Chapter 20.32 — DENSITY BONUS

The purpose of this chapter is not intended to expand the requirements of Government Code Sections 65915 through 65918, as the same may be amended from time to time, but rather to provide a means for granting density bonuses and incentives as required by State law. This chapter provides regulations for considering density bonus and incentive requests for the development of housing that is affordable to extremely low-, very low-, low-, and moderate- income households, foster youth, disabled veterans, homeless persons, lower-income students, senior citizens, and childcare. (Ord. 2022-18 § 1 (Exh. A), 2022)

As used in this chapter, the following words shall have the following meanings:

A. “Affordable housing” means housing for which the allowable housing expenses paid by a
qualifying household shall not exceed a specified fraction of the county median income,
adjusted for household size. This includes housing designated for extremely low-, very
low-, low-, and moderate-income households.

B. “Childcare facility” means a child day care facility, other than a family day care home,
including, but not limited to, infant centers, preschools, extended day care facilities, and
school-age childcare center. “Childcare facility” does not include public or private primary
or secondary education facilities.

C. “Condominium conversion” means the conversion of apartments, or other rental units, into
ownership property that consists of an undivided interest in common in a portion of real
property coupled with a separate interest within the boundaries of the dwelling unit.

D. “Density bonus” means a density increase over the maximum allowable residential density
under applicable zoning and Land Use Element of the General Plan as of the date of
application.

E. “Development standard” means a site or construction condition, including, but not limited
to, a height limitation, setback requirement, floor area ratio, an on-site open-space
requirement, or a parking ratio that applies to a housing development pursuant to any
ordinance, General Plan policy, specific plan, or other local condition, law, policy,
resolution, or regulation. Development standard shall not mean an impact fee, inclusionary
housing requirement, or dedication of land.

F. “Disabled veteran” means any veteran who is currently declared by the United States
Veterans Administration to be ten (10) percent or more disabled as a result of service in the
armed forces. Proof of such disability shall be deemed conclusive if it is of record in the
United States Veterans Administration.

G. “Equivalent financial value” means an incentive that would result in a reduction in cost to
the developer/property owner based upon the land cost per dwelling unit and shall be
calculated based upon the difference in the value of the land with and without the density
bonus.

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City of Newport Beach, CA § 20.32.020 PLANNING AND ZONING § 20.32.030

H. “Equivalent size” means that the replacement units specified in Section 20.32.120 contain
at least the same total number of bedrooms as the units being replaced.

I. “Foster youth” means a person in California whose dependency was established or continued by a court of competent jurisdiction, including a tribal court, on or after the youth’s 13th birthday and who is no older than twenty-five (25) years of age at the commencement of the academic year.

J. “Homeless person” shall have the same meaning as that phrase is defined in Section 11302
of the Federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Ch. 119).

K. “Housing development” means a development project for five or more residential dwelling
units, including mixed-use developments, subdivisions, or common interest development.
A “housing development” may consist of residential units, unimproved residential lots, a
project to substantially rehabilitate and convert an existing commercial building to
residential use, or the substantial rehabilitation of an existing multifamily dwelling where
the result of the rehabilitation would result in a net increase in available residential units.
For purposes of calculating a density bonus, the residential units shall be on contiguous
sites that are the subject of one development application but may include more than one
subdivision map.

L. “Lower-income student” means a student who has a household income and asset level that
does not exceed the level for Cal Grant A or Cal Grant B award recipients as set forth in
California Education Code Section 69432.7(k)(1). The eligibility of a student to occupy a
unit for lower-income students under this section shall be verified by an affidavit, award
letter, or letter of eligibility provided by the institution of higher education in which the
student is enrolled or by the California Student Aid Commission that the student receives
or is eligible for financial aid, including an institutional grant or fee waiver from the college
or university, the California Student Aid Commission, or the Federal government.

M. “Major transit stop” means a site containing an existing rail transit station or the
intersection of two or more major bus routes with a frequency of service interval of fifteen
(15) minutes or less at the intersection of the two routes during both the morning and
afternoon peak commute hours.

N. “Natural or constructed impediments” means a hindrance or obstruction that prevents
pedestrian or bicycle access to a major transit stop. Natural or constructed impediments
include, but are not limited to, freeways, rivers, mountains, harbors, and bodies of water,
but do not include residential structures, shopping centers, parking lots, or rails used for
transit.

