Chapter 17.10 AFFORDABLE HOUSING REQUIREMENTS

Chapter 17.10
AFFORDABLE HOUSING REQUIREMENTS

Sections:

17.10.010 Declaration of findings and legislative intent.

17.10.020 Definitions.

17.10.030 Inclusionary housing requirements for residential development projects.

17.10.031 Inclusionary housing in-lieu fee for small residential projects.

17.10.032 Development of on-site affordable dwelling units.

17.10.034 Affordable housing in-lieu fee.

17.10.035 Repealed.

17.10.036 Development of off-site affordable units by affordable housing partnerships.

17.10.037 Existing unit conversion, program and Measure J trust fund.

17.10.038 Repealed.

17.10.040 Priority processing.

17.10.050 Investor-owner (rental) unit requirements.

17.10.060 Owner-builder unit requirements.

17.10.070 Ownership unit requirements.

17.10.075 Lease-purchase unit requirements.

17.10.080 Eligibility for rent or purchase.

17.10.090 Default, foreclosure, and loss of the unit.

17.10.100 Conflict of interest.

17.10.105 Violations.

17.10.110 Enforcement.

17.10.120 Appeals.

17.10.130 Annual report and administration.

17.10.010 Declaration of findings and legislative intent.

The County of Santa Cruz declares that the citizens of the County with average and below average incomes are experiencing a housing shortage. Whereas the goal of the County is to achieve a balanced community with housing available for households of all income levels, there exists within the County a shortage of housing that is affordable to persons with average and below average incomes. Increasingly, persons with average and below average incomes who work and/or live within the County are unable to locate housing at prices they can afford; economically disadvantaged households are increasingly excluded from living in Santa Cruz County.

Federal and State housing subsidy programs are not sufficient by themselves to satisfy the housing needs of average and below average income households. The County finds that the high cost of newly constructed housing is not conducive to the provision of housing affordable to average and below average income households, and that continued new development which does not include lower cost housing will serve further to aggravate the current housing shortage.

The County finds that the housing shortage for persons of average and below average incomes is detrimental to the public health, safety and welfare. The County further finds that it is a public purpose of the County of Santa Cruz as mandated by Measure J, a voter-adopted referendum measure, that housing be made available for persons with average and below average incomes, and that such supply of housing remains affordable to subsequent purchasers. The County further finds that it is a public policy of the State of California, as mandated by the requirements for the Housing Element of the County General Plan and the Local Coastal Plan, to make available an adequate supply of housing for persons of all economic segments of the community, and to ensure that such supply of housing remains affordable to subsequent purchasers.

The purpose of this chapter is to enhance the public welfare, and to assure that future housing development contributes to the provision of housing units affordable by households of average and below average income. It is an additional purpose of this chapter to achieve affordable housing at a minimal additional cost to housing consumers and taxpayers. A further purpose is to achieve the housing objectives contained in State law, and in the Santa Cruz County General Plan and the Local Coastal Program Land Use Plan. [Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 1, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3039, 1981; Ord. 3025, 1980; Ord. 3002, 1980].

17.10.020 Definitions.

For the purpose of this chapter, the following words and phrases shall be defined as set forth in this section.

“Administering agency” means the Redevelopment Agency of the County of Santa Cruz, the Santa Cruz County Planning Department or any other agency as determined by the Board of Supervisors, which is involved in the administration of the County’s Affordable Housing Program.

“Affordable housing” means housing which is affordable to average or below average income households, as required, regulated and allowed by this chapter. Affordable housing units are the same as inclusionary units for the purposes of this chapter.

“Affordable housing guidelines” means the Santa Cruz County affordable housing guidelines adopted by the Board of Supervisors to implement this chapter (previously entitled the “Santa Cruz County Affordable Housing Program Income, Asset, and Unit Price Guidelines”).

“Applicant” means any person, firm, partnership, association, joint venture, corporation, entity, or combination of entities seeking County permits and approval.

“Assisted housing” means any project receiving all or a portion of its development funding from any local, State or Federal governmental or nonprofit funding source which meets the criteria for affordable housing specified in the affordable housing guidelines.

“At one location” means all adjacent land owned or controlled by the applicant, the property lines of which are contiguous at any point, or the property lines of which are separated only by a public or private street, road, or other public or private right-of-way, or separated only by other lands owned or controlled by the applicant.

“Average (moderate) income households” means households with incomes between 80 and 120 percent of the median household income for the Santa Cruz Primary Metropolitan Statistical Area (PMSA), as determined periodically by the U.S. Department of Housing and Urban Development (HUD). The definition for average income households for the purposes of this chapter corresponds to the definition of moderate income households for State and Federally assisted housing programs.

“Below average (lower) income households” means households with annual incomes less than 80 percent of median household income for the Santa Cruz PMSA. The definition for below average income households for the purposes of this chapter corresponds to the definition of low income households used for State and Federally assisted housing programs.

“Congregate senior housing” means senior housing with individual living units which provides residents with central management, a minimum of two meals per day in a central dining facility, and transportation services. Congregate housing also provides recreational and social activities and facilities. Maid and linen service, sundries, beautician, banking and other similar services may also be made available where they are appurtenant to the congregate use on the site. Another term used for congregate housing is “life care facility,” which is a congregate development as described above in conjunction with a nursing and medical facility.

“Dwelling unit” means a dwelling designed for occupancy by one family or household.

“Eligible purchaser” means a household which is qualified by the administering agency, according to procedures established by the County, as meeting the requirements of this chapter for the purchase of affordable units; or a public body providing affordable housing; or an investor-owner as defined in this section.

“Eligible renter” means a household qualified by the administering agency, according to procedures established by the County, as meeting the requirements of this chapter for the rental of affordable units.

“Enhanced affordable” refers to the additional 25 percent affordable units required in the Regional Housing Need R Combining District. These units may be rented at enhanced low income levels or sold at enhanced moderate income levels.

“Enhanced low income” means a household earning up to 100 percent of median income. Rental pricing for units designated as affordable to enhanced low income households is based on 80 percent of median income, as adjusted for household size.

“Enhanced moderate income” means a household earning up to 150 percent of median income. Sales pricing for units designated as affordable to enhanced moderate income households is based on 120 percent of median income, as adjusted for household size.

“Final inspection” means an inspection performed by the administering agency to verify completion of the housing project per approved plans and to allow occupancy of housing units.

“Housing costs” means the monthly mortgage, principal and interest, property taxes, association fees, and required homeowner’s insurance for ownership units, and the monthly rent for rental units.

“HUD” means the U.S. Department of Housing and Urban Development.

“Inclusionary housing units” means housing units which are affordable to average or below average income households as required, regulated, and allowed by this chapter. Inclusionary housing units are the same as affordable housing units for the purposes of this chapter.

“Investor-owner” means an individual, partnership or corporation which develops or purchases affordable housing units for rental to below average income households.

“Market rate unit” means a dwelling unit which is not subject to the rental, sale or resale regulations of this chapter.

“Median income” means the median income for the Santa Cruz PMSA, unless otherwise stipulated, as periodically determined by HUD. The current County median income figure is contained in the affordable housing guidelines.

“New dwelling unit” means a dwelling unit that is newly constructed on a site, including replacement dwellings.

“Owner-builder” means an individual or household who proposes to build a unit, with or without the assistance of a contractor, for his/her primary place of residence.

“Ownership housing project” means a project composed of one or more separately owned dwelling units.

“Project” means a residential development or land subdivision proposal for which County permits and approvals are sought.

“Rental housing project” means a multifamily housing structure under unified ownership, within which separate dwelling units are rented or leased.

“Resale controls” means legal restrictions by which the price of affordable units will be controlled by this chapter for a specified period of time.

