Manhattan Beach Municipal Code § 10.94.040 Affordable housing concessions and incentives

A. State Law Governs. The provisions of this chapter shall be governed by the requirements of Government Code Section 65915, as that statute is amended from time-to-time. Where conflict occurs between the provisions of this chapter and State law, the State law provisions shall govern, unless otherwise specified.

B. Compatibility. All affordable housing units shall be dispersed within market-rate projects whenever feasible. Affordable housing units within market-rate projects shall be comparable with the design and use of market-rate units in appearance, use of materials, and finished quality. The design and appearance of the affordable housing units shall be compatible with the design of the total housing project and consistent with the surrounding neighborhood. Forms, materials and proportions that are compatible with the character of the surroundings shall be used.

C. Availability. All affordable housing units shall be constructed concurrently with, and made available for qualified occupants at the same time as, the market-rate housing units within the same project unless both the City and the developer agree in the affordable housing agreement to an alternative schedule for development.

D. Affordable Housing Agreement. An affordable housing agreement shall be made a condition of the planning permits for all projects granted a density bonus, pursuant to this chapter. The agreement shall be recorded as a restriction on the parcel or parcels on which the affordable housing units will be constructed. The agreement shall be consistent with Section 10.94.050(D), affordable housing agreement required.

E. Median Income Levels. For the purpose of determining the income levels for households under this chapter, the City shall use the Los Angeles County income limits found in Title 25, Section 6932 of the California Code of Regulations, and regularly updated and published by the State Department of Housing and Community Development, or other income limits adopted by the City Council if the State Department of Housing and Community Development fails to provide regular updates.

F. Effect of Granting Density Bonus. The granting of a density bonus shall not, in and of itself, be interpreted to require a general plan amendment, zoning change, or other discretionary approval.

(§ 14, Ord. 13-0006, eff. August 1, 2013)

A. Density Bonus. Pursuant to Government Code Section 65915, the City shall grant a density bonus in the following amounts over the otherwise allowable maximum residential density permitted by this chapter and the General Plan, and at least one (1) or more of the affordable housing Incentives, as set forth in Section 10.94.040 ("affordable housing concessions and incentives"), if the applicant agrees or proposes to construct any one (1) of the following:

1. Lower Income Units. A density bonus of twenty percent (20%) if ten percent (10%) of the total units of a housing development are target units affordable to lower income households, as defined in Section 50079.5 of the Health and Safety Code.

2. Very Low Income Units. A density bonus of twenty percent (20%), if five percent (5%) of the total units of a housing development are Target Units affordable to very low income households, as defined in Section 50105 of the Health and Safety Code.

3. Senior Citizen Housing Development. A density bonus of twenty percent (20%), if a housing development qualifies as a senior citizen housing development, as defined in Section 51.3 of the Civil Code.

4. Moderate Income Units in Condominium and Planned Unit Developments. A density bonus of five percent (5%) if ten percent (10%) of the total dwelling units in a condominium project, as defined in subdivision (f) of, or in a planned development, as defined in subdivision (k) of Section 1351 of the Civil Code, are Target Units affordable to persons and families of moderate income, as defined in Section 50093 of the Health and Safety Code.

5. Housing Accompanied by Land Donation. A density bonus of fifteen percent (15%), if a housing developer agrees to donate land to the City, subject to the requirements of Section 10.94.060 ("density bonuses for housing developments accompanied by land donation").

B. Applicability. The provisions of subsection A shall be applicable to residential projects of five (5) or more units, and senior citizen housing developments of at least thirty-five (35) units.

