Chapter 16.50
INCLUSIONARY HOUSING1
Sections:
16.50.030 Inclusionary units or fee required.
16.50.040 Number of inclusionary units.
16.50.060 Credit for additional affordable units.
16.50.070 Inclusionary unit standards.
16.50.080 Inclusionary housing agreement.
16.50.120 Inclusionary housing fund.
16.50.130 Administrative fees.
16.50.140 Taking determination.
16.50.160 Repealed.
16.50.010 Purpose.
The purpose of this chapter is to facilitate the development and availability of housing affordable to a broad range of households with varying income levels within the city. It is intended in part to implement state policy that declares that local governments have a responsibility to exercise their powers to facilitate the development of housing to adequately provide for the housing needs of all economic segments of the community, as stated in Government Code Section 65580. It is also intended to implement the housing element of the general plan, which calls for the adoption of an inclusionary housing program to require either production of affordable housing at moderate, low, and very low income levels or payment of in-lieu fees where applicable toward affordable housing development. (Ord. 306 § 2, 2006)
16.50.020 Definitions.
The definitions contained in Chapter 16.06 HMC shall apply to the provisions of this chapter. (Ord. 306 § 2, 2006)
16.50.030 Inclusionary units or fee required.
A. Requirement. All residential development projects shall either include the number of inclusionary units required under HMC 16.50.040 or, if applicable, pay the in-lieu fee required under HMC 16.50.050. No application for a rezoning, tentative map, parcel map, conditional use permit, design review, or building permit for a residential development project shall be approved, nor shall any such residential development project be constructed, without compliance with this chapter.
B. Exemptions. This chapter shall not apply to the reconstruction of any dwelling units that were destroyed by fire, flood, earthquake or other act of nature. (Ord. 306 § 2, 2006)
16.50.040 Number of inclusionary units.
A. Fifteen percent of all newly constructed dwelling units in residential developments projects shall be developed, offered to and sold or rented to very low, low and moderate income households, at affordable housing costs, as follows:
1. If the residential development project consists of sale units, the inclusionary units shall be sold to low and moderate income households.
2. If the residential development consists of rental units, a minimum of 10 percent of all units shall be rented to very low income households; the remaining five percent shall be rented to low or moderate income households.
B. When the application of the percentages specified above results in a number that includes a fraction, the fraction shall be rounded up to the next whole number if the fraction is seven-tenths or more. If the result includes a fraction below seven-tenths, the developer shall have the option of rounding up to the next whole number and providing the inclusionary unit on-site, or paying a fee in lieu of providing an additional inclusionary unit. The in-lieu fee shall be calculated in accordance with HMC 16.50.050.
C. The developer may request that the project include inclusionary units that are targeted to a mix of income levels (moderate, low and very low) instead of just to one income level. The final decision regarding the mix of targeted income levels shall be made by the city council pursuant to this chapter and generally consistent with subsection A of this section.
D. The unit mix (i.e., the number of bedrooms per unit) of the inclusionary units shall be in the same proportion as the unit mix of the market-rate units. For example, if a project has 10 two-bedroom units and 20 one-bedroom units and is required to include three inclusionary units, then the inclusionary units must consist of one two-bedroom unit and two one-bedroom units. If only one inclusionary unit is required and the other units in the project have various numbers of bedrooms, the developer may select the number of bedrooms for that unit. If inclusionary units cannot mathematically be exactly proportioned in accordance with the market-rate units, the director pursuant to this chapter shall determine the unit mix.
E. Except as provided in this chapter, all inclusionary units shall be built on the same site as the remainder of the project.