O. “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable
impact, based on objective, identified written public health or safety standards, policies, or
conditions as they existed on the date the application was deemed complete. The following
shall not constitute a specific, adverse impact upon the public health or safety: (1)
inconsistency with the zoning or General Plan land use designation; or (2) the eligibility to
claim a welfare exemption under California Revenue and Taxation Code Section 214(G).

P. “Unobstructed access” means that the income qualified resident of the housing
development is able to walk or bike to or from the residence without trespassing or
otherwise encountering natural or constructed impediments.
(Ord. 2022-18 § 1 (Exh. A), 2022; Ord. 2023-22 § 906, 2023)

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City of Newport Beach, CA § 20.32.030 NEWPORT BEACH CODE § 20.32.030

A. To be eligible for a density bonus, incentive(s) or concession(s), or waiver or reduction of development standard(s) as provided by this chapter, a housing development or condominium conversion shall include only one of the following requirements and satisfy all other applicable provisions of this Zoning Code:

1. A minimum of five percent of the total number of units of a housing development
shall be restricted and affordable to very low-income house-holds.

2. A minimum of ten (10) percent of the total number of units of a housing development
shall be restricted and affordable to low-income households.

3. A minimum of ten (10) percent of the total units in a for-sale housing development
shall be restricted and affordable to moderate-income house-holds, provided that all
units in the housing development are offered to the public for purchase.

4. One hundred (100) percent of all units in a housing development, exclusive of a
manager’s unit or units, shall be restricted and affordable to lower-income
households, except that no more than twenty (20) percent of the units in the housing
development, including total units and density bonus units, may be affordable to
moderate-income households.

5. A minimum of ten (10) percent of the total units of a housing development for
transitional foster youth, disabled veterans, or homeless persons shall be provided at
the same affordability level as very low-income units.

6. A minimum of twenty (20) percent of the total units of a housing development shall
be affordable to lower-income college students.

7. A condominium conversion project where either thirty-three (33) percent of the units
converted are affordable to low- or moderate-income house-holds, or fifteen (15)
percent of the units converted are affordable to very low- or extremely low-income
households.

8. A senior citizen housing development, as defined in California Civil Code Sections

A. Fractional Units. The calculation of a density bonus in compliance with this section that results in fractional units, including base density and bonus density, shall be rounded up to the next whole number.

B. Mixed Income Development. If a housing development qualifies for a density bonus under
more than one income category, as senior housing, or as housing intended to serve
transitional foster youth, disabled veterans, or homeless persons, the applicant shall select
only one of the above categories in the application. Density bonuses from more than one
category may not be combined.

C. General Plan and Zoning Consistency. The granting of a density bonus, in and of itself,
shall not be interpreted as requiring a General Plan amendment, Zoning Map amendment,
or other discretionary approval.

D. Financial Incentives. The provisions of this chapter shall not be interpreted to require or
limit the City from providing direct financial incentives, including the provision of publicly
owned land or the waiver of fees or dedication requirements.

E. Increased Density Limit. A housing development shall not exceed the cumulative total of
base units allowed by the underlying zone and the density bonus units allowed by Section

increase density.

F. Reduced Density. An applicant for a density bonus may elect to provide a lesser percentage
of density increase than what is authorized by Section 20.32.050 including, but not limited
to, no increase in density, but shall remain eligible for concessions or incentives, waivers
of development standards, and eligible parking requirements provided the project meets the
eligibility requirements of this section.
(Ord. 2022-18 § 1 (Exh. A), 2022)

A housing development that meets one of the eligibility levels in Section 20.32.030 is entitled to a density bonus as provided herein.

