 1, 2021; Ord. 2020-25 § 1, 2020; Ord. 2019-21 § 1, 2019: Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2008-20 § 1 (part), 2008: Ord. 2007-19 § 1 (part), 2007: Ord. 2006-16 § 2 (part), 2006).

24.16.020 BASIC ON-SITE INCLUSIONARY HOUSING REQUIREMENTS.

1. Applicability.

a. The inclusionary housing requirements defined in this chapter are applicable to all residential developments that create two or more new and/or additional dwelling units or FDU or SRO units at one location by construction or alteration of structures, or would create two or more lots through approval of a parcel map or tentative map, except for exempt residential developments under subsection (2).

b. Additional rent above and beyond affordable rent or affordable ownership cost may be permitted for the commercial/work space in a live/work unit at a rent that is determined to be affordable to qualifying households and is proportionate to the amount of commercial space provided. The amount of rent for the commercial portion of the live/work unit shall be agreed upon by the developer, the economic development director, and the planning and community development director. If no agreement can be reached, the city will retain an outside financial consultant to evaluate and determine the allowable affordable rent and establish a methodology for determining future commercial rent levels. The methodology for determining future commercial rent levels shall be defined in every affordable housing development agreement for residential developments that include at least one live/work unit.

2. The following residential developments are exempt from the requirements of this chapter:

a. Residential developments developed pursuant to the terms of a development agreement executed prior to the effective date of the ordinance codified in this chapter; provided, that such residential developments comply with any affordable housing requirements included in the development agreement or any predecessor inclusionary housing requirements in effect on the date the development agreement was executed.

b. Residential developments for which a complete application was filed with the city prior to the effective date of the ordinance codified in this chapter; provided, that such residential developments comply with any predecessor inclusionary housing requirements in effect on the date the application for the residential development was deemed complete.

c. Residential developments if exempted by California Government Code Section 66474.2 or 66498.1; provided, that such residential developments comply with any predecessor inclusionary housing requirements in effect on the date the application for the residential development was deemed complete.

d. Residential developments replacing dwelling units that have been destroyed by fire, flood, earthquake, or other acts of nature, so long as no additional dwelling units are created by the residential development; and provided, that such residential developments comply with any inclusionary housing requirements previously applied to the dwelling units being replaced.

e. Rental residential developments with two to four dwelling units.

3. Ownership Residential Developments With Two to Four Dwelling Units. For ownership residential developments that would create at least two but not more than four new or additional dwelling units and/or live/work units at one location, the applicant shall either: (a) make one inclusionary unit available for sale at an affordable ownership cost; (b) make one inclusionary unit available at an affordable rent for low income households; or (c) pay an in-lieu fee calculated pursuant to Section 24.16.030(6).

4. Ownership Residential Developments With Five or More Dwelling Units. For ownership residential developments that would create five or more new or additional dwelling units and/or live/work units at one location, the applicant shall provide inclusionary units as follows:

a. Affordable Housing Requirement for Ownership Residential Developments. In an ownership residential or live/work development, twenty percent of the dwelling units shall be made available for sale to low and moderate income households at an affordable ownership cost.

b. Fractional Affordable Housing Requirement for Ownership Residential Developments – 0.7 Units or Less. If the number of dwelling units required under subsection (4)(a) results in a fractional requirement of 0.7 or less, then the applicant shall either: (i) make one inclusionary unit available for sale at an affordable ownership cost; (ii) make one inclusionary unit available at an affordable rent for low income households; or (iii) pay an in-lieu fee calculated pursuant to Section 24.16.030(6). This subsection (4)(b) applies to the fractional unit only, and whole units shall be provided as required by subsection (4)(a).

c. Fractional Affordable Housing Requirement for Ownership Residential Developments – More Than 0.7 Units. If the number of dwelling units required under subsection (4)(a) results in a fractional requirement of greater than 0.7, then the applicant shall either: (i) make one inclusionary unit available for sale at an affordable ownership cost; or (ii) make one inclusionary unit available at an affordable rent for low income households. This subsection (4)(c) applies to the fractional unit only, and whole units shall be provided as required by subsection (4)(a).

d. Rental Units in an Ownership Residential Development.

i. In an ownership residential development where all dwelling units are initially offered for rent, an applicant may satisfy the inclusionary requirements by providing rental units as provided in subsection (5).

ii. The rent regulatory agreement required by Section 24.16.045 shall include provisions for sale of the inclusionary units at an affordable ownership cost to eligible households within ninety days from the issuance of the public report by the California Department of Real Estate permitting sale of the units or at termination of the tenant’s lease whichever is later and otherwise in compliance with state law; provided, however, that the sale of the entire ownership residential development from one entity to another shall not trigger the obligation to sell individual inclusionary units. To the extent relocation payments are required by law, the applicant shall be wholly responsible for the cost of preparing a relocation plan and making required payments. Any tenant of an inclusionary unit at the time units are offered for sale that qualifies to purchase an inclusionary unit at an affordable ownership cost shall be offered a right of first refusal to purchase the inclusionary unit. At sale, appropriate documents shall be recorded to ensure the continued affordability of the inclusionary units at an affordable ownership cost as required by Section 24.16.045.

5. Rental Residential Developments With Five or More Dwelling Units. For rental residential developments that would create five or more new or additional dwelling units and/or live/work units at one location, the applicant shall provide inclusionary units as follows:

a. Rental residential developments that would create five or more new or additional dwelling units or live/work units at one location shall provide twenty percent of the dwelling units as inclusionary units, which shall be made available for rent to low income households at an affordable rent.

b. SRO Developments. In a rental residential development comprised of SRO units, twenty percent of the single-room occupancy units shall be made available for rent to very low income households at an affordable rent.

c. Fractional Affordable Housing Requirement for Rental Residential Developments With More Than Five Dwelling Units. If the number of dwelling units required results in a fractional requirement of 0.7 or less, then there will be no inclusionary requirement for the fractional unit. If the number of dwelling units required results in a fractional requirement of greater than 0.7, then the applicant shall make one inclusionary unit available at an affordable rent. This subsection (5)(c) applies to the fractional unit only, and whole units shall be provided as required by subsections (5)(a) and (b).

6. The requirements of subsections (3) through (5) are minimum requirements and shall not preclude a residential development from providing additional affordable units or affordable units with lower rents or sales prices than required.

a. By mutual agreement by the developer, the planning and community development director, and the economic development director, the percentage of inclusionary units may be increased in exchange for reduced parking and/or other development requirements.

b. If the developer agrees to make at least forty percent of the residential project available for rent to low income households at a rental cost affordable to low income households, in addition to reduction of development requirements, by mutual agreement by the developer, the planning and community development director, and the economic development director, the city may also provide financial incentives to increase the number of inclusionary units in a project.

7. For the purposes of calculating the number and type of inclusionary units required by this section, rental accessory dwelling units constructed either as part of the initial development, or anytime thereafter, shall be subject to the requirements of subsection (5). The inclusionary requirement for accessory dwelling units constitutes a separate inclusionary requirement than that of the primary residential use, such that only accessory dwelling units shall count toward the inclusionary requirement calculation for the accessory dwelling units on the lot, and only the residential units comprising the primary residential use shall count toward the inclusionary requirement calculation for the primary residential use on the lot. The accessory dwelling unit inclusionary requirement shall be met with accessory dwelling units or as otherwise permitted under Section 24.16.030, including, but not limited to, payment of the in-lieu fee.

8. For purposes of calculating the number of inclusionary units required by this section, any dwelling units authorized as a density bonus pursuant to Part 3 of this chapter shall not be counted as part of the residential development. However, if a developer receives a city rental housing bonus as authorized by Section 24.16.035(4), then all of the dwelling units in the project, including the dwelling units authorized as a density bonus, shall be counted as part of the residential development for purposes of calculating the inclusionary units required by this section.

(Ord. 2024-18 § 7, 2024; Ord. 2022-18 § 22, 2022; Ord. 2021-04 § 2, 2021; Ord. 2019-25 § 1, 2020; Ord. 2019-21 § 2, 2019; Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2008-20 § 1 (part), 2008: Ord. 2008-14 § 5, 2008: Ord. 2007-19 § 1 (part), 2007: Ord. 2006-16 § 2 (part), 2006).

24.16.025 STANDARDS FOR INCLUSIONARY UNITS.

1. All inclusionary units shall remain affordable in perpetuity.

2. Inclusionary units shall be dispersed throughout the residential development to prevent the creation of a concentration of affordable units within the residential development, and no required inclusionary units shall be constructed as accessory dwelling units, except for inclusionary accessory dwelling units required for residential developments including five or more accessory dwelling units, subject to the requirements of Section 24.16.020(8).

3. Inclusionary units shall be compatible with the design of market rate units in terms of exterior appearance, materials, and finished quality. Interior finishes, features, and amenities may differ from those provided in the market rate units, so long as the finishes, features, and amenities are durable, of good quality, compatible with the market rate units, and consistent with contemporary standards for new housing.

4. The applicant may reduce square footage of inclusionary units as compared to the market rate units, provided all units conform to all requirements of Titles 18 and 19 and meet the minimum square footage requirement that affordable units are at least seventy-five percent of the average size of all market rate units in the development with the same bedroom count, and for residential developments including five or more accessory dwelling units, the inclusionary requirements for the accessory dwelling units shall be met by providing accessory dwelling units conforming to the above standards for size. For the purpose of this subsection, the “average size” of a unit with a certain bedroom count equals the total square footage of all market rate units or all accessory dwelling units, with that bedroom count in the development divided by the total number of market rate units, or accessory dwelling units, with the same bedroom count in the development.

5. For developments with multiple market rate unit types containing differing numbers of bedrooms, inclusionary units shall be representative of the market rate unit mix and for developments including accessory dwelling units, the required inclusionary accessory dwelling units shall be calculated separately and shall be representative of the accessory dwelling unit size mix.

6. All building permits for inclusionary units in a phase of a residential development shall be issued concurrently with, or prior to, issuance of building permits for the market rate units, and the inclusionary units shall be constructed concurrently with, or prior to, construction of the market rate units. Occupancy permits and final inspections for inclusionary units in a phase of a residential development shall be approved concurrently with, or prior to, approval of occupancy permits and final inspections for the market rate units. When alternative methods of compliance are proposed pursuant to Section 24.16.030, the planning and community development director and the economic development director may jointly approve alternative phasing of market rate and inclusionary units if it finds that the proposal provides adequate security to ensure construction of the inclusionary units. Phases of construction shall be defined as a part of the first approval.

7. Rental to Tenant-Based Subsidy Holders. Owners of rental residential developments or SRO developments shall accept tenant-based subsidy holders (subsidy holders) as tenants of the inclusionary units, on the same basis as all other prospective tenants. The owner shall not apply selection criteria to subsidy holders that are more burdensome than the criteria applied to all other prospective tenants, nor shall the owner apply or permit the application of management policies or lease provisions which have the effect of precluding occupancy of the inclusionary units by subsidy holders.

(Ord. 2022-18 § 23, 2022; Ord. 2020-25 § 2, 2020; Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2007-19 § 1 (part), 2007: Ord. 2006-16 § 2 (part), 2006).

24.16.030 ALTERNATIVE METHODS TO COMPLY WITH INCLUSIONARY HOUSING REQUIREMENTS.

1. Application Submittal. Any application to use an alternative method to meet inclusionary housing requirements shall be submitted as part of the first approval for any residential development subject to the inclusionary housing requirements.

2. Findings. For all alternative methods of compliance with the inclusionary housing requirements, the approval body must make findings (a) and (b) in this subsection. Approval body determinations regarding alternative methods of compliance may be appealed as provided in Section 24.16.050.

a. The proposal for the alternative method of compliance is consistent with the Santa Cruz General Plan and all of its elements.

b. The proposal conforms to the standards established for inclusionary units in Section 24.16.025, unless the alternative method does not require compliance with that section.

3. Off-Site Construction of Inclusionary Units. An applicant may propose to construct all or a portion of the required inclusionary units off site. Off-site inclusionary units may include any combination of new dwelling units, or new dwelling units created in existing structures. For the purposes of determining compliance with the city’s inclusionary housing requirements, all properties included in the proposal shall be treated as one residential development.

a. An application for off-site inclusionary units shall be accompanied by the following information:

(1) Identification of all of the entities responsible for development of the market rate units and the inclusionary units.

(2) The location of the sites where the market rate and inclusionary units will be constructed.

(3) For each site, the same level of detail for the off-site inclusionary units as for the market rate residential development including: the number, unit type, number of bedrooms and baths, approximate location, size, and design, construction and completion schedule of all inclusionary units including the phasing of inclusionary units in relation to market rate units.

(4) If the inclusionary units will not be constructed concurrently with the market rate units, the applicant shall specify the security to be provided to the city to ensure that the inclusionary units will be constructed.

(5) Evidence of ownership or control of all sites proposed for market rate and inclusionary units. This requirement may be waived at the sole discretion of the planning and community development director with sufficient evidence that ownership or control will be secured within a reasonable amount of time after the application is submitted.

b. At the joint discretion of the planning and community development director and the economic development director, off-site units may be excluded from existing low income areas as defined by U.S. Department of Housing and Urban Development and/or where there is a concentration of low income households.

c. The approval body may approve a proposal for off-site inclusionary units if it makes all of the findings required by subsection (2) and each of the following findings:

(1) The off-site development will provide the greater of one affordable unit or thirty percent more inclusionary units than would otherwise be required if the inclusionary units were constructed on site;

(2) The off-site location is suitable for the proposed affordable housing and will not tend to cause residential segregation;

(3) The developer has provided clear and convincing evidence that financing has been secured for the off-site inclusionary units; and

(4) Each entity responsible for development of the inclusionary and market rate units has adequate site control and the capacity to construct the units as proposed.

d. Prior to final or parcel map approval and prior to issuance of any building permit for the residential development, the owner and the developer of the site where the off-site inclusionary units will be located and the developer of the residential development shall all enter into the developer affordable housing agreement required by Section 24.16.040.

e. Prior to issuance of any certificate of occupancy or final inspection for any market rate units, the owner and the developer of the site where the off-site inclusionary units will be located shall enter into a regulatory agreement to ensure that the off-site inclusionary units will remain affordable in perpetuity.

f. Once an applicant has received approval for off-site construction of inclusionary units on a specific site, no substitution of sites may be made unless approved by the planning and community development director.

g. If the off-site construction of inclusionary units is not substantially completed within eighteen months of completion of on-site construction then the approval body may require the applicant to pay double the amount of in-lieu fees as provided for in subsection (6).

4. Conversion of Existing Market Rate Housing or Upper Floors of Commercial/Office Buildings to Inclusionary Units. An applicant may propose to convert existing residential units or upper floors of commercial/office buildings into inclusionary units in lieu of constructing new inclusionary units on site.

a. Any application to convert existing residential units or existing commercial/office space into inclusionary units shall be accompanied by the following information regarding the existing dwelling units proposed to be converted:

(1) Identification of all of the entities responsible for development of the market rate units and the inclusionary units.

(2) The location of the site where the existing units will be converted to inclusionary units and evidence of ownership or control of all sites proposed for conversion of existing units to inclusionary units.

(3) If the inclusionary units will not be constructed concurrently with the market rate units, the applicant shall describe the proposed phasing and specify the security to be provided to the city to ensure that the inclusionary units will be constructed.