F. If a proposed residential project would result in the demolition or elimination of existing dwelling units that have (or within the 12 months prior to submittal of the application had) rent levels affordable to very low income or low income households, and these dwelling units were built less than 30 years ago, the affordable dwelling units must be replaced on a one-for-one basis affordable to very low income or low income households. If the number of required inclusionary units is less than the number of low income units being eliminated, then developer shall either (1) include a number of inclusionary units affordable to very low income or low income households in an amount equal to the number of low income units being eliminated or (2) provide the number of inclusionary units required based upon project size (or pay the in-lieu fee if permitted by this chapter), and pay the low income per-unit in-lieu fee for each replacement unit over the inclusionary unit amount. (Ord. 306 § 2, 2006)
16.50.050 Alternatives.
A. In-Lieu Fee. At the discretion of the developer, payment of a fee in-lieu of all or some of the inclusionary units may be made as follows:
1. The amount of the fee shall be calculated using the fee schedule established by resolution of the city council.
2. The in-lieu fee shall be paid for all phases, if any, at the time of and as a condition of the issuance of a building permit for the residential development project.
3. The fees collected shall be deposited in the inclusionary housing fund.
B. Off-Site Units. Inclusionary units may be constructed off-site only upon a determination by the city that on-site construction is infeasible. If this option is chosen, then the off-site inclusionary units must be constructed prior to or concurrently with construction of the on-site project. The inclusionary unit size and count must meet the same requirements as if the inclusionary units were constructed on-site. No occupancy will be permitted for any corresponding market-rate unit prior to inclusionary unit construction completion or payment of required in-lieu fees.
C. Land Dedication. In lieu of building inclusionary units, the developer may dedicate to the city land within the city that the city determines is suitable for the construction of inclusionary units and is of equivalent or greater value than is produced by applying the city’s current in-lieu fee to the Inclusionary obligation. (Ord. 306 § 2, 2006)
16.50.060 Credit for additional affordable units.
If the developer completes construction of a greater number of inclusionary units in the project than required by this chapter, the additional units may be credited toward meeting the requirements of this chapter by a future project. Upon completion of the additional inclusionary units, the director shall issue a certificate of inclusionary unit credit documenting the credits. The developer may use the credits in a future project or transfer the credits in writing to another developer. Credits will only be counted toward required inclusionary units with the same bedroom count, the same tenure (rental or ownership), equivalent affordability targets, and in the same area of the city as determined by the director. The credits must be used within 10 years of issuance. Residential development projects which have obtained a density bonus or which are government-subsidized shall not be eligible for credits. (Ord. 306 § 2, 2006)
16.50.070 Inclusionary unit standards.
A. Design. Inclusionary units must be dispersed throughout a residential development project and be comparable in construction quality and exterior design to the market-rate units. The inclusionary units must have access to all on-site amenities.
B. Timing. All inclusionary units must be constructed and occupied concurrently with or prior to the construction and occupancy of market-rate units or development. In phased developments, inclusionary units shall be constructed and occupied in proportion to the number of units in each phase of the residential development project.
C. Terms of Affordability. Rental inclusionary units must remain affordable for 55 years, as documented through an affordable inclusionary housing agreement recorded against the property and executed by the ultimate owner of the property. Ownership inclusionary units must remain affordable for 45 years pursuant to an inclusionary housing agreement recorded against the property. (Ord. 306 § 2, 2006)
16.50.080 Inclusionary housing agreement.
A. Residential projects shall be approved only concurrently with the approval of an inclusionary housing agreement pursuant to HMC 16.50.030. This section shall not apply (1) if the developer of a residential development project chooses to pay an in-lieu fee; (2) if the city council approves the request of a developer to construct the inclusionary units off-site pursuant to HMC 16.50.050(B); or (3) if the city council approves the request of a developer to dedicate land pursuant to HMC 16.50.050(C).
B. Information in Application. Applications for residential development projects shall include the following information in addition to information otherwise required under this code.
