Chapter 24.16
AFFORDABLE HOUSING PROVISIONS

Sections:

Part 1: INCLUSIONARY HOUSING REQUIREMENTS

24.16.010    Purpose.

24.16.015    Definitions.

24.16.020    Basic on-site inclusionary housing requirements.

24.16.025    Standards for inclusionary units.

24.16.030    Alternative methods to comply with inclusionary housing requirements.

24.16.035    Incentives for compliance with inclusionary housing requirements.

24.16.040    Developer affordable housing agreement.

24.16.045    Continued affordability and initial occupancy.

24.16.050    Appeals.

24.16.055    Waivers or reductions of inclusionary housing requirements.

24.16.060    Implementation and enforcement.

Part 2: ACCESSORY DWELLING UNITS

24.16.100    Purpose.

24.16.120    Locations permitted.

24.16.125    Definitions.

24.16.130    Permit procedures.

24.16.140    Development standards.

24.16.141    New construction accessory dwelling unit development standards.

24.16.142    Conversion accessory dwelling unit development standards.

24.16.150    Deed restrictions.

24.16.160    Zoning incentives.

24.16.170    Junior accessory dwelling units.

Part 3: DENSITY BONUS PROVISIONS FOR RESIDENTIAL UNITS

24.16.200    Purpose.

24.16.205    Definitions.

24.16.210    Eligibility for residential density bonuses.

24.16.215    Density bonuses for affordable, senior, and special needs housing.

24.16.220    City density bonuses for housing developments.

24.16.222    Replacement housing requirements.

24.16.225    Incentives and concessions for affordable housing.

24.16.230    Density bonus for land dedication.

24.16.235    Density bonus or incentive for child care facilities.

24.16.240    Density bonus for condominium conversions.

24.16.245    Summary tables.

24.16.250    Calculation of density bonus for housing developments.

24.16.255    Standards for incentives, concessions, and waivers for housing developments.

24.16.256    Modified parking standards for housing developments.

24.16.258    Commercial development bonus.

24.16.260    Standards for density bonus housing developments.

24.16.262    Local coastal plan consistency.

24.16.265    Submittal of application for affordable housing plan.

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

24.16.275    Developer affordable housing agreement.

24.16.280    Continued affordability and initial occupancy.

24.16.285    Appeals.

24.16.290    Implementation and enforcement.

Part 4: FEE WAIVERS FOR AFFORDABLE UNITS

24.16.300    Units eligible for fee waivers.

24.16.310    Procedure for waiver of fees.

Part 1: INCLUSIONARY HOUSING REQUIREMENTS

24.16.010 PURPOSE.

The purpose of the inclusionary housing requirements is to enhance the public welfare by adopting policies to utilize remaining developable land in the city in a manner consistent with state and local housing policies and needs, meet the city’s share of regional housing needs, implement the housing element’s goals and objectives, improve the feasibility of rental housing development, assure compatibility between market rate units and inclusionary units, and make housing available for households of all income levels.

(Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2006-16 § 2 (part), 2006).

24.16.015 DEFINITIONS.

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

1.    “Affordable ownership cost” means average monthly housing costs during the first calendar year of a household’s occupancy, including mortgage payments, property taxes, homeowner’s insurance, and homeowner’s association dues, if any, the sum of which does not exceed eighty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

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

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

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

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

3.    “Affordable units” are dwelling units which are affordable to extremely low, very low, low, median, or moderate income households as defined by this part or by any federal or state housing program and are subject to rental, sale, or resale provisions to maintain affordability.

4.    “Approval body” means the body with the authority to approve the proposed residential development.

5.    “Area median income” is area median income for Santa Cruz County as published and periodically updated by the state of California pursuant to California Code of Regulations, Title 25, Section 6932, or successor provision.

6.    “Assisted living unit” is any dwelling unit in a facility licensed under Chapter 3.2 of the California Health and Safety Code as a residential care facility for the elderly, or an assisted living unit as defined in Section 1771(a)(6) of the California Health and Safety Code.

7.    “Assumed household size based on unit size” is a household of one person in a studio apartment, two persons in a one-bedroom unit, three persons in a two-bedroom unit, and one additional person for each additional bedroom thereafter.

8.    “Co-housing development” is an intentional community of private dwelling units clustered around shared space. Each attached or single-family home has traditional amenities, including a private kitchen. Shared spaces typically feature a common house, which may include a large kitchen and dining area, laundry, and recreational spaces. Households collaboratively plan and manage shared spaces. The legal structure is typically an HOA, condo association, or housing cooperative.

9.    “Congregate living unit” is any dwelling unit in a senior housing development or senior citizen housing development, as defined in Section 51.3 of the California Civil Code, that provides private living quarters with centralized dining services and shared living spaces and may include access to social and recreational activities.

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

11.    “First approval” is the first of the following approvals to occur with respect to a residential development: development agreement, planned development permit, tentative map, minor land division, use permit, design permit, building permit, or any other permit listed in Section 24.04.030.

12.    “Household income” is the combined adjusted gross household income for all adult persons living in a living unit as calculated for the purpose of the Housing Choice Voucher/ Section 8 program under the United States Housing Act of 1937, as amended, or its successor provision.

13.    “Household, low income” is a household whose income does not exceed the low income limits applicable to Santa Cruz County, as published and periodically updated by the California Department of Housing and Community Development pursuant to Section 50079.5 of the California Health and Safety Code.

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

15.    “Household, moderate income” is a household whose income does not exceed the moderate income limits applicable to Santa Cruz County, as published and periodically updated by the California Department of Housing and Community Development pursuant to Section 50093 of the California Health and Safety Code.

16.    “Household, very low income” is a household whose income does not exceed the very low income limits applicable to Santa Cruz County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50105 of the California Health and Safety Code.

17.    “Inclusionary unit” is an ownership or rental dwelling unit or SRO unit within a residential development which is required under this part to be rented at an affordable rent or sold at an affordable ownership cost to specified households.

18.    “Live/work unit” is a dwelling unit, part of which is used as a business establishment and the dwelling unit is the principal residence of the business operator or an employee of the business establishment who works in the unit.

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

20.    “Ownership residential development” means any residential project that includes the creation of two or more new or additional dwelling units or live/work units that may be sold individually, including co-housing developments.

21.    “Rental residential development” means any residential development that creates one or more additional dwelling units that cannot be lawfully sold individually in conformance with the California Subdivision Map Act.

22.    “Residential development” is any project requiring any discretionary permit from the city, or a building permit, for which an application has been submitted to the city, and which would create two or more new or additional dwelling units or SRO units by construction or alteration of structures.

23.    “SRO” means a single-room occupancy residential unit that provides sleeping and living facilities in a single room but where sanitary or cooking facilities may be provided within the unit and/or shared within the housing project, or a rooming unit or efficiency unit located in a residential hotel, as that term is defined in accordance with California Health and Safety Code Section 50519, that is offered for occupancy by tenants for at least thirty consecutive days.

(Ord. 2019-21 § 1, 2019: Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2008-20 § 1 (part), 2008: Ord. 2007-19 § 1 (part), 2007: Ord. 2006-16 § 2 (part), 2006).

24.16.020 BASIC ON-SITE INCLUSIONARY HOUSING REQUIREMENTS.

1.    Applicability.

a.    The inclusionary housing requirements defined in this chapter are applicable to all residential developments that create two or more new and/or additional dwelling units or SRO units at one location by construction or alteration of structures, except for exempt residential developments under subsection (2).

b.    Additional rent above and beyond affordable rent or affordable ownership cost may be permitted for the commercial/work space in a live/work unit at a rent that is determined to be affordable to qualifying households and is proportionate to the amount of commercial space provided. The amount of rent for the commercial portion of the live/work unit shall be agreed upon by the developer, the economic development director, and the planning and community development director. If no agreement can be reached, the city will retain an outside financial consultant to evaluate and determine the allowable affordable rent and establish a methodology for determining future commercial rent levels. The methodology for determining future commercial rent levels shall be defined in every affordable housing development agreement for residential developments that include at least one live/work unit.

2.    The following residential developments are exempt from the requirements of this chapter:

a.    Residential developments developed pursuant to the terms of a development agreement executed prior to the effective date of the ordinance codified in this chapter; provided, that such residential developments comply with any affordable housing requirements included in the development agreement or any predecessor inclusionary housing requirements in effect on the date the development agreement was executed.

b.    Residential developments for which a complete application was filed with the city prior to the effective date of the ordinance codified in this chapter; provided, that such residential developments comply with any predecessor inclusionary housing requirements in effect on the date the application for the residential development was deemed complete.

c.    Residential developments if exempted by California Government Code Section 66474.2 or 66498.1; provided, that such residential developments comply with any predecessor inclusionary housing requirements in effect on the date the application for the residential development was deemed complete.

d.    Residential developments replacing dwelling units that have been destroyed by fire, flood, earthquake, or other acts of nature, so long as no additional dwelling units are created by the residential development; and provided, that such residential developments comply with any inclusionary housing requirements previously applied to the dwelling units being replaced.

e.    Accessory dwelling units.

f.    Rental residential developments with two to four dwelling units.

3.    Ownership Residential Developments with Two to Four Dwelling Units. For ownership residential developments that would create at least two but not more than four new or additional dwelling units and/or live/work units at one location, the applicant shall either: (a) make one inclusionary unit available for sale at an affordable ownership cost; (b) make one inclusionary unit available at an affordable rent for low income households; or (c) pay an in-lieu fee calculated pursuant to Section 24.16.030(6).

4.    Ownership Residential Developments with Five or More Dwelling Units. For ownership residential developments that would create five or more new or additional dwelling units and/or live/work units at one location, the applicant shall provide inclusionary units as follows:

a.    Affordable Housing Requirement for Ownership Residential Developments. In an ownership residential or live/work development, twenty percent of the dwelling units shall be made available for sale to low and moderate income households at an affordable ownership cost.

b.    Fractional Affordable Housing Requirement for Ownership Residential Developments – 0.7 Units or Less. If the number of dwelling units required under subsection (4)(a) results in a fractional requirement of 0.7 or less, then the applicant shall either: (i) make one inclusionary unit available for sale at an affordable ownership cost; (ii) make one inclusionary unit available at an affordable rent for low income households; or (iii) pay an in-lieu fee calculated pursuant to Section 24.16.030(6). This subsection (4)(b) applies to the fractional unit only, and whole units shall be provided as required by subsection (4)(a).

c.    Fractional Affordable Housing Requirement for Ownership Residential Developments – More Than 0.7 Units. If the number of dwelling units required under subsection (4)(a) results in a fractional requirement of greater than 0.7, then the applicant shall either: (i) make one inclusionary unit available for sale at an affordable ownership cost; or (ii) make one inclusionary unit available at an affordable rent for low income households. This subsection (4)(c) applies to the fractional unit only, and whole units shall be provided as required by subsection (4)(a).

d.    Rental Units in an Ownership Residential Development.

i.    In an ownership residential development where all dwelling units are initially offered for rent, an applicant may satisfy the inclusionary requirements by providing rental units as provided in subsection (5).

ii.    The rent regulatory agreement required by Section 24.16.045 shall include provisions for sale of the inclusionary units at an affordable ownership cost to eligible households within ninety days from the issuance of the public report by the California Department of Real Estate permitting sale of the units or at termination of the tenant’s lease whichever is later and otherwise in compliance with state law; provided, however, that the sale of the entire ownership residential development from one entity to another shall not trigger the obligation to sell individual inclusionary units. To the extent relocation payments are required by law the applicant shall be wholly responsible for the cost of preparing a relocation plan and making required payments. Any tenant of an inclusionary unit at the time units are offered for sale that qualifies to purchase an inclusionary unit at an affordable ownership cost shall be offered a right of first refusal to purchase the inclusionary unit. At sale appropriate documents shall be recorded to ensure the continued affordability of the inclusionary units at an affordable ownership cost as required by Section 24.16.045.

5.    Rental Residential Developments with Five or More Dwelling Units. For rental residential developments that would create five or more new or additional dwelling units and/or live/work units at one location, the applicant shall provide inclusionary units as follows:

a.    Rental residential developments that would create five or more new or additional dwelling units or live/work units at one location shall provide twenty percent of the dwelling units as inclusionary units, which shall be made available for rent to low income households at an affordable rent.

b.    SRO Developments. In a rental residential development comprised of SRO units, twenty percent of the single-room occupancy units shall be made available for rent to very low income households at an affordable rent.

c.    Fractional Affordable Housing Requirement for Rental Residential Developments with More Than Ten Dwelling Units. If the number of dwelling units required results in a fractional requirement of 0.7 or less, then there will be no inclusionary requirement for the fractional unit. If the number of dwelling units required results in a fractional requirement of greater than 0.7, then the applicant shall make one inclusionary unit available at an affordable rent. This subsection (5)(d) applies to the fractional unit only, and whole units shall be provided as required by subsections (4)(a) and (b).

6.    The requirements of subsections (3) through (5) are minimum requirements and shall not preclude a residential development from providing additional affordable units or affordable units with lower rents or sales prices than required.

a.    By mutual agreement by the developer, the planning and community development director, and the economic development director, the percentage of inclusionary units may be increased in exchange for reduced parking and/or other development requirements.

b.    If the developer agrees to make at least forty percent of the residential project available for rent to low income households at a rental cost affordable to low income households, in addition to reduction of development requirements, by mutual agreement by the developer, the planning and community development director, and the economic development director, the city may also provide financial incentives to increase the number of inclusionary units in a project.

7.    For purposes of calculating the number of inclusionary units required by this section, an accessory dwelling unit or units shall not be counted either as part of the residential development or as an affordable unit fulfilling the inclusionary requirements for the residential development unless an alternative is approved under Section 24.16.030.