(4) The same level of detail for the converted inclusionary units as for the market rate residential development for the following:

(i) Floor plans showing size and number of bedrooms of the units to be converted; number of bedrooms and square footage of market rate units in the proposed residential development.

(ii) Site plans and building elevations showing landscaping, lot lines, property dimensions, easements, location of all structures, and parking for the units to be converted.

(5) Existing rent or appraised value of each unit on the property to be converted, proposed rents or sales prices after rehabilitation and/or conversion, and any existing rent limits, resale price restrictions, or other affordability restrictions imposed by any public agency, nonprofit agency, land trust, or other body.

(6) For conversion of market rate housing units, size of household occupying each unit on the property to be converted, vacancy rates for each month during the past two years, and existing tenant incomes.

(7) For conversion of market rate housing units, a property inspection report prepared by a certified housing inspector and a termite report, both prepared no more than sixty days before the filing of the application. The property inspection report shall include an examination of all common and private areas within the existing dwelling units for compliance with the Uniform Housing Code, the structural condition of the property, identification of all code violations or unsafe elements, any potentially hazardous soil or geologic conditions, and condition of paved areas and drainage.

(8) For conversion of commercial space, a property inspection report prepared by a certified inspector and a termite report, both prepared no more than sixty days before the filing of the application. The property inspection report shall include an examination of all common and private areas, the structural condition of the property, identification of all code violations or unsafe elements, any potentially hazardous soil or geological conditions, and condition of paved areas and drainage.

(9) Plans and a written description of rehabilitation to be completed, including correction of all code violations and completion of all termite repairs described in the property inspection report and termite report; cost of rehabilitation; and the value of the property, including land, buildings, and all other improvements, after rehabilitation.

(10) Description of benefits to be offered to existing tenants, which for conversion of market rate housing units would include but not be limited to right of first refusal to remain in the unit, and any expected need for relocation of existing tenants.

c. No inclusionary units may be created by converting existing rental dwelling units into condominiums.

d. The conversion of existing market rate housing or conversion of existing commercial/office space to inclusionary units is not required to comply strictly with Section 24.16.025, with deviations subject to the joint approval of the planning and community development director and the economic development director. Unless otherwise determined by agreement of both the planning and community development director and the economic development director, if conversion of existing units is proposed and the existing residential development requires significant rehabilitation (costs estimated at about twenty-five percent of after-construction value), all units in the existing residential development shall be rehabilitated in addition to the inclusionary units.

e. The approval body may approve a proposal for conversion of existing dwelling units to inclusionary units if it makes all of the findings required by subsection (2) and all of the following findings:

(2) The developer has provided clear and convincing evidence that financing has been secured for the off-site inclusionary units;

(3) Each entity responsible for development of the inclusionary and market rate units or commercial space has adequate site control and the capacity to construct the units as proposed;

(4) The rehabilitation plans include all construction required to meet all current requirements of the Uniform Housing Code, as determined by the chief building official of the city;

(5) For conversion of market rate housing units the cost of rehabilitation is greater than twenty-five percent of the value of the property, including land, buildings, and all other improvements after rehabilitation unless otherwise determined by agreement of both the planning and community development director and the economic development director that conditions of the property do not require substantial rehabilitation; and

(6) The dwelling units or commercial space to be converted are not subject to any rent limits, resale price restrictions, or other affordability restrictions imposed by any public agency, nonprofit agency, land trust, or other body, unless the affordability restrictions are at risk of expiring within five years and the existing agreement with affordability restrictions cannot be renewed, or the conversion will make the units affordable to households with lower incomes than the existing affordability restrictions.

f. For conversion of market rate housing units, if more than forty percent of the units on one site will be converted to inclusionary units, the approval body must additionally find that the rehabilitated inclusionary units will remove blight and enhance physical and social conditions in the surrounding area.

g. The conversion of existing market rate housing or conversion of existing commercial/office space may be based on the number of bedrooms in the residential development to encourage the development of smaller units when feasible. The converted units shall not be larger in terms of the number of bedrooms than the required inclusionary unit that the converted unit is replacing, unless approved by the planning and community development director, and in no event shall the maximum number of bedrooms in a unit satisfying inclusionary requirements using bedroom counts exceed the smaller of either: (1) the market rate unit in the development with the greatest number of bedrooms; or (2) three bedrooms.

h. Any existing tenants in units proposed to be converted who are relocated shall be eligible for relocation benefits pursuant to Section 24.08.1350.

i. If the conversion of existing units and substantial rehabilitation of the development is not substantially completed within eighteen months of completion of the new residential development, then the approval body may require the applicant to pay double the amount of in-lieu fees as provided for in subsection (6).

5. Transfer of Credit. An applicant may propose to receive credit for affordable units constructed prior to or concurrently with the market rate project.

a. When a residential development is proposed that includes more inclusionary units than required by this part, the applicant may propose that the excess inclusionary units be made available to satisfy inclusionary requirements on other sites. The credits may be made available to other residential developments for a maximum period of five years from issuance of the last certificate of occupancy for the residential development that includes the excess inclusionary units.

b. The residential development that includes the excess inclusionary units may not receive or have received any local, state, or federal affordable housing financial assistance.

c. An application for a residential development that includes excess inclusionary units proposed to be made available for credit shall be accompanied by the following as part of the first approval for the residential development:

(1) Identification of excess inclusionary units to be made available for credit to other residential developments, including in particular the number of bedrooms, tenure, size, and location.

(2) Person or entity authorized to transfer credit to other residential developments.

d. An application for a residential development that proposes to receive credit for inclusionary units previously approved for the transfer of credit shall be accompanied by the following:

(1) A written agreement with the holder of the rights to the excess inclusionary units consenting to the transfer of credit.

(2) Evidence that the transferred units satisfy all or a portion of the residential development’s inclusionary requirements, including but not limited to inclusionary units of an appropriate size with at least the same number of bedrooms and tenure as would otherwise be required.

(3) Sufficient evidence provided that demonstrates to the satisfaction of the planning and community development director that the inclusionary units to be credited to the residential development have been constructed or will be constructed prior to or concurrently with the market rate units in the residential development.

e. The city council may approve a proposal to use excess inclusionary units on another site to meet the development’s inclusionary requirements if it makes all of the findings required by subsection (2) and the following findings:

(1) The off-site residential development with excess inclusionary units will provide the greater of one affordable unit or thirty percent more inclusionary units than would otherwise be required if the inclusionary units were constructed on site.

(2) The excess inclusionary units are of an appropriate size with at least the same number of bedrooms and tenure as would otherwise be required, and have already been constructed or will be constructed prior to or concurrently with the market rate units in the residential development.

6. In-Lieu Housing Fees.

a. An applicant may pay in-lieu fees to the city rather than construct inclusionary units on site under the following circumstances:

(1) For all ownership residential developments or residential subdivisions that would create two but no more than four additional dwelling units or parcels at one location, the applicant may elect to pay an in-lieu fee for the fraction of an inclusionary unit equal to 0.15 times the number of units or parcels in the residential development or subdivision reduced by sixty percent.

(2) For ownership residential developments where any dwelling units are offered for sale, or where all dwelling units are offered for rent, but where a subdivision map has been recorded to create parcels containing single dwelling units, the applicant may elect to pay an in-lieu fee for any fraction of an inclusionary unit equal to 0.7 or less.

(3) For rental residential developments that would create five but no more than ten additional dwelling units at one location, the applicant may elect to pay an in-lieu fee for any inclusionary unit as required by Section 24.16.020(5).

(4) For residential developments that the approval body determines are assisted living units, co-housing developments, congregate living units, or live/work units the applicant may elect to pay an in-lieu fee for the entire inclusionary unit requirement.

(5) Except as provided in subsection (6)(c), for all other residential developments creating five or more units, in-lieu fees may be paid for all or a portion of the required inclusionary units at the discretion of the approval body if the approval body makes the findings required by subsection (2), accompanied by a staff report with a recommendation from the planning and community development director and the economic development director, except that conformance with Section 24.16.025 is not required. The approval body must also find that either the in-lieu fees will provide for the greater of one affordable unit or at least thirty percent more inclusionary units or affordable housing than would be provided by the on-site provision of inclusionary units by providing matching funds for state or federal grants or otherwise. It is the city council’s intent that, except as provided in subsections (6)(a)(1) through (4), in-lieu fees be infrequently approved.

b. In-lieu fees may be established from time to time by resolution of the city council or may be determined for a specific residential development by calculating the difference between (1) the affordable sales price of an inclusionary unit, and (2) the value of a market rate unit. The value of a market rate unit shall be determined by an appraisal provided by the developer from a qualified appraiser that was completed within three months prior to entering into an affordable housing agreement.

(1) The market rate value to calculate in-lieu fees for live/work units may be calculated using a square footage multiplier times one hundred percent of the designated residential areas and fifty percent of the designated work areas. The source of the square footage multiplier may be the most recent data from internet real estate data resources such as Zillow, Trulia, or other available sources that reflect actual market values or from a square footage appraisal provided by the developer from a qualified appraiser that was completed within three months prior to entering into an affordable housing agreement.

(2) The market rate value to calculate in-lieu fees for co-housing developments may be calculated using a square footage multiplier times one hundred percent of the square footage of an average size unit plus a proportionate amount of shared space, as jointly determined to be reasonable by the planning and community development director and the economic development director. The source of the square footage multiplier may be the most recent data from internet real estate data resources such as Zillow, Trulia, or other available sources that reflect actual market values or from a square footage appraisal provided by the developer from a qualified appraiser that was completed within three months prior to entering into an affordable housing agreement.

c. In-lieu fees per parcel for subdivisions shall be calculated to be fifty percent of the average appraised value of the parcels in the subdivision where the average appraised value equals the appraised value of all parcels in the subdivision divided by the number of parcels in the subdivision. The appraisal shall be provided by the developer from a qualified licensed residential appraiser. For subdivisions that consist of two to four parcels, this amount shall be further reduced by sixty percent.

d. For residential developments, in-lieu fees shall be paid prior to or at the time of final inspection by the city planning and community development building division, or as determined in an affordable housing development agreement, with additional terms approved by the approval body. For projects constructed in phases, in-lieu fees shall be paid in the proportion that the phase bears to the overall project.

e. Notwithstanding subsection (6)(c), in-lieu fees for subdivisions shall be paid prior to or concurrently with final subdivision map approval.

f. All in-lieu fees shall be deposited into a separate account entitled the affordable housing trust fund. The monies in the affordable housing trust fund and all earnings from investment of the monies in the affordable housing trust fund shall be used within a reasonable amount of time to assist in the construction of new low income housing units with long-term affordability restrictions or preservation of existing low income housing units, including required administrative support.

7. Land Dedication. For residential developments with an inclusionary requirement of seven or more inclusionary units, an applicant may propose to donate a minimum of fifteen percent of the net developable land area of the residential development to the city for the construction of a project with at least twenty-five percent of its total units restricted to low income households or below, or a lesser amount of land if the parcel is adjacent to a city owned land and is determined by the economic development director that the parcel is a critical component of a larger city supported affordable housing project.

a. An application for land dedication shall be accompanied by the following information. These requirements may be modified or waived at the sole discretion and joint determination of the planning and community development director and the economic development director if the dedicated land is adjacent to city owned land and/or can be incorporated into a city supported affordable housing development project.

(1) Area to be dedicated to the city.

(2) Demonstration that the density approved for the site is suitable for affordable housing development, evidence of adequate infrastructure, and a site plan demonstrating that the site can accommodate the required number of inclusionary units.

(3) Identification of the entity that will construct the inclusionary units.

(4) Pro forma demonstrating that development of the inclusionary units on the site is financially feasible.

(5) If the inclusionary units will not be constructed concurrently with the market rate units, the applicant shall describe the proposed phasing and specify the security to be provided to the city to ensure that the inclusionary units will be constructed.

b. The approval body may approve a proposal for land dedication if it makes all of the findings required by subsection (2) and the following additional finding: a residential development that includes twenty-five percent low income units is feasible on the property to be dedicated.

c. The property shall be dedicated to the city at the earliest of: (1) recordation of any final or parcel map, or (2) issuance of any building permit for the residential development.

d. The city may make the site available without cost to a low income housing developer with proven experience and the ability to finance and construct an affordable housing project in the most expeditious manner. To the extent feasible, the applicant shall process the low income residential development on the dedicated site concurrently with the processing of the market rate development.

8. Congregate Living Units or Assisted Living Units. An applicant may propose to satisfy the inclusionary housing requirements of this chapter by providing congregate living units or assisted living units. If the approval body determines that a proposed residential development includes congregate living units or assisted living units, the following alternative requirements shall apply:

a. Fifteen percent of the congregate living or assisted living units shall be made available for rent to low income households at an affordable rent. Monthly charges for congregate living or assisted living services in addition to the affordable rent may not exceed thirty-five percent of fifty percent of area median income for a single person, divided by twelve, or forty-five percent of fifty percent of area median income for two persons, divided by twelve.

b. The proportion of studio or one-bedroom units that are designated to be shared by non-family-members shall not exceed the proportion of the number of market rate units designated to be shared by non-family-members to the total number of market rate units. Furthermore, no more than two persons may occupy a studio or one-bedroom unit. For purposes of affordable rent calculations, for any unit shared by non-family-members the portion of the unit occupied by each individual shall be treated like a studio apartment and the rent for one person shall be equivalent to the affordable rent for a studio apartment. This section should not be interpreted to create a bias for undesired double occupancy.

9. Rental to Tenant-Based Subsidy Holders.

a. Owners of rental residential developments or single-room occupancy unit (SRO) developments may elect to use the following procedures to offer inclusionary units comprising up to five percent of the total units in the development as payment standard units available to tenant-based subsidy holders (subsidy holders). The developer affordable housing agreement, as defined in Section 24.16.040, shall require that fifteen percent of the total units in the development will be restricted to low income households at an affordable rent, and that five percent of the total units in the project will be payment standard units restricted to moderate income households at an affordable rent as defined in Section 24.16.015(2)(b) or rented to subsidy holders, so long as the development complies with the procedures described in subsections (b) through (e) to offer the five percent payment standard units in the development to subsidy holders. Both the low income units and the payment standard units shall remain affordable in perpetuity as per Section 24.16.025(1).

b. The owner will notify the housing authority of the county of Santa Cruz (housing authority) that a unit or units are available for rent to subsidy holders and list the units on the Section 8 Housing Choice Voucher rental listing website, advertising the units to subsidy holders within one week of the following dates (as applicable):

(1) At initial lease-up, when new inclusionary units are initially marketed, and prior to receipt of a certificate of occupancy or final inspection, the owner shall list the five percent payment standard units on the housing authority’s Section 8 Housing Choice Voucher rental listing website, advertising the units to subsidy holders (or other marketing service as requested by the housing authority).

