Chapter 15.23 — HOUSING INCENTIVE OVERLAY ZONE (HIOZ)

(A) The Housing Incentive Overlay Zone (HIOZ) is intended to facilitate the by-right development of multiple-family housing, including affordable housing, on designated parcels, and to implement state laws that require cities to demonstrate available land capacity to accommodate the city’s projected need for housing.

(B) The HIOZ is an overlay zone, to be used only with an underlying nonresidential base zone. The HIOZ shall apply to the designated parcels as identified in the zoning map and parcel list on file in the Community and Economic Development Department.

(C) The requirements imposed by the HIOZ are intended to supersede those requirements in the base zone when a designated parcel is developed in compliance with this chapter.

(Ord. 3335, passed 1-21-2025)

The application of the HIOZ shall be signified by the designation of a “-HI” suffix following the base zone designation on the official zoning map. For example, the use of this zone in conjunction with the General Commercial Zone would be designated as “GC-HI.” (Ord. 3335, passed 1-21-2025)

For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning. AFFORDABLE HOUSING. As defined per Chapter 15.04.040 (Definitions).

MIXED-USE DEVELOPMENT. As defined per Chapter 15.04.040 (Definitions).

MULTIPLE-FAMILY HOUSING. See the definition for DWELLING, MULTIPLE in § 15.04.040 (Definitions).

(Ord. 3335, passed 1-21-2025)

For properties not currently included in the HIOZ, a request for a HIOZ designation may be initiated by the following.

(A) A request for a HIOZ designation may be initiated by an application by a property owner made in accordance with the procedures identified in Chapter 15.72 (Amendments).

(B) Application of this zone shall be consistent with the objectives of the Zoning Ordinance and General Plan, reasonably compatible with surrounding land uses and promote the general health, safety and welfare.

(Ord. 3335, passed 1-21-2025)

For properties included in the HIOZ, projects shall be approved in accordance with the following procedures.

(A) Minor site plan review. Projects developed in this zone that meet all objective development standards shall be subject to review as a minor site plan pursuant to Chapter 15.47 (Site Plan Review) and approved ministerially by the Director of Community and Economic Development. The design review criteria of § 15.47.060 are not applicable to this approval.

(B) Major site plan review. Projects developed in this zone that seek to exceed the height requirement or that wish to satisfy the required affordable housing by an alternative means as set forth in § 15.23.065, shall be processed as a major site plan review pursuant to Chapter 15.47 and shall be subject to approval by the Planning Commission. The design review criteria of § 15.47.060 are not applicable to this approval.

(C) Affordable housing. HIOZ projects that reserve at least 20% units for lower, very low, extremely low or acutely low-income households shall be ministerially approved without the need for any site plan review. This provision shall not apply if any portion of the required affordable housing is satisfied by an alternative means as set forth in § 15.23.065.

(D) Additional approvals. Projects that require approval for a lot line adjustment, consolidation of lots or subdivision in conjunction with approval pursuant to this chapter shall comply with Title 16 (Subdivisions).

(E) Provisions of approval. Projects shall comply with the applicable provisions of Chapter 15.76 (Procedures, Hearings, Notices and Fees) for the expiration, renewal, extension, refiling and withdrawal of approval, unless superseded by state law.

(F) Courtesy notification. Staff shall mail written notification to property owners, tenants and businesses within a 300-foot radius of the subject property at the time of project application submittal to the city.

(Ord. 3335, passed 1-21-2025; Ord. 3337, passed 3-4-2025)

(A) Minimum requirement for affordable housing. At least 20% of the total residential units in a HIOZ project developed pursuant to this chapter shall be sold or rented at an affordable housing cost or affordable rent to households of moderate, low, very low, extremely low or acutely low income, as defined by state law. If the units are rental units, the affordable units shall be deed-restricted for a period of not less than 55 years. If the units are for-sale units, the units shall be sold in accordance with Cal. Gov’t Code § 65915, if no other provisions of law

apply.

(B) Relationship to state density bonus. Affordable units qualifying for a density bonus under state law shall count toward meeting the number of affordable units required under this section.

(C) Agreement. Prior to the issuance of a building permit, an agreement in a form approved by the City Attorney shall be executed and recorded as a deed restriction on the property to ensure that the property complies with all of the requirements in this chapter, including, but not limited to, the requirement that affordable units shall be deed restricted as provided for in division (A) above. The city shall provide periodic monitoring of compliance with the provisions of the deed restriction.