8.    For purposes of calculating the number of inclusionary units required by this section, any dwelling units authorized as a density bonus pursuant to Part 3 of this chapter shall not be counted as part of the residential development. However, if a developer receives a city rental housing bonus as authorized by Section 24.16.035(4), then all of the dwelling units in the project, including the dwelling units authorized as a density bonus, shall be counted as part of the residential development for purposes of calculating the inclusionary units required by this section.

(Ord. 2019-25 § 1, 2020; Ord. 2019-21 § 2, 2019; Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2008-20 § 1 (part), 2008: Ord. 2008-14 § 5, 2008: Ord. 2007-19 § 1 (part), 2007: Ord. 2006-16 § 2 (part), 2006).

24.16.025 STANDARDS FOR INCLUSIONARY UNITS.

1.    All inclusionary units shall remain affordable in perpetuity.

2.    Inclusionary units shall be dispersed throughout the residential development to prevent the creation of a concentration of affordable units within the residential development.

3.    Inclusionary units shall be compatible with the design of market rate units in terms of exterior appearance, materials, and finished quality. Interior finishes, features, and amenities may differ from those provided in the market rate units, so as long as the finishes, features, and amenities are durable, of good quality, compatible with the market rate units, and consistent with contemporary standards for new housing.

4.    The applicant may reduce square footage of inclusionary units as compared to the market rate units, provided all units conform to all requirements of Titles 18 and 19 and meet the minimum square footage requirement that affordable units are at least seventy-five percent of the average size of all market rate units in the development with the same bedroom count. For the purpose of this subsection, the “average size” of a unit with a certain bedroom count equals the total square footage of all market rate units with that bedroom count in the development divided by the total number of market rate units with the same bedroom count in the development.

5.    For developments with multiple market rate unit types containing differing numbers of bedrooms, inclusionary units shall be representative of the market rate unit mix.

6.    All building permits for inclusionary units in a phase of a residential development shall be issued concurrently with, or prior to, issuance of building permits for the market rate units, and the inclusionary units shall be constructed concurrently with, or prior to, construction of the market rate units. Occupancy permits and final inspections for inclusionary units in a phase of a residential development shall be approved concurrently with, or prior to, approval of occupancy permits and final inspections for the market rate units. When alternative methods of compliance are proposed pursuant to Section 24.16.030, the planning and community development director and the economic development director may jointly approve alternative phasing of market rate and inclusionary units if it finds that the proposal provides adequate security to ensure construction of the inclusionary units. Phases of construction shall be defined as a part of the first approval.

(Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2007-19 § 1 (part), 2007: Ord. 2006-16 § 2 (part), 2006).

24.16.030 ALTERNATIVE METHODS TO COMPLY WITH INCLUSIONARY HOUSING REQUIREMENTS.

1.    Application Submittal. Any application to use an alternative method to meet inclusionary housing requirements shall be submitted as part of the first approval for any residential development subject to the inclusionary housing requirements.

2.    Findings. For all alternative methods of compliance with the inclusionary housing requirements, the approval body must make findings (a) and (b) in this subsection. Approval body determinations regarding alternative methods of compliance may be appealed as provided in Section 24.16.050.

a.    The proposal for the alternative method of compliance is consistent with the Santa Cruz General Plan and all of its elements.

b.    The proposal conforms to the standards established for inclusionary units in Section 24.16.025, unless the alternative method does not require compliance with that section.

3.    Off-Site Construction of Inclusionary Units. An applicant may propose to construct all or a portion of the required inclusionary units off site. Off-site inclusionary units may include any combination of new dwelling units, or new dwelling units created in existing structures. For the purposes of determining compliance with the city’s inclusionary housing requirements, all properties included in the proposal shall be treated as one residential development.

a.    An application for off-site inclusionary units shall be accompanied by the following information:

(1)    Identification of all of the entities responsible for development of the market rate units and the inclusionary units.

(2)    The location of the sites where the market rate and inclusionary units will be constructed.

(3)    For each site, the same level of detail for the off-site inclusionary units as for the market rate residential development including: the number, unit type, number of bedrooms and baths, approximate location, size, and design, construction and completion schedule of all inclusionary units including the phasing of inclusionary units in relation to market rate units.

(4)    If the inclusionary units will not be constructed concurrently with the market rate units, the applicant shall specify the security to be provided to the city to ensure that the inclusionary units will be constructed.

(5)    Evidence of ownership or control of all sites proposed for market rate and inclusionary units. This requirement may be waived at the sole discretion of the planning and community development director with sufficient evidence that ownership or control will be secured within a reasonable amount of time after the application is submitted.

b.    At the joint discretion of the planning and community development director and the economic development director, off-site units may be excluded from existing low income areas as defined by U.S. Department of Housing and Urban Development and/or where there is a concentration of low income households.

c.    The approval body may approve a proposal for off-site inclusionary units if it makes all of the findings required by subsection (2) and each of the following findings:

(1)    The off-site development will provide the greater of one affordable unit or thirty percent more inclusionary units than would otherwise be required if the inclusionary units were constructed on site;

(2)    The off-site location is suitable for the proposed affordable housing and will not tend to cause residential segregation;

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

(4)    Each entity responsible for development of the inclusionary and market rate units has adequate site control and the capacity to construct the units as proposed.

d.    Prior to final or parcel map approval and prior to issuance of any building permit for the residential development, the owner and the developer of the site where the off-site inclusionary units will be located and the developer of the residential development shall all enter into the developer affordable housing agreement required by Section 24.16.040.

e.    Prior to issuance of any certificate of occupancy or final inspection for any market rate units, the owner and the developer of the site where the off-site inclusionary units will be located shall enter into a regulatory agreement to ensure that the off-site inclusionary units will remain affordable in perpetuity.

f.    Once an applicant has received approval for off-site construction of inclusionary units on a specific site, no substitution of sites may be made unless approved by the planning and community development director.

g.    If the off-site construction of inclusionary units is not substantially completed within eighteen months of completion of on-site construction then the approval body may require the applicant to pay double the amount of in-lieu fees as provided for in subsection (6).

4.    Conversion of Existing Market Rate Housing or Upper Floors of Commercial/Office Buildings to Inclusionary Units. An applicant may propose to convert existing residential units or upper floors of commercial/office buildings into inclusionary units in lieu of constructing new inclusionary units on site.

a.    Any application to convert existing residential units or existing commercial/office space into inclusionary units shall be accompanied by the following information regarding the existing dwelling units proposed to be converted:

(1)    Identification of all of the entities responsible for development of the market rate units and the inclusionary units.

(2)    The location of the site where the existing units will be converted to inclusionary units and evidence of ownership or control of all sites proposed for conversion of existing units to inclusionary units.

(3)    If the inclusionary units will not be constructed concurrently with the market rate units, the applicant shall describe the proposed phasing and specify the security to be provided to the city to ensure that the inclusionary units will be constructed.

(4)    The same level of detail for the converted inclusionary units as for the market rate residential development for the following:

(i)    Floor plans showing size and number of bedrooms of the units to be converted; number of bedrooms and square footage of market rate units in the proposed residential development.

(ii)    Site plans and building elevations showing landscaping, lot lines, property dimensions, easements, location of all structures, and parking for the units to be converted.

(5)    Existing rent or appraised value of each unit on the property to be converted, proposed rents or sales prices after rehabilitation and/or conversion, and any existing rent limits, resale price restrictions, or other affordability restrictions imposed by any public agency, nonprofit agency, land trust, or other body.

(6)    For conversion of market rate housing units, size of household occupying each unit on the property to be converted, vacancy rates for each month during the past two years, and existing tenant incomes.

(7)    For conversion of market rate housing units, a property inspection report prepared by a certified housing inspector and a termite report, both prepared no more than sixty days before the filing of the application. The property inspection report shall include an examination of all common and private areas within the existing dwelling units for compliance with the Uniform Housing Code, the structural condition of the property, identification of all code violations or unsafe elements, any potentially hazardous soil or geologic conditions, and condition of paved areas and drainage.

(8)    For conversion of commercial space, a property inspection report prepared by a certified inspector and a termite report, both prepared no more than sixty days before the filing of the application. The property inspection report shall include an examination of all common and private areas, the structural condition of the property, identification of all code violations or unsafe elements, any potentially hazardous soil or geological conditions, and condition of paved areas and drainage.

(9)    Plans and a written description of rehabilitation to be completed, including correction of all code violations and completion of all termite repairs described in the property inspection report and termite report; cost of rehabilitation; and the value of the property, including land, buildings, and all other improvements, after rehabilitation.

(10)    Description of benefits to be offered to existing tenants, which for conversion of market rate housing units would include but not be limited to right of first refusal to remain in the unit, and any expected need for relocation of existing tenants.

b.    At the joint discretion of the planning and community development director and the economic development director, off-site units may be excluded from existing low income areas as defined by U.S. Department of Housing and Urban Development and/or where there is a concentration of low income households if such exclusion will not tend to cause residential segregation.

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

d.    The conversion of existing market rate housing or conversion of existing commercial/office space to inclusionary units is not required to comply strictly with Section 24.16.025, with deviations subject to the joint approval of the planning and community development director and the economic development director. Unless otherwise determined by agreement of both the planning and community development director and the economic development director, if conversion of existing units is proposed and the existing residential development requires significant rehabilitation (costs estimated at about twenty-five percent of after-construction value), all units in the existing residential development shall be rehabilitated in addition to the inclusionary units.

e.    The approval body may approve a proposal for conversion of existing dwelling units to inclusionary units if it makes all of the findings required by subsection (2) and all of the following findings:

(1)    The off-site development will provide the greater of one affordable unit or thirty percent more inclusionary units than would otherwise be required if the inclusionary units were constructed on site;

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

(3)    Each entity responsible for development of the inclusionary and market rate units or commercial space has adequate site control and the capacity to construct the units as proposed;

(4)    The rehabilitation plans include all construction required to meet all current requirements of the Uniform Housing Code, as determined by the chief building official of the city;

(5)    For conversion of market rate housing units the cost of rehabilitation is greater than twenty-five percent of the value of the property, including land, buildings, and all other improvements after rehabilitation unless otherwise determined by agreement of both the planning and community development director and the economic development director that conditions of the property do not require substantial rehabilitation; and

(6)    The dwelling units or commercial space to be converted are not subject to any rent limits, resale price restrictions, or other affordability restrictions imposed by any public agency, nonprofit agency, land trust, or other body, unless the affordability restrictions are at risk of expiring within five years and the existing agreement with affordability restrictions cannot be renewed, or the conversion will make the units affordable to households with lower incomes than the existing affordability restrictions.

f.    For conversion of market rate housing units, if more than forty percent of the units on one site will be converted to inclusionary units, the approval body must additionally find that the rehabilitated inclusionary units will remove blight and enhance physical and social conditions in the surrounding area.

g.    The conversion of existing market rate housing or conversion of existing commercial/office space may be based on the number of bedrooms in the residential development to encourage the development of smaller units when feasible. The converted units shall not be larger in terms of the number of bedrooms than the required inclusionary unit that the converted unit is replacing, unless approved by the planning and community development director, and in no event shall the maximum number of bedrooms in a unit satisfying inclusionary requirements using bedroom counts exceed the smaller of either: (1) the market rate unit in the development with the greatest number of bedrooms; or (2) three bedrooms.

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

i.    If the conversion of existing units and substantial rehabilitation of the development is not substantially completed within eighteen months of completion of the new residential development, then the approval body may require the applicant to pay double the amount of in-lieu fees as provided for in subsection (6).

5.    Transfer of Credit. An applicant may propose to receive credit for affordable units constructed prior to or concurrently with the market rate project.

a.    When a residential development is proposed that includes more inclusionary units than required by this part, the applicant may propose that the excess inclusionary units be made available to satisfy inclusionary requirements on other sites. The credits may be made available to other residential developments for a maximum period of five years from issuance of the last certificate of occupancy for the residential development that includes the excess inclusionary units.

b.    The residential development that includes the excess inclusionary units may not receive or have received any local, state, or federal affordable housing financial assistance.

c.    An application for a residential development that includes excess inclusionary units proposed to be made available for credit shall be accompanied by the following as part of the first approval for the residential development:

(1)    Identification of excess inclusionary units to be made available for credit to other residential developments, including in particular the number of bedrooms, tenure, size, and location.

(2)    Person or entity authorized to transfer credit to other residential developments.

d.    An application for a residential development that proposes to receive credit for inclusionary units previously approved for the transfer of credit shall be accompanied by the following:

(1)    A written agreement with the holder of the rights to the excess inclusionary units consenting to the transfer of credit.

(2)    Evidence that the transferred units satisfy all or a portion of the residential development’s inclusionary requirements, including but not limited to inclusionary units of an appropriate size with at least the same number of bedrooms and tenure as would otherwise be required.

(3)    Sufficient evidence provided that demonstrates to the satisfaction of the planning and community development director that the inclusionary units to be credited to the residential development have been constructed or will be constructed prior to or concurrently with the market rate units in the residential development.

e.    The city council may approve a proposal to use excess inclusionary units on another site to meet the development’s inclusionary requirements if it makes all of the findings required by subsection (2) and the following findings:

(1)    The off-site residential development with excess inclusionary units will provide the greater of one affordable unit or thirty percent more inclusionary units than would otherwise be required if the inclusionary units were constructed on site.

(2)    The excess inclusionary units are of an appropriate size with at least the same number of bedrooms and tenure as would otherwise be required, and have already been constructed or will be constructed prior to or concurrently with the market rate units in the residential development.

