Chapter 17.27 — DENSITY BONUSES AND OTHER INCENTIVES

The purpose of this chapter is to:

• A. Implement Housing Element policies of the General Plan that promote an increase in housing opportunities for households of all income categories, including populations such as farmworkers, seniors, and the disabled.

• B. Establish procedures for providing density bonuses and other potential incentives or concessions consistent with State law to provide additional housing to meet the needs of the City.

• (Ord. 20-03 § 6)

• A. State Law Governs. Persons seeking to construct affordable housing developments in accordance with this Title may utilize the density bonus allowances set forth in State Density Bonus Law, pursuant to California Government Code Section 65915 et seq. Where a conflict occurs between the provisions of this chapter and State law, the State law will govern.

• B. Compatibility. All affordable housing units must be dispersed within market-rate projects whenever feasible. Affordable housing units within market-rate projects must be comparable with market-rate units in exterior appearance and use of materials.

• C. Availability. All affordable housing units must be constructed and occupied concurrently with or before the construction and occupancy of market-rate units. In phased developments, inclusionary units may be constructed and occupied in proportion to the number of units in each phase of the residential development unless both the City and the developer agree in the Density Bonus Agreement to an alternative schedule for development.

• D. Density Bonus Agreement. A Density Bonus Agreement will be made a condition of planning permit approval for all projects granted a density bonus, pursuant to this chapter. Consistent with all applicable requirements of this chapter, the Agreement must be recorded as a restriction on the parcel(s) on which the affordable housing units will be constructed.

• E. Effect of Granting Density Bonus. The granting of a density bonus will not require a General Plan amendment, Local Coastal Program amendment, Zoning Ordinance or Map change, unless associated with development that otherwise would require such discretionary review and approval(s).

• (Ord. 20-03 § 6)

A. Application and Review Process.

1. The applicant must request in the application the incentives or concessions the applicant wishes to obtain, together with reasonable documentation showing how the incentives and/or concessions will result in cost reductions for the project. Applications will be reviewed and processed according to the provisions of Chapter 17.52 , Common Procedures.

2. In accordance with State law, neither the granting of a density bonus nor the granting of a concession, incentive, waiver, or modification will be interpreted, in and of itself, to require a variance, zoning amendment, General Plan amendment, Local Coastal Program amendment, or any discretionary approval in addition to that required for the underlying housing development.

• B. Density Bonus Agreement Required. All affordable housing projects receiving a density bonus or incentive require approval of a Density Bonus Agreement conforming to the provisions of Title

7, Division 1, Chapter 4, Article 4.3 of the Government Code . The Agreement must be recorded as a covenant on the title to the property. The Agreement must include, without limitation, the following:

1. Number of Units. The total number of units approved for the project, including the number of affordable housing units.

2. Unit Detail. The location, unit sizes (in square feet), and number of bedrooms of the affordable housing units.

3. Household Income Group. A description of the household income groups to be accommodated by the project and a calculation of the affordable rent or sales price.

4. Certification Procedures. The party responsible for certifying rents or sales prices of units, and the process that will be used to certify renters or purchasers of such units throughout the term of the agreement.

5. Schedule. A schedule for the completion and occupancy of both the affordable and the market-rate housing units.

6. Remedies for Breach. A description of the remedies for breach of the Agreement by either party.

7. Required Term of Affordability. Unless the affordable housing unit is governed by subsection 17.28.050(C) , the term of affordability restrictions shall be 55 years.

8. Expiration of Agreement. Provisions covering the expiration of the agreement, including notice prior to conversion to market rate units and right of first refusal option for the City and/or the public disclosure of accrued equity for for-sale units.

9. Transfers and Conveyances. A new affordability housing covenant will be entered into upon each change of ownership of an affordable housing unit and upon any transfer or conveyance (whether voluntarily or by operation of law) of an owner -occupied affordable housing unit.

10. Rental Housing Developments. In the case of rental housing developments, the Agreement must provide for the following conditions governing the use of affordable housing units during the use restriction period:

• a. The rules and procedures for qualifying tenants, establishing affordable rent rates, filling vacancies, and maintaining affordable housing units for qualified tenants;

  - b. Provisions requiring owners to verify tenant incomes and maintain books and records to demonstrate compliance with this chapter; and 
  
  - c. Provisions requiring owners to submit an annual report to the City, which includes the name, address, and income of each person occupying affordable housing units, and which identifies the bedroom size(s) and monthly rent or cost of each affordable housing unit. The City will ensure this information is not shared except for reporting purposes. 
  

  11. Other Provisions. Any other provisions necessary to ensure implementation and compliance with this chapter, as determined by the City Attorney.

• C. Notice of Conversions. Notice of conversions of affordable units to market-rate units after fulfillment of the required term of affordability must be provided pursuant to the following requirements:

  1. General. At least one-year notice is required prior to the conversion of any rental units for affordable households to market-rate.

  2. Required Notice. Notice must be given to the following:

     • a. The City;

     • b. The California Department of Housing and Community Development;

     • c. The Housing Authority of the County of Santa Barbara;

     • d. The residents of the affordable housing units proposed to be converted; and

     • e. Any other person deemed appropriate by the City.

• D. Findings. In addition to any other findings required by this Title, the following findings apply, where applicable pursuant to this Chapter.

  1. Required Finding for Approval. The Review Authority shall approve a housing development pursuant to this Chapter only if the following finding is made:

     • a. The housing development provides the housing required by State Density Bonus Law to be eligible for the requested density bonus and/or any incentives, waivers, or parking reductions, as evidenced by this finding.

  2. Finding for Denial of a Concession or Incentive. The Review Authority shall grant an incentive or concession requested by an applicant pursuant to this Chapter unless it makes a written finding, based on substantial evidence, of one or more of the following findings:

     • a. The concession or incentive does not result in identifiable and actual cost reductions, consistent with Government Code Section 65915(k) , to provide for affordable housing costs, as defined in Health and Safety Code Section 50052.5 ; or for rents for the targeted units to be set as specified in Government Code Section 65915(c) .

• b. The concession or incentive would have a specific, adverse impact, as defined in Government Code Section 65589.5(d)(2) , upon the public health or safety or on any real property that is listed in the California Register of Historic Resources, and there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact without rendering the housing development unaffordable to low-income and moderateincome households.

  - c. The proposed incentive would be contrary to state or federal law. 
  

  3. Finding for Denial of Waiver or Reduction. The Review Authority shall grant a waiver of development standards requested by an applicant for a housing development pursuant to this Chapter unless it makes a written finding of any of the following:

     • a. The application of the development standard for which a waiver or reduction is requested would not have the effect of physically precluding the construction of a development meeting the criteria in Government Code Section 65915(b) at the densities or with the concessions or incentives permitted under Government Code Section 65915 .

     • b. The waiver or reduction would have a specific, adverse impact, as defined in Government code Section 65589.5(d)(2) , upon health or safety, and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

     • c. The waiver or reduction would have an adverse impact on any real property listed in the California Register of Historic Resources.

     • d. The waiver or reduction would be contrary to state or federal law.

  4. Finding for Denial of a Density Bonus or Concession for a Childcare Facility. The Review Authority may deny a request for a density bonus or incentive for a childcare facility that is

based all or in part on the proposed provision of a childcare facility if the Review Authority makes a written finding, based on substantial evidence, that:

a. The City already has adequate childcare facilities. (Ord. 20-03 § 6; Ord. 24-01, 4/16/2024; Ord. No. 24-05, 12/3/2024; Ord. 25-10, 12/2/2025)