(2) At receipt by the owner of a notice of vacancy or availability of a vacated unit in a designated payment standard unit, the owner shall list that unit on the housing authority’s Section 8 Housing Choice rental listing website (or other marketing service as requested by the housing authority).

c. Thirty days after the owner lists the available unit or units on the housing authority’s Section 8 Housing Choice rental listing website, the rent for five percent payment standard units will be established as either:

(1) The payment standard rent, as defined by the housing authority, if the owner enters into a housing assistance payments contract for a subsidy holder with the housing authority; or

(2) Either payment standard rent or a deed restricted rent, as defined in Section 24.16.015(2)(b), affordable to income qualifying moderate income households, whichever is less, if no eligible subsidy holder applied to rent the unit, as demonstrated by the owner.

d. In order to qualify under this section, an owner will be required to enter into a housing assistance payment contract with the housing authority for each payment standard unit rented to a subsidy holder and a rental agreement with subsidy holders who become tenants of the owner. When either a subsidy holder or moderate income tenant vacates one of the five percent designated payment standard units, the owner shall again follow the process outlined in subsection (9)(c).

e. The owner will be required to retain records proving the thirty-day marketing requirement was met and, if rented to a moderate income household, demonstrating that no eligible subsidy holder submitted a rental application. These records must be available upon request from the city at any time after the thirty-day period and must be retained for five years after each time one of the units undergoes the thirty-day housing authority marketing requirement process.

f. The owner may elect to offer low income units to subsidy holders if the following criteria are met:

(1) If a subsidy holder applies for a vacant unit and any payment standard unit is available, the subsidy holder must occupy the payment standard unit before any vacant low income unit is occupied.

(2) If a subsidy holder applies for a vacant unit and all payment standard units are occupied by subsidy holders, the subsidy holder may be placed in a vacant low income unit, and the rent charged to the housing authority cannot exceed the Santa Cruz housing authority payment standard rent, and the owner must enter into a housing assistance payments contract for a subsidy holder with the housing authority.

(3) If a subsidy holder applies for a vacant unit and not all of the payment standard units in the project are occupied by subsidy holders, the subsidy holder may be placed in a vacant low income unit, but the rent paid to the owner by the Santa Cruz housing authority may not exceed the affordable rent for the low income unit until all of the payment standard units in the project are occupied by subsidy holders. The location of the designated payment standard units may be modified to include other units occupied by subsidy holders, so long as the owner notifies the city in writing of the changed location of the payment standard units.

10. Employer Sponsored Housing. To create more housing opportunities for employees in the city where it is difficult to attract and retain the workforce, the following employer sponsored housing requirements may be utilized as an alternate means of compliance. An applicant/employer may propose to satisfy the inclusionary housing requirements of this chapter by providing housing for its own employees based on the following requirements:

a. The following alternate means of compliance applies to all employer sponsored housing including school district employer sponsored housing if a school district elects to utilize this provision rather than the following subsection (b). For this alternate means of compliance, the proposed residential development must qualify based on the following requirements:

1. This section applies to rental residential development only.

2. The rental units shall be restricted to the employer’s employees except that the employer may allow other members of the public to occupy the housing if none of the employer’s eligible employees desire to rent an available unit.

3. An employer shall retain the right to prioritize its own employees over other members of the public to occupy housing.

4. The majority of the rental units shall serve low or moderate income households.

5. Sections 24.16.020 and 24.16.025 shall be replaced by the affordability requirements and preferences in this section for employer sponsored housing only.

6. The employer must demonstrate that the housing will be used to attract and retain low and/or moderate income employees and that such alternative compliance will provide more affordable units than would compliance with Section 24.16.020.

7. The employer must provide a greater number of affordable units than this chapter requires but the affordability levels of those restricted units can have a broader range as defined by the rents affordable to the employees (for instance, fifty-one percent at one hundred twenty percent AMI).

8. Prior to final inspection or issuance of a certificate of occupancy, the employer must provide a management plan to the city describing the employer’s policies if an employee no longer qualifies to reside in the housing or no employee is qualified to rent an available unit at the designated affordability level. City’s intent is that at least seventy-five percent of the units be rented to eligible employees at all times to qualify as employer sponsored housing. Employer must specify how they will comply with this intent in the management plan and must propose a compliance procedure if they fall out of compliance.

9. The employer must demonstrate that the project will not increase segregation and will meet requirements of state and federal fair housing law, including affirmatively furthering fair housing requirements.

10. A majority of the rental units must receive public funding from local, state or federal funds, affordable housing funds or affordable housing tax credits and the funding regulations must not conflict with the requirements in this section.

b. The following alternate means of compliance only applies to school district employer sponsored housing:

1. School district employer sponsored housing projects conforming to the requirements of the Teacher Housing Act of 2016 (Health and Safety Code Section 53570 et seq. or successor provisions) will be deemed to satisfy the inclusionary housing requirements of this chapter. For any such projects, an agreement must be executed to formalize that the project has met this alternate means of compliance, and annual compliance reports must be submitted to confirm compliance with the affordability provisions of the Teacher Housing Act of 2016.

11. Other Alternative Compliance Methods. An applicant may propose an alternative compliance method to provide affordable units through other means. The approval body may approve or conditionally approve such an alternative only if the approval body determines, based on substantial evidence, that 1) such alternative compliance will provide as many or more affordable units at the same or lower income levels; and 2) financing has been committed to ensure that the affordable units will be constructed.

(Ord. 2021-04 § 3, 2021; Ord. 2020-25 § 3, 2020; Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2008-20 § 2, 2008: Ord. 2008-14 § 6, 2008: Ord. 2007-19 § 1 (part), 2007: Ord. 2006-16 § 2 (part), 2006).

24.16.035 INCENTIVES FOR COMPLIANCE WITH INCLUSIONARY HOUSING REQUIREMENTS.

The following incentives may be available for the provision of inclusionary units:

1. Fee waivers may be granted pursuant to Part 4 of this chapter.

2. A residential development may satisfy its inclusionary housing requirements through any of the alternative compliance methods available in Section 24.16.030 in lieu of providing inclusionary units on site.

3. The interior amenities and square footage of the inclusionary units may be reduced below those required for the market rate units, as provided in Section 24.16.025(4).

4. Residential developments in which all dwelling units are offered for rent, inclusionary units are provided within the development, no subdivision map has been recorded, and no density bonus under Part 3 of this chapter has been requested are eligible for the following additional incentive:

a. A twenty-seven and one-half percent “city rental housing bonus.”

(Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2006-16 § 2 (part), 2006).

24.16.040 DEVELOPER AFFORDABLE HOUSING AGREEMENT.

1. Developers subject to the inclusionary housing requirements of this part shall agree to enter into a developer affordable housing agreement with the city. A developer affordable housing agreement shall be a condition of approval for all residential developments subject to this chapter and shall be recorded as a restriction on any residential development in which the inclusionary units will be constructed.

2. The developer affordable housing agreement shall be recorded prior to or concurrently with final parcel map or final subdivision map approval, or, where the residential development does not include a map, prior to issuance of a building permit for any structure in the residential development. The developer affordable housing agreement shall run with the land and bind all future owners and successors in interest.

3. The developer affordable housing agreement shall be in a form provided by the city and shall include, without limitation, the following:

a. The total number of units approved for the residential development and the number, location, and level of affordability of inclusionary units.

b. Standards for determining affordable rent or affordable ownership cost for the inclusionary units.

c. The location, unit size in square feet, and number of bedrooms of the inclusionary units.

d. Provisions to ensure initial and continuing affordability, including the execution and recordation of subsequent agreements.

e. A schedule for completion and occupancy of inclusionary units in relation to construction of market rate units.

f. 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.

g. Procedures for qualifying tenants and prospective purchasers of inclusionary units.

h. Provisions requiring maintenance of records to demonstrate compliance with this chapter.

i. Provisions specifically describing how affordable rent and/or affordable ownership costs are calculated for the inclusionary units. Unless another basis has mutually been agreed upon by the developer, the planning and community development director, and the economic development director, the determination shall be made in accordance with Section 24.16.045(4). If there is more than a three-year delay in execution of the developer affordable housing agreement and the final building permit, the developer may request any in-lieu fees be recalculated and with the concurrence of the planning and community development and economic development directors, the city may recalculate fees accordingly.

4. Other provisions to ensure implementation and compliance with this chapter.

(Ord. 2018-13 § 1 (part), 2018: Ord. 2008-14 § 7, 2008: Ord. 2006-16 § 2 (part), 2006).

24.16.045 CONTINUED AFFORDABILITY AND INITIAL OCCUPANCY.

1. The city council, by resolution, shall establish guidelines for determining household income, asset limits, occupancy standards, affordable ownership cost, affordable rent, provisions for continued monitoring of tenant eligibility, resale price, and other implementation criteria. The city shall use standard documents as approved by the city attorney to ensure the continued affordability of the inclusionary units in all residential developments. The documents may include, but are not limited to, inclusionary housing agreements, rent regulatory agreements, promissory notes, deeds of trust, options to purchase, and resale restrictions.

2. Rent regulatory agreements consistent with the requirements of this part shall be recorded against residential developments containing rental inclusionary units. If the inclusionary units are designated for owner-occupancy, resale restrictions, deeds of trust, options to purchase, and/or other documents consistent with the requirements of this part shall be recorded against the owner-occupied inclusionary units.

3. Any household that occupies an inclusionary unit must occupy that unit as its principal residence, except in circumstances that may require the temporary vacation of the unit. For rented inclusionary units, the documents required by subsection (1) shall provide for continued occupancy for limited periods by households occupying the units, whose incomes increase during their occupancy so that they exceed the maximum otherwise permitted for the unit.

4. The maximum sales price shall be calculated using the methodology defined in the resolution and/or guidelines identified in and applied under the inclusionary agreement for that property. Unless otherwise required by California Government Code Section 66474.2 or 65589.5(o), or any other applicable state codes or successor provisions, the resolution in effect at the time of first approval shall be the basis for these calculations, unless another inclusionary ordinance or implementing resolution basis more recently approved by the council has been defined and mutually been agreed upon by the developer, the planning and community development director, and the economic development director or otherwise authorized by the approval body. The resale restrictions shall allow the city a right of first refusal or option to purchase any owner-occupied inclusionary unit at the maximum resale price permitted under this section at any time the owner proposes sale.

5. No household shall be permitted to begin occupancy of an inclusionary unit designated for owner-occupancy unless the city or its designee has approved the household’s eligibility. No household shall be permitted to begin occupancy of an inclusionary rental unit unless the city or its designee has approved the household’s eligibility, except that tenants are not required to be income-eligible if the rental cost affordable to low income households is at least ninety percent of the average rent for market rate dwelling units with the same number of bedrooms in the development.

6. As consistent with state and federal law, preferences for rental inclusionary units shall be given in the following priority order:

a. Residents of the city of Santa Cruz for at least one year.

b. Those employed in the city of Santa Cruz.

c. Residents of the county of Santa Cruz for at least one year.

d. Those employed in the county of Santa Cruz.

7. As consistent with state and federal law, preferences for ownership inclusionary units shall be given in the following priority order:

a. Those who live or work in the city of Santa Cruz.

b. Those who live or work in the county of Santa Cruz.

8. The city council by resolution may establish fees for the ongoing administration and monitoring of the inclusionary units, which fees may be updated periodically, as required.

(Ord. 2019-25 § 2, 2020; Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2008-20 § 3, 2008: Ord. 2006-16 § 2 (part), 2006).

24.16.050 APPEALS.

1. An applicant or any other person whose interests are adversely affected by any determination of the planning and community development department staff or of an agency retained by the city with regard to this part may appeal the determination to the planning and community development director.

2. An applicant or any other person whose interests are adversely affected by the determination of the planning and community development director with regard to this part may appeal the determination to the city council.

3. The procedure for appeals shall be consistent with the procedures prescribed in Sections 24.04.180 through 24.04.185.

(Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2006-16 § 2 (part), 2006).

24.16.055 WAIVERS OR REDUCTIONS OF INCLUSIONARY HOUSING REQUIREMENTS.

1. Notwithstanding any other provision of this chapter, the inclusionary housing requirements may be waived, adjusted, or reduced if an applicant shows, based on substantial evidence, that there is no reasonable relationship between the impact of a proposed development and the requirements of this part, or that applying the requirements of this chapter would take property in violation of the United States or California Constitution.

2. Any request for a waiver, adjustment, or reduction under this section shall be submitted as a part of the first approval. The request for a waiver, reduction, or adjustment shall set forth in detail the factual and legal basis for the claim.

3. The request for a waiver, adjustment, or reduction shall be reviewed and considered as a part of the first approval. In making a determination on an application for waiver, adjustment, or reduction, the applicant shall bear the burden of presenting substantial evidence to support the claim. The city may assume each of the following when applicable:

a. That the applicant will provide the most economical inclusionary units to meet the requirements of this chapter.

b. That the applicant is likely to obtain housing subsidies when such funds are reasonably available.

c. The extent to which the applicant will benefit from density bonuses or other incentives.

The waiver, adjustment, or reduction may be approved by the approval body only to the extent necessary to avoid an unconstitutional result, after adoption of written findings, based on substantial evidence, supporting the determinations required by this section.

(Ord. 2019-21 § 3, 2019: Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2006-16 § 2 (part), 2006).

24.16.060 IMPLEMENTATION AND ENFORCEMENT.

1. The city council may adopt affordable housing program guidelines, by resolution, as mandatory regulations applicable to the implementation of this chapter.

2. In addition to any other powers or duties prescribed by law, the economic development director shall have the following powers and duties in relation to this part:

a. To monitor compliance with the provisions of this part and to refer to the city attorney for appropriate action any person violating the provisions of this part; and

b. To administer this part.

3. The city attorney shall be authorized to enforce the provisions of this part, all agreements entered into pursuant to this part, and all other requirements of this part, by civil action and any other proceeding or method permitted by law. The city may, at its discretion, take such enforcement action as is authorized under any provision of this code and/or any other action authorized by law or by any agreement executed pursuant to this part.

4. Failure of any official or agency to enforce the requirements of this chapter shall not constitute a waiver or excuse any applicant or owner from the requirements of this part. No permit, license, map, or other approval or entitlement for a residential development shall be issued, including without limitation a final inspection or certificate of occupancy, until all applicable requirements of this part have been satisfied.

5. The remedies provided for herein 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.

(Ord. 2021-04 § 4, 2021; Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2006-16 § 2 (part), 2006).

Part 2: ACCESSORY DWELLING UNITS

24.16.100 PURPOSE.

The ordinance codified in this part provides for accessory dwelling units in certain areas and on lots developed or proposed to be developed with single- or multifamily dwellings. Such accessory dwellings are allowed because they can contribute needed housing to the community’s housing stock. Accessory dwelling units provide housing for family members, students, the elderly, in-home health care providers, the disabled, and others within existing neighborhoods, and homeowners who create accessory dwelling units may benefit from added income and an increased sense of security.

In addition, the ordinance codified in this part provides a mechanism to grant legal status to existing illegally constructed accessory dwelling units in single-family neighborhoods. By encouraging legalization, safe dwellings may be added to the city’s existing housing supply.

Accessory dwelling units and junior accessory dwelling units are considered dwelling units for the purposes of meeting the city’s regional housing needs assessment allocation and for the purposes of replacement housing and relocation assistance requirements.

Thus, it is found that accessory dwelling units are a residential use that is consistent with the General Plan objectives and zoning regulations and that enhances housing opportunities throughout the city of Santa Cruz. To ensure that accessory dwelling units will conform to General Plan policy, the following regulations are established.

(Ord. 2024-18 § 8, 2024; Ord. 2022-18 § 24, 2022; Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 2, 2019: Ord. 2016-19 § 1 (part), 2016: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.120 LOCATIONS PERMITTED.

Accessory dwelling units are permitted on lots of any size in conjunction with a proposed or existing residential use in any zone that allows residential uses.

