Chapter 17.140 — AFFORDABLE HOUSING DENSITY BONUSES AND INCENTIVES

As required by State law, this chapter offers density bonuses and incentives or concessions for the development of housing that is affordable to the types of households and qualifying residents identified in Section 17.140.020. This chapter is intended to implement the requirements of Government Code § 65915 et seq., or as may be amended, and the housing element of the general plan. The bonuses for affordable housing in this chapter are distinguished from, and are mutually exclusive of, other density bonuses available to projects that provide workforce housing pursuant to the Town Density Bonus Program described in Chapter 17.136. Developers may apply for a density bonus and other incentives, if eligible, pursuant to either Chapter 17.136 or this chapter, but not both.

(Code 1990, § 17.140.010; Ord. No. 14-02, § 4, 3-19-2014; Ord. No. 20-02, § 4(exh. A, b.), 3-18-2020)

In order to be eligible for a State Housing Density Bonus or other incentives or concessions as provided by this chapter, a proposed housing development shall comply with the following requirements, and satisfy all other applicable provisions of this chapter, except as provided by Section 17.140.040.

(1)

Resident requirements. A housing development proposed to qualify for a State Housing Density Bonus and incentive or concession shall be designed and constructed so that it includes at least one of the following:

a.

Five percent of the total number of proposed units are for very low-income households, as defined by the Health and Safety Code § 50105;

b.

Ten percent of the total number of proposed units are for lower income households, as defined by the Health and Safety Code § 50079.5;

c.

Ten percent of the total dwelling units in a common interest development as defined in Civil Code § 4100 are for persons and families of moderate-income, as defined in Health and Safety Code § 50093, provided that all units in the development are offered to the public for purchase; or

d.

The project is a senior citizen housing development as defined in Civil Code §§ 51.3 and 51.12 or is a mobilehome park that limits residency based on age requirements for housing older persons in compliance with Civil Code § 798.76 or 799.5.

(2)

Applicant selection of basis for bonus. For the purposes of calculating the amount of the density bonus in compliance with Section 17.140.030, the applicant who requests a density bonus shall elect whether the bonus shall be awarded on the basis of Section 17.140.030(1)a, b, c, or d.

(3)

Bonus units shall not qualify for a project. Density bonus units authorized by this chapter shall not be included when determining the number of target units required to qualify for a density bonus.

(4)

Minimum project size to qualify for density bonus. The density bonus provided by this chapter shall be available only to a housing development of five or more dwelling units.

(5)

Condominium conversion projects. A condominium conversion project for which a density bonus is requested shall comply with Government Code § 65915.5 and Section 17.52.110.

(Code 1990, § 17.140.020; Ord. No. 14-02, § 4, 3-19-2014)

The amount of a density bonus allowed in a housing development shall be determined by the Commission in compliance with this section. For the purposes of this chapter, the term "density bonus" means a density increase over the otherwise maximum allowable residential density under the applicable zone and designation of the land use element of the general plan as of the date of the application by the applicant to the Town.

(1)

Density bonus. A housing project that complies with the eligibility requirements in Section 17.140.020(1)a, b, c, or d, shall be entitled to density bonuses as follows, unless a lesser percentage is proposed by the applicant.

a.

Density bonus for very low-income households. For each one percent increase above five percent in the percentage of target units affordable to very low-income households, the density bonus shall be increased by 2.5 percent, up to a maximum of 35 percent. For example, a 20 unit project with two very low-income units (i.e., ten percent of units is very low-income) is entitled to a 32.5 percent density bonus, resulting in seven additional units.

b.

Density bonus for low-income households. For each one percent increase above ten percent in the percentage of target units affordable to low-income households, the density bonus shall be increased by 1.5 percent, up to a maximum of 35 percent. For example, a 20 unit project with three low-income units (i.e., 15 percent of units is low-income) is entitled to a 27.5 percent density bonus, resulting in six additional units.

c.

Density bonus for moderate-income units in common interest development. For a residential project that is a qualified common interest development pursuant to Section 17.140.020(1)c, for each one percent increase above ten percent in the percentage of target units for sale to moderate-income households at an affordable sales price, the density bonus shall be increased by one percent, up to a maximum of 35 percent. For example, a 20-unit project with four moderate-income units (i.e., 20 percent of units is moderate-income) is entitled to a 15 percent density bonus, resulting in three additional units.

d.

Density bonus for senior housing units. A housing development that is eligible for a bonus in compliance with the criteria in Section 17.140.020(1)d shall be entitled to a density bonus of 20 percent of the number of senior housing units.

