Chapter 24.16
AFFORDABLE HOUSING PROVISIONS

Sections:

Part 1: INCLUSIONARY HOUSING REQUIREMENTS

24.16.010    Purpose.

24.16.015    Definitions.

24.16.020    Basic on-site inclusionary housing requirements.

24.16.025    Standards for inclusionary units.

24.16.030    Alternative methods to comply with inclusionary housing requirements.

24.16.035    Incentives for compliance with inclusionary housing requirements.

24.16.040    Developer affordable housing agreement.

24.16.045    Continued affordability and initial occupancy.

24.16.050    Appeals.

24.16.055    Waivers of inclusionary housing requirement.

24.16.060    Implementation and enforcement.

Part 2: ACCESSORY DWELLING UNITS

24.16.100    Purpose.

24.16.120    Locations permitted.

24.16.130    Permit procedures.

24.16.150    Findings required for conditionally permitted accessory dwelling units.

24.16.160    Design and development standards.

24.16.170    Deed restrictions.

24.16.180    Zoning incentives.

Part 3: DENSITY BONUS PROVISIONS FOR RESIDENTIAL UNITS

24.16.200    Purpose.

24.16.205    Definitions.

24.16.210    Eligibility for density bonuses.

24.16.215    Density bonuses for affordable and senior housing.

24.16.220    City density bonuses.

24.16.225    Incentives and concessions for affordable housing.

24.16.230    Density bonus for land dedication.

24.16.235    Density bonus of incentive for child care facilities.

24.16.240    Density bonus for condominium conversions.

24.16.245    Summary tables.

24.16.250    Calculation of density bonus.

24.16.255    Standards for incentives and concessions.

24.16.260    Standards for density bonus residential developments.

24.16.265    Affordable housing plan submittal.

24.16.270    City review of application for density bonuses and other incentives.

24.16.275    Developer affordable housing agreement.

24.16.280    Continued affordability and initial occupancy.

24.16.285    Appeals.

24.16.290    Implementation and enforcement.

Part 4: FEE WAIVERS FOR AFFORDABLE UNITS

24.16.300    Units eligible for fee waivers.

24.16.310    Procedure for waiver of fees.

PART 1: INCLUSIONARY HOUSING REQUIREMENTS

24.16.010 PURPOSE.

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. 2006-16 § 2 (part), 2006).

24.16.015 DEFINITIONS.

For purposes of this Part 1 of Chapter 24.16, the following definitions shall apply. Unless specifically defined below, words or phrases shall be interpreted as to give this Part 1 its most reasonable interpretation.

1.    “Affordable ownership costs” 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, which do not exceed the following:

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

b.    For lower income households: eighty percent of area median, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve. (Also used as inclusionary sale price for median income households.)

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

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

a.    For lower income households: eighty percent of area median income, adjusted for assumed household size based on unit size, multiplied by forty 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 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 very low, lower, median, or moderate income households as defined by this Part 1 or by any federal or state housing program 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 and periodically updated by the state of California pursuant to California Code of Regulations, Title 25, Section 6932, or successor provision.

5.    “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.

6.    “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.

7.    “Congregate living unit” is any dwelling unit in a senior housing development or senior citizen housing, 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.

8.    Declining and Emerging Housing Markets. For purposes of this Chapter 24.16, Part I, the city council may adopt a resolution declaring the existence of a “declining housing market” or an “emerging housing market” in the city of Santa Cruz. A declining housing market declaration shall be supported by a finding that the overall median housing prices in the city have declined during five of six prior months. An emerging housing market declaration may be supported by a finding that the median housing prices in the city have increased during five of the previous six months. A declining housing market declaration, unless terminated by the city council, shall remain in effect until the city council thereafter adopts an emerging housing market declaration. In ascertaining median home prices for purposes of declining and emerging housing market declarations, the declarations shall be made with reference to the average median prices for single-family and townhome/condominium dwellings in the city or county of Santa Cruz for the six-month period of time under consideration.

9.    “Density bonus” is a density increase over the otherwise allowable maximum residential density on a site, granted pursuant to Part 3 of Chapter 24.16.

10.    “First approval” is the first of the following approvals to occur with respect to a residential 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.

11.    “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 Section 8 program under the United States Housing Act of 1937, as amended, or its successor provision.

12.    “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 Section 50079.5 of the California Health and Safety Code.

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

14.    “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 Section 50079.5 of the California Health and Safety Code.

15.    “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 Section 50105 of the California Health and Safety Code.

16.    “Inclusionary unit” is an ownership or rental dwelling unit or single-room occupancy unit within a residential development which is required under this Part 1 of Chapter 24.16 to be rented at affordable rents or sold at an affordable ownership cost to specified households.

17.    “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.

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

19.    “Maximum residential density” is the maximum number of dwelling units permitted by the Zoning Ordinance on the date an application for a residential development is deemed complete. This definition is used to calculate a density bonus pursuant to Part 3 of Chapter 24.16.

20.    “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 single-room occupancy units by construction or alteration of structures.

21.    “Small ownership unit (SOU)” is a dwelling unit containing no more than one bedroom and floor area ranging from four hundred to six hundred fifty square feet, located on a separate subdivided parcel and included in a residential development where all dwelling units are SOU units and are offered for sale to the general public.

(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.    Exemptions. The inclusionary housing requirements are applicable to all residential developments that create two or more new or additional dwelling units or single-room occupancy units at one location by construction or alteration of structures, except for the following:

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 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.    A single-family residential unit with an accessory dwelling unit.

2.    Residential Developments with Two to Four Dwelling Units. For residential developments that would create two but no more than four additional dwelling units at one location, the applicant shall either: (a) make available for rent or sale one inclusionary unit at an ownership or rental cost affordable to lower income households; or (b) pay an in-lieu fee calculated pursuant to Section 24.16.030(6).

