HomeMy WebLinkAboutStaff Report 3962
City of Palo Alto (ID # 3962)
City Council Staff Report
Report Type: Action Items Meeting Date: 8/19/2013
City of Palo Alto Page 1
Summary Title: Density Bonus Ordinance
Title: Adoption of Ordinance for a New Chapter 18.15 (Residential Density
Bonus) to Include in Title 18 of the Palo Alto Municipal Code to Implement
Government Code Section 65915
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that the City Council review and adopt New Chapter 18.15 (Residential
Density Bonus) to Title 18 (Zoning) of the Palo Alto Municipal Code to Implement Government
Code Section 65915
Executive Summary
In 2004, SB 1818 significantly amended State Density Bonus Law (Government Code Section
65915) including requiring local jurisdictions to adopt the law into their municipal codes. As
jurisdictions adopted the State law, many wrestled with implementing the State law while
respecting local codes, particularly in granting concessions and incentives. The 2007-2014
Housing Element, recently approved by the Council, provides that the City will adopt a Density
Bonus ordinance to comply with its requirements under State law to provide affordable housing
opportunities. A local Density Bonus ordinance allows the City to take local concerns into
account when granting approvals for density bonus projects. Staff has prepared a draft Density
Bonus Ordinance, including a menu of automatic concessions. Any concessions requested not
listed on the menu of concessions would require additional review by the Approving Authority
reviewing the land use application. Staff believes that the ordinance meets the purpose and
intent of the State law while respecting local preferences. The draft ordinance has been
included as Attachment A.
Background
City of Palo Alto Page 2
The State Density Bonus Law (Section 65915 of the Government Code) was first adopted in
1979. The law allows developers who offer affordable units in their developments a density
bonus above what the zoning ordinance would typically allow. Originally, developers received a
density bonus of 25% if they met the density bonus requirements.
In 2004, the State Legislature passed SB 1818, which significantly amended Section 65915 of
the Government Code (Attachment C). The significant changes to the law, effective on January
1, 2005, included:
A higher maximum market-rate unit density bonus of 35% for a lower percentage of
affordable units provided;
A sliding scale of market-rate density bonus percentages from 20%-35% depending on
the percentage of affordable units provided;
Provision for up to three (3) development concessions or incentives, depending on the
percentage of affordable units provided;
Granting the developer a density bonus if they donate land for very low income housing;
and
Required jurisdictions to implement Density Bonus law through local codes.
In the past, the City has applied the Density Bonus law on an ad hoc basis to both market rate
and affordable developments. Palo Alto Family Apartments, located at 801 Alma Street and
developed by Eden Housing, is a 50 unit affordable rental development. Eden requested
concessions to encroach into the required setbacks, exceed the maximum floor area ratio (FAR)
and not provide private useable open space. The development at 195 Page Mill Road also
requested concessions to allow residential uses in the General Manufacturing (GM) zoning
district and to exceed the maximum FAR in return for providing 17 affordable housing units
(20% of the total units). No developer has requested an increase in density though the Density
Bonus law. All requests have been for concessions.
The 2007-2014 Housing Element Update includes a draft program (Program 3.1.10) requiring
that a density bonus ordinance be adopted that is consistent with Government Code 65915.
Staff anticipates that density bonus will be an important tool in the production of affordable
housing in addition to helping the City meet its Housing Element and Regional Housing Needs
Allocation (RHNA) requirements.
Discussion
Significant Revisions
City of Palo Alto Page 3
As mentioned, SB 1818 provided significant revisions to Density Bonus law. Developers are
now able to receive is higher percentage bonus for a lower percentage of affordable units
provided. The percentage of density bonus received is dependent on the affordability level of
the affordable housing provided.
Below are the eligibility requirements for a density bonus award.
Density Bonus Summary Table
Restricted Affordable
Units or Category
Minimum
Percentage of
Restricted
Affordable Units
Percentage
of Density
Bonus
Granted
Additional
Bonus for
Each 1%
Increase in
Restricted
Affordable
Units
Percentage
of Restricted
Units
Required for
Maximum
35% Density
Bonus
Very Low Income 5% 20% 2.50% 11%
Lower Income 10% 20% 1.50% 20%
Moderate Income 10% 5% 1% 40%
Senior Citizen Housing 100% 20% ------ ------
Qualifying Mobile Park 100% 20% ------ ------
In addition, SB 1818 increased the number of concessions that a developer could request for a
lower percentage of affordable housing provided. As with the density bonus, the number of
concessions is dependent on the affordability level of the units and the percentage of
affordable units provided.
City of Palo Alto Page 4
Concessions and Incentives Summary Table
Target Group Restricted Affordable Units
Very Low Income 5% 10% 15%
Lower Income 10% 20% 30%
Moderate Income (Common Interest Development) 10% 20% 30%
Maximum Incentive(s)/Concession(s) 1 2 3
Planning and Transportation Commission Review
There has been extensive discussion of the draft ordinance by the PTC. On October 19, 2011,
the PTC conducted a study session regarding Government Code Section 65915 and the SB 1818
amendments. Since no developer has requested an increase in density, the discussion was
focused primarily on allowable concessions and an evaluation of the reasonableness of the
requested concession(s). Staff provided the density bonus ordinances from the City of San
Mateo and City of Santa Monica as reference for PTC review. The ordinances from those
jurisdictions were chosen based on their differing approaches to granting concessions for
proposed developments. The City of Santa Monica’s ordinance was more detailed in its
requirements in granting concessions. The Santa Monica code also placed quantified limits on
the types of concessions offered. In addition, if the developer did not choose one of the
concessions on the menu, a noticed public hearing was required to review the concession(s)
proposed by the developer. The City of San Mateo’s ordinance contained broader concessions
with no quantified thresholds or limitations on the City’s acceptance.
From the discussion, three main issues were raised:
1. A concern was raised that a developer, with the use of the concession(s), could
circumvent height limits and/or other zoning requirements without the City’s ability to
review the impacts;
2. Eligibility for a concession by simply meeting City’s minimum BMR requirements, and
3. The City’s ability to request for financial documentation in support of the requested
concession(s).
The PTC directed staff to prepare a City draft ordinance similar to the style of the Santa Monica
ordinance and their menu of concessions.
City of Palo Alto Page 5
January 9, 2013, the PTC considered the formal draft ordinance. The Commission was
supportive of the menu of concessions. However, there was substantial discussion about the
requirement of a developer to submit project pro-formas in support of a requested concession
not on the menu. In addition, the PTC wanted to see quantified concessions instead of more
general, open ended concessions. The meeting was continued to March 5, 2013 for staff to
return with responses to PTC comments. Staff returned with revisions that quantified the
concessions and reduced the pro forma requirement from mandatory submittal of the project
pro forma to requesting financial information when necessary. The PTC approved the draft
ordinance by a vote of 7-0. The minutes from the March 5 meeting have been included as
Attachment B.
Summary of Key Issues
The draft density bonus ordinance has been prepared with much of the language from the
State law incorporated verbatim into the ordinance. However, the draft ordinance differs from
the State law by providing greater detail and clarity for the granting of incentives and
concessions.
Concession Evaluation Process
Staff used the Santa Monica ordinance as the draft ordinance model. The ordinance provides a
menu of concessions which the developer can choose. These concessions are the more
commonly requested concessions, including relief from setbacks, floor area ratio (FAR) and
maximum height requirements. If the developer chooses from the menu of concessions, the
concession would be granted. These concessions are generally considered to have minimal
adverse impacts. If a developer requests a concession that does not fall within the parameters
of the menu concessions, the requested concession is reviewed as part of the underlying land
use application review with the appropriate Approval Authority (the City Council or the Director
of Planning and Community Environment) granting or denying the concession request.
Per State law, concessions must be granted to the developer unless the Approval Authority can
make one of the following findings:
1. The Concession, Incentive, waiver or modification is not required to provide for Affordable
Rents or Affordable Sales Prices; or
2. The Concession, Incentive, waiver or modification would have a specific, adverse impact
upon public health or safety or the physical environment or on real property 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
City of Palo Alto Page 6
unaffordable to Low and Moderate Income households.
3. The Concession, Incentive, waiver or modification is contrary to state or federal law.
Menu of Concessions
The Zoning ordinance (Title 18) was considered during the development of the proposed menu
of concessions. Concessions were crafted in consideration of the City’s 50 foot height limit, in
that any concession request that would exceed the 50 foot height limit would require Approval
Authority review. Floor Area Ratio maximums were also considered, in that while the floor area
limits could be exceeded as a concession, the amount of additional floor area granted could not
exceed the total square footage of the affordable housing. This concession was crafted to avoid
the situation of providing only minimal affordable housing to be eligible for concessions, then
using the concessions to maximize commercial floor area or other non-affordable residential
area.
Request for Financial Information
If the developer requests a concession not on the menu, additional review of the concession is
required. As part of the review, the Approving Authority may request the developer submit
financial information as documentation to support the concession request. The documentation
would be used to demonstrate the concession is necessary to provide for affordable rents or
sales prices.
Recent Court Decision
The Planning and Transportation Commission discussed whether to allow Inclusionary Units to
take advantage of the Density Bonus. The Commission elected to recommend to the Council
that Inclusionary units should not qualify for a Density Bonus as such units were required under
the City’s separate BMR ordinance. While there was no legal precedent at the time prohibiting
the exclusion of Inclusionary Units, the Commission was told this was an unsettled area of law.
Subsequent to the Commission hearing, on July 11, 2013, the Court of Appeal in Latinos Unidos
Del Valle De Napa Y Solano v. County of Napa held that Inclusionary Units should be counted as
qualifying affordable units for purposes of qualifying for a Density Bonus. Note that the County
of Napa is a very recent Court of Appeal decision and some early commentary has questioned
its legal reasoning. That being said, for now the City is recommending that the Density Bonus
ordinance be amended to comport with the County of Napa holding that Inclusionary BMR
units qualify for a density bonus and concessions. The amendments are shown in track changes
format in the Draft Ordinance (Attachment A.) The City Attorney’s office will continue to
monitor this issue and, if warranted, may recommend additional amendments to the Density
Bonus or BMR Ordinance..
City of Palo Alto Page 7
Density Bonus Ordinance
Staff worked with the City Attorney in preparing the draft density bonus ordinance. Some of
the more relevant sections of the ordinance include:
1. Implementation (Sec. 18.15.030) –
The ordinance applies when the development includes five or more residential units,
and
Developers can request up to a maximum density bonus of 35% depending on the
number of affordable units and the level of affordability.
2. Development Standards (Sec. 18.15.040) –
The required units are to be built on-site and shall be generally equivalent in size,
fixtures and finishes to the market rate units;
The affordability term will be 30 years for low income rental and for ownership units
and 59 years for moderate income units, and
Includes the option for offsite development of the affordable units.