A. Density Bonus for Very Low-, Low-, and Moderate-Income Households. A housing
development that is eligible for a density bonus pursuant to Section 20.32.030(A)(1)
through (A)(4) is entitled to a density bonus calculated as follows:

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City of Newport Beach, CA § 20.32.050 NEWPORT BEACH CODE § 20.32.050

TABLE 3-6
VERY LOW, LOW, AND MODERATE

Density Bonus Percentage
Percentage of Base
Units Proposed Very Low-Income Low-Income Moderate-Income
5% 20% - -

6% 22.5% - -

7% 25% - -

8% 27.5% - -

9% 30% - -

10% 32.5% 20% 5%

11% 35% 21.5% 6%

12% 38.75% 23% 7%

13% 42.5% 24.5% 8%

14% 46.25% 26% 9%

15% 50% 27.5% 10%

16% 50% 29% 11%

17% 50% 30.5% 12%

18% 50% 32% 13%

19% 50% 33.5% 14%

20% 50% 35% 15%

21% 50% 38.75% 16%

22% 50% 42.5% 17%

23% 50% 46.25% 18%

24% 50% 50% 19%

25% 50% 50% 20%

26% 50% 50% 21%

27% 50% 50% 22%

28% 50% 50% 23%

29% 50% 50% 24%

30% 50% 50% 25%

31% 50% 50% 26%

32% 50% 50% 27%

33% 50% 50% 28%

34% 50% 50% 29%

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City of Newport Beach, CA § 20.32.050 PLANNING AND ZONING § 20.32.050

TABLE 3-6 VERY LOW, LOW, AND MODERATE

Density Bonus Percentage
Percentage of Base
Units Proposed Very Low-Income Low-Income Moderate-Income

35% 50% 50% 30%

36% 50% 50% 31%

37% 50% 50% 32%

38% 50% 50% 33%

39% 50% 50% 34%

40% 50% 50% 35%

41% 50% 50% 38.75%

42% 50% 50% 42.5%

43% 50% 50% 46.25%

44% 50% 50% 50%

100% 80% 80% 80%

Notwithstanding the foregoing, a cap on density will not apply if both of the following
conditions are met:

1. One hundred (100) percent of the units in a housing development exclusive of a
manager’s unit or units, are restricted and affordable to very low- and low-income
households, except that no more than twenty (20) percent of the total units (including
density bonus units) in the housing development are restricted and affordable to
moderate-income house-holds.

2. The housing development is located within one-half mile of a major transit stop with
unobstructed access.

B. Density Bonus for Transitional Foster Youth, Disabled Veterans, or Homeless Persons. A
housing development that is eligible for a density bonus at the level set forth in Section
20.32.030(A)(5) shall be entitled to a density bonus of twenty (20) percent.

C. Density Bonus for Lower-Income College Students. A student housing development that is
eligible for a density bonus at the level set forth in Section 20.32.030(A)(6) shall be entitled
to a density bonus of thirty-five (35) percent.

1. All units in the student housing development shall be used exclusively for
undergraduate, graduate, or professional students enrolled full-time at an institution
of higher education accredited by the Western Association of Schools and Colleges
or the Accrediting Commission for Community and Junior Colleges.

2. The applicant or property owner shall provide evidence to the City that the housing
development shall be subject to an operating agreement or lease with one or more
institution of higher education that all units shall be exclusively occupied by the
students of the institution(s).

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City of Newport Beach, CA § 20.32.050 NEWPORT BEACH CODE § 20.32.050

3. The rent for affordable units shall be calculated at thirty (30) percent of sixty-five (65)
percent of the area median income for a single-room occupancy unit.

4. Priority for the affordable units shall be given to lower-income students experiencing
homelessness. A homeless service provider, as defined in California Health and
Safety Code Section 103577(3)(e), or institution of higher education that has
knowledge of a person’s homeless status may verify a person’s status as homeless for
purposes of this subsection.

5. For purposes of calculating a density bonus granted pursuant to this section, the term
“unit” shall mean one rental bed and its pro rata share of associated common area
facilities.

D. Density Bonus for Condominium Conversion. A condominium conversion that is eligible
for a density bonus pursuant to Section 20.32.030(A)(7) shall be entitled to a density bonus
of twenty-five (25) percent provided the condominium conversion meets all of the
requirements in Section 20.32.100.

E. Density Bonus for Senior Housing. A senior housing development that is eligible for a
density bonus pursuant to Section 20.32.030(A)(8) shall be entitled to a density bonus of
twenty (20) percent.

