Beverly Hills Municipal Code Art. 48 Inclusionary and Replacement Housing Requirements for Residential Development

The provisions of this article establish standards and procedures that encourage the development of housing that is affordable to a range of households with varying income levels and prohibit approval of projects that fail to comply with its requirements. The purpose of this article is to encourage the development and availability of affordable housing by ensuring that the addition of affordable housing units is in proportion with the overall increase in new housing units. In addition, the purpose of this article is to ensure that any replacement housing units are provided within new residential developments as required by state law, including, but not limited to, State Density Bonus Law (Government Code Section 65915) the Housing Crisis Act (Government Code Section 66300 et. seq.), and Housing Element Law (Government Code Section 65583.2(g)(3)).

(Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, eff. 11-26-2021; Ord. 24-O-2904, eff. 1-3-2025)

As used in this article, the following terms shall have the following meanings:

ADJUSTED FOR HOUSEHOLD SIZE APPROPRIATE FOR THE UNIT: For a household of one (1) person in the case of a studio unit, two (2) persons in the case of a one-bedroom unit, three (3) persons in the case of a two-bedroom unit, four (4) persons in the case of a three-bedroom unit, and five (5) persons in the case of a four-bedroom unit.

AFFORDABLE HOUSING COST: The total housing costs paid by a qualifying household, which shall not exceed a specified fraction of its gross income, adjusted for household size appropriate for the unit, as follows:

1. Very low-income households, rental or for-sale units: Thirty percent (30%) of fifty percent (50%) of the Los Angeles County median income.

2. Low-income households, rental units: Thirty percent (30%) of sixty percent (60%) of the Los Angeles County median income.

3. Low-income households, for-sale units: Thirty percent (30%) of seventy percent (70%) of the Los Angeles County median income.

4. Moderate-income households, rental units: Thirty percent (30%) of one hundred ten percent (110%) of the Los Angeles County median income.

5. Moderate-income households, for sale units: Thirty-five percent (35%) of one hundred and ten percent (110%) of the Los Angeles County median income.

AFFORDABLE HOUSING TRUST FUND: Shall have the meaning set forth in section 10-3-4808 below.

DEVELOPER: Any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities, which seeks city approvals for all or part of a residential development.

DEVELOPMENT AGREEMENT: An agreement entered into between the city and a developer pursuant to California Government Code section 65864 et seq.

DIRECTOR: The city's Director of Community Development.

DWELLING UNIT: One (1) or more rooms, designed, occupied, or intended for occupancy as separate living quarters, with full cooking, sleeping, and bathroom facilities for the exclusive use of a single household.

EQUIVALENT SIZE: For purposes of determining the required size of a replacement housing unit, equivalent size shall mean that the replacement housing unit contains at least the same total number of bedrooms as the units being replaced.

HCD: The California Department of Housing and Community Development.

HUD: The United States Department of Housing and Urban Development.

INCLUSIONARY HOUSING AGREEMENT: A legally binding agreement between a developer and the city, in form and substance satisfactory to the director and city attorney, setting forth those provisions necessary to ensure that the requirements of this article are satisfied.

INCLUSIONARY HOUSING PLAN: The plan referenced in section 10-3-4804 below, as may be augmented by administrative guidelines formulated by the Director of Community Development, which sets forth the manner in which the requirements of this article will be implemented for a particular residential development.

INCLUSIONARY UNIT: A dwelling unit that will be offered for occupancy by very-low, low-, or moderate-income households, at an affordable housing cost, pursuant to this article.

IN-LIEU FEE: A fee paid to the city by a developer instead of providing the required inclusionary units within the residential development.

LOW-INCOME HOUSEHOLDS: Households whose gross income is greater than fifty percent (50%) and does not exceed eighty percent (80%) of the median income for Los Angeles County as determined annually by HCD based on household income data promulgated by HUD.

MARKET RATE UNITS: Those dwelling units in a residential development that are not inclusionary units or other units reserved for moderate income, low-income, or very-low income households.

MODERATE-INCOME HOUSEHOLDS: Households whose gross income is greater than eighty percent (80%) and does not exceed one hundred and twenty percent (120%) of the median income for Los Angeles County as determined annually by HCD based on household income data promulgated by HUD.