“Section 8” means the major Federal housing program in which eligible very low income and low income households receive financial assistance to rent housing units.

“Very low income households” means households with annual incomes less than 50 percent of median household income for the Santa Cruz PMSA. The definition of very low income households is used for State and Federally assisted programs and is included in the below average income household category for purposes of this chapter. [Ord. 4879 § 1, 2007; Ord. 4876 § 1, 2007; Ord. 4755 §§ 1, 2, 2004; Ord. 4662 § 1, 2002; Ord. 4425 § 1, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 3, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3002, 1980].

17.10.030 Inclusionary housing requirements for residential development projects.

(A) Projects Subject to Inclusionary Housing Requirements. The following residential development projects consisting of the construction of new dwelling units and/or the creation of new parcels intended for permanent residential occupancy shall be subject to the inclusionary housing requirements of this chapter:

(1) Residential Project at One Location. An application for a residential development at one location, whether to be constructed at one time or in phases, shall be subject to the requirements of this chapter if it will result in the creation of:

(a) Five or more new dwelling units;

(b) Parcels providing building sites for a total of five or more new dwelling units; or

For purposes of this subsection, “one location” shall include all adjacent parcels of land owned or controlled by the applicant, the property lines of which are contiguous at any point, or the property lines of which are separated only by a public or private street, road, or other public or private right-of-way, or separated only by the lands owned or controlled by the applicant.

(2) Concurrent Adjacent Residential Projects. Applications for concurrent adjacent residential developments which together will result in the creation of five or more new dwelling units, parcels providing building sites for a total of five or more new dwelling units, or a combination of new dwelling units and parcels together providing for a total of five or more new dwelling units, developed by applicants on adjacent properties either at one time or in phases shall be subject to the requirements of this chapter. For purposes of this subsection: “adjacent properties” shall include all adjacent parcels of land owned or controlled by the applicants, the property lines of which are contiguous at any point, or the property lines of which are separated only by a public or private street, road, or other public or private right-of-way, or separated only by the lands owned or controlled by the applicants; and “concurrent” applications shall include all applications which have been submitted and are concurrently being processed for action by the County. If the property ownership and application for one project contain no parties in whole or in part, or their spouses, who are also a party to the property ownership and application of the concurrent adjacent development, the concurrent applications may be granted an exception to the affordable housing requirements imposed by this chapter upon a showing satisfactory to the decision-making body that neither project receives direct financial benefit by virtue of the concurrent adjacent development.

(3) Sequential Adjacent Residential Projects. Applications by the same owner or applicant for sequential adjacent residential developments which together will result in the creation of five or more new dwelling units, parcels providing building sites for a total of five or more new dwelling units, or a combination of new dwelling units and parcels together providing for a total of five or more new dwelling units, developed on the same or adjacent properties either at one time or in phases shall be subject to the requirements of this chapter. For purposes of this subsection, “same owner or applicant” shall include any person who participates in the development as a full or partial owner or applicant, or a spouse of such person; “adjacent properties” shall include all adjacent parcels of land owned or controlled by the owner and/or applicant, the property lines of which are contiguous at any point, or the property lines of which are separated only by a public or private street, road, or other public or private right-of-way, or separated only by the lands owned or controlled by the owner and/or applicant; and “sequential” projects shall include all projects for which applications have been submitted to the County within a period of 10 years.

(B) Inclusionary Housing Requirement. The affordable housing obligation for any project identified in subsection (A) of this section shall be calculated by multiplying the number of new dwelling units or new residential building sites by the affordable housing percentage for the type of project, as specified below. Projects which generate an affordable housing obligation of less than a whole unit or a fractional amount more than a whole unit(s) shall contribute funds equivalent to the fractional amount above or below a whole unit to the Measure J trust fund, as specified in SCCC 17.10.034(E). The project developer may elect to construct additional affordable unit(s) instead of paying the fractional fee. Those projects which generate an affordable housing obligation equivalent to a whole unit or units of affordable housing shall construct the affordable dwelling unit(s) within the project pursuant to the requirements of SCCC 17.10.032, or alternately, shall meet the affordable housing requirement through the options provided in subsection (C) of this section:

(1) Standard Development. Standard development projects shall include the construction of affordable dwelling units equivalent in number to a minimum of 15 percent of the total number of new dwelling units and new undeveloped residential building sites in the project;

(2) Bonus Density Development. Development projects qualifying for bonus zoning density pursuant to Chapter 17.12 SCCC shall designate the affordable dwelling units;

(3) Priority Processing Development. Development projects qualifying for priority processing shall meet the requirements of SCCC 17.10.040 (standard priority processing) by the construction of affordable dwelling units equivalent in number to a minimum of 25 percent of the total number of new dwelling units and new undeveloped residential building sites in the project; or development projects which are developed with bonus density and include the construction of affordable dwelling units equivalent in number to a minimum of 35 percent of the total number of new dwelling units and new undeveloped residential building sites in the project before the density bonus is applied shall be entitled to priority processing;

(4) Congregate Senior Housing Development. Congregate senior housing development projects developed pursuant to SCCC 13.10.324 shall designate affordable congregate care units equivalent in number to a minimum of 35 percent of the total number of congregate care units in the project;

(5) Nonresidential to Residential Rezoning and/or General Plan Amendment. Nonresidential parcels which as a result of a rezoning and/or General Plan amendment are rezoned or designated as residential shall be required to provide 40 percent of the total number of units as affordable in accordance with SCCC 13.10.215(A)(1), except that rezonings into the Regional Housing Need R Combining District per SCCC 13.10.475 through 13.10.478 are exempt from this requirement. A minimum of one-half of the affordable units shall be affordable to below average (lower) income households. All affordable units must be constructed on-site. Development under these provisions shall only qualify for incentives and concessions relating to site standards as identified in SCCC 17.12.040 but are not eligible for additional density bonus units. If the calculation of the affordable housing obligation under subsection (B) of this section results in any fractional obligation above a whole unit, the project developer shall contribute funds equivalent to the fractional amount to the Measure J trust fund as provided in SCCC 17.10.034. No alternative options for satisfying the affordable requirement are allowed.

(6) Regional Housing Need R Combining District.

(a) The following requirements apply to sites designated in the Regional Housing Need R Combining District:

(i) Sites shall first meet the requirements of subsection (B)(1) of this section.

(ii) An additional affordable housing requirement of 25 percent of the total number of new dwelling units is required. Units meeting the 25 percent requirement will be considered enhanced affordable units and shall meet the requirements of this subsection (B)(6).

(iii) Notwithstanding subsections (6)(a)(i) and (ii) of this section, in the event that a developer believes that the affordable housing requirements for a project proposed for a site designated in the Regional Housing Need R Combining District renders the project financially infeasible, the developer may request relief from a proportional amount of the affordability requirements. That request shall be submitted to the Planning Director with all supporting information, including the development pro forma for the project. The Planning Director shall analyze that request and make suitable recommendations to the Board of Supervisors. In the event that the Board finds that the developer has provided evidence that fulfillment of the affordable housing requirements renders the project financially infeasible, the Board shall grant an increase in the allowed unit resale price, above the price restrictions contained in subsections (B)(1) and (B)(6) of this section, in an amount equal to that required to render the project financially feasible. In the event that such price modifications are granted, the developer shall grant the County Redevelopment Agency the option to purchase units at the revised sales price for the purpose of writing them down to suitable levels of affordability.

(iv) All affordable units must be constructed on-site.

(v) Developments under these provisions are eligible for concessions relating to site standards as identified in SCCC 13.10.477(B)(3).

(vi) Developments under these provisions are eligible for incentives and concessions relating to site standards as identified in SCCC 17.12.040 where the percentage of affordable units provided exceeds 40 percent, but are not eligible for additional density bonus units.

