Chapter 12.08.27

DENSITY BONUS ORDINANCE

REGULATIONS

The purpose of this Part is to implement State law requirements under California Government Code §§ 65915 through 65918, as they may be amended from time to time, or the current equivalent to encourage the development of residential development that offers a percentage of its units to be made available to families of low or moderate income.

Pursuant to California Government Code §§ 65915 and 65917, the City must grant to an applicant of a qualifying housing development who seeks a density bonus (“Developer”) either (1) a density bonus or (2) a density bonus with an additional incentive(s) as set forth in this Part. A density bonus housing agreement shall be made a condition of any density bonus approved pursuant to this Part, and may be prepared as part of the Development Agreement (“DA”) process. The agreement shall be recorded as a covenant on the property on which the designated affordable dwelling units will be constructed, which covenant shall run with the land.

The following are eligibility requirements for a density bonus, incentives or concessions applicable to this Part:

• A. Affordability. A Developer entering into an agreement pursuant to California Government Code § 65915 to construct a housing development may quality for a density bonus, if the proposed housing development of 5 or more residential units includes;

  1. A minimum of 55% of the total units made available to very low-income households, as defined by the most recent version of the applicable section of the California Health and Safety Code; or

  2. A minimum of 10% of the total units made available to lower income households, as defined by the most recent version of the applicable sections of the California Health and Safety Code; or

  3. A minimum of 10% of the total units in a common interest development made available to moderate income households, as defined by the most recent version of the California Health and Safety Code, provided that all units in the development are offered to the public for purchase; or

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4. A senior housing development or senior restricted mobile home parks, as defined by the most recent version of the applicable in sections of the California Government Code.

• B. California Government Code § 65915.5 shall govern the availability of bonus incentives for projects which convert apartments to condominium projects which include at least 33% of the total units of the proposed condominium project to persons and families of low or moderate income as defined in California Health and Safety Code § 50093, or 15% of the total units to lower income households as defined in California Health and Safety Code § 50079.5.

• C. Allowed density bonus. For the purposes of calculating the density bonus below, the Developer shall select which qualifying density listed in Part A above under which the Developer wishes the bonus to be awarded. Qualifying developments are eligible for a density bonus and one or more additional incentives or concessions as follows:

  1. Lower income households. A housing development eligible for a bonus in compliance with criteria of Part A.1 above (10% of lower income households) shall be entitled to a density bonus calculated pursuant to California Government Code § 65915(f)(1).

  2. Very low-income households. A housing development eligible for a bonus in compliance with criteria of Part A.2 above (5% of very low-income households) shall be entitled to a density bonus calculated pursuant to California Government Code § 65915(f)(2).

  3. Common interest development. A housing development eligible in compliance with criteria of Part A.3 above (10% for moderate income households) shall be entitled to a density bonus calculated pursuant to California Government Code § 65915(f)(4).

  4. Senior citizen development. A housing development eligible for a bonus in compliance with criteria of Part A.4 above (senior citizen development or mobile home park) shall be entitled to a density bonus calculated pursuant to California Government Code § 65915(f)(3).

5. Density bonus for land donation. When an applicant for a tentative subdivision map, parcel map, or other residential development approval donates land to the City, the maximum allowable residential development under the applicable zoning ordinance and general plan, as permitted by California Government Code § 65915(g)(1). This increase shall be in addition to any other density bonus. The applicant shall meet the conditions in California Government Code § 65915(h) in order to qualify for the additional development.

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6. Density bonus for housing with child care facilities. The City shall grant a housing development that includes a child care facility in compliance with California Government Code § 65915(h).

7. Any additional qualifying project allowable under California Government Code § 65915 as amended from time to time.

• D. Development standards. Projects qualifying under this Part shall comply with the following development standards:

  1. Designated affordable units shall be reasonably dispersed throughout the project where feasible, shall contain on average the same number of bedrooms as the non-designated units in the project, and shall be compatible with the design or use of the remaining units in terms of appearance, materials, and finished quality.

  2. If the project is phased, the density bonus units shall be phased in in the same proportion as the non-density bonus units, or phased in another sequence acceptable to the City.

At the time of adoption of this Density Bonus ordinance, the City does not have an inclusionary housing policy in place. However, if an inclusionary housing policy is adopted, designated affordable units shall count towards the requirements of the City’s inclusionary housing requirements.

The following are allowed incentives or concessions that can be made for projects qualifying under this Part:

• A. Applicant request and City approval. An applicant for a density bonus may submit to the City a proposal for the specific incentives or concessions listed that the applicant requests, and may request a meeting with the City staff prior to submitting the development application. The City Council shall grant an incentive or concession request that complies with the requirements of this Part and state law, unless the City Council makes in writing, based on substantial evidence, the findings established in California Government Code §§ 65915(d)(1)(A), 65195(d)(1)(B) or 65915(d)(1)(C).

• B. Number of incentives. The applicant shall receive other concessions or incentives, as listed in Part C below, which significantly contribute to the economic feasibility of construction or the qualifying development project. The number of concessions or incentives will be determined by California Government Code § 65915(d)(2).

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• C. Types of incentives. For the purposes of this Part, bonus concessions or incentives which the City may provide include, but are not limited to, any of the following, as established in California Government Code § 65915(k).

