Chapter 17.32 — AFFORDABLE HOUSING

The purpose of this policy is to:

• A. Encourage the development and availability of housing affordable to a broad range of households with varying income levels within City as mandated by State Law, California Government Code Sections 65580 and following;

• B. Promote the City of Jackson's goal to add affordable housing units to the City's housing stock in proportion to the overall increase in new jobs and housing units;

• C. Offset the need for housing that is created by new development, protecting the economic diversity of the City's housing stock and promoting a jobs/housing balance, and in doing so, mitigating environmental and other impacts of traffic, transit and air quality and reducing demands on the region's transportation infrastructure.

For all Residential Developments of 10 or more units, at least 10 percent of the total units must be Inclusionary Units within the development and restricted for occupancy by Low-, Very Low-, or Extremely Low Income Households as defined by the Regional Housing Needs Assessment Tables. The number of Inclusionary Units required for a particular project will be determined only once, at the time of tentative or parcel map approval, or, for developments not processing a map, prior to issuance of a building permit. If a change in the subdivision design results in a change in the total number of units, the number of Inclusionary Units required will be recalculated to coincide with the final approved project.

• A. Calculation. For purposes of calculating the number of affordable units required by this Section, any additional units authorized as a density bonus under California Government Code Section 65915(b)(1) or (b)(2) will not be counted in determining the required number of Inclusionary Units. In determining the number of whole Inclusionary Units required, any decimal fraction less than 0.5 shall be rounded down to the nearest whole number, and any decimal fraction of 0.5 or more shall be rounded up to the nearest whole number.

• B. Type of Inclusionary Units. At least one quarter of the Inclusionary Units (or 2.5 percent of the total development) must be restricted to occupancy by Extremely Low-Income Households. One-quarter of the Inclusionary Units (or 2.5 percent of the total development) must be restricted to occupancy by Very Low-Income Households. An additional one-half of the Inclusionary Units (or 5 percent of the total development) must be restricted to occupancy by Low-Income Households.

• C. Limitation for Rental Projects. The City acknowledges that the published appellate case of Palmer/Sixth Street Properties, L.P. v. City of Los Angeles (2nd Dist. 2009) 175 Cal. App. 4th 1396 holds that the Costa-Hawkins Act (Civil Code § 1954.50 et seq.) precludes local governments from requiring a developer to set affordable rent levels for private rental housing unless the developer has agreed to such rental restrictions in exchange for financial assistance or other consideration from the local government. This Section and chapter shall be fully operative at such time that the Palmer case is overturned, disapproved or depublished by a court of competent jurisdiction, or the state legislature amends state law to authorize local governments to require the development and restriction of affordable rental units in the manner set forth in this Section and chapter. Except as expressly limited by the Palmer case, this Section and chapter remain in full force and effect.

The requirements of this Policy do not apply to:

• A. The reconstruction of any structures that have been destroyed by fire, flood, earthquake or other act of nature provided that the reconstruction of the site does not increase the number of residential units by more than nine.

• B. Housing constructed by other government agencies.

Inclusionary Units built under this Policy must conform to the following standards:

• A. Design. Except as otherwise provided in this Chapter, Inclusionary Units must be comparable in infrastructure (including sewer, water and other utilities), construction quality and exterior design to the Market-rate Residential Units. Inclusionary Units may be smaller in aggregate size and have different interior finishes and features than Market-rate Units so long as the interior features are durable, of good quality and consistent with contemporary standards for new housing. The number of bedrooms should be the same as those in the Market-rate Units, except that if the Market-rate Units provide more than three bedrooms, the Inclusionary Units need not provide more than three bedrooms.

• B. Timing. All Inclusionary Units must be constructed and occupied concurrently with or prior to the construction and occupancy of Market-rate Units or 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.

• C. Duration of Affordability Requirement. Inclusionary Units produced under this Section must be legally restricted to occupancy by Households of the income levels for which the units were designated for a minimum of 55 years for rental units and 45 years for owner occupied units.

• A. Developer Proposal. A Developer may propose an alternative means of compliance in an Affordable Housing Plan according to the following provisions.

  1. Off-Site Construction. Inclusionary Units may be constructed off-site if the Inclusionary Units will be located in an area where, based on the availability of affordable housing, the City Manager finds that the need for such units is greater than the need in the area of the proposed development.

