HomeMy WebLinkAbout2017-04-17 Ordinance 5408161122 jb 0131520 1 April 5, 2017
Ordinance No. 5408
Ordinance of the City of Palo Alto Repealing Chapter 16.47 (Approval of Projects with
Impacts on Housing) and Chapter 18.14 (Below Market Rate Housing Program) of the
Palo Alto Municipal Code and Replacing Them with a New Chapter 16.65 (Citywide
Affordable Housing Requirements)
The City Council of the City of Palo Alto hereby finds and declares as follows:
A. Under California Government Code Section 65580(d) all cities have a responsibility to
use the powers vested in them to facilitate the improvement and development of housing and to make
adequate provision for the housing needs of all economic segments of the community.
B. The provision of safe and stable housing for households at all income levels is essential
for the public welfare of the city. Housing in Palo Alto has become steadily more expensive and housing
costs have gone up faster than incomes. Federal and state government programs do not provide
enough affordable housing to satisfy the needs of very low, low, or moderate income households. As a
result, there is a severe shortage of adequate, affordable housing for extremely low, very low and
moderate income households, as evidenced by the following findings in the City's 20152023 Housing
Element:
1. Despite a high median income in Palo Alto, nearly 30 percent of all households
overpaid for their housing (more than 30 percent of their income) in 2010;
2. It is estimated that 63 percent of extremely low income renter households and
75 percent of extremely low income owner households overpaid for housing in 2010. Of the estimated
1,520 low income households, 75 percent of renter households and 44 percent of homeowner
households paid more than 30 percent of their income for housing.
3. Extremely low, very low and low income households in Palo Alto have almost no
affordable housing options without substantial subsidies. For moderate income households, adequately
sized and affordable rental housing options are very limited as well.
4. Homeownership is largely beyond the reach of most lower and moderate
income households in Palo Alto and low and very low income households have difficulty finding rental
properties in Palo Alto.
C. As stated in the City of Palo Alto's Housing Element, it is the City's policy to encourage,
foster, and preserve diverse housing opportunities for very low, low, and moderate income households.
The City can achieve its goals of providing more affordable housing and achieving an economically
balanced community only if part of the new housing built in the City is affordable to households with
limited incomes.
D. In order to meet the needs of moderate households, dwelling units will need to house a
variety of household types, incomes, and age groups.
E. The affordable housing ordinance codified in this chapter will substantially advance the
City's legitimate interest in providing additional housing affordable to all income levels and dispersed
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throughout the City by requiring construction of belowmarket rate housing and providing funds for
housing affordable to very low, low, and moderate income households.
F. New marketrate housing creates a demand for affordable housing, because new
residents of that housing purchase goods and utilize services in the community, increasing local
employment and attracting employees, of whom a quantifiable number will have very low, low, or
moderate incomes and cannot afford marketrate housing, as demonstrated in the Residential Impact
Fee Nexus Study dated October 2015, prepared by Strategic Economics and Vernazza Wolfe Associates,
Inc.
G. Because nonresidential projects also attracts employees, of whom a quantifiable
number will have very low, low, or moderate incomes, new nonresidential projects similarly increase the
demand for and exacerbate the shortage of housing available for people at these income levels, as
demonstrated in the Commercial Linkage Fee Nexus Study dated November 2015, prepared by Strategic
Economics and Vernazza Wolfe Associates, Inc.
H. Construction of marketrate housing and nonresidential projects that do not include
affordable units also aggravates the existing shortage of affordable housing by absorbing the supply of
available land.
I. Based on the findings above, the City desires to further the public health, safety and
welfare by requiring residential and nonresidential projects in the City to mitigate their impact on the
need for affordable housing in the City.
J. This ordinance implements Housing Element Program H3.1.2. In particular, this
ordinance:
1. Implements the inclusionary requirements, standards, and price limits
contained in Programs H3.1.2(a) and (b);
2. Contains standards for determining the feasibility of onsite BMR units, contains
BMR program priorities, and provides standards for alternatives, fractional units, and payment of inlieu
fees as contained in Programs H3.1.2(c), (d), and (e), and after consideration of the possible policy
contained in Program H3.1.2(h);
3. Contains provisions for reviewing developer requests that the requirements in
the ordinance constitute a taking, consistent with Program H3.1.2(f);
4. Permits smaller or duplex BMR units in new single family residential subdivisions
after consideration of the possible policy contained in Program H3.1.2(g);
5. Evaluated and determined not to adopt the policy contained in Program
H3.1.2(i); and
6. Completed a nexus study to identify the impact of market rate housing on the
need for affordable housing, and developed policies for rental housing based on the results of the study,
consistent with Program H3.1.2(j). The nexus study also ensured that commercial developments
contribute to affordable housing through the payment of fees (Program H3.1.6).