3.    Residential Developments with Five or More Dwelling Units. Residential developments that would create five or more new or additional ownership, rental, single-room occupancy, congregate living, live/work or assisted living units at one location shall provide inclusionary units as follows:

a.    Ownership Units (Not SOU Units). In a residential or live/work development, except a small ownership unit (SOU) development, where any dwelling units are offered for sale, fifteen percent of the dwelling units shall be made available for sale to lower and median income households at an ownership cost affordable to lower income households. However, if the developer agrees to sell all of the units in the residential development at a price no more than fifteen percent higher than the ownership cost affordable to lower income households, then all units in the residential development may be sold at that price. If fifteen percent of the dwelling units results in a fractional requirement of 0.7 or less, then the applicant may elect to either provide the affordable unit or pay an in-lieu fee calculated pursuant to Section 24.16.030(6) for the fractional unit. An additional inclusionary unit shall be provided for all fractional requirements greater than 0.7.

b.    Small Ownership Units. In a residential development comprised of small ownership units, fifteen to thirty percent of the small ownership units shall be made available for sale to lower and median income households at an ownership cost affordable to lower income households. The percentage rate shall be established by resolution and henceforth referred to as the SOU inclusionary percentage. If the SOU inclusionary percentage of the dwelling units results in a fractional requirement of 0.7 or less, then the applicant may elect to either provide the affordable unit or pay an in-lieu fee calculated pursuant to Section 24.16.030(6) for the fractional unit. An additional inclusionary unit shall be provided for all fractional requirements greater than 0.7.

c.    Rental Units Without a Subdivision Map. In a residential or live/work development where all dwelling units are offered for rent, and no subdivision map has been recorded to create parcels containing single dwelling units, fifteen percent of the dwelling units shall be made available for rent to lower income households at a rent affordable to lower income households. However, individual rents shall not be regulated or the qualifications of individual tenant households monitored by the city if the rental cost affordable to lower income households as defined by resolution is at least ninety percent of the average rent for all dwelling units within the same residential development with the same number of bedrooms. (The ninety percent threshold can be calculated by dividing the affordable rent as determined by resolution for each unit size, as determined by bedroom count, by the average rent for the same size unit in the residential development.) If fifteen percent of the dwelling units results in a fractional requirement greater than 0.7, then an additional inclusionary unit shall be provided. No in-lieu fee is required for fractional requirements of 0.7 or less.

d.    Rental Units with a Subdivision Map. In a residential or live/work development where all dwelling units are offered for rent, but where a subdivision map has been recorded to create parcels containing single dwelling units, as soon as any dwelling unit in the residential development is offered for sale, fifteen percent of non-SOU dwelling units or the SOU inclusionary percentage times the number of SOU dwelling units shall be offered for sale to lower and median income households at an ownership cost affordable to lower income households. If the required percent of the dwelling units results in a fractional requirement of 0.7 or less, then the applicant may elect to either provide the affordable unit or pay an in-lieu fee calculated pursuant to Section 24.16.030(6) for the fractional unit. An additional inclusionary unit shall be provided for all fractional requirements greater than 0.7.

e.    Rental Units with a Subdivision Map during Declining Housing Markets. In periods of declining housing markets, as defined in Section 24.16.015(8), dwelling units in a residential development may be offered for sale without requiring compliance with subsection (3)(d), for a period specified by the city council in its declining housing market declaration, not to exceed one year following the end of the declining housing market. However, no inclusionary units may be sold as market-rate units. In addition, after an emerging housing market is declared subsection (3)(d) shall be in effect regarding new rental tenancies and units must be offered for sale when vacated by existing tenants.

f.    Single-Room Occupancy Units. In a residential development comprised of single-room occupancy units, fifteen percent of the single-room occupancy units shall be made available for rent to lower income households at a rental cost affordable to very low income households. If fifteen percent of the single-room occupancy units results in a fractional requirement greater than 0.7, then an additional inclusionary unit shall be provided. No in-lieu fee is required for fractional requirements of 0.7 or less.

g.    Congregate Living and Assisted Living Units. In a residential development comprised of congregate living or assisted living units, fifteen percent of the congregate living or assisted living units shall be made available for rent to lower income households at a rental cost affordable to very low income households. If fifteen percent of the units results in a fractional requirement greater than 0.7, then an additional inclusionary unit shall be provided. No in-lieu fee is required for fractional requirements of 0.7 or less. 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.

4.    The requirements of subsection (3) 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.

5.    At the applicant’s option, for developments with multiple market rate unit types containing differing numbers of bedrooms, the inclusionary housing requirements may be satisfied based on the number of bedrooms rather than the number of units in the residential development, in which event the inclusionary units shall contain at least fifteen percent of the total number of bedrooms in the residential development.

6.    For purposes of calculating the number of inclusionary units required by this section, an accessory dwelling unit or units shall not be counted either as part of the residential development or as an affordable unit fulfilling the inclusionary requirements for the residential development.

7.    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 24.16.220(1), 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.

8.    If a residential development receives a density bonus pursuant to Part 3 of this chapter, any affordable units and any dedication of property that were used to qualify the residential development for the density bonus may not also be used to meet the inclusionary housing requirements included in this Part 1.

(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. If a developer chooses to satisfy all or a portion of the inclusionary requirement with rental units, as permitted by Government Code Section 65589.8, then the developer affordable housing agreement for the rental inclusionary units shall include the developer’s agreement to the limitations on rents required by Section 24.16.040:

2.    Inclusionary units shall be reasonably dispersed throughout the residential 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 inclusionary units, provided all units conform to all requirements of Titles 18 and 19 of the Santa Cruz Municipal Code and meet the minimum standards shown in the table below.

 

 

Single-Room Occupancy

Small Ownership Unit

Studio

One Bedroom

Two Bedrooms

Three Bedrooms

Four Bedrooms

Minimum Size (sq. ft.)

250

500 or the average size of the market rate units, whichever is smaller

500

650

900

1,100

1,275

3.    For developments with multiple market rate unit types containing differing numbers of bedrooms, inclusionary units shall be representative of the market rate unit mix. However, if the applicant chooses to provide inclusionary units based on the number of bedrooms in the residential development pursuant to Section 24.16.020(5), then the inclusionary units may be comprised of dwelling units of any bedroom size.

4.    For congregate living or assisted living units, 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.

5.    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 city council may 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.

