Chapter 6-37 — INCLUSIONARY HOUSING

Editor's note— Ord. No. 697, § 3(Exh. A), adopted July 28, 2025, repealed the former Ch. 6-37, §§ 6-3701 —6-3715, and enacted a new Ch. 6-37 as set out herein. The former Ch. 6-37 pertained to similar subject matter and derived from Ord. No. 645, § 4(exh. A), adopted June 13, 2016; Ord. No. 659, § 4(exh. A), adopted Sept. 25, 2017; and Ord. No. 663, § 1(exh. A), adopted June 25, 2018.

The purpose of this chapter is to facilitate the development and availability of housing affordable to a broad range of households of various income levels and sizes in Lafayette. This chapter is intended to:

(a)

Implement state policy that declares local governments have a responsibility to facilitate development to provide for the housing needs of all economic segments of the community;

(b)

Implement the housing element of the general plan, which calls for the adoption of an inclusionary housing program;

(c)

Facilitate the development of affordable housing units within a project; and

(d)

Assist in the dispersal of affordable housing units throughout the city.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

In this chapter, unless the context requires otherwise:

(a)

"Affordable rent" means a rental rate that results in monthly housing costs, including utilities, that collectively do not exceed the following:

(1)

For a very low-income household, one-twelfth of the product of 30 percent times 50 percent of the area median income adjusted for family size appropriate for the unit.

(2)

For a low-income household, one-twelfth of the product of 30 percent times 80 percent of the area median income adjusted for family size appropriate for the unit.

(b)

"Affordable sales price" means a sales price that results in monthly housing costs, including mortgage (principle and interest), property taxes, utilities, property insurance and homeowner association fees, that collectively do not exceed the following:

(1)

For a very low-income household, one-twelfth of the product of 35 percent times 50 percent of the area median income adjusted for family size appropriate for the unit.

(2)

For a low-income household, one-twelfth of the product of 35 percent times 80 percent of the area median income adjusted for family size appropriate for the unit.

(3)

For a moderate-income household, one-twelfth of the product of 35 percent times 110 percent of the area median income adjusted for family size appropriate for the unit.

(c)

"Area median income" means the combined salaries, wages or other sources of income of a single household, based upon household size, for Contra Costa County as published annually by the State of California Department of Housing and Community Development.

(d)

"Downtown" means the area within the boundaries of the downtown specific plan map.

(e)

"First time homebuyer" means a household that has had no ownership in a principal residence during the three-year period ending on the date of purchase of the affordable unit.

(f)

"Inclusionary housing agreement" means a document that has been reviewed and approved by the planning and building director that delineates the exact requirements that a developer shall meet to fulfill the requirements under this chapter.

(g)

"Inclusionary unit" means a dwelling unit that has an affordable sales or rental price for households for a household at the applicable income level under the requirements of this chapter.

(h)

"Large family" means a household with five or more members.

(i)

"Low-income household" means a household whose annual income does not exceed 80 percent of area median income, adjusted for household size as published by the State of California Department of Housing and Community Development for Contra Costa County.

(j)

"Moderate-income household" means a household whose annual income does not exceed 110 percent of area median income, adjusted for household size as published by the State of California Department of Housing and Community Development for Contra Costa County, and would apply to for-sale moderate income housing.

(k)

"Project" means a residential or mixed-use development creating a net increase of two or more for sale or rental dwelling units. This excludes a legal second unit unless that unit is built to satisfy the requirements of this chapter.

(l)

"Very low-income household" means a household whose annual income does not exceed 50 percent of area median income, adjusted for household size as published by the State of California Department of Housing and Community Development for Contra Costa County.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

(a)

Geographic Area. The provisions of this chapter applies city-wide.

(b)

Development Size Threshold. The provisions of this chapter apply to all projects creating a net increase of two or more residential units.

(c)

Income Calculations. The State of California calculates annual income limits for very low-, low- and moderate-income households that may vary from the definitions for such households contained in this chapter. In applying Sections 6-3702(a), (b), (g), (h) and (j) above to a proposed project, applicants may use the higher of the household income limits established in this chapter (50 percent of area median income for very low, 80 percent of area median income for low, and 110 percent of area median income for moderate), or the household income limits established by the State of California for the same income categories.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

(a)

Single-Family. For projects creating single-family dwellings, 15 percent of the units must be inclusionary units sold or rented at an affordable price to moderate-income households.

