HomeMy WebLinkAboutStaff Report 2404-2874CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, May 06, 2024
Council Chambers & Hybrid
5:30 PM
Agenda Item
11.LEGISLATIVE: Adoption of an Ordinance Updating Chapter 18.15 (Density Bonus) of Title
18 (Zoning) to Reflect Recent Changes in State Density Bonus Law and Revising
Regulations for Provision of On-Site Affordable Rental Units Under the City’s Inclusionary
Housing Ordinance; Recommended by the Planning and Transportation Commission
March 13, 2024. CEQA Status: Exempt under CEQA Guidelines Section 15061(b)(3).
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: May 6, 2024
Report #:2404-2874
TITLE
LEGISLATIVE: Adoption of an Ordinance Updating Chapter 18.15 (Density Bonus) of Title 18
(Zoning) to Reflect Recent Changes in State Density Bonus Law and Revising Regulations for
Provision of On-Site Affordable Rental Units Under the City’s Inclusionary Housing Ordinance;
Recommended by the Planning and Transportation Commission March 13, 2024. CEQA Status:
Exempt under CEQA Guidelines Section 15061(b)(3).
RECOMMENDATION
Staff recommends the City Council adopt the attached ordinance (Attachment A) updating Palo
Alto’s Density Bonus regulations in accordance with recent changes in state law and revising
regulations regarding the provision of on-site affordable rental units.
BACKGROUND
Chapter 18.15 of the Palo Alto Municipal Code outlines the City’s Residential Density Bonus
program. This Chapter was enacted to comply with the state density bonus law, California
Government Code Section 65915. California’s density bonus law requires local governments to
provide housing developers with density bonuses and other concessions or incentives when the
developers agree to provide a certain percentage of affordable housing. This state law requires
compliance by local governments, even in the absence of local ordinances providing state
mandated bonuses, concessions, or incentives. A local ordinance, however, can provide clarity
to developers and the public regarding the interaction of state density bonus law with other
aspects of local zoning regulations.
Palo Alto first adopted its Density Bonus ordinance (PAMC Chapter 18.15) in 2014. Since that
time, the City has periodically updated the code in response to changes in state law, most
recently in 2021. Since that time, a variety of bills have made minor changes to state law,
including SB 728 (2021), and AB 2334 (2022). More recently, AB 323 (2023) made a major
revision, adding an “additional” density bonus that allows a developer to achieve up to a 100%
density bonus over the base provided in Title 18 or the Comprehensive Plan.
In 2017, the City also recodified and updated its inclusionary housing ordinance in PAMC
Chapter 16.65. In accordance with that effort, the City Council also set housing impact fees,
housing in-lieu fees, and defined the on-site affordability alternative for rental housing projects
(Ordinance No. 5409). Although the on-site affordability option has not been used in years past,
as rental housing developers could simply pay an impact fee, it is likely to become more
relevant as developers seek to utilize state density bonus law, which requires provision of on-
site affordable units.
Planning and Transportation Commission Review
On March 13, 2024, the Planning and Transportation Commission recommended, on a 7-0 vote,
that the City Council adopt the proposed ordinance with minor edits, including: (1) Delete the
menu of concessions, (2) Include the clarification or change to affordable housing requirement
that it be low income in Section 3 of the ordinance, and (3) correction of typos and clarification
of non-substantive issues. Links to the staff report and video are provided below.1 Commission
correspondence is published on the PTC webpage.2 There was one public speaker to the item,
who mentioned a specific pending project which was not on the agenda.
This item implements Program 3.8 of the City’s adopted 2023-2031 Housing Element, which
directs staff to ensure that the zoning code remains consistent with state law. As an action
implementing prior Council direction, adoption of this ordinance has been placed on the
consent calendar.
ANALYSIS
Regardless of whether the City acts to amend its ordinances, the changes to state law will
dictate the City’s actions when reviewing a state density bonus project. The state law is written
to supersede any conflicting local ordinances. Amending the City’s Zoning Code will provide
clarity to the public about the current laws applicable in the City. The following are changes
made to Chapter 18.15, Density Bonus:
1. Applicability. These amendments clarify that projects in a Planned Community Zone or
subject to a development agreement are not eligible for density bonus and that the use of state
density bonus law might render a project ineligible for local incentives like the Housing
Incentive Program (HIP) or the recently adopted El Camino Focus Area standards.
1 Link to PTC report: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas-
minutes/planning-and-transportation-commission/2024/ptc-3.13-density-bonus.pdf
Link to video of March 13, 2024 PTC meeting: https://midpenmedia.org/planning-and-transportation-commission-
2-3132024/
2 Link to staff correspondence with PTC members: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-
minutes-reports/agendas-minutes/planning-and-transportation-commission/2024/ptc-3.13-commission-
communications.pdf
2. Definitions. These amendments are primarily to include new and amended definitions in
state law. Most notable among these is the updated definition of “base density” or “maximum
allowable residential density,” which now provides explicit direction on how to apply density
bonus to zones that do not provide a maximum number of dwelling units per acre. In the past,
Palo Alto had very few areas that did not regulate maximum du/acre, but rezonings under the
2023-2031 Housing Element have increased the number of sites where this may apply.
In addition, following the PTC review, staff‘s attention was drawn to an outdated requirement
in the City’s ordinance with respect to qualifying development. The existing definition of
“development” requires that a project provide five or more “additional” or net-new units. The
current requirement in state law is simply that a project include “five or more residential units.”
