Downey Municipal Code Ch. 5 Inclusionary Housing

The purposes of this chapter are to encourage the development and availability of housing affordable to a broad range of households with varying income levels within the City and promote the City's goal to add affordable housing units to the City's housing stock. This chapter is intended to assist the City in meeting its regional share of housing needs and implementing the goals and objectives of the General Plan, including the housing element and any applicable specific plans.

(Added by Ord. 22-1482, adopted 4-26-22)

This chapter shall apply Citywide to the new construction of all rental and ownership housing developments of 10 units or more.

(Added by Ord. 22-1482, adopted 4-26-22)

As used in this chapter, the following terms shall have the meaning and usage indicated below:

Affordable Housing Policies and Procedures.

The City's Affordable Housing Policies and Procedures as adopted by the City Council of the City of Downey.

Affordable Housing Inclusionary Fund.

That special fund of the City established by the City as provided in this chapter, Inclusionary Housing.

Area Median Income.

The median household income as provided in Section 50093(c) of the California Government Code, as it is currently enacted or hereinafter amended.

Household.

One person living alone or two or more persons sharing residency whose income is considered for housing payments.

Inclusionary Housing Plan.

A plan for a residential development submitted by an applicant as provided by in this chapter, which sets forth the manner in which the requirements of this chapter will be implemented for a particular housing development.

Inclusionary Unit.

An ownership unit that must be offered to eligible renters or purchasers (in accordance with eligibility requirements set by the City) at a City-approved affordable rental or sale price according to the requirements herein.

Market-Rate Unit.

An ownership unit in a residential development that is not an inclusionary unit.

Moderate Income Household.

A household whose income does not exceed the moderate income limits applicable to Los Angeles County as defined in California Health and Safety Code Section 50093 and published annually pursuant to Title 25 of the California Code of Regulations, Section 6932 (or its successor provision) by the California Department of Housing and Community Development. Moderate-income households are generally households with incomes between 80% and 120% of area median income.

Off-Site Inclusionary Unit.

An inclusionary unit that will be built separately or at a different location than the main development.

On-Site Inclusionary Unit.

An inclusionary unit that will be built as part of the main development.

Ownership Unit.

A residential unit that may be sold separately under the requirements of the State Subdivision Map Act. For purposes of this chapter, a residential unit may be designated as an ownership unit whether or not it is rented by the owner thereof.

Rental Housing.

Housing developed and maintained as multiple residential units on the same lot for occupancy by separate households pursuant to a lease or other rental agreements where all residential units are owned exclusively by the same legal entity.

Unit Size.

All of the livable floor area within the perimeter walls of a residential unit.

(Added by Ord. 22-1482, adopted 4-26-22)

(a) General Requirements.

(1) Developments of Ten or More Rental Housing Units. All new rental housing developments shall reserve 11% of the lesser of either the maximum residential density or the number of residential units proposed by the developer (prior to the grant of any density bonus), as units affordable to moderate-income households, as defined in this chapter. Alternatively, the developer shall have the option to develop inclusionary units off site, or pay an in-lieu fee, as provided elsewhere in this chapter.

(2) Development of Ten or More Ownership Units. All new rental housing developments shall reserve 10% of the lesser of either the maximum residential density or the number of residential units proposed by the developer (prior to the grant of any density bonus), as units affordable to moderate-income households, as defined in this chapter. Alternatively, the developer shall have the option to develop inclusionary units off site, or pay an in-lieu fee, as provided elsewhere in this chapter. This requirement shall also apply to residential lot subdivisions for the construction of single unit homes.

(b) Density Bonus Affordable Units. To the extent required by State law, all affordable units required pursuant to the grant of a density bonus shall count toward the inclusionary unit requirement contained in this chapter.

(c) Rounding. Any fractional unit resulting from the calculation of the inclusionary requirement referenced in this chapter will be rounded up to the next whole number or the developer may elect to pay the appropriate in-lieu fee for the fractional unit.

(d) Price Limits for Inclusionary Units. Inclusionary units must be restricted for rent or sale at affordable prices for moderate income households.

(Added by Ord. 22-1482, adopted 4-26-22)

(a) Construction Standards for Inclusionary Units. Inclusionary units built under this chapter must conform to the following standards:

(1) Design. Except as otherwise provided in this chapter, inclusionary units must be dispersed evenly throughout a residential development and must be comparable in construction quality and exterior design to the market-rate units constructed as part of the development.

(2) Bedrooms and Bathrooms. The average number of bedrooms in the inclusionary units must equal or exceed the average number of bedrooms in the market-rate units of the development. The required number of bathrooms shall not be greater than the number of bathrooms in the market-rate units. The minimum unit size of each inclusionary unit shall be in conformance with the City's Affordable Housing Policies and Procedures.