6.    In-Lieu Housing Fees.

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

(1)    For all ownership residential developments or residential subdivisions that would create two but no more than four additional dwelling units or parcels at one location, the applicant may elect to pay an in-lieu fee for the fraction of an inclusionary unit equal to 0.15 times the number of units or parcels in the residential development or subdivision reduced by sixty percent.

(2)    For ownership residential developments where any dwelling units are offered for sale, or where all dwelling units are offered for rent, but where a subdivision map has been recorded to create parcels containing single dwelling units, the applicant may elect to pay an in-lieu fee for any fraction of an inclusionary unit equal to 0.7 or less.

(3)    For rental residential developments that would create five but no more than ten additional dwelling units at one location, the applicant may elect to pay an in-lieu fee for any inclusionary unit or fraction of an inclusionary unit as required by Section 24.16.020(5).

(4)    For residential developments that the approval body determines are assisted living units, co-housing developments, congregate living units, or live/work units the applicant may elect to pay an in-lieu fee for the entire inclusionary unit requirement.

(5)    Except as provided in subsection (6)(c), for all other residential developments creating five or more units, in-lieu fees may be paid for all or a portion of the required inclusionary units at the discretion of the approval body if the approval body makes the findings required by subsection (2), accompanied by a staff report with a recommendation from the planning and community development director and the economic development director, except that conformance with Section 24.16.025 is not required. The approval body must also find that either the in-lieu fees will provide for the greater of one affordable unit or at least thirty percent more inclusionary units or affordable housing than would be provided by the on-site provision of inclusionary units by providing matching funds for state or federal grants or otherwise. It is the city council’s intent that, except as provided in subsections (6)(a)(1) through (4), in-lieu fees be infrequently approved.

b.    In-lieu fees may be established from time to time by resolution of the city council or may be determined for a specific residential development by calculating the difference between (1) the affordable sales price of an inclusionary unit, and (2) the value of a market rate unit. The value of a market rate unit shall be determined by an appraisal provided by the developer from a qualified appraiser that was completed within three months prior to entering into an affordable housing agreement.

(1)    The market rate value to calculate in-lieu fees for live/work units may be calculated using a square footage multiplier times one hundred percent of the designated residential areas and fifty percent of the designated work areas. The source of the square footage multiplier may be the most recent data from internet real estate data resources such as Zillow, Trulia, or other available sources that reflect actual market values or from a square footage appraisal provided by the developer from a qualified appraiser that was completed within three months prior to entering into an affordable housing agreement.

(2)    The market rate value to calculate in-lieu fees for co-housing developments may be calculated using a square footage multiplier times one hundred percent of the square footage of an average size unit plus a proportionate amount of shared space, as jointly determined to be reasonable by the planning and community development director and the economic development director. The source of the square footage multiplier may be the most recent data from internet real estate data resources such as Zillow, Trulia, or other available sources that reflect actual market values or from a square footage appraisal provided by the developer from a qualified appraiser that was completed within three months prior to entering into an affordable housing agreement.

c.    In-lieu fees per parcel for subdivisions shall be calculated to be fifty percent of the average appraised value of the parcels in the subdivision where the average appraised value equals the appraised value of all parcels in the subdivision divided by the number of parcels in the subdivision. The appraisal shall be provided by the developer from a qualified licensed residential appraiser. For subdivisions that consist of two to four parcels, this amount shall be further reduced by sixty percent.

d.    For residential developments, in-lieu fees shall be paid prior to or at the time of final inspection by the city planning and community development building division, or as determined in an affordable housing development agreement, with additional terms approved by the approval body. For projects constructed in phases, in-lieu fees shall be paid in the proportion that the phase bears to the overall project.

e.    Notwithstanding subsection (6)(c), in-lieu fees for subdivisions shall be paid prior to or concurrently with final subdivision map approval.

f.    All in-lieu fees shall be deposited into a separate account entitled the affordable housing trust fund. The monies in the affordable housing trust fund and all earnings from investment of the monies in the affordable housing trust fund shall be used within a reasonable amount of time to assist in the construction of new low income housing units with long-term affordability restrictions or preservation of existing low income housing units, including required administrative support.

7.    Land Dedication. For residential developments with an inclusionary requirement of seven or more inclusionary units, an applicant may propose to donate a minimum of fifteen percent of the net developable land area of the residential development to the city for the construction of a project with at least twenty-five percent of its total units restricted to low income households or below, or a lesser amount of land if the parcel is adjacent to a city owned land and is determined by the economic development director that the parcel is a critical component of a larger city supported affordable housing project.

a.    An application for land dedication shall be accompanied by the following information. These requirements may be modified or waived at the sole discretion and joint determination of the planning and community development director and the economic development director if the dedicated land is adjacent to city owned land and/or can be incorporated into a city supported affordable housing development project.

(1)    Area to be dedicated to the city.

(2)    Demonstration that the density approved for the site is suitable for affordable housing development, evidence of adequate infrastructure, and a site plan demonstrating that the site can accommodate the required number of inclusionary units.

(3)    Identification of the entity that will construct the inclusionary units.

(4)    Pro forma demonstrating that development of the inclusionary units on the site is financially feasible.

(5)    If the inclusionary units will not be constructed concurrently with the market rate units, the applicant shall describe the proposed phasing and specify the security to be provided to the city to ensure that the inclusionary units will be constructed.

b.    The approval body may approve a proposal for land dedication if it makes all of the findings required by subsection (2) and the following additional finding: a residential development that includes twenty-five percent low income units is feasible on the property to be dedicated.

c.    The property shall be dedicated to the city at the earliest of: (1) recordation of any final or parcel map, or (2) issuance of any building permit for the residential development.

d.    The city may make the site available without cost to a low income housing developer with proven experience and the ability to finance and construct an affordable housing project in the most expeditious manner. To the extent feasible, the applicant shall process the low income residential development on the dedicated site concurrently with the processing of the market rate development.

8.    Congregate Living Units or Assisted Living Units. An applicant may propose to satisfy the inclusionary housing requirements of this chapter by providing congregate living units or assisted living units. If the approval body determines that a proposed residential development includes congregate living units or assisted living units, the following alternative requirements shall apply:

a.    Fifteen percent of the congregate living or assisted living units shall be made available for rent to low income households at an affordable rent. Monthly charges for congregate living or assisted living services in addition to the affordable rent may not exceed thirty-five percent of fifty percent of area median income for a single person, divided by twelve, or forty-five percent of fifty percent of area median income for two persons, divided by twelve.

b.    The proportion of studio or one-bedroom units that are designated to be shared by non-family-members shall not exceed the proportion of the number of market rate units designated to be shared by non-family-members to the total number of market rate units. Furthermore, no more than two persons may occupy a studio or one-bedroom unit. For purposes of affordable rent calculations, for any unit shared by non-family-members the portion of the unit occupied by each individual shall be treated like a studio apartment and the rent for one person shall be equivalent to the affordable rent for a studio apartment. This section should not be interpreted to create a bias for undesired double occupancy.

9.    Other Alternative Compliance Methods. An applicant may propose an alternative compliance method to provide affordable units through other means. The approval body may approve or conditionally approve such an alternative only if the approval body determines, based on substantial evidence, that such alternative compliance will provide as many or more affordable units at the same or lower income levels and will otherwise provide greater public benefit than would provision of the affordable units on site.

(Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2008-20 § 2, 2008: Ord. 2008-14 § 6, 2008: Ord. 2007-19 § 1 (part), 2007: Ord. 2006-16 § 2 (part), 2006).

24.16.035 INCENTIVES FOR COMPLIANCE WITH INCLUSIONARY HOUSING REQUIREMENTS.

The following incentives may be available for the provision of inclusionary units:

1.    Fee waivers may be granted pursuant to Part 4 of this chapter.

2.    A residential development may satisfy its inclusionary housing requirements through any of the alternative compliance methods available in Section 24.16.030 in lieu of providing inclusionary units on site.

3.    The interior amenities and square footage of the inclusionary units may be reduced below those required for the market rate units, as provided in Section 24.16.025(4).

4.    Residential developments in which all dwelling units are offered for rent, inclusionary units are provided within the development, no subdivision map has been recorded, and no density bonus under Part 3 of this chapter has been requested are eligible for the following additional incentive:

a.    A twenty-seven and one-half percent “city rental housing bonus.”

(Ord. 2018-18 § 1 (part), 2018: Ord. 2018-13 § 1 (part), 2018: Ord. 2006-16 § 2 (part), 2006).

24.16.040 DEVELOPER AFFORDABLE HOUSING AGREEMENT.

1.    Developers subject to the inclusionary housing requirements of this part shall agree to enter into a developer affordable housing agreement with the city. A developer affordable housing agreement shall be a condition of approval for all residential developments subject to this chapter and shall be recorded as a restriction on any residential development in which the inclusionary units will be constructed.

2.    The developer affordable housing agreement shall be recorded prior to or concurrently with final parcel map or final subdivision map approval, or, where the residential development does not include a map, prior to issuance of a building permit for any structure in the residential development. The developer affordable housing agreement shall run with the land and bind all future owners and successors in interest.

3.    The developer affordable housing agreement shall be in a form provided by the city and shall include, without limitation, the following:

a.    The total number of units approved for the residential development and the number, location, and level of affordability of inclusionary units.

b.    Standards for determining affordable rent or affordable ownership cost for the inclusionary units.

c.    The location, unit size in square feet, and number of bedrooms of the inclusionary units.

d.    Provisions to ensure initial and continuing affordability, including the execution and recordation of subsequent agreements.

e.    A schedule for completion and occupancy of inclusionary units in relation to construction of market rate units.

f.    A description of remedies for breach of the agreement by either party. The city may identify tenants or qualified purchasers as third party beneficiaries under the agreement.

g.    Procedures for qualifying tenants and prospective purchasers of inclusionary units.

h.    Provisions requiring maintenance of records to demonstrate compliance with this chapter.

i.    Provisions specifically describing how affordable rent and/or affordable ownership costs are calculated for the inclusionary units. Unless another basis has mutually been agreed upon by the developer, the planning and community development director, and the economic development director, the determination shall be made in accordance with Section 24.16.045(4). If there is more than a three-year delay in execution of the developer affordable housing agreement and the final building permit, the developer may request any in-lieu fees be recalculated and with the concurrence of the planning and community development and economic development directors, the city may recalculate fees accordingly.

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

(Ord. 2018-13 § 1 (part), 2018: Ord. 2008-14 § 7, 2008: Ord. 2006-16 § 2 (part), 2006).

24.16.045 CONTINUED AFFORDABILITY AND INITIAL OCCUPANCY.

1.    The city council, by resolution, shall establish guidelines for determining household income, asset limits, occupancy standards, affordable ownership cost, affordable rent, provisions for continued monitoring of tenant eligibility, resale price, and other implementation criteria. The city shall use standard documents as approved by the city attorney to ensure the continued affordability of the inclusionary units in all residential developments. The documents may include, but are not limited to, inclusionary housing agreements, rent regulatory agreements, promissory notes, deeds of trust, options to purchase, and resale restrictions.

2.    Rent regulatory agreements consistent with the requirements of this part shall be recorded against residential developments containing rental inclusionary units. If the inclusionary units are designated for owner-occupancy, resale restrictions, deeds of trust, options to purchase, and/or other documents consistent with the requirements of this part shall be recorded against the owner-occupied inclusionary units.

3.    Any household that occupies an inclusionary unit must occupy that unit as its principal residence, except in circumstances that may require the temporary vacation of the unit. For rented inclusionary units, the documents required by subsection (1) shall provide for continued occupancy for limited periods by households occupying the units, whose incomes increase during their occupancy so that they exceed the maximum otherwise permitted for the unit.

4.    The maximum sales price shall be calculated using the methodology defined in the resolution and/or guidelines identified in and applied under the inclusionary agreement for that property. Unless otherwise required by California Government Code Section 66474.2 or 65589.5(o), or any other applicable state codes or successor provisions, the resolution in effect at the time of first approval shall be the basis for these calculations, unless another inclusionary ordinance or implementing resolution basis more recently approved by the council has been defined and mutually been agreed upon by the developer, the planning and community development director, and the economic development director or otherwise authorized by the approval body. The resale restrictions shall allow the city a right of first refusal or option to purchase any owner-occupied inclusionary unit at the maximum resale price permitted under this section at any time the owner proposes sale.

5.    No household shall be permitted to begin occupancy of an inclusionary unit designated for owner-occupancy unless the city or its designee has approved the household’s eligibility. No household shall be permitted to begin occupancy of an inclusionary rental unit unless the city or its designee has approved the household’s eligibility, except that tenants are not required to be income-eligible if the rental cost affordable to low income households is at least ninety percent of the average rent for market rate dwelling units with the same number of bedrooms in the development.

6.    As consistent with state and federal law, preferences for rental inclusionary units shall be given in the following priority order:

a.    Residents of the city of Santa Cruz for at least one year.

b.    Those employed in the city of Santa Cruz.

c.    Residents of the county of Santa Cruz for at least one year.

d.    Those employed in the county of Santa Cruz.

7.    As consistent with state and federal law, preferences for ownership inclusionary units shall be given in the following priority order:

a.    Those who live or work in the city of Santa Cruz.

b.    Those who live or work in the county of Santa Cruz.

8.    The city council by resolution may establish fees for the ongoing administration and monitoring of the inclusionary units, which fees may be updated periodically, as required.

(Ord. 2019-25 § 2, 2020; Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2008-20 § 3, 2008: Ord. 2006-16 § 2 (part), 2006).

