Chapter 23.50
DENSITY BONUS AND OTHER DEVELOPER INCENTIVES

Sections:

23.50.010    Purpose.

23.50.020    Eligibility for density bonus and incentives and concessions.

23.50.030    General provisions for density bonus and incentives and concessions.

23.50.040    Number and types of density bonuses and incentives and concessions allowed.

23.50.050    Location of density bonus units.

23.50.060    Continued availability.

23.50.070    Process for approval or denial.

23.50.010 Purpose.

The purpose of this chapter is to provide incentives for the production of housing for very low-income, lower-income, moderate-income, special needs, and senior households in the City and to establish procedures for carrying out the legislative requirements and complying with Section 65915 et seq. of the California Government Code. In enacting this chapter, it is the intent of the City to facilitate the development of affordable housing by positively impacting the economic feasibility of providing lower-income housing and implementing the goals, objectives, and policies of the City’s housing element. [Ord. 23-2014 §3 (Exh. A), eff. 10-10-2014]

23.50.020 Eligibility for density bonus and incentives and concessions.

The City shall grant one (1) density bonus, with concessions or incentives, as specified in EGMC Section 23.50.040 (Number and types of density bonuses and incentives and concessions allowed), when the applicant for a residential development seeks and agrees to construct a residential development, excluding any units permitted by the density bonus awarded pursuant to this chapter, that shall contain at least one (1) of the following. The units qualifying a development for a density bonus shall be referred to as “target units.” The applicant shall specify which of the following is the basis for the density bonus:

A. Ten (10%) percent of the total units of a housing development are for lower-income households;

B. Five (5%) percent of the total units of a housing development are for very low-income households;

C. A senior citizen housing development as defined in Sections 51.3 and 51.12 of the California Civil Code, or age-restricted mobile home park; or

D. Ten (10%) percent of the total dwelling units are in a common interest development as defined in Section 4100 of the California Civil Code for persons and families of moderate income; provided, that all units in the development are offered to the public for purchase. [Ord. 23-2014 §3 (Exh. A), eff. 10-10-2014]

23.50.030 General provisions for density bonus and incentives and concessions.

The following general requirements apply to the application and determination of all incentives and bonuses:

A. Rounding. All density calculations resulting in fractional units shall be rounded up to the next whole number; except that the percentage of total units proposed to qualify the development for a density bonus shall not be rounded up. For example, for a two hundred (200) unit project that proposes twenty-one (21) lower-income units (or ten and one-half (10.5%) percent), the allowed density bonus would be based on ten (10%) percent lower-income units, not eleven (11%) percent.

B. Relation to General Plan, Zoning. The granting of a density bonus, or a concession or incentive, shall not be interpreted, in and of itself, to require a General Plan amendment, zoning change (rezone), or other discretionary approval.

C. Density Bonus Excluded in Calculation. The density bonus shall not be included when calculating the total number of housing units that qualify the housing development for a density bonus.

D. Parking. Upon request by the applicant, the City shall not require that a housing development meeting the requirements of EGMC Section 23.50.020 (Eligibility for density bonus and incentives and concessions) provide a vehicular parking ratio, inclusive of handicapped and guest parking that exceeds the following. If the total of parking spaces required for a housing development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subsection, a development may provide “on-site parking” through tandem parking or uncovered parking, but not through on-street parking.

1. Zero (0) (studio) to one (1) bedroom: one (1) on-site parking space per unit;

2. Two (2) to three (3) bedrooms: two (2) on-site parking spaces per unit;

3. Four (4) or more bedrooms: two and one-half (2.5) parking spaces per unit.

E. Waived or Reduced Development Standards. The City shall not apply any development standard that would have the effect of physically precluding the construction of a housing development meeting the requirements of EGMC Section 23.50.020 (Eligibility for density bonus and incentives and concessions) at the densities or with the incentives or concessions permitted by this chapter. A proposed waiver or reduction of development standards shall neither reduce nor increase the number of allowable incentives or concessions under EGMC Section 23.50.040 (Number and types of density bonuses and incentives and concessions allowed).