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Based on the above, the City Council further finds that this ordinance is consistent with the Housing
Element and that any minor modifications in specific procedures are intended to better implement the
NOW, THEREFORE, the City Council of the City of Palo Alto, California, hereby ordains as follows:
SECTION 1: Chapter 16.47 (Approval of Projects with Impacts on Housing) of the Palo Alto
Municipal Code is hereby repealed.
SECTION 2: Chapter 18.14 (Below Market Rate Housing Program) of the Palo Alto Municipal
Code is hereby repealed.
SECTION 3: New Chapter 16.65 (Citywide Affordable Housing Requirements) is hereby
added to the Palo Alto Municipal Code to read in full as follows:
Chapter 16.65
CITYWIDE AFFORDABLE HOUSING REQUIREMENTS
Sections:
16.65.010 Purpose
16.65.020 Definitions
16.65.025 Exemptions
16.65.030 Basic Affordable Housing Requirements Residential Ownership Projects
16.65.040 Basic Affordable Housing Requirements MixedUse, Nonresidential and
Residential Rental Projects
16.65.060 Housing Impact Fee and InLieu Fee
16.65.070 Requirements for Residential Projects Containing Ownership and Rental Units
and for Mixed Use Projects
16.65.075 Provision of Affordable Units
16.65.080 Alternative Means of Compliance
16.65.090 Application and Review Procedures
16.65.100 Affordable Housing Funds
16.65.110 Administrative Relief
16.65.120 Enforcement
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16.65.010 Purpose. The purposes of this chapter are to:
A.Enhance the public welfare by establishing policies to provide affordable housing, meet
the City's regional share of housing needs, and implement the goals and objectives of
the comprehensive plan and housing element.
B.Mitigate the impacts of residential rental and nonresidential projects on the need for
affordable housing by imposing a housing impact fee whereby developers of residential
rental and nonresidential projects will contribute to the supply of housing for
households with very low, low, and moderate incomes.
C.Increase funds available to support the preservation and production of new affordable
housing in the City of Palo Alto.
D.Ensure that developers of new nonresidential square footage provide funding to
mitigate the impacts of new employment on the demand for affordable housing.
E.Ensure that developers of new marketrate rental housing provide funding to mitigate
the impacts of new residents on local employment and the resultant increased demand
for affordable housing.
F.To create incentives for developers to build new affordable units on or offsite instead
of paying impact fees or in lieu fees.
G.To provide affordable housing that serves qualifying Palo Alto residents and those who
work in the City.
16.65.020 Definitions. The definitions set forth in this section shall govern the application and
interpretation of this chapter. Words and phrases not defined in this section shall be interpreted so as
to give this chapter its most reasonable application.
A."Affordable housing agreement" means an agreement in conformance with Section
16.65.090(B) between the City and an applicant, governing how the applicant shall
comply with this chapter.
B."Affordable housing guidelines" means the requirements for implementation and
administration of this chapter adopted by the planning and community environment
director in accordance with Section 16.65.090(D).
C."Affordable housing plan" means a plan containing all of the information specified in
and submitted in conformance with Section 16.65.090(A) specifying the manner in
which affordable units will be provided in conformance with this chapter and the
affordable housing guidelines.
D."Affordable rent" means the total monthly housing expenses for a rental affordable unit
not exceeding the rents specified by Section 50053 of the California Health and Safety
Code and California Code of Regulations Title 25, Sections 69106924. As used in this
Chapter, "affordable rent" shall include the total of monthly payments by the tenant for
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all of the following: (1) use and occupancy of the affordable unit and land and all
facilities associated with the affordable unit, including but not limited to parking, bicycle
storage, storage lockers, and use of all common areas; (2) any additional separately
charged fees or service charges assessed by the owner, other than security deposits; (3)
an allowance for utilities paid by the tenant as established by the City, including garbage
collection, sewer, water, electricity, gas, and other heating, cooking, and refrigeration
fuel, but not telephone service or cable TV; and (4) any other interest, taxes, fees or
charges for use of the land or affordable unit or associated facilities and assessed by a
public or private entity other than the owner, and paid by the tenant.