(vii) No alternative options, including those set forth in subsection (C) of this section for satisfying the affordable housing requirement are allowed for projects within the Regional Housing Need R Combining District.

(C) Alternative Options to Satisfy Inclusionary Housing Requirement. As an alternative to the construction of each affordable dwelling unit within a project as required pursuant to subsection (B)(1) of this section, the affordable housing requirements of this chapter may be satisfied by one or a combination of the following options:

(1) Payment of an in-lieu fee pursuant to SCCC 17.10.034 in place of constructing a required affordable dwelling unit; or

(2) Participation in the existing unit conversion program pursuant to SCCC 17.10.037; or

(3) Financial contribution to a nonprofit sponsored affordable housing project pursuant to SCCC 17.10.036 in place of constructing a required affordable dwelling unit on-site. Where an applicant proposes to satisfy the affordable housing requirement through participation with a non-profit housing developer for the construction of affordable residential units on a different site, the affordable unit requirement shall be based on the total number of new dwelling units and new undeveloped residential building sites included at both sites.

Use of these alternative options requires approval by the approving body at the time of the development approval.

(D) Unit Affordability Requirements.

(1) Term of Restrictions. Affordable ownership and rental units shall be subject to the requirements of this chapter for the life of the unit.

(2) Sales Price. The maximum allowable sales price for affordable housing units created pursuant to subsection (B)(1) of this section shall be limited to be affordable to moderate income households, unless otherwise required to be affordable to lower income or very low income households in order for the project to qualify for bonus zoning density pursuant to Chapter 17.12 SCCC and/or public funding programs. For affordable units in the Regional Housing Need R Combining District, the enhanced affordable units shall have a maximum allowable sales price limited to be affordable to enhanced moderate income households unless otherwise required to be affordable at a lower income level. The County shall establish maximum allowable affordable unit sales prices pursuant to the pricing guidelines in the affordable housing guidelines adopted by the Board of Supervisors.

(3) Rental Price. The maximum allowable rental price for affordable housing units created pursuant to subsection (B)(1) of this section shall be limited to be affordable to lower income households unless otherwise required to be affordable to very low income households in order for the project to qualify for bonus zoning density pursuant to Chapter 17.12 SCCC and/or public funding programs. For affordable units in the Regional Housing Need R Combining District, the enhanced affordable units shall have a maximum allowable rental price that shall be affordable to enhanced low income households unless otherwise required to be affordable at a lower income level. The County shall establish maximum allowable affordable unit rental prices pursuant to the pricing guidelines in the affordable housing guidelines adopted by the Board of Supervisors.

(4) Unit Occupancy. For units developed pursuant to subsection (B)(1) of this section, the income and assets of owner-occupant households shall not exceed the limits for a moderate income household, and for tenant households shall not exceed the limits for a lower income household, unless more stringent limits are required in order for the project to qualify for bonus zoning density pursuant to Chapter 17.12 SCCC and/or public funding programs. For enhanced affordable units (subsection (B)(6) of this section), the income and assets of owner-occupant households shall not exceed the limits for an enhanced moderate income household, and for tenant households, shall not exceed the limits for an enhanced low income household, unless more stringent limits are required by funding sources. The County shall establish maximum allowable household income and asset levels in the affordable housing guidelines adopted by the Board of Supervisors. Sales and rental contracts for affordable units shall not be enforceable, and sale and occupancy of units shall not be allowed until the purchasing and/or occupying household is certified by the County as meeting the established income and asset limits.

(E) Development Permit and Tentative Map Procedures.

(1) Development Application. All appropriate maps and other materials submitted with an application for approval of a residential development permit and/or tentative map for a project subject to the affordable housing requirements of this chapter shall explicitly identify those residential units and/or residential parcels within the project sufficient to satisfy the project’s affordable housing requirements, and shall also indicate the affordable housing option(s) pursuant to subsections (B) and (C) of this section that the developer will utilize to fulfill the requirements of this chapter. The identification of affordable units and/or parcels within the project shall be provided to ensure compliance with the requirement of this chapter regardless of which of the affordable housing options is approved by the approving body.

(2) Development Conditions. The conditions of approval of a residential development permit and/or tentative map shall indicate how the development will meet the inclusionary housing requirements of this chapter. Those projects that will include construction of affordable units on site shall identify residential units and/or residential parcels within the project adequate to satisfy the project’s affordable housing requirements. Such identification of affordable units shall be provided to ensure compliance with the requirement of this chapter.

(F) Participation Agreement Procedures. Prior to the recording of the final subdivision map or the issuance of any building permits for residential units within the project, whichever event occurs first, an affordable housing program participation agreement shall be signed by the Planning Director, or his or her designee, on behalf of the County and by the owners of the property having authorization to encumber the property and by any existing holder of trust deeds on the property. The participation agreement shall be binding on the heirs, assigns and successors in interest of the property owner, and shall be recorded in the official records of Santa Cruz County. The participation agreement shall include, at the minimum, the following provisions:

(1) Binding of the Project Site. The participation agreement shall contain the affordable housing requirements established for the project pursuant to this chapter and shall encumber the entire property on which the project is to be developed with the obligation to fulfill such affordable housing requirements.

(2) Lien on Designated Parcels. The participation agreement shall create an enforceable lien on each of the affordable parcels designated in the conditions of project approval, or alternately on every parcel in a project where the in-lieu fee option is chosen, to allow for collection of an in-lieu fee pursuant to SCCC 17.10.034 regardless of the option selected to satisfy the affordable housing requirement for the project. This lien is intended to allow for collection of such in-lieu fee(s) if needed to enforce compliance with the requirements of this chapter and shall be released by the County upon fulfillment of the affordable housing obligations pursuant to this chapter.

(3) Selection of Affordable Housing Option. The participation agreement shall designate the option selected by the applicant for satisfying the affordable housing requirements of this chapter. The project developer may subsequently change the designated option for satisfying the project’s affordable housing obligations through an amendment approved by the approving body upon a written finding that all applicable requirements for the option selected shall be met. In approving an amendment, the approving body may impose reasonable conditions upon the applicant to ensure compliance with the provisions of this chapter. In the event of such an amendment, a new participation agreement shall be executed and recorded in accordance with the requirements of this section to reflect the new option selected.

(4) Project Covenants, Conditions and Restrictions. The participation agreement shall include a provision prohibiting any amendments to a project’s covenants, conditions and restrictions that would increase the proportion of the homeowners’ association assessment payable by any affordable housing unit, and shall create a right of judicial enforcement of this requirement by the County and/or the owner of any affected affordable unit exclusively in favor of the owner of each affordable unit in the development.

(5) Enforcement. The participation agreement shall include a provision providing for the payment by the owner to the County of a reasonable rental value of an affordable unit from the date of any unauthorized occupation, and for the recovery by the County of reasonable attorney fees and costs required to pursue legal action to enforce the agreement.

(G) Rental Housing Projects. A rental housing project of five or more new dwelling units is a residential development subject to the inclusionary housing requirements of this chapter, and, notwithstanding any other provision of this code, shall satisfy the affordable housing obligations required by this chapter as follows:

(1) The affordable housing obligation shall be calculated by multiplying the number of new dwelling units by the affordable housing percentage for the type of project, as specified in subsections (B)(1) through (B)(5) of this section.

(2) For a rental housing project of seven new dwelling units or more, where such calculation results in a fractional number, the number of units shall be determined by rounding down to the nearest whole number.

(3) A rental housing project shall not be subject to an inclusionary housing in-lieu fee.

(4) An alternative option authorized by subsection (C) of this section may not be used to satisfy an inclusionary housing obligation for a rental housing project.