3. Development Concessions and Incentives (Sec. 18.15.050) –
A menu of the concessions was created, listing the more commonly requested
concessions of setbacks, floor area ratio (FAR) and height limit. These concessions
would be granted without additional review;
Any concession not on the menu of concessions would require additional review and
approval by the Approval Authority. The Approval Authority is determined by the
underlying discretionary permit application type;
Financial information may be requested to document the financial necessity of the
concession if the requested concession is not on the menu of concessions;
It is not necessary to request a density bonus in order to request concessions, and
The City Council has the discretion to allow more generous concessions for 100%
affordable housing projects.
4. Waiver/Modification of Development Standards (Sec. 18.15.060)
State law also allows the applicant to request a waiver or modification of
development standards if such standards would physically preclude the construction
of the proposed development at the increased density with the incorporated
concessions and incentives. The ordinance requires the applicant to demonstrate
City of Palo Alto Page 8
that without the waiver or modification, the development standards would
physically preclude the construction of the development at the site.
5. Child Care Facilities (Sec. 18.15.070) –
Housing developments providing child care facilities may also take advantage of
density bonus and concessions.
6. Application Requirements (Sec. 18.15.080) –
Outlines the procedure for developers to request density bonus and concessions,
and
Those concessions requested not listed in Section 18.15.050 would require
additional review, including possible submittal of financial information if requested.
7. Review Procedures (Sec. 18.15.090) –
Outlines the process if the developer chooses a concession not on the menu, and
As part of the public hearing, the Approval Authority will need to make separate
findings for the granting of the concessions.
8. Regulatory Agreement (Section 18.15.100) – All density bonus development will be
required to enter into a regulatory agreement.
The Agreement will designate the units, affordability term and level of affordability.
Policy Implications
The proposed density bonus ordinance is consistent with the policies and programs in the
current and proposed Housing Element. Program H-38 of the current 1999-2006 Housing
Element calls for the adoption of a revised density bonus program ordinance. Since this was
not completed, it remains a program in the Housing Element update.
In the draft 2007-2014 Housing Element update, a program stipulating the adoption of a
density bonus ordinance (Program 3.1.10) has been transferred from the current Housing
Element. The draft ordinance meets the requirements of the program.
Environmental Review
City of Palo Alto Page 9
The proposed Ordinance revises the requirements for granting a residential density bonus to
comply with revisions to State law enacted by the Legislature through the adoption of Senate
Bill 1818. Adoption of the draft density bonus will only codify allowances that developers have
been able to use in housing developments since 2005. The revisions modify the criteria and
incentives offered to qualifying developments but do not authorize construction not already
permitted under the City’s existing codes. It is uncertain how many project applicants will seek
to utilize the provisions of State law and this Ordinance and where such projects might be
located in the City. Further, each individual project will be subject to its own environmental
review. Consequently, the attached proposed ordinance is exempt from the requirements of
the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of
the California Code of Regulations since it can be seen with certainty that there is no possibility
the adoption and implementation of this Ordinance may have a significant effect on the
environment.
Attachments:
Attachment A: Ordinance for Draft Residential Density Bonus with Menu (PDF)
Attachment B: March 5, 2013 PTC Meeting Excerpt Minutes (PDF)
Attachment C: Amended Government Code Section 65915 (SB 1818) (PDF)
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130102 jb 0131030 Rev. July 26, 2013
Ordinance No. ______
Ordinance of the Council of the City of Palo Alto Adopting New Chapter
18.15 (Residential Density Bonus) of Title 18 (Zoning) of the Palo Alto
Municipal Code to Implement Government Code Section 65915
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Recitals. The Council of the City of Palo Alto finds and
declares as follows:
A. The State Density Bonus Law (Section 65915 of the Government Code)
was first adopted in 1979. The law allows developers who offer affordable units in their
developments a density bonus above what the zoning ordinance would typically allow.
Originally, developers received a density bonus of 25% if they met the density bonus
requirements.
B. In 2004, the State Legislature passed SB 1818, which significantly
amended Section 65915 of the Government Code. The significant changes to the law,
effective on January 1, 2005, included:
A higher maximum market‐rate unit density bonus of 35% for a lower
percentage of affordable units provided;
A sliding scale of market‐rate density bonus percentages from 20%‐35%
depending on the percentage of affordable units provided;
Provision for up to three (3) development concessions or incentives,
depending on the percentage of affordable units provided;
Granting the developer a density bonus if they donate land for very low
income housing; and
Required jurisdictions to implement Density Bonus law through
local codes.
C. In the past, the City has applied the Density Bonus law on an ad hoc basis
to both market rate and affordable developments. Palo Alto Family Apartments,
located at 801 Alma Street and developed by Eden Housing, is a 50 unit affordable
rental development. Eden requested concessions to encroach into the required
setbacks, exceed the maximum floor area ratio (FAR) and to not provide private useable
open space. The development at 195 Page Mill Road also requested concessions to
allow residential uses in the General Manufacturing (GM) zoning district and to exceed
the maximum FAR in return for providing 17 affordable housing units (20% of the total
units).
D. The 2007‐2014 Housing Element Update includes a program (Program
3.1.10) requiring that a density bonus ordinance be adopted that is consistent with
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130102 jb 0131030 Rev. July 26, 2013
Government Code 65915. Staff anticipates that density bonus will be an important tool
to help the City accommodate its Regional Housing Needs Allocation (RHNA) numbers.
SECTION 2. Chapter 18.15 (Residential Density Bonus) of Title 18 (Zoning) of the
Palo Alto Municipal Code is hereby added to read as follows:
Chapter 18.15
Residential Density Bonus
Sections:
18.15.010 Purpose
18.15.020 Definitions
18.15.030 Density Bonuses
18.15.040 Development Standards for Affordable Units
18.15.050 Development Concessions and Incentives
18.15.060 Waiver/Modification of Development Standards
18.15.070 Child Care Facilities
18.15.080 Application Requirements
18.15.090 Review Procedures
18.15.100 Regulatory Agreement
18.15.010 Purpose
The purpose of this chapter is to:
(a) Comply with the state density bonus law under California Government Code
section 65919.
(b) Establish procedures for implementing state density bonus requirements as set
forth in California Government Code Section 65915, as amended.
(c) Facilitate the development of affordable housing consistent with the goals,
objectives, and policies of the City’s Comprehensive Plan Housing Element.
18.15.020 Definitions
Whenever the following terms are used in this Chapter, they shall have the meaning
established by this section:
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(a) "Affordable Rent" means monthly rent, including a reasonable allowance for
utilities and all fees for housing services, for rental Restricted Affordable Units reserved for
Very Low or Lower Income Households, that does not exceed the following:
(i) Very Low Income: 50 percent of the area median income for Santa Clara
County, adjusted for presumed household size, multiplied by 30 percent
and divided by 12.
(ii) Lower Income: 60 percent of the area median income for Santa Clara
County, adjusted for presumed household size, multiplied by 30 percent
and divided by 12.
(b) "Affordable Sales Price" means the maximum sales price at which Very Low,
Lower and Moderate Income Households can qualify for the purchase of Restricted Affordable
Units as set forth in the City of Palo Alto’s Below Market Rate Housing Program. The sales price
shall be considered affordable only if it is based on a reasonable down payment, and monthly
housing payments (including interest, principal, mortgage insurance, property taxes and
assessments, fire and casualty insurance, homeowners association fees, property maintenance
and repairs, and a reasonable allowance for utilities), all as determined by the City, that are
equal to or less than:
(i) Very Low Income: 50 percent of the area median income for Santa Clara
County, adjusted for presumed household size, multiplied by 30 percent
and divided by 12.
(ii) Lower Income: 70 percent of the area median income for Santa Clara
County, adjusted for presumed household size, multiplied by 30 percent
and divided by 12.
(iii) Moderate Income: 110 percent of the area median income for Santa Clara
County, adjusted for presumed household size, multiplied by 30 percent
and divided by 12.
(c) "Applicant" means any person, firm, partnership, association, joint venture,
corporation, or any entity or combination of entities who seeks Development permits or
approvals from the City of Palo Alto.
(d) "Approval Authority" means the person or body that is authorized to approve a
Development as specified in the City of Palo Alto Municipal Code.
(e) "Below Market Rate Housing Program" means Chapter 18.14 of the Palo Alto
Municipal Code and the Administrative Guidelines for the Below Market Rate Program.
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(f) "Child Care Facility" means a child day care facility other than a family day care
home, including, but not limited to, infant centers, preschools, extended day care facilities, and
school age child care centers.
(g) "Concession or Incentive" as used interchangeably means such regulatory
concessions as specified in Government Code Section 65915(k) to include:
(i) A reduction of site Development Standards or architectural design
requirements which exceed the minimum applicable building standards
approved by the State Building Standards Commission pursuant to Part 2.5
(commencing with Section 18901) of Division 13 of the Health and Safety
Code, including, but not limited to, a reduction in setback, coverage, and/or
parking requirements which result in identifiable, financially sufficient and
actual cost reductions;
(ii) Allowing mixed use development in conjunction with the proposed
residential development, if nonresidential land uses will reduce the cost of
the residential project and the nonresidential land uses are compatible
with the residential project and existing or planned development in the
area where the Development will be located; and
(iii) Other regulatory Concessions proposed by the applicant or the City which
result in identifiable financially sufficient, and actual cost reductions.
(h) "Density Bonus" means a density increase over the Maximum Residential
Density granted pursuant to Government Code Section 65915 and this Ordinance.
(i) "Density Bonus Units" means those dwelling units granted pursuant to the
provisions of this Chapter which exceed the otherwise Maximum Residential Density for the
development site.
(j) "Development" means all developments pursuant to a proposal to construct or
place five (5) or more additional dwelling units on a lot or contiguous lots including, without
limitation, a planned unit development, site plan, subdivision, or conversion of a non‐
residential building to dwelling units.
(k) "Development Standard" means a site or construction condition such as a
height limitation, a setback, or a floor‐area ratio, that applies to a Development pursuant to any
ordinance, general plan element, specific plan, charter, or other City 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
Development.
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(l) "Discretionary Permit" means any permit issued for the Development which
requires the exercise of judgment or deliberation from the Approval Authority, including but
not limited to conditional use permits, variances, site plans, design review, planned
development permits, general and specific plan approvals and amendments, zoning
amendments, and tentative and parcel maps.
(m) "Lower, Very Low, or Moderate Income” means annual income of a household
that does not exceed the maximum income limits for the income category, as adjusted for
household size, applicable to Santa Clara County, as published and periodically updated by the
State Department of Housing and Community Development pursuant to Sections 50079.5,
50105, or 50093 of the California Health and Safety Code.
