National City Municipal Code Ch. 18.48 Residential Density Bonus and Affordable Housing Incentives

A. Intent and Purposes of Section. The intent and purposes of this chapter are to:

1. Implement the policies of the general plan's housing element for developing affordable housing for households with very low, low, and moderate incomes.

2. Encourage affordable housing units to be developed citywide and designed to be consistent with the surrounding neighborhood.

3. Implement the provisions of State Government Code Section 65915, 65915.5, 65915.7, and 65917 ("State Density Bonus Law") and any subsequent amendments thereto It is intended that density bonuses and concessions provided pursuant to this chapter are consistent with State Density Bonus Law.

(Ord. No. 2024-2529, 4-2-2024)

A. Section Definitions. Within this chapter, the following definitions shall apply:

1. "Additional incentives" means any regulatory concessions or incentives which would result in identifiable cost avoidance or reductions that are offered in addition to a density bonus, as also specified in California Government Code Subsections 65915.

2. "Density bonus" means a density increase of up to thirty-five percent over the otherwise maximum residential density allowable by the applicable zoning designation, pursuant to State Government Code Section 65915, as amended from time to time.

3. "Density bonus units" means those residential units granted pursuant to the provisions of this chapter that exceed the otherwise allowable maximum residential density for the development site.

4. "Development standard" shall have the meaning given that term by Government Code Section 65915.

5. "Financial pro forma" means a financial report for density bonus projects that shall include identifiable, financially sufficient, and actual cost reductions achieved through any requested incentives or concessions, as well as evidence that the cost reduction allows the developer to provide affordable rents or affordable sales prices.

6. "Housing development" for the purpose of this chapter means construction projects consisting of five or more residential units, including single-family, multi-family, and mobile homes for sale or rent.

7. "Lower income household" means households whose income is no more than eighty percent of the area median income of San Diego County, as established and amended time to time by Section 8 of the United States Housing Act of 1937, pursuant to Section 50079.5 of the California Health and Safety Code.

8. "Maximum residential density" means the maximum number of residential units permitted by the city's General Plan Land Use Element and Land Use Code at the time of application, excluding the provisions of this chapter. In calculating the required number of dwelling units affordable to moderate, lower, or very low-income households, any decimal fraction resulting from the applicable percent of the total units shall be rounded to the next larger whole number.

9. "Moderate income household" means households whose income does not exceed one hundred twenty percent of the area median income of San Diego County, as established and amended time to time by Section 8 of the United States Housing Act of 1937, pursuant to Section 50093 of the California Health and Safety Code.

10. "Non-restricted unit" means all units within a housing development as defined in this section, excluding the target units.

11. "Target unit" means a dwelling unit within a housing development that will be reserved for sale to or rent to, and affordable to, very low, or moderate income households, or qualifying residents.

12. "Very low-income household" means households whose income is no more than fifty percent of the area median income of San Diego County, as established and amended time to time by Section 8 of the United States Housing Act of 1937, pursuant to Section 50105 of the California Health and Safety Code.

(Ord. No. 2024-2529, 4-2-2024)

A. Applicants seeking a density bonus shall be subject to the eligibility requirements listed in this section. To be eligible for a density bonus, incentive or concession, waiver or reduction in development standards, and reduced parking ratios, a planned housing development shall contain at least one of the following:

1. Ten percent of the total units of a housing development for lower income households.

2. Five percent of the total units of a housing development for very low-income households.

3. A senior citizen housing development, as defined in Sections 51.3 and 51.12 of the California Civil Code, or a mobile home park that limits residency based on age requirements for housing for older persons pursuant to the California Civil Code.

4. Ten percent of the total dwelling units in a housing development are sold to persons and families of moderate income, as defined in Section 50093 of the Health and Safety Code, provided that all units in the development are offered to the public for purchase.

5. Ten percent of the total units of a housing development for transitional foster youth, as defined in Section 66025.9 of the California Education Code, disabled veterans, as defined in Section 18541, or homeless persons, as defined in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.). These units shall be subject to a recorded affordability restriction of fifty-five years and shall be provided at the same affordability level as very low-income units.