24.16.050 APPEALS.

1.    An applicant or any other person whose interests are adversely affected by any determination of the planning and community development department staff or of an agency retained by the city with regard to this part may appeal the determination to the planning and community development director.

2.    An applicant or any other person whose interests are adversely affected by the determination of the planning and community development director with regard to this part may appeal the determination to the city council.

3.    The procedure for appeals shall be consistent with the procedures prescribed in Sections 24.04.180 through 24.04.185.

(Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2006-16 § 2 (part), 2006).

24.16.055 WAIVERS OR REDUCTIONS OF INCLUSIONARY HOUSING REQUIREMENTS.

1.    Notwithstanding any other provision of this chapter, the inclusionary housing requirements may be waived, adjusted, or reduced if an applicant shows, based on substantial evidence, that there is no reasonable relationship between the impact of a proposed development and the requirements of this part, or that applying the requirements of this chapter would take property in violation of the United States or California Constitution.

2.    Any request for a waiver, adjustment, or reduction under this section shall be submitted as a part of the first approval. The request for a waiver, reduction, or adjustment shall set forth in detail the factual and legal basis for the claim.

3.    The request for a waiver, adjustment, or reduction shall be reviewed and considered as a part of the first approval. In making a determination on an application for waiver, adjustment, or reduction, the applicant shall bear the burden of presenting substantial evidence to support the claim. The city may assume each of the following when applicable:

a.    That the applicant will provide the most economical inclusionary units to meet the requirements of this chapter.

b.    That the applicant is likely to obtain housing subsidies when such funds are reasonably available.

c.    The extent to which the applicant will benefit from density bonuses or other incentives.

The waiver, adjustment, or reduction may be approved by the approval body only to the extent necessary to avoid an unconstitutional result, after adoption of written findings, based on substantial evidence, supporting the determinations required by this section.

(Ord. 2019-21 § 3, 2019: Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2006-16 § 2 (part), 2006).

24.16.060 IMPLEMENTATION AND ENFORCEMENT.

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

2.    In addition to any other powers or duties prescribed by law, the economic development director shall have the following powers and duties in relation to this part:

a.    To monitor compliance with the provisions of this part and to refer to the city attorney for appropriate action any person violating the provisions of this part; and

b.    To administer this part.

3.    The city attorney shall be authorized to enforce the provisions of this part, all agreements entered into pursuant to this part, and all other requirements of this part, by civil action and any other proceeding or method permitted by law. The city may, at its discretion, take such enforcement action as is authorized under any provision of this code and/or any other action authorized by law or by any agreement executed pursuant to this part.

4.    Failure of any official or agency to enforce the requirements of this chapter shall not constitute a waiver or excuse any applicant or owner from the requirements of this part. No permit, license, map, or other approval or entitlement for a residential development shall be issued, including without limitation a final inspection or certificate of occupancy, until all applicable requirements of this part have been satisfied.

5.    The remedies provided for herein shall be cumulative and not exclusive and shall not preclude the city from any other remedy or relief to which it otherwise would be entitled under law or equity.

(Ord. 2018-13 § 1 (part), 2018: Ord. 2009-18 § 1 (part), 2009: Ord. 2006-16 § 2 (part), 2006).

Part 2: ACCESSORY DWELLING UNITS

24.16.100 PURPOSE.

The ordinance codified in this part provides for accessory dwelling units in certain areas and on lots developed or proposed to be developed with single- or multifamily dwellings. Such accessory dwellings are allowed because they can contribute needed housing to the community’s housing stock. Thus, it is found that accessory dwelling units are a residential use which is consistent with the General Plan objectives and zoning regulations and which enhances housing opportunities that are compatible with residential development. Accessory dwelling units provide housing for family members, students, the elderly, in-home health care providers, the disabled and others within existing neighborhoods, and homeowners who create accessory dwelling units may benefit from added income and an increased sense of security.

In addition the ordinance codified in this part provides a mechanism to grant legal status to existing illegally constructed accessory dwelling units in single-family neighborhoods. By encouraging legalization, safe dwellings may be added to the city’s existing housing supply.

Thus it is found that accessory dwelling units are a residential use which is consistent with the General Plan objectives and zoning regulations and which enhances housing opportunities throughout the city of Santa Cruz. To ensure that accessory dwelling units will conform to General Plan policy the following regulations are established.

(Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 2, 2019: Ord. 2016-19 § 1 (part), 2016: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.120 LOCATIONS PERMITTED.

Accessory dwelling units are permitted on lots of any size in conjunction with a proposed or existing residential use in any zone that allows residential uses.

(Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 3, 2019: Ord. 2016-19 § 1 (part), 2016: Ord. 2016-12 § 7, 2016: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.125 DEFINITIONS.

The following definitions shall apply to accessory dwelling units throughout the municipal code:

“Conversion accessory dwelling unit” shall mean any accessory dwelling unit created primarily by the conversion of any permitted or legal nonconforming structure erected prior to 2017, or portion of such a structure. On property developed with multifamily structures only areas that are not used as livable space, including, but not limited to, storage rooms, boiler rooms, passageways, attics, basements, or garages, shall be eligible to become conversion accessory dwelling units. Consistent with zoning standards, conversion accessory dwelling units shall be permitted to expand the existing footprint of the structure by up to one hundred fifty square feet, and the existing height by up to two feet, and must be in conformance with all requirements of Section 24.16.142.

“New construction accessory dwelling unit” shall mean any accessory dwelling unit that includes new construction and which does not meet the definition and requirements for a conversion accessory dwelling unit.

(Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 4, 2019).

24.16.130 PERMIT PROCEDURES.

1.    Accessory dwelling units shall be principally permitted uses within the zoning districts specified in Section 24.16.120 and subject to the development standards in Section 24.16.140 et seq.

2.    Accessory dwelling units on substandard lots shall not be required to obtain a design permit unless they are associated with the construction of a new single-family dwelling per Section 24.08.400 et seq.

3.    City shall issue a ministerial building permit for an accessory dwelling unit or junior accessory dwelling unit without discretionary review or a hearing, consistent with the provisions of this chapter and state law, within sixty days of submittal of a complete building permit application, unless provided otherwise. The sixty-day review period shall not apply when:

a.    Additional administrative or discretionary review is required under applicable provisions of the Santa Cruz Municipal Code or otherwise allowed by state law.

i.    Applications to construct accessory dwelling units shall be subject only to ministerial permitting processes to the extent necessary to allow construction of a single-story accessory dwelling unit conforming to the size limits stated in Section 24.16.140(3). Applications that propose to locate an accessory dwelling unit on a parcel or portion of a parcel triggering additional administrative or discretionary review shall only be relieved of the requirement for those reviews when no alternative site plan or project proposal can be created which would allow the creation of an up to eight-hundred-square-foot accessory dwelling unit that would not trigger additional reviews;

b.    If the permit application to create an accessory dwelling unit or junior accessory dwelling unit is submitted with a permit application to create a new single-family dwelling on the same lot or parcel; or

c.    When the applicant seeks a delay.

4.    Applications to construct accessory dwelling units on properties that are designated as historic resources by the city, the state of California, or by the National Register of Historic Places shall show substantial compliance with the guidelines of the Secretary of the Interior for development on such properties.

5.    Applications to construct accessory dwelling units on properties that are subject to the Citywide Creeks and Wetlands Plan shall demonstrate compliance with the requirements established in that plan for such properties, as implemented by Section 24.08.2100 et seq.

(Ord. 2020-23 § 8 (part), 2020: Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 5, 2019: Ord. 2016-19 § 1 (part), 2016: Ord. 2016-12 § 8, 2016: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003).

24.16.140 DEVELOPMENT STANDARDS.

All accessory dwelling units, both new construction and conversion, must conform to the following requirements:

1.    Number of Accessory Dwelling Units per Parcel.

a.    For parcels zoned for and including a proposed or existing single-family home: One accessory dwelling unit shall be allowed for each parcel. Each parcel may also include a junior accessory dwelling unit conforming to the standards set forth in Section 24.16.170.

b.    For parcels developed with an existing multifamily structure(s): Two new construction and at least one conversion accessory dwelling unit shall be allowed on each parcel. Up to twenty-five percent of the number of existing dwellings in the structure may be added as conversion accessory dwelling units. When the twenty-five percent limit results in a fraction of a unit, the total number of accessory dwelling units that may be added shall be determined by rounding the fraction up to the next whole number.

i.    For the purposes of this section, multifamily structures are those that contain more than one dwelling unit, including but not limited to duplexes, triplexes, apartment buildings, and condominium buildings.

2.    Parking. No off-street parking shall be required for any accessory dwelling unit. Any parking spaces, covered or uncovered, removed in order to create an accessory dwelling unit shall not be required to be replaced.

3.    Unit Size.

a.    The floor area for new construction detached accessory dwelling units shall not exceed ten percent of the net lot area or eight hundred fifty square feet for a studio or one-bedroom ADU, or one thousand square feet for an ADU with more than one bedroom, whichever is greater, and no detached new construction ADU shall exceed a maximum of one thousand two hundred square feet of habitable area.

b.    The floor area for new construction accessory dwelling units attached to the principal residential use on the property shall not exceed fifty percent of the existing habitable floor area of the principal residential use on the property, or eight hundred fifty square feet for a studio or one-bedroom ADU, or one thousand square feet for an ADU with more than one bedroom, whichever is greater.

c.    The floor area for conversion accessory dwelling units shall not be limited, subject to compliance with Section 24.16.142.

d.    Accessory units that utilize alternative green construction methods that cause the exterior wall thickness to be greater than normal shall be accommodated by calculating the unit square footage size in a manner that accounts for the difference between the square footage of the proposed structure and the square footage of a traditional frame house.

e.    Stairways which provide access to accessory dwelling units do not count toward the floor area of an accessory dwelling unit when the stairs are not part of the conditioned space, the stairs do not include any other rooms or room-like areas that would function as habitable floor area for the ADU, and there is a fire-rated entry door at the top of the stairs at the entrance to the accessory dwelling unit.

4.    Existing Development on Lot. One of the following conditions must be present in order to approve an application to create an accessory dwelling unit:

1.    One or more single-family dwellings exists on the lot or will be constructed in conjunction with the accessory dwelling unit;

2.    The lot contains an existing multifamily structure, as defined in subsection (1)(b)(i).

5.    Rear Yard Lot Coverage. In no case shall any accessory dwelling unit be limited in size based on rear yard lot coverage requirements contained in Section 24.12.140(5). In the application of Section 24.12.140(5), accessory dwelling units shall count toward the limit on allowable coverage by other accessory structures.

6.    The following standards apply to accessory dwelling units located outside the standard side and rear yard setbacks for the zone district in which they are proposed:

The entrance to the accessory dwelling unit shall face the interior of the lot unless the accessory dwelling unit is directly accessible from an alley, a public street, or the Monterey Bay Sanctuary Scenic Trail.

Windows which face an adjoining residential property shall be designed to obscure views of neighboring yards by ADU occupants, including transom windows, translucent glass, or other methods; alternatively, fencing or landscaping shall be required to provide screening.

7.    Alley or Rail Trail Orientation. When an accessory dwelling unit is adjacent to an alley or the Monterey Bay Sanctuary Scenic Trail, the accessory dwelling unit is encouraged to be oriented toward the alley or trail with the front access door and windows facing the alley. Parking provided off the alley shall maintain a twenty-four-foot back-out which includes the alley. Fences shall be three feet, six inches tall along the alley. However, higher fencing up to six feet can be considered in unusual design circumstances, subject to review and approval of the zoning administrator.

8.    Occupancy.

a.    For accessory dwelling units permitted between January 1, 2020, and January 1, 2025, owner occupancy shall not be required and no land use agreement requiring owner occupancy shall be recorded or enforced on properties containing these units.

b.    For accessory dwelling units permitted on or before December 31, 2019, or on or after January 1, 2025, the property owner or an adult member of the property owner’s immediate family, limited to the property owner’s spouse, adult children, parents, or siblings, and subject to verification by the city, must occupy either the primary or accessory dwelling as his or her principal place of residence except under circumstances as established by resolution by the city council that may allow the property owner or the executor or trustee of the property owner’s estate to apply to the city council for approval of a temporary change in use allowing both units to be rented for a period of no more than two years with a possible extension of one year by the planning director if circumstances warrant. Upon the expiration of the rental period, the property owner and/or the property owner’s immediate family member, as specified above, shall reoccupy the property, or the property owner shall cease renting one of the units, or shall sell the property to a buyer who will reside on the property. A fee for such a request shall be in an amount established by resolution by the city council.

c.    For purposes of this chapter, the property owner is the majority owner of the property as shown in the most recent Santa Cruz County assessor’s roll.

d.    If there is more than one property owner of record, the owner with the majority interest in the property shall be deemed the property owner for purposes of this chapter. Any property owner of record holding an equal share interest in the property may be deemed the majority property owner if no other property owner owns a greater interest. For example, if the property is owned by two people, each with a fifty percent interest, either of the two owners may be deemed the property owner for purposes of the owner occupancy requirement. If three people own the property, each with a thirty-three and one-third percent interest, any one of the three may be deemed the property owner for purposes of the owner occupancy requirement.)

e.    Notwithstanding subsection (8)(a), the community development director, in consultation with the city manager and city attorney, shall be authorized to promulgate regulations intended to legalize accessory dwelling units which are nonconforming solely by virtue of the fact that the property owner has failed to comply with subsection (8)(b)’s owner occupancy requirement, including but not limited to regulations providing for the amortization of the nonconformity by specifying a period of time within which the absentee owner must either establish occupancy or discontinue the accessory dwelling unit use of the property, or alternatively sell the property, and regulations providing for the recordation of land use agreements specifying the terms of amortization.

f.    Accessory dwelling unit properties shall be used for long-term residential purposes. Accessory dwelling unit properties may neither be used on a transient occupancy basis nor for short-term/vacation rental purposes. Within condominium or townhouse properties that contain an accessory dwelling unit associated with a specific individual unit and not the larger common condominium or townhouse complex, neither the accessory dwelling unit nor the associated condominium or townhouse unit shall be used as a short-term rental.

i.    Exception. A legal accessory dwelling unit property that had legal status prior to November 10, 2015, and was in use as a short-term/vacation rental prior to that date, and for which the owner remits transient occupancy tax in compliance with Chapter 3.28 in full in a timely manner for the use of the property as short-term/vacation rental purposes, may continue the use. The owner must meet the owner occupancy requirement of this code.