(5) If a rental housing project is later converted to an ownership housing project, it shall be subject to any applicable inclusionary housing fees in effect at that time. [Ord. 4879 §§ 2, 3, 4, 2007; Ord. 4876 § 2, 2007; Ord. 4843 § 2, 2006; Ord. 4817 § 3, 2006; Ord. 4783 § 4, 2005; Ord. 4767 § 4, 2004; Ord. 4764 § 4, 2004; Ord. 4662 § 2, 2002; Ord. 4509 § 2, 1998].

17.10.031 Inclusionary housing in-lieu fee for small residential projects.

This section is intended to provide a mechanism for small residential projects to contribute toward the development of affordable housing through payment of an in-lieu fee.

(A) Projects Subject to the Inclusionary Housing In-Lieu Fee for Small Residential Projects. The following residential development projects consisting of the construction of new dwelling units and/or the creation of new parcels intended for permanent residential occupancy shall be subject to the inclusionary housing in-lieu fee for small projects as set forth in this section:

(1) Residential Project at One Location. An application for a residential development at one location, whether to be constructed at one time or in phases, shall be subject to the inclusionary housing in-lieu fee for small residential projects imposed by this section if it will result in the creation of:

(a) Three or four new dwelling units;

(b) Parcels providing building sites for a total of three or four new dwelling units; or

(c) A combination of new dwelling units and parcels together providing for a total of three or four or more new dwelling units.

(2) Concurrent Adjacent Residential Projects. Applications for concurrent adjacent residential developments which together will result in the creation of three or four new dwelling units, parcels providing building sites for a total of three or four dwelling units, or a combination of new dwelling units and parcels together providing for a total of three or four new dwelling units, developed by applicants on adjacent properties either at one time or in phases shall be subject to the requirements of this section. For purposes of this subsection, “adjacent properties” shall include all adjacent parcels of land owned or controlled by the applicants, the property lines of which are contiguous at any point, or the property lines of which are separated only by a public or private street, road, or other public or private right-of-way, or separated only by the lands owned or controlled by the applicants; and “concurrent” applications shall include all applications which have been submitted and are concurrently being processed for action by the County. If the property ownership and application for one project contain no parties in whole or part, or their spouses, who are also a party to the property ownership and application of the concurrent adjacent development, the concurrent applications may be granted an exception to the inclusionary housing in-lieu fee for small residential projects imposed by this section upon a showing satisfactory to the decision-making body that neither project receives direct financial benefit by virtue of the concurrent adjacent development.

(3) Sequential Adjacent Residential Projects. Applications by the same owner or applicant for sequential adjacent residential developments which together will result in the creation of three or four new dwelling units, parcels providing building sites for a total of three or four new dwelling units, or a combination of new dwelling units and parcels together providing for a total of three or four new dwelling units, developed on the same or adjacent properties either at one time or in phases shall be subject to the inclusionary housing in-lieu fee for small residential projects imposed by this section. For purposes of this subsection, “same owner or applicant” shall include any person who participates in the development as a full or partial owner or applicant, or a spouse of such person; “adjacent properties” shall include all adjacent parcels of land owned or controlled by the owner and/or applicant, the property lines of which are contiguous at any point, or the property lines of which are separated only by a public or private street, road, or other public or private right-of-way, or separated only by the lands owned or controlled by the owner and/or applicant; and “sequential” projects shall include all projects for which applications have been submitted to the County within a period of 10 years.

(B) Payment of Inclusionary Housing In-Lieu Fee for Small Residential Projects. Those projects identified in subsection (A) of this section and not identified in SCCC 17.10.030(A) shall pay the inclusionary housing in-lieu fee for small residential projects to the County for each new unit or new parcel in the project. Payment of this fee shall be a condition of project approval for the land division and associated development permits and also a condition of building permit issuance.

(1) Exemptions. For a project of three or four new units, two of the new units shall be exempt from this fee requirement.

(C) Lien on Designated Parcels. Prior to the recording of the final parcel map creating the new parcels, an agreement creating an enforceable lien in the applicable fee amount on the third and fourth parcels in the project shall be executed and recorded in the official records of Santa Cruz County. This agreement shall be signed by the owners of the property and any existing holders of trust deeds on the property, and by the Planning Director or his/her designee on behalf of the County, and shall be binding on all heirs, assigns and successors in interest of the property owner. The agreement shall require the following provisions:

(1) Payment of the inclusionary housing in-lieu fee for small residential projects for each parcel prior to issuance of a building permit or transfer of ownership, whichever occurs first.

(2) Payment of the fee at the rate in effect at time of payment as shown in the then current affordable housing guidelines and/or unified fee schedule.

(3) The County shall record a release of this lien for each subject parcel upon receipt of fee payment for the respective parcel.

Alternatively, the project developer may opt to pay this fee for the subject parcel(s) prior to recordation of the final parcel map rather than record the agreement specified above.

(D) Fee Rate. The inclusionary housing in-lieu for small residential projects shall be that amount set forth in the affordable housing guidelines that is in effect on the date of the fee payment. The fee may be adjusted as deemed necessary by the Board of Supervisors as described in subsection (E) of this section.

(E) Adjustment of In-Lieu Fee for Small Residential Projects. The inclusionary housing in-lieu fee for small residential projects shall be shown in the affordable housing guidelines and shall be a part of the County’s unified fee schedule. At the time of the biannual review of the unified fee schedule, the rate for the inclusionary housing in-lieu fee for small residential projects may be reviewed and may be adjusted at that time.

(F) Measure J Trust Fund. All inclusionary housing in-lieu fees for small residential projects and accrued interest received pursuant to this section shall be deposited into a trust fund known as the Measure J trust fund, maintained by the County. The trust funds shall be expended at the discretion of the County Board of Supervisors for the purposes of developing or preserving affordable housing units in the County. [Ord. 4662 § 3, 2002].

17.10.032 Development of on-site affordable dwelling units.

(A) Affordable Unit Standards. Except as otherwise defined in SCCC 13.10.477(B)(3) for projects in the Regional Housing Need R Combining District, affordable dwelling units may include reduced interior amenities compared to the market rate units; provided, that the affordable units comply with all requirements in the affordable housing guidelines as well as the following standards:

(1) Unit Location. The affordable dwelling units shall be distributed throughout the development project. This distribution requirement may only be waived by the decision-making body upon a finding that such distribution is infeasible for one or more of the following reasons:

(a) Significant topographic or other constraints exist rendering such distribution infeasible; or

(b) Substantially improved site design will result from such waiver; or

(d) Significant economic hardship that does not apply to other projects in the County will result from such distribution.

(2) Parcel Size. The parcels on which the affordable units are located shall be no smaller than the smallest parcel on which market rate units in the project are to be located.

(3) Bedroom Count. The average bedroom count in the affordable units shall not be less than the average bedroom count in the market rate units in the project. Affordable units located in projects in the Regional Housing Need R Combining District shall be allowed to average 0.5 of a bedroom less than the average number of bedrooms in the market rate units.

(4) Exterior Design. The exterior design of the affordable units shall be consistent with the market rate units in the development based on exterior design details, materials and number of stories, with no significant identifiable differences between the units visible from the street. In addition, the size of affordable units shall be reasonably consistent with the rest of the project, with an affordable unit size not less than 75 percent of the average size of market rate units, except that all affordable units in the Regional Housing Need R Combining District shall not be less than 70 percent of the average size of the market rate units, unless a smaller unit size is allowed by the decision-making body at the time of project approval and with the written findings that a smaller size will provide adequate and decent affordable housing, the affordable units will provide housing units compatible with the remainder of the development, and that a larger unit size would impose a financial hardship on the project developer. In no case shall an affordable unit size be less than the minimum specified by the affordable housing guidelines.

