32-73 INCLUSIONARY HOUSING.

This section shall be entitled the Inclusionary Housing Ordinance.

(Ord. 2025-02, § 2)

The Town Council of the Town of Danville finds that Danville is experiencing a housing shortage for affordable housing. A goal of the Town is to achieve a balanced community with housing available for households of a range of income levels. Increasingly, households with very low, low and moderate incomes who work and/or live within the Town are unable to locate housing at prices they can afford and are increasingly excluded from living in the Town. The Town finds that the high cost of newly constructed housing does not, to any appreciable extent, provide affordable housing, and that continued new development which does not include nor contribute toward lower cost housing will serve to further aggravate the current housing problems by reducing the supply of developable land. The Town further finds that the housing shortage for affordable housing is detrimental to the public health, safety and welfare, and further that it is a public purpose of the Town, and a public policy of the State of California as mandated by the requirements for a Housing Element of the Town’s General Plan, to make available an adequate supply of housing for persons of all economic segments of the community.

(Ord. 2025-02, § 2)

The purpose of this section is to enhance the public welfare and assure that new residential developments with eight (8) or more dwelling units or lots contribute to the attainment of the Town’s housing goals by increasing the production of affordable housing, and additionally stimulating funds for development of affordable housing. The regulations set forth in this chapter shall apply to all areas of the Town of Danville.

(Ord. 2025-02, § 2)

For the purposes of this section, certain words and phrases shall be interpreted as set forth in this section, unless it is apparent from the context that a different meaning is intended.

Accessory dwelling unit. An attached or detached conditioned residential unit, which provides complete, independent living facilities for one or more persons, consistent with the requirements established under this section. It includes permanent provisions for living, sleeping, cooking, eating and sanitation on the same parcel as the primary unit. The term “accessory dwelling unit” includes a granny unit, second dwelling unit, guesthouse, in-law unit, casitas, efficiency unit (as defined in Health and Safety Code Section 17958.1), manufactured home (as defined in Health and Safety Code Section 18007), and similar accessory dwelling units, which provide complete independent living facilities (Government Code 65852.2(i)(4)).

Affordable housing cost. The cost to rent or purchase a house as defined in Section 50052.5 of the Health and Safety Code (Government Code Section 65915(d)(1)). Housing cost means the monthly mortgage (including principal and interest), property taxes, and homeowner association fees, where applicable, for ownership units; and the monthly rent and an appropriate utility allowance for rental units.

Affordable unit, for rent. Affordable rent (including a reasonable utility allowance) shall not exceed the following:

1. For very low-income households, the rental rate is not to exceed the product of thirty percent (30%) times fifty

percent (50%) of the area median income adjusted for family size appropriate for the unit. The actual rental rate shall be based on the actual income of a prospective household within the income range;

2. For low-income households, the rental rate is not to exceed the product of thirty percent (30%) times eighty percent (80%) of the area median income adjusted for family size appropriate for the unit. The actual rental rate shall be based on the actual income of a prospective household within the income range;

3. For moderate-income households, the rental rate is not to exceed the product of thirty percent (30%) times one hundred twenty percent (120%) of the area median income adjusted for family size appropriate for the unit. The actual rental rate shall be based on the actual income of a prospective household within the income range.

Affordable unit, for sale. Affordable housing cost may not exceed the following:

1. For very low-income households, the mortgage cost is not to exceed the product of thirty percent (30%) times fifty percent (50%) of the area median income adjusted for family size appropriate for the unit. The actual sale price shall be based on the actual income of a prospective household within the income range;

2. For low-income households, the mortgage cost is not to exceed the product of thirty percent (30%) times eighty percent (80%) of the area median income adjusted for family size appropriate for the unit. The actual sale price shall be based on the actual income of a prospective household within the income range;

3. For moderate-income households, the mortgage cost is not to exceed the product of thirty percent (30%) times one hundred twenty percent (120%) of area median income adjusted for family size appropriate for the unit.

The actual sale price shall be based on the actual income of a prospective household within the income range.

Applicant. Any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which seeks Town real property development permits and approvals.

Approval. Approval by the Town of a discretionary permit such as a tentative map, planned development or use permit for a residential development project.

Area median income. The area median income for Contra Costa County pursuant to California Health and Safety Code Section 50093(c).

Below market rate or BMR. Residential units sold or rented at rates affordable to very low-, low- or moderate-income households.

Danville employee. Any head of household, or in the case of married couples either spouse, who has worked within the Town limits continually for one (1) year in the year immediately preceding the occupancy of an affordable unit.