9.    Connections Between Units. At the discretion of the planning director, accessory dwelling units may be permitted to create direct access between units, or common access to a shared garage, laundry room, or storage area; provided, that each unit meets the definition of dwelling unit found in Section 24.22.320.

10.    Other Code Requirements. The accessory dwelling unit shall meet the requirements of the California Building Standards Code, including the alternative means and methods section as prescribed therein.

11.    Large Home Design Permit. The square footage of an accessory dwelling unit shall not be counted with the square footage of the single-family home in determining whether a large home design permit is required.

(Ord. 2020-23 § 8 (part), 2020: Ord. 2019-29 § 1 (part), 2020: Ord. 2019-05 §§ 1, 2, 2019; Ord. 2019-04 §§ 6, 7, 2019; Ord. 2016-19 § 1 (part), 2016: Ord. 2015-15 § 1, 2015; Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2008-04 § 1, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003. Formerly 24.16.160).

24.16.141 NEW CONSTRUCTION ACCESSORY DWELLING UNIT DEVELOPMENT STANDARDS.

1.    Design. The design of the accessory dwelling unit shall relate to the design of the principal single-family dwelling by use of the compatible exterior wall materials, window types, door and window trims, roofing materials and roof pitch.

2.    Setbacks for New Construction Detached Accessory Dwelling Units.

a.    The side yard and rear yard setbacks for a new construction detached single-story accessory dwelling unit shall not be less than three feet and the distance between buildings on the same lot must be a minimum of six feet.

b.    Any portion of a new construction accessory dwelling unit that is over sixteen feet in height shall provide side setbacks of at least five feet and rear setbacks of at least ten feet.

i.    Exception: Any two-story accessory dwelling unit oriented toward an alley, street, or the Monterey Bay Scenic Sanctuary Trail shall provide a setback of no less than five feet from the side and rear property lines.

c.    If any portion of a new construction accessory dwelling unit is located in front of the principal structure, then the front and side yard setbacks shall be the same as those required for single-family homes in the zoning district.

3.    Setbacks for New Construction Attached Accessory Dwelling Units. New construction attached accessory dwelling units shall meet the same setbacks required for the principal structure, either the single-family dwelling or the multi-family structure, by the zoning district, except that any requirement for an additional setback based on height over fifteen feet shall not apply to the portion of the structure that contains the accessory dwelling unit.

4.    Building Height and Stories.

a.    A one-story detached new construction accessory dwelling unit shall be no more than sixteen feet in height measured to the roof peak.

b.    A two-story detached new construction accessory dwelling unit shall meet one of the following standards, with height measured to the roof peak:

i.    Any two-story accessory dwelling unit that is built within four feet of a side and rear property line shall be subject to a height limit of sixteen feet.

ii.    Any two-story accessory dwelling unit that is oriented toward an alley, street, or the Monterey Bay Scenic Sanctuary Trail shall be subject to a height limit of twenty-two feet.

iii.    Any other two-story accessory dwelling unit shall be subject to a height limit of twenty-two feet.

c.    Any two-story detached new construction accessory dwelling unit shall place access stairs, decks, entry doors, and windows toward the interior of the lot, an alley, road, or the Monterey Bay Sanctuary Scenic Trail, if applicable. Second-story windows shall be oriented to obscure views of neighboring yards by ADU occupants by using transom windows, translucent glass, or other methods. These requirements do not apply to two-story ADUs that conform to the setbacks required for the primary structure on the parcel.

d.    An attached new construction accessory dwelling unit may occupy any level of the principal single-family dwelling and must comply with the height standard established for single-family homes in the zone district, except as noted in subsection (3).

e.    If the design of the principal structure has special roof features that should be matched on the detached accessory dwelling unit to enhance design compatibility, the maximum allowed building height of the accessory dwelling unit may be exceeded in order to include such similar special roof features, subject to review and approval of the zoning administrator as part of the review of the building permit application.

5.    Substandard Lots. When a new construction accessory dwelling unit is proposed on a substandard residential lot, as defined in Section 24.22.520, the following design standards shall apply, but shall not serve to limit the accessory dwelling unit to a size of less than eight hundred square feet:

a.    The maximum allowable lot coverage for all structures shall be forty-five percent. Lot coverage shall include the footprints of the first floor, garage (attached and detached), decks and porches (greater than thirty inches in height and not cantilevered), and any second-story cantilevered projection (enclosed or open) beyond two and one-half feet. Decks under thirty inches in height or fully cantilevered with no vertical support posts do not count toward lot coverage for this purpose. Second-story enclosed cantilevered areas that project less than thirty inches from the building wall do not count toward lot coverage. For such areas that project more than thirty inches from the building wall, only the floor area that projects more than thirty inches shall be counted as lot coverage.

b.    The floor area for all second stories shall not exceed fifty percent of the first floor area for all structures, except in cases where the first floor area of the structure to which a second story is being added constitutes thirty percent or less of the net lot area.

c.    Continuous long walls parallel to the side property line with narrow side yards shall be minimized.

d.    Landscaping shall be required at least for front yard areas.

e.    Structures, landscaping or other features shall incorporate methods to lessen the visibility of garages on a street facade.

6.    Large Home Design Permit. Accessory dwelling units, both attached and detached, conversion and new construction, shall not contribute to the need for a large home design permit and, consistent with Section 24.16.130, shall be subject only to ministerial review. The city reserves the right to delay action on an application to build an accessory dwelling unit until such time as the permits for the primary residential use on the parcel have been approved.

(Ord. 2020-23 § 8 (part), 2020: Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 8, 2019).

24.16.142 CONVERSION ACCESSORY DWELLING UNIT DEVELOPMENT STANDARDS.

1.    Setbacks and Lot Coverage. Conversion accessory dwelling units shall be permitted to maintain the existing setbacks and lot coverage of the structure to be converted or reconstructed, regardless of their conformance to current zoning standards.

2.    Reconstruction. Structures to be converted may either be converted utilizing the existing structural components of the building, or reconstructed within the existing three-dimensional physical space occupied by the structure.

3.    Additions and Expansions. An accessory dwelling unit shall be considered a conversion accessory dwelling unit when the proposed dwelling unit is created primarily within an existing or reconstructed structure.

a.    Expansions of floor space up to one hundred fifty square feet shall be permitted, and these expansions shall comply with the development standards that apply to new construction accessory dwelling units as stated in Section 24.16.141, and shall not enlarge the accessory dwelling unit beyond the size permitted for a new construction accessory dwelling unit on the parcel.

b.    Expansions of height up to two feet in additional height shall be permitted, and these expansions shall comply with the height limits set for new construction accessory dwelling units in Section 24.16.141.

c.    Any expansion in excess of the above thresholds will trigger review as a new construction accessory dwelling unit, including assessment of any required fees.

(Ord. 2019-29 § 1 (part), 2020: Ord. 2019-05 § 3, 2019; Ord. 2019-04 §§ 9, 10, 2019).

24.16.150 DEED RESTRICTIONS.

Before obtaining a building permit for an accessory dwelling unit or junior accessory dwelling unit the property owner shall file with the county recorder a declaration of restrictions containing a reference to the deed under which the property was acquired by the present owner and stating that:

1.    The accessory dwelling unit or junior accessory dwelling unit shall not be sold separately.

2.    The unit is restricted to the approved size.

3.    The use of the accessory dwelling unit or junior accessory dwelling unit shall be in effect only so long as the property is in compliance with the ordinance as codified and the land use agreement recorded on the property, including any requirements regarding occupancy.

4.    The above declarations are binding upon any successor in ownership of the property; lack of compliance shall be cause for code enforcement.

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

6.    For properties with accessory dwelling units and/or junior accessory dwelling units that are located in a permit parking program district, the primary residence and the accessory dwelling unit combined shall qualify only for the number of residential parking permits that would have been available to the primary residence. No additional permits will be granted for the accessory dwelling unit. The property owner shall offer the tenant of an accessory dwelling unit a residential parking permit if requested by the tenant.

7.    For properties developed with single-family homes, neither the accessory dwelling unit, the junior accessory dwelling unit, nor the primary unit shall be used as a short-term rental. On properties zoned for and developed with multifamily structures, the accessory dwelling unit shall not be used as a short-term or vacation rental. In units within condominium or townhouse properties that contain an accessory dwelling unit associated with a specific individual unit and not the larger common condominium or townhouse complex, neither the accessory dwelling unit nor the associated condominium or townhouse unit shall be used as a short-term rental.

(Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 §§ 11, 12, 2019; Ord. 2016-19 § 1 (part), 2016: Ord. 2015-15 § 2, 2015: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2008-04 § 2, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003. Formerly 24.16.170).

24.16.160 ZONING INCENTIVES.

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

1.    Affordability Requirements for Fee Waivers. Accessory dwelling units proposed to be rented at affordable rents, as established by the city, may have development fees waived per Part 4 of this chapter. Existing dwelling units shall be relieved of the affordability requirement upon payment of fees in the amount previously waived plus the difference between that amount and the fees in effect at the time of repayment.

2.    Covered Parking. The covered parking requirement for the principal single-family dwelling shall not apply if an accessory dwelling unit is provided. However, no plumbing fixtures may be installed in any remaining existing garage or newly constructed garage on a property that has an accessory dwelling unit without approval of the zoning administrator.

3.    Front or Exterior Yard Parking. Three parking spaces may be provided in the front or exterior yard setback under this incentive with the parking design subject to approval of the zoning administrator. The maximum impervious surfaces devoted to the parking area shall be no greater than the existing driveway surfaces at time of application. Not more than fifty

percent of the front yard width shall be allowed to be parking area.

4.    Tandem Parking. For a parcel with a permitted accessory dwelling unit, required parking spaces for the principal single-family dwelling and the accessory dwelling unit may be provided in tandem on a driveway. A tandem arrangement consists of one car behind the other. No more than three total cars in tandem may be counted towards meeting the parking requirement.

(Ord. 2019-29 § 1 (part), 2020: Ord. 2019-04 § 13, 2019; Ord. 2016-19 § 1 (part), 2016: Ord. 2015-08 § 1 (part), 2015: Ord. 2015-02 § 1 (part), 2015: Ord. 2012-19 § 5, 2012; Ord. 2008-14 § 8, 2008: Ord. 2003-17 § 2 (part), 2003; Ord. 2003-16 § 2 (part), 2003. Formerly 24.16.180).

24.16.170 JUNIOR ACCESSORY DWELLING UNITS.

1.    Notwithstanding any other regulation or definition of this code, a junior accessory dwelling unit shall be permitted on parcels in zones where single-family dwellings are an allowed use and where single-family structures exist or are proposed on the site, and where the owner of the property occupies the property as their primary place of residence.

2.    For the purposes of this section, “junior accessory dwelling unit” shall have the same meaning as defined in Section 65852.22 of the California Government Code.

3.    Junior accessory dwelling units must be attached to a single-family dwelling, may be created in any part of an existing or proposed single-family dwelling, and may be created in an addition to a single-family dwelling.

4.    Junior accessory dwelling units may be no larger than five hundred square feet in size.

5.    Junior accessory dwelling units shall contain, at a minimum, the following features:

a.    An exterior entrance separate from that of the primary home.

b.    A cooking facility with appliances.

c.    A food preparation counter and storage cabinets of reasonable size in relation to the size of the junior accessory dwelling unit.

6.    Junior accessory dwelling units may include separate sanitation facilities, or may share sanitation facilities with the primary dwelling.

7.    Junior accessory dwelling units that contain all the required features of a dwelling unit will not be required to maintain an interior connection between the junior accessory dwelling unit and the primary dwelling. Junior accessory dwelling units that do not contain all the required features of a dwelling unit will be required to maintain an interior connection between the junior accessory dwelling unit and the primary dwelling unit.

8.    A deed restriction pursuant to Section 24.16.150 shall be required and recorded on the parcel.

(Ord. 2019-29 § 2, 2020).

PART 3: DENSITY BONUS PROVISIONS FOR RESIDENTIAL UNITS

24.16.200 PURPOSE.

The purposes of this Part 3 of this chapter are: (1) to provide incentives for the production of housing for very-low-income, low-income, moderate-income, and senior households; (2) to provide incentives for the creation of rental housing serving lower-income households; (3) to provide incentives for the construction of child care centers serving very-low-, low-, and moderate-income households; and (4) to implement California Government Code Sections 65915, 65915.5, 65915.7, and 65917 as required by Government Code Section 65915(a). In enacting this part, it is also the intent of the city of Santa Cruz to implement the goals, objectives, and policies of the city’s General Plan Housing Element to encourage the construction of affordable housing in the city. Further, it is the intent of the city of Santa Cruz to encourage the development of rental housing in order to serve an economically diverse community and to mitigate the trend, as documented in the General Plan Housing Element, that only limited rental unit development occurs without public assistance.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.205 DEFINITIONS.