  1. A reduction in site development standards or a modification of zoning code requirements of architectural design requirements that exceed the minimum State of California Building Standard, pursuant to California Government Code § 65915(k);

  2. A modification of zoning ordinance requirements or design standards requirements that result in identifiable financially sufficient and actual cost reductions that exceed the minimum State of California Building Standards pursuant to California Government Code § 65915(k), including but not limited to, a reduction in setback and square footage requirements and in the ratio of vehicular parking spaces that would otherwise be required;

  3. Approval of mixed-use zoning in conjunction with the housing project, if commercial, office, industrial, or other land uses will reduce the cost of the housing development and if the commercial, office, industrial, or other land uses are compatible with the housing project; and

  4. Any other incentive or concession proposed by the Developer or the City that results in an identifiable, financially sufficient and actual cost reductions.

  5. Any additional qualifying density bonus, incentive or concession allowable under California Government Code § 65915, as amended from time to time.

• 27-6. Processing of Bonus Requests

The following is required for processing a bonus request:

• A. Permit requirement. A request for a density bonus and other incentives and concessions shall be evaluated and decided through the permit process in as though it were a use permit application to the City Council for approval.

• B. Finding for approval. The approval of a density bonus and other incentives and concessions shall require that the review authority firs make all the following findings:

1. The residential development will be consistent with the General Plan and concessions.

   2. The approved number of dwellings can be accommodated by existing and planned infrastructure capacities.

   3. Adequate evidence exists to indicate that the project will provide affordable housing in a manner consistent with the purpose and intent of this Chapter.

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4. There are sufficient provisions to guarantee that the units will remain affordable for the required time period.

The following is required for a density bonus agreement:

• A. Agreement required and provisions. An applicant requesting a density bonus agreement shall agree to enter into a recordable density bonus agreement (“agreement”) with the City in a form approved by the City Attorney. The executed agreement shall be recorded on the property designated for the construction of the designated affordable units. The approval and recordation shall take place prior to final map approval, or where a map is not being process, prior to issuance of building permits for such properties.

• B. Project information. The agreement shall include at least the following information about the project:

  1. The total number of units approved for the housing development, including the number of designated affordable units.

  2. A description of the household income group to be accommodated by the housing development, and the standards and methodology for determining the corresponding affordable rent or affordable sales price and housing cost consistent with U.S. Department of Housing and Urban Development (“HUD”) Guidelines.

  3. The marketing plan for the affordable units.

  4. The location, unit sizes (square feet), and number of bedrooms of the designated affordable dwelling units.

  5. Tenure of the use restrictions for designated affordable dwelling units of the time periods required by this Part and California Government Code § 65915.

  6. A schedule for completion and occupancy of the designated affordable dwelling units.

  7. A description of the additional incentives being provided by the City.
  • A description of the remedies for breach of the agreement by the owners.

9. Other provisions to ensure successful implementation and compliance with California Government Code § 65915.

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The agreement shall provide, at a minimum, that:

• A. The Developer shall give the City the continuing right-of-first-refusal to lease or purchase any or all the designated affordable dwelling units at the appraised value.

• B. The deeds to the designated affordable dwelling units shall contain a covenant stating that the developer or successors-in-interest shall not assign, lease, rent, sell, sublet, or otherwise transfer any interest for designated affordable dwelling units without the written approval of the City.

• C. When providing the written approval, the City shall confirm that the price (rent or sale) of the designated affordable dwelling unit is consistent with the limits established for low and very low-income households, as published by HUD.

• D. The City shall have the authority to enter into other agreements with the developer, or purchasers of the designated affordable dwelling units, to ensure that the required dwelling units are continuously occupied by eligible households.

• E. Applicable deed restrictions, in the form satisfactory to the City Attorney, shall contain provisions for the enforcement of owner or developer compliance. Any default or failure to comply may result in foreclosure, specific performance, or withdrawal of the Certificate of Occupancy.

• F. In any action taken to enforce compliance with deed restrictions, the City Attorney shall, if compliance is ordered by a court of competent jurisdiction, take all action that may be allowed by law to recover all of the City’s costs of action including legal services.

• G. Compliance with the agreement will be monitored and enforced in compliance with the measures included in the agreement.

• H. The designated affordable dwelling units that qualified the housing development for a density bonus and other incentives and concessions shall continue to be available as affordable units in compliance with the requirements of California Government Code § 65915(c).

• I. For-sale housing conditions. In the case of for-sale housing developments, the agreement shall provide for the following conditions governing the initial sale and use of designated affordable dwelling units during the applicable restriction period:

  1. A requirement that designated affordable dwelling units shall be owneroccupied by eligible households, or by qualified residents in the case of senior housing.

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2. Provisions as the City may require ensuring continued compliance with maintaining affordable dwelling units in compliance with this Part and state law.

3. Terms for future sales and recapture of any equity to ensure continued affordability of dwelling units for the requisite time period, as prescribed by California Government Code § 65915(c).

• J. Rental housing conditions. In the case of rental housing development, the agreement shall provide for the following conditions governing the use of designated affordable dwelling units during the restriction period:

1. The rules and procedures for qualifying tenants, establishing affordable rent, filling vacancies, and maintaining the designated affordable dwelling units for qualified tenants.

   2. Provisions requiring owners to annually verify to the City tenant incomes and maintain books and record to demonstrate compliance with this Part.

   3. Provisions requiring owners to submit an annual report to the City, which includes the name, address, and income of each person occupying the designated affordable dwelling units, and which identifies the bedroom size and monthly rent or cost of each unit.

   4. The applicable use restriction shall comply with the time limits for continued availability in compliance with this Part.

• K. Execution of agreement. Following City Council approval of the agreement and execution of the agreement by all parties, the City shall record the completed agreement on the parcels designated for the construction of designated affordable dwelling units, at the County Recorder’s Office.

• L. The approval and recordation shall take place at the same time as the final map or, where a map is not being processed, before issuance of Building Permits for the project.

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