(Ord. 2022-18 § 24, 2022; Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 3, 2019: Ord. 2016-19 § 1 (part), 2016: Ord. 2016-12 § 7, 2016: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.125 DEFINITIONS.

The following definitions shall apply to accessory dwelling units throughout the municipal code:

1. “Attached accessory dwelling unit” shall mean an accessory dwelling unit that is attached to the primary dwelling, including to an attached garage.

2. “Conversion accessory dwelling unit” shall mean any accessory dwelling unit created by the conversion of any one permitted, entitled, or legal nonconforming building, or portion of such a building. The conversion accessory dwelling unit may either be converted utilizing the existing structural components of the building or reconstructed within the existing three-dimensional physical space occupied by the building. On property developed with multi-unit buildings, only areas that are not used as livable space, including, but not limited to, storage rooms, boiler rooms, passageways, attics, basements, or garages, shall be eligible to become conversion accessory dwelling units. The limitation on converting nonlivable space shall not apply to a nonconforming duplex on a single-family zoned lot where one unit is converted to an accessory dwelling unit to result in a single-family home and accessory dwelling unit on the site. Consistent with zoning standards, conversion accessory dwelling units shall be permitted to expand the existing footprint of the building by up to one hundred fifty square feet, and the existing height by up to two feet.

3. “Detached accessory dwelling unit” shall mean an accessory dwelling unit that is separated from any single- or multi-unit building.

4. “Multi-unit building” shall mean a building with two or more attached dwellings on a single lot, including apartment or condominium buildings that contain at least two units. Accessory dwelling units do not count toward the number of units in this calculation.

5. “New construction accessory dwelling unit” shall mean any accessory dwelling unit that includes new construction and that does not meet the definition and requirements for a conversion accessory dwelling unit.

6. “Nonexempt accessory dwelling unit” shall mean an accessory dwelling unit that does not meet the definition of a statewide exemption accessory dwelling unit.

7. “Primary dwelling” shall mean the dwelling unit with which the accessory dwelling unit or junior accessory dwelling unit is associated.

8. “Single-unit building” shall mean a structurally independent building that contains one dwelling unit. A single-unit building may be the only building on the lot, such as a single-family home or a townhome, or it may be a detached residential condominium or apartment unit on a lot with one or more other dwellings that are not attached to the single-unit building. Accessory dwelling units do not count toward the number of units in this calculation.

9. “Statewide exemption accessory dwelling unit” shall mean any of the following:

a. One accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing single-unit building, including a single-family dwelling, townhome, or a detached residential condominium or apartment unit on a lot with multiple dwellings, if all of the following apply:

i. The accessory dwelling unit or junior accessory dwelling unit is within the proposed space of a single-unit building or it is within the existing space of a single-unit building or detached accessory building. This type of statewide exemption accessory dwelling unit does not include a building reconstructed within the three-dimensional space of an existing building to be demolished.

ii. If the accessory dwelling unit is within the space of an existing detached accessory building, the accessory dwelling unit may include an expansion of not more than one hundred fifty square feet beyond the same physical dimensions as the existing accessory building. An expansion beyond the physical dimensions of the existing building shall be limited to accommodating ingress and egress.

iii. The accessory dwelling unit has an exterior entrance separate from that of the primary dwelling unit.

iv. The side and rear setbacks are sufficient for fire and safety.

v. The junior accessory dwelling unit complies with the requirements of Section 24.16.170.

b. One detached, new construction accessory dwelling unit that meets the following standards:

i. The accessory dwelling unit shall be located on a lot with a proposed or existing single-unit building, including a single-family dwelling, townhome, or a detached residential condominium or apartment unit on a site with multiple dwellings.

ii. The accessory dwelling unit size shall not exceed eight hundred square feet in floor area.

iii. Interior side yard and rear yard setbacks shall be at least four feet.

iv. The accessory dwelling unit shall meet one of the following height limitations as measured to the roof peak:

1. A height of sixteen feet; or

2. A height of eighteen feet if the accessory dwelling unit is on a lot within one-half mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. This height can be increased an additional two feet to twenty feet to accommodate a roof pitch on the accessory dwelling unit that is aligned with the roof pitch of the primary dwelling unit.

v. The accessory dwelling unit may be combined with a junior accessory dwelling unit that meets the standards as described in Section 24.16.170.

c. Multiple accessory dwelling units within the portions of existing multi-unit buildings, including a residential condominium or apartment building with two or more attached units, that are not used as livable space, including but not limited to storage rooms, boiler rooms, passageways, attics, basements, or garages, if each unit complies with state building standards for dwellings. The number of accessory dwelling units permitted is equivalent to up to twenty-five percent of the number of existing, legally permitted units in the multi-unit building, or one, whichever is greater. When the twenty-five percent limit results in a fraction of a unit, the total number of accessory dwelling units that may be added shall be determined by rounding the fraction up to the next whole number.

d. Not more than two detached accessory dwelling units that are located on a lot that has an existing or proposed multi-unit building, including a residential condominium or apartment building with two or more attached units. Each accessory dwelling unit shall meet the following standards:

i. Rear and interior side yard setbacks shall be at least four feet. If the existing multi-unit building has a rear or interior side yard setback of less than four feet, the existing multi-unit building will not be required to be modified to meet this setback.

ii. The accessory dwelling units shall meet one of the following height limitations as measured to the roof peak:

1. A height of sixteen feet; or

3. A height of eighteen feet for a detached accessory dwelling unit on a lot with an existing or proposed multi-unit, multistory building.

(Ord. 2024-18 § 9, 2024; Ord. 2022-18 § 24, 2022; Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 4, 2019).

24.16.130 PERMIT PROCEDURES.

1. Accessory dwelling units shall be principally permitted uses within the zoning districts specified in Section 24.16.120 and subject to the development standards in Section 24.16.140 et seq.

2. City shall issue a ministerial building permit for an accessory dwelling unit or junior accessory dwelling unit without discretionary review or a hearing, consistent with the provisions of this chapter and state law, within sixty days of submittal of a complete building permit application, unless provided otherwise. The sixty-day review period shall not apply when:

a. The permit application to create an accessory dwelling unit or junior accessory dwelling unit requires simultaneous approval of a discretionary or building permit associated with creating a new single-unit or multi-unit building on the same lot or parcel. The city may delay approving or denying the building permit application for the accessory dwelling unit or the junior accessory dwelling unit until the city approves or denies the permit application to create the new single-unit or multi-unit building; or

b. When the applicant seeks a delay for any reason, including but not limited to pursuit of a discretionary permit pursuant to subsection (8). The period of the delay shall not count toward the sixty-day time period.

3. If the city denies an application to create an ADU or JADU, the city must provide the applicant with comments that include, among other things, a list of all defective or deficient items and a description of how the application may be remedied by the applicant. Notice of the denial and corresponding comments must be provided to the applicant in accordance with the sixty-day time period set forth in subsection (2).

4. Construction of an accessory dwelling unit shall not constitute a Group R occupancy change under the local building code, except as specified under state law. Construction of an accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in the existing single-unit or multi-unit building.

5. The city shall not require, as a condition for ministerial approval of a permit application for the creation of an accessory dwelling unit or a junior accessory dwelling unit, the correction of nonconforming zoning conditions, building code violations, or unpermitted structures unless they present a threat to public health and safety and are affected by the construction of the accessory dwelling unit.

6. The city shall not require, and the applicant shall not be otherwise required, to provide written notice or post a placard for the demolition of a detached garage that is to be replaced with an accessory dwelling unit, unless the property is located within an architecturally and historically significant historic district.

7. An accessory dwelling unit replacing a detached garage shall receive review and issuance of a demolition permit concurrently with the review and issuance of the permit for the accessory dwelling unit.

8. To promote flexibility in siting of accessory dwelling units, nothing in this part shall prohibit an applicant from pursuing a discretionary permit to construct an accessory dwelling unit on a lot that has a buildable area of at least eight hundred square feet with at least four-foot side and rear yard setbacks for an attached or detached accessory dwelling unit with application of all site development standards or waivers as provided in Section 24.16.141 but where the applicant chooses to place the accessory dwelling unit in a location that does not meet such standards or waivers.

(Ord. 2024-18 § 10, 2024; Ord. 2022-18 § 24, 2022; Ord. 2020-23 § 8 (part), 2020: Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 5, 2019: Ord. 2016-19 § 1 (part), 2016: Ord. 2016-12 § 8, 2016: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.140 GENERAL DEVELOPMENT STANDARDS.

All accessory dwelling units, both new construction and conversion, shall conform to the following requirements:

1. Number of Accessory Dwelling Units per Parcel.

a. For parcels including a proposed or existing single-unit building, including a single-family home, townhome, or multiple detached dwellings, but not including any multifamily structures: One non-exempt accessory dwelling unit shall be allowed on each lot in addition to any statewide exemption accessory dwelling units. Each lot may also include a junior accessory dwelling unit conforming to the standards set forth in Section 24.16.170.

b. For lots developed with an existing or proposed multi-unit building, including an apartment or condominium building with two or more dwelling units: No nonexempt accessory dwelling units shall be allowed in addition to any statewide exemption dwelling units. The number of statewide exemption dwelling units allowed on each lot equals two new construction and at least one conversion accessory dwelling unit. Up to twenty-five percent of the number of existing dwellings in the multi-unit building may be added as conversion accessory dwelling units. When the twenty-five percent limit results in a fraction of a unit, the total number of accessory dwelling units that may be added shall be determined by rounding the fraction up to the next whole number.

2. Existing Development on Lot. One of the following conditions must be present in order to approve an application to create an accessory dwelling unit:

a. One or more single-unit buildings, as defined in Section 24.16.125(8), exists on the lot or will be constructed concurrently and in conjunction with the accessory dwelling unit;

b. The lot contains an existing multi-unit building, as defined in Section 24.16.125(4), or a multi-unit building that will be constructed concurrently and in conjunction with the accessory dwelling unit.

3. Building Code Requirements. The accessory dwelling unit shall meet the requirements of the California Building Standards Code, including the alternative means and methods section as prescribed therein.

4. Large Home Design Permit. The square footage of an accessory dwelling unit shall not be counted with the square footage of the single-family home in determining whether a large home design permit is required. The square footage of a junior accessory dwelling unit shall be counted with the square footage of the single-family home in determining whether a large home design permit is required.

5. Accessory dwelling units that require approval of a coastal permit shall conform to the standards in Section 24.12.140(2).

6. Accessory dwelling units shall meet the inclusionary requirements described under Section 24.16.020(8).

(Ord. 2024-18 § 11, 2024; Ord. 2022-18 § 24, 2022; Ord. 2020-23 § 8 (part), 2020: Ord. 2019-29 § 1 (part), 2020: Ord. 2019-05 §§ 1, 2, 2019; Ord. 2019-04 §§ 6, 7, 2019; Ord. 2016-19 § 1 (part), 2016: Ord. 2015-15 § 1, 2015; Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2008-04 § 1, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003. Formerly 24.16.160).

24.16.141 SITE DEVELOPMENT STANDARDS.

Despite any directly conflicting zone district site development standards, all accessory dwelling units shall comply with the following site development standards. All other zone district site development standards not listed here shall apply to accessory dwelling units.

1. General.

Development Standard	Attached	Conversion1,2	Detached
Maximum Floor Area (square feet)3,4	Greatest of: • 850 for a studio or one bedroom. • 1,000 for a unit with two or more bedrooms. • 50% of the habitable area of the primary dwelling to which the unit is attached.	Footprint of existing building. Can expand footprint by 150.5,6	Greatest of: • 850 for a studio or one bedroom. • 1,000 for a unit with two or more bedrooms. • 10% net lot area and no more than 1,200 habitable square feet.
Maximum Height (feet)7	Zone district standard that applies to primary dwelling.	Maintain existing, or expand up to lesser of 2' or standard for new construction ADU.8	• 16' to roof peak if less than 4' from side/rear property line. • 22' to roof peak if 4' or more from side/rear property line.
Minimum Front Setback (feet)	Zone district standard that applies to primary dwelling.	Maintain existing. Any expansion shall meet new construction standard.	Lesser of: • Front wall line of primary building, excluding any projections from that line. • Zone district standard.
Minimum Rear Setback (feet)	4'	Maintain existing. Any expansion shall meet new construction standard.	3' for up to 16' height. 4' above 16' height.
Minimum Exterior Side Yard Setback	Zone district standard that applies to primary dwelling.	Maintain existing. Any expansion shall meet new construction standard.	Zone district standard.
Minimum Interior Side Yard Setback	4'9	Maintain existing. Any expansion shall meet new construction standard.	3' for up to 16' height. 4' above 16' height.
Minimum Distance Between Buildings	6'	Maintain existing. 6' for any expansion.	6'
1. Conversion accessory dwelling units may occupy the three-dimensional space, including setbacks, lot coverage, and height, of the building to be converted or reconstructed, regardless of conformance to current zoning standards.
2. A conversion accessory dwelling unit with any expansion in excess of the above thresholds shall be reviewed as a new construction accessory dwelling unit, including assessment of any required fees.
3. Accessory dwelling units that utilize alternative green construction methods that cause the exterior wall thickness to be greater than normal shall be accommodated by calculating the unit square footage size in a manner that accounts for the difference between the square footage of the proposed building and the square footage of a traditional frame house.
4. Stairways that provide access to accessory dwelling units do not count toward the floor area of an accessory dwelling unit when the stairs are not part of the conditioned space, the stairs do not include any other rooms or room-like areas that would function as habitable floor area for the ADU, and there is a fire-rated entry door at the top of the stairs at the entrance to the accessory dwelling unit.
5. An expansion of up to one hundred fifty square feet shall not enlarge the accessory dwelling unit beyond one thousand two hundred square feet unless necessary to accommodate ingress and egress to the accessory dwelling unit.
6. Expansions detached from the primary dwelling shall meet height and setback requirements for a new construction detached accessory dwelling unit. Expansions attached to the primary dwelling shall meet height and setback requirements for new construction attached dwelling units. Expansions of either type on a substandard lot shall be consistent with substandard lot development standards described in subsection (7).
7. If the design of the building in which the primary dwelling is located has special roof features that should be matched on the detached accessory dwelling unit to enhance design compatibility, the maximum allowed building height of the accessory dwelling unit may be exceeded in order to include such similar special roof features, subject to review and approval of the zoning administrator as part of the review of the building permit application.
8. Existing and resulting roof height are measured to the roof peak. Other portions of the roof may expand more than two feet if their resulting height is the same or lower than the resulting roof peak.
9. Any zone development standard for an additional setback based on building height or stories shall not apply to the portion of the building that contains the accessory dwelling unit.

2. Parking. No off-street parking shall be required for any accessory dwelling unit outside of the Coastal Zone. Any parking spaces, covered or uncovered, removed in order to create an accessory dwelling unit shall not be required to be replaced outside the Coastal Zone. For properties within the Coastal Zone, parking requirements are contained in Section 24.12.240(1).

3. Rear Yard Lot Coverage. In no case shall any accessory dwelling unit be limited in size based on rear yard lot coverage requirements contained in Section 24.12.140(1)(f). In the application of Section 24.12.140(1)(f), the footprint of accessory dwelling units shall not count toward the maximum allowable lot coverage by accessory buildings in yard setback areas.