A net increase in units is only expressly required when the project is the substantial
rehabilitation of an existing multifamily dwelling. Accordingly, the proposed ordinance removes
the requirement for project to provide additional units, except in the limited circumstance
specified in state law.
3. Size of bonus and number of concessions. The ordinance includes minor adjustments
regarding the amount of density bonus and number of concessions granted in certain
situations, in accordance with changes in state law.
4. Additional density bonus. The ordinance adds provisions regarding the “additional density
bonus” authorized by AB 323.
5. Updated provision on incentives and concessions. Updated regulations on the use of
incentives and concessions and, in accordance with the PTC recommendation, deleted the pre-
approved “menu” of incentives and concessions. This menu was not used by developers.
Recent caselaw on density bonus has also led developers to utilize incentives, concessions, and
waiver much more aggressively, such that they are unlikely to consult a menu of pre-approved
options.
In addition to updates to Chapter 18.15, the ordinance also amends the City’s on-site
alternative for rental housing projects. These requirements are not codified. Potentially as a
result of error, the regulations adopted by the Council in 2017 are too permissive, as they allow
a rental housing developer to provide 15% of units at rates affordable to moderate income
households. Recent experience has shown that this level of affordability can be fairly close to
market rate in some situations. Staff proposes to revise this requirement to be 15% of units at
rates affordable to lower income households, which is more typical. This update also includes
an option for developers to provide units affordable to very low income households, drawing
from the ratios used in state density bonus law. Following the PTC review, staff updated the
proposed requirement for very low income units from 8% to 9%, which also aligns with both
state density bonus law and Council’s direction in the Planned Home Zoning (PHZ) program.
FISCAL/RESOURCE IMPACT
There is no fiscal impact associated with this action.
STAKEHOLDER ENGAGEMENT
The Planning and Transportation Commission meeting was the opportunity for the public to
comment on the proposed ordinance.
ENVIRONMENTAL REVIEW
The adoption of this ordinance is not a project subject to the California Environmental Quality
Act, under CEQA Guidelines Section 15061(b)(3), because it can be seen with certainty that
adoption of the ordinance will not have a significant impact on the environment.
ATTACHMENTS
Attachment A: Draft Ordinance Amending PAMC Chapter 18.15 and Updating Rental
Alternative Regulations
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
*NOT YET APPROVED*
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Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Chapter 18.15
(Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code
to Incorporate Changes in State Density Bonus Law and Revising
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On October 11, 2023, the Governor approved AB 1287, which substantially revised the
provisions of State Density Bonus law (Government Code Section 65915), which requires
a city to provide a developer that proposes a housing development within the
jurisdictional boundaries of that city with a density bonus and other incentives or
concessions for the production of lower income housing units, or for the donation of
land within the development, if the developer agrees to construct a specified
percentage of units for very low income, low-income, or moderate-income households
or qualifying residents and meets other requirements.
B. In 2023 and previous years, the Governor has approved additional revisions to State
Density Bonus Law, including AB 323, SB 713, AB 682, AB 2334, SB 290, and SB 728.
C. The City Council is therefore updating Chapter 18.15 (Density Bonus) of Title 18 (Zoning)
of the Palo Alto Municipal Code to incorporate these revisions in state law.
SECTION 2. Chapter 18.15 (Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code is
amended to read as follows [additions are underlined and deletions struck-through].
18.15.010 Purpose and Applicability
(a) The purpose of this chapter is to:
(a1) Comply with the state density bonus law under California Government Code s
Section 65915. To the extent this chapter conflicts with California Government Code
Section 65915, the provisions of Section 65915 shall prevail.
(b2) Establish procedures for implementing state density bonus requirements as set
forth in California Government Code Section 65915, as amended.
(c3) Facilitate the development of affordable housing consistent with the goals,
objectives, and policies of the City’s Comprehensive Plan Housing Element.
(b) This chapter applies to all development applications, as defined herein, except:
(1) Developments proposed in conjunction with a rezoning to the Planned Community
zone district, which shall be entitled to densities and specific development plans
*NOT YET APPROVED*
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approved as part of the rezoning and shall not be entitled to a density bonus in addition
to the units entitled by the rezone.
(2) Developments proposed in conjunction with a development agreement, pursuant to
Government Code section 65864-65869.5, where the development agreement specifies
the densities and/or development standards permitted thereunder.
(c) Utilization of the benefits afforded by this chapter will preclude an applicant from taking
advantage of some local alternatives to state density bonus law, such as the Housing Incentive
Program or El Camino Real Focus Area standards set forth in Chapter 18.14.
18.15.020 Definitions
Whenever the following terms are used in this chapter, they shall have the meaning established
by this section. To the extent these terms are defined in California Government Code Section
65915, the definitions provided therein shall govern and the following definitions are provided
for convenience only:
(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, as further defined in the California Health and Safety Code Section 50053.
that does not exceed the following:
(i) Very low income: 50% of the area median income for Santa Clara County, adjusted for
presumed household size, multiplied by 30% and divided by 12.
(ii) Lower income: 60% of the area median income for Santa Clara County, adjusted for
presumed household size, multiplied by 30% 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 the monthly housing costs provided in Health and Safety Code Section 50052.5:
(i) Very low income: 50% of the area median income for Santa Clara County, adjusted for
presumed household size, multiplied by 30% and divided by 12.
(ii) Lower income: 80% of the area median income for Santa Clara County, adjusted for
presumed household size, multiplied by 30% and divided by 12.