For purposes of this Part 3 of this chapter, the following definitions shall apply. Unless specifically defined below, words or phrases shall be interpreted as to give this Part 3 its most reasonable interpretation.

1.    “Affordable ownership costs” means a sales price resulting in projected average monthly housing costs during the first calendar year of a household’s occupancy, including mortgage payments, property taxes, homeowners insurance, and homeowners association dues, if any, and a reasonable allowance for utilities, property maintenance, and repairs, which do not exceed the following:

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

b.    For lower-income households: seventy percent of area median income adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

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

The city may determine sales prices of affordable units by any reasonable method so long as average monthly housing payments of eligible households do not exceed those permitted by this definition.

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

a.    For lower-income households: sixty percent of area median income, adjusted for

assumed household size based on unit size, multiplied by thirty percent and divided by twelve.

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

c.    For federally subsidized units under the Housing Choice Voucher/Section 8 Program or other similar federal programs, federal rental terms may be applied at the discretion of the planning and community development director.

3.    “Affordable units” are dwelling units which are affordable to very-low-, lower-, or moderate-income households as defined by this Part 3 and are subject to rental, sale, or resale provisions to maintain affordability.

4.    “Area median income” is area median income for Santa Cruz County as published by the state of California pursuant to California Code of Regulations, Title 25, Section 6932, or successor provision.

5.    “Assumed household size based on unit size” is a household of one person in a studio apartment, two persons in a one-bedroom unit, three persons in a two-bedroom unit, and one additional person for each additional bedroom thereafter.

6.    “Child care facility” is a child daycare facility other than a family daycare home, as defined in Section 24.22.355, including, but not limited to, infant centers, preschools, extended daycare facilities, and school age child care centers.

7.    “Commercial development” is a construction project for nonresidential uses.

8.    “Commercial development bonus” is a modification of development standards mutually agreed upon by the city and a commercial developer that is provided to a commercial development eligible for such a bonus under Section 24.16.258. Examples of a commercial development bonus include an increase in floor area ratio, increased building height, or reduced parking.

9.    “Density bonus” is a density increase over the otherwise allowable maximum residential density on a site, granted pursuant to this Part 3 of this chapter or, if elected by the applicant, a lesser percentage of density increase, including, but not limited to, no increase in density.

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

11.    “Development standard” is any site or construction condition that applies to a housing development pursuant to any ordinance, General Plan element, specific plan, or other local condition, law, policy, resolution, or regulation. A “site and construction condition” is a development regulation or law that specifies the physical development of a site and buildings on the site in a housing development.

12.    “First approval” is the first of the following approvals to occur with respect to a housing development: specific plan, development agreement, planned development permit, tentative map, minor land division, use permit, design permit, building permit, or any other permit listed in Section 24.04.030.

13.    “Household income” is the combined adjusted net household income for all adult persons living in a living unit as calculated pursuant to California Code of Regulations, Title 25, Section 6916, or successor provision.

14.    “Household, low or lower income” is a household whose income does not exceed the lower-income limits applicable to Santa Cruz County, as published and periodically updated by the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50079.5.

15.    “Household, moderate income” is a household whose income does not exceed the moderate-income limits applicable to Santa Cruz County, as published and periodically updated by the California Department of Housing and Community Development pursuant to California Health and Safety Code Section 50079.5.

16.    “Household, very low income” is a household whose income does not exceed the very-low-income limits applicable to Santa Cruz County, as published and periodically updated by the State Department of Housing and Community Development pursuant to California Health and Safety Code Section 50105.

17.    “Housing development” is a development project on contiguous lots that are the subject of one development application, consisting of five or more residential units (not including any density bonus units), including single-family and multifamily and single-room occupancy units, for sale or for rent. For the purposes of this Part 3, “housing development” also includes a subdivision or a common interest development consisting of five or more residential units or unimproved residential lots, a mixed-use development that includes five or more residential units or unimproved residential lots, the substantial rehabilitation and conversion of an existing commercial building to residential use, and the substantial rehabilitation of an existing multifamily dwelling, where the rehabilitation or conversion would create a net increase of at least five residential units. In all cases density bonus units are not included for the purpose of determining whether the development consists of five or more units or lots.

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

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

20.    “Major transit stop” is an existing site, or a site included in the regional transportation plan, that contains a rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of fifteen minutes or less during the morning and afternoon peak commute periods. A housing development is considered to be within one-half mile of a major transit stop if all parcels within the housing development have no more than twenty-five percent of their area farther than one-half mile from the stop and if not more than ten percent of the units or one hundred units, whichever is less, in the housing development are farther than one-half mile from the stop.

21.    “Market rate unit” is a dwelling unit which is not an affordable unit as defined in this Part 3.

22.    “Maximum residential density” is the maximum number of residential units allowed in a housing development by the city’s zoning ordinance and by the land use element of the General Plan on the date that the application for the housing development is deemed complete. If the maximum density allowed by the zoning ordinance is inconsistent with the density allowed by the land use element of the General Plan, the land use element density shall prevail. This definition is used to calculate a density bonus pursuant to this Part 3 of this chapter.

23.    “Partnered housing agreement” is an agreement approved by the city between a commercial developer and a housing developer identifying how the commercial development will provide housing available at affordable ownership cost or affordable rent. A partnered housing agreement may consist of the formation of a partnership, limited liability company, corporation, or other entity recognized by the state in which the commercial developer and the housing developer are each partners, members, shareholders, or other participants, or a contract between the commercial developer and the housing developer for the development of both the commercial development and the housing development.

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

25.    “Special needs housing” is any housing, including supportive housing, intended to benefit, in whole or in part, persons identified as having special needs relating to mental health; physical disabilities; developmental disabilities, including without limitation intellectual disability, cerebral palsy, epilepsy, and autism; and risk of homelessness, and housing intended to meet the housing needs of persons eligible for mental health services funded in whole or in part by the Mental Health Services Fund, created by California Welfare and Institutions Code Section 5890.

26.    “Unobstructed access” to a location means that a resident is able to access the location without encountering natural or constructed impediments.

(Ord. 2018-10 § 1 (part), 2018: Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.210 ELIGIBILITY FOR RESIDENTIAL DENSITY BONUSES.

A housing development, as defined in Section 24.16.205(17), is eligible for a density bonus if it:

1.    Includes a request for a density bonus as part of the application for the housing development; and

2.    Meets the criteria for a density bonus established in Section 24.16.215, 24.16.220, 24.16.230, 24.16.235, or 24.16.240; and

3.    Provides replacement housing as required by Section 24.16.222.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.215 DENSITY BONUSES FOR AFFORDABLE, SENIOR, AND SPECIAL NEEDS HOUSING.

1.    Very-Low- and Lower-Income Housing and Senior Housing. Subject to the findings included in Section 24.16.270, a housing development is eligible for a twenty percent density bonus if the applicant agrees to construct at least one of the following and any additional replacement units required by Section 24.16.222:

a.    Ten percent of the total units in the housing development are made available to lower-income households based on affordable rents or affordable ownership costs; or

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

c.    The project is a senior citizen housing development of thirty-five dwelling units or more as defined in California Civil Code Section 51.3, or a mobilehome park that limits residency based on age requirements for older persons pursuant to California Civil Code Section 798.76 or 799.5. The density bonus for a senior citizen housing development may be applied only to the number of senior housing units.

As an example of the application of this section, if a forty-unit project includes either four lower-income units (ten percent) or two very-low-income units (five percent) or is a senior citizen housing development, the project would be entitled to build eight density bonus units, or

a total of forty-eight units. None of the eight bonus units would need to be affordable.

2.    Moderate Income Housing. Subject to the findings included in Section 24.16.270, a housing development is eligible for a five percent density bonus if it meets all of the following criteria:

a.    The applicant agrees to construct at least ten percent of the total units in the housing development at an ownership cost affordable to moderate-income households and includes any additional replacement units required by Section 24.16.222;

b.    The housing development is a common interest project as defined by California Civil Code Section 4100; and

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

3.    Special Needs Housing. Subject to the findings included in Section 24.16.270, a housing development is eligible for a density bonus of twenty percent of the type of units listed in subsection (3)(a) if the applicant agrees to construct all of the following and any additional replacement housing units required by Section 24.16.222:

a.    Ten percent of the total units in the housing development for transitional foster youth, as defined in Education Code Section 66025.9; disabled veterans, as defined in Government Code Section 18541; or homeless persons, as defined in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Section 11301 et seq.); and

b.    The units described in subsection (3)(a) are subject to a recorded restriction requiring that the units remain affordable to very-low-income households for fifty-five years.

4.    Additional Density Bonus. The density bonus for which the housing development is eligible shall increase if the percentage of very-low-, lower-, and moderate-income housing units exceeds the base percentage established in subsections (1) and (2), as follows:

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

b.    Lower-Income Units. For each one percent increase above ten percent in the percentage of dwelling units affordable to lower-income households based on density bonus affordable rents and affordable ownership costs, the density bonus shall be increased by one and one-half percent up to a maximum of thirty-five percent.

c.    Moderate-Income Ownership Units. For each one percent increase above ten percent of the percentage of dwelling units offered for sale at an ownership cost affordable to moderate-income households, the density bonus shall be increased by one percent up to a maximum of thirty-five percent.

d.    An additional density bonus may be given for a senior citizen housing development only if it includes the required percentage of very-low-, lower-, or moderate-income units.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.220 CITY DENSITY BONUSES FOR HOUSING DEVELOPMENTS.

The city rental housing density bonus provided pursuant to this section is provided as an alternative to the density bonuses provided elsewhere in this Part 3. A housing development is eligible for a twenty-seven and one-half percent density bonus if all of the units in the housing development are offered to the public for rent, and the developer agrees to enter into an enforceable restriction to ensure that no subdivision map will be recorded or no community apartment or stock cooperative will be created to create parcels containing single dwelling units that may be sold individually. If the twenty-seven and one-half bonus is greater than that to which the developer would otherwise be entitled pursuant to Section 24.16.215, the city rental housing bonus shall be considered to be one incentive or concession for purposes of Section 23.16.225.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.222 REPLACEMENT HOUSING REQUIREMENTS.

1.    Replacement housing shall be provided on the site of a housing development which meets both of the following conditions:

a.    Rental housing is now located or was located on the site at any time in the five-year period preceding the date of submittal of the density bonus application; and

b.    The rental housing is or was during that five-year period:

(1)    Subject to a recorded covenant, ordinance, or law restricting rents to levels affordable to very-low- and lower-income households;

(2)    Subject to any form of public rent or price control; or

(3)    Occupied by very-low- or lower-income households.

2.    A housing development subject to this section is not eligible for a density bonus, incentive, concession, waiver, or parking reduction provided by this Part 3 unless the proposed housing development contains one of the following, whichever results in a greater number of affordable units:

a.    The percentage of affordable units specified in Section 24.16.215; or

b.    The replacement affordable units specified in California Government Code Sections 65915(c)(3)(B) and (C).

(Ord. 2017-20 § 1 (part), 2017).

24.16.225 INCENTIVES AND CONCESSIONS FOR AFFORDABLE HOUSING.

An applicant for a density bonus may seek incentives and concessions as described in Section 24.16.255 as follows:

1.    One incentive or concession for housing developments where at least ten percent of the total units are affordable to lower-income households, at least five percent of the total units are affordable to very-low-income households, or at least ten percent of the total units in a common interest development are available to moderate-income households at affordable ownership costs.

2.    Two incentives or concessions for housing developments where at least twenty percent of the total units are affordable to lower-income households, at least ten percent of the total units are affordable to very-low-income households, or at least twenty percent of the total units in a common interest development are available to moderate-income households at affordable ownership costs.

3.    Three incentives or concessions for housing developments where at least thirty percent of the total units are affordable to lower-income households, at least fifteen percent of the total units are affordable to very-low-income households, or at least thirty percent of the total units in a common interest development are available to moderate-income households at affordable ownership costs.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.230 DENSITY BONUS FOR LAND DEDICATION.

1.    A housing development is eligible for a fifteen percent density bonus when an applicant for a housing development chooses to dedicate land to the city for the construction of very-low-income housing. For each one percent increase above the minimum ten percent land dedication described in subsection (2)(b), the maximum density bonus shall be increased by one percent, up to a maximum of thirty-five percent. This density bonus shall be in addition to any density bonus allowed by Section 24.16.215, up to a maximum combined density bonus of thirty-five percent if an applicant seeks both the density bonus authorized by this section and a density bonus authorized by Section 24.16.215.

2.    The city may approve the density bonus described in this section if it makes all of the following findings when approving the housing development:

a.    The applicant will dedicate and transfer the land no later than the date of approval of the final map, parcel map, or development application for the housing development.

b.    The developable acreage and zoning regulations of the land to be transferred will permit construction of dwelling units affordable to very-low-income households in an amount not less than ten percent of the total number of dwelling units in the proposed housing development, or will permit construction of a greater percentage of very-low-income dwelling units if proposed by the developer to qualify for a density bonus of more than fifteen percent.

c.    The transferred land is at least one acre in size or is large enough to permit development of at least forty units, has the appropriate general plan land use designation, has the appropriate zoning and development standards for development at a density of twenty units per acre, and at the time of project approval is, or at the time of construction will be, served by adequate public facilities and infrastructure.

d.    No later than the date of approval of the final map, parcel map, or other development application for the housing development, the transferred land will have all of the applicable development permits and approvals, other than any required building permit approval, necessary for the development of the very-low-income housing units on the transferred land.

e.    The transferred land and the very-low-income units constructed on the land will be subject to a recorded developer affordable housing agreement ensuring continued affordability of the units consistent with Section 24.16.260(1), which restriction shall be filed for recordation by the city with the Santa Cruz County recorder’s office on the property at the time of dedication.

f.    The land will be transferred to the city or to a housing developer approved by the city. The city reserves the right to require the applicant to identify a developer for the very-low-income units and to require that the land be transferred to that developer.

g.    The transferred land is within the site boundaries of the proposed housing development. The transferred land may be located within one-quarter mile of the boundary of the proposed housing development; provided, that the city council finds, based on substantial evidence, that off-site dedication will provide as much or more affordable housing at the same or lower income levels, and of the same or superior quality of design and construction, will not create or exacerbate residential segregation, and will otherwise provide greater public benefit than donating land on site.

h.    A proposed source of funding for the very-low-income units shall be identified no later than the date of approval of the final subdivision map, parcel map, or development application.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.235 DENSITY BONUS OR INCENTIVE FOR CHILD CARE FACILITIES.