(3) Timing of Construction. All inclusionary units must be constructed and occupied concurrently with or prior to the construction and occupancy of market-rate units of the development. In phased developments, inclusionary units may be constructed and occupied in proportion to the number of units in each phase of the residential development.

(4) Duration of Affordability Requirement. Inclusionary units produced under this chapter must be legally restricted to occupancy by households of the income levels for which the units were designated pursuant to and in conformance with the City's Affordable Housing Policies and Procedures for a minimum of 55 years.

(Added by Ord. 22-1482, adopted 4-26-22)

(a) Payment of In-Lieu Fee to City. The requirements of this chapter may also be satisfied by paying an in-lieu fee to the City for deposit into the City's Affordable Housing Inclusionary Fund as such fund is provided for in this chapter, Inclusionary Housing.

(b) Calculation of In-Lieu Fee. The in-lieu fee for each required inclusionary unit that is not constructed on site will be calculated as of the date of Planning Commission final approval.

(1) Amount of Fee. The amount of the in-lieu fee shall be calculated in compliance with the fee resolution adopted by the City Council.

(2) Timing of Payment. The fee required by this section shall be paid to the satisfaction of the director of finance before issuance of building permits for the approved project. For residential lot subdivisions, payment of the in-lieu fee shall be made prior to recordation of the Final Subdivision Map.

(3) Basis for Fee Computation. Fees paid to fulfill the requirements of this chapter shall be computed based on the number and size of the units to be constructed. Unit size shall be calculated based on gross livable floor area, including private balconies, decks and patios.

(4) Affordable Housing Trust Fund. Fees paid to fulfill the requirements of this chapter shall be placed in the City's Affordable Housing Trust Fund. The funds shall be used exclusively for housing projects which target extremely low-, very low-, low-, and moderate-income households.

(Added by Ord. 22-1482, adopted 4-26-22)

(a) Alternative Methods of Compliance—Applicant Proposals. An applicant, at the applicant's option, may propose an alternative means of compliance with this chapter by submitting to the City an Inclusionary Housing Plan prepared in accordance with the following alternative compliance provisions:

(1) Off-Site Construction. All or some of the required inclusionary units may be constructed off site if the Planning Commission (or the City Council on appeal) finds that the combination of location, unit size, unit type, pricing, and timing of availability of the proposed off-site inclusionary units would provide equivalent or greater benefit than would result from providing those inclusionary units on site as might otherwise be required by this chapter. Prior to the recordation of the Final Subdivision Map for the residential development subject to the inclusionary requirements of this chapter, the applicant shall post a bond, bank letter of credit, or other security acceptable to the Community Development Director, in the amount of the in-lieu fee required by this chapter, which the City may call and may deposit in the Affordable Housing Inclusionary Fund and may spend in accordance with the terms of that Fund in the event that the off-site inclusionary units are not completed (as evidenced by the issuance of a certificate of occupancy for such units) according to the schedule stated in the Inclusionary Housing Plan submitted by the applicant and prior to the completion and occupancy of the residential development.

(2) Dedication of Land for Affordable Housing Purposes. In lieu of building inclusionary units on or off site or the payment of in-lieu fees, an applicant may choose to dedicate land to the City (or a City-designated nonprofit housing developer) under circumstances where the land is suitable for the construction of inclusionary units and under circumstances which the Planning Commission, or the City Council on appeal, reasonably has determined to be of equivalent or greater value than would be produced by applying the City's current in-lieu fee to the applicant's inclusionary housing obligation.

(3) Combination of Approaches. The Planning Commission, or the City Council on appeal, may accept any combination of on-site construction, off-site construction, in-lieu fees and land dedication which, in the Planning Commission's or City Council's determination, would provide equivalent or greater benefit than that which might result from providing inclusionary units on site.

(b) Discretion of Planning Commission or City Council. The Planning Commission, or the City Council on appeal, may approve, conditionally approve or reject any alternative proposed by an applicant as part of an Affordable Housing Plan. Any approval or conditional approval must be based on a finding that the purposes of this chapter would be better served by implementation of the proposed alternative. In determining whether the purposes of this chapter would be better served under the proposed alternative, the Planning Commission, or the City Council on appeal, should consider the extent to which other factors affect the feasibility of prompt construction of the inclusionary housing units, such as site design, zoning, infrastructure, clear title, grading and environmental review.

(Added by Ord. 22-1482, adopted 4-26-22)

(a) Generally. The submittal of an Inclusionary Housing Plan and recordation of an approved City affordability control covenant shall be a precondition on the City approval of any residential development or Final Subdivision Map, and no building permit shall be issued for any development to which this chapter applies without full compliance with the provision of this section. This section shall not apply to exempt projects or to projects where the requirements of the chapter are satisfied by payment of an in-lieu fee under this chapter.