6. Twenty percent of the total units for lower income students in a student housing development that meets the following requirements. The units described in this subparagraph shall be subject to a recorded affordability restriction of fifty-five years:

a. All units in the student housing development will be used exclusively for undergraduate, graduate, or professional students enrolled full time at an institution of higher education accredited by the Western Associate of Schools and Colleges or the Accrediting Commission for Community and Junior Colleges. In order to be eligible under this subclause, the developer shall, as a condition of receiving a certificate of occupancy, provide evidence to the city that the developer has entered into an operating agreement or master lease with one or more institutions of higher education for the institution or institutions to occupy all units of the student housing development with students from that institution or institutions.

b. The applicable twenty percent units will be used for lower income students. For purposes of this clause, "lower income students" means students who have a household income and asset level that does not exceed the level for Cal Grant A or Cal Grant B award recipients.

c. The rent provided in the applicable units of the development for lower income students shall be calculated at thirty percent of sixty-five percent of the area median income for a single-room occupancy unit type.

d. The housing development will provide priority for the applicable affordable units for lower income students experiencing homelessness. A homeless service provider, as defined in paragraph (3) of subdivision (e) of Section 103577 of the Health and Safety Code, or institution of higher education that has knowledge of a person's homeless status may certify a person's status as homeless for purposes of this subclause.

7. One hundred percent of all units in the housing development, including total units and density bonus units, but exclusive of a manager's unit or units, are for lower income households, except that up to twenty percent of the units in the development, including total units and density bonus units, may be for moderate-income households.

B. An applicant shall be ineligible for a density bonus or any other incentives or concessions under this section if the housing development is proposed on any property that includes a parcel or parcels on which rental dwelling units are or, if the dwelling units have been vacated or demolished in the five-year period preceding the application, have been subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of lower or very low income; subject to any other form of rent or price control through a public entity's valid exercise of its police power; or occupied by lower or very low income households, unless the proposed housing development replaces those units, and either of the following applies:

1. The proposed housing development, inclusive of the units replaced pursuant to this paragraph, contains affordable units at the percentages set forth in subdivision 18.48.040.

2. Each unit in the development, exclusive of a manager's unit or units, is affordable to, and occupied by, either a lower or very low-income household.

(Ord. No. 2024-2529, 4-2-2024)

A. In applications for projects meeting the minimum threshold of five units or more, the density bonus provisions set forth in Government Code Section 65915, as amended from time to time, shall apply.

B. It is the intent of this chapter to ensure that all projects applying for the concessions and incentives of this chapter provide for affordable housing units that are comparable in size, design, and quality to the market units in the same project. The city manager or his/her designee, unless otherwise specified, shall have the discretion and authority to enforce this provision during the application process.

C. An applicant shall agree to, and the city shall ensure, the continued affordability of all very low- and low-income rental units that qualified the applicant for the award of the density bonus for fifty-five years, or longer if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program.

(Ord. No. 2024-2529, 4-2-2024)

A. Requests for Incentives and Concessions. In applications for projects meeting the minimum threshold of five units or more, concessions and incentives including reductions in site development standards, modifications of zoning code or architectural design requirements, and other incentives or concessions defined in Government Code Section 65915(1) may be requested, consistent with the parameters enumerated below.

B. Development Standards. Applicants may seek a waiver or modification of development standards that will have the effect of precluding the construction of a residential development meeting the criteria of Government Code Section 65915 at the densities or with the incentives or concessions permitted by that section.

C. Financial Incentives. Nothing in this section requires the city to provide direct financial incentives for the residential development, including but not limited to the provision of publicly owned land, waiver of fees, off-site improvements, or dedication requirements.

D. Density Calculations. All density calculations resulting in fractional units shall be rounded up to the next whole number. A general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval shall not be required.

E. Concessions and Incentives.

1. An applicant for a density bonus may submit to the City a proposal for the specific incentives or concessions that the applicant requests pursuant to this section, and may request a meeting with the City. The City shall grant the concession or incentive requested by the applicant unless the City makes a written finding, based upon substantial evidence, of any of the following:

a. The concession or incentive does not result in identifiable and actual cost reductions 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 subdivision 18.48.030.

b. The concession or incentive would have a specific adverse impact upon public health and safety, or the physical environment, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact.

c. The concession or incentive would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety 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-income and moderate-income households.

d. The concession or incentive would be contrary to state or federal law.

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

a. One incentive or concession for planned housing developments that include at least ten percent of the total units for lower income households, at least five percent for very low-income households, or at least ten percent for persons and families of moderate income in a development for which the units are for sale.

b. Two incentives or concessions for planned housing developments that include at least seventeen percent of the total units for lower income households, at least ten percent for very low-income households, or at least twenty percent for persons and families of moderate income in a development for which the units are for sale.

c. Three incentives or concessions for planned housing developments that include at least twenty-four percent of the total units for lower income households, at least fifteen percent for very low-income households, or at least thirty percent for persons and families of moderate income in a development for which the units are for sale.

d. Five incentives or concessions for planned housing developments meeting the criteria of subparagraph (7) of paragraph (A) of subdivision 18.48.030. If the planned housing development is located within one-half mile of a major transit stop, the applicant shall also receive a height increase of up to three additional stories, or thirty-three feet.

e. One incentive or concession for projects that include at least twenty percent of the total units for lower income students in a student housing development.

f. Four incentives or concessions for projects that include at least sixteen percent of the units for very low income households or at least forty-five percent for persons and families of moderate income in a development in which the units are for sale.