(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 city council must make the following findings:

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.

c.    The alternative method of compliance will provide a public benefit not otherwise obtainable if on-site inclusionary units are provided as required by Section 24.16.020. For the purpose of this subsection, “a public benefit not otherwise obtainable” is defined as:

(1)    The same or superior quality of design and construction and, with the exception of live/work units, the provision of more inclusionary units than would otherwise be required if the inclusionary units were constructed on site; or

(2)    Except for live/work units, the provision of at least two dwelling units affordable to lower income households, one and one-half dwelling units affordable to very low income households, or one dwelling unit affordable to extremely low income households for each inclusionary unit that would otherwise be required to be constructed on site; and, except for live/work units, if conversion of existing units is proposed, all units in the existing residential development will be rehabilitated in addition to the inclusionary units, and the existing residential development requires significant rehabilitation (costs estimated at twenty-five percent of after-construction value); or

(3)    Except for live/work units, if in-lieu fees are proposed, the fees are needed by the city as matching funds for state or federal grants for current or future affordable housing projects, or the in-lieu fees will provide substantially more affordable housing than would be provided by on-site provision of inclusionary units, equivalent to subsection (2)(c)(1) at a minimum; or

(4)    For live/work units, additional alternative inclusionary units above the fifteen percent requirement shall not be required; and if an existing unit is used, at the discretion of the planning director, rehabilitation of all other units in the complex may not be required; however, requirements to be determined by the planning director to rehabilitate the alternative inclusionary unit shall apply and in-lieu fees may be allowed solely at the discretion of the city council.

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; provided, that off-site inclusionary units may not exceed forty percent of the total units on any one site. 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.

b.    The city council may approve a proposal for off-site inclusionary units if it makes all of the findings required by subsection (2) and both of the following findings:

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

(2)    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.

c.    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.

d.    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.

e.    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 director of the planning and community development department.

f.    If the off-site construction of inclusionary units is not substantially completed within eighteen months of completion of on-site construction, then the city council 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 to Inclusionary Units. An applicant may propose to convert existing residential units into inclusionary units in lieu of constructing new inclusionary units on site.

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

b.    The conversion of existing market rate housing to inclusionary units need not comply strictly with Sections 24.16.025(2) and (3) but the types of units and numbers of bedrooms provided in the converted units shall be reasonably similar to those that would have been required for on-site inclusionary units, subject to the approval of the director of planning and community development.

c.    For residential developments located within the HD-O High-Density Overlay District, existing dwelling units proposed for conversion into inclusionary units must be located within the downtown planning area as defined by the Downtown Area Plan.

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

e.    Any application to convert existing residential units 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)    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)    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)    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.

(9)    Description of benefits to be offered to existing tenants, including but not limited to right of first refusal to remain in the unit, and any expected need for relocation of existing tenants.

f.    The city council 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:

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

(2)    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.

(3)    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.

(4)    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.

(5)    The dwelling units 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, or the conversion will make the units affordable to households with lower incomes than the existing affordability restrictions.

(6)    The dwelling units to be converted will be affordable to households with lower incomes than required for new inclusionary units, as specified by city council resolution.

(7)    The converted units are not less than eighty percent of the average size of the market rate units and have the same proportion of bedroom types as the market rate units, unless the city council finds that a modification of this requirement will provide a great number of inclusionary units or a deeper level of affordability, or that it is infeasible to provide affordable units of this size.

g.    If more than forty percent of the units on one site will be converted to inclusionary units, the city council must additionally find that the rehabilitated inclusionary units will remove blight and enhance physical and social conditions in the surrounding area.

h.    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 city council 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 lower income dwelling 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 1, 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 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:

(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)    Total number of inclusionary units proposed, not to exceed forty percent of the total number of dwelling units in the residential development.

(3)    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 appropriate size, number of bedrooms, and tenure.

e.    The city council may approve a proposal to make inclusionary units available to meet inclusionary requirements on other sites if it makes all of the findings required by subsection (2) and all of the following findings:

(1)    The residential development has not received any local, state, or federal affordable housing financial assistance.

(2)    No more than forty percent of the dwelling units in the residential development are inclusionary units.

f.    The city council may approve a proposal to receive credit for inclusionary units previously approved for the transfer of credit if it makes all of the findings required by subsection (2) and the following finding:

The inclusionary units to be credited to the residential development will be constructed prior to or concurrently with the market rate units in the residential development.

6.    In-Lieu Housing Fees.

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

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

(2)    For 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 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 city council and only if the city council makes the findings required by subsection (2), except that conformance with Section 24.16.025 is not required.

b.    In-lieu fees per unit shall be calculated as 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 using one of two methods, which shall be designated by the developer at the time the affordable housing agreement is signed. Accessory dwelling units or their square footage shall not be included in the market rate value calculations. The two methods are as follows:

(1)    Value of the market rate unit shall be equal to the average appraised value of all units in the proposed development. The appraisal shall be conducted by a licensed residential appraiser within three months prior to entering into an affordable housing agreement. The licensed residential appraiser shall be selected by the city and paid by the developer.

(2)    Value of the market rate unit shall be calculated by multiplying the average square footage per unit by the actual market rate price per square foot obtained when the units are sold. The market price per square foot shall be based upon the average sale price per square foot of fifty percent of the market rate units in the development. If this method is selected, estimated in-lieu fees may be paid when fees are due per subsection (6)(e) below and adjustments (additional payment made to the city or refunds made from the city) shall be made following sale of fifty percent of the market rate units.

c.    In-lieu fees for residential developments creating two but no more than four additional dwelling units shall be reduced by fifty percent. In-lieu fees for fractions of units, as defined in subsection (6)(a)(1), shall be further reduced by twenty percent. In-lieu fees for fractions of units, as defined in subsection (6)(a)(1), may be further reduced in a declining or emerging housing market, as defined in Section 24.16.015(8), by a resolution of the city council.

d.    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 conducted by a licensed residential appraiser to be selected by the city and paid for by the developer. For subdivisions that consist of two to four parcels, this amount shall be further reduced by fifty percent.

e.    In-lieu fees shall be paid prior to or at the time the building permit is finalized (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 city council. For projects constructed in phases, in-lieu fees shall be paid in the proportion that the phase bears to the overall project.

f.    In-lieu fees for subdivisions shall be paid prior to or concurrently with final subdivision map approval.

g.    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 lower income housing units with long-term affordability restrictions, 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 one hundred percent lower income project.

a.    An application for land dedication shall be accompanied by the following information:

(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 city council 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 one hundred percent lower 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 shall make the site available without cost to a lower 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 lower income residential development on the dedicated site concurrently with the processing of the market rate development.