PROTECTED HOUSING UNIT: Protected units are defined as those residential dwelling units that are or were:

Subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of lower or very low income within the past 5 years;

Subject to any form of rent or price control through a public entity's valid exercise of its police power within the past 5 years; orOccupied by lower or very low-income households (i.e., an affordable Protected Unit), as determined by the City using Median Income figures as published by the California Department of Housing and Community Development ("HCD") within the past 5 years.

For the purposes of implementing government code sections 66300 to 66301, inclusive, a protected housing unit shall also include any unit withdrawn from rent or lease per the Ellis Act within the past 10 years.

REPLACEMENT HOUSING UNIT: A housing unit included in a new development to satisfy a requirement to replace an existing or preexisting unit demolished to enable the new development.

RESIDENTIAL DEVELOPMENT: The construction, development, or subdivision of property, including condominium conversions, resulting in five (5) or more lots or dwelling units, including dwelling units in mixed-use projects.

VERY-LOW-INCOME HOUSEHOLDS: Households whose gross income is equal to fifty percent (50%) or less of the median income for Los Angeles County as determined annually by HCD based on household income data promulgated by HUD. (Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, eff. 11-26-2021; Ord. 24-O-2904, eff. 1-3-2025)

A. This article shall apply to all residential developments, as defined herein, where the lots or units will be offered for sale or for rent, and when the development application or applications for the residential development is deemed complete after the effective date of Ordinance 21-O-2850.

B. Notwithstanding subsection A, inclusionary units shall not be required for any project for which the city enters into a development agreement or for any project that is otherwise exempt under state law.

C. All inclusionary units shall be subject to the occupancy standards set forth in BHMC §10-3-1528.

(Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2800, 1-28-2020; Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, eff. 11-26-2021; Ord. 24-O-2902, eff. 12-8-2024)

A. Inclusionary units shall be reserved for very low-, low- and moderate- income households, and offered at an affordable housing cost, as follows:

1. For residential development projects with five (5) or more but less than ten (10) residential units, the developer shall provide one (1) rental unit affordable to low-income households, but shall have the option of paying a fee in lieu of constructing the unit pursuant to the following schedule:

2. For all newly constructed rental residential developments with ten (10) or more residential units, a minimum ten percent (10%) of all the units in the development shall be rented to and occupied by very low-income, low income, or moderate income households, however an applicant may provide the required inclusionary units on a different site within the City.

3. For all condominium conversion projects and newly constructed condominiums in a residential or mixed-use development with ten (10) or more residential units, a minimum ten percent (10%) of all the units in the development shall be rental units and rented to and occupied by very low-income, low-income, or moderate income households, however an applicant may provide the required inclusionary units on a different site within the City.

4. For all residential developments that are single-family subdivisions, a minimum ten percent (10%) of all the units in the development shall be sold to and occupied by very low-income, low-income, or moderate income households, however an applicant may provide the required inclusionary units on a different site within the City.

5. When only one affordable dwelling unit is constructed, it may be allocated for a very low, low or moderate income household. When two (2) or more affordable units are constructed, the units shall be allocated for very low income households, low income households, moderate income household, or combination thereof as the applicant may determine in conjunction with any density bonus that may also be sought for the project.

B. The city shall set on an annual basis, or as otherwise needed, the maximum allowable rents and sales prices for inclusionary units, adjusted for family size.

C. In calculating the required number of inclusionary units in subsections A1, A2, and A3 above, fractional units of one-half (.50) or above shall be rounded up to a whole unit. (Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, 11-26-2021)

Along with an application for a residential development, a developer shall submit a housing plan to the Director of Community Development setting forth in detail the manner in which the provisions of this article will be implemented for the proposed residential development. No application shall be deemed complete until the developer has submitted a complete housing plan. (Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, eff. 11-26-2021)

For residential developments providing inclusionary units on-site, an inclusionary housing agreement is required. Such agreement, which shall include provisions and terms for meeting the requirements of this article, shall be approved by the city manager and city attorney, and recorded as a deed restriction against the property prior to issuance of either a grading or building permit, whichever comes first. (Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, eff. 11-26-2021)

A. To the maximum extent possible, all inclusionary units shall be:

1. Reasonably placed in the residential development with balanced consideration given to both the potential economic and physical design constraints as well as the impact that the location of the units may have on the quality of living for prospective tenants.

2. Proportional in number of bedrooms, to the extent practicable, to the market rate units, unless the number of bedrooms for affordable units is dictated by requirements of state law, in which case the state law requirements shall be followed.