An applicant may submit to the City a proposal for the waiver or reduction of development standards, when standards would have the effect of physically precluding the proposed development, and may request a meeting with the City. Nothing in this subsection, however, shall be interpreted to require the City to waive or reduce development standards if:

1. The waiver or reduction would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5 of the California Government Code, upon health and safety or the physical environment and for which the City determines 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;

2. This would have an adverse impact on any real property that is listed in the California Register of Historical Resources; or

3. The waiver or reduction would be contrary to State or Federal law.

F. Multiple Zoning Districts. If the site of a development proposal is located in two (2) or more zoning districts, the number of dwelling units permitted in the development is the sum of the dwelling units permitted in each of the zoning districts respectively. The permitted number of dwelling units may be distributed within the development without regard to the zone boundaries.

G. City Authority. 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.

H. Agreement Required.

1. Prior to the award of a density bonus and any related incentives or concessions, the applicant shall enter into an agreement with the City to ensure the continued affordability of all target units.

2. For all target units, the agreement shall specify the household income classification, number, location, size, and construction scheduling and shall require target units in a project and phases of a project to be constructed concurrently with the construction of nontarget units. The agreement shall include such other provisions as necessary to establish compliance with the requirements of this chapter.

I. Reports. The applicant shall submit financial or other reports along with the application for the project to establish compliance with this chapter. The City may retain a consultant to review any financial report (pro forma). The cost of the consultant shall be borne by the applicant, except that if the applicant is a nonprofit organization, the cost of the consultant may be paid by the City upon prior approval of the City Council.

J. CEQA Review. Any residential development that qualifies for a density bonus shall not be exempt from compliance with the California Environmental Quality Act. [Ord. 23-2014 §3 (Exh. A), eff. 10-10-2014]

23.50.040 Number and types of density bonuses and incentives and concessions allowed.

A. Density Bonus. A housing development that satisfies the eligibility requirements in EGMC Section 23.50.020 (Eligibility for density bonus and incentives and concessions) shall be entitled to the following density bonus:

1. For developments providing ten (10%) percent lower-income target units, the City shall provide a twenty (20%) percent increase above the otherwise maximum allowable residential density as of the date of application, plus a one-and-one-half (1.5%) percent supplemental increase over that base for every one (1%) percent increase in low-income target units above ten (10%) percent. The maximum density bonus allowed including supplemental increases is thirty-five (35%) percent.

2. For developments providing five (5%) percent very low-income target units, the City shall provide a twenty (20%) percent increase above the otherwise maximum allowable residential density as of the date of application, plus a two-and-one-half (2.5%) percent supplemental increase over that base for every one (1%) percent increase in very low-income target units above five (5%) percent. The maximum density bonus allowed including supplemental increases is thirty-five (35%) percent.

3. For senior citizen housing developments, a flat twenty (20%) percent of the number of senior units.

4. For common interest developments providing ten (10%) percent moderate-income target units, the City shall provide a five (5%) percent increase above the otherwise maximum allowable residential density as of the date of application, plus a one (1%) percent increase in moderate-income units above ten (10%) percent. The maximum density bonus allowed including supplemental increases is thirty-five (35%) percent.

B. Number of Incentives or Concessions. In addition to the density bonus described in this section, an applicant may request specific incentives or concessions. The applicant shall receive the following number of incentives or concessions.

1. One (1) incentive or concession for projects that include at least ten (10%) percent of the total units for lower-income households, at least five (5%) percent for very low-income households, or at least ten (10%) percent for persons and families of moderate income in a common interest development.

2. Two (2) incentives or concessions for projects that include at least twenty (20%) percent of the total units for lower-income households, at least ten (10%) percent for very low-income households, or at least twenty (20%) percent for persons and families of moderate income in a common interest development.

3. Three (3) incentives or concessions for projects that include at least thirty (30%) percent of the total units for lower-income households, at least fifteen (15%) percent for very low-income households, or at least thirty (30%) percent for persons and families of moderate income in a common interest development.

C. Available Incentives and Concessions. The following are available incentives or concessions:

1. A reduction in the site development standards or a modification of the requirements of this title that exceed the minimum building standards approved by the California Building Standards Commission as provided in Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code, including but not limited to a reduction in setback and square footage requirements and in the ratio of vehicle parking spaces that would otherwise be required and that results in identifiable, financially sufficient, and actual cost reductions.