(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 24.16.

2.    A residential development may satisfy its inclusionary housing requirements through any of the options 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(2).

4.    The inclusionary housing requirements may be satisfied based on the number of bedrooms rather than the number of units.

5.    Residential developments in which all units are offered for rent, but where a subdivision map has been recorded, are not required to limit rents to an affordable level until individual dwelling units are offered for sale.

6.    Residential developments in which all dwelling units are offered for rent, and no subdivision map has been recorded, are eligible for a 27.5 percent density bonus.

7.    Residential developments located in the HD-O High Density Overlay Zone are eligible for a floor area ratio bonus equal to the percentage of affordable units, up to a maximum of twenty-five percent.

(Ord. 2006-16 § 2 (part), 2006).

24.16.040 DEVELOPER AFFORDABLE HOUSING AGREEMENT.

1.    Developers subject to the inclusionary housing requirements of this Part 1 of this chapter 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 on 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.

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

(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 Part 1 of this chapter 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 Part 1 of this chapter 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. 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 lower income households is at least ninety percent of the average rent for market rate dwelling units with the same number of bedrooms.

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. 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 division staff or of an agency retained by the city with regard to this Part 1 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 1 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 of the Santa Cruz Municipal Code.

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

24.16.055 WAIVERS OF INCLUSIONARY HOUSING REQUIREMENT.

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 1, or that applying the requirements of this chapter would take property in violation of the United States or California Constitutions.

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 decision-making 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. 2009-18 § 1 (part), 2009: Ord. 2006-16 § 2 (part), 2006).

24.16.060 IMPLEMENTATION AND ENFORCEMENT.

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

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 1:

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 1.

3.    The city attorney shall be authorized to enforce the provisions of this Part 1, all agreements entered into pursuant to this Part 1, and all other requirements of this Part 1, 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 1.

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 1. 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 1 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. 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-family dwellings. Such accessory dwellings are allowed because they can contribute needed housing to the community’s housing stock. Thus, it is found that accessory units are a residential use which is consistent with the General Plan objectives and zoning regulations and which enhances housing opportunities that are compatible with single-family development.

To ensure that accessory units will conform to General Plan policy the following regulations are established.

(Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.120 LOCATIONS PERMITTED.

Accessory dwelling units are permitted in the following zones on lots of five thousand square feet or more:

1.    RS-5A, RS-10A;

2.    RS-1A, RS-2A;

3.    R-1-10;

4.    R-1-7;

5.    R-1-5;

6.    R-L, R-T(A), (B), and (D).

(Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.130 PERMIT PROCEDURES.

The following 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 24.16.160.

1.    Any accessory dwelling unit meeting the same development standards as permitted for the main building in the zoning district, whether attached or detached from the main dwelling.

2.    Any single story accessory dwelling unit.

Any accessory dwelling unit not meeting the requirements above shall be conditionally permitted uses within the zoning districts specified in Section 24.16.120 and shall be permitted by administrative use permit at a public hearing before the zoning administrator, subject to the findings per Section 24.16.150 and the development standards in Section 24.16.160.

(Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.150 FINDINGS REQUIRED FOR CONDITIONALLY PERMITTED ACCESSORY DWELLING UNITS.

Before approval or modified approval of an application for an accessory dwelling unit, the decision making body shall find that:

1.    Exterior design of the accessory unit is compatible with the existing residence on the lot through architectural use of building forms, height, construction materials, colors, landscaping, and other methods that conform to acceptable construction practices.

2.    The exterior design is in harmony with, and maintains the scale of, the neighborhood.

3.    The accessory unit does not result in excessive noise, traffic or parking congestion.

4.    The property fronts on an adequate water main and sewer line each with the capacity to serve the additional accessory unit.

5.    The site plan provides adequate open space and landscaping that is useful for both the accessory dwelling unit and the primary residence. Open space and landscaping provides for privacy and screening of adjacent properties.

6.    The location and design of the accessory unit maintains a compatible relationship to adjacent properties and does not significantly impact the privacy, light, air, solar access or parking of adjacent properties.

7.    The one and one-half to two-story structure generally limits the major access stairs, decks, entry doors, and major windows to the walls facing the primary residence, or to the alley if applicable. Windows that impact the privacy of the neighboring side or rear yard have been minimized. The design of the accessory unit shall relate to the design of the primary residence and shall not visually dominate it or the surrounding properties.

8.    The site plan shall be consistent with physical development policies of the General Plan, any required or optional element of the General Plan, any area plan or specific plan or other city policy for physical development. If located in the Coastal Zone, a site plan shall also be consistent with policies of the Local Coastal Program.

9.    The orientation and location of buildings, structures, open spaces and other features of the site plan are such that they maintain natural resources including heritage or significant trees and shrubs to the extent feasible and minimize alteration of natural land forms. Building profiles, location and orientation relate to natural land forms.

10.    The site plan is situated and designed to protect views along the ocean and of scenic coastal areas. Where appropriate and feasible, the site plan restores and enhances the visual quality of visually degraded areas.

11.    The site plan incorporates water-conservation features where possible, including in the design of types of landscaping and in the design of water-using fixtures. In addition, water restricting shower heads and faucets are used, as well as water-saving toilets utilizing less than three gallons per flush.

(Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.160 DESIGN AND DEVELOPMENT STANDARDS.

All accessory dwelling units must conform to the following standards:

1.    Parking. One parking space shall be provided on site for each studio and one bedroom accessory unit. Two parking spaces shall be provided on site for each two bedroom accessory unit. Parking for the accessory unit is in addition to the required parking for the primary residence. (See Section 24.16.180 for parking incentives.)

2.    Unit Size. The floor area for accessory units shall not exceed five hundred square feet for lots between five thousand and seven thousand, five hundred square feet. If a lot exceeds seven thousand, five hundred square feet, an accessory unit may be up to six hundred forty square feet and, for lots in excess of ten thousand square feet, a unit may be up to eight hundred square feet. In no case may any combination of buildings occupy more than thirty percent of the required rear yard for the district in which it is located, except for units which face an alley, as noted in subsection (10) of this section. Accessory units that utilize alternative green construction methods that cause the exterior wall thickness to be greater than normal shall have the unit square footage size measured similar to the interior square footage of a traditional frame house.