(n) "Maximum Residential Density" means the maximum number of dwelling units
permitted in the Development by the City’s Comprehensive Plan Land Use Element and Zoning
Ordinance at the time of application, excluding the provisions of this Chapter. If the
Development is a planned community zone, the Maximum Residential Density shall be
determined on the basis of the Comprehensive Plan and the maximum density of the previous
zone designation. If the maximum density allowed by the Zoning Ordinance is inconsistent with
the density allowed by the Land Use Element of the City’s Comprehensive Plan, the Land Use
Element density shall prevail.
(o) "Non‐Restricted Unit" means all dwelling units within a Development excluding
the Restricted Affordable Units.
(p) “Qualifying Mobilehome Park” means a mobilehome park that limits residency
based on age requirements for housing older persons pursuant to Section 798.76 and 799.5 of
the Civil Code.
(q) "Qualifying Resident" means senior citizens or other persons eligible to reside in
a Senior Citizen Housing Development or Qualifying Mobilehome Park.
(r) "Regulatory Agreement" means a recorded and legally binding agreement
between an applicant and the City to ensure that the requirements of this Chapter are satisfied.
The Regulatory Agreement, among other things, shall establish: the number of Restricted
Affordable Units, their size, location, terms and conditions of affordability, and production
schedule.
(s) "Restricted Affordable Unit" means a dwelling unit within a Development which
will be available at an Affordable Rent or Affordable Sales Price for sale or rent to Very Low,
Lower or Moderate Income households.
(t) "Senior Citizen Housing Development" means a Development consistent with
the California Fair Employment and Housing Act (Government Code Section 12900 et. seq.,
including 12955.9 in particular), which has been "designed to meet the physical and social
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needs of senior citizens," and which otherwise qualifies as "housing for older persons" as that
phrase is used in the federal Fair Housing Amendments Act of 1988 (P.L. 100‐430) and
implementing regulations (24 CFR, part 100, subpart E), and as that phrase is used in California
Civil Code Section 51.2 and 51.3.1
18.15.030 Density Bonuses
This Section describes the Density Bonuses that will be provided, at the request of an
applicant, when that applicant provides Restricted Affordable Units as described below.
(a) The City shall grant a 20 percent (20%) Density Bonus when an applicant
for a Development of five (5) or more dwelling units seeks and agrees to construct at least any
one of the following in accordance with the requirements of this Section and Government Code
Section 65915:
(i) At least 10 percent (10%) of the total dwelling units of the Development as
Restricted Affordable Units affordable to Lower Income Households. For
each one percent (1%) increase in the percentage of restricted Lower
Income units, a Development will receive an additional one and one‐half
percent (1.5%) density bonus up to thirty‐five percent (35%) of the
Maximum Residential Density; or
(ii) At least five percent (5%) of the total dwelling units of the Development as
Restricted Affordable Units affordable to Very Low Income Households.
For each one percent (1%) increase in the percentage of restricted Very
Low Income units, a Development will receive an additional two and one‐
half percent (2.5%) density bonus up to thirty‐five percent (35%) of the
Maximum Residential Density; or
(iii) A Senior Citizen Housing Development; or
(iv) A Qualifying Mobilehome Park.
(b) The City shall grant a five percent (5%) Density Bonus when an applicant for a
Development of five (5) or more additional dwelling units seeks and agrees to construct, in
accordance with the requirements of this Section and Government Code Section 65915, at least
10 percent (10%) of the total dwelling units in a common interest development as defined in
California Civil Code Section 1351 for Moderate Income Households, provided that all dwelling
units in the Development are offered to the public for purchase. For each one percent (1%)
increase in the percentage of restricted Moderate Income units, a Development will receive an
additional one percent (1%) density bonus up to thirty‐five percent (35%) of the Maximum
Residential Density.
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(c) No additional Density Bonus shall be authorized for a Senior Citizen
Development or Qualifying Mobilehome Park beyond the Density Bonus authorized by
subsection (a) of this Section.
(d) When calculating the number of permitted Density Bonus Units, any fractions of
units shall be rounded to the next highest number. An applicant may elect to receive a Density
Bonus that is less than the amount permitted by this Section; however, the City shall not be
required to similarly reduce the number of Restricted Affordable Units required to be dedicated
pursuant to this Section and Government Code Section 65915(b).
(e) Each Development is entitled to only one Density Bonus, which shall be selected
by the applicant based on the percentage of Very Low Restricted Affordable Units, Lower
Income Restricted Affordable Units, or Moderate Income Restricted Affordable Units, or the
Development’s status as a Senior Citizen Housing Development or Qualifying Mobilehome Park.
Density bonuses from more than one category may not be combined. In no case shall a
Development be entitled to a Density Bonus of more than thirty‐five percent (35%).
(f) The Density Bonus Units shall not be included when determining the number of
Restricted Affordable Units required to qualify for a Density Bonus. When calculating the
required number of Restricted Affordable Units, any resulting decimal fraction shall be rounded
to the next larger integer.
(g) Any Restricted Affordable Unit provided pursuant to the City’s Below Market
Rate Housing Program shall not be included when determining the number of Restricted
Affordable Units required to qualify for a Density Bonus or other entitlement under this
Chapter. In addition However, the payment of a housing impact or in lieu fee shall not qualify
for a Density Bonus or other entitlement under this Chapter.
(h) Certain other types of development activities are specifically eligible for a
Density Bonus pursuant to State law:
(i) A Development may be eligible for a Density Bonus in return for land
donation pursuant to the requirements set forth in Government Code
Section 65915(g).
(ii) A condominium conversion may be eligible for a Density Bonus or
Concession pursuant to the requirements set forth in Government Code
Section 65915.5.
(i) Notwithstanding any provision of this Chapter, all Developments must satisfy all
applicable requirements of the City's Below Market Rate Housing Program, which may impose
requirements for Restricted Affordable Units in addition to those required to receive a Density
Bonus or Concessions.
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Table 1 summarizes the density bonus provisions described in this Section.
Table 1
Density Bonus Summary Table
Restricted Affordable
Units or Category
Minimum
Percentage of
Restricted
Affordable Units
Percentage
of Density
Bonus
Granted
Additional
Bonus for
Each 1%
Increase in
Restricted
Affordable
Units
Percentage
of Restricted
Units
Required for
Maximum
35% Density
Bonus
Very Low Income 5% 20% 2.50% 11%
Lower Income 10% 20% 1.50% 20%
Moderate Income 10% 5% 1% 40%
Senior Citizen Housing 100% 20% ‐‐‐‐‐‐ ‐‐‐‐‐‐
Qualifying Mobile Park 100% 20% ‐‐‐‐‐‐ ‐‐‐‐‐‐
Note: A density bonus may be selected from only one category up to a maximum of 35% of the Maximum
Residential Density.
18.15.040 Development Standards for Affordable Units
(a) Restricted Affordable Units shall be constructed concurrently with Non‐
Restricted Units unless both the City and the applicant agree within the Regulatory Agreement
to an alternative schedule for development.
(b) Moderate Income Restricted Affordable Units shall remain restricted and
affordable to the designated income group for a minimum period of 59 years (or a longer
period of time if required by the construction or mortgage financing assistance program,
mortgage insurance program, or rental subsidy program). Very Low and Lower Restricted
Affordable Units shall remain restricted and affordable to the designated income group for a
period of 30 years for both rental and for‐sale units (or a longer period of time if required by a
construction or mortgage financing assistance program, mortgage insurance program, or rental
subsidy program).
(c) In determining the maximum Affordable Rent or Affordable Sales Price of
Restricted Affordable Units, the presumed household size as set forth in the City’s Below
Market Rate Housing Program shall be used, unless the Development is subject to different
assumptions imposed by other governmental regulations.
(d) Restricted Affordable Units shall be built on‐site and be dispersed within the
Development, except as permitted in subsection (e) of this Section. The number of bedrooms of
the Restricted Affordable Units shall be equivalent to the bedroom mix of the Non‐Restricted
Units in the Development; except that the applicant may include a higher proportion of
Restricted Affordable Units with more bedrooms. The design, appearance and general quality
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of the Restricted Affordable Units shall be compatible with the design of the Non‐Restricted
Units in the Development. The Development shall comply with all applicable Development
Standards, except those which may be modified as provided by this Chapter.
(e) Circumstances may arise in which the City Council finds that the public interest
would be served by allowing some or all of the Restricted Affordable Units associated with one
Development to be produced and operated at an alternative development site. Where the
applicant and the City form such an agreement, the resulting linked developments shall be
considered a single Development for purposes of this Chapter. Under these circumstances, the
applicant shall be subject to the same requirements established by this Chapter for the
Restricted Affordable Units to be provided on the alternative site.
(f) A Regulatory Agreement, as described in Section 18.15.090, shall be made a
condition of the Discretionary Permits for all Developments pursuant to this Chapter. The
Regulatory Agreement shall be recorded as a restriction on the Development. The Regulatory
Agreement shall be consistent with the City’s Below Market Rate Housing program guidelines.
18.15.050 Development Concessions and Incentives
This Section includes provisions for providing Concessions or Incentives pursuant to
Government Code Section 65915.
(a) By Right Parking Incentives. Upon request by the applicant, a Development that
is eligible for a Density Bonus may provide parking as provided in this subsection (a), consistent
with Government Code Section 65915(p), inclusive of handicapped and guest parking:
(i) Zero to one bedroom unit: one on‐site parking space;
(ii) Two to three bedroom unit: two on‐site parking spaces;
(iii) Four or more bedroom unit: two and one‐half parking spaces.
If the total number of spaces required results in a fractional number, it shall be rounded
up to the next whole number. For purposes of this subsection, this parking may be provided
through tandem parking or uncovered parking, but not through on‐street parking.
(b) Other Incentives and Concessions. A Development is eligible for other
Concessions or Incentives as follows:
(i) One Concession or Incentive for a Development that makes at least ten
percent (10%) of the total dwelling units affordable to Lower Income
households; or at least five percent (5%) of the total dwelling units
affordable to Very Low Income households; or at least ten percent (10%) of
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130102 jb 0131030 Rev. July 26, 2013
the total dwelling units affordable to Moderate Income households in a
common interest development.
(ii) Two Concessions or Incentives for a Development that makes at least
twenty percent (20%) of the total dwelling units affordable to Lower
Income households; or at least ten percent (10%) of the total dwelling units
affordable to Very Low Income households; or at least twenty percent
(20%) of the total dwelling units affordable to Moderate Income
households in a common interest development.
(iii) Three Concessions or Incentives for a Development that makes at least
thirty percent (30%) of the total dwelling units affordable to Lower Income
households; or at least fifteen percent (15%) of the total dwelling units
affordable to Very Low Income households, or at least thirty percent (30%)
of the total dwelling units affordable to Moderate Income households in a
common interest development.
