Chapter 15.58
AFFORDABLE HOUSING INCENTIVES1

Sections:

15.58.010    Affordable housing incentives.

15.58.010 Affordable housing incentives.

A. Purpose. This chapter is intended to provide incentives for the production of housing for very low, lower, and moderate income, or senior households in accordance with California Government Code Sections 65915 and 65917, as amended or superseded. In enacting these provisions, it is the intent of the city to facilitate the development of affordable housing and to implement the goals, objectives, and policies of the city’s housing element.

B. Definitions. See Chapter 15.94 AVMC for definitions of such terms as “affordable unit,” “density bonus units” and “maximum residential density.”

C. Eligibility for Bonus and Incentives. To be eligible for a density bonus and other incentives as provided by this chapter, a proposed residential development project shall:

1. Consist of five or more dwelling units; and

2. Include one or more of the following within the development:

a. Ten percent of the total dwelling units reserved for lower income households, as defined in California Health and Safety Code Section 50079.5; or

b. Five percent of the total dwelling units reserved for very low income households, as defined in California Health and Safety Code Section 50105; or

c. A senior citizen housing development as defined in California Civil Code Sections 51.3 and 51.12, or mobile-home park that limits residency based on age requirements for housing for older persons pursuant to California Civil Code Sections 798.76 or 799.5; or

d. Ten percent of the total dwelling units in a common interest development as defined in California Civil Code Section 1351 for persons and families of moderate income, as defined in California Health and Safety Code Section 50093; provided, that all units in the development are offered to the public for purchase.

D. Types of Bonuses and Incentives Allowed. A residential development project that satisfies all relevant provisions of this chapter shall be entitled to a density bonus and one or more incentives described below. If the density bonus units cannot be accommodated on a parcel due to strict compliance with the provisions of this title, the city council shall waive or modify development standards to accommodate the density bonus units and/or grant the incentives to which the development would be entitled pursuant to this chapter, unless such waiver, modification or incentive would have a specific adverse impact, as defined herein, upon health, safety, or the physical environment, and for which there is no feasible method to mitigate or avoid the specific adverse impact.

1. Minimum Density Bonus. The minimum density bonus granted to a residential development project that is eligible for a density bonus pursuant to this chapter shall be equal to at least:

a. A 20 percent increase in density, when the development meets the requirements of subsection (C)(2)(a), (b) or (c) of this section;

b. A five percent increase in density, when the development meets the requirements of subsection (C)(2)(d) of this section;

c. A 15 percent increase in density, when an applicant for a residential development project donates land to the city in accordance with the requirements of California Government Code Section 65915(g)(1) and (2) of sufficient acreage to permit construction of units affordable to very low income households equal to at least 10 percent of the total dwelling units. Nothing in this chapter shall be construed to enlarge or diminish the authority of the city to require a developer to donate land as a condition of development; or

d. The city may, in its discretion, grant a density bonus that is greater than that described in subsections (D)(1)(a) through (c) of this section for a development that meets the requirements therein or proportionately lower than that described in subsections (D)(1)(a) through (c) of this section for a development that does not meet the requirements therein.

2. Additional Density Bonus. A residential development project that satisfies all relevant provisions of this chapter and that includes affordable housing units in excess of the base percentage established in subsection (C)(2) of this section shall be entitled to an additional density bonus and one or more incentives described below. The amount of density bonus to which an applicant is entitled shall vary according to the amount by which the percentage of affordable housing units exceeds the base percentage established in subsection (C)(2) of this section. The amount of density bonus for a donation of land shall vary according to the amount by which the donation exceeds the base donation established by California Government Code Section 65915(g).

a. Lower Income Households. For each one percent increase above 10 percent in the percentage of units affordable to lower income households, the density bonus shall be increased by one and one-half percent.

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

c. Moderate Income Households. For each one percent increase above 10 percent in the percentage of units affordable to moderate income households in a condominium project or a planned development, the density bonus shall increase by one percent.

d. Donation of Land. The density bonus shall be increased by one percent for each one percent increase in the donation of land above the minimum 10 percent requirement of subsection (D)(1)(c) of this section. Nothing in this chapter shall be construed to enlarge or diminish the authority of the city to require a developer to donate land as a condition of development.