4. Projections. An accessory dwelling unit that meets the standard zone district setbacks shall be permitted to include projections as described in Section 24.12.120(1). An accessory dwelling unit, or portion thereof, that does not meet standard zone district setbacks but meets standard setbacks for new construction accessory dwelling units shall be permitted to include architectural features such as cornices, canopies, eaves, and sills that project into the setback two and one-half feet. A conversion accessory dwelling unit, or portion thereof, that does not meet standard setbacks for new construction accessory dwelling units shall not contain any new projections beyond any already present on the existing wall.

5. If a new construction detached accessory dwelling unit is attached to a nonhabitable accessory use within the same building, then the portion of the building containing the nonhabitable use shall meet the site development standards for nonhabitable accessory buildings as described in Section 24.12.140. A garage may have interior access to an accessory dwelling unit, but no other nonhabitable accessory use within the same building shall have interior access to the accessory dwelling unit.

6. Clear Corner Triangle and Clear Vision Area. Any new construction accessory dwelling unit or expansion of a conversion accessory dwelling unit shall be located outside of the clear corner triangle, as defined in Section 24.22.202, and the clear vision area, as defined in Section 24.22.206.

7. Substandard Lots. When a new construction accessory dwelling unit is proposed on a substandard residential lot, as defined in Section 24.22.520, that contains a single-family residential use, the following design standards shall apply:

a. The maximum allowable lot coverage for all structures shall be forty-five percent, except that lot coverage shall be waived to the extent that it physically precludes the construction of the accessory dwelling unit up to eight hundred square feet in floor area. The lot coverage of the accessory dwelling unit shall not be included in the calculation of all other structures’ maximum allowable lot coverage. Lot coverage shall include the footprints of the first floor, garage and other accessory buildings (attached and detached), decks and porches (greater than thirty inches in height and not cantilevered), and any second-story cantilevered projection (enclosed or open) beyond two and one-half feet. Decks under thirty inches in height or fully cantilevered with no vertical support posts do not count toward lot coverage for this purpose. Second-story enclosed cantilevered areas that project less than thirty inches from the building wall do not count toward lot coverage. For such areas that project more than thirty inches from the building wall, only the floor area that projects more than thirty inches shall be counted toward lot coverage.

b. The floor area of a building’s second story shall be limited to one hundred percent of the floor area of the building’s first floor if the floor area of the building’s first story constitutes thirty percent or less of the net lot area.

c. The floor area of a building’s second story shall not exceed fifty percent of the floor area of the building’s first story if the building’s first story has greater than thirty percent lot coverage up to a maximum of forty-five percent lot coverage.

d. The floor area of a building’s second story shall be limited to fifty percent of forty-five percent lot coverage if the building’s first story has greater than forty-five percent lot coverage.

8. Archaeological Resources. The application shall be consistent with all objective standards relating to the preservation of archaeological resources pursuant to Section 24.12.430.

9. Distance From Natural Features. Any new construction accessory dwelling unit or expansion of a conversion accessory dwelling unit shall be consistent with the following standards for distance from natural features.

a. The accessory dwelling unit shall not be constructed within any watercourse setback designated within the City-Wide Creeks and Wetlands Management Plan that does not allow for construction of an accessory dwelling unit by right, as implemented by Section 24.08.2100 et seq.

b. If the site or an adjacent lot contains a wetland or potential wetland as shown in the City-Wide Creeks and Wetlands Management Plan, the accessory dwelling unit shall be located at a distance from the wetland as recommended in a report prepared by a professional biologist with a background in wetland biology.

c. The accessory dwelling unit shall not be constructed within twenty feet of a thirty percent or greater slope.

d. The accessory dwelling unit and any related construction and site work shall be located away from a heritage tree, or any street tree growing in the public right-of-way protected under Chapter 13.30, the greatest distance of: ten feet, or three times the diameter of the tree’s largest trunk at fifty-four inches above grade, or the drip line of the tree.

e. When the project site includes an area mapped for sensitive habitat or vegetation under the General Plan, the accessory dwelling unit and related site work shall be located at a distance from such habitat or vegetation area as determined in a report prepared pursuant to Section 24.14.080 by a professional biologist with a background in sensitive habitat biology.

10. If the application of all site development standards results in a buildable area that physically precludes the creation of any attached or detached accessory dwelling unit of up to eight hundred square feet with at least four-foot interior side and rear yard setbacks, including both statewide exemption accessory dwelling units and nonexempt accessory dwelling units, then the applicant only may waive any one or more of the following site development standards to the extent that it increases the buildable area to allow such an accessory dwelling unit:

a. Percentage of primary dwelling; and/or

b. Lot coverage; and/or

c. Floor area ratio; and/or

d. Open space; and/or

e. Front setbacks.

11. If waiver of all the standards listed in subsection (10) results in a buildable area that physically precludes the creation of a statewide exemption accessory dwelling unit, then the following site development standards shall be waived only to the extent that the waiver increases the buildable area to allow construction of a statewide exemption accessory dwelling unit. Such waivers are limited to the following:

a. First, the applicant may waive any one or more of the following standards:

i. Exterior side yard setback; and/or

ii. Distance between buildings; and/or

iii. Second-floor area of a structure on a substandard lot; and/or

iv. Distance from thirty percent or greater slopes.

b. If waiver of all standards in subsection (11)(a) results in a buildable area that physically precludes the creation of a statewide exemption accessory dwelling unit, then the applicant may waive any one or more of the following standards:

i. The management and development setbacks of a watercourse, but not the riparian setback, when recommendations in a report prepared by a professional biologist with a background in riparian biology are followed and included on the building permit plans. The report recommendations shall not include a requirement to move the building; and/or

ii. The required distance from a heritage tree, or any street tree growing in the public right-of-way protected under Chapter 13.30, if a report prepared by a professional consulting arborist determines that the reduced distance does not require removal of the tree or any other action that would require approval of a heritage tree permit pursuant to Chapter 9.56 or street tree permit pursuant to Chapter 13.30 and when the building permit plans incorporate all recommendations from the report.

c. If waiver of all the standards in subsection (11)(b) results in a buildable area that physically precludes the creation of a statewide exemption accessory dwelling unit, then the applicant may waive any one or more of the following standards:

i. The required distance from a heritage tree or any street tree growing in the public right-of-way protected under Chapter 13.30, if a report prepared by a professional consulting arborist determines that the tree must be removed or that any other action must be taken that would otherwise require a heritage tree permit pursuant to Chapter 9.56 or street tree permit pursuant to Chapter 13.30. In this case, the statewide exemption dwelling unit is exempt from heritage tree permit and street tree permit requirements. Instead, the building permit plans shall include replacement tree(s) with a location and species specified in the arborist report, or the applicant shall pay an in-lieu fee, as described in the city’s heritage tree regulations of Chapter 9.56, street tree regulations of Chapter 13.30, associated city council resolutions, and associated implementing standards.

ii. The riparian setback of a watercourse, when recommendations in a report prepared by a professional biologist with a background in riparian biology are followed and included on the building permit plans. The report recommendations shall not include a requirement to move the building; and/or

iii. Distance from a wetland as determined pursuant to subsection (9)(b), when recommendations in a report prepared by a professional biologist with a background in wetland biology are followed and included on the building permit plans. The report recommendations shall not include a requirement to move the building; and/or

iv. Distance from a sensitive habitat or vegetation area as determined pursuant to subsection (9)(e), when recommendations in a report prepared by a professional biologist with a background in sensitive habitat biology are followed and included on the building permit plans. The report shall not include a requirement to move the building; and/or

v. Distance from an archaeological resource recommended in a report prepared by a professional archaeologist. The applicant shall submit an additional review by the archaeologist with recommendations for archaeological resource protection based on the proposed location of the accessory dwelling unit. The additional review shall not include a requirement to move the building. The recommendations from the additional review shall be followed and included on the building permit plans.

d. If waiver of all the standards in subsection (11)(c) results in a buildable area that precludes creation of a statewide exemption accessory dwelling unit, then the applicant may waive the following standards in the following order:

i. Clear vision area;

ii. Clear corner triangle.

(Ord. 2024-18 § 12, 2024; Ord. 2022-18 § 24, 2022; Ord. 2020-23 § 8 (part), 2020: Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 8, 2019).

24.16.142 ACCESSORY DWELLING UNIT DESIGN STANDARDS.

All accessory dwelling units, or the type of accessory dwelling unit if specified below, shall comply with the following design standards:

1. Municipal Code Requirements. All accessory dwelling units shall meet the objective design standards set forth in this code, including landscape and tree removal and/or replacement requirements.

2. The following standards apply to accessory dwelling units that do not meet one or more of the standard setbacks for the zone district in which they are proposed:

a. The entrance to the accessory dwelling unit, access stairs, and second-story decks shall face the interior of the lot unless the accessory dwelling unit is adjacent to an alley or a public street.

b. When an accessory dwelling unit is adjacent to an alley or a public street, the accessory dwelling unit shall be oriented toward the alley or street with the front access door and windows facing the alley or street. The entry facing the alley or street shall include a minimum of twelve square feet of flat, unenclosed, covered area, which may be a projection from the building, or inset, or a combination of the two.

c. Windows that do not meet the standard zone district side or rear setback and that face an adjoining residential property shall be designed to obscure views of that property by ADU occupants, including transom windows, translucent glass, or other methods; alternatively, fencing or landscaping shall be required to provide screening.

3. Connections Between Units. Accessory dwelling units shall not create access between units except a connection between the accessory dwelling unit and the primary dwelling via common access to a shared garage, laundry room, or storage area; provided, that each unit meets the definition of dwelling unit found in Section 24.22.320.

4. The application to construct an accessory dwelling unit on a property that is designated as a historic resource by the National Register of Historic Places, the state of California, or by the city, including any property that has been determined to be eligible for the city’s historic building survey list but the property owner has elected to not list the property (opt out), shall show substantial compliance with the guidelines of the Secretary of the Interior for development on such properties as confirmed in a report prepared by a professional historic consultant who is listed on the department of planning and community development’s approved consultant list.

(Ord. 2024-18 § 13, 2024; Ord. 2022-18 § 24, 2022; Ord. 2019-29 § 1 (part), 2020: Ord. 2019-05 § 3, 2019; Ord. 2019-04 §§ 9, 10, 2019).

24.16.150 USE STANDARDS.

1. For any unit that is not approved for separate sale under the provisions of Government Code Sections 66340 through 66341: the accessory dwelling unit shall not be sold separately.

2. The unit shall not be altered from the approved size except by approval of a subsequent building permit where the resulting unit meets the accessory dwelling unit development standards described in this part.

3. The use of the accessory dwelling unit shall be in effect only so long as the property is in compliance with the ordinance as codified in this section.

4. Neither an accessory dwelling unit nor an associated primary dwelling shall be used on a transient occupancy basis or for short-term/vacation rental purposes with a term of thirty or fewer days.

a. Exception. A legal accessory dwelling unit property that had legal status prior to November 10, 2015, and was in use as a short-term/vacation rental prior to that date, and for which the owner remits transient occupancy tax in compliance with Chapter 3.28 in full in a timely manner for the use of the property as short-term/vacation rental purposes, may continue the use.

5. For properties with accessory dwelling units that are located in a permit parking program district, the primary dwelling and the accessory dwelling unit combined shall qualify only for the number of residential parking permits that would have been available to the primary dwelling. No additional permits will be granted for the accessory dwelling unit. The property owner shall offer the tenant of an accessory dwelling unit a residential parking permit if requested by the tenant.

6. For properties developed with attached accessory dwelling units, any portion of the accessory dwelling unit that in the future is remodeled to become part of the primary dwelling shall meet the zone district development standards that apply the primary dwelling.

7. If rented, the accessory dwelling unit and primary dwelling unit shall be registered with the residential rental dwelling unit inspection and maintenance program.

8. Occupancy.

a. For accessory dwelling units permitted on or after January 1, 2020, owner occupancy shall not be required and no land use agreement requiring owner occupancy shall be recorded or enforced on properties containing these units.

b. For accessory dwelling units permitted on or before December 31, 2019, the property owner or an adult member of the property owner’s immediate family, limited to the property owner’s spouse, adult children, parents, or siblings, and subject to verification by the city, shall occupy either the primary or accessory dwelling as his or her principal place of residence except under circumstances as established by resolution by the city council that may allow the property owner or the executor or trustee of the property owner’s estate to apply to the city council for approval of a temporary change in use allowing both units to be rented for a period of no more than two years with a possible extension of one year by the planning director if circumstances warrant. Upon the expiration of the rental period, the property owner and/or the property owner’s immediate family member, as specified above, shall reoccupy the property, or the property owner shall cease renting one of the units, or shall demolish the accessory dwelling unit, or shall sell the property to a buyer who will reside on the property. A fee to cover the costs of processing such a request shall be in an amount established by resolution by the city council.

c. For purposes of this chapter, the property owner is the majority owner of the property as shown in the most recent Santa Cruz County assessor’s roll.

d. If there is more than one property owner of record, the owner with the majority interest in the property shall be deemed the property owner for purposes of this chapter. Any property owner of record holding an equal share interest in the property may be deemed the majority property owner if no other property owner owns a greater interest. (For example, if the property is owned by two people, each with a fifty percent interest, either of the two owners may be deemed the property owner for purposes of the owner occupancy requirement. If three people own the property, each with a thirty-three and one-third percent interest, any one of the three may be deemed the property owner for purposes of the owner occupancy requirement.)

(Ord. 2024-18 § 14, 2024; Ord. 2022-18 § 24, 2022; Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 §§ 11, 12, 2019; Ord. 2016-19 § 1 (part), 2016: Ord. 2015-15 § 2, 2015: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2008-04 § 2, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003. Formerly 24.16.170).

24.16.160 ZONING INCENTIVES.

The following incentives are to encourage construction of accessory dwelling units:

1. Affordability Requirements for Fee Waivers. In addition to any inclusionary housing requirements as set forth under Section 24.16.010 et seq., accessory dwelling units proposed to be rented at affordable rents, as established by the city, may have development fees waived per Part 4 of this chapter. Existing dwelling units shall be relieved of the affordability requirement upon payment of fees in the amount previously waived plus the difference between that amount and the fees in effect at the time of repayment.

2. Front or Exterior Yard Parking. Three parking spaces may be provided in the front or exterior yard setback under this incentive with the parking design subject to approval of the zoning administrator. The maximum impervious surfaces devoted to the parking area shall be no greater than the existing driveway surfaces at time of application. Not more than fifty percent of the front yard width shall be allowed to be parking area.

3. Tandem Parking. For a parcel with a permitted accessory dwelling unit, required parking spaces for the primary single-family dwelling and the accessory dwelling unit may be provided in tandem on a driveway. A tandem arrangement consists of one car behind the other. No more than three total cars in tandem may be counted towards meeting the parking requirement.

(Ord. 2024-18 § 15, 2024; Ord. 2022-18 § 24, 2022; Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 13, 2019; Ord. 2016-19 § 1 (part), 2016: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2012-19 § 5, 2012; Ord. 2008-14 § 8, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003. Formerly 24.16.180).

24.16.170 JUNIOR ACCESSORY DWELLING UNITS.

1. Notwithstanding any other regulation or definition of this code, one junior accessory dwelling unit shall be permitted on lots in zones where single-family dwellings are an allowed use, including in the R-S, R-1, R-L, R-M, R-H, R-T(A), R-T(B), R-T(C), R-T(D), R-T(E), and P-A zones; where one or more single-unit buildings, including a single-family home, townhome, or a detached condominium or apartment on a site with multiple units, exist or are proposed on the lot; and where the owner of the property occupies the property as their principal place of residence.