(B) Timing of Completion. Affordable units shall be made available for occupancy either prior to or concurrently with the date that the market rate units in a project are made available for occupancy, and in the same ratio as the affordable unit requirement which is applicable to the project. For example, for a project with a 25 percent affordable housing requirement, at least one affordable unit shall receive final building permit inspection clearances concurrently with or prior to the final clearance of every third market rate unit constructed in the project until all of the affordable housing units required in the project have been constructed. For a project with a 15 percent affordable housing requirement, at least one affordable unit shall receive final building permit inspection clearances concurrently with or prior to the final clearance of every sixth market rate unit constructed in the project until all of the affordable housing units required in the project have been constructed. In no case shall the last market rate unit in the project receive final building permit inspection clearances until the last affordable unit in the project has received final building permit clearance.

(C) Recording of Declaration of Restrictions. Prior to the issuance of a building permit for an affordable dwelling unit, the property owner having authority to encumber the property and any existing holders of trust deeds on the property shall sign an affordable housing program declaration of restrictions which subjects the affordable unit to the requirements of this chapter and the County’s affordable housing guidelines, both as amended from time to time, including the specific ownership and occupancy restrictions established for the units pursuant to SCCC 17.10.030(D). The declaration of restrictions shall be permanently binding on the heirs, assigns and successors in interest of the property owner, and shall be recorded in the official records of Santa Cruz County. [Ord. 4879 § 5, 2007; Ord. 4662 § 4, 2002; Ord. 4509 § 2, 1998].

17.10.034 Affordable housing in-lieu fee.

(A) Fee Authorization. An in-lieu fee may be paid for each affordable unit required pursuant to SCCC 17.10.030(B) in place of constructing the affordable housing within the project. If the in-lieu fee option is designated in the recorded participation agreement for the project, the participation agreement shall create a lien on each dwelling unit or parcel in that portion of the development generating the affordable housing requirement in order to provide for payment of the in-lieu fee pursuant to this section.

(B) In-Lieu Calculation. The fee is keyed to the average price of the ultimate market rate units or lots developed, and is structured to provide developers with an alternative way to meet their affordable housing obligation. The amount of an affordable housing in-lieu fee shall be determined based on the average sales price of the market rate dwelling units and/or parcels in a project sold to bona fide purchasers for value according to the then current affordable housing fee schedule, shown in Section 13 of the affordable housing guidelines and/or in the County’s unified fee schedule in effect at the time of fee payment.

(C) Fee Payment Process. A proportionate part of the in-lieu fee shall be paid out of the sales escrow for the sale to a bona fide purchaser for value of each dwelling unit or parcel in the project for which the fee requirement was established. For example, for a five-unit project with a 15 percent affordable housing requirement resulting in an obligation to provide one affordable unit, a partial in-lieu fee shall be paid out of the sales escrow for each of the units sold in the amount of one-fifth of the in-lieu fee based on the sales price of each unit. All in-lieu fee payments shall be nonrefundable once they have been received by the County.

(D) Release of Project Encumbrances. Concurrent with the partial payment of an in-lieu fee from the sale of each unit in a project, the County shall record a release of the affordable housing encumbrances imposed on that unit through the recorded participation agreement.

(E) Measure J Trust Fund. All affordable housing in-lieu fees and accrued interest received pursuant to this chapter shall be deposited into a separate trust fund, known as the Measure J trust fund, maintained by the County. The trust funds shall be expended at the discretion of the County Board of Supervisors for the purposes of developing or preserving affordable housing units in the County.

(F) Annual Adjustment of In-Lieu Fee. The in-lieu fee is determined by the affordable housing fee schedule, which shall be a part of the County’s unified fee schedule. At the time of the biannual review of the unified fee schedule, the in-lieu fee shall be reviewed. The review shall utilize the latest real estate data regarding the sales prices of lots and homes in Santa Cruz County and the current affordable unit prices. If determined to be necessary by the Board of Supervisors, the affordable housing fee schedule shall be adjusted at that time and updated in the new unified fee schedule. [Ord. 4662 § 5, 2002; Ord. 4599 § 1, 2000; Ord. 4509 § 2, 1998].

17.10.035 Affordable housing requirements and incentives for land division.

Repealed by Ord. 4509. [Ord. 4081, 1990].

17.10.036 Development of off-site affordable units by affordable housing partnerships.

(A) A developer of a market rate project may meet the project’s affordable housing obligation off-site in an affordable housing development undertaken in partnership with a nonprofit developer when approved by the Board of Supervisors based on the following findings:

(1) The off-site affordable housing project receiving a financial contribution from the market rate developer contains more than the number of affordable units which would otherwise have been required for the combined projects (beyond the 15 percent affordable housing requirement), or an equal number of affordable units required by both projects but at a greater level of affordability;

(2) Based on a review of the financial and legal agreements between the market rate developer and the non-profit partner, the County has determined that the market rate developer is providing reasonable financial and other support to the affordable housing project in exchange for being allowed to satisfy the developer’s affordable housing obligation;

(3) The affordable housing partnership either owns, has an option to purchase, or otherwise has the right to build on the property on which the off-site affordable housing project will be developed;

(4) The site for the off-site affordable housing project has in place the proper zoning and general plan designation for the proposed off-site project and the developer’s application initiating the land use review process has been deemed complete;

(5) The nonprofit affordable housing developer has obtained full legal commitments for all necessary financing for the project or the County has approved a plan for the financing of the project;

(6) The affordable housing project can reasonably be expected to be constructed and occupied within two years of completion of the associated market rate project; and

(7) The average number of bedrooms per unit in the non-profit affordable housing project is equivalent to the average number of bedrooms per unit of the market rate project for that portion of the affordable housing project receiving the financial contribution from the market rate developer; or the nonprofit affordable housing project is designed to serve a special segment of affordable housing which would not require an equivalent number of bedrooms per unit.

(B) The financial contributions of the market rate developer to the affordable housing partnership shall be held in trust by the County for distribution to the non-profit housing developer at such time as other financing has been obtained and the project is ready for construction. In the event the affordable housing project is not constructed within a two-year period of the completion of the market rate project, or if the County otherwise determines that the affordable project is not likely to ever be constructed, the County may transfer such funds to be irrevocably deposited in the in-lieu fee trust fund established pursuant to SCCC 17.10.034(E).

(C) More than one market rate developer may participate in an off-site housing partnership with the same affordable housing development as long as all the findings of this section are made for each market rate development. [Ord. 4509 § 2, 1998].

17.10.037 Existing unit conversion program and Measure J trust fund.

(A) Existing Unit Conversion Program. As an alternative to constructing an affordable unit pursuant to SCCC 17.10.032, a developer of a project with an obligation for a whole unit or units of affordable housing may participate in the existing unit conversion program. This program allows developers to satisfy their inclusionary housing requirement through the purchase and sale of existing housing units as affordable units pursuant to the following requirements and the applicable sections of the affordable housing guidelines:

(1) The use of this option shall be approved by the approving body as a part of the original development permit.

(2) Developers shall convert at least two existing units for each inclusionary unit that would otherwise be required to be built.

(3) The units shall be located in the same planning area as the market rate development.

(4) Recording of Declaration of Restrictions. The execution and recording of the standard affordable housing declaration of restrictions shall be required of the purchasing household as a condition of sale. The purchasers of the converted units having authority to encumber the property and any existing holders of trust deeds on the property shall sign an affordable housing program declaration of restrictions which subjects the affordable unit to the requirements of this chapter and the County’s affordable housing guidelines, both as amended from time to time, including the specific ownership and occupancy restrictions established for the units pursuant to SCCC 17.10.030(D). The declaration of restrictions shall be permanently binding on all heirs, assigns and successors in interest of the property owner, and shall be recorded in the official records of Santa Cruz County.

