Newark Municipal Code Ch. 17.18 Affordable Housing Program

The provision of safe and stable housing for households at all income levels is essential for the public welfare of the city. Housing in the city has become steadily more expensive and housing costs have gone up faster than incomes. Federal and state government programs do not provide enough affordable housing to satisfy the needs of very low, low, or moderate income households.

As provided in the housing element of the general plan, the city wishes to retain an economically balanced community with housing available to households of all income levels, which is only possible if some of the housing built within the city is affordable to households with limited incomes.

Because new housing contributes to the demand for goods and services, it increases local employment and attracts employees, of whom a quantifiable number will have very low, low, or moderate incomes, increasing the demand for and exacerbating the shortage of housing available for people at these income levels. Further, new housing construction that does not include affordable units aggravates the existing shortage of affordable housing by absorbing the supply of available residential land. In addition, because non-residential development also attracts employees, of whom a quantifiable number will have very low, low, or moderate incomes, new non-residential development projects similarly increase the demand for and exacerbate the shortage of housing available for people at these income levels.

This chapter therefore imposes a residential and non-residential development housing impact fee to provide a means whereby developers of residential and non-residential development projects contribute to the supply of housing for households with very low, low, and moderate incomes. It also implements Program 8 in the city's 2007-2014 Housing Element, which called for amendments to the city's inclusionary housing program if problems were found due to market conditions. Because no affordable housing was produced by the city's former program, the city has adopted a housing impact fee to create a more effective affordable housing program.

(Ord. No. 503, § 1(Exh. A), 1-25-2018)

A. Application. A housing impact fee is hereby imposed on all developers of residential and non-residential development projects.

B. Calculation of Housing Impact Fee. The housing impact fee for residential and non-residential development projects shall be charged on a per square foot basis for new floor area, excluding additions to existing residential dwellings. The amount and calculation of each such fee shall be established by resolution of the city council. The city council may review the fees from time to time at its sole discretion and may, based on that review, adjust the fee amount. Housing impact fees shall not exceed the cost of mitigating the impact of the non-residential and residential projects on the need for affordable housing in the city.

C. Time of Payment. Payment of the residential and non-residential development housing impact fee shall be due at the issuance of the building permit for the development. The fees shall be calculated based on the fee schedule in effect at the time the building permit is issued.

D. Processing Requirements. No application for a building permit for any project subject to this section shall be deemed complete unless the application contains the items listed below. The director may require similar information for completeness of other city permits or licenses as necessary or convenient to implement this section:

1. A statement of the new square feet in a residential or non-residential development project to be constructed, added, or placed that are subject to the requirements of this section, together with documentation sufficient to support the application;

2. The intended use or uses for the residential or non-residential development project by new square feet; and

3. A statement of any exemptions applicable to the project.

New square footage shall be calculated on either a gross square foot or net square foot basis, as specified in the fee schedule adopted by resolution of the city council.

(Ord. No. 503, § 1(Exh. A), 1-25-2018)

This fee shall not apply to developers of residential or non-residential development projects which fall within one or more of the following categories:

A. Emergency Food and Shelter Services. Development projects to be operated by non-profit organizations and which will provide food storage, meal service, and/or temporary shelter to the homeless.

B. Specific Uses. Projects for any of the following uses:

1. Colleges and trade schools.

2. Community assembly.

3. Community garden.

4. Cultural institutions.

5. Day care centers providing care for eight or fewer persons.

6. Emergency shelter.

7. Park and recreation facilities.

8. Public works and utilities.

9. Schools.

10. Social service facilities.

11. Temporary uses.

C. Government Property. Residential or non-residential development projects located on property owned by the State of California, the United States of America, or any of its agencies and used exclusively for governmental or educational purposes.

D. Damaged Property. Any structure proposed to repair or replace a building that was damaged or destroyed by fire or other calamity, and construction of the replacement building begins within one year.

E. Vested Rights. Residential or non-residential development projects to the extent they have received a vested right to proceed without payment of housing impact fees pursuant to state law including those that are the subject of development agreements currently in effect with the city, if such development agreements were approved prior to the effective date of this chapter and where such agreements expressly preclude the city from requiring payment of the housing impact fee.

F. Prior Application. Residential or non-residential uses as set forth in an application for a building permit, use permit, rezoning or similar discretionary approval accepted as complete by the city prior to the effective date of this title; however, any extension or modification of such approval or permit after such date shall not be exempt.

G. Affordable Housing. Housing for very low, low, or moderate income households that fully mitigates the development's impacts on the need for affordable housing.