1.    A housing development that is eligible for a density bonus and includes a child care facility that will be located on the premises of, as part of, or adjacent to the housing development, is eligible for either of the following, at the option of the city, if requested by the applicant:

a.    An additional density bonus that is an amount of square feet of residential space that is equal to or greater than the amount of square feet in the child care facility; or

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

2.    The developer affordable housing agreement shall require that:

a.    The child care facility may be used only for child care for a period of time that is as long as or longer than the period of time during which the affordable units are required to remain affordable pursuant to Section 24.16.260(1); and

b.    Of the children who attend the child care facility, the percentage of children of very-low-income households, lower-income households, or moderate-income households shall be equal to or greater than the percentage of dwelling units that are proposed to be affordable to very-low-income households, lower-income households, or moderate-income households; and

c. The developer or successor in interest shall be responsible for all costs of monitoring and reporting required by this subsection (2).

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

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.240 DENSITY BONUS FOR CONDOMINIUM CONVERSIONS.

1.    A housing development for a conversion of existing rental apartments to condominiums is eligible for a density bonus or other incentives of equivalent financial value if the applicant agrees to provide thirty-three percent of the total units in the proposed condominium project as affordable to lower-income or moderate-income households based on density bonus affordable ownership costs, or to provide fifteen percent of the total units in the condominium conversion project as affordable to lower-income households based on density bonus affordable ownership costs. All such density bonus affordable units shall remain affordable in perpetuity.

2.    For purposes of this section, a “density bonus” means an increase in units of twenty-five percent over the existing number of apartments. Pursuant to state law, the density bonus units must be provided within the existing structure or structures proposed for conversion. Incentives of equivalent financial value may include fee reductions or waivers at the city’s sole discretion but shall not include monetary subsidies from the city.

3.    No condominium conversion shall be eligible for a density bonus if the apartments proposed for conversion constitute a housing development for which a density bonus or other incentives were previously provided pursuant to the Santa Cruz Municipal Code or Government Code Section 65915.

4.    Nothing in this section shall be construed to require the city to approve a proposal to convert rental apartments into condominiums.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.245 SUMMARY TABLES.

The following tables summarize the available density bonuses, incentives, and concessions for housing developments:

Density Bonus Summary 

Types of Affordable Units Providing Eligibility for a Density Bonus

Minimum %

Bonus Granted

Additional Bonus for Each 1% Increase in Affordable Units

% Affordable Units Required for Maximum 35% Bonus

A density bonus may be selected from only one category, except that bonuses for land donation may be combined with others, up to a maximum of 35%, and an additional sq. ft. bonus may be granted for a child care center.

Very low income

5%

20%

2.5%

11%

Lower income

10%

20%

1.5%

20%

Moderate income (ownership units only)

10%

5%

1%

40%

Senior housing

100% senior

20%

Units for transitional foster youth, disabled veterans, or homeless

10%
(Units must also be affordable to very-low-income households)

20% of designated units

Rental housing(A)

No map

27.5%

Land donation for very-low-income housing

10% of market-rate units

15%

1%

30% of market-rate units

Condominium conversion – moderate income

33%

25%(B)

Condominium conversion – lower income

15%

25%(B)

Child care center

Sq. ft. in child care center (B)

Notes:

(A) City bonus; not required by state law. Rental housing bonus is considered an incentive if greater than bonus allowed by state law. City bonuses are alternatives to state density bonus.

(B) Or and incentive of equal value, at the city’s option. See table below.

Incentives and Concessions Summary

Target Units of Category

% of Target Units

Pursuant to State Density Bonus

Very low income

5%

10%

15%

Lower income

10%

20%

30%

Moderate income (ownership units only)

10%

20%

30%

Maximum Incentive(s)/Concessions(A)(B)(C)

1

2

3

 

Notes:

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

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

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

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.250 CALCULATION OF DENSITY BONUS FOR HOUSING DEVELOPMENTS.

1.    When calculating the maximum residential density and number of permitted density bonus units, any calculations resulting in fractional units shall be rounded to the next larger whole number.

2.    The density bonus units shall not be included in the “total units” when determining the number of affordable units required to qualify a housing development for a density bonus pursuant to Section 24.16.215(1), (2), or (3). When calculating the required number of affordable units, any calculations resulting in fractional units shall be rounded to the next larger whole number.

3.    The applicant may request a lesser density bonus than the project is entitled to, but no reduction may be permitted in the number of affordable units or land dedication required to qualify a housing development for a density bonus. Regardless of the number of affordable units or land dedication, no housing development may be entitled to a total density bonus of more than thirty-five percent.

4.    Each housing development is entitled to only one density bonus, which may be selected by the applicant based on the percentage of either very-low-income dwelling units, lower-income dwelling units, or moderate-income ownership dwelling units; the project’s status as either a senior housing project; the project’s provision of housing for transitional foster youth, disabled veterans, or homeless persons; or as a project eligible for a city rental housing bonus. Density bonuses from more than one category may not be combined, except that bonuses for land dedication pursuant to Section 24.16.230 may be combined with bonuses granted pursuant to Section 24.16.215, up to a maximum of thirty-five percent, and an additional square footage bonus for child care centers may be granted as described in Section 24.16.235.

5.    For purposes of calculating the number of inclusionary units required by Part 1 of this chapter, any dwelling units authorized as a density bonus pursuant to this Part 3 shall not be counted as part of the housing development. However, if a developer elects to receive a city rental housing bonus as authorized by Section 24.16.220, then all of the dwelling units in the project, including the dwelling units authorized as a density bonus, shall be counted as part of the housing development for purposes of calculating the inclusionary units required by Part 1.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.255 STANDARDS FOR INCENTIVES, CONCESSIONS, AND WAIVERS FOR HOUSING DEVELOPMENTS.

1.    For purposes of this Part 3, concessions and incentives include the following:

a.    A reduction of site development standards or a modification of zoning code requirements or architectural design requirements which exceed the minimum building standards provided in California Health and Safety Code Division 13, Part 2.5 (commencing with Section 18901), and which result in identifiable and actual cost reductions to provide for affordable ownership costs or affordable rents.

b.    Approval of mixed-use development in conjunction with the housing development if nonresidential land uses will reduce the cost of the housing development and if the city finds that the proposed nonresidential uses are compatible with the housing development and with existing or planned development in the area where the proposed housing development will be located.

c.    Other regulatory incentives or concessions proposed by the developer or the city which result in identifiable and actual cost reductions to provide for affordable ownership costs or affordable rents.

2.    Concessions Allowed by Right. The following concessions and incentives may be approved without any requirement that the applicant demonstrate to the city that the requested concession or incentive results in identifiable and actual cost reductions to the project to provide for affordable ownership costs or affordable rents:

a.    Up to a twenty percent reduction in a yard setback or building stepback requirement, with each structure in a required yard setback or building stepback counting as one concession or incentive;

b.    Up to a twenty percent increase in maximum lot coverage;

c.    Up to a twenty percent reduction in required landscape area;

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

e.    Reduction of off-street parking requirements as described in Section 24.16.256;

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

g.    Approval of fee waivers pursuant to Part 4 of this chapter.

3.    Concessions Requiring Additional Analysis. For requests for any concessions other than those listed in subsection (2), the applicant shall provide a pro forma and/or other reasonable documentation demonstrating to the city that the requested concession or incentive results in identifiable and actual cost reductions to the project to provide for affordable ownership costs or affordable rents. For the purposes of this section, the term “reasonable documentation” may include cost estimates prepared by a California-licensed professional contractor, architect, engineer, or other professional with such financial expertise.

4.    Applicants may seek a waiver or modification of development standards that will have the effect of physically precluding the construction of a housing development eligible for a density bonus at the density or with the incentives or concessions permitted by this Part 3. The applicant shall bear the burden of demonstrating that the development standards that are requested to be waived will have the effect of physically precluding the construction of the housing development with the density bonus and incentives.

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

6.    For the purposes of calculating the number of density bonus units in areas where a maximum density range is not provided in the zone district or general plan, an implicit residential density shall be calculated based on a project put forward by the applicant that meets all applicable development standards. Objective development standards such as setbacks, floor area ratio, and height limitations, while not defining the maximum density range per se, can be utilized to determine the implicit residential density allowed. In this approach, a project defines the applicable residential density for itself based on meeting applicable development standards. The average size of the units presented in the base density project must be equal to or greater than the average size of the units presented in the density bonus project.

(Ord. 2020-23 § 9, 2020: Ord. 2018-10 § 1 (part), 2018: Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.256 MODIFIED PARKING STANDARDS FOR HOUSING DEVELOPMENTS.

1.    Upon the request of the developer, the city shall not require off-street parking for a housing development eligible for a density bonus that exceeds the following:

a.    Zero- to one-bedroom units: one on-site parking space.

b.    Two- to three-bedroom units: two on-site parking spaces.

c.    Four- and more bedroom units: two and one-half parking spaces.

2.    For certain other housing developments that are eligible for a density bonus, upon the request of the developer, the city shall not require a vehicular parking ratio that exceeds the ratios shown in the following table. However, if the city, at its cost, has conducted an area wide or citywide parking study in the last seven years, then the city may find, based on substantial evidence, that a higher parking ratio is required than shown in the following table. In no event may the required parking be greater than the ratio provided in subsection (1). The parking study must conform to the requirements of California Government Code Section 65915(p)(7).

 

 

Type of Development

Maximum Number of Required Off-Street Parking Spaces

Rental or ownership housing development with:

1. At least 11 percent very-low-income or 20 percent lower-income units; and

2. Within one-half mile of a major transit stop; and

3. Unobstructed access to the major transit stop.

0.5 per bedroom

Rental housing development with:

1. All units affordable to lower-income households except manager’s unit(s); and

2. Within one-half mile of a major transit stop; and

3. Unobstructed access to the major transit stop.

0.5 per unit

Senior citizen rental housing development with:

1. All units affordable to lower-income households except manager’s unit(s); and either

2. Has paratransit service; or

3. Is within one-half mile of fixed bus route service that operates eight times per day, with unobstructed access to that service.

0.5 per unit

Special needs rental housing development with:

1. All units affordable to lower-income households except manager’s unit(s); and either

2. Has paratransit service; or

3. Is within one-half mile of fixed bus route service that operates eight times per day, with unobstructed access to that service.

0.3 per unit

Guest parking and handicapped parking shall be included within the maximum number of spaces that may be required. If the total number of parking spaces required for a housing development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this section, a housing development may provide on-site parking through tandem parking or uncovered parking, but not through on-street parking.

(Ord. 2017-20 § 1 (part), 2017).

24.16.258 COMMERCIAL DEVELOPMENT BONUS.

1.    When a developer proposes to construct a commercial development and has entered into a partnered housing agreement approved by the city, the city shall grant a commercial development bonus mutually agreed upon by the developer and the city. The commercial development bonus shall not include a reduction or waiver of fees imposed on the commercial development to provide for affordable housing.

2.    The partnered housing agreement shall include all of the following provisions:

a.    The housing development shall be located either on the site of the commercial development or on a site within the city that is within one-half mile of a major transit stop and is located in close proximity to public amenities, including schools and employment centers.

b.    At least thirty percent of the total units in the housing development shall be made available at affordable ownership cost or

affordable rent for low-income households, or at least fifteen percent of the total units in the housing development shall be made available at affordable ownership cost or affordable rent for very-low-income households.

c.    The commercial developer must agree either to directly build the affordable units; donate a site consistent with subsection (a) for the affordable units; or make a cash payment to the housing developer for the affordable units.

3.    The housing development shall remain eligible for any density bonuses, incentives, concessions, waivers, and parking reductions the housing development would otherwise be eligible for and that are provided by this Part 3.

4.    Any approved partnered housing agreement shall be described in the city’s housing element annual report as required by Government Code Section 65915.7(k).

(Ord. 2017-20 § 1 (part), 2017).

24.16.260 STANDARDS FOR DENSITY BONUS HOUSING DEVELOPMENTS.

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

a.    Rental units affordable to very-low- and lower-income households shall remain affordable to the designated income group for a minimum of fifty-five years or for a longer period of time if required by any construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program applicable to the dwelling units, except that lower income units in a condominium conversion project shall remain affordable in perpetuity.

b.    For-sale units affordable to very-low-, lower-, or moderate-income households shall remain affordable in perpetuity.

2.    Affordable units qualifying a housing development for a density bonus shall be reasonably dispersed throughout the housing development and compatible with the design of market rate units in terms of appearance, materials, and finished quality. The applicant may reduce the interior amenities and square footage of affordable units, provided all units conform to all requirements of Titles 18 and 19 and are at least seventy-five percent of the average square footage of all market rate units in the development with the same bedroom count.