  2. Combination. The City Manager may accept any combination of on-site construction and off-site construction.

• B. Discretion. The City Manager may approve, conditionally approve or reject any alternative proposed by a Developer as part of an Affordable Housing Plan. Any approval or conditional approval must be based on a finding that the purposes of this Policy would be better served by implementation of the proposed alternative(s). The decision of the City Manager may be appealed to the City Council within 10 days of the City Manager's decision.

The City may provide one or more of the following incentives to a Developer who elects to satisfy the inclusionary housing requirements of this Policy by producing rental units or owner-occupied housing

units on the site of a Residential Development. Special preferences shall be given to projects offering Extremely Low-Income units.

• A. Modifed Development Standards to Increase Density. Modification in development or zoning provided that such modifications exceed the minimum building standards provided in the Uniform Building Code that will allow for increased density, including, the following for the development of low income units:

  1. The City may provide a 20 percent increase above the otherwise maximum allowable residential density;

  2. Low income single-family units may reduce the parking requirements to one covered parking space and one uncovered with tandem parking allowed; and

  3. The front yard setback for all low income residential units may be reduced to 10 feet with the exception of the covered parking portion of the structure which must maintain a 25-foot setback from back of sidewalk or curb if there is no sidewalk, to accommodate one additional off-street parking space.

• B. Mixed Use Zoning. Approval of mixed use zoning in conjunction with a Development if such uses are compatible with the existing or planned development in the area where the proposed Development will be located.

• C. Fee Reductions. A 50 percent reduction of fees required by City Schedule of Charges for Special Services and Local Facilities Participation Charges for the portion of the Development devoted to Inclusionary Units. The fee reduction may be up to 75 percent for Extremely LowIncome units.

• D. Financial Assistance. To the extent budgeted by the City Council and otherwise available, financial assistance for the inclusionary housing component of the development in the form of loans or grants from sources as may be available to City.

• A. General. Approval of an Inclusionary Housing Plan and implementation of an approved Inclusionary Housing Agreement is a condition of any tentative map, parcel map or building permit for any Development for which this Policy applies. This Section does not apply to exempt projects.

• B. Inclusionary Housing Plan. The City Manager shall approve, conditionally approve or reject the Inclusionary Housing Plan within 60 days of the date of a complete application for that approval. If the Inclusionary Housing Plan is incomplete, the Inclusionary Housing Plan will be returned to the Developer along with a list of the deficiencies or the information required. No application for a tentative map, parcel map or building permit to which this Policy applies may be deemed complete until an Inclusionary Housing Plan is submitted to the City Manager. At any time during the review process, the City Manager may require from the Developer additional information reasonably necessary to clarify and supplement the application or determine the consistency of the proposed Inclusionary Housing Plan with the requirements of this Policy. The Inclusionary Housing Plan must include:

  1. The location, structure (attached, semi-attached, or detached), proposed tenure (for sale or rental), and size of the proposed market-rate, commercial space and/or 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;

  3. The income levels to which each Inclusionary Unit will be made affordable;

  4. The mechanisms that will be used to assure that the units remain affordable for the desired term, such as resale and rental restrictions, deeds of trust, and rights of first refusal and other documents;

  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 incentives that are requested of City; and

  7. Any other information reasonably requested by the City Manager to assist with evaluation of the Plan under the standards of this Policy.

• C. Inclusionary Housing Agreement. The forms of the Inclusionary Housing Agreement, resale and rental restrictions, deeds of trust, rights of first refusal and other documents authorized by this Policy, and any change in the form of any such document which materially alters any requirement in the document, must be approved by the City Manager or his/her designee prior to being executed with respect to any Residential Development or Affordable Housing Proposals. The form of the Inclusionary Housing Agreement will vary, depending on the manner in which the provisions of this Policy are satisfied for a particular development. All Inclusionary Housing Agreements must include, at minimum, the following:

  1. Description of the development, including whether the Inclusionary Units will be rented or owner-occupied;

  2. The number, size and location of Extremely Low-, Very Low-, and Low-Income Units;

3. Inclusionary incentives by the City, including the nature and amount of any local public funding (if any);

   4. Provisions and/or documents for resale restrictions, deeds of trust, rights of first refusal or rental restrictions;

   5. Provisions for monitoring the ongoing affordability of the units, and the process for qualifying prospective resident Households for income eligibility; and

   6. Any additional obligations relevant to the compliance with this Policy.

• D. Recording of Agreement. Inclusionary Housing Agreements that are acceptable to the City Manager must be recorded against owner-occupied Inclusionary Units and residential projects containing rental Inclusionary Units. Additional rental or resale restrictions, deeds of trust, rights of first refusal and/or other documents acceptable to the City Manager must also be recorded against owner-occupied Inclusionary Units. Such items must be approved as to form by the City Attorney. In cases where the requirements of this Policy are satisfied through the development of Off-Site Units, the Inclusionary Housing Agreement must simultaneously be recorded against the property where the Off-Site Units are to be developed.