H. Chapter 17.27. Residential development projects that fulfill the requirements of Chapter 17.27.

(Ord. No. 503, § 1(Exh. A), 1-25-2018; Ord. No. 560, § 4(Exh. B), 1-22-2026)

The city council may elect to waive the payment of the impact fee if a developer of a residential or non-residential development project includes the provision of community benefits in excess of those required by the impacts of the project, and if the city council finds that the proposed benefits to the community exceed those that would be provided by the payment of the housing impact fee. Such community benefits may include the provision of senior housing, the generation of significant sales taxes, or the elimination of nuisances. If the city council elects to waive housing impact fees pursuant to this provision, the community benefits shall be guaranteed by a binding document in a form that is acceptable to the city attorney.

(Ord. No. 503, § 1(Exh. A), 1-25-2018)

A. Mitigation of Housing Impacts. The city council may adopt by resolution the percentage of affordable units needed to fully mitigate the impact of residential or non-residential projects on the need for affordable housing.

B. Residential Projects.

1. As an alternative to paying the housing impact fee, a developer of residential property may provide on-site affordable rental or for-sale residential units or an alternative housing program. Any affordable rental or for-sale units proposed as an alternative to the payment of the housing impact fee shall be subject to the requirements described in this section. The program shall be guaranteed by a binding and recorded document, such as a development agreement, in a form that is acceptable to the city attorney.

2. A developer who proposes the provision of affordable units that are rental must submit an affidavit to the city stating that any rental affordable units proposed by the developer are not subject to Civil Code Section 1954.52(a) nor any other provision of the Costa Hawkins Rental Housing Act (Civil Code Sections 1954.51 et seq.) inconsistent with controls on rents, because, pursuant to Civil Code Sections 1954.52(b) and 1954.53(a)(2), prior to approval of the residential project, the developer will enter into a contract with the city or another public agency agreeing to the limitations on rents contained in Section 17.18.050, Standards for Alternatives to Payment of Housing Impact Fee, in consideration for a direct financial contribution or any form of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division I of Title 7 of the Government Code. The developer may request that the city waive the affordable housing impact fee as a direct financial contribution to the rental residential project.

C. Non-residential Development Projects. A developer of non-residential development projects may propose an alternative affordable housing program to mitigate the impact of the development on the need for affordable housing. Any affordable rental or for-sale units proposed as an alternative to the payment of the housing impact fee shall be subject to the requirements described in Section 17.18.050, Standards for Alternatives to Payment of Housing Impact Fee. The program shall be guaranteed by a binding and recorded document, such as a development agreement, in a form that is acceptable to the city attorney.

D. Planning Commission. The alternative means of compliance shall be brought to the planning commission for its consideration. The planning commission shall consider the alternative and recommend approval, conditional approval or denial to the city council. The commission shall only recommend approval or conditional approval of the alternative means of compliance if it is able to make all of the findings set forth below:

1. The proposed alternative means of compliance fulfills the purposes of this chapter as set forth in Section 17.18.010, Purpose;

2. The proposed alternative means of compliance will further affordable housing opportunities in the city to an equal or greater extent than compliance with the requirements of Section 17.18.020, Housing Impact Fee, and will fully mitigate the impact of the project on the need for affordable housing;

3. The proposed alternative means of compliance would better address the city's needs than compliance with the requirements of Section 17.18.020, Housing Impact Fee; and

4. The proposed alternative means of compliance will not unduly concentrate affordable housing in one geographic area so as to result in housing segregation.

E. City Council. After consideration of the planning commission's recommendation, the city council may approve, conditionally approve, or deny the alternative means of compliance. The council shall only approve or conditionally approve the alternative means of compliance if it is able to make all of the findings described in Subsection D above.

(Ord. No. 503, § 1(Exh. A), 1-25-2018)

A. The for-sale and rental affordable units developed as an alternative to the payment of the housing impact fee shall be subject to a resale restriction, deed of trust, and/or regulatory agreement recorded against the property as applicable. These agreements shall have a term of fifty-five years for rental affordable units and a term of thirty years for for-sale units and shall require the affordable units to be rented to very low or low-income households at an affordable rent, or to be sold to very low, low or moderate income households at an affordable ownership cost.