E."Affordable sales price" means the maximum purchase price that will be affordable to
the specified household at the specified income level, calculated in accordance with
California Health and Safety Code Section 50052.5. The affordable sales price shall
include a reasonable down payment, and monthly housing payments (including interest,
principal, mortgage insurance, property taxes, homeowners insurance, homeowners
association dues, property maintenance and repairs, and a reasonable allowance for
utilities), all as determined by the City.
F."Affordable unit" means a dwelling unit affordable to very low, low, or moderate
income households.
G."Applicant" or "developer" means a person, persons, or entity that applies for a
residential or nonresidential project and also includes the owner or owners of the
property if the applicant does not own the property on which development is proposed.
H."Area median income" or "AMI" means the annual median income for Santa Clara
County, adjusted for household size, as published periodically in the California Code of
Regulations, Title 25, Section 6932, or its successor provision, or as established by the
City of Palo Alto in the event that such median income figures are no longer published
periodically in the California Code of Regulations.
I."Building permit" includes full structural building permits as well as partial permits such
as foundationonly permits.
J."Common ownership or control" refers to property owned or controlled by the same
person, persons, or entity, or by separate entities in which any shareholder, partner,
member, or family member of an investor of the entity owns ten percent (10%) or more
of the interest in the property.
K."Commercial housing fund" means a fund or account designated by the City to maintain
and account for all monies received from nonresidential project applicants pursuant to
this chapter.
L."Decisionmaking body" means the City staff person or body authorized to approve or
deny an application for a planning or building permit for a residential, mixed use or
nonresidential project.
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M."Density bonus units" means dwelling units approved in a residential project pursuant to
California Government Code Section 65915 that are in excess of the maximum allowable
residential density otherwise permitted by the City of Palo Alto.
N."First approval" means the first of the following approvals to occur with respect to a
residential project: planning permit or building permit.
O."Housing impact fee" or "housing fee" means the fee paid by developers of residential
and nonresidential projects to mitigate the impacts that such developments have on the
demand for affordable housing in the City.
P."Low income households" are those households whose income does not exceed the low
income limits applicable to Santa Clara County as defined in California Health and Safety
Code Section 50079.5 and published annually pursuant to Title 25 of the California Code
of Regulations, Section 6932 (or its successor provision) by the California Department of
Housing and Community Development, generally households with incomes between
fifty percent (50%) and eighty percent (80%) of area median income.
Q."Market rate unit" means a new dwelling unit in a residential project that is not an
affordable unit.
R.ng permit or building permit that
includes the creation of one or more new dwelling units and the construction of net new
gross square footage of nonresidential space or the conversion of a residential use to a
nonresidential use.
S."Moderate income households" are those households whose income does not exceed
the moderate income limits applicable to Santa Clara County as defined in California
Health and Safety Code Section 50093 and published annually pursuant to Title 25 of the
California Code of Regulations, Section 6932 (or its successor provision) by the California
Department of Housing and Community Development, generally households with
incomes between eighty percent (80%) and one hundred twenty percent (120%) of area
median income.
T."Nonresidential project" means an application for a planning permit or building permit
that includes the new construction of net new gross square feet of nonresidential space,
the conversion of a residential use to a nonresidential use, or the conversion of exempt
space (as provided in Section 16.65.025) to nonexempt space.
U."Planning permit" means any discretionary approval of a residential project, including
but not limited to a comprehensive or specific plan adoption or amendment, rezoning,
tentative map, parcel map, conditional use permit, variances, or architectural review.
V."Residential housing fund" means a fund or account designated by the City to maintain
and account for all monies received from residential project applicants pursuant to this
chapter.
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W."Residential ownership project" means any residential project that includes the creation
of one or more new dwelling units that may lawfully be sold individually. A residential
ownership project also includes the conversion of a residential rental project to a
residential ownership project.
X."Residential project" means any development for which a planning permit or building
permit is required that includes the creation of one or more new dwelling units,
conversion of nonresidential uses to dwelling units, or the conversion of a use from a
residential rental project to a residential ownership project.