(b)

Multi-Family. For projects creating multiple for sale family dwellings, 15 percent of the total units must be inclusionary units, with nine percent sold at an affordable sales price to low or moderate-income households and six percent sold to an affordable sales price of very low-income households.

For projects that are multi-family rental dwellings, 15 percent of the total units must be inclusionary units, with nine percent rented at an affordable price to low-income households and six percent rented at an affordable price to very low-income households.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

(a)

To calculate the number of inclusionary units required, multiply 15 percent with the total number of units in the project.

(b)

When six percent and nine percent are multiplied with the total units to determine the number for each respective income category and the result is less than one unit for each income category, then the total combined percentage may be affordable to low or moderate-income households.

(c)

Notwithstanding subsections (a) and (b) above, a project with two to six units may elect to pay the applicable in-lieu fees and is not required to build inclusionary units.

(d)

Notwithstanding subsections (a) and (b) above, a project with seven to 20 for-sale units may elect to make all of the inclusionary units affordable at moderate-income. Similarly, a project with seven to 20 rental units may elect to make all of the inclusionary units affordable at low-income.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

If multiplying the required 15 percent with the total number of units results in other than a whole number, a result equal to or greater than one-half shall be rounded up to the next whole unit. An in-lieu fee shall be paid for a result less than one-half.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

This chapter establishes provisions under which an in-lieu fee is collected for inclusionary units. The city council shall establish the amount based on an appropriate fee study and shall update the fee over time. The in-lieu fee requirements of this chapter shall be effective only after the city council has adopted or updated the fee by resolution.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

Segmentation of a project in order to avoid the requirements of this chapter is not permitted. Construction of proximate dwelling units within any five-year period for which there is evidence of common ownership, control or interest, and whether or not covered by the same land use entitlements, shall be subject to the regulations of this chapter. However, nothing herein shall prohibit the phased development of a project, as approved by the city.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

(a)

For-sale inclusionary units shall be restricted to the applicable income level for a period not less than 45 years.

(b)

Rental inclusionary units shall be restricted to the applicable income level for a period not less than 55 years, including inclusionary units proposed as rentals under Section 6-3712 of this chapter.

(c)

The term of for-sale units' affordability resets upon sale of the unit(s).

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

Inclusionary units must be dispersed throughout the project and be comparable in terms of bedroom count and exterior design to the market rate units. The inclusionary units must have access to all amenities available to the market rate units.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

Inclusionary units must be constructed prior to or concurrently with the construction of the market rate units. The developer shall complete construction of all inclusionary units prior to final inspection of the final market rate unit. In phased developments, inclusionary units may be constructed and occupied in proportion to the number of units in each phase.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

(a)

Off-Site Development. Instead of providing inclusionary units on-site to satisfy the requirements of this chapter, a developer may propose providing all or a portion of the inclusionary units off-site, including for- sale housing or rental housing (see subsection (b) for-rent alternative to fee or sale, below).

(1)

In order to approve such a proposal, the city council must find that on-site production of such units is infeasible or that greater public benefit will result from the units being off-site.

(2)

The city council shall require the provision of a minimum of one and may require up to two off-site units for every unit not provided on-site.

(3)

Regardless of the number of off-site for-sale units that are required, 40 percent of the off-site units shall be affordable to very low-income households and 60 percent shall be affordable to low- or moderate-income households.

(4)

Regardless of the number of off-site rental units that are required, 40 percent of the off-site units shall be affordable to very low-income households and 60 percent shall be affordable to low-income households.

(5)

Nothing in this section shall obligate the council to allow any off-site units.

(6)

A developer proposing to provide the inclusionary units off-site must provide a relocation plan for any current tenants that may be displaced by the development of affordable units at the off-site location.

(7)

All other provisions of this chapter apply, whether the units are produced on-site or off-site.

(b)

For-Rent Alternative to Fees or Sale.

(1)

Ownership Projects. An applicant for a residential ownership project may elect to provide all or a portion of the inclusionary units required for the residential project at affordable rent to lower income households rather than provide for-sale units. Fifteen percent of the total units must be affordable to lower incomes, with nine percent rented at an affordable rent to low income households and six percent rented at an affordable rent to very low income households. If the applicant proposes to provide rental units off-site, 40

percent of the off-site rental units shall be affordable to very low-income households and 60 percent shall be affordable to low-income households.