B. Affordable units shall be comparable to the market rate units in a residential development as follows:

1. The affordable units shall have the same proportion of units of different bedroom sizes as provided in the residential development project as a whole;

2. The exterior appearance of the affordable units shall be indistinguishable from that of market rate units;

3. The affordable units shall be dispersed throughout the residential development project;

4. The affordable units shall be provided or have access to the same amenities as the market rate units, including air conditioning, covered garages, recreation facilities and laundry facilities; and

5. All affordable units in a residential development project or phase of a project shall be constructed concurrently with the market rate units.

(Ord. No. 503, § 1(Exh. A), 1-25-2018)

There is hereby established in the City of Newark the affordable housing fund. Separate accounts within such housing fund may be created from time to time to avoid co-mingling as required by law or as deemed appropriate to further the purposes of the fund.

A. Administration. The housing fund shall be administered by the Director, who shall have the authority to govern the housing fund consistent with this chapter and to prescribe procedures for said purpose, subject to approval by the city council.

B. Advisory Committee. The community development advisory committee shall review the status of the fund annually. As appropriate, the committee may define and prioritize recommended uses of the monies in the housing fund, subject to approval by the city council.

C. Purpose and use of funds.

1. Monies deposited in the housing fund, along with any interest earnings on such monies, shall be used solely to increase and preserve the supply of housing affordable to households of very low, low, and moderate incomes; including, but not limited to, acquisition of property and property rights, cost of construction, including costs associated with planning, administration, and design, as well as actual building or installation, as well as any other costs associated with the construction or financing of affordable housing; and reimbursement to the city for such costs if funds were advanced by the city from other sources. To the maximum extent possible, all monies should be used to provide for additional affordable housing. Monies may also be used to cover reasonable administrative expenses not reimbursed through processing fees, including reasonable consultant and legal expenses related to the establishment and/or administration of the housing fund and reasonable expenses for administering the process of calculating, collecting, and accounting for housing fees authorized by this section.

2. Monies in the housing fund may be disbursed, hypothecated, collateralized or otherwise employed for these purposes from time to time as the director and city council determine is appropriate to accomplish the purposes of the housing fund. The housing fund monies may be extended for the benefit of rental or owner occupied housing or housing services.

3. Expenditures by the director from the housing fund shall be controlled, authorized, and paid in accordance with general city budgetary policies. Execution of contracts related to the use or administration of housing fund monies shall be in accordance with standard city policy.

(Ord. No. 503, § 1(Exh. A), 1-25-2018)

A. As part of an application for the first approval of a residential or non-residential development project, a developer or applicant may request that the requirements of this chapter be waived or modified, based upon a showing that applying the requirements of this chapter would result in an unconstitutional taking of property or would result in any other unconstitutional result, or because there is no reasonable relationship between the impact of the development and the need for affordable housing. Any request for a waiver or modification shall be submitted concurrently with the project application. Failure to do so shall constitute a failure to exhaust administrative remedies. The developer or applicant shall set forth in detail the factual and legal basis for the claim, including all supporting technical documentation. Any request for a waiver or modification based on this section shall be reviewed and considered at the same time as the project application.

B. The waiver or modification may be approved only to the extent necessary to avoid an unconstitutional result, based upon legal advice provided by or at the behest of the city attorney, after adoption of written findings, based on legal analysis and the evidence. If a waiver or modification is granted, any change in the project shall invalidate the waiver or modification, and a new application shall be required for a waiver or modification pursuant to this section.

(Ord. No. 503, § 1(Exh. A), 1-25-2018)

A. Housing Impact Fee. Payment of the housing impact fee is the joint and several obligations of the applicant and the property owner for the subject residential or non-residential development project. In the event of administrative error, the city shall provide the applicant with a written notice, and the applicant shall be required to pay the fees within thirty days. The city may institute any appropriate legal actions or proceedings necessary to ensure compliance herewith, including, but not limited to, actions to revoke, deny, or suspend any permit or development approval.

B. Violations. No person shall sell or rent an affordable unit built as an alternative to the payment of the housing impact fee at a price or rent exceeding the maximum allowed under this chapter, or to a household not qualified under this chapter. Said sale or rental shall constitute a public nuisance and shall be punishable as a misdemeanor. Each month that such unit is occupied in violation of this chapter shall constitute a separate violation.

C. Enforcement. The city attorney shall be authorized to enforce the provisions of this chapter and all regulatory agreements and resale controls placed on affordable units by administrative or civil action or any other proceeding or method permitted by law. Failure of any official or agency to fulfill the requirements of this chapter shall not excuse any applicant, developer, or owner from the requirements of this chapter.

(Ord. No. 503, § 1(Exh. A), 1-25-2018)