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

4.    All building permits for affordable units qualifying a housing development for a density bonus shall be issued concurrently with, or prior to, issuance of building permits for the market rate units, and the affordable units shall be constructed concurrently with, or prior to, construction of the market rate units. Occupancy permits and final inspections for affordable units qualifying a housing development for a density bonus shall be approved concurrently with, or prior to, approval of occupancy permits and final inspections for the market rate units.

(Ord. 2018-10 § 1 (part), 2018: Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.262 LOCAL COASTAL PLAN CONSISTENCY.

1.    State density bonus law provides that it shall not be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act of 1976.

2.    For development within the coastal zone, the requested density bonus and any requested incentive, concession, waiver, modification, modified parking standard, or commercial development bonus shall be consistent with state density bonus criteria. All applicable requirements of the certified Santa Cruz local coastal program shall be met (including but not limited to sensitive habitat, agriculture, public viewshed, public recreational access, and open space), with the exception of the numeric standards changed through state density bonus provisions.

(Ord. 2019-09 § 1, 2019: Ord. 2017-20 § 1 (part), 2017).

24.16.265 SUBMITTAL OF APPLICATION FOR AFFORDABLE HOUSING PLAN.

1.    An application for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus pursuant to this Part 3 shall be submitted as part of the first approval of the housing development or commercial development in the form of an affordable housing plan which shall be processed concurrently with all other applications required for the housing development or commercial development.

2.    Upon submittal, the director of the planning and community development department shall determine if the affordable housing plan is complete and conforms to the provisions of this chapter. No application for a first approval for a housing development or commercial development requesting a density bonus, incentives, concessions, waivers, modified parking standard, or commercial development bonus may be deemed complete unless an affordable housing plan is submitted conforming to the provisions of this section. The applicant shall be informed whether the application is complete consistent with Government Code Section 65943.

3.    The affordable housing plan shall include at least the following information:

a.    Site plan showing total number of units, number and location of affordable units, and number and location of proposed density bonus units.

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

c.    Summary table showing the maximum number of units permitted by the zoning and general plan excluding any density bonus units, affordable units qualifying the project for a density bonus, level of affordability of all affordable units, proposed bonus percentage, number of density bonus units proposed, and total number of dwelling units proposed on the site.

d.    Tenure (rental versus for-sale) of target units and proposals for ensuring affordability.

e.    A description of all dwelling units existing on the site in the five-year period preceding the date of submittal of the application and identification of any units rented in the five-year period. If dwelling units on the site are currently rented, income and household size, if known, of all residents of currently occupied units. If any dwelling units on the site were rented in the five-year period but are not currently rented, the income and household size, if known, of residents occupying dwelling units when the site contained the maximum number of dwelling units.

f.    Description of any recorded covenant, ordinance, or law applicable to the site that restricted rents to levels affordable to very-low- or lower-income households in the five-year period preceding the date of submittal of the application.

g.    For all incentives and concessions except those listed in Section 24.16.255(2), a pro forma demonstrating that the requested incentives and concessions result in identifiable and actual cost reductions and evidence that the cost reduction allows the applicant to provide affordable rents or affordable ownership costs. If a mixed-use building or project is proposed as an incentive, the applicant shall also provide evidence that nonresidential land uses will reduce the cost of the residential project and that the nonresidential land uses are compatible with the residential project and the existing or planned surrounding development.

h.    Any pro forma submitted to comply with subsection (2)(g) may not include the lost opportunity cost of any affordable units (i.e., the revenue that would have been generated had the units been rented or sold at market rate) and may include as an additional cost only those additional expenses that are required solely because of the proposed construction of the affordable units. The cost of reviewing any required pro forma data submitted in support of a request for a concession or incentive, including but not limited to the cost to the city of hiring a consultant to review the pro forma, shall be borne by the applicant. The pro forma shall also include: (1) the actual cost reduction achieved through the incentive or concession; and (2) evidence that the cost reduction allows the developer to provide affordable rents or affordable sales prices.

i.    For waivers or modifications of development standards: the application shall provide evidence that each development standard for which the waiver is requested will have the effect of physically precluding the construction of the housing development at the densities or with the incentives or concessions permitted by this Part 3.

j.    If a parking modification is requested, a table showing parking required by the zoning ordinance and proposed parking. If a parking reduction provided by Section 24.16.256(2) is requested, evidence that the project is eligible for the requested parking reduction.

k.    In phased housing projects, for each construction phase, the affordable housing plan shall specify, at the same level of detail as the application for the housing development: the number, unit type, tenure, number of bedrooms and baths, approximate location, size, and design, construction and completion schedule of all affordable units, phasing of all other affordable units in relation to market rate units, marketing plan, and intended rent or sale price and basis for calculation.

l.    If the affordable units will not be constructed concurrently with the market rate units, the affordable housing plan shall describe the proposed phasing and specify the security to be provided to the city to ensure that the affordable units will be constructed.

m.    If a density bonus or concession is requested for a land donation, the application shall show the location of the land to be dedicated and provide evidence that each of the findings included in Section 24.16.230 can be made.

n.    If a density bonus or concession is requested for a child care center, the application shall show the location and square footage of the child care center and provide evidence that each of the standards included in Section 24.16.235 has been met.

o.    If a density bonus or incentive is requested for a condominium conversion, the application shall provide evidence that all of the requirements found in Section 24.16.240 have been met.

p.    If a commercial development bonus is requested for a commercial development, the application shall include the proposed partnered housing agreement, the proposed commercial development bonus, and evidence that each of the standards included in Section 24.16.258 has been met.

4.    A request for a minor modification of an approved affordable housing plan may be granted by the director of the planning and community development department if the modification is substantially in compliance with the original affordable housing plan and the conditions of approval. Other modifications to the affordable housing plan shall be processed in the same manner as the original affordable housing plan.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.270 CITY REVIEW OF APPLICATION FOR DENSITY BONUSES AND OTHER INCENTIVES.

1.    An application for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus pursuant to this Part 3 shall be reviewed at a noticed public hearing as part of the first approval of the housing development by the approval body with authority to approve the housing development within the timelines prescribed by Government Code Section 65950 et seq. However, if review by the planning commission or city council is not required, the application shall be heard by the zoning administrator. Any decision regarding a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus may be appealed as provided in Section 24.16.285. In accordance with state law, neither the granting of a concession or incentive, nor the granting of a density bonus, shall be interpreted, in and of itself, to require a General Plan amendment, zoning change, variance, or other discretionary approval.

2.    Before approving an application for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus, the approval body shall make the following findings, as applicable:

a.    The housing development is eligible for a density bonus and any concessions, incentives, waivers, modifications, or modified parking standards requested; conforms to all standards for affordability included in this section; and includes a financing mechanism for all implementation and monitoring costs.

b.    Any requested incentive or concession will result in identifiable and actual cost reductions to provide for affordable rents or affordable ownership costs based upon appropriate financial analysis and documentation if required by Section 24.16.255.

c.    If the density bonus is based all or in part on dedication of land, the approval body has made the findings included in Section 24.16.230.

d.    If the density bonus, incentive, or concession is based all or in part on the inclusion of a child care center, the development conforms to the standards included in Section 24.16.235.

e.    If the density bonus incentive or concession is approved for a condominium conversion, the development conforms to the standards included in Section 24.16.240.

f.    If the incentive or concession includes mixed-use buildings or developments, the nonresidential land uses will reduce the cost of the housing development and the proposed nonresidential uses are compatible with the housing development and with existing or planned development in the area where the proposed housing development will be located.

g.    If a waiver or modification is requested, the applicant has shown that the development standards for which the waiver or modification is requested will have the effect of physically precluding the construction of the housing development at the densities or with the incentives or concessions permitted by this Part 3.

h.    If a commercial development bonus is requested, the project complies with the requirements of Section 24.16.258, the city has approved the partnered housing agreement, and the bonus has been mutually agreed upon by the city and the commercial developer.

i.    If the housing development or the commercial development is in the coastal zone, any requested density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus is consistent with all applicable requirements of the certified Santa Cruz local coastal program, with the exception of density.

3.    If the required findings can be made, and a request for an incentive or concession is otherwise consistent with this section, the approval body may deny an incentive or concession only if it makes a written finding, based upon substantial evidence, of one of the following:

a.    The incentive or concession does not result in identifiable and actual cost reductions to provide for affordable rents or affordable ownership costs; or

b.    The incentive or concession would have a specific adverse impact upon public health or safety, or the physical environment, or on any real property that is listed in the California Register of Historic Resources, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to lower-, very-low- and moderate-income households. For the purpose of this subsection, “specific adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, written public health or safety standards, policies, or conditions, as they existed on the date that the application was deemed complete; or

c.    The concession or incentive is contrary to state or federal law.

4.    If the required findings can be made, and a request for a waiver or modification is otherwise consistent with this section, the approval body may deny the requested waiver or modification only if it makes a written finding, based upon substantial evidence, of one of the following:

a.    The modification would have a specific adverse impact upon health, safety, or the physical environment, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to lower-, very-low- and moderate-income households. For the purpose of this subsection, “specific adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, written public health or safety standards, policies, or conditions as they existed on the date that the application was deemed complete; or

b.    The modification would have an adverse impact on any real property that is listed in the California Register of Historic Resources; or

c.    The waiver or modification is contrary to state or federal law, which may include a finding that the development standards for which the waiver is requested would not have the effect of physically precluding the construction of the housing development with the density bonus and incentives permitted.

5.    If a density bonus or concession is based on the provision of child care centers, and if the required findings can be made, the approval body may deny the bonus or concession only if it finds, based on substantial evidence, that the city already has adequate child care centers.

(Ord. 2018-10 § 1 (part), 2018: Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.275 DEVELOPER AFFORDABLE HOUSING AGREEMENT.

Any density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial density bonus granted pursuant to this Part 3 shall be described in, and the conditions of approval incorporated into, the developer affordable housing agreement required by Section 24.16.040. Prior to recordation of any final or parcel map or issuance of any building permit for the housing development or commercial development, the developer affordable housing agreement shall be recorded as a restriction on any housing development granted any density bonus, incentive, concession, waiver, modification, or revised parking standard granted pursuant to this Part 3.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.280 CONTINUED AFFORDABILITY AND INITIAL OCCUPANCY.

Provisions for continued affordability and initial occupancy of affordable units qualifying a housing development or commercial development for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial density bonus shall be the same as those specified for inclusionary units in Section 24.16.045, except that no very-low- and lower-income tenant household may occupy rental affordable units qualifying a housing development for a density bonus until the city or its designee has approved the household’s eligibility as a very-low- or lower- income household, as appropriate.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.285 APPEALS.

1.    An applicant or any other person whose interests are adversely affected by any determination of the planning and community development division staff or of an agency retained by the city with regard to this Part 3 may appeal the determination to the director of planning and community development.

2.    An applicant or any other person whose interests are adversely affected by the determination of the director of the planning and community development with regard to this Part 3 may appeal the determination to the city council.

3.    The procedure for appeals shall be consistent with the procedures prescribed in Sections 24.04.180 through 24.04.185.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

24.16.290 IMPLEMENTATION AND ENFORCEMENT.

1.    The city council may adopt guidelines, by resolution, to assist in the implementation of all aspects of this Part 3.

2.    In addition to any other powers or duties prescribed by law, the director of planning and community development shall have the following powers and duties in relation to this Part 3:

a.    To monitor compliance with the provisions of this Part 3 and to refer to the city attorney for appropriate action any person violating the provisions of this Part 3; and

b.    To administer this Part 3.

3.    The city attorney shall be authorized to enforce the provisions of this Part 3, all agreements entered into pursuant to this Part 3, and all other requirements of this Part 3, by civil action and any other proceeding or method permitted by law. The city may, at its discretion, take such enforcement action as is authorized under any provision of the Santa Cruz Municipal Code and/or any other action authorized by law or by any agreement executed pursuant to this Part 3.

4.    Failure of any official or agency to enforce the requirements of this Part 3 shall not constitute a waiver or excuse any applicant or owner from the requirements of this Part 3. No permit, license, map, or other approval or entitlement for a housing development shall be issued, including without limitation a final inspection or certificate of occupancy, until all applicable requirements of this Part 3 have been satisfied.

5.    The remedies provided for herein shall be cumulative and not exclusive and shall not preclude the city from any other remedy or relief to which it otherwise would be entitled under law or equity.

(Ord. 2017-20 § 1 (part), 2017: Ord. 2006-19 § 2 (part), 2006).

Part 4: FEE WAIVERS FOR AFFORDABLE UNITS

24.16.300 UNITS ELIGIBLE FOR FEE WAIVERS.

a.    The city may grant waivers of the following development fees if the waivers will assist in providing residential units affordable to low or very-low income households, excluding units developed as inclusionary units for low income households under Chapter 24.16 Part 1, Inclusionary Housing Requirements or replacement housing units provided under Chapter 24.08.1360, Replacement Housing Requirements:

1.    Sewer and water connection fees for units affordable to low and very low income households.

2.    Planning application and planning plan check fees for projects that are one hundred percent affordable to low and very-low income households.

3.    Building permit and plan check fees for units affordable to very-low income households.

4.    Park land and open space dedication in-lieu fee for units affordable to very low income households.

5.    Parking deficiency fee for units affordable to very-low income households.

6.    Fire fees for those units affordable to very-low income households.

(Ord. 2006-24 § 1, 2006: Ord. 93-51 § 6, 1993).

24.16.310 PROCEDURE FOR WAIVER OF FEES.

A fee waiver supplemental application shall be submitted at the time an application for a project with affordable units is submitted to the city.

(Ord. 93-51 § 6, 1993).