Y."Residential rental project" means any residential project on property under common
ownership and control that creates one or more net new dwelling units that cannot be
lawfully sold individually.
Z."Very low income households" are those households whose income does not exceed
the very low income limits applicable to Santa Clara County as defined in California
Health and Safety Code Section 50105 and published annually pursuant to Title 25 of the
California Code of Regulations, Section 6932 (or its successor provision) by the California
Department of Housing and Community Development, generally households with
incomes less than fifty percent (50%) of area median income.
16.65.025. Exemptions. The following development projects are exempt from the provisions of
this chapter:
A.Residential projects consisting of the construction of one or two units, unless included in
a mixed use project.
B.Accessory dwelling units.
C. Junior accessory dwelling units.
D. Places of worship;
E. Colleges and universities
F. Commercial recreation;
G. Hospitals and convalescent facilities;
H. Private clubs, lodges, and fraternal organizations;
I. Private education facilities;
J. Public Facilities;
K. Retail service, eating and drinking service, personal service, or automotive service when
the total additional service related square footage is 1,500 square feet or less. This exemption shall
apply only when the additional square footage of new development does not exceed 1,500 square feet.
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New development that is larger than 1,500 square feet shall pay a fee or otherwise comply with this
Chapter for all square footage, including the first 1,500 square feet;
L. New gross square footage used for (1) an onsite cafeteria, recreational facility, or day
care facility provided for employees or their children and not open to the public; or (2) a hazardous
materials storage facility;
M. Projects that have established a vested right not to be subject to this chapter; and
N. Any nonresidential project otherwise determined to be exempt pursuant to City Council
resolution.
If a development project is exempt from this Chapter at initial construction, but later converts to a use
subject to this Chapter, the converted square footage will be deemed net new square footage or
dwelling units, as applicable, subject to the requirements of this Chapter.
16.65.030 Basic Affordable Housing Requirement Residential Ownership Projects. The
provisions of this section shall apply to all residential ownership projects, including the residential
ownership portion of any mixed use project containing three or more units, except for any residential
ownership project exempt under Section 16.65.025.
A.Unless an alternative is approved as described in Section 16.65.080, residential
ownership projects shall provide the following:
a. For projects on sites of less than five acres, fifteen percent (15%) of the dwelling
units in the project shall be made available at affordable sales price to very low,
low, and moderate income households;
b. For projects on sites of five acres or more, twenty percent (20%) of the dwelling
units in the project shall be made available at affordable sales price to very low,
low, and moderate income households; and
c. For projects that convert existing rental housing to condominiums, other
residential ownership or nonresidential space or that remove existing rental
housing, twentyfive percent (25%) of the dwelling units in the project shall be
made available at affordable sales price to very low, low, and moderate income
households.
d. Calculations of the number of affordable units required by this Section shall be
based on the number of dwelling units in the residential project, excluding any
density bonus units. Projects shall not receive a credit for any existing dwelling
units demolished as part of the project.
B.The affordable units shall be made available at the following affordable sales prices:
1. For projects subject to subsections 16.65.030(A)(1) and (2), at least twothirds
of the required affordable units must be made available at affordable sales price
to households earning eighty percent (80%) to onehundred percent (100%) of
the area median income, and onethird may be made available at affordable
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sales prices to households earning between onehundred percent (100%) and
onehundred twenty percent (120%) of the area median income.
2. For projects subject to subsection 16.65.030(A)(3), at least fourfifths of the
required affordable units must be made available at affordable sales price to
households earning eighty percent (80%) to onehundred percent (100%) of the
area median income, and onefifth may be made available at affordable sales
prices to households earning between onehundred percent (100%) and one
hundred twenty percent (120%) of the area median income.
C.When the affordable housing requirements described in this Section result in a
fractional unit, an inlieu payment as specified in Section 16.65.060 may be made for the
fractional unit instead of providing an affordable unit, except that, if the project
contains thirty (30) or more units, an additional affordable unit shall be provided for
each fractional unit of 0.50 or more. The inlieu fee for a fractional unit shall be
16.65.040 Basic Requirement Mixed Use, Nonresidential and Residential Rental Projects.
Unless the mixed use, nonresidential or residential rental project is exempt under Section 16.65.025 or
an alternative is approved as described in Section 16.65.080, all mixed use, nonresidential and
residential rental projects shall pay housing impact fees as specified in Section 16.65.060 to mitigate the
mixed use project containing three or more units shall comply with Section 16.65.030.