3. Comparable with the market rate units in terms of the base design and appearance.

B. All inclusionary units in a residential development shall be made available for occupancy concurrently with or prior to the occupancy of the market rate units. In the event the city approves a phased project, the inclusionary units required by this article shall be provided proportionally within each phase of the residential development.

C. Inclusionary units shall remain restricted for owner-occupancy by the target income category at the applicable affordable housing cost for a period of not less than forty-five (45) years. At the request of the owner-occupants who initially occupy the inclusionary unit and subsequently seek to sell the inclusionary unit, the city may impose the equity sharing agreement rules included in California Density Bonus Law, currently codified as Government Code section 65915(c)(2), instead of requiring the aforementioned restriction for forty-five (45) years.

D. Inclusionary units in rental residential developments shall remain restricted for occupancy by the target income category at the applicable affordable housing cost for a period of not less than fifty-five (55) years.

E. The occupancy of the inclusionary units shall be governed by the terms of the inclusionary housing agreement recorded as a deed restriction against the property. (Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, 11-26-2021)

A. The city council may adopt administrative guidelines to assist in implementing and administering this article.

B. Any violation of this article constitutes a misdemeanor.

C. The provisions of this article shall apply to all owners, developers, their agents, successors, and assigns that propose a residential development, occupy an inclusionary unit, or both. All inclusionary units shall be sold or rented in accordance with this article and any regulations and administrative guidelines adopted pursuant to this article.

D. Any individual who sells or rents an inclusionary unit in violation of the provisions of this article, the guidelines, or the inclusionary housing agreement shall be required to forfeit to the city all monetary amounts obtained in violation of those provisions. Recovered funds shall be deposited into the affordable housing trust fund.

E. The city may institute any appropriate legal actions or proceedings necessary to ensure compliance with this article, including, but not limited to:

1. Actions to revoke, deny, or suspend any permit, including a building permit, certificate of occupancy, or discretionary approval; and

2. Actions for injunctive relief or damages.

F. In any action to enforce this article or an inclusionary housing agreement recorded hereunder, the city shall be entitled to recover its reasonable attorney's fees and costs. (Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, eff. 11-26-2021)

A. There is an established separate fund of the city, known as the Affordable Housing Trust Fund. All monies collected by the city pursuant to this article shall be deposited in the Affordable Housing Trust Fund.

B. The monies in the fund and all earnings from investment of the monies in the fund shall be expended to provide housing affordable to very low-income, low-income, and moderate-income households in the city. Such expenditures may include, but shall not be limited to, the costs of administration, monitoring, and compliance for the city's affordable housing program, as further explained in subsection C.

C. For the purpose of this article, providing housing affordable to very low-, low-, and moderate-income households may include, but is not limited to, expending funds for the following: development of affordable units; acquisition of property for the development of such units; subsidies for the construction of such units; maintenance of affordable housing; partnering with affordable housing developers; conversion of existing market rate units to very low-, low- and moderate-income for-sale or rental units; subsidies for covenants to create or preserve very low-, low-, and moderate-income units; substantial rehabilitation of very low-, low-, and moderate-income units; and costs to administer the Affordable Housing Trust Fund and inclusionary housing program. (Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, eff. 11-26-2021)

The City Council may by resolution establish reasonable fees and deposits for the administration of this chapter. (Ord. 19-O-2797, 12-17-2019; amd. Ord. 20-O-2823, eff. 11-10-2020; Ord. 21-O-2850, eff. 11-26-2021)

A. Sites Inventory: Notwithstanding any other law, sites identified in the 2021-2029 Housing Element sites inventory that currently have residential uses, or within the past five years have had residential uses that have been vacated or demolished, that are or were subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of low or very low income, subject to any other form of rent or price control through a public entity's valid exercise of its police power, or occupied by low- or very low income households, shall be subject to a policy requiring the replacement of all those units affordable to the same or lower income level as a condition of any development on the site. Replacement requirements shall be consistent with those set forth in Government Code Section 65915(c)(3).

B. All Project: All projects shall comply with applicable state law requirements related to replacement housing including, but not limited to, State Density Bonus Law (Government Code Section 65915) and the Housing Crisis Act (Government Code Section 66300 et. seq.), as amended from time to time.

(Ord. 24-O-2904, eff. 1-3-2025)