(Ord. 3335, passed 1-21-2025)

To comply with the city’s affordable housing requirement set forth in § 15.23.060, applicants may choose one of the following options. (A) Applicants may construct their required inclusionary housing units on-site within the residential project. The inclusionary housing units must be constructed prior to or concurrently with construction of the market-rate units in the development project. If the project is a for-sale project, the applicant may choose to rent the units to households meeting the required income levels. In such case, the applicant shall either manage the units or enter into an agreement with a qualified nonprofit housing corporation to manage these units. The agreement shall be subject to approval of the city. All rental units shall be required to remain affordable for a period of 55 years.

(B) Applicants may construct their required inclusionary housing units off-site. If this option is chosen, then the off-site inclusionary units must be constructed prior to or concurrently with construction of the residential development project. The inclusionary unit size and count must meet the same requirements as if the inclusionary units were constructed on-site. No certificate of occupancy will be issued for any corresponding market rate unit prior to inclusionary unit construction completion.

(1) The applicant may enter into an agreement with a qualified nonprofit housing corporation or other entity to construct and own or operate these units. The agreement shall be subject to approval by the city.

(2) The applicant may enter an agreement with another entity to construct these units. The agreement shall be subject to the approval of the city.

(C) Applicants may pay in-lieu fees. The in-lieu fee shall be charged at an amount to be determined by City Council resolution. All in-lieu fees shall be paid prior to the issuance of a building permit for any residential structure in the development project.

(D) Applicants may acquire and reconstruct existing units, subject to the following provisions. These types of units can be acquired by the applicant, then reconstructed in accordance with city building converted to procedures and requirements, then affordable inclusionary housing units.

(E) In lieu of building inclusionary units, the developer may dedicate to the city land within the city that the city determines is suitable for the construction of inclusionary units and is of equivalent or greater value than is produced by applying the city’s current in-lieu fee to the inclusionary obligation. The land shall be donated no later than the date of approval of the final subdivision map, parcel map or issuance of first building permit for the residential units, whichever occurs first.

(F) Applicants may choose any combination of the options described in divisions (A) through (E) above to comply with the provisions of this chapter. The city shall review these proposals on a project-by-project basis to ensure that the required number of inclusionary housing units are ultimately provided.

(G) All on-site or off-site inclusionary housing units, regardless if the units are for-sale or rental, shall be comparable to the units developed in the housing project which gave rise to the obligation to provide the inclusionary units.

(H) City Council shall adopt guidelines for the implementation of this section.

(Ord. 3335, passed 1-21-2025)

(A) Minimum requirement for commercial floor area. Projects bordered on one or more sides by a major or primary arterial and with a total project site area of least one acre shall be required to provide ground-floor commercial uses as a part of a horizontal or vertical mixeduse development. The area of ground-floor commercial uses to be provided shall be equivalent to the permitted total floor area of commercial and/or industrial uses existing on-site. Projects shall be exempt from this requirement if a certified market analysis report provided for the Director’s review and approval demonstrates the infeasibility of accommodating this requirement.

(B) Maximum requirement for commercial intensity. Projects that provide commercial uses as part of a horizontal or vertical mixed-use development shall comply with the maximum nonresidential intensity requirements set forth by the underlying nonresidential base zone. (Ord. 3335, passed 1-21-2025)

The following uses are permitted in the HIOZ.

(A) The residential uses permitted in the R-5 (Maximum-Density Multiple-Family) District per Chapter 15.17 (Residential Zone Classifications) are permitted in the HIOZ and shall be allowed ministerially.

(B) The commercial uses permitted for mixed-use development per § 15.30.040(E) (Mixed-Use (Commercial/residential) Development) are permitted in the HIOZ as specified.

(Ord. 3335, passed 1-21-2025)

Projects in this zone shall be developed in compliance with the applicable development standards of the respective permitted uses included in the project per the following:

(A) For residential uses, as established in Chapter 15.17 (Residential Zone Classifications); and

(B) For mixed-use development, as established in Chapter 15.18 (Mixed-Use Development Standards for the HIOZ).

(A) The minimum residential density for HIOZ projects shall be 20 dwelling units per acre.

(B) The maximum residential density for HIOZ projects shall be 60 dwelling units per acre, not inclusive of any additional density a project may receive in compliance with the State Density Bonus Law, Cal. Gov’t Code Title 7, Division 1, Chapter 4.3 (commencing with § 65915), and the provisions of this code.

(Ord. 3335, passed 1-21-2025)