Table 2 summarizes the provisions of Concessions or Incentives described in subsection (a).
Table 2
Concessions and Incentives Summary Table
Target Group Restricted Affordable Units
Very Low Income 5% 10% 15%
Lower Income 10% 20% 30%
Moderate Income (Common Interest Development) 10% 20% 30%
Maximum Incentive(s)/Concession(s) 1 2 3
Notes: 1. Concessions or Concessions may be selected from only one category (very low, lower, or
moderate)
2. No concessions or Concessions are available for land donation, or for Senior Citizen Housing
Developments and Qualifying Mobilehome Parks that do not contain Restricted Affordable Units.
(c) In submitting a request for Concessions or Incentives, an applicant may request
the specific Concessions set forth below. The following Concessions and Incentives are deemed
not to have a specific adverse impact as defined in Section 18.15.090 (b)(ii).
(i) Up to a 50% average reduction of the side yard setback requirement if the
design is consistent with the design guidelines, unless adjacent to R‐1, R‐2,
RMD and other low density residential zones;
(ii) Up to a 50% average reduction of the front yard setback requirements so
long as setback is consistent with the design guidelines, unless adjacent to
R‐1, R‐2, RMD and other low density residential zones;
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130102 jb 0131030 Rev. July 26, 2013
(iii) Up to a 50% average reduction of the rear yard setback requirements so
long as the setback is consistent with the design guidelines, unless
adjacent to R‐1, R‐2, RMD and other low density residential zones;
(iv) A percentage increase in the height limit equal to the Density Bonus
percentage for which the Development is eligible if necessary to
accommodate the Restricted Affordable Units, with a maximum increase of
one foot per Affordable Unit, and no event to exceed fifty (50) feet;
(v) Up to fifty percent (50%) increase in the Floor Area Ratio (FAR) or up to the
square footage of the Restricted Affordable Units, whichever is less. For a
mixed use project, the applicant can elect to receive this FAR bonus for the
entire project or for just the residential portion of the project. Any FAR
bonus under this section shall be consistent with the applicable height
requirements;
(vi) Reduction in daylight plane requirements not to exceed 50% of the length
of the adjacent lot line;
(vii) Reduction in site coverage requirement;
(viii) Reduction in private; or
(ix) Reduction in public open space; or
(d) The setbacks referenced in this Section shall not include Special Setbacks as
defined in Section 20.08.020.
(e) For Developments that propose to construct one hundred percent (100%) of the
dwelling units (except a manager's unit) as Restricted Affordable Units that are affordable to
Very Low and/or Lower Income households, the Council may grant additional Concessions or
Incentives or exceed the limits set forth in (i) to (ix) above if the Council finds that such
Concessions or Incentives are required to provide for affordable housing costs, as defined in
Section 50052.3 of the Health and Safety Code and are in the interest of the public health,
safety, or welfare.
(f) Nothing in this Chapter shall be construed to require the provision of direct
financial Concessions for the Development, including the provision of publicly owned land by
the City or the waiver of fees or dedication requirements.
18.15.060 Waiver/Modification of Development Standards
An applicant may apply for a waiver or modification of Development Standards that will
have the effect of physically precluding the construction of a Development at the densities or
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with the Concessions or Incentives permitted by this Chapter. The developer must demonstrate
that Development Standards that are requested to be waived or modified will have the effect of
physically precluding the construction of a Development meeting the criteria of subsection (a)
of Section 18.15.030 at the densities or with the Concessions or Incentives permitted by this
Chapter.
18.15.070 Child Care Facilities
(a) When an applicant proposes to construct a Development that is eligible for a
Density Bonus under Section 18.15.030 and includes a child care facility that will be located on
the premises of, as part of, or adjacent to, the Development, the City shall grant either:
(i) An additional density bonus that is an amount of square feet of residential
space that is equal to or greater than the square footage of the child care
facility; or
(ii) An additional Concession or Incentive that contributes significantly to the
economic feasibility of the construction of the child care facility.
(b) The City shall require, as a condition of approving the Development, that the
following occur:
(i) The child care facility shall remain in operation for a period of time that is
as long as or longer than the period of time during which the Restricted
Affordable Units are required to remain affordable pursuant to Section
18.15.040. In the event the childcare operations cease to exist, the
Director of Planning and Community Environment may approve an
alternative community service use for the child care facility.
(ii) Of the children who attend the child care facility, the children of Very Low,
Lower and Moderate Income households shall equal a percentage that is
equal to or greater than the percentage of Restricted Affordable Units in
the Development that are required for Very Low, Lower and Moderate
Income households pursuant to Section 18.15.030.
(c) Notwithstanding subsections (a) and (b) above, the City shall not be required to
provide a density bonus or a Concession or Incentive for a child care facility if it finds, based
upon substantial evidence, that the community has adequate child care facilities.
18.15.080 Application Requirements
An application for a Density Bonus, Incentive, Concession, waiver, modification or
revised parking standard shall be made as follows:
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(a) An application for a Density Bonus, Incentive, Concession, waiver, modification
or revised parking standard shall be submitted with the first application for a Discretionary
Permit for a Development and shall be processed concurrently with those Discretionary
Permits. The application shall be on a form prescribed by the City and shall include the
following information:
(i) A brief description of the proposed Development, including the total
number of dwelling units, Restricted Affordable Units, and Density Bonus
Units proposed.
(ii) The zoning and comprehensive plan designations and assessor's parcel
number(s) of the project site, and a description of any Density Bonus,
Concession or Incentive, waiver or modification, or revised parking
standard requested
(iii) A vicinity map and preliminary site plan, drawn to scale, including building
footprints, driveway and parking layout.
(iv) If a Concession or Incentive is requested, a brief explanation as to the
actual cost reduction achieved through the Concession or Incentive and
how the cost reduction allows the applicant to provide the Restricted
Affordable Units.
(v) If a waiver or modification is requested, a brief explanation of why the
Development Standard would physically preclude the construction of the
Development with the Density Bonus, Incentives, and Concessions
requested.
(vi) Site plan showing location of market‐rate units, Restricted Affordable
Units, and Density Bonus units within the proposed Development;
(vii) Level of affordability of the Restricted Affordable Units and proposed
method to ensure affordability;
(viii) For Concessions and Incentives that are not included within the menu of
Incentives/Concessions set forth in subsection (c) of Section 18.15.050, the
application may include financial information if requested by the Director,
providing evidence that the requested Concessions and Incentives result in
identifiable, financially sufficient, and actual cost reductions. The cost of
reviewing any required financial information, including, but not limited to,
the cost to the City of hiring a consultant to review the financial data, shall
be borne by the applicant. The financial information shall include all of the
following items:
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130102 jb 0131030 Rev. July 26, 2013
(A) The actual cost reduction achieved through the Concession;
(B) Evidence that the cost reduction allows the applicant to provide
affordable rents or affordable sales prices; and
(C) Other information requested by the Planning Director. The
Planning Director may require any financial information include
information regarding capital costs, equity investment, debt
service, projected revenues, operating expenses, and such other
information as is required to evaluate the financial information;
(ix) If a waiver or modification of a Development Standard is requested, the
applicant shall provide evidence that the Development Standard for which
the waiver is requested will have the effect of physically precluding the
construction of the Development with the Density Bonus and Concessions
requested;
(x) If a Density Bonus or Concession is requested for a land donation, the
application shall show the location of the land to be dedicated, provide
proof of site control, and provide evidence that all of the requirements and
each of the findings included in Government Code Section 65915(g) can be
made;
(xi) If a density bonus or Concession is requested for a child care facility, the
application shall show the location and square footage of the child care
facilities and provide evidence that all of the requirements and each of the
findings included in Government Code Section 65915(h) can be made.
(xii) If a Density Bonus or Concession is requested for a condominium
conversion, the applicant shall provide evidence that all of the
requirements found in Government Code Section 65915.5 can be met.
(d) In accordance with state law, neither the granting of a Concession, Incentive,
waiver, modification, or revised parking standard, 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.
(e) This Chapter implements State Density Bonus law. Any Density Bonus, Incentive,
Concession, revised parking standard, waiver, or modification sought by an Applicant shall be
made pursuant to this Chapter and may not be combined with similar requests under State
Density Bonus law.
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130102 jb 0131030 Rev. July 26, 2013
18.15.090 Review Procedures
An application for a Density Bonus, Incentive, Concession, waiver, modification or
revised parking standard shall be acted upon by the Approval Authority concurrently with the
application for the first Discretionary Permit. The granting of a Density Bonus shall not be
deemed approval of the entire Project or approval of any subsequent discretionary permit.
(a) Before approving an application for a Density Bonus, Incentive, Concession,
waiver, modification or revised parking standard, the Approval Authority shall make the
following findings, as applicable:
(i) The Development is eligible for the Density Bonus and any Concessions,
waivers, modifications, or revised parking standards requested.
(ii) Any requested Concession or Incentive will result in identifiable, financially
sufficient, and actual cost reductions based upon the financial analysis and
documentation provided. The City finds that the Concessions and
Incentives included in Section 18.50.050(c) will result in identifiable,
financially sufficient, and actual cost reductions.
(iii) If the Density Bonus is based all or in part on donation of land, a finding
that all the requirements included in Government Code Section 65915(g)
have been met.
(iv) If the Density Bonus, Concession or Incentive is based all or in part on the
inclusion of a child care facility, a finding that all the requirements included
in Government Code Section 65915(h) have been met.
(v) If the Concession or Incentive includes mixed‐use development, a finding
that all the requirements included in Government Code Section 65915(k)(2)
have been met.
(vi) If a waiver or modification is requested, a finding that the Development
Standards for which the waiver is requested would have the effect of
physically precluding the construction of the Development with the Density
Bonus and Concessions permitted.
(b) If the findings required by subsection (a) of this Section cannot be made, the
Approval Authority may deny an application for a Concession, Incentive, waiver or modification
only if it makes one of the following written findings, supported by substantial evidence:
(i) The Concession, Incentive, waiver or modification is not required to
provide for Affordable Rents or Affordable Sales Prices; or
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130102 jb 0131030 Rev. July 26, 2013
(ii) The Concession, Incentive, waiver or modification would have a specific,
adverse impact upon public health or safety or the physical environment or
on real property 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 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 for the Development was deemed complete; or
(iii) The Concession, Incentive, waiver or modification is contrary to state or
federal law.
(c) If the Approval Authority is not the City Council, any decision denying a Density
Bonus, Incentive, Concession, waiver, modification or revised parking standard may be
appealed to the City Council within fourteen days of the date of the decision.
18.15.100 Regulatory Agreement
(a) Applicants for a Density Bonus, Incentive, Concession, waiver, modification or
revised parking standard shall enter into a Regulatory Agreement with the City. The terms of
the draft agreement shall be approved as to form by the City Attorney and reviewed and
revised as appropriate by the Director of Planning and Community Environment, who shall
formulate a recommendation to the Approval Authority for final approval.