3.    Existing Development on Lot. A single-family dwelling exists on the lot or will be constructed in conjunction with the accessory unit.

4.    Number of Accessory Units per Parcel. Only one accessory dwelling unit shall be allowed for each parcel.

5.    Setbacks for Detached Accessory Dwelling Units. The side-yard and rear-yard setbacks for detached single-story structures containing an accessory dwelling unit shall not be less than three feet in accordance with the International Building Code, and the distance between buildings on the same lot must be a minimum of ten feet. Accessory units higher than one story shall provide side yard setbacks of five feet and rear yard setbacks of ten feet. If any portion of an accessory dwelling unit is located in front of the main building, then the front and side yard setbacks shall be the same as a main building in the zoning district. (Accessory dwelling units are not eligible for variances to setbacks.)

6.    Setbacks for Attached Accessory Dwelling Units. Attached accessory dwelling units shall meet the same setbacks as a main building in the zoning district.

7.    Other Code Requirements. The accessory unit shall meet the requirements of the International Building Code.

8.    Occupancy.

a.    The property owner must occupy either the primary or accessory dwelling as his or her principal place of residence.

b.    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.

c.    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.)

9.    Building Height and Stories.

a.    A one story detached accessory dwelling unit shall be no more than thirteen feet in height.

b.    A one and one-half to two story detached accessory dwelling shall be no more than twenty-two feet in height measured to the roof peak.

c.    An attached accessory unit may occupy a first or second story of a main residence if it is designed as an integral part of the main residence and meets the setbacks required for the main residence.

d.    If the design of the main dwelling has special roof features that should be matched on the detached accessory unit, the maximum building height of the accessory dwelling unit may be exceeded to include such similar special roof features subject to review and approval of the zoning administrator.

10.    Alley Orientation. When an accessory dwelling unit is adjacent to an alley, every effort shall be made to orient the accessory dwelling unit toward the alley with the front access door and windows facing the alley. Parking provided off the alley shall maintain a twenty-four-foot back out which includes the alley. Fences shall be three feet, six inches along the alley. However, higher fencing up to six feet can be considered in unusual design circumstances subject to review and approval of the zoning administrator.

11.    Design. The design of the accessory unit shall relate to the design of the primary residence by use of the similar exterior wall materials, window types, door and window trims, roofing materials and roof pitch.

12.    Large Home Design Permit. The square footage of an attached or detached accessory unit shall be counted with the square footage of the single-family home in determining whether a large home design permit is required.

13.    Open Space and Landscaping. The site plan shall provide open space and landscaping that are useful for both the accessory dwelling unit and the primary residence. Landscaping shall provide for the privacy and screening of adjacent properties.

14.    The following standards apply to accessory dwelling units located outside the standard side and rear yard setbacks for the district:

The entrance to the accessory unit shall face the interior of the lot unless the accessory unit is directly accessible from an alley or a public street.

Windows which face an adjoining residential property shall be designed to protect the privacy of neighbors; alternatively, fencing or landscaping shall be required to provide screening.

15.    A notice of application shall be sent to the immediately adjoining neighbors.

(Ord. 2008-04 § 1, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.170 DEED RESTRICTIONS.

Before obtaining a building permit for an 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 stating that:

1.    The accessory unit shall not be sold separately.

2.    The unit is restricted to the approved size.

3.    The use permit for the accessory unit shall be in effect only so long as either the main residence, or the accessory unit, is occupied by the majority owner of record as the owner’s principal place of residence.

4.    The above declarations are binding upon any successor in ownership of the property; lack of compliance shall be cause for code enforcement and/or revoking the conditional use permit.

5.    The deed restrictions shall lapse upon removal of the accessory unit.

(Ord. 2008-04 § 2, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.180 ZONING INCENTIVES.

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

1.    Affordability Requirements for Fee Waivers. Accessory units proposed to be rented at affordable rents, as established by the city, may have development fees waived per Part 4 of Chapter 24.16 of the Zoning Ordinance. Existing accessory 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.    Covered Parking. The covered parking requirement for the primary residence shall not apply if an accessory dwelling unit is provided.

3.    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.

4.    Tandem Parking. For a parcel with a permitted accessory dwelling unit, required parking spaces for the primary residence 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.

5.    Alley Presence. If an accessory dwelling unit faces an alley as noted in the design standards in this chapter, the limitations on rear yard coverage as specified in Sections 24.16.160(2) and/or 24.12.140(5) do not apply.

6.    Historic Properties. Accessory dwelling unit regulations regarding lot size and unit size may be allowed in accord with Section 24.12.445 for lots with historic buildings listed on the city historic building survey and on lots with contributing buildings within historic districts.

(Ord. 2012-19 § 5, 2012; Ord. 2008-14 § 8, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

PART 3: DENSITY BONUS PROVISIONS FOR RESIDENTIAL UNITS

24.16.200 PURPOSE.

The purposes of this Part 3 of Chapter 24.16 of the Santa Cruz Municipal Code 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 and moderate 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 Sections 65915, 65915.5, and 65917 of the California Government Code 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. It is also the intent of the city of Santa Cruz to provide a density bonus only when a developer requests and is not otherwise required to include affordable units.

(Ord. 2006-19 § 2 (part), 2006).

24.16.205 DEFINITIONS.

For purposes of this Part 3 of Chapter 24.16, 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 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, 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 density bonus 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.

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

a.    For density bonus 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.

3.    “Affordable units” are dwelling units which are affordable to very low, lower, or moderate income households as defined by this Part 3 or by any federal or state housing program 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 day care facility other than a family day care home, as defined in Section 24.22.355 of the Municipal Code, including, but not limited to, infant centers, preschools, extended day care facilities, and school age child care centers.

7.    “Density bonus” is a density increase over the otherwise allowable maximum residential density on a site, granted pursuant to this Part 3 of Chapter 24.16.

8.    “Density bonus units” are residential units granted pursuant to this Part 3 of Chapter 24.16 which exceed the otherwise allowable maximum residential density for a residential development.

9.    “Development standard” is any site or construction condition that applies to a residential 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 residential development.

10.    “First approval” is the first of the following approvals to occur with respect to a residential 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.