(5) Timing of Completion. Converted units shall be made available for occupancy either prior to or concurrently with the date that the market rate units in a project are made available for occupancy, and in the same ratio as the affordable unit requirement which is applicable to the project. For example, for a project with a 15 percent affordable housing requirement, at least two converted units shall be transferred to eligible purchasers concurrently with or prior to the final clearance of every sixth market rate unit constructed in the project until all of the converted units required by the project have been sold. For a project with a 20 percent affordable housing requirement, at least two converted units shall be transferred to eligible purchasers concurrently with or prior to the final clearance of every fourth market rate unit constructed in the project until all of the converted units required by the project have been constructed. In no case shall the last market rate unit in the project receive final building permit inspection clearances until the last converted unit in the project has been sold to an eligible purchaser.

(B) Measure J Trust Fund. A trust fund shall be established and shall be known as the Measure J trust fund. The trust funds shall be expended at the discretion of the County Board of Supervisors for the purposes of developing or preserving affordable housing units, or for other activities which increase the affordable housing stock in the County. All fractional amounts of the affordable housing obligation and accrued interest received pursuant to this chapter shall be deposited into a trust fund known as the Measure J trust fund, to be maintained by the County. The amount of the contribution to this fund from applicable development shall be the fractional amount of the inclusionary housing unit obligation as determined by SCCC 17.10.030(B) and shall be based on the affordable unit fee schedule, as adopted and amended by the Board of Supervisors as part of the unified fee schedule.

(1) Fee Payment Process. A proportionate part of the fractional unit fee shall be paid out of the sales escrow for the sale to a bona fide purchaser for value of each market rate dwelling unit or parcel in the project for which the fee requirement was established. For example, for a five-unit project with a 15 percent affordable housing requirement resulting in an obligation to provide 0.75 affordable units, a partial fee shall be paid out of the sales escrow for each of the units sold in the amount of one-fifth of the fractional fee based on the applicable fee rate shown in Section 13 of the then-current affordable housing guidelines. All fractional fee payments shall be nonrefundable once they have been received by the County.

(2) Release of Project Encumbrances. Concurrent with the partial payment of a fractional fee from the sale of each unit in a project, the County shall record a release of the affordable housing encumbrances imposed on that unit through the recorded participation agreement.

(3) Annual Adjustment of Fee Schedule. At the time of the annual update of the income and rent indices in the affordable housing guidelines, the affordable unit fee schedule shall be reviewed and may be adjusted by the administering agency. [Ord. 4662 § 6, 2002].

17.10.038 Dedication of residential parcels.

Repealed by Ord. 4662. [Ord. 4509 § 2, 1998].

17.10.040 Priority processing.

Applications for approval of tentative maps and residential development permits which meet the requirements below shall qualify for priority processing by the County, which provides that once an application is certified by the Planning Department as complete and eligible for such processing, the project will be immediately assigned to staff for processing in advance of all nonpriority applications including scheduling for environmental review (if required) and subsequent scheduling for public hearing and final action by the Planning Commission and/or Board of Supervisors. The following residential development projects consisting of either the construction of residential units and/or the creation of residential parcels shall be eligible for priority processing:

(A) Standard Density Projects. Projects which are developed within the standard density limits of the applicable zone districts, and in which 25 percent or more of the project units are affordable to moderate, lower or very low income households, shall be entitled to priority processing of the discretionary permits required for the development.

(B) Bonus Density Projects. Projects that are developed with bonus density and include the construction of affordable dwelling units equivalent in number to a minimum of 35 percent of the total number of new dwelling units and new undeveloped residential building sites in the project before the density bonus is applied shall be entitled to priority processing of the discretionary permits required for the development. [Ord. 4817 § 4, 2006; Ord. 4509 § 2, 1998].

17.10.050 Investor-owner (rental) unit requirements.

Affordable units may be marketed as investor-owner rental units, subject to the following requirements:

(A) Developers of projects in which affordable units are built pursuant to the requirements of this chapter may retain all or a portion of the units as investor-owners to be rented to eligible renters in accordance with this section.

(B) Investor-owners may purchase affordable units either individually or in groups of units within a project for subsequent rental to eligible renters in accordance with this section. The sale of units to investor-owners shall be in accordance with SCCC 17.10.070 and with the provisions of the affordable housing guidelines, except that investor-owners need not be of average or below-average income. Units sold to investor-owners must be subsequently rented to program eligible individuals per the requirements of said guidelines.

(C) Except as otherwise provided in this subsection, affordable ownership units may be converted to affordable investor-owner (rental) units. The owner shall file a notice of intent to rent with the administering agency prior to offering a unit for rent and shall be bound by the requirements of this section and the affordable housing guidelines. The owner shall also record an amended declaration of restrictions stating that the unit is a rental unit as defined and governed by this chapter and the affordable housing guidelines. Notwithstanding the foregoing, an owner of an affordable unit who is determined by the administering agency to have rented the unit for rents in excess of the amounts permitted under this chapter shall only be eligible to convert the unit to a rental unit if the owner, within 30 days after receipt of notice from the administering agency, cures the violation by paying to the administering agency the amount of the excess rents collected by the owner, and by recording an amended declaration of restrictions stating that the unit is a rental unit as defined and governed by this chapter and the affordable housing guidelines. If the owner fails to cure the violation within the 30-day period, the owner shall submit to the administering agency a written irrevocable offer to sell the unit to the County in a form approved by the administering agency for a price not in excess of the maximum sales price set in accordance with the resale price provisions of the affordable housing guidelines, and subject to all the other resale price provisions of the guidelines, including the provisions for an inspection and for owner responsibility for certain repairs.

(D) All affordable rental units shall be rented either:

(1) To households participating in the Housing Authority of the County of Santa Cruz Section 8 housing assistance program;

(2) To any households earning below average income;

(3) To households participating in programs such as the (a) HUD Section 8 new construction program, (b) the California Housing Finance Agency multiple-family lending program, or (c) other programs whereby projects receive direct Federal or State assistance to make units affordable to below average income households.

(E) Developers of projects not receiving direct Federal or State assistance shall prepare and submit to the administering agency a certification of the availability of the affordable rental unit prior to final inspection of the project by the County. In the event of a subsequent vacancy, the owner shall notify, using a notice of intent to rent, the administering agency that the unit is available for rental pursuant to this chapter. The units shall be rented to households certified by the administering agency as meeting the requirements of the affordable housing guidelines of the affordable housing program established by Board of Supervisors resolution as required by SCCC 17.10.080. The owner shall have discretion in the selection of eligible renters; provided, that except for the amount of rent to be charged pursuant to this chapter, the same rental terms and conditions are applied to tenants of affordable units as to all other tenants, and no other or additional fees are charged.

(F) All households renting affordable rental units shall be offered leases of at least 12 months in duration. The rent stipulated in this lease shall not be higher than the maximum allowed by the affordable housing guidelines in effect when the lease is signed. The owner of an affordable rental unit shall notify the tenants 120 days prior to the termination of the restrictions of this chapter, or the conversion of the unit to an affordable ownership unit and that this termination or conversion may mean that rents will be increased or the unit sold.

(G) The owner may convert an affordable rental unit to an affordable ownership unit by notifying the administering agency, in writing, of his intent to sell. The sales price shall be set at the level allowed under the affordable housing guidelines in effect at the time of the sale. [Ord. 4755 § 3, 2004; Ord. 4425 § 4, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 6, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3234 § 3, 1982; Ord. 3002, 1980].

17.10.060 Owner-builder unit requirements.

(A) An owner-builder who meets the eligibility criteria established by the affordable housing guidelines shall be eligible to obtain an affordable housing building permit.

