Chapter 11-09
INCLUSIONARY HOUSING
Sections:
Article 1. Purpose
Article 2. Applicability
Article 3. Definitions
Article 4. Unit Reservation
11-09-400 Reservation requirements.
Article 5. In-Lieu Fees
11-09-500 In-lieu fee alternative – In-lieu fee authorized.
11-09-505 Amount of in-lieu fee.
11-09-510 Use of in-lieu fees.
Article 6. Reservation Options
11-09-600 Options for providing reserved units.
Article 1. Purpose
11-09-100 Intent.
It is the intent of this Chapter to establish requirements for the reservation of housing units for very low- and low-income households in residential projects as provided for in the General Plan.
Article 2. Applicability
11-09-200 Applicability.
The provisions of this Chapter shall apply to all residential projects of six (6) or more units including, without limitation, condominium conversions and time extensions for previously approved residential projects.
Article 3. Definitions
11-09-300 Definitions.
(A) Affordable. For the purpose of this Chapter, the term “affordable” shall have the following meanings:
(1) A for-sale housing unit shall be affordable if the sales price does not exceed two hundred fifty percent (250%) of the area median income for San Benito County, adjusted for family size/bedroom size, as published by HUD. The family size/bedroom size adjustment shall be as follows:
(a) One (1) bedroom units shall be based on the median income for a family of two (2);
(b) Two (2) bedroom units shall be based on the median income for a family of three (3);
(c) Three (3) bedroom units shall be based on the median income for a family of four (4);
(d) Four (4) bedroom units shall be based on the median income for a family of five (5).
(2) Rental housing unit shall be affordable if the total housing cost, including rent and utilities, paid by a household does not exceed thirty percent (30%) of the monthly gross income of a household, as defined in subsection (C) of this Section, adjusted for household size. A household size used to calculate the maximum affordable rent shall be those indicated in subsection(A)(1) of this Section.
(B) “Area median income” means the median household income of San Benito County or equivalent geographic area as annually estimated by HUD pursuant to Section 8 of the United States Housing Act of 1937. In the event such HUD determinations of area median income are discontinued, the area median income shall be that median household income as established and published by the State of California Department of Housing and Community Development pursuant to Health and Safety Code Section 50093.
(C) “Household” means a person or persons living together in the same residence, with an aggregate income not exceeding the limits to be designated as a very low-, low-, or moderate-income household under this Chapter.
(D) “HUD” means the United States Department of Housing and Urban Development.
(E) “Low-income household” means a person or persons living together as a household unit whose combined incomes do not exceed eighty percent (80%) of the median income for San Benito County for an equivalent size household.
(F) “Reserved unit” means a residential dwelling unit deed restricted for occupancy by a very low- or low-income household pursuant to the requirement of this Chapter.
(G) “Residential project” means any new construction of dwelling units or condominium conversion.
(H) “Very low-income household” means a person or persons living together as a household unit whose combined income does not exceed fifty percent (50%) of the median income for San Benito County for an equivalent sized household.
Article 4. Unit Reservation
11-09-400 Reservation requirements.
(A) Reservation of For-Sale Units.
(1) No for-sale residential project of six (6) or more units subject to this Chapter shall be approved in any area of the City unless at least one (1) such housing unit is reserved for sale to very low- or low-income households or reserved as rental units for very low- or low-income households for each five (5) units of market-rate housing.
(2) Calculation of Reservation Requirement. The calculation of the number of housing units to be reserved shall be made utilizing the total number of housing units in the residential project prior to including any increase in the allowable number of such housing units authorized by any density bonus granted pursuant to Government Code Section 65915 et seq. If the calculation of the number of housing units to be reserved results in a fraction of a whole number, the developer may either reserve one (1) additional housing unit or pay a partial in-lieu fee equal to the remaining fraction. The amount of the in-lieu fee shall be determined according to SJBMC 11-09-505.
(3) Timing for Construction of Reserved Units. The reserved units shall be constructed either prior to or simultaneously with the nonreserved units within the development. If the development is being constructed in phases, the percentage of reserved units to be constructed in each phase shall be equivalent to one (1) reserved unit for every five (5) market rate units being constructed in that phase.
(4) Sales Price. The initial sales price and the resale sales price of reserved units shall be limited to ensure that the price is and remains affordable to very low- or low-income households as defined in SJBMC 11-09-300.
(5) Sales Restriction. Reserved units shall be sold or resold only to eligible very low- or low-income households. A deed restriction, covenant, and/or other instrument enforceable by the City and approved by the City Attorney limiting the resale of such units to eligible very low- or low-income households shall be recorded against the title of all reserved units. The duration of such resale restrictions shall be a minimum of fifty-five (55) years.
(6) Rental Restriction. The requirements in subsection (B) of this Section shall apply if rental housing is provided as the reserved units.
(B) Reservation of Rental Unit.
(1) No rental residential project subject to this Chapter (including time extensions) shall be permitted unless at least one (1) affordable unit is reserved for very low- or low-income households for each five (5) units of market-rate housing.
(2) Calculation of Reservation Requirement. The provisions of this subsection shall apply to the calculation of the number of housing units to be reserved in any rental housing development.