2. For the purposes of this section, “junior accessory dwelling unit” shall have the same meaning as defined in Section 66313 of the California Government Code.

3. Junior accessory dwelling units shall be attached to a single-unit building and may be created in any part of an existing or proposed single-unit building, including in an attached garage. For purposes of this section, a “proposed single-unit building” shall mean the resulting building including the junior accessory dwelling unit, regardless of whether portions of the building already exist, and shall therefore include any new single-unit building or a single-unit building resulting from an addition to an existing single-unit building.

4. Junior accessory dwelling units shall be no larger than five hundred square feet in size.

5. Junior accessory dwelling units shall contain, at a minimum, the following features:

a. An exterior entrance separate from that of the primary dwelling.

b. A cooking facility with appliances.

c. A food preparation counter and storage cabinets of reasonable size in relation to the size of the junior accessory dwelling unit.

6. Junior accessory dwelling units may include separate sanitation facilities or may share sanitation facilities with the primary dwelling. Where sanitation facilities are shared with the primary dwelling, the junior accessory dwelling unit shall have access to the primary dwelling through internal circulation and shall not be required to exit the building in order to reach the entrance to the primary dwelling.

7. The property owner shall occupy either the junior accessory dwelling unit or the primary dwelling to which the junior accessory dwelling unit is attached as his or her principal place of residence. Owner occupancy shall not be required if the owner is another governmental agency, land trust, or housing organization.

a. For purposes of this section, the property owner is:

i. The majority owner(s) of the property as shown in the most recent Santa Cruz County records.

ii. If there is more than one property owner of record, the owner with the majority or highest ownership interest in the property shall be deemed the property owner. Any property owner(s) of record holding an equal share interest in the property may be deemed the majority property owner(s) if no other property owner owns a greater interest.

iii. For property held by a corporation or business entity, a shareholder or officer of the corporation or business entity with the greatest shares or business interest as defined in the articles of incorporation, or other applicable business document.

iv. For property held in trust: (a) the trustor(s) or settlor(s) who created the trust in which the property is held; or any person(s) or entity deemed as the legal owner of the property held in trust in accordance with the trust document, and (b) who has/have the highest ownership interest in the property.

8. Before obtaining a building permit for a junior accessory dwelling unit, the property owner shall file with the county recorder a declaration of restrictions containing a reference to the deed under which the property was acquired by the present owner and including:

a. A prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-unit building, including a statement that the deed restriction may be enforced against future purchasers.

b. A restriction on the size and attributes of the junior accessory dwelling unit that conforms with the standards in this section.

(Ord. 2024-18 § 16, 2024; Ord. 2022-18 § 24, 2022; Ord. 2019-29 § 2, 2020).

PART 3: DENSITY BONUS PROVISIONS FOR RESIDENTIAL UNITS

24.16.200 PURPOSE.

The purposes of this Part 3 of this chapter are: (1) to provide incentives for the production of housing for very-low-income, low-income, moderate-income, and senior households; (2) to provide incentives for the creation of rental housing serving lower-income households; (3) to provide incentives for the construction of child care centers serving very-low-, low-, and moderate-income households; and (4) to implement California Government Code Sections 65915, 65915.5, 65915.7, and 65917 as required by Government Code Section 65915(a). In enacting this part, it is also the intent of the city of Santa Cruz to implement the goals, objectives, and policies of the city’s General Plan Housing Element to encourage the construction of affordable housing in the city. Further, it is the intent of the city of Santa Cruz to encourage the development of rental housing in order to serve an economically diverse community and to mitigate the trend, as documented in the General Plan Housing Element, that only limited rental unit development occurs without public assistance.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.205 DEFINITIONS.

For purposes of this Part 3, the following definitions shall apply. Unless specifically defined below, words or phrases shall be interpreted as to give this Part 3 its most reasonable interpretation.

1. “Affordable ownership costs” means a sales price resulting in projected average monthly housing costs during the first calendar year of a household’s occupancy, including mortgage payments, property taxes, homeowners insurance, and homeowners association dues, if any, and a reasonable allowance for utilities, property maintenance, and repairs, which do not exceed the following:

a. For moderate-income households: one hundred ten percent of area median income adjusted for assumed household size based on unit size, multiplied by thirty-five percent, and divided by twelve.

b. For lower-income households: seventy percent of area median income adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

c. For very-low-income households: fifty percent of area median income adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

The city may determine sales prices of affordable units by any reasonable method so long as average monthly housing payments of eligible households do not exceed those permitted by this definition.

2. “Affordable rent” means monthly housing expenses, including rent, utilities, and all fees for housing services, which does not exceed the following:

a. For lower-income households: sixty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

b. For very-low-income households: fifty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

c. For federally subsidized units under the Housing Choice Voucher/Section 8 Program or other similar federal programs, federal rental terms may be applied at the discretion of the planning and community development director.

3. “Affordable units” are dwelling units which are affordable to very-low-, lower-, or moderate-income households as defined by this Part 3 and are subject to rental, sale, or resale provisions to maintain affordability.

4. “Area median income” is area median income for Santa Cruz County as published by the state of California pursuant to California Code of Regulations, Title 25, Section 6932, or successor provision.

5. “Assumed household size based on unit size” is a household of one person in a studio apartment, two persons in a one-bedroom unit, three persons in a two-bedroom unit, and one additional person for each additional bedroom thereafter.

6. “Child care facility” is a child daycare facility other than a family daycare home, as defined in Section 24.22.355, including, but not limited to, infant centers, preschools, extended daycare facilities, and school age child care centers.

7. “Commercial development” is a construction project for nonresidential uses.

8. “Commercial development bonus” is a modification of development standards mutually agreed upon by the city and a commercial developer that is provided to a commercial development eligible for such a bonus under Section 24.16.258. Examples of a commercial development bonus include an increase in floor area ratio, increased building height, or reduced parking.

9. “Density bonus” is a density increase over the otherwise allowable maximum residential density on a site, granted pursuant to this Part 3 or, if elected by the applicant, a lesser percentage of density increase, including, but not limited to, no increase in density.

10. “Density bonus units” are residential units granted pursuant to this Part 3 which exceed the otherwise allowable maximum residential density for a housing development.

11. “Development standard” is any site or construction condition that applies to a housing development pursuant to any ordinance, General Plan element, specific plan, or other local condition, law, policy, resolution, or regulation. A “site and construction condition” is a development regulation or law that specifies the physical development of a site and buildings on the site in a housing development.

12. “First approval” is the first of the following approvals to occur with respect to a housing development: specific plan, development agreement, planned development permit, tentative map, minor land division, use permit, design permit, building permit, or any other permit listed in Section 24.04.030.

13. “Flexible density unit” or “FDU” is a dwelling unit ranging from two hundred twenty to six hundred fifty square feet that is exempt from General Plan and zoning ordinance density standards. Developments including this unit type may consist solely of FDUs or include other residential units.

14. “Household income” is the combined adjusted net household income for all adult persons living in a living unit as calculated pursuant to California Code of Regulations, Title 25, Section 6916, or successor provision.

15. “Household, low or lower income” is a household whose income does not exceed the lower-income limits applicable to Santa Cruz County, as published and periodically updated by the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50079.5.

16. “Household, moderate income” is a household whose income does not exceed the moderate-income limits applicable to Santa Cruz County, as published and periodically updated by the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50079.5.

17. “Household, very low income” is a household whose income does not exceed the very-low-income limits applicable to Santa Cruz County, as published and periodically updated by the State Department of Housing and Community Development pursuant to California Health and Safety Code Section 50105.

18. “Housing development” is a development project on contiguous lots that are the subject of one development application, consisting of five or more residential units (not including any density bonus units), including single-family and multifamily and single-room occupancy units, for sale or for rent. For the purposes of this Part 3, “housing development” also includes a subdivision or a common interest development consisting of five or more residential units or unimproved residential lots, a mixed-use development that includes five or more residential units or unimproved residential lots, the substantial rehabilitation and conversion of an existing commercial building to residential use, and the substantial rehabilitation of an existing multifamily dwelling, where the rehabilitation or conversion would create a net increase of at least five residential units. In all cases density bonus units are not included for the purpose of determining whether the development consists of five or more units or lots.

19. “Incentives and concessions” are regulatory concessions as listed in Section 24.16.255.

20. “Inclusionary unit” is an ownership or rental dwelling unit or single-room occupancy unit within a housing development which is required under Part 1 of this chapter to be rented at affordable rents or sold at an affordable ownership cost to specified households.

21. “Major transit stop” is an existing site, or a site included in the regional transportation plan, that contains a rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of fifteen minutes or less during the morning and afternoon peak commute periods. A housing development is considered to be within one-half mile of a major transit stop if all parcels within the housing development have no more than twenty-five percent of their area farther than one-half mile from the stop and if not more than ten percent of the units or one hundred units, whichever is less, in the housing development are farther than one-half mile from the stop.

22. “Market rate unit” is a dwelling unit which is not an affordable unit as defined in this Part 3.

23. “Maximum residential density” is the maximum number of residential units allowed in a housing development by the city’s zoning ordinance and by the land use element of the General Plan on the date that the application for the housing development is deemed complete. If the maximum density allowed by the zoning ordinance is inconsistent with the density allowed by the land use element of the General Plan, the land use element density shall prevail. This definition is used to calculate a density bonus pursuant to this Part 3.

24. “Partnered housing agreement” is an agreement approved by the city between a commercial developer and a housing developer identifying how the commercial development will provide housing available at affordable ownership cost or affordable rent. A partnered housing agreement may consist of the formation of a partnership, limited liability company, corporation, or other entity recognized by the state in which the commercial developer and the housing developer are each partners, members, shareholders, or other participants, or a contract between the commercial developer and the housing developer for the development of both the commercial development and the housing development.

25. “Special needs housing” is any housing, including supportive housing, intended to benefit, in whole or in part, persons identified as having special needs relating to mental health; physical disabilities; developmental disabilities, including without limitation intellectual disability, cerebral palsy, epilepsy, and autism; and risk of homelessness, and housing intended to meet the housing needs of persons eligible for mental health services funded in whole or in part by the Mental Health Services Fund, created by California Welfare and Institutions Code Section 5890.

26. “Unobstructed access” to a location means that a resident is able to access the location without encountering natural or constructed impediments.

(Ord. 2022-18 § 25, 2022; Ord. 2018-10 § 1 (part), 2018: Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.210 ELIGIBILITY FOR RESIDENTIAL DENSITY BONUSES.

A housing development, as defined in Section 24.16.205(17), is eligible for a density bonus if it:

1. Includes a request for a density bonus as part of the application for the housing development; and

2. Meets the criteria for a density bonus established in Section 24.16.215, 24.16.220, 24.16.230, 24.16.235, or 24.16.240; and

3. Provides replacement housing as required by Section 24.16.222.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.215 DENSITY BONUSES FOR AFFORDABLE, SENIOR, AND SPECIAL NEEDS HOUSING.

1. Very-Low- and Lower-Income Housing and Senior Housing. Subject to the findings included in Section 24.16.270, a housing development is eligible for a twenty percent density bonus if the applicant agrees to construct at least one of the following and any additional replacement units required by Section 24.16.222:

a. Ten percent of the total units in the housing development are made available to lower-income households based on affordable rents or affordable ownership costs; or

b. Five percent of the total units in the housing development are made available to very-low-income households at affordable rents or affordable ownership costs; or

c. The project is a senior citizen housing development of thirty-five dwelling units or more as defined in California Civil Code Section 51.3, or a mobilehome park that limits residency based on age requirements for older persons pursuant to California Civil Code Section 798.76 or 799.5. The density bonus for a senior citizen housing development may be applied only to the number of senior housing units.

As an example of the application of this section, if a forty-unit project includes either four lower-income units (ten percent) or two very-low-income units (five percent) or is a senior citizen housing development, the project would be entitled to build eight density bonus units, or a total of forty-eight units. None of the eight bonus units would need to be affordable.

2. Moderate Income Housing. Subject to the findings included in Section 24.16.270, a housing development is eligible for a five percent density bonus if it meets all of the following criteria:

a. The applicant agrees to construct at least ten percent of the total units in the housing development at an ownership cost affordable to moderate-income households and includes any additional replacement units required by Section 24.16.222;

b. The housing development is a common interest project as defined by California Civil Code Section 4100; and

c. All of the dwelling units in the housing development are offered to the public for purchase.

3. Special Needs Housing. Subject to the findings included in Section 24.16.270, a housing development is eligible for a density bonus of twenty percent of the type of units listed in subsection (3)(a) if the applicant agrees to construct all of the following and any additional replacement housing units required by Section 24.16.222:

a. Ten percent of the total units in the housing development for transitional foster youth, as defined in Education Code Section 66025.9; disabled veterans, as defined in Government Code Section 18541; or homeless persons, as defined in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Section 11301 et seq.); and

b. The units described in subsection (3)(a) are subject to a recorded restriction requiring that the units remain affordable to very-low-income households for fifty-five years.

4. Additional Density Bonus. The density bonus for which the housing development is eligible shall increase if the percentage of very-low-, lower-, and moderate-income housing units exceeds the base percentage established in subsections (1) and (2), as follows:

a. Very-Low-Income Units. For each one percent increase above five percent in the percentage of dwelling units affordable to very-low-income households, the density bonus shall be increased by two and one-half percent up to a maximum of thirty-five percent.

b. Lower-Income Units. For each one percent increase above ten percent in the percentage of dwelling units affordable to lower-income households based on density bonus affordable rents and affordable ownership costs, the density bonus shall be increased by one and one-half percent up to a maximum of thirty-five percent.

c. Moderate-Income Ownership Units. For each one percent increase above ten percent of the percentage of dwelling units offered for sale at an ownership cost affordable to moderate-income households, the density bonus shall be increased by one percent up to a maximum of thirty-five percent.

d. An additional density bonus may be given for a senior citizen housing development only if it includes the required percentage of very-low-, lower-, or moderate-income units.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.220 CITY DENSITY BONUSES FOR HOUSING DEVELOPMENTS.

The city rental housing density bonus provided pursuant to this section is provided as an alternative to the density bonuses provided elsewhere in this Part 3. A housing development is eligible for a twenty-seven and one-half percent density bonus if all of the units in the housing development are offered to the public for rent, and the developer agrees to enter into an enforceable restriction to ensure that no subdivision map will be recorded or no community apartment or stock cooperative will be created to create parcels containing single dwelling units that may be sold individually. If the twenty-seven and one-half bonus is greater than that to which the developer would otherwise be entitled pursuant to Section 24.16.215, the city rental housing bonus shall be considered to be one incentive or concession for purposes of Section 23.16.225.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.222 REPLACEMENT HOUSING REQUIREMENTS.

1. Replacement housing shall be provided on the site of a housing development which meets both of the following conditions:

a. Rental housing is now located or was located on the site at any time in the five-year period preceding the date of submittal of the density bonus application; and

b. The rental housing is or was during that five-year period:

(1) Subject to a recorded covenant, ordinance, or law restricting rents to levels affordable to very-low- and lower-income households;

(2) Subject to any form of public rent or price control; or

(3) Occupied by very-low- or lower-income households.