F. Waivers of Development Standards that Physically Preclude Construction.

1. An applicant may submit to the City a proposal for the waiver or reduction of development standards that will have the effect of physically precluding the construction of a housing development that meets the criteria of subdivision 18.48.030.

2. A proposal for the waiver or reduction of development standards pursuant to this section shall neither reduce nor increase the number of incentives or concessions to which the applicant is entitled pursuant to subparagraph (E) of subdivision 18.48.050.

G. Density Bonus Amount. The City shall grant one Density Bonus, the amount of which is specified in this subsection, when an Applicant seeks and agrees to construct a housing development that meets the standards and criteria of the following specified housing unit types, detailed in subdivision 18.48.030.

1. Common Interest Development.

a. A common interest development in which ten percent of the total dwelling units are restricted for persons and families of moderate income, provided that all units in the development are offered to the public for purchase, shall be eligible for the following density bonus:

2. A housing development in which ten percent of the total units are restricted for lower income households.

3. A development in which five percent of the total units are restricted for very low-income households.

4. For housing developments consistent with Section 18.48.030 (A)(3), a senior citizen housing development or a mobilehome park that limits residency based on age, the density bonus shall be twenty percent of the number of senior housing units.

5. For housing developments consistent with Section 18.48.030 (A)(5),a development with units that are restricted for transitional foster youth, disabled veterans, or homeless persons,, the density bonus shall be twenty percent of the number of the type of units giving rise to a density bonus under that subparagraph.

6. For housing developments consistent with Section 18.48.030 (A)(6), student housing developments, the density bonus shall be thirty-five percent of the student housing units.

7. For housing development consistent with Section 18.48.030 (A)(7), the following shall apply:

a. Except as otherwise provided in clause (b), the density bonus shall be eighty percent of the number of units for lower income households.

b. No maximum density controls shall be placed if the development is located within one-half mile of a major transit stop.

8. Land donation.

a. When an applicant for a tentative subdivision map, parcel map, or other residential development approval donates land to the City in accordance with this subdivision, the applicant shall be entitled to a fifteen percent increase above the otherwise maximum allowable residential density for the entire development, as follows:

b. This density bonus increase shall be in addition to any increase in density mandated by Section 18.48.030 (A), up to a maximum combined mandated density increase of thirty-five percent if an applicant seeks an increase pursuant to both this subparagraph and Section 18.48.030(A). All density calculations resulting in fractional units shall be rounded up to the next whole number. An applicant shall be eligible for the increased density bonus described in this subparagraph if all of the following conditions are met:

i. 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.

ii. 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 of the number of residential units of the planned housing development.

iii. The transferred land is at least one acre in size or of sufficient size to permit development of at least forty units, has the appropriate general plan designation, is appropriately zoned with appropriate development standards for development at the density described in paragraph (3) of subdivision (c) of Section 65583.2 of the California Government Code, and is or will be served by adequate public facilities and infrastructure.

iv. The transferred land shall have 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, not later than the date of approval of the final subdivision map, parcel map, or residential development application.

v. The transferred land and the affordable units shall be subject to a deed restriction ensuring continued affordability of the units consistent with California Government Code Section 65915 (c)(1) and (2), which shall be recorded on the property at the time of the transfer.

vi. The land is transferred to the local agency or to a housing developer approved by the Housing Authority. The local agency may require the applicant to identify and transfer the land to the developer.

vii. The transferred land shall be within the boundary of the planned housing development or, if the Housing Authority agrees, within one-quarter mile of the boundary of the planned housing development.

viii. A proposed source of funding for the very low-income units shall be identified not later than the date of approval of the final subdivision map, parcel map, or residential development application.

9. Childcare Facility.

a. When an applicant proposes to construct a housing development that conforms to the requirements of subdivision 18.48.030 and includes a childcare facility that will be located on the premises of, as part of, or adjacent to, the project, either of the following shall be granted:

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

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

b. As a condition of approving the housing development that includes a childcare facility, the following shall occur:

1. 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 pursuant to California Government Code Section 65915 (c).

2. 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 pursuant to Section 18.48.030 (A).