16.65.060 Housing Impact Fee and InLieu Fee.
A.Fees. The amount of any housing impact fees and inlieu fees shall be established from
time to time by ordinance or resolution of the City Council. Housing impact fees shall
not exceed the cost of mitigating the impact of mixeduse, nonresidential and
residential rental projects on the need for affordable housing in the City.
B.Fee Payment. Housing impact fees and inlieu fees, if required, shall be paid prior to
issuance of any building permit for a development project subject to this chapter or at a
time otherwise specified by City Council ordinance or resolution.
16.65.070 Requirements for Residential Projects Containing Ownership and Rental Units and for
Mixed Use Projects
A.Residential Projects Containing Ownership and Rental Units. When a residential
project includes both ownership and rental dwelling units, the provisions of this chapter
that apply to ownership residential projects shall apply to that portion of the
development that consists of ownership dwelling units, while the provisions of this
chapter that apply to rental residential project shall apply to that portion of the
development that consists of rental dwelling units.
B.Mixed Use Projects Containing Residential Units. When a mixed use project contains
three or more dwelling units, either residential rental or residential ownership, the
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provisions of this chapter that apply to residential ownership and residential rental
projects shall apply to those portions of the development that consist of residential
ownership or residential rental units, as applicable, while the provisions of this chapter
that apply to nonresidential projects shall apply to that portion of the development
that consists of nonresidential uses. When a mixed use project contains fewer than
three dwelling units, impact fees shall apply to those units.
16.65.075 Provision of Affordable Units.
A.Standards for Affordable Units.
1. Affordable units shall be comparable in exterior appearance and overall quality
of construction to marketrate units in the same housing development. Interior
finishes and amenities must equal those provided in the base model market
rate units.
2. The number of bedrooms and the size of the affordable units shall be
comparable to the average number of bedrooms in the marketrate units,
except that in a singlefamily detached development, the decisionmaking body
may allow smaller affordable units or duplex affordable units, if permitted in the
zoning district, when this furthers the provision of onsite affordable units. The
affordable units shall be reasonably dispersed within the residential project,
with unit locations comparable to those of the marketrate units, or, subject to
the approval of the Planning and Community Environment director, may be
clustered within the residential project when this furthers affordable housing
opportunities.
3. The affordable units shall have the same amenities as the market rate units,
including the same access to and enjoyment of common open space, parking,
storage, and other facilities in the residential project.
B.Timing of Construction. The affordable units shall be constructed in proportion to
construction of the marketrate units. No building permit shall be issued for any
marketrate unit unless a proportional number of building permits have been issued for
affordable units, and no certificates of occupancy or final inspections shall be issued for
any marketrate units unless a proportional number of certificates of occupancy or final
inspections have been issued for affordable units. An alternative phasing plan may be
approved as part of the approval of the affordable housing plan described in Section
16.65.090.
C.Continued Affordability.
1. All affordable units provided under Section 16.65.030 or Section 16.65.080 shall
be subject to a resale restriction, deed of trust, and/or regulatory agreement
recorded against the property for execution by the city manager, in a form
approved by the city attorney, to ensure the continued affordability of the
affordable units.
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2. Notwithstanding Section 18.15.040, to be considered as affordable units under
this chapter, all affordable units shall remain affordable to the targeted income
group for 99 years, except in the case of affordable housing developments
provided as an alternate means of compliance pursuant to Section 16.65.080,
the City may authorize a 55 year affordability restriction if required to maintain
eligibility for tax credit financing.
3. Any household that occupies an affordable unit must occupy that unit as its
principal residence, unless otherwise approved in writing for rental to a third
party for a limited period of time due to household hardship, as determined by
the City.
4. No household may begin occupancy of an affordable unit until the household
has been determined to be eligible to occupy that unit by the City or designee.
16.65.080 Alternative Means of Compliance. The developer of a mixed use, residential or
nonresidential project may request an alternate means of compliance, as described in this section, as a
component of the affordable housing plan required by Section 16.65.090.
A.Provisions Applicable to All Alternatives. The following provisions apply to all
alternative means of compliance described in this Section 16.65.080.
1. The applicant shall bear the burden of presenting substantial evidence to
support a finding of infeasibility under Section 16.65.080(B) and to support the
feasibility of any proposed alternative. The applicant shall set forth in detail the
factual and legal basis for any request under this section.