C. Calculation of Density Bonuses.

1. Density Bonus Units. When calculating the number of permitted density bonus units, all fractional units shall be rounded up to the next whole number. The density bonus shall not be included when determining the number of target affordable or senior housing units to be provided in a development project;

2. Sliding Scale for Greater Density Bonus. An applicant is entitled to receive a bonus larger than the percentages specified in subsection A if the percentage of affordable housing exceeds the percentages specified in subsection A, subject to the following provisions:

a. Lower Income Dwellings. For each additional one percent (1%) increase above ten percent (10%) in the proportion of units affordable to lower income households, the density bonus shall be increased by one and one-half percent (1.5%) up to a maximum of thirty-five percent (35%) of the maximum allowable residential density for the site.

b. Very Low Income Dwellings. For each additional one percent (1%) increase above five percent (5%) in the proportion of units affordable to very low income households, the density bonus shall be increased by two and one-half percent (2.5%) up to a maximum of thirty-five percent (35%) of the maximum allowable residential density for the site.

c. Condominium and Planned Unit Developments. For each additional one percent (1%) increase above ten percent (10%) in the proportion of units affordable to moderate income households in condominium and planned unit developments, the density bonus shall be increased by one percent (1%) up to a maximum of thirty-five percent (35%) of the maximum allowable residential density for the site.

d. Housing Accompanied by Land Donation. For each additional one percent (1%) increase above the minimum ten percent (10%) land donation described in Section 10.94.060 ("density bonuses for housing developments accompanied by land donation"), the density bonus shall be increased by one percent (1%), up to a maximum of thirty-five percent (35%) of the maximum allowable residential density for the site.

D. Applicant May Request Smaller Density Bonus. Notwithstanding the foregoing, the City may award a smaller density bonus than specified in this section if the applicant so requests.

(§ 14, Ord. 13-0006, eff. August 1, 2013)

A. Density Bonus. When an applicant proposes to construct a housing development that conforms to the requirements of Section 10.94.020(A) ("density bonus"), and includes a childcare facility other than a family day care home that will be located on the premises of, as part of, or adjacent to, the project, the City shall grant either of the following:

1. Additional Density Bonus. A density bonus of additional residential units equal in square footage to the amount of square feet of the childcare facility, or

2. Additional Concession or Incentive. An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the childcare facility.

B. Conditions of Approval. The City shall require as a condition of approving the housing development that the following occur:

1. Length of Operation. The childcare facility remains in operation for a period of time that is as long as, or longer than, the length of time during which Section 10.94.050(B) ("duration of affordability of rental units") requires that the affordable housing units remain affordable.

2. Attending Children. The percentage of children of very low, low or moderate income households who attend the childcare facility shall be the same or greater than the percentage of dwelling units in the project that are required for households at each income level, pursuant to Section 10.94.030(A) ("density bonus").

C. Exceptions. The City shall not be required to provide a density bonus or concession for a childcare facility if it finds that, based upon substantial evidence, the community has adequate childcare facilities.

(§ 14, Ord. 13-0006, eff. August 1, 2013)

A. Number of Incentives or Concessions. In addition to a density bonus, an applicant is entitled to receive incentives or concessions as follows:

1. One (1) incentive or concession for projects that include at least ten percent (10%) of the total units for lower income households, at least five percent (5%) for very low income households, or at least ten percent (10%) for persons and families of moderate income in a condominium or planned development, or

2. One (1) incentive or concession for senior citizen housing developments, or

3. Two (2) incentives or concessions for projects that include at least twenty percent (20%) of the total units for lower income households, at least ten percent (10%) for very low income households, or at least twenty percent (20%) for persons and families of moderate income in a condominium or planned development, or

4. Three (3) incentives or concessions for projects that include at least thirty percent (30%) of the total units for lower income households, at least fifteen percent (15%) for very low income households, or at least thirty percent (30%) for persons and families of moderate income in a condominium or planned development.

B. Proposal of Incentives and Findings. An applicant may propose specific incentives or concessions that would contribute significantly to the economic feasibility of providing affordable units pursuant to this chapter and state law. In addition to any increase in density to which an applicant is entitled, the City shall grant one or more incentives or concessions that an applicant requests, up to the maximum number of incentives and concessions required pursuant to subsection A, unless the City makes a written finding that either:

1. The concession or incentive is not necessary in order to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in Government Code Section 65915(c), or

2. The concession or incentive would have a specific adverse impact, as defined in Government Code Section 65589.5(d)(2), upon public health and safety or the physical environment or on any real property that is listed in the California 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 concession or incentive would be contrary to state or federal law.