H. Parking.

1. Except as provided in Subsections (2), (3), and (4), upon the request of the developer, a vehicular parking ratio, inclusive of parking for persons with a disability and guests, shall not be required of a housing development that exceeds the following ratios:

a. Zero to one bedroom: one onsite parking space.

b. Two to three bedrooms: one and one-half onsite parking spaces.

c. Four and more bedrooms: two and one-half parking spaces.

2. Notwithstanding subparagraph (1), if a housing development includes at least twenty percent low-income units for housing developments meeting the requirements of Section 18.48.030 (A)(1), or at least 11 percent very low-income units for housing developments meeting the criteria of Section 18.48.030(A)(2),, is located within one-half mile of a major transit stop, and there is unobstructed access to the major transit stop from the housing development, then, upon the request of the developer, the city shall not impose a vehicular parking ratio, inclusive of parking for persons with a disability and guests, that exceeds 0.5 spaces per unit. Notwithstanding subparagraph (1), if a development includes at least forty percent moderate-income units for housing development meeting the criteria of Section 18.48.030 (A)(4), is located within one-half mile of a major transit stop, as defined in subdivision (b) of Section 21155 of the Public Resources Code, and the residents of the development have unobstructed access to the major transit stop from the development then, upon the request of the developer, the city shall not impose a vehicular parking ration, inclusive of parking for persons with disability and guests, that exceeds 0.5 spaces per bedroom.

3. Notwithstanding subparagraph (1), if a development meets the criteria of Section 18.48.030 (A)(7), then, upon the request of the developer, the city shall not impose vehicular parking standards if the development meets any of the following criteria:

a. The housing development is located within one-half mile of a major transit stop and there is unobstructed access to the major transit stop from the housing development.

b. The housing development is a for-rent housing development for individuals who are fifty-five years of age or older that complies with Section 51.2 and 51.3 of the Civil Code and the housing development has either paratransit service or unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times per day.

c. The development is either a special needs housing development, as defined in Section 51312 of the Health and Safety Code, or a supportive housing development, as defined in Section 50675.14 of the Health and Safety Code. A development that is a special needs housing development shall have either paratransit service or unobstructed access, within one-half mile, to fixed bus route service that operates at least eight times a day.

4. If the total number of parking spaces required for a housing development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subdivision, a housing development may provide onsite parking through tandem parking or uncovered parking, but not through on-street parking.

(Ord. No. 2024-2529, 4-2-2024)

A. Application Conference. Prior to submitting an application, an applicant proposing a housing development pursuant to this section shall schedule a pre-application conference with appropriate planning and/or housing division staff. The applicant should provide the following information:

1. A brief description of the proposed development, including at a minimum the total number of units, total number of target units, and total number of density bonus units proposed.

2. The combined general plan/zoning designations and assessor parcel number(s) of the project site.

3. A vicinity map and preliminary site plan, drawn to scale, including building footprints, driveway and parking layout.

4. If an additional incentive(s) is requested, the application should describe why the additional incentive(s) is necessary to ensure affordability of the target units and density bonus units proposed.

B. Application/Processing. Requests for a density bonus and/or additional incentive(s) pursuant to this section shall be submitted to the planning division and processed pursuant to procedures in Division 1 for approval of a conditional use permit and concurrently with any other application(s) required for the development. In addition, applications shall include the following:

1. A description of any requested density bonuses, incentives, concessions, waivers or modifications of development standards, or modified parking standards.

2. Identification of all affordable units qualifying for the project for a density bonus, and level of affordability of all affordable units.

3. For waivers or modifications of development standards: evidence that the imposition of the development standards for which a waiver is requested will have the effect of precluding the construction of the residential development at the densities or with the incentives or concessions permitted by Government Code Section 65915.

C. Findings for Approval. Before any density bonus and/or additional incentive is granted, the approving authority shall make the following findings:

1. The residential development is eligible for a density bonus and any concessions, incentives, waivers, modifications, or reduced parking standards requested.

2. The residential development conforms to all standards for affordability included in this chapter.

3. If a waiver or modification is requested, the applicant has shown that the imposition of the development standards sought to be waived or modified will have the effect of physically precluding the construction of the development at the densities or with the incentives or concessions otherwise permitted by this chapter.

D. Findings for Denial—Concessions, Incentives, Waivers, Modifications.

1. Concessions or Incentives. The city may deny one or more requested concessions or incentives if, based on substantial evidence, the city makes either of the following findings:

a. The concession or incentive is not required 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 Section 65915(c); or

b. The concession or incentive would have a specific adverse impact, as defined in Government Code Section 65598.5(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 rending the development unaffordable to very low, low, and moderate income households.

