Section 402. Affordability Provisions

• (a) A development shall be subject to a requirement mandating a minimum percentage of units be affordable to households making at or below 80 percent Area Median Income (AMI), based on one of the following categories:

  • (1) In a locality that the Department has determined is subject to the Streamlined Ministerial Approval Process pursuant to Section 200(c), the development shall dedicate either:

    • (A) A minimum of 10 percent of the total number of units prior to calculating any density bonus to housing affordable to households making at or below 80 percent of the AMI. If the locality has adopted a local ordinance that requires greater than 10 percent of the units be dedicated to housing affordable to households making at or below 80 percent of the AMI, that local affordable housing requirement applies.

    • (B) Or, if located in the San Francisco Bay Area pursuant to Section 200 (x), the project may elect to dedicate 20 percent of the total number of units to housing affordable to households making below 120 percent of the AMI. However, to satisfy this requirement and be eligible to proceed under these provisions, the average income of the tenant income restrictions for those units must equal at or below 100 percent of the AMI. A local ordinance adopted by the locality applies if it requires greater than 20 percent of the units be dedicated to housing affordable to households making at or below 120 percent of the AMI, or requires that any of the units be dedicated at a level less than 120 percent.

      • (i) In order to comply with subparagraph (A), the rent or sale price charged for units that are dedicated to housing affordable to households between 80 percent and 120 percent of the AMI shall not exceed 30 percent of the gross income of the household.

    • (C) Developments of 10 units or less are not subject to either affordability provision outlined in subparagraphs (A) and (B), above.

    • (D) A development proponent may satisfy the affordability requirements of this subsection with a unit that is restricted to households with incomes lower than those prescribed under subparagraph (A) and (B).

  • (2) In a locality that the Department has determined is subject to the Streamlined Ministerial Approval Process pursuant to Section 200, subparagraph (e), the development shall dedicate a minimum of 50 percent of the total number of units prior to calculating any density bonus to housing affordable to households making at or below 80 percent of the AMI.

    • (A) If the locality has adopted a local ordinance that requires greater than 50 percent of the units be dedicated to housing affordable to households making at or below 80 percent of the AMI, that local affordable housing requirement applies.

Streamlined Ministerial Approval Process Guidelines

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Department of Housing and Community Development

• (3) In a locality that the Department has determined is subject to the Streamlined Ministerial Approval Process pursuant to Section 200, subparagraph (d), the development shall dedicate a minimum of 10 percent of the total number of units to housing affordable to households making at or below 80 percent of the AMI.

  - (A) If the locality has adopted a local ordinance that requires greater than 10 percent of the units be dedicated to housing affordable to households making below 80 percent of the AMI, that local affordable housing requirement applies. 
  
  - (B) A development proponent may satisfy the affordability requirements of this subsection with a unit that is restricted to households with incomes lower than 80 percent of AMI. 
  

• (b) A covenant or restriction shall be recorded against the development dedicating the minimum percentage of units to housing affordable to households making at or below 80 percent of the AMI pursuant to Section 402 (a)(1-3).

  • (1) The recorded covenant or restriction shall remain an encumbrance on the development for a minimum of either:

    • (A) 55 years for rental developments or

    • (B) 45 years for owner-occupied properties.

  • (2) The development proponent shall commit to record a covenant or restriction dedicating the required minimum percentage of units to below market housing prior to the issuance of the first building permit .

  • (3) The percentage of units affordable to households making at or below 80 percent of the AMI per this section is calculated based on the total number of units in the development exclusive of additional units provided by a density bonus.

  • (4) The percentage of units affordable to households making at or below 80 percent of the AMI per this section shall be built on-site as part of the development.

• (c) The percentage of units affordable to households making at or below 80 percent of the AMI per this section is calculated based on the total number of units in the development exclusive of additional units provided by a density bonus.

• (d) The percentage of units affordable to households making at or below 80 percent of the AMI per this section shall be built on-site as part of the development.

• (e) If the locality has adopted an inclusionary ordinance, the objective standards contained in that ordinance apply to the development under the Streamlined Ministerial Approval Process. For example, if the locality’s adopted ordinance requires a certain percentage of the units in the development to be affordable to very low-income units, the development would need to provide that percentage of very low-income units to be eligible to use the Streamlined Ministerial Approval Process.

• (f) All affordability calculations resulting in fractional units shall be rounded up to the next whole number. Affordable units shall be distributed throughout the development, unless otherwise necessary for state or local funding programs, and have access to the same

Streamlined Ministerial Approval Process Guidelines

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Department of Housing and Community Development

common areas and amenities as the market rate units. Identification in the development application of the location of the individual affordable units is not required for ministerial approval but distribution of units per this subsection can be included as a condition of approval per Section 301(a)(5), and the methods to achieve distribution is recorded through an affordable housing agreement or as part of a recorded covenant or restriction, unless providing location of affordable units at time of application is required by ordinance or as an adopted objective standard .

• (g) Affordability of units to households at or below 80 percent of the AMI per this Section is calculated based on the following:

  • (1) For owner-occupied units, affordable housing cost is calculated pursuant to Health and Safety Code Section 50052.5.

  • (2) For rental units, affordable rent is calculated pursuant to Health and Safety Code Section 50053.

• (h) Units used to satisfy the affordability requirements pursuant to this Section may be used to satisfy the requirements of other local or state requirements for affordable housing, including local ordinances or the Density Bonus Law, provided that the development proponent complies with the applicable requirements in the other state or local laws. Similarly, units used to satisfy other local or state requirements for affordable housing may be used to satisfy the affordability requirements of this Section provided that the development proponent complies with all applicable requirements of this Section.

NOTE: Authority cited: Government Code section 65913.4(l). Reference cited: Government Code section 65913.4(a).