3. The density bonus units shall not be included when determining the total number of dwelling units in the residential development project. All calculations resulting in fractional units shall be rounded up to the next whole number. In no event shall the city be required to grant more than a 35 percent increase over the otherwise maximum allowable residential density under the applicable provisions of this code and the land use element of the city’s general plan. The density bonus percentages available pursuant to the requirements of this chapter are shown in the following table:

Table 15.58.010

Density Bonus Percentages 

 

Qualifying Percentage (of total units)

Minimum Density Bonus (above maximum allowable density)

Increase in Density Bonus (for each 1% over qualifying percentage)

Lower

10%

20%

1.5%

Very Low

5%

20%

2.5%

Moderate

10%

5%

1%

Senior Citizen

n/a

20%

n/a

Donation

10%

15%

1%

4. Incentives – Number. An eligible residential development project shall receive one, two or three of the incentives described in subsection (D)(5) of this section, as follows:

a. Lower Income Households. An applicant shall receive:

i. One incentive is for a residential development project in which at least 10 percent of the total dwelling units are reserved for lower income households;

ii. Two incentives for a residential development project in which at least 20 percent of the total dwelling units are reserved for lower income households; and

iii. Three incentives for a residential development project in which at least 30 percent of the total dwelling units are reserved for lower income households.

b. Very Low Income Households. An applicant shall receive:

i. One incentive for a residential development project in which at least five percent of the total dwelling units are reserved for very low income households;

ii. Two incentives for a residential development project in which at least 10 percent of the total dwelling units are reserved for very low income households; and

iii. Three incentives for a residential development project in which at least 15 percent of the total dwelling units are reserved for very low income households.

c. Moderate Income Households. An applicant shall receive:

i. One incentive for a residential development project in which at least 10 percent of the total dwelling units are reserved for persons and families of moderate income in a condominium project or a planned development;

ii. Two incentives for a residential development project in which at least 20 percent of the total dwelling units are reserved for persons and families of moderate income in a condominium project or a planned development; and

iii. Three incentives for a residential development project in which at least 30 percent of the total dwelling units are reserved for persons and families of moderate income in a condominium project or a planned development.

5. Incentives – Description. A residential development project that is eligible to receive incentives pursuant to subsection (D)(4) of this section shall be entitled to the following incentives in the number specified in subsection (D)(4) of this section:

a. A reduction in the applicable development standards (e.g., coverage, setback, zero lot line and/or reduced parcel sizes, and/or parking requirements).

b. Approval of mixed use zoning in conjunction with the housing project if nonresidential land uses would reduce the cost of the housing project, and the nonresidential land uses would be compatible with the housing project and adjoining development.

c. Other regulatory incentives or concessions proposed by the applicant or the city that would result in identifiable cost reductions.

6. Nothing in this chapter shall be construed to require the city to provide, or limit the city’s ability to provide, direct financial incentives for housing developments, including the provision of publicly owned land by the city or the waiver of fees and dedication requirements.

7. Limitations and Exceptions.

a. In order to receive incentives as described in subsections (D)(4) and (5) of this section, an applicant must submit a proposal to the city requesting the specific incentives that the applicant desires.

b. The city shall grant the incentives requested by the applicant pursuant to subsection (D)(7)(a) of this section and required pursuant to subsection (D)(4) of this section, unless the city makes a written finding, based upon substantial evidence, of any of the following:

i. The incentive is not required in order to provide for affordable housing costs, as defined in California Health and Safety Code Sections 50052.5 and 50053; or

ii. The incentive would have a specific adverse impact upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low and moderate income households. As used in this subsection, a “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 the application was deemed complete. Inconsistency with the zoning ordinance or general plan land use designation shall not constitute a specific, adverse impact upon the public health or safety.

iii. The incentive would be contrary to state or federal law.

c. The city’s granting of an incentive shall not be interpreted, in and of itself, to require a general plan amendment, zoning change, or other discretionary approval.

d. Nothing in this chapter shall be interpreted to require the city to waive or reduce development standards or to grant an incentive that would have a specific adverse impact upon health, safety or the physical environment for which there is no feasible method to mitigate or avoid the specific adverse impact; nor shall this subsection require the city to waive or reduce development standards or to grant an incentive that would have an adverse impact on any real property that is listed in the California Register of Historical Resources.

e. The affordable units shall be generally dispersed throughout the residential development project and shall not differ in appearance from the other dwelling units in the project.