2. Waivers and Modifications. The city may deny one or more requested waivers or modifications if the city makes either of the following findings:

a. The waiver or modification would have a specific adverse impact, as defined in Government Code Section 65598.5(d)(2), upon public health and safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact; or

b. The waiver or modification would have a specific adverse impact on any real property that is listed in the California Register of Historical Resources.

E. Deed Covenant. Approval of a density bonus and/or additional incentive(s) pursuant to this section shall require the recordation of a deed covenant recorded against the property to ensure the target unit(s) is maintained for affordability for the time period required prior to final map recordation or prior to the issuance of a building permit, if no subdivision of property is involved.

F. Appeal Procedure. The decision of the planning commission to approve or deny a request for a density bonus, additional incentive(s), and/or waivers or modifications of development standards pursuant to this section may be appealed to the city council pursuant to procedures for appeal of other discretionary permit applications that are concurrently considered, or if no other discretionary permit applications are concurrently considered, the decision of the planning commission may be appealed pursuant to procedures specified in Section 18.12.110 (Conditional Use Permits) of the Land Use Code.

(Ord. No. 2024-2529, 4-2-2024)

A. Agreement with the City. Applicants/developers requesting a density bonus shall enter into a density bonus housing agreement with the city. The terms of the draft agreement shall be approved by the executive director of the community development commission of the city of National City or his designee.

B. Recordation. Following execution of the agreement by all parties, the completed density bonus housing agreement, or memorandum thereof, shall be recorded with the County of San Diego Recorders Office, and the conditions therefore filed and recorded on the parcel or parcels designated for construction of target units and a copy of the recorded document shall be provided to the city. Recordation of the agreement shall occur prior to recordation of a final map or prior to issuance of building permits, whichever occurs first. The density bonus housing agreement shall be binding to all future owners and successors in interest during the term of the agreement, unless rescinded by the city upon completion of terms of the agreement.

C. Provisions of Agreement. The density bonus housing agreement shall include at least the following:

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

2. A description of the household income group to be accommodated by the housing development, as outlined in Section 18.48.060 of this chapter, and the standards for determining the corresponding affordable rent or affordable sales price and housing cost.

3. The location, unit sizes (square feet), and number of bedrooms of target units.

4. Tenure of use restrictions for target units of at least ten or thirty years, in accordance with Section 18.48.060 of this chapter.

5. A schedule for completion and occupancy of target units.

6. A description of the density bonus, additional incentive(s) or equivalent financial incentives being provided by the city.

7. A requirement to submit to the executive director of the community development commission of the city of National City or his designee for review and approval of an affirmative marketing plan, which details the actions the developer/applicant shall take to provide information and otherwise attract eligible persons to the available housing units without regard to race, sex, sexual orientation, marital status, familial status, color, religion, national origin, ancestry, handicap, age, or any other category which may be defined by law now or in the future.

8. A description of remedies for breach of the agreement by either party. The city may identify tenants or qualified purchasers as third party beneficiaries under the agreement.

9. Other provisions to ensure implementation and compliance with this section.

10. Provision allowing payment of fee by applicant to the city to recover their administrative expenses.

D. For-Sale Housing Developments. In the case of for-sale housing developments, the density bonus housing agreement shall provide for the following conditions governing the initial sale and use of target units during the applicable use restriction period:

1. Target units shall, upon initial sale, be sold to eligible very low, low, or moderate income households at an affordable sales price and housing cost, or to qualified residents (i.e., maintained as senior citizen housing) as defined by this chapter.

2. Target units shall be initially owner-occupied by eligible very low, low, or moderate households, or by qualified residents in the case of senior citizen housing.

3. Target units, if later rented by the owner, shall be made available to eligible very low, low, or moderate income households at an affordable rent or to qualified residents (i.e., senior citizens) as defined by this chapter.

4. The initial purchaser of each target unit shall execute an instrument or agreement approved by the city restricting the sale or rental of the target unit in accordance with this title during the applicable use restriction period. Such instrument or agreement shall be recorded against the parcel containing the target unit and shall contain such provisions as the city may require to ensure continued compliance with this chapter and the state density bonus law.

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

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

2. Property owners shall be required to verify tenant incomes on an annual basis and maintain books and records to demonstrate compliance with this chapter.

3. Property owners shall be required to submit an annual report to the city, which includes the name, address, household size, and income of each household occupying target units, and which identifies the bedroom size and monthly rent or cost of each target unit.

4. Property owners shall be required to allow a city representative to inspect each unit annually at a minimum to ensure that units are being maintained to local Code and the Department of Housing and Urban Development (HUD) Housing Quality Standards.

(Ord. No. 2024-2529, 4-2-2024)