(b) Following execution of the agreement by all parties, the completed Density
Bonus Regulatory Agreement, or memorandum thereof, shall be recorded and the
conditions filed and recorded on the Development.
(c) The approval of the Regulatory Agreement shall take place prior to tentative
map approval, and recordation shall take place prior to final map approval, or, where a
map is not being processed, prior to Architectural Review approval. The Regulatory
Agreement shall be binding to all future owners and successors in interest.
(d) The Regulatory Agreement shall be consistent with the guidelines of the City’s
Below Market Rate Program and shall include at a minimum the following:
(i) The total number of dwelling units approved for the Development,
including the number of Restricted Affordable Units;
(ii) A description of the household income group to be accommodated by the
Restricted Affordable Units, and the standards for determining the
corresponding Affordable Rent or Affordable Sales Price;
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130102 jb 0131030 Rev. July 26, 2013
(iii) The location, dwelling unit sizes (square feet), and number of bedrooms of
the Restricted Affordable Units;
(iv) Term of use restrictions for Restricted Affordable Units of at least 59 years
for Moderate Income units and at least 30 years for Low and Very Low
units;
(v) A schedule for completion and occupancy of Restricted Affordable Units;
(vi) A description of any Concession, Incentive, waiver, modification, or revised
parking standard, if any, being provided by the City;
(vii) A description of remedies for breach of the agreement (the City may
identify tenants or qualified purchasers as third party beneficiaries under
the agreement); and
(viii) Other provisions to ensure implementation and compliance with this
Section.
SECTION 3. CEQA The proposed Ordinance revises the requirements for granting
a residential density bonus to comply with revisions to State law enacted by the
Legislature through the adoption of Senate Bill 1818. Adoption of the draft density
bonus codifies allowances that developers have been able to use in housing
developments since 2005. Further, the revisions modify the criteria and incentives
offered to qualifying developments but do not authorize construction not already
permitted under the City’s existing codes. Also, it is uncertain how many project
applicants will seek to utilize the provisions of State law and this Ordinance and where
such projects might be located in the City. Further, each individual project will be
subject to its own environmental review. Consequently, this ordinance is exempt from
the requirements of the California Environmental Quality Act (CEQA) pursuant to
Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen
with certainty that there is no possibility the adoption and implementation of this
Ordinance may have a significant effect on the environment.
SECTION 4. Severability. If any provision, clause, sentence or paragraph of this
ordinance, or the application to any person or circumstances, shall be held invalid, such
invalidity shall not affect the other provisions of this Ordinance which can be given
effect without the invalid provision or application and, to this end, the provisions of this
Ordinance are hereby declared to be severable.
/ /
/ /
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130102 jb 0131030 Rev. July 26, 2013
SECTION 5. This ordinance shall be effective on the thirty‐first date after the
date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Senior Assistant City Attorney City Manager
____________________________
Director of Planning &
Community Environment
1
Planning and Transportation Commission 1
Verbatim Minutes 2
March 5, 2013 3
4
EXCERPT 5
6
Review and Recommendation to City Council to Adopt New Chapter 18.15 (Residential 7
Density Bonus) to Title 18 (Zoning) of the Palo Alto Municipal Code to Implement 8
Government Code Section 65915 (Continued from January 9, 2013) 9
10
Chair Martinez: We’re going to reconvene and start right up with Item Number 2, Review and 11
recommendation to City Council on the proposed Density Bonus Ordinance. We’ll start with a 12
staff report. 13
14
Tim Wong, Senior Planner, Housing: Good evening Commissioners, my name is Tim Wong and 15
I’m a Senior Planner. On January 9th the Planning Commission, the Planning and Transportation 16
Commission (PTC) first reviewed the initial draft Density Bonus Ordinance and there were a 17
number of comments made, but coming out of that meeting there were three main discussion 18
points. Number one main discussion point about the draft ordinance; the first point was about 19
requiring a pro forma. A second discussion point was quantification of concessions on the menu. 20
And lastly there was also some points made about jurisdiction oversight for these concessions. 21
22
And so staff went back and revised the draft Density Ordinance based on PTC feedback and in 23
regards to the requirement of pro forma, staff has revised that requirement to say that instead of 24
requiring or will require the submittal of a pro forma, staff has revised that language to say “may 25
require financial information.” Staff feels that that requirement should be retained since per the 26
Government code the only way to deny a concession is proof that it is not, that concession is not 27
needed to provide affordable units or lower the affordability. So, but instead of making it 28
mandatory staff has revised it to make it on the Director’s discretion. 29
30
Secondly the second item was quantification or quantifying the concessions. So staff has gone 31
back and quantified the more popular concessions, the setback, daylight plane, and previously 32
the height had already been quantified therefore it hadn’t been touched. Some of the less popular 33
concessions on the menu have not been quantified to hopefully make them more attractive for 34
potential developers in the future. 35
36
And lastly the last point was government or jurisdiction oversight to these concessions. In that 37
staff responds to that comment is that through the menu of concessions and quantifying some of 38
these concessions that is probably what the City can do in overseeing those concessions. The 39
purpose and intent of the government code is to kind of eliminate, not eliminate, limit City 40
oversight or jurisdiction oversight and staff feels that what is before you is probably what the 41
City can do while meeting the purpose and intent of the code. So that concludes staff’s 42
presentation. 43
44
Chair Martinez: Commissioners questions? Commissioner Alcheck? Oh, I don’t know, I should 45
ask that. Are there any members of the public who care to speak on this item? I see none. Ok. 46
Questions, comments from Commissioners. Oh I guess we’ll go with Commissioner Keller. 47
48
2
Commissioner Keller: Yeah, I suggested you formally open and close the public hearing just for 1
formality and then I’ll… 2
3
Chair Martinez: Someone might be rushing in at the last; I’m going to give them a shot at it. 4
5
Commissioner Keller: At least open it anyway. 6
7
Chair Martinez: Oh, ok. Let’s open the public hearing. 8
9
Commissioner Keller: I, based on the fact that we had an extensive discussion on this several, not 10
very, I guess several months ago, I have only one change to the recommendation that I would 11
like to see. And that is that I brought up the issue of special setbacks. And the narrative 12
basically said that special setbacks are setbacks and therefore they’re covered by what’s 13
described. That was not the intent of my suggestion. My suggestion was that special setbacks 14
may not be reduced by concession ever. And this allows setbacks to be reduced. So I was 15
suggesting that special setbacks be excluded from allowing for concessions. And the reason for 16
that is special setbacks are situations where this contextual thing going on in a neighborhood. So 17
for example, along Alma Street there’s a special 30 foot setback and that’s true along a number 18
of our major residential arterials. And I think that that should be respected regardless of the 19
development with the possible exception of Alma Village, which I didn’t agree with either. But 20
essentially those special setbacks should be respected so I would like to exclude them. 21
22
Chair Martinez: I have a question about that. Are the special setbacks somewhere codified that 23
we know what they are or is that just sort of a general term that we apply? 24
25
Amy French, Chief Planning Official: This is Amy French, Chief Planning Official. We have a 26
map that identifies the special setbacks. They were identified on… they’re larger in general than 27
the 20 foot front yard setbacks. These are arterial streets such as Middlefield, Embarcadero and 28
they’re identified through Title 19 of the Palo Alto Municipal Code in reference to the map that 29
was adopted. 30
31
Chair Martinez: Ok and to our City Attorney. Are we in compliance with the State mandate if 32
we adopt such restrictions? 33
34
Cara Silver, Sr. Assistant City Attorney: Thank you Chair. Cara Silver, Senior Assistant City 35
Attorney. What I would suggest if that’s the Commission’s intent, is to specify in the sort of 36
what we call the ministerial menu of concessions that are granted as a almost a matter of right 37
that the special, that those shall not include a waiver from the special setbacks. However, if we 38
were to outright prohibit any granting of some special setbacks even upon a financial finding that 39
the Density Bonus provision is designed to accommodate that could be legally problematic. 40
41
Chair Martinez: Commissioner Keller. 42
43
Commissioner Keller: I would certainly be supportive of the suggestion that Counsel has 44
recommended to us and that would implement what I would want. 45
46
Chair Martinez: Are you done? Commissioner Panelli, comments? Really? The other side? 47
Commissioner Alcheck. 48
49
3
Commissioner Alcheck: I’m prepared to support this. My concern and I mentioned it last time 1
was that we’re sort of setting the bar even higher and in doing so creating a bigger hurdle for 2
developers who may otherwise provide low income or affordable housing. And I guess my 3
request would be that if staff could alert us when an applicant successfully applies for this. That 4
would be of interest to me. Because it’s my understanding that this happens very infrequently 5
and so I’d just like to know if over the next year or so when those things happen because then we 6
can kind of keep track of whether or not this is accomplishing I think the lofty goal of 7
encouraging affordable housing units. But otherwise I support the Motion. I support the making 8
of a Motion. 9
10
Chair Martinez: Thank you. Commissioner Tanaka, comments? Commissioner King. 11
12
Commissioner King: Let’s see. I am walking into this sort of halfway through. I read the 13
minutes from last time and one of the things that was of interest to me were Commissioner 14
Keller’s comments about the time limit on these. And so I guess one question; what is for a 15
family of four what is the moderate income housing limit currently? Can somebody on staff 16
advise? 17
18
Mr. Wong: Commissioner King the median income for a family of four in Santa Clara County is 19
$101,300. So for a moderate income it’s about ten percent higher or $110,000-115,000 for a 20
family of four. 21
22
Commissioner King: Ok, thank you. And so my understanding is the State Density Bonus is a 23
mechanism for the State without funding affordable housing themselves to basically allow us, or 24
requires us to go above and beyond what we consider the reasonable entitlements for a property 25
effectively burdening the community, the neighbors, whomever, that we for whose protection we 26
set those entitlements and then that effective cost that is borne by the community and converted 27
into money for the developer as an incentive then lasts as long as the building is there. And so I 28
had asked staff and they were kind enough to respond today about that and it sounds like on the 29
low and very-low income units that there’s a 30 years and that as a minimum, but their response 30
was that we can’t go beyond that. But on the moderate income housing they’re using 59 years, 31
staff has proposed 59 years. 32
33
To me if our goal over time is to foster affordable housing and in this case moderate affordable 34
housing, moderate income affordable housing, as we run out of more projects over time or we 35
will truly be built out then these won’t get replaced. And so if the overarching goal for the 36
community is to have this amenity then it doesn’t seem logical to me to have a limit 59 years for 37
those, for that requirement. And so I guess my question is am I missing something? Why 38
wouldn’t we just make that in perpetuity or as long as the building exists? And it sounds like 39
from the response today that really we’re doing the 59 years for consistency and because, and I 40
quote, let’s see… consistency and then there was one… I think it basically was to paraphrase 41
because that’s how we’ve done it. And so oftentimes that is how things are retained and so I’d 42