11.    “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 Section 8 program under the United States Housing Act of 1937, as amended, or its successor provision.

12.    “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 Section 50079.5 of the California Health and Safety Code.

13.    “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 Section 50079.5 of the California Health and Safety Code.

14.    “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 Section 50105 of the California Health and Safety Code.

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

16.    “Inclusionary unit” is an ownership or rental dwelling unit or single-room occupancy unit within a residential development which is required under Part 1 of Chapter 24.16 to be rented at affordable rents or sold at an affordable ownership cost to specified households.

17.    “Market rate unit” is a dwelling unit which is not an affordable unit or an inclusionary unit.

18.    “Maximum residential density” is the maximum number of dwelling units permitted by the zoning ordinance on the date an application for a residential development is deemed complete. This definition is used to calculate a density bonus pursuant to this Part 3 of Chapter 24.16.

19.    “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 single-room occupancy units by construction or alteration of structures.

20.    “Small ownership unit” or “SOU” is a dwelling unit containing no more than one bedroom and floor area ranging from four hundred to six hundred fifty square feet, located on a separate subdivided parcel and included in a residential development where all dwelling units are SOU units and are offered for sale to the general public.

(Ord. 2006-19 § 2 (part), 2006).

24.16.210 ELIGIBILITY FOR DENSITY BONUSES.

A residential development is eligible for a density bonus if it:

1.    Creates at least five additional dwelling units or single-room occupancy units, not including any density bonus units;

2.    Includes a request for a density bonus as part of the application for the residential development; and

3.    Meets the criteria for a density bonus established in Sections 24.16.215, 24.16.220, 24.16.230, 24.16.235, or 24.16.240.

(Ord. 2006-19 § 2 (part), 2006).

24.16.215 DENSITY BONUSES FOR AFFORDABLE AND SENIOR HOUSING.

1.    Very Low and Lower Income Housing and Senior Housing. A residential development is eligible for a twenty percent density bonus if the applicant agrees to construct at least one of the following:

a.    Ten percent of the total units affordable to lower income households based on density bonus affordable rents or ownership costs; or

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

c.    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 Sections 798.76 or 799.5.

2.    Moderate Income Housing. A residential 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 at an ownership cost affordable to moderate income households;

b.    The residential development is a common interest project as defined by Section 1351 of the California Civil Code; and

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

d.    As an example of the application of this section, if a 40-unit project includes either four lower-income units (10%) or two very-low-income units (5%), in addition to the required inclusionary units, the project would be entitled to build eight density bonus units, or a total of 48 units. None of the eight bonus units would need to be affordable.

3.    Additional Density Bonus. The density bonus for which the residential 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) above, as follows:

a.    Very low income units – For each one percent (1%) increase above five percent (5%) in the percentage of dwelling units affordable to very low income households, the density bonus shall be increased by two and half percent (2.5%) up to a maximum of thirty-five percent (35%).

b.    Lower income units – For each one percent (1%) increase above ten percent (10%) 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 half percent (1.5%) up to a maximum of thirty-five percent (35%).

c.    Moderate income ownership units – For each one percent (1%) increase above ten percent (10%) 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 (1%) up to a maximum of thirty-five percent (35%).

4.    Inclusionary Units Not Eligible for a Density Bonus. Affordable units that qualify a project for a density bonus pursuant to this Section 24.16.215 do not meet the inclusionary housing requirements included in Part 1 of this chapter. All affordable units qualifying a residential development for a density bonus pursuant to this section must be provided in addition to the inclusionary units required by Part 1.

(Ord. 2006-19 § 2 (part), 2006).

24.16.220 CITY DENSITY BONUSES.

City density bonuses provided pursuant to this section are provided as an alternative to the density bonuses provided elsewhere in this Part 3.

1.    City Rental Housing Bonus. A residential development is eligible for a 27.5% density bonus if all of the units in the residential 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 converted community apartment or stock cooperative will be created time to create parcels containing single dwelling units. If the 27.5% 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.

2.    City Floor Area Bonus. A residential development located in the HD-O High-Density Overlay District providing the fifteen percent (15%) inclusionary units required by Part 1 of this chapter shall be eligible for a floor area ratio bonus equal to the percentage of affordable units, up to a maximum of twenty-five percent (25%). If the floor area bonus is greater than that to which the developer would otherwise be entitled pursuant to Section 24.16.215, the city floor area bonus shall be considered to be one incentive or concession for purposes of Section 23.16.225.

(Ord. 2006-19 § 2 (part), 2006).

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 residential developments where at least ten percent (10%) of the total units are affordable to lower income households based on density bonus affordable rents or ownership costs, at least five percent (5%) of the total units are affordable to very low income households, or at least ten percent (10%) of the total units are available to moderate income households at affordable ownership costs.

2.    Two incentives or concessions for residential developments where at least twenty percent (20%) of the total units are affordable to lower income households based on density bonus affordable rents or ownership costs, at least ten percent (10%) of the total units are affordable to very low income, or at least twenty percent (20%) of the total units are available to moderate income households at affordable ownership costs.

3.    Three incentives or concessions for residential developments where at least thirty percent (30%) of the total units are affordable to lower income households based on density bonus affordable rents or ownership costs, at least fifteen percent (15%) of the total units are affordable to very low income households, or at least thirty percent (30%) of the total units are available to moderate income households at affordable ownership costs.

(Ord. 2006-19 § 2 (part), 2006).

24.16.230 DENSITY BONUS FOR LAND DEDICATION.

1.    A residential development is eligible for a fifteen percent (15%) density bonus when an applicant for a residential development chooses to dedicate land to the city for the construction of very low income housing. For each one percent (1%) increase above the minimum ten percent (10%) land dedication described in paragraph (2)(b) of this section, the maximum density bonus shall be increased by one percent (1%), up to a maximum of thirty-five percent (35%). 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 (35%) 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 residential 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 residential 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 (10%) of the total number of dwelling units in the proposed 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 (15%).

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 to make feasible the development of very low income housing, 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 residential 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, unless the city council finds that the applicant has provided specific assurances guaranteeing the timely completion of the very low income units, including satisfactory assurances that construction and permanent financing will be secured for the construction of the units within a reasonable time.

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, City of Santa Cruz Redevelopment Agency, 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.