(iii) Moderate income: 120% of the area median income for Santa Clara County, adjusted
for presumed household size, multiplied by 30% and divided by 12.
*NOT YET APPROVED*
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(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. Approval Authority shall also
include recommending bodies such as the Architectural Review Board and the Planning and
Transportation Commission.
(e) “Below market rate housing program” means Chapter 18.14 16.65 of the Palo Alto
Municipal Code and the Administrative Guidelines adopted thereunder for the below market
rate program.
(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) (1) 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) (2) 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) (3) 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, granted pursuant to Government Code
Section 65915 and this ordinance, over the otherwise maximum allowable gross residential
density as of the date of application granted pursuant to Government Code Section 65915 and
this ordinance, or, if elected by the applicant, a lesser percentage of density increase, including,
but not limited to, no increase in density.
(i) “Density bonus units” means those dwelling units granted pursuant to the provisions of
this chapter which exceed the otherwise maximum allowable gross residential density for the
development site.”
(j) “Development” means all developments pursuant to a single application 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
*NOT YET APPROVED*
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of a non-residential building to dwelling units, or substantial rehabilitation of an existing
multifamily building where the result of the rehabilitation would be a net increase in available
residential units.
(k) “Development standard” means a site or construction condition, other than a control on
maximum density, such as a height limitation, a setback, or a floor-area ratio, an onsite open-
space requirement, a minimum lot area per unit requirement, or a parking 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, including regulations enacted by the
electorate exercising the local initiative or referendum power. In zones lacking a dwelling-units-
per-acre standard, Floor Area Ratio or FAR acts as a limitation on density and is therefore not
considered a development standard subject to waiver, incentive, or concession. 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.
(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) "Lower income student" means a student who has a household income and asset level
that does not exceed the level for Cal Grant A or Cal Grant B award recipients as set forth in
Section 69432.7(k) of the Education Code. The eligibility of a unit for lower income students
under this section shall be verified by an affidavit, award letter, or letter of eligibility provided
by the institution of higher education in which the student is enrolled or by the California
Student Aid Commission that the student receives or is eligible for financial aid, including an
institutional grant or fee waiver from the college or university, the California Student Aid
Commission, or the federal government.
(o) "Major transit stop" has the same meaning as defined in subdivision (b) of Section 21155
of the California Public Resources Code.
(1) “Located within one-half mile of a major transit stop” means that any point on a
proposed development is within one-half mile of any point on the property on which a
major transit stop is located, including any parking lot owned by the transit authority or
other local agency operating the major transit stop.
(n p) “Maximum allowable residential density” or “base density” means the maximum
greatest number of dwelling units permitted in the development by the city’s Comprehensive
*NOT YET APPROVED*
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Plan Land Use Element, a specific plan, an area plan, or and Zoning Ordinance at the time of
application, excluding the provisions of this chapter. If a range of density is permitted, the
greatest number of units allowed by the specific zoning range, specific plan, or Comprehensive
Plan Land Use Element shall apply. 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. However, if the applicable zoning ordinance, specific
plan, or land use element does not provide a dwelling-units-per-acre standard for density, then
the maximum allowable residential density shall be calculated by:
(1) Estimating the realistic development capacity of the site based on the objective
development standards applicable to the project, including, but not limited to, floor
area ratio, site coverage, maximum building height and number of stories, building
setbacks and stepbacks, public and private open-space requirements, minimum
percentage or square footage of any nonresidential component, and parking
requirements, unless not required for the base project. Parking requirements shall
include considerations regarding number of spaces, location, design, type, and
circulation. A developer may provide a base density study and the local agency shall
accept it, provided that it includes all applicable objective development standards.
(2) Maintaining the same average unit size and other project details relevant to the
base density study, excepting those that may be modified by waiver or concession to
accommodate the bonus units, in the proposed project as in the study.
(oq) “Non-restricted unit” means all dwelling units within a development excluding the
restricted affordable units.
(p r) “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 s) “Qualifying resident” means senior citizens or other persons eligible to reside in a senior
citizen housing development or qualifying mobilehome park.
(r t) “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 u) “Replace” means either of the following:
(I 1) If any dwelling units described in Section 18.15.030(i) are occupied on the date
that the application is submitted to the City, the proposed housing development shall
provide at least the same number of units of equivalent size to be made available at
affordable rent or affordable housing cost to, and occupied by, persons and families in
the same or lower income category as those households in occupancy. For unoccupied
dwelling units described in Section 18.15.030(i) in a development with occupied units,
the proposed housing development shall provide units of equivalent size or type, or
*NOT YET APPROVED*
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both, to be made available at affordable rent or affordable housing cost to, and
occupied by, persons and families in the same or lower income category as the last
household in occupancyin the same proportion of affordability as the occupied units. If
the income category of the (last) household in occupancy is not known, it shall be
rebuttably presumed that lower income renter households occupied these units in the
same proportion of lower income renter households to all renter households within the
jurisdiction, as determined by the most recently available data from the United States
Department of Housing and Urban Development’s Comprehensive Housing Affordability
Strategy database. All replacement calculations resulting in fractional units shall be
rounded up to the next whole number. If the replacement units will be rental dwelling
units, these units shall be subject to a recorded affordability restriction for at least 55
years. If the proposed development is for-sale units, the units replaced shall be subject
to California Government Code Section 65915(c)(2). For purposes of this subsection (s)
of Section 18.15.020, “equivalent size” means that the replacement units contain at
least the same total number of bedrooms as the units being replaced.