2. A housing development subject to this section is not eligible for a density bonus, incentive, concession, waiver, or parking reduction provided by this Part 3 unless the proposed housing development contains one of the following, whichever results in a greater number of affordable units:

a. The percentage of affordable units specified in Section 24.16.215; or

b. The replacement affordable units specified in California Government Code Sections 65915(c)(3)(B) and (C).

(Ord. 2017-20 § 1 (part), 2017).

24.16.225 INCENTIVES AND CONCESSIONS FOR AFFORDABLE HOUSING.

An applicant for a density bonus may seek incentives and concessions as described in Section 24.16.255 as follows:

1. One incentive or concession for housing developments where at least ten percent of the total units are affordable to lower-income households, at least five percent of the total units are affordable to very-low-income households, or at least ten percent of the total units in a common interest development are available to moderate-income households at affordable ownership costs.

2. Two incentives or concessions for housing developments where at least twenty percent of the total units are affordable to lower-income households, at least ten percent of the total units are affordable to very-low-income households, or at least twenty percent of the total units in a common interest development are available to moderate-income households at affordable ownership costs.

3. Three incentives or concessions for housing developments where at least thirty percent of the total units are affordable to lower-income households, at least fifteen percent of the total units are affordable to very-low-income households, or at least thirty percent of the total units in a common interest development are available to moderate-income households at affordable ownership costs.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.230 DENSITY BONUS FOR LAND DEDICATION.

1. A housing development is eligible for a fifteen percent density bonus when an applicant for a housing development chooses to dedicate land to the city for the construction of very-low-income housing. For each one percent increase above the minimum ten percent land dedication described in subsection (2)(b), the maximum density bonus shall be increased by one percent, up to a maximum of thirty-five percent. This density bonus shall be in addition to any density bonus allowed by Section 24.16.215, up to a maximum combined density bonus of thirty-five percent if an applicant seeks both the density bonus authorized by this section and a density bonus authorized by Section 24.16.215.

2. The city may approve the density bonus described in this section if it makes all of the following findings when approving the housing development:

a. The applicant will dedicate and transfer the land no later than the date of approval of the final map, parcel map, or development application for the housing development.

b. The developable acreage and zoning regulations of the land to be transferred will permit construction of dwelling units affordable to very-low-income households in an amount not less than ten percent of the total number of dwelling units in the proposed housing development, or will permit construction of a greater percentage of very-low-income dwelling units if proposed by the developer to qualify for a density bonus of more than fifteen percent.

c. The transferred land is at least one acre in size or is large enough to permit development of at least forty units, has the appropriate general plan land use designation, has the appropriate zoning and development standards for development at a density of twenty units per acre, and at the time of project approval is, or at the time of construction will be, served by adequate public facilities and infrastructure.

d. No later than the date of approval of the final map, parcel map, or other development application for the housing development, the transferred land will have all of the applicable development permits and approvals, other than any required building permit approval, necessary for the development of the very-low-income housing units on the transferred land.

e. The transferred land and the very-low-income units constructed on the land will be subject to a recorded developer affordable housing agreement ensuring continued affordability of the units consistent with Section 24.16.260(1), which restriction shall be filed for recordation by the city with the Santa Cruz County recorder’s office on the property at the time of dedication.

f. The land will be transferred to the city or to a housing developer approved by the city. The city reserves the right to require the applicant to identify a developer for the very-low-income units and to require that the land be transferred to that developer.

g. The transferred land is within the site boundaries of the proposed housing development. The transferred land may be located within one-quarter mile of the boundary of the proposed housing development; provided, that the city council finds, based on substantial evidence, that off-site dedication will provide as much or more affordable housing at the same or lower income levels, and of the same or superior quality of design and construction, will not create or exacerbate residential segregation, and will otherwise provide greater public benefit than donating land on site.

h. A proposed source of funding for the very-low-income units shall be identified no later than the date of approval of the final subdivision map, parcel map, or development application.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.235 DENSITY BONUS OR INCENTIVE FOR CHILD CARE FACILITIES.

1. A housing development that is eligible for a density bonus and includes a child care facility that will be located on the premises of, as part of, or adjacent to the housing development, is eligible for either of the following, at the option of the city, if requested by the applicant:

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.

2. The developer affordable housing agreement shall require that:

a. The child care facility may be used only for child care for a period of time that is as long as or longer than the period of time during which the affordable units are required to remain affordable pursuant to Section 24.16.260(1); and

b. Of the children who attend the child care facility, the percentage of children of very-low-income households, lower-income households, or moderate-income households shall be equal to or greater than the percentage of dwelling units that are proposed to be affordable to very-low-income households, lower-income households, or moderate-income households; and

c. The developer or successor in interest shall be responsible for all costs of monitoring and reporting required by this subsection (2).

3. Notwithstanding any requirement of this section, the city shall not be required to provide a density bonus or concession for a child care facility if it makes a written finding, based upon substantial evidence, that the community already has adequate child care facilities.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.240 DENSITY BONUS FOR CONDOMINIUM CONVERSIONS.

1. A housing development for a conversion of existing rental apartments to condominiums is eligible for a density bonus or other incentives of equivalent financial value if the applicant agrees to provide thirty-three percent of the total units in the proposed condominium project as affordable to lower-income or moderate-income households based on density bonus affordable ownership costs, or to provide fifteen percent of the total units in the condominium conversion project as affordable to lower-income households based on density bonus affordable ownership costs. All such density bonus affordable units shall remain affordable in perpetuity.

2. For purposes of this section, a “density bonus” means an increase in units of twenty-five percent over the existing number of apartments. Pursuant to state law, the density bonus units must be provided within the existing structure or structures proposed for conversion. Incentives of equivalent financial value may include fee reductions or waivers at the city’s sole discretion but shall not include monetary subsidies from the city.

3. No condominium conversion shall be eligible for a density bonus if the apartments proposed for conversion constitute a housing development for which a density bonus or other incentives were previously provided pursuant to the Santa Cruz Municipal Code or Government Code Section 65915.

4. Nothing in this section shall be construed to require the city to approve a proposal to convert rental apartments into condominiums.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.245 SUMMARY TABLES.

The following tables summarize the available density bonuses, incentives, and concessions for housing developments:

Density Bonus Summary
Types of Affordable Units Providing Eligibility for a Density Bonus	Minimum %	Bonus Granted	Additional Bonus for Each 1% Increase in Affordable Units	% Affordable Units Required for Maximum 35% Bonus
A density bonus may be selected from only one category, except that bonuses for land donation may be combined with others, up to a maximum of 35%, and an additional sq. ft. bonus may be granted for a child care center.
Very low income	5%	20%	2.5%	11%
Lower income	10%	20%	1.5%	20%
Moderate income (ownership units only)	10%	5%	1%	40%
Senior housing	100% senior	20%	—	—
Units for transitional foster youth, disabled veterans, or homeless	10% (Units must also be affordable to very-low-income households)	20% of designated units	—	—
Rental housing(A)	No map	27.5%	—	—
Land donation for very-low-income housing	10% of market-rate units	15%	1%	30% of market-rate units
Condominium conversion – moderate income	33%	25%(B)	—	—
Condominium conversion – lower income	15%	25%(B)	—	—
Child care center	—	Sq. ft. in child care center (B)	—	—
Notes:
(A) City bonus; not required by state law. Rental housing bonus is considered an incentive if greater than bonus allowed by state law. City bonuses are alternatives to state density bonus. (B) Or and incentive of equal value, at the city’s option. See table below.

Incentives and Concessions Summary
Target Units of Category	% of Target Units
Pursuant to State Density Bonus
Very low income	5%	10%	15%
Lower income	10%	20%	30%
Moderate income (ownership units only)	10%	20%	30%
Maximum Incentive(s)/Concessions(A)(B)(C)	1	2	3

Notes:
(A) Concessions or incentives may be selected from only one category (very low, lower, or moderate).
(B) No concessions or incentives are available for land donation.
(C) Condominium conversions and child care centers may have one concession or a density bonus at the city’s option, but not both.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.250 CALCULATION OF DENSITY BONUS FOR HOUSING DEVELOPMENTS.

1. When calculating the maximum residential density and number of permitted density bonus units, any calculations resulting in fractional units shall be rounded to the next larger whole number.

2. The density bonus units shall not be included in the “total units” when determining the number of affordable units required to qualify a housing development for a density bonus pursuant to Section 24.16.215(1), (2), or (3). When calculating the required number of affordable units, any calculations resulting in fractional units shall be rounded to the next larger whole number.

3. The applicant may request a lesser density bonus than the project is entitled to, but no reduction may be permitted in the number of affordable units or land dedication required to qualify a housing development for a density bonus. Regardless of the number of affordable units or land dedication, no housing development may be entitled to a total density bonus of more than thirty-five percent.

4. Each housing development is entitled to only one density bonus, which may be selected by the applicant based on the percentage of either very-low-income dwelling units, lower-income dwelling units, or moderate-income ownership dwelling units; the project’s status as either a senior housing project; the project’s provision of housing for transitional foster youth, disabled veterans, or homeless persons; or as a project eligible for a city rental housing bonus. Density bonuses from more than one category may not be combined, except that bonuses for land dedication pursuant to Section 24.16.230 may be combined with bonuses granted pursuant to Section 24.16.215, up to a maximum of thirty-five percent, and an additional square footage bonus for child care centers may be granted as described in Section 24.16.235.

5. For purposes of calculating the number of inclusionary units required by Part 1 of this chapter, any dwelling units authorized as a density bonus pursuant to this Part 3 shall not be counted as part of the housing development. However, if a developer elects to receive a city rental housing bonus as authorized by Section 24.16.220, then all of the dwelling units in the project, including the dwelling units authorized as a density bonus, shall be counted as part of the housing development for purposes of calculating the inclusionary units required by Part 1.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.255 STANDARDS FOR INCENTIVES, CONCESSIONS, AND WAIVERS FOR HOUSING DEVELOPMENTS.

1. For purposes of this Part 3, concessions and incentives include the following:

a. A reduction of site development standards or a modification of zoning code requirements or architectural design requirements which exceed the minimum building standards provided in California Health and Safety Code Division 13, Part 2.5 (commencing with Section 18901), and which result in identifiable and actual cost reductions to provide for affordable ownership costs or affordable rents.

b. Approval of mixed-use development in conjunction with the housing development if nonresidential land uses will reduce the cost of the housing development and if the city finds that the proposed nonresidential uses are compatible with the housing development and with existing or planned development in the area where the proposed housing development will be located.

c. Other regulatory incentives or concessions proposed by the developer or the city which result in identifiable and actual cost reductions to provide for affordable ownership costs or affordable rents.

2. Concessions Allowed by Right. The following concessions and incentives may be approved without any requirement that the applicant demonstrate to the city that the requested concession or incentive results in identifiable and actual cost reductions to the project to provide for affordable ownership costs or affordable rents:

a. Up to a twenty percent reduction in a yard setback or building stepback requirement, with each structure in a required yard setback or building stepback counting as one concession or incentive;

b. Up to a twenty percent increase in maximum lot coverage;

c. Up to a twenty percent reduction in required landscape area;

d. Up to a twenty percent reduction in required common open space area or private open space area per unit, or the elimination of private open space for twenty percent of units;

e. Reduction of off-street parking requirements as described in Section 24.16.256;

f. Approval of a city rental housing density bonus pursuant to Section 24.16.220, if the density bonus is greater than that to which the developer would otherwise be entitled; or

g. Approval of fee waivers pursuant to Part 4 of this chapter.

3. Concessions Requiring Additional Analysis. For requests for any concessions other than those listed in subsection (2), the applicant shall provide a pro forma and/or other reasonable documentation demonstrating to the city that the requested concession or incentive results in identifiable and actual cost reductions to the project to provide for affordable ownership costs or affordable rents. For the purposes of this section, the term “reasonable documentation” may include cost estimates prepared by a California-licensed professional contractor, architect, engineer, or other professional with such financial expertise.

4. Applicants may seek a waiver or modification of development standards that will have the effect of physically precluding the construction of a housing development eligible for a density bonus at the density or with the incentives or concessions permitted by this Part 3. The applicant shall bear the burden of demonstrating that the development standards that are requested to be waived will have the effect of physically precluding the construction of the housing development with the density bonus and incentives.

5. Nothing in this section requires the city to provide direct financial incentives for the housing development, including but not limited to the provision of publicly owned land or waiver of fees or dedication requirements.

6. For the purposes of calculating the number of density bonus units in areas where a maximum density range is not provided in the zone district or general plan, an implicit residential density shall be calculated based on a project put forward by the applicant that meets all applicable development standards. Objective development standards such as setbacks, floor area ratio, and height limitations, while not defining the maximum density range per se, can be utilized to determine the implicit residential density allowed. In this approach, a project defines the applicable residential density for itself based on meeting applicable development standards. The average size of the units presented in the base density project must be equal to or greater than the average size of the units presented in the density bonus project.

(Ord. 2020-23 § 9, 2020: Ord. 2018-10 § 1 (part), 2018: Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.256 MODIFIED PARKING STANDARDS FOR HOUSING DEVELOPMENTS.

1. Upon the request of the developer, the city shall not require off-street parking for a housing development eligible for a density bonus that exceeds the following:

a. Zero- to one-bedroom units: one on-site parking space.

b. Two- to three-bedroom units: two on-site parking spaces.

c. Four- and more bedroom units: two and one-half parking spaces.

2. For certain other housing developments that are eligible for a density bonus, upon the request of the developer, the city shall not require a vehicular parking ratio that exceeds the ratios shown in the following table. However, if the city, at its cost, has conducted an area wide or citywide parking study in the last seven years, then the city may find, based on substantial evidence, that a higher parking ratio is required than shown in the following table. In no event may the required parking be greater than the ratio provided in subsection (1). The parking study must conform to the requirements of California Government Code Section 65915(p)(7).

Type of Development	Maximum Number of Required Off-Street Parking Spaces
Rental or ownership housing development with: 1. At least 11 percent very-low-income or 20 percent lower-income units; and 2. Within one-half mile of a major transit stop; and 3. Unobstructed access to the major transit stop.	0.5 per bedroom
Rental housing development with: 1. All units affordable to lower-income households except manager’s unit(s); and 2. Within one-half mile of a major transit stop; and 3. Unobstructed access to the major transit stop.	0.5 per unit
Senior citizen rental housing development with: 1. All units affordable to lower-income households except manager’s unit(s); and either 2. Has paratransit service; or 3. Is within one-half mile of fixed bus route service that operates eight times per day, with unobstructed access to that service.	0.5 per unit
Special needs rental housing development with: 1. All units affordable to lower-income households except manager’s unit(s); and either 2. Has paratransit service; or 3. Is within one-half mile of fixed bus route service that operates eight times per day, with unobstructed access to that service.	0.3 per unit

Guest parking and handicapped parking shall be included within the maximum number of spaces that may be required. If the total number of parking spaces required for a housing development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this section, a housing development may provide on-site parking through tandem parking or uncovered parking, but not through on-street parking.

(Ord. 2017-20 § 1 (part), 2017).

24.16.258 COMMERCIAL DEVELOPMENT BONUS.

1. When a developer proposes to construct a commercial development and has entered into a partnered housing agreement approved by the city, the city shall grant a commercial development bonus mutually agreed upon by the developer and the city. The commercial development bonus shall not include a reduction or waiver of fees imposed on the commercial development to provide for affordable housing.