C. Types of Incentives. Incentives provided pursuant to this chapter may consist of any combination of the items listed below. In addition to the incentives listed, the City may allow for fast track and priority processing for a project with affordable housing.

1. Modification of Development Standards. Up to twenty percent (20%) in modification of site development standards or zoning code requirements that exceeds minimum building code standards and fire code standards, including, but not limited to:

a. Reduced minimum lot sizes and/or dimensions.

b. Reduced minimum building setbacks and building separation requirements.

c. Reduced minimum outdoor and/or private outdoor living area requirements.

d. Increased maximum lot coverage.

e. Increased building height.

2. Reduced Parking.

a. Upon the applicant's request, the City shall allow a reduction in required parking, excluding handicapped parking. For a development that receives a density bonus pursuant to this chapter, the City shall not require a parking ratio that exceeds the following:

i. One (1) on-site space for zero (0) to one (1) bedroom units;

ii. Two (2) on-site spaces for two (2) to three (3) bedroom units;

iii. Two and one-half (2.5) spaces for four (4) or more bedroom units.

b. 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.

c. At the applicant's request, tandem parking may be counted toward meeting these parking requirements.

3. Mixed Use Zoning. 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 such uses are compatible with the housing project and the surrounding area.

4. Other Incentives. Other regulatory incentives or concessions proposed by the developer or the City that result in identifiable cost reductions or avoidance.

D. Additional Incentives. The City may allow for additional affordable housing incentives to be granted on a case-by-case basis, when requested by an applicant when more than fifty percent (50%) of the affordable housing units provided contain three (3) or more bedrooms to meet the needs of large families.

(§ 14, Ord. 13-0006, eff. August 1, 2013)

A. Application and Review Process. A preliminary review of development projects proposed pursuant to this chapter is encouraged to identify potential application issues, including proposed modifications to development standards. The applicant shall request in the application the incentives the applicant wishes to obtain. The application shall include financial data showing how the incentives are necessary to make the affordable units feasible. Applications shall be reviewed and processed according to the provisions of Chapter 10.12 ("residential districts").

B. Duration of Affordability of Rental Units. All lower income and very low income housing units shall be kept affordable for a minimum period of thirty (30) years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program, consistent with state law.

C. Definition of Affordability. Those units targeted for lower income households as defined in Section 10.94.020 ("state affordable housing density bonus"), shall be affordable at a rent that does not exceed thirty percent (30%) of sixty percent (60%) of the area median income. Units targeted for very low income households shall be affordable at a rent that does not exceed thirty percent (30%) of fifty percent (50%) of area median income. Units targeted for moderate income households shall be affordable at a rent that does not exceed thirty-five percent (35%) of one hundred ten percent (110%) of area median income. Median income levels shall be the income limits for Los Angeles County households as provided for in Section 10.94.010.E ("median income levels").

D. Affordable Housing Agreement Required. All affordable housing projects shall be subject to the approval of an affordable housing agreement conforming to the provisions of Title 7, Division 1, Chapter 4, Article 2.5 of the Government Code, which shall be recorded as a covenant on the title to the Property. The terms of the agreement shall be reviewed and revised as appropriate by the Director and/or City Attorney, who shall formulate a recommendation to the Planning Commission for final approval. This agreement shall include, but is not limited to, the following:

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

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

3. Target Group. A description of the household income groups to be accommodated by the project and a calculation of the affordable rent or sales price, or a commitment to provide a senior citizen housing development.

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

5. Schedule. A schedule for the completion and occupancy of the affordable housing units.

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

7. Required Term of Affordability. For lower income and very low income units, duration of affordability of the housing units, pursuant to Section 10.94.050(B) ("duration of affordability of rental units"). Provisions should also cover resale control and deed restrictions on targeted housing units that are binding on property upon sale or transfer, in accordance with the requirements of Government Code Section 65915.