(ii2) If all dwelling units described in Section 18.15.030(i) have been vacated or
demolished within the five-year period preceding the application, the proposed housing
development shall provide at least the same number of units of equivalent size, as
existed at the highpoint of those units in the five-year period preceding the application
to be made available at affordable rent or affordable housing cost to, and occupied by,
persons and families in the same or lower income category as those persons and
families in occupancy at that time, if known. If the incomes of the persons and families
in occupancy at the highpoint is not known, it shall be rebuttably presumed that low-
income and very low income renter households occupied these units in the same
proportion of low-income and very low income renter households to all renter
households within the jurisdiction, as determined by the most recently available data
from the United States Department of Housing and Urban Development’s
Comprehensive Housing Affordability Strategy database., then one-half of the required
units shall be made available at affordable rent or affordable housing cost to, and
occupied by, very low income persons and families and one-half of the required units
shall be made available for rent at affordable housing costs to, and occupied by, low-
income persons and families. All replacement calculations resulting in fractional units
shall be rounded up to the next whole number. If the replacement units will be rental
dwelling units, these units shall be subject to a recorded affordability restriction for at
least 55 years. If the proposed development is for-sale units, the units replaced shall be
subject to California Government Code Section 65915(c)(2).
(t v) “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.
(u w) “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
*NOT YET APPROVED*
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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 these phrases are
used in California Civil Code Sections 51.2, and 51.3, and 51.12.
(x)“Shared housing building” means a residential or mixed-use structure, with five or more
shared housing units and one or more common kitchens and dining areas designed for
permanent residence of more than 30 days by its tenants. The kitchens and dining areas within
the shared housing building shall be able to adequately accommodate all residents. If a local
ordinance further restricts the attributes of a shared housing building beyond the requirements
established in this section, the local definition shall apply to the extent that it does not conflict
with the requirements of this section.
(y) “Total units” or “total dwelling units” means a calculation of the number of units that:
(1) Excludes a unit added by a density bonus awarded pursuant to this section or any
local law granting a greater density bonus.
(2) Includes a unit designated to satisfy an inclusionary zoning requirement of a city,
county, or city and county.
For purposes of calculating a density bonus granted pursuant to this section for a shared
housing building, “unit” means one shared housing unit and its pro rata share of associated
common area facilities.
(z) “Very low vehicle travel area” means an urbanized area, as designated by the United States
Census Bureau, where the existing residential development generates vehicle miles traveled
per capita that is below 85 percent of either regional vehicle miles traveled per capita or city
vehicle miles traveled per capita. For purposes of this paragraph, “area” may include a travel
analysis zone, hexagon, or grid. For the purposes of determining “regional vehicle miles
traveled per capita” pursuant to this paragraph, a “region” is the entirety of incorporated and
unincorporated areas governed by a multicounty or single-county metropolitan planning
organization, or the entirety of the incorporated and unincorporated areas of an individual
county that is not part of a metropolitan planning organization.
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 twenty 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 1) A rental or for-sale development, including a shared housing building, that
provides at At least ten percent (10%) of the total dwelling units of the development as
restricted affordable units affordable to lower income households. Between ten and
*NOT YET APPROVED*
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twenty percent (10-20%), f For each one percent (1%) increase in the percentage of
restricted lower income units up to twenty percent (20%) of total units, a development
will receive an additional one and one-half percent (1.5%) density bonus up to thirty-five
percent (35%) density bonus of the maximum residential density. For each one percent
(1%) increase in the percentage of restricted lower income units exceeding twenty
percent (20%) of total units, a development will receive an additional three and three-
quarters percent (3.75%) density bonus up to fifty percent (50%) density bonusof the
maximum residential density; or
(ii 2) A rental or for-sale development, including a shared housing building, that
provides at At least five percent (5%) of the total dwelling units of the development as
restricted affordable units affordable to very low income households. Between five and
eleven percent (5-11%), f For each one percent (1%) increase in the percentage of
restricted very low income units up to eleven percent (11%) of total units, a
development will receive an additional two and one-half percent (2.5%) density bonus
up to thirty-five percent (35%) density bonusof the maximum residential density. For
each one percent (1%) increase in the percentage of restricted very low income units
exceeding eleven percent (11%) of total units, a development will receive an additional
three and three-quarters percent (3.75%) density bonus up to fifty percent (50%)
density bonusof the maximum residential density; or
(iii 3) A senior citizen housing development; or
(iv 4) A qualifying mobilehome park; or
(v 5) At least ten percent (10%) of the total dwelling units of the development for
transitional foster youth, as defined in Section 66025.9 of the Education Code, disabled
veterans, as defined in Section 18541 of the Government Code, or homeless persons, as
defined in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et
seq.). The units described in this subsection shall be subject to a recorded affordability
restriction of 55 years and shall be provided at the same affordability level as very low
income units.
(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 a
development, in accordance with the requirements of this Section and Government Code
Section 65915, in which at least 10 percent (10%) of the total dwelling units of a housing
development are sold to persons and families of low or 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 between ten and
forty percent (10-40%) of total units, a development will receive an additional one percent (1%)
density bonus up to thirty-five percent (35%) density bonus of the maximum residential
density. For each one percent (1%) increase in the percentage of total dwelling units restricted
for moderate income households exceeding forty percent (40%), a development will receive an
additional three and three-quarters percent (3.75%) density bonus up to fifty percent (50%) of
the maximum residential density.