(B) Only one owner-builder building permit shall be issued under this section to any single applicant and such a building permit shall not be transferable. No parcel for which a building permit is issued under this section shall be eligible for minor land division or subdivision during the term of the resale restrictions imposed by this chapter.

(C) The owner-builder unit shall be considered an ownership unit. [Ord. 4755 § 4, 2004; Ord. 4425 § 5, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 7, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3002, 1980].

17.10.070 Ownership unit requirements.

(A) The owner of an affordable ownership unit, on its sale or resale, shall sell the unit to an average or below average income household for a price mutually agreed upon by the buyer and seller; provided, that this price is not in excess of the maximum sales price set according to the provisions contained in the affordable housing guidelines.

(B) Prior to offering a unit for sale, the owner shall send a written notice of intent to sell to the administering agency.

The administering agency will then notify the owner of the current maximum sales price. Prior to the close of the sale, the owner shall notify the administering agency of the proposed sale price and the administering agency shall review the proposed sale to assure conformance with this chapter and with the affordable housing guidelines.

(C) Upon the sale of an affordable housing unit, the purchaser shall be required to enter into a new affordable housing declaration of restrictions which incorporates all current policies contained within the affordable housing ordinance and affordable housing guidelines.

(D) Closing costs and title insurance shall be paid pursuant to the custom and practice in the County of Santa Cruz at the time of opening of escrow. No charges or fees shall be imposed by the seller on the purchaser of an affordable unit which are in addition to or more than charges imposed upon purchasers of market rate units, except for administrative fees charged by the administering agency established in the affordable housing guidelines.

(E) The purchaser of an ownership affordable unit shall verify in a form acceptable to the County that the unit is being purchased for the purchaser’s primary place of residence, and that if this unit ceases to function as his or her primary residence, it will either be sold according to the requirements of this chapter or rented to an eligible below average income household as certified by the administering agency in accordance with the requirements of SCCC 17.10.050(C) and (D).

(F) The following transfers of title or any interest therein shall not be treated as a sale or resale under the provisions of this section; provided, however, that the affordable housing restrictions shall continue to run with the title to said unit following such transfers:

(1) Transfers by gift, devise or inheritance to the purchaser-owner’s spouse or children; or

(2) Transfers of title to a spouse as part of a divorce or dissolution proceeding; or

(3) Acquisition of title or interest therein in conjunction with marriage; or

(4) Acquisition of the unit by an employer pursuant to an employer sponsored relocation program, and subsequent sale by the employer to an eligible purchaser or the County. In order for this exception to be applied, a new affordable housing declaration of restrictions shall be recorded, both when the employer acquires the unit and when the unit is sold to an eligible purchaser. No rental of the unit is permitted pursuant to this exception.

(G) The Board of Supervisors may provide, by resolution for a shared equity option, to allow the builder and purchasers of affordable ownership units to share in the ownership of such units. [Ord. 4755 § 5, 2004; Ord. 4425 § 6, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 8, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3234 § 4, 1982; Ord. 3002, 1980].

17.10.075 Lease-purchase unit requirements.

Affordable units may be marketed on a lease-purchase basis, subject to the following requirements:

(A) Affordable lease-purchase units shall be subject to all provisions of this chapter governing rental units while being leased and governing ownership units at the time the purchase option is exercised, except as otherwise provided in this section.

(B) No lease-purchaser shall be eligible to participate in occupying or owning a lease-purchase unit unless such participant, prior to either occupation or ownership, is determined by the administering agency to meet the requirements of the affordable housing guidelines for ownership units.

(C) Rental payments for lease of a lease-purchase unit may exceed the amount set forth in the affordable housing guidelines; provided, however, that the amount by which such rent exceeds said rent schedule amount shall be credited to the purchaser’s payment of the purchase price. If the purchase option is not exercised, said amount shall be refunded immediately by the lessor-seller to the lease-purchaser.

(D) The entire amount of any advance payment to the lessor-seller as prepayment of rent, cleaning or security deposit, or other substantially equivalent payment, shall be credited to the purchaser’s payment of the purchase price. If the purchase option is not exercised, said amount shall be subject to State law governing same.

(E) Each and every lease-purchase agreement for a lease-purchase unit shall provide that the maximum term of said lease shall not exceed 12 months. If, at the end of the 12-month period, lessee-purchaser does not exercise the purchase option on a lease-purchase unit, said unit must be sold according to the regulations in this chapter and the affordable housing guidelines.

(F) Escrow proceedings for lease-purchase units shall not exceed the 12-month option period by more than an additional 60 days.

(G) If a lessee-purchaser does not exercise the purchase option on a lease-purchase unit and does not involuntarily vacate the premises, the lessor-seller shall, without cost to the County, immediately proceed to require the lease-purchaser to vacate said unit, including by appropriate legal action, if necessary. If, in the sole discretion of the County, the County determines that the lessor-seller is not reasonably performing said obligation, the County may commence appropriate legal action to require the lease-purchaser to vacate said unit. The lessor-seller shall execute all documents necessary or convenient for this purpose and shall be liable for the costs (including staff and court), expenses, and attorney’s fees so incurred by the County.

(H) The maximum sales price at the time of exercise of the purchase option shall be the amount in effect at the time the lease-purchase agreement is entered into. [Ord. 4755 § 6, 2004; Ord. 4425 § 7, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 9, 1986; Ord. 3666 § 1, 1985].

17.10.080 Eligibility for rent or purchase.

(A) The County shall establish, by resolution, income requirements for average or below average income households; asset requirements for purchasers or renters of affordable units; and formulas for establishing maximum housing unit monthly rents and maximum sales prices. In establishing levels of very low, below average (lower) and average (moderate) household income, the County shall consider median household income and household size. The County may adopt additional administrative guidelines as necessary to provide for additional eligibility criteria, or to assure the affordability of units.

(B) The administering agency shall review the assets and income of prospective purchasers and renters of affordable units and shall inform them of the requirements of this program. [Ord. 4425 § 8, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 10, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3002, 1980].

17.10.090 Default, foreclosure, and loss of the unit.

(A) In the event a notice of default is recorded on a completed habitable single-family dwelling, townhouse, or condominium unit, which has been designated as an affordable unit pursuant to the provisions of this chapter, the County, or an eligible purchaser approved by the administering agency, shall have the option to purchase the unit following the recording of the notice of default, and the failure of the owner to cure the default within the statutory reinstatement period (i.e., the period commencing with the date of recordation of the notice of default until five business days prior to the date of sale set forth in the recorded notice of sale. The purchase price for the defaulted unit shall be the amount that the owner would have received on the date of the foreclosure sale under the resale price provisions of the affordable housing guidelines. In addition, all of the other resale price provisions of the guidelines shall apply including the provisions for an inspection of the premises and for owner responsibility for certain repairs. The eligible purchaser, approved by the administering agency, or the County may exercise the option to purchase by paying any amounts due to holders of liens, including but not limited to encumbrance(s), taxes and assessments; and paying to the owner any balance of the funds remaining after payment of the costs of sale and any costs of repairs chargeable to the owner. The administering agency is authorized to act on behalf of the County to exercise and complete options to purchase under this section.

(B) In the event the County or an approved eligible purchaser does not exercise an option to purchase the completed single-family dwelling, townhouse, or condominium unit prior to the trustee’s sale or judicial foreclosure, the unit shall be free from the restrictions of this chapter, and the owner shall be deemed in compliance with the provisions of this chapter with the exception of the provisions of subsection (C) of this section. Single-family units which have not been completed for occupancy and multiple-family apartments shall not be released from the restrictions of this chapter through a trustee’s sale or judicial foreclosure.