1. The location, structure, proposed tenure (rental or ownership) and size of the proposed market rate and inclusionary units;
2. The calculations used to determine the number of required inclusionary units;
3. A floor plan or site plan depicting the location of the inclusionary units;
4. The income level targets for each inclusionary unit;
5. A statement that the developer, and eventually the homeowner, will accept the city’s mechanisms that will be used to assure that the inclusionary units remain affordable for the required term;
6. For phased developments, a phasing plan;
7. A description of any requested incentives as allowed in this chapter;
8. A marketing plan for the process by which qualified households will be reviewed and selected to either purchase or rent affordable units; and
9. Any other information requested by the community development director.
C. Approval. An inclusionary housing agreement in a form prepared by the city shall be executed prior to issuance of a building permit. The inclusionary housing agreement shall provide for the implementation of the requirements of this chapter. All inclusionary housing agreements must include, at a minimum, the following:
1. Description of the development including whether the inclusionary units be rented or owner-occupied;
2. The number, size and location of the inclusionary units, or any approved alternative;
3. Inclusionary housing incentives by the city (if any);
4. Provisions and/or documents for resale restrictions, deeds of trust, rights of first refusal or rental restrictions that shall be recorded against the property;
5. Provisions for monitoring the ongoing affordability or the inclusionary units, the process for marketing inclusionary units, and qualifying prospective residents’ households for eligibility; and
6. Deed restriction.
D. Incentives.
1. In approving an inclusionary housing agreement, the decision-making body, in its sole discretion, shall include one or more of the following incentives:
a. Unit Size Reduction. The size of the inclusionary units may be smaller than the market-rate units, consistent with all other provisions herein.
b. Interior Finishes. Inclusionary units that are “for sale” may have different interior and features than market-rate units so long as the interior and features are durable, of good quality and consistent with current state building code standard for new housing.
2. A developer may apply for a density bonus and other incentives if the project includes very low, low and/or senior housing units at levels beyond those required by this chapter to the extent permitted by Government Code Section 65915. (Ord. 306 § 2, 2006)
16.50.090 Adjustment.
The requirements of this chapter may be adjusted or waived if the developer demonstrates that applying this chapter would take property in violation of the United States and/or California Constitutions. The developer shall submit a request for an adjustment waiver together with the application and such additional information as may be required by the director to make a determination. (Ord. 306 § 2, 2006)
16.50.100 Enforcement.
A. The provisions of this chapter shall apply to all developers and their agents, successors and assigns proposing a residential development. All inclusionary units shall be rented or sold in accordance with this chapter and the regulations adopted pursuant to HMC 16.50.110.
B. Any individual who sells or rents an inclusionary unit in violation of the provisions of this chapter shall be required to forfeit all financial benefit obtained. Forfeited funds shall be deposited into the inclusionary housing trust fund.
C. The city may initiate any appropriate legal actions or proceedings necessary to ensure compliance with this chapter, including but not limited to: (1) actions to revoke, deny or suspend any permit, including a building permit, certificate of occupancy, or discretionary approval; and (2) actions for injunctive relief or damages.
D. In any action to enforce this chapter or inclusionary housing agreement recorded hereunder, the city shall be entitled to recover its reasonable attorneys’ fees and costs. (Ord. 306 § 2, 2006)
16.50.110 Regulations.
The city council shall by resolution establish regulations for the implementation of this chapter. (Ord. 306 § 2, 2006)
16.50.120 Inclusionary housing fund.
There is hereby established a separate fund of the city to be known as the inclusionary housing fund. All monies collected pursuant to this chapter shall be deposited in the inclusionary housing fund. (Ord. 306 § 2, 2006)
16.50.130 Administrative fees.
The city council may by resolution establish reasonable fees and deposits for the administration of this chapter. (Ord. 306 § 2, 2006)
16.50.140 Taking determination.
A. Commencing upon the approval or disapproval of the inclusionary housing plan by the director pursuant to the regulations, and within 15 days thereafter, a developer may request a determination that the requirements of this chapter, taken together with the inclusionary housing incentives, as applied to the residential development, would legally constitute a taking of property of the residential development without just compensation under the California or Federal Constitutions. The developer has the burden of providing economic information and other evidence necessary to establish that application of the provisions of this chapter to the residential development would constitute a taking of the property of the proposed residential development without just compensation. The director shall make the determination, which may be appealed in the manner and within the time set forth in this title, except the city council shall serve as the review body.