*NOT YET APPROVED*
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(c) The city shall grant a thirty-five percent (35%) density bonus when an applicant for a
student housing 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:
(i 1) At least twenty percent (20%) of the total dwelling units will be restricted and used
for lower income students.
(ii 2) For purposes of calculating a density bonus granted pursuant to this
subparagraph, the term "unit" as used in this subparagraph means one rental bed and
its pro rata share of the associated common area facilities. The units described in this
subparagraph shall be subject to an affordability restriction of 55 years.
(iii 3) All units will be used exclusively for undergraduate, graduate, or professional
students enrolled full time at an institution of higher education accredited by the
Western Association of Schools and Colleges or the Accrediting Commission for
Community and Junior Colleges.
(iv 4) The applicant submits evidence that the applicant entered into an operating
agreement or master lease with one or more institutions of higher education for the
institution(s) to occupy all units of the student housing development with students from
that institution(s).
(v 5) The rent provided in the applicable units of the development for lower income
students shall be calculated at thirty percent (30%) of sixty-five percent (65%) of the
area median income for Santa Clara County for a single-room occupancy unit type.
(vi 6) The applicant will provide priority for the applicable affordable units for lower
income students experiencing homelessness. A homeless service provider, as defined in
paragraph (3) of subdivision (e) of Section 103577 of the Health and Safety Code, or
institution of higher education that has knowledge of a person's homeless status may
verify a person's status as homeless for purposes of this subclause.
(d) The city shall grant an eighty percent (80%) density bonus to a development if the
following criteria apply: one hundred percent (100%) of all units in the development, including
total units and density bonus units, but exclusive of manager's unit or units, are for lower
income households, as defined by Section 50079.5 of the Health and Safety Code, except that
twenty percent (20%) of the units in the development, including total units and density bonus
units, may be for moderate-income households, as defined in Section 50053 of the Health and
Safety Code. For rental units, rents shall be restricted as set forth in Government Code section
65915(c)(1)(B)(ii). The city will not impose any maximum controls on density if either of the
following apply:
(i 1) Except as otherwise provided in clause (ii), the city will grant a density bonus of
eighty percent (80%) of the number of units for lower income households The housing
development is located in a very low vehicle travel area within a designated county.
*NOT YET APPROVED*
10 0160139_20240416_ay16
(ii 2) If the The development is located within one-half mile of a major transit stop, the
city will not impose any maximum controls on density.
(e) When calculating the number of permitted density bonus units, any fractions of units
shall be rounded to the next highest number Each component of any density calculation,
including base density and bonus density, resulting in fractional units shall be separately
rounded up to the next whole 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).
(f) Each development is entitled to only one density bonus, which shall be selected by the
applicant based on the percentage of very low, low, or moderate-income 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, or the development's provision of restricted affordable units for transitional foster youth,
disabled veterans, lower income students, or homeless persons. Density bonuses from more
than one category may not be combined. Except as provided for in 18.15.030(d) and 18.15.035,
in no case shall a development be entitled to a density bonus of more than fifty percent (50%).
(g) 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 or fraction shall be rounded to the next
larger integer.
(h) Any restricted affordable unit provided pursuant to the city’s below market rate housing
program shall be included when determining the number of restricted affordable units required
to qualify for a density bonus or other entitlement under this chapter. However, the payment
of a housing impact or in lieu fee shall not qualify for a density bonus or other entitlement
under this chapter.
(i) An applicant (or project) shall be ineligible for a density bonus or any other incentives or
concessions under this chapter if the housing development is proposed on any property that
includes a parcel or parcels on which rental dwelling units are located or, if the dwelling units
have been vacated or demolished in the five-year period preceding the application, have been
subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to
persons and families of lower or very low income; subject to any other form of rent or price
control through the City’s valid exercise of its police power; or occupied by lower or very low
income households, unless the proposed housing development replaces those units, and either
of the following applies:
(i 1) The proposed housing development, inclusive of the units replaced pursuant to
this paragraph, contains affordable units at the percentages set forth in
Section 18.15.030.
*NOT YET APPROVED*
11 0160139_20240416_ay16
(ii 2) Each unit in the development, exclusive of a manager’s unit or units, is affordable
to, and occupied by, either a lower or very low income household.
(j) Certain other types of development activities are specifically eligible for a density bonus
pursuant to state law:
(i 1) 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 2) A condominium conversion may be eligible for a density bonus or concession
pursuant to the requirements set forth in Government Code Section 65915.5.
(iii 3) An applicant for a commercial development who has entered into an agreement
for partnered housing may be eligible for a density bonus pursuant to the requirements
set forth in Government Code Section 65915.7.
(k) As provided in Section 18.15.080(c), development proposed with rezoning to the Planned
Community zone district are entitled to densities approved as part of the rezoning and shall not
be entitled to a density bonus in addition to the units entitled by the rezone.
(l k) Notwithstanding any provision of this chapter, all developments must satisfy all
applicable requirements of the city’s Below Market Rate Housing Program in Chapter 16.65,
which may impose requirements for restricted affordable units in addition to those required to
receive a density bonus or concessions.
(l) For sites where Title 18, a Specific Plan, or the Comprehensive Plan do not expressly
prescribe a maximum number of dwelling units per acre and FAR therefore acts as the
limitation on density, the base density shall be calculated by estimating the realistic
development capacity, as described in Section 18.15.020(p). In such circumstances, the density
bonus shall be granted as additional floor area in proportion to the number of bonus units
proposed. The Director of Planning and Development Services may issue additional guidance on
the application of this section.