F. Density Bonus for Donating Land for Very Low-Income Units. A housing development
that includes the donation of land for the development of very low-income housing
pursuant to Section 20.32.030(A)(9) shall be entitled to a density bonus calculated as
follows:

TABLE 3-7
LAND DEDICATED TO ACCOMMODATE VERY LOW-INCOME

Percentage of Base Units Proposed Density Bonus Percentage

10% 15%

11% 16%

12% 17%

13% 18%

14% 19%

15% 20%

16% 21%

17% 22%

18% 23%

19% 24%

20% 25%

21% 26%

22% 27%

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City of Newport Beach, CA § 20.32.050 PLANNING AND ZONING § 20.32.050

TABLE 3-7

LAND DEDICATED TO ACCOMMODATE VERY LOW-INCOME

Percentage of Base Units Proposed Density Bonus Percentage

23% 28%

24% 29%

25% 30%

26% 31%

27% 32%

28% 33%

29% 34%

30% 35%

1. Any increase authorized by this subsection may be approved in addition to any
increase in density allowed by Section 20.32.030 up to a maximum combined density
increase of thirty-five (35) percent.

2. The donated land shall be the greater of:

a. One acre;

b. Sufficient square-footage or acreage to permit development of the percentage of
base units proposed; or

c. Sufficient square-footage or acreage to permit development of forty (40) units
under the existing general plan and zoning designation.

3. The existing General Plan and zoning designation of the donated land shall be zoned
to accommodate at least thirty (30) dwelling units per acre, and is, or will be, served
by adequate public facilities and infrastructure through the construction of the
housing development.

4. The land shall be donated and transferred to the City or a housing developer that is
approved by the City. The applicant shall donate and transfer the land no later than
the date of approval of the final subdivision map, or issuance of building permits for
the housing development where no subdivision is required.

5. The City shall not approve the final subdivision map or issue building permits for the
housing development unless and until all permits, other than building permits, for the
development of very low-income housing have been issued for the donated and
transferred land.

6. The donated and transferred land shall be within the boundary of the housing
development, or upon approval of the review authority, within one-quarter mile of the
housing development.

7. The source of funding for the development of very low-income housing on the
donated and transferred land shall be identified not later than the date of approval of
the final subdivision map or issuance of building permits for the housing

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City of Newport Beach, CA § 20.32.050 NEWPORT BEACH CODE § 20.32.060

development.

8. The donated and transferred land and the affordable units shall be subject to a deed
restriction recorded on the property at the time of transfer ensuring continued
affordability of the units consistent with Section 20.32.130.
(Ord. 2022-18 § 1 (Exh. A), 2022; Ord. 2023-22 § 908, 2023)

A. Applicability. For a housing development that meets one of the eligibility levels in Section 20.32.030, the applicant may request application of the parking requirements set forth below. An applicant may request additional parking incentives beyond those provided in this section in compliance with Sections 20.32.070 and 20.32.080.

B. Number of Parking Spaces Required.

1. Parking Ratios. At the request of the applicant, the following minimum parking ratios
may apply to the housing development:

Dwelling Unit Size On-Site Parking per Unit

Studio to 1 Bedroom 1 space

2 to 3 Bedrooms 1.5 spaces

4 or More Bedrooms 2.5 spaces

2. Within One-Half Mile of Major Transit Stop. Notwithstanding subsection (B)(1) of
this section, if a housing development provides at least twenty (20) percent low-
income units or eleven (11) percent very low-income units and is located within one-
half mile of a major transit stop with unobstructed access, then, upon the request of
the developer, the City may not impose a vehicular parking ratio, inclusive of
handicapped and guest parking, that exceeds 0.5 spaces per bedroom.

3. Zero Parking. Notwithstanding subsection (B)(1) of this section, if a housing
development consists solely of rental units affordable to lower-income families, then
upon the request of the developer, the City may not impose a vehicular parking ratio,
inclusive of handicapped and guest parking, if either of the following criteria are met:

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

b. The housing development is a for-rent housing development for individuals who
are sixty-two (62) years of age or older that meet the definition in California
Civil Code Sections 51.2 and 51.3 and the housing development has either
paratransit service or unobstructed access within one-half mile of a fixed bus
route that operates at least eight times per day; or

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

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City of Newport Beach, CA § 20.32.060 PLANNING AND ZONING § 20.32.070

least eight times per day.