Danville resident means any person who has lived within the Town limits of Danville for one (1) year in the year immediately preceding the occupancy of an affordable unit.

Developer. The same as “applicant” (see above definition).

Household income levels. Includes:

1. Low-income household. A household whose income is between fifty percent (50%) and eight percent (80%) of the median household income for Contra Costa County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Health and Safety Code Section 50093(c).

2. Moderate-income household. A household with an annual income between eighty percent (80%) of the area median family income and one hundred twenty percent (120%) of area median income limits applicable to Contra Costa County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50093(c) of the California Health and Safety Code.

3. Very low-income household. A household whose income does not exceed fifty percent (50%) of the median income limits applicable to Contra Costa County, as published and periodically updated by the State Department of Housing and Community Development pursuant to California Health and Safety Code Section 50093(c).

Incentive. A benefit offered by the Town to facilitate construction of residential developments which include BMR units. Among others, benefits may include fee waivers or reductions for BMR units, and flexibility and/or relaxation of development regulations,

In-lieu participation fee. A fee paid to the Town by an applicant for a residential development in the Town in lieu of providing the inclusionary affordable units required by this section (See subsection 32-73.8).

Project owner. Any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which holds fee title to the land on which the project is located.

Residential development. Developments of eight (8) or more units or lots for, without limitation, detached single-family dwellings, multiple dwelling structures, groups of dwellings, condominium conversions, cooperative developments and land subdivisions intended to be sold to the general public.

Town. The Town of Danville, California or its designee, or any entity with which the Town contracts with to administer this section.

Unit type. Dwelling units with similar floor area and number of bedrooms.

(Ord. 2025-02, § 2)

Each residential development of eight (8) or more lots is subject to this Section 32-73. A project developed consistentwith the regulations of the Density Bonus Ordinance (Municipal Code Section 32-74) shall be considered to have satisfied all requirements contained in this section. A project developed consistent with the California State Density Bonus Law (Government Code Section 65915) shall be considered to have satisfied all requirements contained in this section.

(Ord. 2025-02, § 2)

Every approval for residential development shall assure provision of one (1) or more BMR units according to the following regulations:

a. Residential development with resultant densities less than or equal to seven (7) units an acre shall provide a number of BMR units equal to ten percent (10%) of the number of market rate units in the project. Of the ten percent (10%), half of the units shall be made available to qualifying low-income households, and the other half shall be made available to qualifying moderate-income households.

b. Residential developments with resultant densities of eight (8) or more units per acre:

1. Residential developments up to twenty (20) units in size shall provide a number of BMR units equal to ten percent (10%) of the number of market rate units in the project. Of the ten percent (10%), half of the units shall be made available to qualifying low-income households, and the other half shall be made available to qualifying moderate-income households.

2. Residential developments containing twenty-one (21) or more units shall provide a number of BMR units equal to fifteen percent (15%) of the number of market rate units in the project. Of the fifteen percent (15%), at least one third of the units shall be made available to qualifying very low-income households, another one third shall be made available to qualifying low-income households, and the final one third shall be made available to qualifying moderate-income households.

c. At the discretion of the Town Council, affordable units required pursuant to this section may be provided at a location within the Town other than the residential development which creates the requirement for the affordable units.

d. Fractional units. When the application of the percentages specified above results in a number that includes a fraction, the fraction shall be rounded up to the next whole number if the fraction is seven-tenths (0.7) or more. If the result includes a fraction below seven-tenths (0.7), the developer shall have the option of rounding up to the next whole number and providing the inclusionary unit on site or paying a fee in lieu of providing an additional inclusionary unit. The in-lieu fee shall be calculated in accordance with Section 32-73.8.

(Ord. 2025-02, § 2)

An applicant may request a modification of the following standards where such waiver or modification is necessary to make the provision of BMR units economically feasible. The request shall be accompanied by information sufficient to demonstrate that the incentive is necessary to make the affordable units economically feasible:

a. A reduction in site development standards and modification of Zoning Code requirements or architectural design standards exceeding state building standards, including, but not limited to, a reduction in setback, square footage, minimum lot size, minimum lot dimensions, street section, sidewalks, open space, landscaping or number of required parking spaces.

b. Relaxation of development standards for new subdivisions incorporating BMR secondary units into a single-family development, including, but not limited to, modifications in unit setback requirements, number of bedrooms, parking requirements or other regulations contained in the

Town’s accessory dwelling unit ordinance, as may be amended from time to time.

c. Other regulatory incentives or concessions proposed by the applicant or the Town which result in identifiable cost reductions applicable to the BMR units within a residential development. Where the applicant requests one or more of the incentives listed above, a preliminary project financial report shall be submitted (pro forma), along with the application for the project, in order to evaluate the financial need for the requested incentive(s). At the cost of applicant, the Town may retain a consultant to review the financial report. If the applicant is a nonprofit organization, the Town may elect to pay the cost of the consultant upon approval by the Town Council.