2. Approval of mixed-use zoning in conjunction with the housing development if the nonresidential land uses will reduce the cost of the housing development and the nonresidential land uses are compatible with the housing development and existing or planned development in the area in which the housing development will be located.

3. Other regulatory incentives or concessions proposed by the applicant or the City that result in identifiable, financially sufficient, and actual cost reductions.

4. Priority processing of a housing development that qualifies for a density bonus based on income-restricted units.

D. Additional Density Bonus and Incentives and Concessions for Donation of Land to the City.

1. When an applicant for a tentative subdivision map, parcel map, or other residential development approval donates land to the City (other than that land typically dedicated as part of a subdivision, such as roadways/rights-of-way, parks, utility sites and easements, landscape corridors, and similar land) and agrees to include a minimum of ten (10%) percent of the total units before the density bonus for very low-income households, the applicant shall be entitled to a fifteen (15%) percent increase above the otherwise maximum allowable residential density, plus a one (1%) percent supplemental increase for each additional percentage of very low-income units to a maximum density bonus of thirty-five (35%) percent for the entire development.

2. The density bonus provided in this subsection shall be in addition to any other density bonus provided by this chapter up to a maximum combined density bonus of thirty-five (35%) percent.

3. The applicant shall be eligible for the increased density bonus described in this subsection if all of the following conditions are met:

a. The applicant donates and transfers the land no later than the date of approval of the final subdivision map, parcel map, or residential development application;

b. The developable acreage and zoning designation of the land being transferred are sufficient to permit construction of units affordable to very low-income households in an amount not less than ten (10%) percent of the number of residential units of the proposed development;

c. The transferred land is at least one (1) acre in size or of sufficient size to permit development of at least forty (40) units, has the appropriate General Plan designation, is appropriately zoned with appropriate development standards for development at the density described in paragraph (3) of subdivision (c) of Section 65583.2 of the Government Code, and is or will be served by adequate public facilities and infrastructure;

d. The transferred land shall have all of the entitlements and approvals, other than building permits, necessary for the development of the very low-income housing units on the transferred land, not later than the date of approval of the final subdivision map, parcel map, or residential development application, except that the City may subject the proposed development to subsequent design review to the extent authorized by subdivision (i) of Section 65583.2 of the Government Code if the design is not reviewed by the City prior to the time of transfer;

e. The transferred land and the affordable units shall be subject to a deed restriction ensuring continued affordability of the units consistent with the requirements of this chapter which shall be recorded on the property at the time of the transfer;

f. The land is transferred to the City or to a housing developer approved by the City;

g. The transferred land shall be within the boundary of the proposed development or, if the City agrees, within one-quarter (1/4) mile of the boundary of the proposed development; and

h. A proposed source of funding for the very low-income units shall be identified not later than the date of approval of the final subdivision map, parcel map, or residential development application.

4. Nothing in this subsection shall be construed to enlarge or diminish the authority of the City to require a developer to donate land as a condition of development.

E. Additional Density Bonus or Incentives and Concessions for Development of Child Care Facility.

1. Housing developments meeting the requirements of EGMC Section 23.50.020 (Eligibility for density bonus and incentives and concessions) and including a child care facility that will be located on the premises of, as part of, or adjacent to the housing development shall receive 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 or concession that contributes significantly to the economic feasibility of the construction of the child care facility.

2. The City shall require the following as conditions of approving the housing development:

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 target units are required to remain affordable, pursuant to subdivision (c) of Section 65915 of the Government Code; and

b. Of the children who attend the child care facility, the children of very low-income households, lower-income households, or moderate income households shall equal a percentage that is equal to or greater than the percentage of target units that are required pursuant to EGMC Section 23.50.020 (Eligibility for density bonus and incentives and concessions).

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

F. Condominium Conversion Incentives for Low-Income Housing Development.

1. When an applicant for approval to convert apartments to a condominium project agrees to the following, the City shall grant either a density bonus of twenty-five (25%) percent over the number of apartments, to be provided within the existing structure or structures proposed for conversion, or provide other incentives of equivalent financial value. In either case, the applicant shall agree to pay for the reasonably necessary administrative costs incurred by the City.

a. Provide at least thirty-three (33%) percent of the total units of the proposed condominium project to persons and families of low or moderate income; or

b. Provide at least fifteen (15%) percent of the total units of the proposed condominium project to lower-income households.