4. Notwithstanding subsections (B)(2) and (B)(3) of this section, the City may impose
the parking ratio set forth in subsection (B)(1) of this section, if the City or an
independent consultant has conducted an areawide or jurisdiction-wide parking study
within the past seven years that demonstrates a higher parking ratio is necessary based
upon an analysis of parking availability, differing levels of transit access, walkability
access to transit services, the potential for shared parking, the effect of parking
requirements on the cost of market-rate and subsidized developments, and the lower
rates of car ownership for low-income and very low-income individuals, including
seniors and special needs individuals.

C. Location of Parking. For purposes of this section, a housing development may provide on-
site parking through uncovered or tandem on-site parking.

D. Rounding of Partial Parking Spaces. 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.
(Ord. 2022-18 § 1 (Exh. A), 2022; Ord. 2023-22 § 909, 2023)

A. Applicant Request and City Approval. The applicant shall include any request for incentive(s) or concession(s) listed in subsection (C) of this section concurrently with the application for project approval. The applicant shall provide documentation establishing that an incentive or concession is necessary to make the housing units economically feasible. When an applicant makes a request for an incentive or concession, the review authority shall grant the request unless one or more of the following findings is made:

1. The incentive or concession is not required in order to provide affordable housing
costs or for rents for the targeted units to be set as specified in Section 20.32.130(B);

2. The incentive or concession would have a specific adverse impact upon public health
and safety, or on any real property 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 incentive would be contrary to State or Federal law.

B. Number of Incentives or Concessions. Except as provided in subsection (A) of this section,
the review authority shall grant the following number of incentives or concessions:

1. One incentive or concession for a housing development that includes at least ten (10)
percent of the total units for low-income households, at least five percent of the total
units for very low-income households, at least twenty (20) percent of the total units
for low-income students in a student housing development, or at least ten (10) percent
of the total units for moderate-income households in a for-sale housing development.

2. Two incentives or concessions for a housing development that includes at least
seventeen (17) percent of the total units for low-income households, at least ten (10)
percent of the total units for very low-income households, or at least twenty (20)

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City of Newport Beach, CA § 20.32.070 NEWPORT BEACH CODE § 20.32.080

percent of the total units for moderate-income house-holds in a for-sale housing development.

3. Three incentives or concessions for a housing development that includes at least twenty-four (24) percent of the total units for low-income households, at least fifteen (15) percent of the total units for very low-income households, or at least thirty (30) percent of the total units for moderate-income house-holds in a for-sale housing development. 4. Four incentives or concession for projects that meet the criteria of Section 20.32.030(A)(4). If the housing development is located within one-half mile of a major transit stop with unobstructed access, the housing development is eligible for a height increase of up to three additional stories, or thirty-three (33) feet.

   C. Type of Incentive or Concession. For the purposes of this chapter, “incentive” or “concession” means any of the following: 1. A reduction in the development standard(s) as that term is defined in Section 20.32.020, that results in identifiable, financially sufficient, and actual cost reductions; 2. A mixed-use project in conjunction with the housing development, if the nonresidential portion of the mixed-use project will reduce the cost of the housing development, is compatible with the residential portion of the housing development, and is compatible with adjacent existing or planned development; 3. A reduction or waiver of any City imposed fee or dedication of land, which shall be at the sole discretion of the City Council; and/or 4. Other regulatory incentives that will result in identifiable, financially sufficient, and actual cost reductions. (Ord. 2022-18 § 1 (Exh. A), 2022)

In addition to requesting an incentive or concession, an applicant for a density bonus may also submit a proposal to the City to waive or reduce an unlimited number of development standards that would otherwise preclude or inhibit construction of the housing development at the densities or with the incentives permitted by this chapter.

A. When an applicant makes a request for a waiver, the review authority shall grant the request
unless any of the following findings are made:

1. The waiver or reduction of development standards would have a specific adverse
impact upon public health or safety, and for which there is no feasible method to
satisfactorily mitigate or avoid the specific adverse impact.

2. The waiver or reduction of development standards would have an adverse impact on
any real property listed in the California Register of Historical Resources.