Table 1 summarizes the density bonus provisions described in this Section.
Table 1
Density Bonus Summary Table
Restricted
Affordable
Units (RAUs)
or Category
Minimum
Percentage of
RAUs
Percentage of
Density Bonus
Granted
Additional
Bonus for
Each 1%
Increase in
RAUs
Percentage of
RAUs Required
for 35%
Density Bonus
Percentage of
RAUs Required
for Maximum
50% Density
Bonus
Very Low
Income
5% 20% 2.50%
(3.75% bonus
11% 15%
*NOT YET APPROVED*
12 0160139_20240416_ay16
for increases
above 11%
RAU)
Lower Income 10% 20% 1.50%
(3.75% bonus
for increases
above 20%
RAU)
20% 24%
Moderate
Income
10% 5% 1%
(3.75% bonus
for increases
above 40%
RAU)
40% 44%
Lower Income
Student
Housing
20% 35% ----- ----- -----
Senior Citizen
Housing
100% 20% ------ ------ ------
Qualifying
Mobile Park
100% 20% ------ ------ ------
100%
Affordable
Units
100% 80% (or no
maximum
density)
----- ----- -----
Note: A density bonus may be selected from only one category.
18.15.035 Additional Density Bonus
(a) Provided that the resulting housing development would not restrict more than 50 percent
of the total units to moderate-income, lower income, or very low income households, the city
shall grant one additional density bonus calculated pursuant to paragraph (b) when an
applicant proposes to construct a housing development that conforms to the requirements of
section 18.15.030, agrees to include additional rental or for-sale units affordable to very low
income households or moderate income households, and meets any of the following
requirements:
(1) The housing development conforms to Section 18.15.030(a)(1) and provides twenty-
four percent (24%) of the total units for lower income households.
*NOT YET APPROVED*
13 0160139_20240416_ay16
(2) The housing development conforms to Section 18.15.030(a)(2) and provides fifteen
percent (15%) of the total units for very low income households.
(3) The housing development conforms to Section 18.15.030(b) and provides forty-four
percent (44%) of the total units for moderate income households.
(b) The additional density bonus granted under this Section shall be calculated as follows:
Table 2
Additional Density Bonus
Percentage Very Low
Income Units
Percentage Density
Bonus
Percentage Moderate
Income Units
Percentage Density
Bonus
5 20 5 20
6 23.75 6 22.5
7 27.5 7 25
8 31.25 8 27.5
9 35 9 30
10 38.75 10 32.5
11 35
12 38.75
13 42.5
14 46.25
15 50
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 55 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 55 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).
*NOT YET APPROVED*
14 0160139_20240416_ay16
(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 the city’s Below Market Rate Housing Program guidelines
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, square footage, appearance and general quality 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) A regulatory agreement, as described in Section 18.15.100, 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 parking for persons with a disability and
guests:
(i 1) Zero to one bedroom unit: one on-site parking space;
(ii 2) Two to three bedroom unit: one and one-half on-site parking spaces;
(iii 3) 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) Additional parking incentives for transit oriented project.
(i 1) For purposes of this subdivision, a development shall have unobstructed access to
a major transit stop if a resident is able to access the major transit stop without
encountering natural or constructed impediments. For purposes of this subdivision,
"natural or constructed impediments" includes, but is not limited to, freeways, rivers,
mountains, and bodies of water, but does not include residential structures, shopping
centers, parking lots, or rails used for transit.
*NOT YET APPROVED*
15 0160139_20240416_ay16
(A) Notwithstanding subdivision (a) above, if a development includes at least
twenty percent (20%) of low-income or at least eleven percent (11%) of very low
income units provided for in section 18.15.030(a)(i 1) or (ii 2), or at least forty
percent (40%) moderate-income units provided for in section 18.15.030(b), and
is located within one-half mile of a major transit stop, as defined in subdivision
(o) of Section 65915 of the Government Code, and there is unobstructed access
to the major transit stop from the development, then, upon request of the
applicant, the city shall not impose a vehicular parking ratio, inclusive of parking
for persons with a disability and guests, that exceeds 0.5 spaces per unit.
(ii 2) Notwithstanding subdivision (a) above, if a development consists solely of rental
units, exclusive of a manager’s unit, with an affordable housing cost to lower income
families, as provided in Section 50052.5 of the Health and Safety Code, then, upon the
request of the applicant, the city shall not impose vehicular parking standards if the
development meets one of the following criteria:
(A) The development is located within one-half mile of a major transit stop, as
defined in subdivision (o) of Section 65915 of the Government Code, and there is
unobstructed access to the major transit stop from the development, the ratio
shall not exceed 0.5 spaces per unit.
(B) The development is a for-rent housing development for individuals who are
62 years of age or older that complies with Sections 51.2 and 51.3 of the Civil
Code, and the development has either paratransit service or unobstructed
access, within one-half mile, to fixed bus route service that operates at least
eight times per day.
(C) The development is either a special needs housing development, as defined
in Section 51312 of the Health and Safety Code, or a supportive housing
development, as defined in Section 50675.14 of the Health and Safety Code. A
development that is a special needs housing development must have either
paratransit service or unobstructed access, within one-half mile, to fixed bus
route service that operates at least eight times per day.