(C) In the event of the occurrence of any of the circumstances described in subsection (C)(1) of this section, any surplus proceeds remaining after payment of encumbrances on the unit shall be distributed as directed in subsection (C)(2) of this section.

(1) This subsection shall apply to any affordable unit which is:

(a) Sold at a trustee’s sale or judicial foreclosure; or

(b) Destroyed and insurance proceeds are distributed to grantee instead of being used to rebuild; or

(c) Condemned and the proceeds thereof are distributed to owner, or in the event of termination, the proceeds thereof are distributed to owner; or

(d) A condominium or townhouse unit and there is a liquidation of the association and distribution of the assets of the association to the members thereof, including the owner;

(2) Surplus proceeds from an affordable unit subject to this subsection shall be distributed as follows:

(a) To the owner up to, but not to exceed, the net amount (after the payment of encumbrances, costs of sale, and any cost of repairs chargeable to the owner) that the owner would have received under the resale price provisions of the affordable housing guidelines had the County been able to exercise its option to purchase the unit on the date of the foreclosure sale, destruction, condemnation, evaluation, or liquidation.

(b) The balance of such surplus shall be distributed to the County and shall be held in the Measure J trust fund.

(D) In the event that the unit is destroyed, or condemned, or the condominium association is liquidated, and the proceeds are utilized for the purpose of rebuilding, the unit constructed shall be bound by the terms of this chapter for the remaining term of the resale restrictions.

(E) The owner of an affordable unit shall not use this property as collateral for an amount exceeding the maximum unit sales price allowed in the affordable housing guidelines unless specifically allowed in writing by the County. [Ord. 4755 § 7, 2004; Ord. 4425 § 9, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 11, 1986; Ord. 3502 § 1, 1984; Ord. 3357 § 1, 1983; Ord. 3329 § 1, 1982; Ord. 3234 § 5, 1982; Ord. 3002, 1980].

17.10.100 Conflict of interest.

Following are those individuals who, by virtue of their position or relationship, are found to be ineligible to purchase or rent an affordable unit as their residence:

(A) All employees and officials of the County of Santa Cruz or the Housing Authority of the County of Santa Cruz by the authority of their position, policy-making authority or influence affecting County housing programs.

(B) The developer or owner of the affordable unit to be purchased or rented.

(C) The immediate relatives, employees, and anyone gaining significant economic benefit from a direct business association with public employees, officials, developers, or owners who are not eligible to purchase or rent an inclusionary unit.

(D) The provisions of this section shall not apply to special purpose projects or owner-builder units. [Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 11, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3002, 1980].

17.10.105 Violations.

(A) It shall be unlawful and a violation of this chapter for the developer or owner of an affordable housing unit or any employee or agent of such developer or owner to sell or rent an affordable unit to anyone who has not first been qualified as eligible by the administering agency.

(B) It shall be unlawful and a violation of this chapter for the developer or owner of an affordable unit or any employee or agent of such developer or owner to sell or rent an affordable unit to any person who has a conflict of interest as defined in SCCC 17.10.100.

(C) It shall be unlawful and a violation of this chapter for the developer or owner of an affordable unit or any employee or agent of such developer or owner to sell an affordable unit for an amount which exceeds the maximum selling price or to rent an affordable unit for an amount which exceeds the maximum rent prescribed for the affordable unit under this chapter; and it shall be further unlawful and a violation of this chapter for any such person to solicit, require or accept in connection with the sale or rental of an affordable unit any payment or other contribution of cash, property, or services, from a purchaser or renter, the value of which when added to the purchase price or rent paid for an affordable unit would exceed the maximum selling price or maximum rent prescribed for the affordable unit under this chapter.

(D) It shall be unlawful and a violation of this chapter for any person to wilfully and knowingly make a false statement or representation, or knowingly fail to disclose a material fact, for the purpose of qualifying as eligible to purchase or rent an affordable unit under this chapter or to obtain an owner-builder building permit. [Ord. 4425 § 10, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 11, 1986; Ord. 3502 § 1, 1984].

17.10.110 Enforcement.

(A) The provisions of this chapter shall apply to all agents, successors and assigns of an applicant. No building permit or occupancy permit shall be issued, nor any development approval be granted which does not meet the requirements of this chapter. The County shall suspend or revoke any building permit or development approval upon finding a violation of any provision of this chapter.

(B) In addition to the provisions of subsection (A), (C), (D) or (E) of this section, the tenant(s), upon giving written notice to the administering agency, may file a civil action to recover from the owner the amount of any excess rents and utilities charged in excess of those allowed by the provisions of this chapter and the affordable housing guidelines, if the tenant met the income eligibility requirements of this chapter and the affordable housing guidelines, during the period of time for which the tenant seeks reimbursement of the excess rents and utilities.

(C) Any person, firm, or corporation, whether as principal, agent, employee or otherwise, violating or causing the violation of any of the provisions of this chapter, shall be guilty of a misdemeanor, and upon conviction thereof shall be punishable for each offense by a fine of not more than $500.00 or by imprisonment in the County jail for a term not exceeding six months, or by both fine and imprisonment. Such person, firm, or corporation shall be deemed to be guilty of a separate offense for each and every day during any portion of which any violation of this chapter is commenced, continued, or permitted by such person, firm, or corporation, and shall be punishable as herein provided.

(D) The County may institute injunction, mandamus, or any appropriate legal actions or proceedings for the enforcement of this chapter; however, if the affordable unit is a multiple-family apartment, the County shall not institute a foreclosure action.

(E) In addition to any other available remedy, if it is determined that rents and utilities in excess of those allowed by operation of the ordinance codified in this chapter and the affordable housing guidelines have been charged to a tenant residing in an affordable housing rental unit, the landlord shall be liable for a civil penalty in the amount of $2,500, and any excess rent and utilities not recovered by a tenant under subsection (B) of this section. If the County does not otherwise recover its reasonable attorney’s fees and other legal costs from the landlord, the County shall deduct its reasonable attorney fees and other legal costs from the amounts collected pursuant to this section and deposit the balance into the Measure J trust fund. [Ord. 5043 § 1, 2009; Ord. 4755 § 8, 2004; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 11, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3002, 1980].

17.10.120 Appeals.

(A) Any applicant or other person whose interests are adversely affected by any determination in regard to the requirements of this chapter may appeal in accordance with the provisions of SCCC 18.10.320, governing appeal of Level III staff approvals. The appeal shall set forth specifically wherein the action taken fails to conform to the provisions of this chapter.

(B) Any person aggrieved by any action involving denial, suspension or revocation of a building or occupancy permit or denial, suspension or revocation of any development approval, or any other action involving the provisions of this chapter may appeal such action or determination in accordance with the provisions of SCCC 18.10.310. [Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 11, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3002, 1980].

17.10.130 Annual report and administration.

(A) The administering agency shall prepare an annual report to the Board of Supervisors on the status of the affordable units constructed under the provisions of this chapter. The report shall include the number, size, type, tenure, and general location of the affordable units as well as the number of resales and rental vacancy rate. The report shall provide a basis for an evaluation of the overall effectiveness of this chapter.

(B) In addition to any other powers or duties heretofore prescribed for the administering agency, the administering agency shall have the following powers and duties:

(1) To monitor compliance with the provisions of this chapter and to refer to the Board of Supervisors for appropriate action any person violating the provisions of this chapter.

(2) To provide for the administration of this chapter and to make recommendations to the Board of Supervisors regarding program changes. [Ord. 4425 § 11, 1996; Ord. 4081, 1990; Ord. 3881 § 1, 1987; Ord. 3802 § 11, 1986; Ord. 3502 § 1, 1984; Ord. 3329 § 1, 1982; Ord. 3002, 1980].