(3) Design and Construction of Reserved Units. The design and exterior appearance of the reserved units shall be compatible with and substantially the same as the nonreserved units within the development and shall contain proportionately the same or a larger number of bedrooms and square footage per reserved unit as the nonreserved units.
(4) Rental Restriction. The rent to be charged for a reserved housing unit shall be so limited as to be affordable to very low- or low-income households.
(5) Deed Restriction. A deed of restriction, covenant, and/or other instrument enforceable by the City and approved by the City Attorney shall be recorded against the title of the property within which the reserved units are located limiting the rental of the reserved units as described in subsection (B)(4) of this section. This rent restriction shall be in effect for a minimum of fifty-five (55) years. Additionally, the property shall be so restricted as to prohibit the conversion of the restricted units for the term of the rent restriction to a condominium, stock cooperative, community apartment, or such other form of ownership which would eliminate the restricted units as rental units.
Article 5. In-Lieu Fees
11-09-500 In-lieu fee alternative – In-lieu fee authorized.
(A) As an alternative to reserving units as required in SJBMC 11-09-400, the City Council, after consideration of the recommendation of the Planning Commission, may, in its sole discretion, allow the developer to pay a fee in lieu of reservation in an amount established by the City Council resolution according to the formula set forth in SJBMC 11-09-505 sufficient to subsidize the price of a median sales price home in San Juan Bautista to the extent that it brings the sales price of such a home into the affordable range for a low-income household.
(B) As to a condominium conversion, where findings can be made by the City Council that (1) no General Plan or specific plan objectives or policies relate to or govern the proposed conversion, and (2) the number of condominium units created will not exceed the number of units existing on the subject property at the time of application for conversion, and (3) the application of SJBMC 11-09-400 and subsection (A) of this Section does not substantially further the purpose of this Chapter regarding the sort of development projects intended for inclusion, and (4) the utilization of this subsection (B) in place of said SJBMC 11-09-400 and subsection (A) of this Section shall not affect or prejudice State-required approval of City’s General Plan or any of its elements, and (5) imposition of an in-lieu fee per subsection (A) of this Section would render conversion infeasible, then and only then the City Council may negotiate, set, and impose an in-lieu fee in a range consistent with the needs of the City and the goals of the developer.
11-09-505 Amount of in-lieu fee.
The amount of the in-lieu fee for each required inclusionary unit as specified in the City Council’s resolution shall be paid at the time of issuance of building permits for the first residential units in a residential project subject to this Chapter. The City Council resolution adopted pursuant to SJBMC 11-09-500 shall use the following formula:
(A) The median sales price of homes sold in the County of San Benito based on the last quarter of the calendar year prior to the year in which the building permit is issued minus the maximum affordable sales price for a three (3) bedroom unit as defined in SJBMC 11-09-300(A). However, the area median income figures in effect during the last quarter of the calendar year prior to the year in which the building permit is being issued shall apply. (Median sales price of new home minus affordable three (3) bedroom sales price equals in-lieu fee.)
(B) To obtain the per unit in-lieu fee, the entire in-lieu fee shall be divided by the total number of units in the project. If the in-lieu fee option is chosen to comply with this Chapter, in whole or in part, the per unit in-lieu fee shall be paid for each unit for which a building permit is issued.
11-09-510 Use of in-lieu fees.
All in-lieu fees collected hereunder shall be used by the City exclusively to provide housing opportunities for very low- or low-income households anywhere within the City. All in-lieu fees shall be held in a separate account with interest accruing to said account. All funds in the account shall be spent in any manner authorized by law as the City Council deems appropriate solely to provide housing opportunities for very low- or low-income households. For the purposes of this Section, the term “provide housing opportunities for very low- or low-income households” means any expenditure authorized by law which directly or indirectly makes housing units affordable to very low- or low-income households.
Article 6. Reservation Options
11-09-600 Options for providing reserved units.
(A) On-Site Reservation. The required number of reserved units shall be provided on the site of the subject development. In this case, the design and exterior appearance of the reserved units shall be compatible with and substantially the same as the nonreserved units within the development and shall contain proportionately the same or a larger number of bedrooms and square footage per reserved unit as the nonreserved units.
(B) Off-Site Provision of For-Sale Reserved Units. If an applicant can provide evidence to demonstrate that on-site provision of reserved units is not feasible, with such evidence being deemed reasonable, accurate, and sufficient at the sole discretion of the City Council, then the reserved units may be provided as for-sale units at another site within the City limits of San Juan Bautista conforming with the requirements of SJBMC 11-09-400.
(C) Off-Site Provision of Rental Reserved Units. If an applicant can provide evidence to demonstrate that on-site provision of reserved units is not feasible, with such evidence being deemed reasonable, accurate, and sufficient at the sole discretion of the City Council, then the reserved units may be provided as rental units at another site within the City limits of San Juan Bautista. Such reserved units must comply with the requirements of SJBMC 11-09-400.
(D) Joint Venture Off-Site Provision of Rental Reserved Units. Provided all participating applicants can meet the “nonfeasibility” test mentioned in subsection (C) of this Section, off-site rental projects may provide the reserved units for multiple applicants.
Legislative History: Ords. 2007-03 (2/20/07), 2009-04 (9/15/2009).