(Ord. 2025-02, § 2)

32-73.8 In Lieu Participation Fees.

Upon approval of the Town Council, an applicant may contribute fees in lieu of providing inclusionary affordable units. Such fees shall be known as “in-lieu participation fees.”

a. The in-lieu fee shall be calculated based on the subsidy differential between what a very low-, low-, or moderateincome household can afford to pay for housing, on a per-square-foot basis, and the estimated total cost of a new non-BMR unit, on a per-square-foot basis. The in-lieu fee shall be calculated on a project-by-project basis, subject to review and approval by the Chief of Planning.

b. The estimated cost of construction may include the estimated construction costs, the cost of land, financing costs, consultant costs, and other demonstrated direct costs.

c. The square footage used to calculate the in-lieu fee shall be equal to the average unit size of all the non-BMR units in the development.

d. The in-lieu fee for the entire residential development shall be due prior to occupancy of the first unit.

(Ord. 2025-02, § 2)

32-73.9 Application Process.

The decision-making body for a formal application meeting the requirements of this section shall be the Planning Commission and/or Town Council, whichever is authorized to approve the associated discretionary permit.

(Ord. 2025-02, § 2)

a. All BMR units shall be sold or rented as affordable units for occupancy only by very low-, low- or moderate-income households.

• b. The term of affordability is twenty (20) years.

c. All fractions of units or lots equal to or greater than seven-tenths (0.7) of a unit shall be rounded up to the nearest whole unit.

d. Households with eligible Danville residents shall be given first preference for BMR units; second preference shall be given to households with eligible Danville employees; third preference shall be given to all other eligible households.

e. Requirements for BMR units shall be established as conditions of approval for the residential development. Compliance with the regulations of this section shall be evidenced by an affordable housing agreement between the applicant and the Town Manager, completed and recorded on the deed to each affected and shall run with the land.

1. The affordable housing agreement shall indicate the intended household type (i.e., for-sale or rental occupancies), number of BMR units; standards for maximum qualifying household incomes; standards for maximum sales prices or rental rates; party/process responsible for certifying tenant incomes; construction scheduling; how vacancies will be marketed and filled; restrictions and enforcement mechanisms binding on property upon sale or transfer; maintenance provisions; and any other information as required by the

Town to comply with the conditions of approval for the residential development.

2. The affordable housing agreement shall include a provision which allows the Town to assign its authority to regulate and enforce the agreement to the Contra Costa County Housing Authority, a nonprofit housing agency or other similar entity.

3. Proof of recordation of the affordable housing agreement on the deed of each BMR unit in a residential development shall be deemed a condition precedent to occupancy.

4. The provisions of this section shall not apply to transfers by gift/device or inheritance to the property owner’s spouse or children; transfers of title to a spouse as part of a divorce or dissolution proceeding; acquisition of title interest therein in conjunction with marriage, provided, however, that the deed restrictions shall continue to run with the title to said property following such transfers.

f. BMR units in a residential development and phases of a residential development shall be constructed concurrently with or prior to the construction of non-BMR units.

• g. BMR units shall be provided as follows:

1. If the BMR units are built within the project, they are not required to be evenly dispersed throughout the development.

2. BMR units are not required to represent the predominant unit type in the project (e.g., locating affordable attached duet units on corner lots in a primarily single-family development or including affordable secondary units into a primarily single family development). However, BMR unit sizes shall not be less than twenty percent (20%) below the average nonBMR units.

3. The exterior design and character of the BMR units shall be substantially consistent with that of the non-BMR units in

the residential development.

4. There may be a reduction of interior amenities provided within the BMR units as may be necessary to retain project affordability.

h. For-sale BMR units shall not be rented unless specifically authorized by the Town. Said authorization shall be formalized by way of execution of an amended affordable housing agreement.

i. The Town may contract with the Contra Costa County Housing Authority, or other similar entity, to administer the sale, rental and/or in-lieu participation fee provisions of this section.

j. The Town Manager may establish administrative guidelines for administration of the provisions of this section.