like to bring up the question, why wouldn’t we push on that for, to match the length of the 43
building’s life? 44
45
Ms. Silver: Why don’t I take a stab at that and then Tim may want to add on. The way the 46
moderate income deed restriction works is that there is no requirement in terms of the term under 47
the State law. And so actually under, there’s no limitation. And so the City has some flexibility 48
in determining what the appropriate term for the affordability restriction should be. The way our 49
4
Below Market Rate (BMR) program is administered is that typically a deed restriction will be 1
placed on the first owner of the property and that deed restriction is typically 59 years. And then 2
when that person, if that person does not stay there for 59 years, which typically is the case the 3
new owner will come in and then a second deed restriction will be placed. And that deed 4
restriction will be 59 years according to our program guidelines. So in essence you have that 5
protection just in the way the program is administered. And I think for administrative ease at this 6
point unless there’s a need to vary from our existing procedures it’s easier at a staff level to be 7
able to administer the BMR program in a consistent fashion. 8
9
Commissioner King: Thank you. And so that’s for the ownership, the purchase BMR program. 10
Now do we not have any structures that serve the rental? Or am I missing something that that’s 11
not for moderate that we don’t offer that for moderate income rental? 12
13
Ms. Silver: We don’t typically in Palo Alto have a lot of moderate income rental properties. We 14
may have some and in that case that’s a good point that we could have a longer deed restriction 15
under State law that would be permissive to require that the property developer continue to offer 16
for rental longer than 59 years. Tim do you know if we have many moderate income units’ 17
rentals? 18
19
Mr. Wong: I do not believe we have any BMR units for moderate income, BMR rental units for 20
moderate income. Our BMR program for rentals is specifically for low income, very-low and 21
low. So we don’t have any moderate income rentals. 22
23
Commissioner King: Thank you. So I guess it begs the question if they don’t exist does it bother 24
even, bother talking about it I guess. Do we have a dinosaur rental program at all? I guess not. 25
Ok. Thank you. 26
27
Chair Martinez: Vice-Chair Michael. 28
29
Vice-Chair Michael: So thank you. So I appreciate all the work done by staff in putting this 30
together and I think it’s the right thing to do and the right way to do it; maybe unlike my feelings 31
on the last item. I think that the question about whether and when the staff would find it 32
appropriate to do some financial analysis in relationship to concessions probably doesn’t apply 33
here as much as it does maybe in the case of a Planned Community (PC) where there may be 34
some quantifiable impact on the infrastructure or community in some way that would bear upon 35
the approval process. So I think that having that be discretionary here is perfectly appropriate. 36
37
Also I really appreciate the work that you’ve done to provide a menu of options regarding the 38
concessions because I think that that encourages a open rational economic opportunity for 39
anybody who is considering doing a project. They can pick and choose, price that out, see if it’s 40
feasible and I hope that although we’ve been told that this is not likely to get heavy use that it 41
would be, that we would start to see some projects which would come under the Density Bonus 42
Ordinance and that would help the City meet its commitments regarding affordable housing and 43
the polices in the Housing Element that we’re about to finally adopt and our commitment under 44
the Regional Housing Needs Allocation (RHNA) which, all of which is very important. So I 45
think this is a step forward in that regard and I think it’s very close to being perfect and I think 46
it’s certainly good enough for our purposes and I support it. 47
48
Chair Martinez: Wait your turn young man. No, go ahead. Commissioner Panelli. 49
5
1
Commissioner Panelli: Ms. Silver you opened up a Pandora’s Box for me here because now I 2
really, I felt pretty good about where I was and now I need to understand something a bit better. 3
4
Chair Martinez: I hate it when she does that. 5
6
Commissioner Panelli: You said, if I were to understand correctly, that in the case of the, to 7
Commissioner King’s questions in the case of the moderate income housing those have deed 8
restrictions which typically last 59 years and if there’s a transfer of property, grantee, 9
grantor/grantee within that 59 year process a new 59 year period begins. Is that accurate? 10
11
Ms. Silver: Yes, that’s correct, and that’s only for ownership units, moderate income ownership 12
units. 13
14
Commissioner Panelli: And so what happens in the case of low and very-low income rental 15
properties that are held by whether it’s a profit or non-profit corporation? Those are the, that’s 16
the 30 year restriction. Correct? 17
18
Ms. Silver: Actually for the City’s affordable housing requirements we generally put a 59 year 19
deed restriction or 55. But the State Density Bonus Law provides that if a developer is willing to 20
put a 30 year deed restriction they are by law entitled to the protections of the Density Bonus 21
Law. 22
23
Commissioner Panelli: And at the end of that 30 years what happens? 24
25
Ms. Silver: It reverts to market rate unless there is some other deed restriction that applies to the 26
property. Typically developers use other funding which may have additional affordability 27
covenants that would operate to extend the term. 28
29
Commissioner Panelli: So this is a nuance I did not explicitly understand when I was reading the 30
material. We are effectively at risk of losing the affordable housing that we entitle every 30 31
years after it’s been entitled as such. And so we’re continuously losing; we give density bonuses 32
and concessions and then we effectively should just assume that we’re going to lose that 33
inventory and have to replenish it somehow. This seems like a really bad recipe. It seems like a 34
recipe for disaster. 35
36
Ms. Silver: That is the case for the small number of affordable units that are created through the 37
Density Bonus Program. State law provides that there is, that developers can just provide a 38
simple 30 year deed restriction. Now, you know, that also lines up with the age of housing stock. 39
Housing stock doesn’t last forever. It does typically turnover over a certain period, whether it’s 40
30 years or 50 years depends. And but that, yes, that is the shortfall of the Density Bonus Law. 41
42
Commissioner Panelli: Ok. Thank you. 43
44
Chair Martinez: It seems to me one of the reasons we would find this attractive is that it would 45
encourage developers to kind of take on more responsibility for lower income housing. I don’t 46
hear from Commissioner Alcheck that this is true. I heard that this would provide more 47
constraint. So is it anticipated, have we done any projections about what the outcome of 48
providing this Density Bonus Law would provide to Palo Alto? Tim? 49
6
1
Mr. Wong: I do not, we have not done any projections since it is an owner, it’s not a requirement 2
such as BMR. We can maybe project how many units and we can take 15 percent of those, but 3
for Density Bonus it really is an owner by owner type decision. So there’s no way to really 4
project how many potential density, affordable housing units we’d get through Density Bonus. 5
6
Chair Martinez: So in looking at our Regional Housing Mandate of 2,180 we couldn’t say that 7
two percent would come from something like this? We have no idea of; it’s a question, but no 8
idea of sort of the positive effects of having this Density Bonus Law? 9
10
Aaron Aknin, Assistant Director: I don’t think we could quantify an exact number of units. The 11
thing I would say, I mean I understand what Commissioner Alcheck is saying, but to the point 12
that I would disagree is that it does create some certainty both for the City in terms of developing 13
a menu of concessions and on the developer end to what the City’s expectations are, what we 14
will consider for these concessions. So I think it does help when they’re taking a look at land 15
and what they want to develop. 16
17
Chair Martinez: Correct me if I’m wrong, but hasn’t the only time this has been used is when 18
low income developers wanted to increase the number of housing units like the Eden project on 19
Alma or the one we heard last time from Palo Alto Housing Corp.? Are there others that 20
(interrupted) 21
22
Mr. Wong: Commissioner Martinez, Density Bonus, 195 Page Mill provided 17 units of 23
affordable housing for two concessions and also 2650. Same developer used Density Bonus for 24
concessions also. 25
26
Commissioner King: Sorry. What level was that? 27
28
Mr. Wong: They were rental, so they were at 60 percent of area median income. So they have 29
the 30 year restrictions on them. 30
31
Chair Martinez: So over the last year how many units do we count for that? 32
33
Mr. Wong: It would be 18 between those two developments in the past. 34
35
Chair Martinez: Well did we get a Density Bonus from the Maybell project? 36
37
Mr. Wong: Not really a Density Bonus. They’re asking for concessions, but they’re not asking 38
for additional density. 39
40
Chair Martinez: And what about the Eden housing project on Alma? They got concessions. Did 41
they get increased density? 42
43
Mr. Wong: I don’t think they got additional density. I know they got concessions. I’ll have to 44
double check, but I don’t believe they asked for density. 45
46
Chair Martinez: Ok so we can get, we can give concessions but not get additional housing units. 47
Is that how it’s going to work? 48
49
7
Mr. Wong: That is correct. The ordinance states that you don’t have to request Density Bonuses 1
to get concessions. You can just request for the concessions. 2
3
Chair Martinez: I see. And the, I like the menu of the specific concessions that are being 4
available, but the 50 foot height limit, how did we hit upon that? It sounds like an obvious 5
question, but I’d like to, I’m trying to trap you so you can respond. 6
7
Mr. Wong: Well in no way can it exceed the 50 foot, but residential I believe the maximum 8
height is 35, so it gives them a little additional height if they are to provide affordable units. 9
10
Chair Martinez: So if somebody’s proposing to do this on a mixed use development along El 11
Camino Real they would be limited to 50 foot? 12
13
Mr. Aknin: Correct. As it’s written out they’d be limited to 50 feet. 14
15
Chair Martinez: So as you’re aware the Architectural Review Board (ARB) has suggested that 16
there be some flexibility to the 50 foot height limit. So do we take that into account in this or is 17
that something that we consider separately? 18
19
Mr. Aknin: At this point I think that’s something that you would consider separately, once 20
there’s direction from Council related to the 50 foot height limit and we have a larger community 21
discussion related to that I think that’s the time that it would be appropriate to put it within this 22
discussion. 23
24
Chair Martinez: Ok so there’s a chance that we might come back and revise this? 25
26
Mr. Aknin: I think so. I mean not immediately, but when we have a community wide discussion 27
I think there could be multiple areas within our code that we’d have to take a look at. 28
29
Chair Martinez: Ok, great thank you. Commissioners anything else? Commissioner Keller? 30
31
Commissioner Keller: So a couple of things. First with respect to the affordability of moderate 32
income units does, if they were moderate income rental units does 18.15.040(b) indicate that 33
those units would be deed restricted for 59 years? Is my reading of that correct? That’s on Page 34
8 of the ordinance. 35
36
Ms. Silver: Yes. That’s correct. 37
38
Commissioner Keller: So even if people were to build a moderate income rental property it 39
would still have that deed restriction. Thank you. 40
41
The second issue is that the Density Bonus Law is unlikely to be used in Palo Alto for increasing 42
density and very likely to be used for concessions. 195 Page Mill and another as an example of 43
concessions. 101 Lytton, which is the project at Lytton and Alma originally had concessions as 44
the reason it was, because of the housing that was there that was later deleted, but somehow the 45
concessions stayed anyway. That project had concessions as well. And it’s likely that there will 46
be other projects that come along for which there are concessions. And right now those 47
concessions are by right and therefore essentially any developer can ask any concession at all 48
and there, the City has no, essentially has no way of restricting that. This would basically 49
8
indicate the menu of restrictions that we’re allowing without such a restriction the developer can 1
build things that are not as compatible with the community and the neighboring properties. And 2