(iii 3) Notwithstanding paragraphs (b)(i), (b)(ii)(A), and (b)(ii)(B), the city may impose a
higher vehicular parking ratio not to exceed the ratio described in subdivision (a) if the
city has conducted an area wide or citywide parking study in compliance with
Government Code Section 65915(p)(8).
(c) Other incentives and concessions. A development is eligible for other concessions or
incentives as follows:
(i 1) 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 the total dwelling units affordable to moderate income
*NOT YET APPROVED*
16 0160139_20240416_ay16
households in a development in which the units are for sale; or at least twenty percent
(20%) of the total units in a student housing development for low income students, as
provided for in 18.15.030(c).
(ii 2) Two concessions or incentives for a development that makes at least seventeen
percent (17%) 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 development in which the units are for sale.
(iii 3) Three concessions or incentives for a development that makes at least twenty-
four percent (24%) 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 development in which the units are for sale.
(4) Four incentives or concessions for least 16 percent (16%) of the units for very low
income households or at least 45 percent (45%) for persons and families of moderate
income in a development in which the units are for sale.
(iv 5) Four Five concessions or incentives for a development that provides one hundred
percent (100%) of the total units, exclusive of a manager's unit or units, are for lower
income households, as described in Section 18.15.030, subdivision (d). If the project is
located within one-half mile of a major transit stop or is located in a very low vehicle
travel area in a designated county, the. Such development may additionally receive a
height increase of three stories or thirty-three (33) feet.
Table 2 3 summarizes the provisions of Concessions or Incentives described in subsection (a).
Table 3 2
Concessions and Incentives Summary Table
Target Group Restricted Affordable Units
Very Low Income 5% 10% 15% 16% ---
Lower Income 10% 17% 24% --- 100%
Moderate Income (Applicable to For-Sale Units
Only)
10% 20% 30% 45% ---
Lower Income Student Housing 20% --- --- --- ---
Maximum Incentive(s)/Concession(s) 1 2 3 4 5
*NOT YET APPROVED*
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Notes:
1. Concessions or incentives may be selected from only one category (very low, lower,
moderate, low income student development)
2. No concessions or incentives are available for land donation, or for senior citizen housing
developments and qualifying mobilehome parks that do not contain restricted affordable units.
3. In a student development, a “unit” is defined according to 18.15.030(c)(ii).
(d) In submitting a request for concessions or incentives, an applicant may request the
specific concessions set forth below. The 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 25% average reduction of a side yard setback requirement if the design is
consistent with the applicable design standards and guidelines, unless adjacent to R-1, R-2,
RMD and other low density residential zones;
(ii) Up to a 25% average reduction of the rear yard setback requirements so long as the
setback is consistent with the applicable design standards and guidelines, unless adjacent to R-
1, R-2, RMD and other low density residential zones;
(iii) 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, unless adjacent to R-1, R-2, RMD and
other low density residential zones, and no event to exceed fifty (50) feet;
(iv) An increase in the floor area ratio (FAR) up to 25% or up to the square footage of the
restricted affordable units, whichever is less. Any FAR bonus under this section shall be
consistent with the applicable height requirements and only apply to the residential portion of
the mixed use project;
(v) Reduction in daylight plane requirements not to exceed 25% of the length of the
adjacent lot line, so long as the intrusion is consistent with applicable design standards and
guidelines, unless adjacent to R-1, R-2, RMD and other low density residential zones;
(vi) Up to fifty percent (50%) increase over the maximum site coverage requirement or up
to the square footage of the restricted affordable units, whichever is less;
(e) The setbacks referenced in this section shall not include special setbacks as defined in
Section 20.08.020.
(f) The setbacks referenced in this section shall only apply to the residential portion of any
mixed use (residential and non-residential) development where it is feasible to setback portions
of the development differently.
(d) The city shall not require, as a condition of granting a concession or incentive the
preparation of an additional report or study that is not otherwise required by state law. The
*NOT YET APPROVED*
18 0160139_20240416_ay16
city may, however, request reasonable documentation to demonstrate that the incentive or
concession meets the definition set forth in Section 18.15.020.
(g e) 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
(a) An applicant may apply for a the waiver or modification of development standards that
will have the effect of physically precluding the construction of a development at the densities
or 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. A development that receives a waiver from any maximum controls
on density pursuant to Section 18.15.030(d)(1) and (d)(2) shall not be eligible for waivers or
modifications to development standards pursuant to this Section.
(b) For sites on which floor area acts as the limitation on density, additional floor area shall
be permitted to accommodate bonus units proposed, as set forth in Section 18.15.030(l), and
no additional waiver of floor area is permitted.
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 1) 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 2) 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 1) 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 Development Services may
approve an alternative community service use for the child care facility.
(ii 2) 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.
*NOT YET APPROVED*
19 0160139_20240416_ay16
(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:
(a) All applications 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 1) A brief description of the proposed development, including the total number of
dwelling units, restricted affordable units, and density bonus units proposed.
(ii 2) 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 3) A vicinity map and preliminary site plan, drawn to scale, including building
footprints, driveway and parking layout.
(iv 4) Site plan showing location of market-rate units, restricted affordable units, and
density bonus units within the proposed development;
(v 5) Level of affordability of the restricted affordable units and proposed method to
ensure affordability;
(b) (6) If a concession or incentive is requested, the following information must be included
in the application:
(i) A a brief explanation as to the actual cost reduction achieved through the concession or
incentive.