B. In making the taking recommendation or determination, the decision-maker shall assume each of the following:
1. Application of the inclusionary housing requirements to the residential development;
2. Application of the inclusionary housing incentives; and
3. Utilization of the most cost-efficient product type for the inclusionary units.
C. If it is determined that the application of the provisions of this chapter would constitute a taking, the inclusionary housing plan shall be modified to reduce the obligations in the inclusionary housing component to the extent and only to the extent necessary to avoid a taking. If it is determined no taking would occur through application of this chapter to the residential development, the requirements of this chapter remain applicable. (Ord. 306 § 2, 2006)
16.50.150 Public nuisance.
Any condition caused or permitted to exist in violation of any of the provisions of this chapter shall constitute a public nuisance and may be abated by the city as such. Each day such condition continues shall be regarded as a new and separate offense. (Ord. 370 § 49, 2012; Ord. 306 § 2, 2006)
16.50.160 Penalty.
Repealed by Ord. 370. (Ord. 306 § 2, 2006)
Code reviser’s note: Ord. 398 §§ 2 – 7, effective January 8, 2015, provide as follows:
SECTION 2. The City Council hereby suspends the application of Highland Municipal Code Sections 16.50.030, 16.50.040, 16.50.050 and 16.50.080 (but not the remainder of Ordinance No. 306) for a period commencing upon the effective date of this Ordinance and continuing for one (1) calendar year thereafter. Such suspension shall automatically terminate within a year of the effective date without the necessity of any action by the City Council. Upon such termination, Highland Municipal Code Sections 16.50.030, 16.50.040, 16.50.050 and 16.50.080 shall be applied, excepting only to the extent these Sections are expressly made inapplicable to particular developments by the terms of Sections 3 and 4 herein.
SECTION 3. Highland Municipal Code Sections 16.50.030, 16.50.040, 16.50.050 and 16.50.080 shall not be applied to a residential development showing in any final map in any of the following circumstances:
(a) If the applicant has not yet obtained approval of a tentative tract map as of the effective date of the Ordinance, only if all of the following three conditions are met:
1. Within one (1) calendar year following the effective date of this Ordinance, an applicant must obtain approval of a tentative tract map that includes the development of housing; and
2. Within one (1) calendar year following the approval of the tentative tract map in Section 3(a)(1), the applicant causes the final map of residential development in that same development to be recorded; and
3. Within two (2) calendar years following recordation of the final map, the applicant causes any building permit to be issued for the residential units shown on that same final map.
(b) If the applicant has obtained approval of a tentative tract map before the effective date of the Ordinance, only if both of the following conditions are met:
1. Within one (1) calendar year following the effective date of this Ordinance, the applicant causes the final map of residential development in that same development to be recorded; and
2. Within two (2) calendar years following recordation of the final map, the applicant causes any building permit to be issued for the residential units shown on that same final map.
(c) If the applicant has recorded a final map before the effective date of the Ordinance, only if the applicant causes any building permit to be issued for the residential units shown on that same final map within one (1) calendar year of the effective date of this Ordinance.
SECTION 4. Nothing herein shall affect any development that, pursuant to Section 3(b) of Ordinance No. 385, caused the final map of residential development to be recorded between January 9, 2014, and January 8, 2015, and thus has two (2) calendar years following recordation of the final map to cause any building permit to be issued for the residential units shown on that same final map.
SECTION 5. The application of Sections 3 and 4 of this Ordinance shall be administered by the City Manager of the City in his or her reasonable discretion. Determinations made by the City Manager shall be subject to appeal under the provisions of the Highland Municipal Code.
SECTION 6. The provisions set forth in this Ordinance shall apply prospectively only. No refunds shall be given for fees already paid.
SECTION 7. Except as expressly set forth in Sections 2, 3, 4 and 5 of this Ordinance, Chapter 16.50, as well as the remainder of Ordinance No. 306, shall remain in full force and effect.