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 distribution of accrued equity for for-sale units.

9. Other Provisions. Other provisions to ensure implementation and compliance with this chapter and state law.

10. Condominium and Planned Unit Developments. In the case of condominium and planned unit developments, the affordable housing agreement shall provide for the following conditions governing the initial sale and initial resale and use of affordable housing units:

a. Target units shall, upon initial sale, be sold to eligible very low, lower, or moderate income households at an affordable sales price and housing cost, or to qualified residents as defined by this chapter.

b. Target units shall be initially owner-occupied by eligible very low, lower, or moderate income households.

c. Upon resale, the seller of a target unit shall retain the value of any improvements, the down payment, and the seller's proportionate share of appreciation. The City shall recapture its proportionate share of appreciation, which shall be used to promote home ownership opportunities as provided for in Health and Safety Code Section 33334.2. The City's proportionate share shall be equal to the percentage by which the initial sale price to the targeted household was less than the fair market value of the dwelling unit at the time of initial sale.

11. Rental Housing Developments. In the case of rental housing developments, the affordable housing agreement shall provide for the following conditions governing the use of target units during the use restriction period:

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

b. Provisions requiring owners to verify tenant incomes and maintain books and records to demonstrate compliance with this chapter.

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

E. Notice of Conversions. Notice of conversions of affordable units to market-rate units shall be provided pursuant to the following requirements:

1. General. At least a one (1) year notice shall be required prior to the conversion of any rental units for affordable households to market-rate.

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

a. The City;

b. The State Housing and Community Development Department (HCD);

c. The Los Angeles County Housing Authority;

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

e. Any other person deemed appropriate by the City.

F. Conversion of Affordable Rental Units. If an owner of a housing development issues a notice-of-intent to convert affordable housing rental units to market-rate housing, the City shall consider taking one (1) or more of the following actions:

1. Meet with the owner to determine the owner's financial objectives;

2. Determine whether financial assistance to the current owner will maintain the affordability of the rental housing development or whether acquisition by another owner dedicated to maintaining the affordability of the development would be feasible; and

3. If necessary to maintain the affordability of the housing unit or facilitate sale of the rental development, consider the use of assistance in accessing state or federal funding.

(§ 14, Ord. 13-0006, eff. August 1, 2013)

The City shall grant a density bonus pursuant to Section 10.94.020 ("state affordable housing density bonus") to a housing development if the applicant agrees to donate land to the City and the applicant satisfies all of the following requirements:

A. The applicant donates and transfers the land no later than the date of approval of the final subdivision map, parcel map, or residential development application;

B. The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households in an amount not less than ten percent (10%) of the number of residential units of the proposed development;

C. The transferred land is at least one (1) acre in size or of sufficient size to permit development of at least forty (40) units, has the appropriate general plan designation, is appropriately zoned for development as affordable housing, and is or will be served by adequate public facilities and infrastructure, as determined by the Director;

D. The transferred land has appropriate zoning and development standards to make the development of the affordable units feasible, as determined by the Director;

E. Prior to the date of approval of the final subdivision map, parcel map, or of the residential development, the transferred land has all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land, except that the City may subject the proposed development to subsequent design review if the design is not reviewed by the City prior to the time of transfer;

F. The transferred land and the affordable units shall be subject to a deed restriction ensuring continued affordability of the units meeting the requirements of an affordable housing agreement as set forth in Section 10.94.050(D) ("affordable housing agreement required");

G. The land is transferred to the City or to a housing developer approved by the City. The City may require the applicant to identify and transfer the land to the developer; and

H. The transferred land is within the boundary of the proposed development or, if the City agrees, within one-quarter (¼) mile of the boundary of the proposed development.

(§ 14, Ord. 13-0006, eff. August 1, 2013)