3.    The transferred land is within the site boundaries of the proposed residential development. The transferred land may be located within one-quarter mile of the boundary of the proposed residential 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, and will otherwise provide greater public benefit than donating land on site.

(Ord. 2006-19 § 2 (part), 2006).

24.16.235 DENSITY BONUS OR INCENTIVE FOR CHILD CARE FACILITIES.

1.    A residential 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 residential 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. 2006-19 § 2 (part), 2006).

24.16.240 DENSITY BONUS FOR CONDOMINIUM CONVERSIONS.

1.    A residential 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 (33%) 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 (15%) 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 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 residential 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. 2006-19 § 2 (part), 2006).

24.16.245 SUMMARY TABLES.

The following tables summarize the available density bonuses, incentives, and concessions.

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. Except in the HD-O High Density Overlay Zone, affordable units provided must be in addition to those required by the City’s Inclusionary Housing Requirements.

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%

Rental housing

No map

27.5%

HD-O High Density Overlay Zone

Meets City inclusionary requirements

FAR % increase equal to % affordable units, up to 25 %

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%(A)

Condominium conversion – lower income

15%

25%(A)

Child care center

Sq. ft. in child care center (A)

Notes:

(A) Or and incentive of equal value, at the city’s option.

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)(D)

1

2

3

Notes:

(A) A concession or incentive may be requested only if an application is also made for a density bonus.

(B) Concessions or incentives may be selected from only one category (very low, lower, or moderate).

(C) No concessions or incentives are available for land donation.

(D) Condominium conversions and child care centers may have one concession or a density bonus at the City’s option, but not both.

(Ord. 2006-19 § 2 (part), 2006).

24.16.250 CALCULATION OF DENSITY BONUS.

1.    When calculating the 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 residential development for a density bonus pursuant to Section 24.16.215(1) or (2). 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 residential development for a density bonus. Regardless of the number of affordable units or land dedication, no residential development may be entitled to a total density bonus of more than thirty-five percent (35%).

4.    Each residential 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, or the project’s status as either a senior housing project or as a project eligible for a city rental housing bonus or city floor area bonus in the HD-O zone. 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 (35%), and an additional square footage bonus for child care centers may be granted as described in Section 24.16.235.

5.    Consistent with Section 24.16.020(6) of Part 1 of this chapter, affordable units and land dedications that qualify a project for a density bonus do not meet the Inclusionary Housing Requirements included in Part 1. All affordable units and land dedications qualifying a residential development for a density bonus must be provided in addition to the inclusionary units or land dedications required by Part 1, except as provided in Section 24.16.220(2) for projects in the HD-O zone.

6.    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 residential development. However, if a developer receives a City Rental Housing Bonus as authorized by Section 24.16.220.1, 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. 2006-19 § 2 (part), 2006).

24.16.255 STANDARDS FOR INCENTIVES AND CONCESSIONS.

1.    For purposes of this Part 3, concessions and incentives include reductions in site development standards, modifications of zoning code or architectural design requirements, and other incentives or concessions defined in Government Code Section 65915(l) that result in identifiable, financially sufficient, and actual cost reductions.

2.    Tier 1 Concessions – No Financial Pro Forma Required. The following concessions and incentives may be approved by the planning and community development director, unless the residential development or other concessions otherwise require approval by the planning commission or city council, and without any requirement that the applicant demonstrate to the city that the requested concession or incentive results in identifiable, financially sufficient, and actual cost reductions to the project pursuant to California Government Code Section 65915(l)(1):

a.    Up to a twenty percent (20%) reduction in a yard setback requirement, with each structure in a required yard setback counting as one concession or incentive;

b.    Up to a twenty percent (20%) increase in maximum lot coverage;

c.    Up to a twenty percent (20%) reduction in required landscape area;

d.    Up to a twenty percent (20%) reduction in required common open space area or private open space area per unit, or the elimination of private open space for twenty percent (20%) of units;

e.    Reduction of off-street parking requirements as described in Section 24.16.260(5);

f.    Approval of a 27.5% city rental housing density bonus pursuant to Section 24.16.220(1), if the density bonus is greater than that to which the developer would otherwise be entitled;

g.    Approval of a floor area ratio bonus pursuant to Section 24.25.220(2); or

h.    Approval of fee waivers pursuant to Part 4 of this Chapter 24.16.

3.    Tier 2 Concessions – Planning Commission Approval and Financial Pro Forma Required. The following concessions and incentives may be approved by the planning commission, unless the residential development or other concessions otherwise require approval by the city council. The applicant shall provide a pro forma demonstrating to the city that the requested concession or incentive results in identifiable, financially sufficient, and actual cost reductions to the project pursuant to California Government Code Section 65915(l)(1):

a.    Greater increases in lot coverage than included in Tier 1;

b.    Greater reductions in front, side, or rear setbacks than included in Tier 1;

c.    Greater reductions in required landscape area than included in Tier 1;

4.    Tier 3 Concessions – City Council Approval and Financial Pro Forma Required. The following concessions and incentives may be approved by the city council. The applicant shall provide a pro forma demonstrating to the city that the requested concession or incentive results in identifiable, financially sufficient, and actual cost reductions to the project pursuant to California Government Code Section 65915(l)(1):

a.    Deferring collection of impact fees on market rate units until issuance of certificate of occupancy;

b.    Reduction in the minimum requirements for lot area; lot width; or distance between residential structures;

c.    Increases in the maximum permitted building height; percentage of compact parking spaces; floor area ratio for non-residential development in mixed use project; fence height; or sign area or dimensions;

d.    Reduced parking space dimensions; driveway width; parking aisle width; garage and carport dimensions; or bicycle parking requirements;

e.    Parking spaces located within required setback areas;

f.    Reduction of off-street parking ratios below those permitted by Government Code Section 65915 (p) and Section 24.16.260(5);

g.    Approval of mixed use buildings or uses as part of the residential development, if non-residential land uses will reduce the cost of the residential development, and if the city finds that the proposed non-residential uses are compatible with the residential development and with existing and planned development in the area where the proposed residential development will be located;

h.    Any direct financial assistance, including that for purchasers of affordable units;

i.    Any additional regulatory incentives or concessions not included in Tier 1 or Tier 2.