so the concession law it basically is, the Density Bonus Law says that the City is supposed to 3
implement it, is supposed to enact and implement the ordinance. Is that correct? 4
5
Ms. Silver: Yes, that’s correct. 6
7
Commissioner Keller: Even though this law has been in existence for eight years or more we 8
have not yet done our duty and implemented such an ordinance so we’re now going ahead and 9
doing that. Is that understanding correct? 10
11
Ms. Silver: Yes, that is. 12
13
Commissioner Keller: Correct. Is there a minimum number of units that are required so if 14
somebody builds a four story building with 2 affordable units on the top floor is, what does that 15
trigger in terms of that? That’s 100 percent affordable, but what do they get for that? 16
17
Mr. Wong: Commissioner Keller, well first Density Bonus Ordinance kicks in when it’s five or 18
more units. So if they only build two units they would not be eligible for concessions or Density 19
Bonus. 20
21
Commissioner Keller: And State law does not require the issuance of bonuses if there are fewer 22
than four units, four units or fewer? 23
24
Mr. Wong: Yes. That was taken verbatim from the code. The five unit criteria threshold. 25
26
Commissioner Keller: Thank you. So I’m going to make hopefully a Friendly Amendment to 27
add in that special setback as (interrupted) 28
29
Chair Martinez: We don’t have a Motion yet. 30
31
Commissioner Keller: We do have a Motion. I thought there was a Motion by Commissioner 32
Alcheck with a Second by Commissioner Tanaka to move staff recommendation. That was not a 33
Motion? 34
35
Chair Martinez: Maybe I wasn’t here. 36
37
MOTION 38
39
Commissioner Keller: Ok, there’s no Motion. Then I’ll make a Motion. So I’ll move the staff 40
recommendation with, as stated with the addition that the special setback language be put in as I 41
discussed with the City Attorney. 42
43
SECOND 44
45
Chair Martinez: Ok. We have a Motion. Any second to the Motion? Yes, Commissioner 46
Alcheck. Care to speak to your Motion? 47
48
9
Commissioner Keller: I’ll just briefly say that this implements the requirement in State law that 1
the City have an implementing ordinance for the Density Bonus Law. And I think this gives a 2
reasonable set of concessions and also has a reasonable way of getting additional data from a 3
developer of low income housing who wishes to have a concession that’s not on the menu. 4
Thank you. 5
6
Chair Martinez: Commissioner Alcheck. 7
8
Commissioner Alcheck: I hope that this ordinance encourages the development of affordable 9
housing units to a greater extent than we’ve seen in the last eight years in this City. So we shall 10
see. 11
12
VOTE 13
14
Chair Martinez: Anyone else? Ok, let’s call for a vote on the Motion. Those in favor say aye 15
(Aye). Got to make sure I got it right this time. Motion passes unanimously. Thank you. Now 16
we will take our 10 minute break for changing of the guard. 17
18
MOTION PASSED (7-0) 19
90
Senate Bill No. 1818
CHAPTER 928
An act to amend Section 65915 of the Government Code, relating to
housing.
[Approved by Governor September 29, 2004. Filed
with Secretary of State September 30, 2004.]
LEGISLATIVE COUNSEL'S DIGEST
SB 1818, Hollingsworth. Density bonuses.
The Planning and Zoning Law requires, when a developer of housing
proposes a housing development within the jurisdiction of the local
government, that the city, county, or city and county provide the
developer with a density bonus or other incentives or concessions for the
production of lower income housing units within the development if the
developer meets certain requirements, including a requirement that the
applicant agree or propose to construct a specified percentage of the total
units for specified income households or qualifying residents. Existing
law also requires an additional density bonus or additional concession
or incentive to be granted to a developer of housing that meets those
requirements and includes a child care facility, as defined, subject to
specified conditions. Existing law prohibits the legislative body from
establishing fees to support the work of the planning agency that exceed
the reasonable cost of providing the service for which the fee is charged.
This bill would revise the above-described provision to, among other
things, require, when a developer seeks a density bonus for a housing
development within, or for the donation of land within, the jurisdiction
of the local government, that the local government provide a density
bonus or other incentives or concessions for the production of housing
units and child care facilities, as specified. By increasing the duties of
local officials, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Ch. 928 Ð 2 Ð
90
The people of the State of California do enact as follows:
SECTION 1.Section 65915 of the Government Code is amended to
read:
65915. (a) When an applicant seeks a density bonus for a housing
development within, or for the donation of land for housing within, the
jurisdiction of a city, county, or city and county, that local government
shall provide the applicant incentives or concessions for the production
of housing units and child care facilities as prescribed in this section. All
cities, counties, or cities and counties shall adopt an ordinance that
specifies how compliance with this section will be implemented.
(b) A city, county, or city and county shall grant a density bonus and
incentives or concessions described in subdivision (d) when the
applicant for the housing development seeks and agrees to construct at
least any one of the following:
(1) Ten percent of the total units of a housing development for lower
income households, as defined in Section 50079.5 of the Health and
Safety Code.
(2) Five percent of the total units of a housing development for very
low income households, as defined in Section 50105 of the Health and
Safety Code.
(3) A senior citizen housing development as defined in Sections 51.3
and 51.12 of the Civil Code.
(4) Ten percent of the total dwelling units in a condominium project
as defined in subdivision (f) of, or in a planned development as defined
in subdivision (k) of, Section 1351 of the Civil Code, for persons and
families of moderate income, as defined in Section 50093 of the Health
and Safety Code.
(c) (1) An applicant shall agree to, and the city, county, or city and
county shall ensure, continued affordability of all lower income density
bonus units for 30 years or a longer period of time if required by the
construction or mortgage financing assistance program, mortgage
insurance program, or rental subsidy program. Those units targeted for
lower income households, as defined in Section 50079.5 of the Health
and Safety Code, shall be affordable at a rent that does not exceed 30
percent of 60 percent of area median income. Those units targeted for
very low income households, as defined in Section 50105 of the Health
and Safety Code, shall be affordable at a rent that does not exceed 30
percent of 50 percent of area median income.
(2) An applicant shall agree to, and the city, county, or city and county
shall ensure that, the initial occupant of the moderate-income units that
are directly related to the receipt of the density bonus in the
condominium project as defined in subdivision (f) of, or in the planned
Ch. 928Ð 3 Ð
90
unit development as defined in subdivision (k) of, Section 1351 of the
Civil Code, are persons and families of moderate income, as defined in
Section 50093 of the Health and Safety Code. Upon resale, the seller of
the unit shall retain the value of any improvements, the downpayment,
and the seller's proportionate share of appreciation. The local
government shall recapture its proportionate share of appreciation,
which shall then be used within three years for any of the purposes
described in subdivision (e) of Section 33334.2 of the Health and Safety
Code that promote homeownership. For purposes of this subdivision,
the local government's proportionate share of appreciation shall be equal
to the percentage by which the initial sale price to the moderate-income
household was less than the fair market value of the home at the time of
initial sale.
(d) (1) An applicant may submit to a city, county, or city and county
a proposal for the specific incentives or concessions that the applicant
requests pursuant to this section, and may request a meeting with the city,
county, or city and county. The city, county, or city and county shall grant
the concession or incentive requested by the applicant unless the city,
county, or city and county makes a written finding, based upon
substantial evidence, of either of the following:
(A) The concession or incentive is not required in order to provide for
affordable housing costs, as defined in Section 50052.5 of the Health and
Safety Code, or for rents for the targeted units to be set as specified in
subdivision (c).
(B) The concession or incentive would have a specific adverse
impact, as defined in paragraph (2) of subdivision (d) of Section
65589.5, upon public health and safety or the physical environment or
on any real property that is listed in the California Register of Historical
Resources and for which there is no feasible method to satisfactorily
mitigate or avoid the specific adverse impact without rendering the
development unaffordable to low- and moderate-income households.
(2) The applicant shall receive the following number of incentives or
concessions:
(A) One incentive or concession for projects that include at least 10
percent of the total units for lower income households, at least 5 percent
for very low income households, or at least 10 percent for persons and
families of moderate income in a condominium or planned
development.
(B) Two incentives or concessions for projects that include at least 20
percent of the total units for lower income households, at least 10 percent
for very low income households, or at least 20 percent for persons and
families of moderate income in a condominium or planned
development.
Ch. 928 Ð 4 Ð
90
(C) Three incentives or concessions for projects that include at least
30 percent of the total units for lower income households, at least 15
percent for very low income households, or at least 30 percent for
persons and families of moderate income in a condominium or planned
development.
(3) The applicant may initiate judicial proceedings if the city, county,
or city and county refuses to grant a requested density bonus, incentive,
or concession. If a court finds that the refusal to grant a requested density
bonus, incentive, or concession is in violation of this section, the court
shall award the plaintiff reasonable attorney's fees and costs of suit.
Nothing in this subdivision shall be interpreted to require a local
government to grant an incentive or concession that has a specific,
adverse impact, as defined in paragraph (2) of subdivision (d) of Section
65589.5, upon health, safety, or the physical environment, and for which
there is no feasible method to satisfactorily mitigate or avoid the specific
adverse impact. Nothing in this subdivision shall be interpreted to
require a local government to grant an incentive or concession that
would have an adverse impact on any real property that is listed in the
California Register of Historical Resources. The city, county, or city and
county shall establish procedures for carrying out this section, that shall
include legislative body approval of the means of compliance with this
section. The city, county, or city and county shall also establish
procedures for waiving or modifying development and zoning standards
that would otherwise inhibit the utilization of the density bonus on
specific sites. These procedures shall include, but not be limited to, such
items as minimum lot size, side yard setbacks, and placement of public
works improvements.
(e) In no case may a city, county, or city and county apply any
development standard that will have the effect of precluding the
construction of a development meeting the criteria of subdivision (b) at
the densities or with the concessions or incentives permitted by this
section. An applicant may submit to a city, county, or city and county a
proposal for the waiver or reduction of development standards and may
request a meeting with the city, county, or city and county. If a court finds
that the refusal to grant a waiver or reduction of development standards
is in violation of this section, the court shall award the plaintiff
reasonable attorney's fees and costs of suit. Nothing in this subdivision
shall be interpreted to require a local government to waive or reduce
development standards if the waiver or reduction would have a specific,
adverse impact, as defined in paragraph (2) of subdivision (d) of Section
65589.5, upon health, safety, or the physical environment, and for which
there is no feasible method to satisfactorily mitigate or avoid the specific
adverse impact. Nothing in this subdivision shall be interpreted to
Ch. 928Ð 5 Ð
90
require a local government to waive or reduce development standards
that would have an adverse impact on any real property that is listed in
the California Register of Historical Resources.