2. Any request under this section shall be submitted to the Planning and
Community Environment Director together with an economic analysis, if
required, or other supporting documentation and shall be acted upon by the
City Council.
3. When the affordable housing alternative results in a fractional unit, fees shall be
paid as specified in the affordable housing guidelines for any fractional units.
4. All affordable units shall conform with the provisions of Section 16.65.075.
5. The city council may approve or conditionally approve any alternative set forth
in this section if it makes all of the following findings and any additional findings
required for the selected alternative:
(a) The number of affordable units provided by the alternative equals or
exceeds that provided by onsite units or by the payment of impact
fees, as applicable to the project;
(b) The level of affordability provided by the alternative is the same or
lower as provided by onsite units or by the payment of impact fees, as
applicable to the project; and
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(c) The alternative is consistent with the comprehensive plan and housing
element and the provisions of this chapter.
B.Residential Ownership Projects.
1. If the provision of affordable ownership units under Section 16.65.030 is
infeasible, an applicant for a residential ownership project may request, in order
of priority, to: (a) provide onsite affordable rental units as provided in
subsection C below; (b) provide offsite affordable units as provided in
subsection D below; (c) dedicate land for affordable housing as provided in
subsection D below; (d) rehabilitate and convert existing residences to
affordable housing, or preserve existing affordable housing, as provided in
subsection E below; or (e) pay the inlieu fee adopted as described in Section
16.65.060. The applicant must demonstrate that each of the higher priority
options is infeasible before the City will consider a lower priority option.
2. For the purposes of this section, "infeasible" means either that: (a) the
affordable sales price would be less than the cost of constructing the affordable
unit, including financing but excluding all other costs, including land, marketing,
improvements, and profit; or (b) provision of the units would produce a
confiscatory or unconstitutional result.
3. Notwithstanding Section 16.65.080(A)(5), the City Council may accept fees in
lieu of the alternatives in Paragraph 1 provided it makes a finding that special
circumstances justify payment of fees over provision of ownership units, such as
a finding that the fees generated would result in more affordable units than
those required to be provided on site or that funds are needed to finance a
pending affordable housing project.
C.Affordable Rental Units in a Residential Ownership Project or a Residential Rental
Project.
1. An applicant for a residential ownership project or a residential rental project
may elect to make available dwelling units in the residential project at
affordable rent rather than provide onsite forsale affordable units or pay
housing impact fees, as applicable. The city council may by ordinance or
resolution specify the percentage and affordability level of rental affordable
units that are equivalent to provision of onsite forsale affordable units or
payment of housing impact fees, as applicable.
2. To ensure compliance with the CostaHawkins Act (Chapter 2.7 of Title 5 of Part
4 of Division 3 of the Civil Code), the City may approve such a proposal only if
the applicant agrees in a rent regulatory agreement with the City to limit rents
in consideration for a direct financial contribution or a form of assistance
specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7
of the Government Code.
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3. Any rent regulatory agreement for rental units in a residential ownership project
shall include provisions for sale of the affordable units and relocation benefits
for tenants of the affordable units if the owner of the residential ownership
project later determines to offer the affordable units in the residential project
for sale to moderate income households at an affordable sales price.
D.Dedication of Land and OffSite Construction of Affordable Units.
1. The applicant may submit an affordable housing plan that proposes either to
dedicate vacant land suitable for affordable housing or to construct affordable
units on another site. Two or more applicants may also jointly propose the
provision of vacant land suitable for affordable housing or the construction of
offsite affordable units on a single site.
2. Construction of the offsite affordable units may not commence prior to the first
approval of the residential project, and construction of the offsite units must
occur concurrently with construction of the marketrate units in the residential
project as described in Section 16.65.075.
3. The city council may approve or conditionally approve the dedication of land or
offsite construction if it makes all of the following findings in addition to making
the findings in subsection (A)(5) above:
(a) Financing or a viable financing plan, which may include public funding, is
in place for the offsite affordable units; and
(b) The offsite location is suitable for the proposed affordable housing,
consistent with any affordable housing guidelines and the Housing
Element, and will not tend to cause residential segregation.
4. No building permit shall be issued for any units in the residential project until
committed funding is available for the offsite units, or units to be constructed
on land to be dedicated.