Table 17.140.030. State Density Bonuses (State Government Code § 65915)

e.

Density bonus for land donation. A residential project may be eligible for a density bonus in return for land donation pursuant to the requirements set forth in Government Code § 65915(g).

(2)

Greater or lesser bonuses. The Town may choose to grant a density bonus greater than provided by this section for a development that meets the requirements of this section or grant a proportionately lower density bonus than required by this section for a development that does not comply with the requirements of this section.

(3)

Density bonus calculations. The calculation of a density bonus in compliance with this section that results in fractional units shall be rounded up to the next whole number, as required by Government Code § 65915(f)(5).

(4)

Requirements for amendments or discretionary approval. The granting of a density bonus shall not be interpreted, in and of itself, to require a general plan amendment, Zoning Map amendment, title amendment, or other discretionary approval.

(5)

Location of bonus units. The developer may locate the density bonus units in areas on the project site other than where the units for the lower income households are located in the housing project.

(Code 1990, § 17.140.030; Ord. No. 14-02, § 4, 3-19-2014)

(a)

Applicant request.

(1)

The applicant may file their request concurrently with the application for project approval.

(2)

The applicant shall show that a waiver or modification of development standards is necessary to make the housing units economically feasible.

(3)

An applicant for a density bonus in compliance with this chapter may also submit to the Town a proposal for the specific incentives or concessions listed in Subsection (d) of this section, below, that the applicant requests in compliance with this section, and may request a meeting with the Director.

(b)

Commission approval. The Commission shall grant an incentive or concession request that complies with this section unless the Commission makes at least one of the following findings in writing, based upon substantial evidence:

(1)

The incentive or concession is not required in order to provide for affordable housing costs, as defined in Health and Safety Code § 50052.5, or for rents for the targeted units to be set as specified in Section 17.140.070(2);

(2)

The incentive or concession would have a specific adverse impact, as defined in Government Code § 65589.5(d)(2), upon public health and safety or the physical environment or on any real property that is listed in the State Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low- and moderate-income households; or

(3)

The incentive or concession would be contrary to State or Federal law.

(c)

Number of incentives or concessions. The applicant shall receive the following number of incentives or concessions:

(1)

One incentive or concession. One incentive or concession for a project that includes at least ten percent of the total units for low-income households, or at least five percent for very low-income households, or at least ten percent for persons and families of moderate-income in a common interest development.

(2)

Two incentives or concessions. Two incentives or concessions for a project that includes at least 20 percent of the total units for low-income households, or at least ten percent for very low-income

households, or at least 20 percent for persons and families of moderate-income in a common interest development.

(3)

Three incentives or concessions. Three incentives or concessions for a project that includes at least 30 percent of the total units for low-income households, or at least 15 percent for very low-income households, or at least 30 percent for persons and families of moderate-income in a common interest development.

Table 17.140.040(c). State Incentives or Concessions (Government Code § 65915)

Affordability Category % of Target Units

Notes:

1 An incentive or concession may be requested only if an application is also made for a density bonus.

2 Incentives may be selected from only one category (i.e., very low, low, or moderate).

(d)

Type of incentives or concessions. For the purposes of this chapter, incentive or concession means any of the following:

(1)

A reduction in the site development standards of this chapter (e.g., lot coverage, setbacks, parking requirements, building height, etc.) or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission in compliance with Health and Safety Code § 18901 et seq., that would otherwise be required, that results in identifiable, financially sufficient, and actual cost reductions;

(2)

Approval of mixed-use zoning not otherwise allowed by this chapter in conjunction with the housing development if nonresidential land uses will reduce the cost of the housing development, and the nonresidential land uses are compatible with the housing project and the existing or planned development in the area where the project will be located;

(3)

Other regulatory incentives or concessions proposed by the applicant or the Town that will result in identifiable, financially sufficient, and actual cost reductions; or

(4)

In its sole and absolute discretion, a direct financial contribution granted by the Council, including the provision of publicly owned land, the waiver of fees or dedication requirements, subsidizing the cost of construction, or participating in the cost of infrastructure.

(e)

Effect of incentive or concession. The granting of an incentive or concession shall not be interpreted, in and of itself, to require a general plan amendment, Zoning Map amendment, title amendment, or other discretionary approval.

(Code 1990, § 17.140.040; Ord. No. 14-02, § 4, 3-19-2014)

(a)

Applicability. This section applies to a development that meets the requirements of 17.140.020, but only at the request of the applicant. An applicant may request additional parking incentives or concessions beyond those provided in this section in compliance with Section 17.140.040 and consistent with Chapter 17.44.