(2)

Sales of Affordable Rental Units. If the owner of the ownership project later determines to offer the affordable rental units in the project for sale at an affordable sales price, any subsequent regulatory agreement shall include provisions for sale of the affordable units, as well as relocation benefits for tenants of the affordable rental units.

(3)

All other provisions of Section 6-3712(a) apply, except Section 6-3712(a)(3).

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

(a)

An inclusionary housing agreement between the developer and the city shall be required for any project subject to the provisions of this chapter in a form approved by the planning and building director. The agreement shall be executed prior to issuance of a building permit.

(b)

The inclusionary housing agreement shall contain the following information:

(1)

The location, tenure (rental or ownership) and size of the proposed market rate and inclusionary units;

(2)

The calculations used to determine the number of inclusionary units;

(3)

A floor plan or site plan depicting the location of the inclusionary units;`

(4)

The affordability level for each inclusionary unit;

(5)

The term of affordability;

(6)

A phasing plan for phased developments;

(7)

A description and details of any requested incentives, waivers or exemptions;

(8)

For projects including a density bonus, documentation that the density bonus is requested for units provided that are inclusive of the city's inclusionary requirements;

(9)

The process by which eligibility of qualified households will be reviewed and selected to rent or purchase affordable units;

(10)

An annual reporting schedule and requirements;

(11)

In for-sale housing, priority to first time home buyers and/or large families and in for-rent housing, priority to large families;

(12)

Additional information as requested by the planning and building director.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

In approving an inclusionary housing agreement, the city may, at its sole discretion, include one or more of the following allowances:

(a)

Unit Size Reduction. The size of the required inclusionary units may be smaller than the market rate units, consistent with all other provisions herein.

(b)

Interior Finishes. Inclusionary units may have different interior finishes than market rate units so long as the interior features are durable, of good quality and consistent with current state building code standards for new housing.

(c)

Accessory Dwelling Units. Projects consisting of single-family detached units may meet the inclusionary unit requirements by providing an accessory dwelling unit in accordance with the provisions of the city's accessory dwelling unit regulations on a one-for-one basis. All other requirements of this chapter, including income restrictions and term of affordability, shall be applied to second units.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)

(a)

A developer of a project subject to the requirements in this chapter may petition the city council for a reduction, adjustment, or waiver of these requirements based upon substantial evidence showing the absence of any reasonable relationship or nexus between the impact of the development and the inclusionary requirements.

(b)

A project subject to the requirements of this chapter and which has received approval for a tentative subdivision or parcel map, use permit or other discretionary approval and submits a new or revised application for the same property may petition for a reduction, adjustment or waiver of the requirements with respect to the number of lots or square footage of construction previously approved.

(c)

Any such petition shall be made in writing and filed with the planning and building department, along with the required fee established by city council resolution, not later than ten days before the first public hearing on any discretionary approval or permit for the development, or if no such discretionary approval or permit is required, or if the developer is protesting an action taken pursuant to the ordinance from which this chapter is derived after the first public hearing on such permit or approval, then the petition shall be filed within ten days after the date of the action objected to by the developer. The petition shall set forth in detail the factual and legal basis for the claim of waiver, reduction, or adjustment.

(d)

The city council shall consider the petition at the public hearing on the permit application or at a separate hearing within 60 days after the filing of the petition, the appellant shall bear the burden of presenting substantial evidence to support the petition including comparable technical information to support petitioner's position.

(e)

No waiver shall be granted by the city council for a new project where a prior project was approved within the last three years unless the city council finds that:

(1)

The new project is superior to the approved project both in its design and its mitigation of environmental impacts,

(2)

Adequate affordable housing already exists in that the aggregate of new or substantially rehabilitated dwelling units within the city makes available more than 15 percent of such units at affordable housing cost

to, and occupied by, persons and families of low and moderate income, and of such 15 percent, not less than 40 percent thereof is available at affordable housing cost to, and occupied by, very low-income households, or

(3)

Exceptions to the affordable housing requirements will result in a better project that better meets the city's housing goals.

(f)

The decision of the city council shall be final. If a reduction, adjustment, or waiver is granted, any change in the project shall invalidate the waiver, adjustment, or inclusionary requirements unless such change is approved by the city in advance.

(Ord. No. 697, § 3(Exh. A), 7-28-2025)