(ii) 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 requires
the submittal of the project proforma or other comparable documentation (referred to herein
as the "proforma information") to the Director, providing evidence that the requested
concessions and incentives result in identifiable and actual cost reductions. The cost of
reviewing the project proforma 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 proforma
information shall include all of the following items:
(A) The actual cost reduction achieved through the concession;
(B) Other information requested by the Planning Director. The Planning Director may
require additional information as is required to evaluate the proforma information;
*NOT YET APPROVED*
20 0160139_20240416_ay16
(c) (7) If a waiver or modification of development standards is requested, the following
information must be included in the application:
(i) A a brief explanation of why the development standard would physically preclude the
construction of the development with the density bonus, incentives, and concessions
requested.
(ii) 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;
(d b) 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;
(e c) 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.
(f d) 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.
(g e) 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.
(h) The Planned Community (PC) zone district is intended to accommodate developments
requiring flexibility under controlled conditions not attainable under other zoning districts.
Because of the flexible nature of the PC zone, which determines site specific requirements
including density, the chapter does not apply to this zoning district.
(i) 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.
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.
*NOT YET APPROVED*
21 0160139_20240416_ay16
(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 1) The development is eligible for the density bonus and any concessions, waivers,
modifications, or revised parking standards requested.
(ii 2) Any requested concession or incentive will result in identifiable and actual cost
reductions based upon the financial analysis and documentation provided. The city finds
that the concessions and incentives included in Section 18.15.050(c) will result in
identifiable and actual cost reductions.
(iii 3) 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 4) 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 5) 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 6) 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) Any granted density bonus and/or concession(s) shall terminate with the demolition,
destruction or other removal of the structure receiving the density bonus and/or concession.
(c) If the findings required by subsection (a) for a concession, incentive or waiver 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 1) The concession or incentive does not result in identifiable and actual cost
reductions required to provide for affordable rents or affordable sales prices; or
(ii 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 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
*NOT YET APPROVED*
22 0160139_20240416_ay16
(iii 3) The concession, incentive, waiver or modification is contrary to state or federal
law.
(d) 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) AApplicants for a density bonus, incentive, concession, waiver, modification or revised
parking standard shall enter into a regulatory agreement with the city in a form acceptable to
the City Attorney. 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
Development Services, 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 The executed regulatory
agreement shall be recorded on the development prior to approval of a final map, or, where a
map is not being processed, prior to approval of the final discretionary permit issuance of a
building permit. 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 1) The total number of dwelling units approved for the development, including the
number of restricted affordable units;
(ii 2) 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;
(iii 3) The location, dwelling unit sizes (square feet), and number of bedrooms of the
restricted affordable units;
(iv 4) Term of use restrictions for restricted affordable units of at least 55 years for
moderate income units and at least 55 years for low and very low units;
(v 5) A schedule for completion and occupancy of restricted affordable units;
(vi 6) A description of any concession, incentive, waiver, modification, or revised
parking standard, if any, being provided by the city;
*NOT YET APPROVED*
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(vii 7) A description of remedies for breach of the agreement (the city may identify
tenants or qualified purchasers as third party beneficiaries under the agreement);
(8) That any restricted affordable unit offered for sale: is initially sold to and occupied by
a person of family of very low, low, or moderate income, or, if not purchased by an
income-qualified household within 180 days after the issuance of a certificate of
occupancy, the unit is purchased by a qualified non-profit housing corporation, in
accordance with Government Code section 65915(c)(2); and
(viii 8) Other provisions to ensure implementation and compliance with this section.
SECTION 3. As provided in Section 16.65.080(C)(1) of the Palo Alto Municipal Code, the City
Council hereby determines that the following percentages of rental affordable units that are
equivalent to provision of on-site for-sale affordable units or payment of housing impact fees.
This supersedes Section 5 of Ordinance No. 5409.
Required Affordable Rental Units
(Where rental alternative requested under 16.65.080(C))
Income Category
Rental Alternative to For-Sale Units (Sites Less than 5 Acres)*
On-Site Alternative for Rental Residential (no condo map)
Very Low Income 9%
Low Income 15% 15%
Moderate Income N/A N/A
Total 15% 9% VLI or 15% LI**
*Rental alternative equivalents for projects over 5 acres will be subject to Council approval on a case by case basis.
** For Residential Rental Projects, the Director of Planning and Development Services or City
Council may approve the provision of a lesser amount of affordable rental units, provided that
the remainder of the housing obligation is paid in housing impact fees. For example, if a project
may propose to restrict 6% of its dwelling units at rents affordable to very low income
households, these units would represent 75% of the project’s affordability obligations and the
remaining 25% could be paid in impact fees; housing impact fees due would be calculated by
taking 25% of the impact fee that would otherwise apply to the project.
SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any
reason held to be invalid or unconstitutional by a decision of any court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions of this
Ordinance. The City Council hereby declares that it would have passed this Ordinance and each
and every section, subsection, sentence, clause, or phrase not declared invalid or
unconstitutional without regard to whether any portion of the Ordinance would be
subsequently declared invalid or unconstitutional.
*NOT YET APPROVED*
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SECTION 5. The Council finds that the Ordinance is exempt from the California Environmental
Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen
with certainty that there is no possibility that updating the municipal code to incorporate
existing changes in State Density Bonus Law will not have a significant effect on the
environment.
SECTION 6. This Ordinance shall be effective on the thirty-first date after the date of its
adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning and
Development Services