(f) The applicant shall show that the waiver or modification is
necessary to make the housing units economically feasible.
(g) (1) For the purposes of this chapter, except as provided in
paragraph (2), ``density bonus'' means a density increase of at least 20
percent, unless a lesser percentage is elected by the applicant, over the
otherwise maximum allowable residential density under the applicable
zoning ordinance and land use element of the general plan as of the date
of application by the applicant to the city, county, or city and county. The
amount of density bonus to which the applicant is entitled shall vary
according to the amount by which the percentage of affordable housing
units exceeds the percentage established in subdivision (b). For each 1
percent increase above 10 percent in the percentage of units affordable
to lower income households, the density bonus shall be increased by 1.5
percent up to a maximum of 35 percent. For each 1 percent increase
above 5 percent in the percentage of units affordable to very low income
households, the density bonus shall be increased by 2.5 percent up to a
maximum of 35 percent. All density calculations resulting in fractional
units shall be rounded up to the next whole number. The granting of a
density bonus shall not be interpreted, in and of itself, to require a general
plan amendment, local coastal plan amendment, zoning change, or other
discretionary approval. The density bonus shall not be included when
determining the number of housing units that is equal to 5 or 10 percent
of the total. The density bonus shall apply to housing developments
consisting of five or more dwelling units.
(2) For the purposes of this chapter, if a development does not meet
the requirements of paragraph (1), (2), or (3) of subdivision (b), but the
applicant agrees or proposes to construct a condominium project as
defined in subdivision (f) of, or a planned development as defined in
subdivision (k) of, Section 1351 of the Civil Code, in which at least 10
percent of the total dwelling units are reserved for persons and families
of moderate income, as defined in Section 50093 of the Health and
Safety Code, a ``density bonus'' of at least 5 percent shall be granted,
unless a lesser percentage is elected by the applicant, over the otherwise
maximum allowable residential density under the applicable zoning
ordinance and land use element of the general plan as of the date of
application by the applicant to the city, county, or city and county. For
each 1 percent increase above 10 percent of the percentage of units
affordable to moderate-income households, the density bonus shall be
increased by 1 percent up to a maximum of 35 percent. All density
calculations resulting in fractional units shall be rounded up to the next
Ch. 928 Ð 6 Ð
90
whole number. The granting of a density bonus shall not be interpreted,
in and of itself, to require a general plan amendment, local coastal plan
amendment, zoning change, or other discretionary approval. The density
bonus shall not be included when determining the number of housing
units that is equal to 10 percent of the total. The density bonus shall apply
to housing developments consisting of five or more dwelling units.
(h) When an applicant for a tentative subdivision map, parcel map, or
other residential development approval donates land to a city, county, or
city and county as provided for in this subdivision, the applicant shall
be entitled to a 15 percent increase above the otherwise maximum
allowable residential density under the applicable zoning ordinance and
land use element of the general plan for the entire development. For each
1 percent increase above the minimum 10 percent land donation
described in paragraph (2) of this subdivision, the density bonus shall be
increased by 1 percent, up to a maximum of 35 percent. This increase
shall be in addition to any increase in density mandated by subdivision
(b), up to a maximum combined mandated density increase of 35 percent
if an applicant seeks both the increase required pursuant to this
subdivision and subdivision (b). All density calculations resulting in
fractional units shall be rounded up to the next whole number. Nothing
in this subdivision shall be construed to enlarge or diminish the authority
of a city, county, or city and county to require a developer to donate land
as a condition of development. An applicant shall be eligible for the
increased density bonus described in this subdivision if all of the
following conditions are met:
(1) The applicant donates and transfers the land no later than the date
of approval of the final subdivision map, parcel map, or residential
development application.
(2) The developable acreage and zoning classification of the land
being transferred are sufficient to permit construction of units affordable
to very low income households in an amount not less than 10 percent of
the number of residential units of the proposed development.
(3) The transferred land is at least one acre in size or of sufficient size
to permit development of at least 40 units, has the appropriate general
plan designation, is appropriately zoned for development as affordable
housing, and is or will be served by adequate public facilities and
infrastructure. The land shall have appropriate zoning and development
standards to make the development of the affordable units feasible. No
later than the date of approval of the final subdivision map, parcel map,
or of the residential development, the transferred land shall have all of
the permits and approvals, other than building permits, necessary for the
development of the very low income housing units on the transferred
land, except that the local government may subject the proposed
Ch. 928Ð 7 Ð
90
development to subsequent design review to the extent authorized by
subdivision (i) of Section 65583.2 if the design is not reviewed by the
local government prior to the time of transfer.
(4) The transferred land and the affordable units shall be subject to a
deed restriction ensuring continued affordability of the units consistent
with paragraphs (1) and (2) of subdivision (c), which shall be recorded
on the property at the time of dedication.
(5) The land is transferred to the local agency or to a housing
developer approved by the local agency. The local agency may require
the applicant to identify and transfer the land to the developer.
(6) The transferred land shall be within the boundary of the proposed
development or, if the local agency agrees, within one-quarter mile of the
boundary of the proposed development.
(i) (1) When an applicant proposes to construct a housing
development that conforms to the requirements of subdivision (b) and
includes a child care facility that will be located on the premises of, as
part of, or adjacent to, the project, the city, county, or city and county
shall grant either of the following:
(A) An additional density bonus that is an amount of square feet of
residential space that is equal to or greater than the amount of square feet
in the child care facility.
(B) An additional concession or incentive that contributes
significantly to the economic feasibility of the construction of the child
care facility.
(2) The city, county, or city and county shall require, as a condition
of approving the housing development, that the following occur:
(A) The child care facility shall remain in operation for a period of
time that is as long as or longer than the period of time during which the
density bonus units are required to remain affordable pursuant to
subdivision (c).
(B) Of the children who attend the child care facility, the children of
very low income households, lower income households, or families of
moderate income shall equal a percentage that is equal to or greater than
the percentage of dwelling units that are required for very low income
households, lower income households, or families of moderate income
pursuant to subdivision (b).
(3) Notwithstanding any requirement of this subdivision, a city,
county, or a city and county shall not be required to provide a density
bonus or concession for a child care facility if it finds, based upon
substantial evidence, that the community has adequate child care
facilities.
(4) ``Child care facility,'' as used in this section, means a child day
care facility other than a family day care home, including, but not limited
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to, infant centers, preschools, extended day care facilities, and schoolage
child care centers.
(j) ``Housing development,'' as used in this section, means one or
more groups of projects for residential units constructed in the planned
development of a city, county, or city and county. For the purposes of this
section, ``housing development'' also includes a subdivision or a
planned unit development or condominium project, as defined in
Section 1351 of the Civil Code, approved by a city, county, or city and
county and consists of residential units or unimproved residential lots
and either a project to substantially rehabilitate and convert an existing
commercial building to residential use or the substantial rehabilitation
of an existing multifamily dwelling, as defined in subdivision (d) of
Section 65863.4, where the result of the rehabilitation would be a net
increase in available residential units. For the purpose of calculating a
density bonus, the residential units do not have to be based upon
individual subdivision maps or parcels. The density bonus shall be
permitted in geographic areas of the housing development other than the
areas where the units for the lower income households are located.
(k) The granting of a concession or incentive shall not be interpreted,
in and of itself, to require a general plan amendment, local coastal plan
amendment, zoning change, or other discretionary approval. This
provision is declaratory of existing law.
(l) For the purposes of this chapter, concession or incentive means
any of the following:
(1) A reduction in site development standards or a modification of
zoning code requirements or architectural design requirements that
exceed the minimum building standards approved by the California
Building Standards Commission as provided in Part 2.5 (commencing
with Section 18901) of Division 13 of the Health and Safety Code,
including, but not limited to, a reduction in setback and square footage
requirements and in the ratio of vehicular parking spaces that would
otherwise be required that results in identifiable, financially sufficient,
and actual cost reductions.
(2) Approval of mixed use zoning in conjunction with the housing
project if commercial, office, industrial, or other land uses will reduce
the cost of the housing development and if the commercial, office,
industrial, or other land uses are compatible with the housing project and
the existing or planned development in the area where the proposed
housing project will be located.
(3) Other regulatory incentives or concessions proposed by the
developer or the city, county, or city and county that result in identifiable,
financially sufficient, and actual cost reductions.
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This subdivision does not limit or require the provision of direct
financial incentives for the housing development, including the
provision of publicly owned land, by the city, county, or city and county,
or the waiver of fees or dedication requirements.
(m) Nothing in this section shall be construed to supersede or in any
way alter or lessen the effect or application of the California Coastal Act
(Division 20 (commencing with Section 30000) of the Public Resources
Code).
(n) Nothing in this section shall be construed to prohibit a city,
county, or city and county from granting a density bonus greater than
what is described in this section for a development that meets the
requirements of this section or from granting a proportionately lower
density bonus than what is required by this section for developments that
do not meet the requirements of this section.
(o) For purposes of this section, the following definitions shall apply:
(1) ``Development standard'' includes site or construction conditions
that apply to a residential development pursuant to any ordinance,
general plan element, specific plan, charter amendment, or other local
condition, law, policy, resolution, or regulation.
(2) ``Maximum allowable residential density'' means the density
allowed under the zoning ordinance, or if a range of density is permitted,
means the maximum allowable density for the specific zoning range
applicable to the project.
(p) (1) Upon the request of the developer, no city, county, or city and
county shall require a vehicular parking ratio, inclusive of handicapped
and guest parking, of a development meeting the criteria of subdivision
(b), that exceeds the following ratios:
(A) Zero to one bedrooms: one onsite parking space.
(B) Two to three bedrooms: two onsite parking spaces.
(C) Four and more bedrooms: two and one-half parking spaces.
(2) If the total number of parking spaces required for a development
is other than a whole number, the number shall be rounded up to the next
whole number. For purposes of this subdivision, a development may
provide ``onsite parking'' through tandem parking or uncovered
parking, but not through onstreet parking.
(3) This subdivision shall apply to a development that meets the
requirements of subdivision (b) but only at the request of the applicant.
An applicant may request additional parking incentives or concessions
beyond those provided in this section, subject to subdivision (d).
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because a local
agency or school district has the authority to levy service charges, fees,
or assessments sufficient to pay for the program or level of service
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mandated by this act, within the meaning of Section 17556 of the
Government Code.
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