• (Ord. 2025-02, § 2)

a. To increase the feasibility of providing affordable units, the Town Council, by resolution, may waive or reduce certain Town fees applicable to the affordable units or the residential development for which they are a part.

• b. A project which provides inclusionary units shall be entitled to priority processing by the Town.

• (Ord. 2025-02, § 2)

It is unlawful for any person, firm, corporation, partnership or other entity to violate any provision or to fail to comply with any of the requirements of this section. A violation of any of the provisions or failure to comply with any of the requirements of this section shall constitute a misdemeanor; except that, notwithstanding any other provisions of this Code, any such violation constituting a misdemeanor under this section may, at the discretion of the enforcing authority, be charged and prosecuted as an infraction.

(Ord. 2025-02, § 2)

a. The Town Manager is hereby designated the enforcing authority of this section.

b. The provisions of this section shall apply to all agents, successors and assigns of an applicant proposing a residential development governed by this section. No building permit or occupancy permit shall be issued, nor any development approval be granted, which does not meet the requirements of this section.

c. In the event that it is determined that a BMR unit is being occupied as a rental unit and that rents in excess of those allowed by operation of this section have been charged, the Town may take the appropriate legal actions or proceedings to recover, and the project owner shall be obligated to pay to the tenant (or to the Town in the event the tenant cannot be located) any excess rental charges.

d. The Town may institute any appropriate legal actions or proceedings necessary to ensure compliance herewith, including, but not limited to, actions to revoke, deny or suspend any permit or development approval.

(Ord. 2025-02, § 2)

Any person aggrieved by any action involving denial, suspension or revocation of an occupancy or other permit, or denial, suspension or revocation of any development approval, may appeal such action or determination in the manner provided for appeal of use permits, by subsection 32-4.7 of the Danville Municipal Code. The developer may appeal for a reduction, adjustment, or waiver of obligations if he or she establishes the absence of a reasonable relationship or nexus between the impact of the development and the inclusionary housing requirement.

(Ord. 2025-02, § 2)

Notwithstanding the provisions of any other section contained within this chapter, and if it is determined to be appropriate by the Town Council, the applicant may fulfill a development’s inclusionary housing requirements with the development of accessory dwelling units as set forth in this section.

a. Applicability. The provisions of this section shall apply to all new residential developments with eight (8) dwelling units..

b. Scope. If the Town Council determines that development of for-rent, below-market-rate (BMR) accessory dwelling units would be appropriate for a project, the minimum number of for-rent, BMR accessory dwelling units supplied in a project shall be equivalent to twenty-five percent (25%) of the number of market rate units established in the project.

c. Affordable housing agreement. An affordable housing agreement, as generally provided for in subsection 32-73.10e, shall be recorded as a deed restriction on the property which incorporates a for-rent, BMR accessory dwelling unit.

d. Qualifying households: maximum income of renters. The for-rent, BMR accessory dwelling unit shall not be rented to low-income households, as defined.

e. Restriction on rental rate. The rental rate shall not exceed what is affordable to a low-income household, adjusted for household size. The Town shall advise the owner of annual changes in the allowable rental rate (and shall provide a schedule for utility allowance adjusted for household size).

f. Design parameters. The for-rent, BMR accessory dwelling units shall be designed such that the physical layout of the unit and its interrelationship with the primary unit ensures its availability as a self-contained, viable accessory dwelling unit.

1. Architectural and physical design. For-rent, BMR accessory dwelling units shall be architecturally compatible with main residential unit in roof pitch, scale, colors, materials, trim, windows, as well as other exterior physical features. Development standards shall be as established within the Town's Accessory Dwelling Unit Ordinance, Section 32-76.

2. Relationship to main residence.

• (a) The accessory dwelling unit may be detached or attached to the main residence;

(b) If detached second units are proposed, each second unit shall be designed to provide privacy for the main residential unit (i.e., minimum number of windows facing the main unit, relative location of entry areas, etc.);

(c) The accessory dwelling unit shall have a separate entrance from the primary residence;

• (d) There shall be no direct access from main residence to the accessory dwelling unit;

(e) The accessory dwelling unit shall have a separate mailing address to allow independent contact with the unit’s occupants; and

(f) Any proposed modifications to the accessory dwelling unit must secure prior review and approval by the Chief of Planning.

(g) The accessory dwelling unit shall be a minimum of four hundred (400) square feet in size.

(h) Deviation from the above-cited dimensional criteria may be considered by the Town Council on a project-byproject basis.

(Ord. 2025-02, § 2)