2. An applicant for approval to convert apartments to a condominium project may submit to the City a preliminary proposal pursuant to this subsection prior to the submittal of any formal requests for subdivision map approvals. The City shall, within ninety (90) days of receipt of a written proposal, notify the applicant in writing of the manner in which it will comply with this subsection.

3. For purposes of this subsection, “other incentives of equivalent financial value” shall not be construed to require the City to provide cash transfer payments or other monetary compensation but may include the reduction or waiver of requirements which the City might otherwise apply as conditions of conversion approval.

4. Nothing in this subsection shall be construed to require the City to approve a proposal to convert apartments to condominiums.

5. An applicant shall be ineligible for a density bonus or other incentives under this subsection if the apartments proposed for conversion constitute a housing development for which a density bonus or other incentive was previously provided. [Ord. 23-2014 §3 (Exh. A), eff. 10-10-2014]

23.50.050 Location of density bonus units.

The location of density bonus units within the housing development may be at the discretion of the developer. However, the target units shall be dispersed throughout the housing development and when feasible shall contain, on average, the same number of bedrooms as the nontarget units in the development, and shall be compatible with the design or use of the remaining units in terms of appearance, materials, and quality finish. [Ord. 23-2014 §3 (Exh. A), eff. 10-10-2014]

23.50.060 Continued availability.

A. Minimum Thirty (30) Years. If a housing development provides low- or very low-income target units to qualify for a density bonus, the target units must remain restricted to lower- or very low-income households for a minimum of thirty (30) years from the date of issuance of the certificate of occupancy by the building official, or longer if required by the project financing.

B. Common Interest Housing. In the case of a common interest housing development providing moderate-income target units to qualify for a density bonus, the initial occupant of the target unit must be a person or family of moderate income. Upon resale, the seller of the target units shall retain the value of any improvements, the down payment, and the seller’s proportionate share of appreciation, and the City shall recapture any initial subsidy and its proportionate share of appreciation which shall then be used within three (3) years for any of the purposes described in subdivision (e) of Section 33334.2 of the California Health and Safety Code that promote homeownership. 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” shall be equal to the percentage by which the initial sale price to the moderate-income household was less than the fair market value of the home at the time of the initial sale.

C. Direct Financial Contributions. Where there is a direct financial contribution to a housing development pursuant to Section 65915 of the Government Code, the City shall assure continued availability for low- and moderate-income units for thirty (30) years. [Ord. 23-2014 §3 (Exh. A), eff. 10-10-2014]

23.50.070 Process for approval or denial.

A. Process for Approval. The density bonus and incentive(s) and concession(s) request shall be considered in conjunction with any necessary development entitlements for the project. The designated approving authority for density bonuses, incentives, and concessions shall be the City Council. In approving the density bonus and any related incentives or concessions, the City and applicant shall enter into a density bonus agreement.

B. Approval of Density Bonus Required. The City shall grant the density bonus requested by the applicant provided it is consistent with the requirements of this chapter and State law.

C. Approval of Incentives or Concessions Required Unless Findings Made. The City shall grant the incentive(s) and concession(s) requested by the applicant unless the City makes a written finding, based upon substantial evidence, of any of the following:

1. The concession or incentive is not required in order to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c).

2. The concession or incentive would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5 of the California Government Code, 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.

3. The concession or incentive would be contrary to State or Federal law.

D. Administrative Fee. The City shall charge applicants an administrative fee to cover the City’s cost to review all materials submitted in accordance with this chapter and for ongoing enforcement of this chapter. The amount of the administrative fee shall be established by City Council resolution and updated as required. Fees will be charged for staff time and materials associated with:

1. Review and approval of applications for the proposed development;

2. Project marketing and lease-up; and

3. Long-term compliance of the applicant and successors-in-interest to the applicant, with respect to the affordable housing units. [Ord. 23-2014 §3 (Exh. A), eff. 10-10-2014]