(b)

Number of parking spaces required.

(1)

At the request of the applicant, the Town shall require the following vehicular parking ratios for a project that complies with the requirements of Section 17.140.020, inclusive of handicapped and guest parking.

a.

Zero to one bedroom: one on-site parking space.

b.

Two to three bedrooms: two on-site parking spaces.

c.

Four or more bedrooms: 2½ on-site parking spaces.

(2)

If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number.

(3)

If, in any instance, the parking ratios listed above would result in a parking requirement greater than that established by Chapter 17.44, the lesser requirement would apply.

(c)

Location of parking. For the purposes of this section, a development may provide on-site parking through tandem parking or uncovered parking, but not through on-street parking.

(Code 1990, § 17.140.050; Ord. No. 14-02, § 4, 3-19-2014)

A housing development that complies with the resident and project size requirements of Section 17.140.020(1) and also includes as part of that development a childcare facility other than a large or small family day care home, that will be located on the site of, as part of, or adjacent to the development, shall be subject to the following:

(1)

Additional bonus and incentive. The Town shall grant a housing development that includes a childcare facility in compliance with this section either of the following:

a.

An additional density bonus that is an amount of floor area in square feet of residential space that is equal to or greater than the floor area of the childcare facility; or

b.

An additional incentive that contributes significantly to the economic feasibility of the construction of the childcare facility.

(2)

Requirements to qualify for additional bonus and incentive. If either the density bonus or incentive is granted in compliance with Subsection (1) of this section, the Town shall require the following as a condition of approving the housing development:

a.

The childcare facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the density bonus units are required to remain affordable in compliance with Section 17.140.070; and

b.

Of the children who attend the childcare facility, the children of very low-income households, lower income households, or families of moderate-income shall equal a percentage that is equal to or greater than the percentage of dwelling units that are required for very low-income households, lower income households, or families of moderate-income in compliance with Section 17.140.020(1).

(3)

Bonus not required when adequate childcare facilities exist. The Town shall not be required to provide a density bonus for a childcare facility in compliance with this section if it finds, based on substantial evidence, that the community has adequate childcare facilities.

(Code 1990, § 17.140.060; Ord. No. 14-02, § 4, 3-19-2014)

The units that qualified the housing development for a density bonus and other incentives or concessions shall continue to be available as affordable units in compliance with the following requirements, as required by Government Code §§ 65915(c) and 65916.

(1)

Duration of affordability. The applicant shall agree to, and the Town shall ensure the continued availability of the units that qualified the housing development for a density bonus and other incentives or concessions, as follows:

a.

Low, very low, and moderate-income units. The continued affordability of all low-, very low-, and moderate- income qualifying units shall be maintained for 30 years, or more, if a longer period continuing affordability is required by the construction or mortgage financing assistance program, mortgage insurance program, rental subsidy program, or by Town policy or ordinance.

b.

Housing development with Town funding. Where there is a direct financial contribution to a housing development through participation in cost of infrastructure, write-down of land costs, or subsidizing the cost of construction, the Town shall ensure continued availability for low- and moderate-income units for 30 years, or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, rental subsidy program, or by Town policy or ordinance.

c.

Enforcement. Continuing affordability of units that qualified the housing development for a density bonus and other incentives or concessions shall be enforced through rent regulatory agreements, resale restrictions, deeds of trust, or other documents as appropriate and acceptable to the Director and Town Attorney, recorded against the subject unit or property except to the extent that any of the requirements therein would conflict with requirements of State law.

(2)

Unit cost requirements. The rents and owner-occupied costs charged for the housing units in the development that qualify the project for a density bonus or other incentives or concessions, shall not exceed the following amounts during the period of continued availability required by this section:

a.

Low income units. Rents for the low-income density bonus units shall be set at an affordable rent as defined in Health and Safety Code § 50053; and

b.

Owner-occupied units. Owner-occupied units shall be available at an affordable housing cost as defined in Health and Safety Code § 50052.5.

(3)

Occupancy and resale of moderate-income common interest development units. An applicant shall agree to, and the Town shall ensure that the initial occupant of moderate-income units that are directly related to the receipt of the density bonus in a common interest development as defined in Civil Code § 4100, are persons and families of moderate-income, as defined in Health and Safety Code § 50093, and that the units are offered at an affordable housing cost, as defined in Health and Safety Code § 50052.5. The Town shall enforce an equity sharing agreement unless it is in conflict with the requirements of another public funding source or law. The following requirements apply to the equity sharing agreement:

a.