5. Offsite construction of affordable units does not qualify the residential project
for a density bonus or other regulatory incentives allowed by Government Code
Section 65915 unless the offsite development includes the dedication of land
conforming to the provisions of Section 65915(g). No offsite alternative may be
approved by the City if a density bonus or other regulatory incentive is
requested for the site on which the affordable housing is to be built. Any off
site alternative must comply with the density, intensity and other development
standards that are permitted under the zone for the site.
E.Rehabilitation and Conversion of Existing MarketRate Housing.
1. The applicant may submit an affordable housing plan that proposes the
rehabilitation and conversion of existing marketrate housing to affordable
housing, or the preservation of existing affordable housing that is not deed
restricted as affordable.
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2. The marketrate units to be converted to affordable units shall be located in a
residential project that is not subject to any existing affordability covenants
except covenants restricting other units in the development.
3. The affordable housing plan shall include a plan for longterm financial
sustainability of the marketrate units to be converted to affordable units, which
incorporate, among other things, provisions to accommodate increases in
4. Any existing tenants in the marketrate units to be converted to affordable
units shall be eligible to remain in the units; or the applicant shall provide
5. The city council may approve or conditionally approve the proposal if it makes
all of the following findings in addition to making the findings in subsection
(A)(5) above:
(a) The proposal includes substantial rehabilitation of the existing housing
equal to at least 25 percent of the afterrehabilitation value of the
property, inclusive of land value, and the units shall be in decent, safe
and sanitary condition and in compliance with all codes;
(b) Financing or a viable financing plan is in place for the units to be
converted to affordable units; and
(c) The offsite location is suitable for the proposed affordable housing,
consistent with any affordable housing guidelines and the Housing
Element, and will not tend to cause residential segregation.
6. No building permit shall be issued for any units in the residential project until
regulatory agreements approved by the city have been recorded for the existing
units to be converted to affordable housing.
F.Mixed Use Projects. An applicant for a mixed use development may submit an
affordable housing plan that proposes to mitigate the affordable housing impacts of the
nonresidential and residential rental portions of the development through any of the
options listed above or through onsite provision of affordable units conforming with
applicable provisions of Section 16.65.075. In addition to making the findings in
subsection (A)(3) above, the city council may approve or conditionally approve such an
alternative if it determines, based on substantial evidence, that such alternative will
provide equal or greater public benefit than would payment of the housing impact fee.
G.Nonresidential Projects. An applicant for a nonresidential development may submit an
affordable housing plan that proposes to mitigate the affordable housing impacts of the
development through any of the options listed above or through onsite provision of
affordable units conforming with applicable provisions of Section 16.65.075. In addition
to making the findings in subsection (A)(5) above, the city council may approve or
conditionally approve such an alternative if it determines, based on substantial
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evidence, that such alternative will provide equal or greater public benefit than would
payment of the housing impact fee.
16.65.090 Application and Review Procedures.
A.Affordable Housing Plan.
1. All residential ownership projects and any mixed use, residential rental or
nonresidential project proposing to provide affordable units under the
provisions of Section 16.65.080 shall submit an affordable housing plan
concurrently with the application for the first approval of the project. The city
shall provide an application form specifying the contents of the affordable
housing plan. If an affordable housing plan is required, no application for a first
approval the project may be deemed complete until a complete affordable
housing plan is submitted. The cost of reviewing any proposed alternative,
including but not limited to the cost to the City of hiring a consultant to review
the application, shall be borne by the applicant.
2. No affordable housing plan is required for a mixed use, residential rental project
or a nonresidential project if the applicant proposes to pay housing impact fees,
or if the project is exempt under Section 16.65.025.
3. Any affordable housing plan shall be processed concurrently with all other
permits required for the development project. Before approving the affordable
housing plan, the decisionmaking body shall find that the affordable housing
plan conforms to this chapter. A condition shall be attached to require
recordation of an affordable housing agreement, as described in subsection B of
this section below, prior to the approval of any final or parcel map or building
permit for the development project.
4. The approved affordable housing plan may be amended prior to issuance of any
building permit for the development project. A request for a minor
modification of an approved affordable housing plan may be granted by the
Planning and Community Environment Director if the modification is
substantially in compliance with the original affordable housing plan and
conditions of approval. Other modifications to the affordable housing plan shall
be processed in the same manner as the original plan.