2. The partnered housing agreement shall include all of the following provisions:

a. The housing development shall be located either on the site of the commercial development or on a site within the city that is within one-half mile of a major transit stop and is located in close proximity to public amenities, including schools and employment centers.

b. At least thirty percent of the total units in the housing development shall be made available at affordable ownership cost or affordable rent for low-income households, or at least fifteen percent of the total units in the housing development shall be made available at affordable ownership cost or affordable rent for very-low-income households.

c. The commercial developer must agree either to directly build the affordable units; donate a site consistent with subsection (a) for the affordable units; or make a cash payment to the housing developer for the affordable units.

3. The housing development shall remain eligible for any density bonuses, incentives, concessions, waivers, and parking reductions the housing development would otherwise be eligible for and that are provided by this Part 3.

4. Any approved partnered housing agreement shall be described in the city’s housing element annual report as required by Government Code Section 65915.7(k).

(Ord. 2017-20 § 1 (part), 2017).

24.16.260 STANDARDS FOR DENSITY BONUS HOUSING DEVELOPMENTS.

1. Affordable units qualifying a housing development for a density bonus shall remain affordable as follows:

a. Rental units affordable to very-low- and lower-income households shall remain affordable to the designated income group for a minimum of fifty-five years or for a longer period of time if required by any construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program applicable to the dwelling units, except that lower income units in a condominium conversion project shall remain affordable in perpetuity.

b. For-sale units affordable to very-low-, lower-, or moderate-income households shall remain affordable in perpetuity.

2. Affordable units qualifying a housing development for a density bonus shall be reasonably dispersed throughout the housing development and compatible with the design of market rate units in terms of appearance, materials, and finished quality. The applicant may reduce the interior amenities and square footage of affordable units, provided all units conform to all requirements of Titles 18 and 19 and are at least seventy-five percent of the average square footage of all market rate units in the development with the same bedroom count.

3. For developments with multiple market rate unit types containing differing numbers of bedrooms, affordable units qualifying a housing development for a density bonus shall be representative of the market rate unit mix.

4. All building permits for affordable units qualifying a housing development for a density bonus shall be issued concurrently with, or prior to, issuance of building permits for the market rate units, and the affordable units shall be constructed concurrently with, or prior to, construction of the market rate units. Occupancy permits and final inspections for affordable units qualifying a housing development for a density bonus shall be approved concurrently with, or prior to, approval of occupancy permits and final inspections for the market rate units.

(Ord. 2018-10 § 1 (part), 2018: Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.262 LOCAL COASTAL PLAN CONSISTENCY.

1. State density bonus law provides that it shall not be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976.

2. For development within the coastal zone, the requested density bonus and any requested incentive, concession, waiver, modification, modified parking standard, or commercial development bonus shall be consistent with state density bonus criteria. All applicable requirements of the certified Santa Cruz local coastal program shall be met (including but not limited to sensitive habitat, agriculture, public viewshed, public recreational access, and open space), with the exception of the numeric standards changed through state density bonus provisions.

(Ord. 2019-09 § 1, 2019: Ord. 2017-20 § 1 (part), 2017).

24.16.265 SUBMITTAL OF APPLICATION FOR AFFORDABLE HOUSING PLAN.

1. An application for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus pursuant to this Part 3 shall be submitted as part of the first approval of the housing development or commercial development in the form of an affordable housing plan which shall be processed concurrently with all other applications required for the housing development or commercial development.

2. Upon submittal, the director of the planning and community development department shall determine if the affordable housing plan is complete and conforms to the provisions of this chapter. No application for a first approval for a housing development or commercial development requesting a density bonus, incentives, concessions, waivers, modified parking standard, or commercial development bonus may be deemed complete unless an affordable housing plan is submitted conforming to the provisions of this section. The applicant shall be informed whether the application is complete consistent with Government Code Section 65943.

3. The affordable housing plan shall include at least the following information:

a. Site plan showing total number of units, number and location of affordable units, and number and location of proposed density bonus units.

b. A description of any requested density bonuses, incentives, concessions, waivers or modifications of development standards, modified parking standards, or commercial development bonus.

c. Summary table showing the maximum number of units permitted by the zoning and general plan excluding any density bonus units, affordable units qualifying the project for a density bonus, level of affordability of all affordable units, proposed bonus percentage, number of density bonus units proposed, and total number of dwelling units proposed on the site.

d. Tenure (rental versus for-sale) of target units and proposals for ensuring affordability.

e. A description of all dwelling units existing on the site in the five-year period preceding the date of submittal of the application and identification of any units rented in the five-year period. If dwelling units on the site are currently rented, income and household size, if known, of all residents of currently occupied units. If any dwelling units on the site were rented in the five-year period but are not currently rented, the income and household size, if known, of residents occupying dwelling units when the site contained the maximum number of dwelling units.

f. Description of any recorded covenant, ordinance, or law applicable to the site that restricted rents to levels affordable to very-low- or lower-income households in the five-year period preceding the date of submittal of the application.

g. For all incentives and concessions except those listed in Section 24.16.255(2), a pro forma demonstrating that the requested incentives and concessions result in identifiable and actual cost reductions and evidence that the cost reduction allows the applicant to provide affordable rents or affordable ownership costs. If a mixed-use building or project is proposed as an incentive, the applicant shall also provide evidence that nonresidential land uses will reduce the cost of the residential project and that the nonresidential land uses are compatible with the residential project and the existing or planned surrounding development.

h. Any pro forma submitted to comply with subsection (2)(g) may not include the lost opportunity cost of any affordable units (i.e., the revenue that would have been generated had the units been rented or sold at market rate) and may include as an additional cost only those additional expenses that are required solely because of the proposed construction of the affordable units. The cost of reviewing any required pro forma data submitted in support of a request for a concession or incentive, including but not limited to the cost to the city of hiring a consultant to review the pro forma, shall be borne by the applicant. The pro forma shall also include: (1) the actual cost reduction achieved through the incentive or concession; and (2) evidence that the cost reduction allows the developer to provide affordable rents or affordable sales prices.

i. For waivers or modifications of development standards: the application shall provide evidence that each development standard for which the waiver is requested will have the effect of physically precluding the construction of the housing development at the densities or with the incentives or concessions permitted by this Part 3.

j. If a parking modification is requested, a table showing parking required by the zoning ordinance and proposed parking. If a parking reduction provided by Section 24.16.256(2) is requested, evidence that the project is eligible for the requested parking reduction.

k. In phased housing projects, for each construction phase, the affordable housing plan shall specify, at the same level of detail as the application for the housing development: the number, unit type, tenure, number of bedrooms and baths, approximate location, size, and design, construction and completion schedule of all affordable units, phasing of all other affordable units in relation to market rate units, marketing plan, and intended rent or sale price and basis for calculation.

l. If the affordable units will not be constructed concurrently with the market rate units, the affordable housing plan shall describe the proposed phasing and specify the security to be provided to the city to ensure that the affordable units will be constructed.

m. If a density bonus or concession 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 findings included in Section 24.16.230 can be made.

n. If a density bonus or concession is requested for a child care center, the application shall show the location and square footage of the child care center and provide evidence that each of the standards included in Section 24.16.235 has been met.

o. If a density bonus or incentive is requested for a condominium conversion, the application shall provide evidence that all of the requirements found in Section 24.16.240 have been met.

p. If a commercial development bonus is requested for a commercial development, the application shall include the proposed partnered housing agreement, the proposed commercial development bonus, and evidence that each of the standards included in Section 24.16.258 has been met.

4. A request for a minor modification of an approved affordable housing plan may be granted by the director of the planning and community development department if the modification is substantially in compliance with the original affordable housing plan and the conditions of approval. Other modifications to the affordable housing plan shall be processed in the same manner as the original affordable housing plan.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.270 CITY REVIEW OF APPLICATION FOR DENSITY BONUSES AND OTHER INCENTIVES.

1. An application for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus pursuant to this Part 3 shall be reviewed at a noticed public hearing as part of the first approval of the housing development by the approval body with authority to approve the housing development within the timelines prescribed by Government Code Section 65950 et seq. However, if review by the planning commission or city council is not required, the application shall be heard by the zoning administrator. Any decision regarding a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus may be appealed as provided in Section 24.16.285. In accordance with state law, neither the granting of a concession or incentive, nor the granting of a density bonus, shall be interpreted, in and of itself, to require a General Plan amendment, zoning change, variance, or other discretionary approval.

2. Before approving an application for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus, the approval body shall make the following findings, as applicable:

a. The housing development is eligible for a density bonus and any concessions, incentives, waivers, modifications, or modified parking standards requested; conforms to all standards for affordability included in this section; and includes a financing mechanism for all implementation and monitoring costs.

b. Any requested incentive or concession will result in identifiable and actual cost reductions to provide for affordable rents or affordable ownership costs based upon appropriate financial analysis and documentation if required by Section 24.16.255.

c. If the density bonus is based all or in part on dedication of land, the approval body has made the findings included in Section 24.16.230.

d. If the density bonus, incentive, or concession is based all or in part on the inclusion of a child care center, the development conforms to the standards included in Section 24.16.235.

e. If the density bonus incentive or concession is approved for a condominium conversion, the development conforms to the standards included in Section 24.16.240.

f. If the incentive or concession includes mixed-use buildings or developments, the nonresidential land uses will reduce the cost of the housing development and the proposed nonresidential uses are compatible with the housing development and with existing or planned development in the area where the proposed housing development will be located.

g. If a waiver or modification is requested, the applicant has shown that the development standards for which the waiver or modification is requested will have the effect of physically precluding the construction of the housing development at the densities or with the incentives or concessions permitted by this Part 3.

h. If a commercial development bonus is requested, the project complies with the requirements of Section 24.16.258, the city has approved the partnered housing agreement, and the bonus has been mutually agreed upon by the city and the commercial developer.

i. If the housing development or the commercial development is in the coastal zone, any requested density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus is consistent with all applicable requirements of the certified Santa Cruz local coastal program, with the exception of density.

3. If the required findings can be made, and a request for an incentive or concession is otherwise consistent with this section, the approval body may deny an incentive or concession only if it makes a written finding, based upon substantial evidence, of one of the following:

a. The incentive or concession does not result in identifiable and actual cost reductions to provide for affordable rents or affordable ownership costs; or

b. The incentive or concession would have a specific adverse impact upon public health or safety, or the physical environment, or on any real property that is listed in the California Register of Historic Resources, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to lower-, very-low- and moderate-income households. For the purpose of this subsection, “specific adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, written public health or safety standards, policies, or conditions, as they existed on the date that the application was deemed complete; or

c. The concession or incentive is contrary to state or federal law.

4. If the required findings can be made, and a request for a waiver or modification is otherwise consistent with this section, the approval body may deny the requested waiver or modification only if it makes a written finding, based upon substantial evidence, of one of the following:

a. The modification would have a specific adverse impact upon health, safety, or the physical environment, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to lower-, very-low- and moderate-income households. For the purpose of this subsection, “specific adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, written public health or safety standards, policies, or conditions as they existed on the date that the application was deemed complete; or

b. The modification would have an adverse impact on any real property that is listed in the California Register of Historic Resources; or

c. The waiver or modification is contrary to state or federal law, which may include a finding that the development standards for which the waiver is requested would not have the effect of physically precluding the construction of the housing development with the density bonus and incentives permitted.

5. If a density bonus or concession is based on the provision of child care centers, and if the required findings can be made, the approval body may deny the bonus or concession only if it finds, based on substantial evidence, that the city already has adequate child care centers.

(Ord. 2018-10 § 1 (part), 2018: Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.275 DEVELOPER AFFORDABLE HOUSING AGREEMENT.

Any density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial density bonus granted pursuant to this Part 3 shall be described in, and the conditions of approval incorporated into, the developer affordable housing agreement required by Section 24.16.040. Prior to recordation of any final or parcel map or issuance of any building permit for the housing development or commercial development, the developer affordable housing agreement shall be recorded as a restriction on any housing development granted any density bonus, incentive, concession, waiver, modification, or revised parking standard granted pursuant to this Part 3.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.280 CONTINUED AFFORDABILITY AND INITIAL OCCUPANCY.

Provisions for continued affordability and initial occupancy of affordable units qualifying a housing development or commercial development for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial density bonus shall be the same as those specified for inclusionary units in Section 24.16.045, except that no very-low- and lower-income tenant household may occupy rental affordable units qualifying a housing development for a density bonus until the city or its designee has approved the household’s eligibility as a very-low- or lower- income household, as appropriate.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.285 APPEALS.

1. An applicant or any other person whose interests are adversely affected by any determination of the planning and community development division staff or of an agency retained by the city with regard to this Part 3 may appeal the determination to the director of planning and community development.

2. An applicant or any other person whose interests are adversely affected by the determination of the director of the planning and community development with regard to this Part 3 may appeal the determination to the city council.

3. The procedure for appeals shall be consistent with the procedures prescribed in Sections 24.04.180 through 24.04.185.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.290 IMPLEMENTATION AND ENFORCEMENT.

1. The city council may adopt guidelines, by resolution, to assist in the implementation of all aspects of this Part 3.

2. In addition to any other powers or duties prescribed by law, the director of planning and community development shall have the following powers and duties in relation to this Part 3:

a. To monitor compliance with the provisions of this Part 3 and to refer to the city attorney for appropriate action any person violating the provisions of this Part 3; and

b. To administer this Part 3.

3. The city attorney shall be authorized to enforce the provisions of this Part 3, all agreements entered into pursuant to this Part 3, and all other requirements of this Part 3, by civil action and any other proceeding or method permitted by law. The city may, at its discretion, take such enforcement action as is authorized under any provision of the Santa Cruz Municipal Code and/or any other action authorized by law or by any agreement executed pursuant to this Part 3.

4. Failure of any official or agency to enforce the requirements of this Part 3 shall not constitute a waiver or excuse any applicant or owner from the requirements of this Part 3. No permit, license, map, or other approval or entitlement for a housing development shall be issued, including without limitation a final inspection or certificate of occupancy, until all applicable requirements of this Part 3 have been satisfied.

5. The remedies provided for herein 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.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

Part 4: FEE WAIVERS FOR AFFORDABLE UNITS

24.16.300 UNITS ELIGIBLE FOR FEE WAIVERS.

a. The city may grant waivers of the following development fees if the waivers will assist in providing residential units affordable to low or very-low income households, excluding units developed as inclusionary units for low income households under Chapter 24.16 Part 1, Inclusionary Housing Requirements or replacement housing units provided under Chapter 24.08.1360, Replacement Housing Requirements:

1. Sewer and water connection fees for units affordable to low and very low income households.

2. Planning application and planning plan check fees for projects that are one hundred percent affordable to low and very-low income households.

3. Building permit and plan check fees for units affordable to very-low income households.

4. Park land and open space dedication in-lieu fee for units affordable to very low income households.

5. Parking deficiency fee for units affordable to very-low income households.

6. Fire fees for those units affordable to very-low income households.

(Ord. 2006-24 § 1, 2006: Ord. 93-51 § 6, 1993).

24.16.310 PROCEDURE FOR WAIVER OF FEES.

A fee waiver supplemental application shall be submitted at the time an application for a project with affordable units is submitted to the city.

(Ord. 93-51 § 6, 1993).