5.    Applicants may seek a waiver or modification of development standards that will have the effect of precluding the construction of a residential development meeting the criteria of Sections 24.16.210 and 24.16.215(1) or (2) at the densities or with the incentives or concessions permitted by this section. The applicant shall show that the waiver or modification is necessary to make the affordable housing units economically feasible based upon appropriate financial analysis and documentation as specified in Section 24.16.265.

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

(Ord. 2006-19 § 2 (part), 2006).

24.16.260 STANDARDS FOR DENSITY BONUS RESIDENTIAL DEVELOPMENTS.

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

a.    Units affordable to very low and lower income households shall remain affordable to the designated income group for a minimum of thirty 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.    Units affordable to moderate income households shall remain affordable in perpetuity.

2.    Affordable units qualifying a residential development for a density bonus shall be reasonably dispersed throughout the residential 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 inclusionary units, provided all units conform to all requirements of Titles 18 and 19 of the Santa Cruz Municipal Code and meet the minimum square footage requirements included in the table below.

TABLE 1

 

Single-Room Occupancy

Small Ownership Unit

Studio

One Bedroom

Two Bedrooms

Three Bedrooms

Four Bedrooms

Minimum Size (sq. ft.)

250

500 or the average size of the market rate units, whichever is smaller

500

650

900

1,100

1,275

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

4.    All building permits for affordable units qualifying a residential 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 residential 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.

5.    Upon the request of the developer, the city shall not require off-street parking for a residential development meeting the criteria of Sections 24.16.210 and 24.16.215(1) or (2) 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.

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 residential development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this section, a residential development may provide on-site parking through tandem parking or uncovered parking, but not through on-street parking.

(Ord. 2006-19 § 2 (part), 2006).

24.16.265 SUBMITTAL OF APPLICATION FOR AFFORDABLE HOUSING PLAN

1.    An application for a density bonus, incentive, concession, waiver, modification, or revised parking standard pursuant to this Part 3 shall be submitted as part of the first approval of the residential development in the form of an affordable housing plan which shall be processed concurrently with all other applications required for the residential 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 residential development requesting a density bonus, incentives, concessions, or waivers may be deemed complete unless an affordable housing plan is submitted conforming to the provisions of this section.

3.    For affordable units qualifying the residential development for a density bonus, the affordable housing plan shall include the following information:

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

b.    Identification of the base project without the density bonus, number and location of all inclusionary units, affordable units qualifying for the project for a density bonus, level of affordability of all affordable and inclusionary units, and identification of the bonus units.

c.    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, financially sufficient, and actual cost reductions.

d.    For waivers or modifications of development standards: (a) a pro forma demonstrating that the waiver or modification is necessary to make the housing units economically feasible based upon appropriate financial analysis and documentation; and (b) evidence that the development standards for which a waiver is requested will have the effect of precluding the construction of the residential development at the densities or with the incentives or concessions permitted by this Part 3.

e.    Any pro forma submitted to comply with subsections (2)(c) and (2)(d) of this section 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: (a) the actual cost reduction achieved through the incentive, concession, or waiver; and (b) evidence that the cost reduction allows the developer to provide affordable rents or affordable sales prices.

f.    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 residential development: the number, unit type, tenure, number of bedrooms and baths, approximate location, size, and design, construction and completion schedule of all inclusionary and other affordable units, phasing of all inclusionary and other affordable units in relation to market rate units, marketing plan, and intended rent or sale price and basis for calculation.

g.    If the inclusionary and other 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 inclusionary and other affordable units will be constructed.

h.    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.

i.    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 the findings included in Section 24.16.235 can be made.

j.    If a mixed use building or development is proposed, the application shall provide evidence that the findings included in Section 24.16.255(4)(g) can be made.

4.    Upon submittal, the city manager or designee shall determine if the affordable housing plan submitted in support of a request for a density bonus, incentive, concession, waiver, modification, or revised parking standard is complete and conforms to the provisions of this chapter. No application for a first approval for a residential development requesting a density bonus, incentives, concessions, or waivers may be deemed complete unless an affordable housing plan is submitted conforming to the provisions of this Part 3.

5.    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. 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, or revised parking standard pursuant to this Part 3 shall be reviewed as part of the first approval of the residential development by the approval body with authority to approve the residential development, unless additional review by the planning commission or city council is required by Section 24.16.255(3) or (4). Any decision regarding a density bonus, incentive, concession, waiver, modification, or revised parking standard 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, or other discretionary approval.

2.    Before approving an application for a density bonus, incentive, concession, waiver, or modification, the approval body shall make the following findings:

a.    The residential development is eligible for a density bonus and any concessions, incentives, waivers, modifications, or reduced 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, financially sufficient, and actual cost reductions 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 approval body has made the finding included in Section 24.16.255.

e.    If the incentive or concession includes mixed use buildings or developments, the approval body has made the finding included in Section 24.16.255(4)(g).

f.    If a waiver or modification is requested, the applicant has shown that the waiver or modification is necessary to make the housing units economically feasible by providing appropriate financial analysis and documentation as described in Section 24.16.255(5), and that the development standards will have the effect of precluding the construction of the residential development at the densities or with the incentives or concessions permitted by this section.

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 either of the following:

a.    The incentive or concession is not required 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.

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 either 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.

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.

6.    A request for a minor modification of an approved affordable housing plan may be granted by the city manager or designee if the modification is substantially in compliance with the original affordable housing plan and conditions of approval. Other modifications to the affordable housing plan shall be processed in the same manner as the original plan.

(Ord. 2006-19 § 2 (part), 2006).

24.16.275 DEVELOPER AFFORDABLE HOUSING AGREEMENT.

Any density bonus, incentive, concession, waiver, modification, or revised parking standard 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 of Part 1 of this chapter. Prior to recordation of any final or parcel map or issuance of any building permit for the residential development, the developer affordable housing agreement shall be recorded as a restriction on any residential development granted any density bonus, incentive, concession, waiver, modification, or revised parking standard granted pursuant to this Part 3.

(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 residential development for a density bonus shall be the same as those specified for inclusionary units in Section 24.16.045 of Part 1 of the chapter, except that no very low and lower income tenant household may occupy rental affordable units qualifying a residential 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. 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 – 24.04.185 of the Santa Cruz Municipal Code.

(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 residential 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. 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).