(b) Inclusionary Housing Plan. Every residential development to which this chapter applies shall include an Inclusionary Housing Plan as part of the application submittal. No application for a tentative map, subdivision map, or building permit for a development to which this chapter applies may be deemed complete until an Inclusionary Housing Plan is submitted to and approved by the Community Development Director as being complete. At any time during the formal development review process, the Community Development Director may require from the applicant additional information reasonably necessary to clarify and supplement the application or determine the consistency of the project's proposed Inclusionary Housing Plan with the requirements of this chapter.

(c) Required Plan Elements. An Inclusionary Housing Plan must include the following elements or submittal requirements:

(1) The number, location, structure (attached, semi-attached, or detached), and size of the proposed market-rate and inclusionary units and the basis for calculating the number of inclusionary units;

(2) A floor or site plan depicting the location of the inclusionary units and the market-rate units;

(3) The income levels to which each inclusionary unit will be made affordable;

(4) The methods to be used to advertise the availability of the inclusionary units and select the eligible purchasers, including preference to be given, if any, to applicants who live or work in the City in conformance with the City's Affordable Housing Policies and Procedures;

(5) For phased development, a phasing plan that provides for the timely development of the number of inclusionary units proportionate to each proposed phase of development;

(6) A description of any modifications or concessions requested as part of a State density bonus;

(7) Any alternative method of compliance proposed for the development along with information necessary to support the findings, required by this chapter, for approval of such alternatives; and

(8) Any other information reasonably requested by the Community Development Director to assist with evaluation of the plan under the standards of this chapter.

(d) Affordability Control Covenants. Prior to issuance of a grading permit or building permit, whichever is requested first, a standard City affordability control covenant must be approved and executed by the Community Development Director, executed by the applicant, and recorded against the title of each inclusionary unit. For residential subdivisions, if subdivision into individual property parcels has not been finalized at the time of issuance of a grading permit or building permit, an overall interim affordability control covenant shall be recorded against the residential development, and shall be replaced by separate recorded affordability control covenants for each unit prior to issuance of a certificate of occupancy for such units.

(Added by Ord. 22-1482, adopted 4-26-22)

(a) Initial Sales Price. The initial sales price of an inclusionary unit must be set in accordance with the City's Affordable Housing Policies and Procedures, using the target income requirements specified in this chapter.

(b) Transfers and Conveyances. A renewal of the affordability controls covenant will be entered into upon each change of ownership of an inclusionary unit and upon any transfer or conveyance (whether voluntarily or by operation of law) of an owner-occupied inclusionary unit as such covenants are required in accordance with the City's Affordable Housing Policies and Procedures.

(c) Resale Price. The maximum sales price and qualifications of purchasers permitted on resale of an inclusionary unit shall be specified in the affordability control covenant and shall be in conformance with the City's then approved and applicable Affordable Housing Policies and Procedures.

(Added by Ord. 22-1482, adopted 4-26-22)

(a) Inclusionary Fund. There is hereby established a separate City Affordable Housing Inclusionary Fund ("Fund") maintained by the City Finance Director. This Fund shall receive all fees contributed under this chapter.

(b) Purpose and Limitations. Monies deposited in the Fund must be used to increase and improve the supply of housing affordable to upper-middle-, middle-, moderate-, low-, and very low-income households in the City and to ensure compliance of such households with the City's Affordable Housing Policies and Procedures. Monies may also be used to cover reasonable administrative or related expenses associated with the administration of this section, including, but not limited to, the City's purchase and resale of affordable housing units that are in default of the affordable control covenant recorded against that property, provided that the City shall, at all times, comply with the applicable provisions and requirements of the State Mitigation Fee Act, Government Code Sections 66000–66025.

(c) Administration. The Fund shall be administered by the Community Development Director, who may develop procedures to implement the purposes of the Fund consistent with the requirements of this chapter and any adopted budget of the City.

(d) Expenditures. Fund monies shall be used in accordance with the City's Housing Element, the City's Affordable Housing Policies and Procedures, or subsequent plan adopted by the City Council to construct, rehabilitate or subsidize affordable housing or assist other governmental entities, private organizations or individuals to do so. Permissible uses include, but are not limited to, assistance to housing development corporations, equity participation loans, grants, pre-home ownership co-investment, pre-development loan funds, participation leases or other public-private partnership arrangements. The Fund may be used for the benefit of both rental and owneroccupied housing in accordance with the applicable requirements of the State Mitigation Fee Act, Government Code Sections 66000–66025.

(Added by Ord. 22-1482, adopted 4-26-22)