• A. General Eligibility. No Household may occupy an Inclusionary Unit unless the City or its designee has approved the Household's eligibility, or has failed to make a determination of eligibility within the time or other limits provided by an Inclusionary Housing Agreement or resale restriction. If the City has failed to identify a Household as an eligible buyer for the initial sale of an Inclusionary Unit that is intended for owner-occupancy 90 days after the unit receives a completed final inspection for occupancy, upon 90 additional days' notice to the City and on satisfaction of such further conditions as may be included in City-approved restrictions (which may include a further opportunity to identify an eligible buyer), the owner may sell the unit at a market price, and the unit will not be subject to any requirement of this Policy thereafter.

• B. Confict of Interest. The following individuals are ineligible to purchase or rent an Inclusionary Unit: (1) City employees and officials (and their immediate family members) who have policymaking authority or influence regarding City housing programs and do not qualify as having a remote interest as provided by California Government Code Section 1091 ; (2) the Project Applicant and its officers and employees (and their immediate family members); and (3) the Project Owner and its officers and employees (and their immediate family members).

• C. Occupancy. Any Household who occupies a rental Inclusionary Unit or purchases an Inclusionary Unit must occupy that unit as a principal residence.

• A. Initial Sales Price. The initial sales price of the Inclusionary Unit must be set so that the eligible Household will pay an Affordable Ownership Cost.

• B. Transfer. Renewed restrictions will be entered into on each change of ownership, with a 45-year renewal term, upon transfer of an owner-occupied Inclusionary Unit prior to the expiration of the 45-year affordability period.

• C. Resale. The maximum sales price permitted on resale of an Inclusionary Unit designated for owneroccupancy shall be the lower of: (1) fair market value or (2) to the extent authorized in any resale restrictions or operative Inclusionary Housing Agreement, sellers may recover at time of sale the market value of capital improvements made by the seller and the seller's necessary and usual costs of sale up to the percent increase in the Area Median Income, and may authorize an increase in the maximum allowable sales price to achieve such recovery.

• D. Changes in Title. Title in the Inclusionary Unit may change due to changes in circumstance, including death, marriage and divorce. Except as otherwise provided by this Policy, if a change in title is occasioned by events that changes the financial situation of the Household so that it is no longer incomeeligible, then the property must be sold to an income-eligible Household within 180 days. Upon the death of one of the owners, title in the property may transfer to the surviving joint tenant without respect to the income-eligibility of the Household. Upon the death of a sole owner or all owners and inheritance of the Inclusionary Unit by a non-income-eligible child or stepchild of one or more owners, there will be a one year compassion period between the time when the estate is settled and the time when the property must be sold to an income-eligible Household. Inheritance of an Inclusionary Unit by any other person whose Household is not income-eligible shall require resale of the unit to an income-eligible Household as soon as is feasible but not more than 180 days.

Rental units will be offered to eligible Households at an Affordable Rent. The owner of rental Inclusionary Units shall certify each tenant Household's income to the City or City's designee at the time of initial rental and annually thereafter. The owner must obtain and review documents that demonstrate the prospective renter's total income, such as income tax returns or W-2s for the previous calendar year, and submit such information on a form approved by the City.

• A. Selection of Tenants. The owners of rental Inclusionary Units may fill vacant units by selecting income-eligible Households from an application list maintained by the City or City's designee. Priority will be given to current residents and employees of businesses within the City of Jackson. Alternatively, owners may fill vacant units through their own selection process, provided that they publish notices of the availability of Inclusionary Units according to guidelines established by the City Manager.

• B. Annual Report. The owner shall submit an annual report summarizing the occupancy of each Inclusionary Unit for the year, demonstrating the continuing income-eligibility of the tenant. The City Manager may require additional information if he or she deems it necessary.

• C. Subsequent Rental to Income-Eligible Tenant. The owner shall apply the same rental terms and conditions to tenants of Inclusionary Units as are applied to all other tenants, except as required to comply with this Policy (for example, rent levels, occupancy restrictions and income requirements) or with other applicable government subsidy programs. Discrimination against persons receiving housing assistance is prohibited.