E. Continued Affordability – Equity Sharing.

1. Before the issuance of a building permit for any dwelling unit in a development for which density bonus units have been awarded or incentives have been granted pursuant to this chapter, the developer shall identify the affordable units and shall enter into a written covenant with the city to guarantee one or both of the following, as applicable:

a. Low and very low income households: The low and very low income units that qualified the applicant for the development incentive shall continue to be offered and available at an affordable housing cost, as defined in California Health and Safety Code Sections 50052.5 and 50053, for a minimum of 30 years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. The 30-year restriction shall renew upon sale or transfer of the units.

b. Moderate income households: The initial occupant of any moderate income unit in a common interest development shall be a person or family of moderate income. The moderate income unit shall be offered at an affordable housing cost, as defined in California Health and Safety Code Sections 50052.5 and 50053. An equity-sharing agreement will be required indicating that upon resale, the seller of the unit shall retain the value of any improvements, the down payment, and the seller’s proportionate share of appreciation. Upon resale, the city shall recapture any initial subsidy and its proportionate share of appreciation. The city’s initial subsidy shall be equal to the fair market value of the home at the time of initial sale minus the initial sale price to the moderate-income household, plus the amount of any down payment assistance or mortgage assistance. If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value. The city’s proportionate share of appreciation shall be equal to the ratio of the local government’s initial subsidy to the fair market value of the home at the time of initial sale. The city shall spend such recaptured funds within five years for the construction, rehabilitation, or preservation of affordable housing for extremely low, very low, low and moderate income persons or families, as described in California Health and Safety Code Section 33334.2(e).

c. The terms and conditions of the covenant required by subsection (E)(1)(a) of this section and the equity-sharing agreement required by subsection (E)(1)(b) of this section shall run with the land which is to be developed, shall be binding upon the successor(s)-in-interest of the developer, and shall be recorded in the county recorder’s office. In addition to the requirements described in subsections (E)(1)(a) and (b) of this section, the covenant or agreement shall include the following provisions:

i. The city shall have a continuing right of first refusal to purchase or lease any or all of the affordable units at the current fair market value;

ii. The deeds to the affordable units shall contain a covenant stating that the owner shall not sell, rent, lease, sublet, assign, or otherwise transfer any interests for same without the written approval of the city confirming that the sell or rental price of the unit is consistent with the limits established by this chapter for lower, very low and moderate income persons and families; and

iii. The city shall have the authority to enter into other agreements with the developer or purchasers of the affordable units, as may be necessary to ensure that the lower, very low, and moderate-income units are continuously occupied by persons or families of lower and very low income.

F. Child Care Facilities.

1. When an applicant proposes to construct a residential development project described in subsection (C) of this section that includes a child care facility located on the premises of, as part of, or adjacent to the project, the city shall grant either of the following:

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.

b. An additional incentive that contributes significantly to the economic feasibility of the construction of the child care facility.

2. The city shall require, as a condition of approving the residential development project, that the following occur:

a. The child care facility shall remain in operation 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 subsection (E) of this section.

b. Of the children who attend the child care facility, the children of very low, lower and moderate income households shall equal a percentage that is equal to or greater than the percentage of dwelling units that are required for very low, lower or moderate income households pursuant to subsection (C)(2) of this section.

3. Notwithstanding subsections (F)(1) and (2) of this section, the city shall not be required to provide a density bonus or incentive for a child care facility if it finds, based upon substantial evidence, that the community has adequate child care facilities.

G. Processing of Bonus Request.

1. Application Required. Residential development projects that include a request for a density bonus and/or incentive pursuant to this chapter shall require the submission of a density bonus application, which shall be approved by the city council.

2. Initial Review of the Density Bonus Request. The director shall notify the applicant within 90 days of the filing of a density bonus application whether the residential development qualifies for the density bonus and incentives described in this chapter.

3. Application Contents. The applicant for a density bonus and/or incentive shall include the following information in an application:

a. The applicant is seeking a density bonus based on the requirements of subsection (C).

b. An election stating that the requested bonus is based on subsection (C)(2)(a), (b), (c), or (d), and a description of the specific density bonuses that the applicant is requesting.

c. Whether the proposed housing development includes a child care facility located on the premises of, as part of, or adjacent to the project.

d. The applicant agrees to the affordability requirements set forth in subsection (E).

e. If applicable, the applicant is also seeking incentives as described in subsections (D)(4) and (5), and a description of the specific incentives that the applicant is requesting.

4. Meeting. The applicant may also request a meeting with the director or his or her designee to discuss the density bonus application.

5. Approving Authority. The city council shall be the approving body of the density bonus and/or incentive, as provided in this chapter.

H. Vehicular Parking Ratio. Parking shall be provided in accordance with AVMC 15.38.030, Spaces required for residential uses. [Ord. 2013-154 §§ 1 – 5; Ord. 2010-126 § 1 (Exh. A); Ord. 2010-123 § 3 (Exh. A)].


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Cross-references: residential development standards, AVMC 15.10.030; supplemental residential regulations, Chapter 15.14 AVMC; affordable housing in residential condominium conversions, AVMC 15.54.100.