B.Affordable Housing Agreement.
1. Affordable housing agreements acceptable to the city manager or designee and
approved as to form by the city attorney shall be recorded against the
residential or nonresidential project prior to approval of any final or parcel map,
or issuance of any building permit, whichever occurs first, unless the project is
required only to pay impact fees.
2. The affordable housing agreement shall specify the number, type, location, size,
and phasing of all affordable units, provisions for income certification and
screening of potential purchasers or renters of units, and resale control
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mechanisms, including the financing of ongoing administrative and monitoring
costs, consistent with the approved affordable housing plan and any affordable
housing guidelines, as determined by the city manager or designee.
C.The City Council, by resolution, may establish fees for the ongoing administration and
monitoring of the affordable units, which fees may be updated periodically, as required.
D.The Planning and Community Environment Director may adopt affordable housing
guidelines to implement this chapter, and may update those guidelines periodically as
required.
16.65.100 Affordable Housing Funds.
A.All housing impact fees or other funds collected under this chapter shall be deposited
B.The monies in the Commercial and Residential Housing Funds and all earnings from
investment of the moneys in the Funds shall be expended exclusively to provide housing
affordable to very low income, lower income, and moderate income households in the
City, consistent with the goals and policies
for administration and compliance monitoring of the affordable housing program.
16.65.110 Administrative Relief.
A.As part of an application for the first approval of a residential or nonresidential project,
a developer may request that the requirements of this chapter be waived or modified
by the city council, based upon a showing that applying the requirements of this chapter
would result in an unconstitutional taking of property or would result in any other
unconstitutional result.
B.The request for a waiver or modification shall set forth in detail the factual and legal
basis for the claim.
C.Any request for a waiver or modification shall be reviewed and considered at the same
time as the project application or any affordable housing plan.
D.The waiver or modification may be approved only to the extent necessary to avoid an
unconstitutional result, based upon legal advice provided by or at the behest of the City
Attorney, after adoption of written findings, based on legal analysis and substantial
evidence. If a waiver or modification is granted, any change in the project shall
invalidate the waiver or modification, and a new application shall be required for a
waiver or modification under this section.
16.65.120 Enforcement.
A.Penalties. Persons employed in the following designated employee positions are
authorized to exercise the authority provided in the California Penal Code Section 836.5
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and are authorized to issue citation for violations of this chapter: development services
director, director of planning and community environment and their designees.
B.The city attorney shall be authorized to enforce the provisions of this chapter and all
affordable housing agreements, regulatory agreements, and all other covenants or
restrictions placed on affordable units, by civil action and any other proceeding or
method permitted by law.
C.Failure of any official or agency to fulfill the requirements of this chapter shall not
excuse any developer or owner from the requirements of this chapter. No permit,
license, map, or other approval or entitlement for a residential project shall be issued,
including without limitation a final inspection or certificate of occupancy, until all
applicable requirements of this chapter have been satisfied.
D.The remedies provided for in this section 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.
SECTION 4. Severability. If any section, subsection, sentence, clause, phrase or word of this
Ordinance is for any reason held to be invalid by a court of competent jurisdiction, such decision shall
not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that
it would have passed and adopted this Ordinance, and each and all provisions hereof, irrespective of the
fact that one or more provisions may be declared invalid.
SECTION 5: CEQA. This ordinance is exempt from the California Environmental Quality Act
(CEQA) under State CEQA Guidelines Section which 15061(b)(3) providing an exemption for
administrative actions that do not result in physical changes to the environment; Section 15378(b)(4)
providing an exemption for government funding mechanisms which do not involve a commitment to
any specific project and Section 15305 (Minor Alterations in Land Use Limitations), a categorical
exemption that applies to code amendments that will not have any significant environmental effects.
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SECTION 6: Public Notice and Effective Date. This Ordinance shall take effect 31 days after
its adoption by the City Council or concurrent with Ordinance 5409, whichever occurs later.
INTRODUCED: March 27, 2017
PASSED: April 17, 2017
AYES: FILSETH, FINE, KNISS, SCHARFF, TANAKA, WOLBACH
NOES: DUBOIS, HOLMAN, KOU
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Senior Asst. City Attorney City Manager
Director of Planning and Community
Environment
DocuSign Envelope ID: 975ACB07-4AEE-4F05-9040-826622D9042A
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