Upon resale, the seller of the unit shall retain the value of any improvements, the down payment, and the seller's proportionate share of appreciation.

b.

The Town shall recapture any additional subsidy and its proportionate share of appreciation, which shall then be used within five years for any of the purposes described in Health and Safety Code § 33334.2(e) that promote home ownership. For the purposes of this section:

The value of the Town's initial subsidy shall be considered equivalent to the fair market value of the home at the time of initial sale, minus the initial sale price to the moderate-income household, plus the amount of any down payment assistance or mortgage assistance. If upon resale the market value is lower than the initial market value, then the value at the time of resale shall be used as the initial market value; and

The Town's proportionate share of appreciation shall be equal to the ratio of the initial subsidy to the fair market value of the home at the time of initial sale.

(Code 1990, § 17.140.070; Ord. No. 14-02, § 4, 3-19-2014)

(a)

Permit requirement. A request for a density bonus and other incentives or concessions shall require use permit approval in compliance with Chapter 17.68. In addition, the density bonus award and other incentives or concessions shall require Council approval.

(b)

Findings for approval. A density bonus and other incentives or concessions may be approved only after all of the following findings are made. It is the responsibility of the applicant to establish evidence in support of the findings for approval.

(1)

All of the findings required for use permit approval;

(2)

A finding that the residential development is eligible for the density bonus and any incentives or concessions, parking reductions, or waivers requested;

(3)

The residential development is consistent with the general plan, except as provided by this chapter for density bonuses, and other incentives and concessions;

(4)

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

(5)

A finding that any requested incentive or concession will result in an identifiable, financially sufficient, and actual cost reduction based upon financial analysis and documentation provided, and none of the findings for denial of an incentive or concession in Section 17.140.040(b) can be made;

(6)

Adequate evidence exists to indicate that the project will provide affordable housing in a manner consistent with Government Code § 65915, or as may be amended, the purpose and intent of this chapter;

(7)

There are sufficient provisions to guarantee that the units will remain at the required affordability levels for the required time period; and

(8)

Affordable housing units would meet the required livability standards.

(Code 1990, § 17.140.080; Ord. No. 14-02, § 4, 3-19-2014)

(a)

Agreement required. Consistent with Government Code § 65917, an applicant requesting a density bonus or incentives or concessions shall agree to enter into a density bonus agreement (referred to as the "agreement") with the Town in a form approved by the Council and Town Attorney. The agreement shall be consistent with any construction or mortgage financing assistance program, mortgage insurance program, rental subsidy program, or other similar grant program requirements or terms.

(b)

Execution of agreement.

(1)

Following approval of the agreement, and execution of the agreement by all parties, the Town shall record the completed agreement on the parcels designated for the construction of designated dwelling units, at the County Recorder's office.

(2)

The approval and recordation shall take place at the same time as the final map or, where a map is not being processed, before the issuance of a building permit for the designated dwelling units.

(3)

The agreement shall be binding on all future owners, developers, or successors-in-interest for the specified term.

(Code 1990, § 17.140.090; Ord. No. 14-02, § 4, 3-19-2014)

(a)

Waiver of standards preventing the use of bonuses, incentives, or concessions.

(1)

As required by Government Code § 65915(e), the Town will not apply a development standard that will have the effect of precluding the construction of a development meeting the criteria of Section 17.140.020(1), at the densities or with the incentives or concessions allowed by this chapter.

(2)

An applicant may submit to the Town a proposal for the waiver or reduction of development and zoning standards that would have the effect of physically precluding the construction of a development utilizing a density bonus consistent with this chapter.

(3)

The applicant shall show that the waiver or reduction is necessary to make the housing units economically feasible.

(b)

Town exemption. Notwithstanding the provisions of Subsection (a) of this section, nothing in this section shall be interpreted to require the Town to:

(1)

Grant a density bonus, incentive or concession, or waive or reduce development standards, if the bonus, incentive, concession, waiver, or reduction would have a specific, adverse impact, as defined in Government Code § 65589.5(d)(2), upon health, safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact;

(2)

Grant a density bonus, incentive or concession, or waive or reduce development standards that would have an adverse impact on any real property that is listed in the State Register of Historical Resources; or

(3)

Grant a density bonus, incentive or concession, or waive or reduce a development standard that is contrary to State or Federal law.

(Code 1990, § 17.140.100; Ord. No. 14-02, § 4, 3-19-2014)