3. The waiver or reduction of development standards would be contrary to State or
Federal law.

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City of Newport Beach, CA § 20.32.080 PLANNING AND ZONING § 20.32.100

B. Notwithstanding subsection (A) of this section, a housing development that is eligible for
no cap on density pursuant to Section 20.32.050(A) shall only be eligible for a waiver or
reduction of development standards as provided in Section 20.32.070(B)(4).
(Ord. 2022-18 § 1 (Exh. A), 2022)

A. Incentives. A housing development that complies with the income requirements of Section 20.32.030(A) and includes a childcare facility, other than a large or small family day care home, that will be located on the same site as the development, shall be eligible for either of the following additional incentives:

1. An amount of residential floor area equal to or greater than the floor area of the
childcare facility; or

2. An incentive that contributes to the economic feasibility of the childcare facility as
provided in Section 20.32.070(C).
Notwithstanding the foregoing, the City shall not be required to provide a density bonus for
a childcare facility if it finds that the community has adequate childcare facilities.

B. Requirements to Qualify for Incentives. The City shall require, as a condition of approval
of the housing development, that:

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 in compliance with Section 20.32.130; and

2. Of the children who attend the childcare facility, the children of very low-income,
low-income, or moderate-income households shall equal a percentage that is equal to
or greater than the percentage of dwelling units that are required for very low-income,
lower-income, or moderate-income households in compliance with Section
20.30.030(A).
(Ord. 2022-18 § 1 (Exh. A), 2022)

A. Density Bonus. When an applicant proposes to convert apartments to condominiums, which meet the eligibility level in Section 20.32.030(A)(7), the City shall grant either a density bonus of up to twenty-five (25) percent pursuant to Section 20.32.050(D) to create additional units on the project site or other incentive of equivalent financial value provided:

1. The applicant agrees to pay for the reasonably necessary administrative costs,
including, but not limited to, staff costs, consultant fees, photocopy costs, and mailing
fees, incurred by the City; and

2. The City places such reasonable conditions on the granting of a density bonus or other
incentives of equivalent financial value as it finds appropriate, including, but not
limited to, conditions which assure continued affordability of units to subsequent very
low-, low- and moderate-income households.

B. Replacement Units. All units within the condominium conversion shall meet the
replacement requirements in Section 20.32.120.

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City of Newport Beach, CA § 20.32.100 NEWPORT BEACH CODE § 20.32.120

C. Ineligible Requests. Apartments which are proposed for conversion to condominiums shall
be ineligible for a density bonus or other incentive under this section if the apartments were
previously granted a density bonus, concession, incentive, or waiver or reduction of
development standards.

D. Preapplication Process. An applicant may submit to the City a preliminary application for
the condominium conversion on a form provided by the Director prior to the submittal of
an application to the City under Chapters 19.08 and 19.64. Within ninety (90) days of
receipt of the preliminary application, the City shall notify the applicant in writing whether
the application is eligible for a condominium conversion pursuant to this section.

E. Approval. An application for condominium conversion shall meet the requirements set
forth in Chapter 19.64. Nothing in this section shall be construed to require the City to
approve an application for a condominium conversion.
(Ord. 2022-18 § 1 (Exh. A), 2022)

Affordable units shall be designed and distributed within the housing development as follows:

A. Number of Bedrooms. Affordable units shall reflect the range of numbers of bedrooms
provided in the residential development project as a whole;

B. Comparable Quality and Facilities. Affordable units shall be constructed to the same
quality and exterior design as the market-rate housing units. Additionally, the affordable
units shall include the same laundry, recreation, and other facilities that are made available
to the market-rate housing units;

C. Access. In mixed-income multi-unit structures, the occupants of the affordable units shall
have the same access to common entrances and any common areas including parking areas
in that structure as the occupants of the market-rate housing units;

D. Size. Affordable units may be smaller and have different interior finishes and features than
the market-rate units; and

E. Location. Affordable units shall be distributed within the residential development, unless
clustering is allowed by the review authority. Notwithstanding, in a mixed-income multi-
unit structure, affordable units shall not be isolated to a specific floor or an area of a specific
floor.
(Ord. 2022-18 § 1 (Exh. A), 2022)

An application for a density bonus on any property with existing rental dwelling units or rental dwelling units that were vacated or demolished within the five years preceding the application; and are, or were, subject to a recorded covenant that restricts rents to very low- or low-income house-holds; or are, or were, occupied by very low- or low-income household(s) shall be subject to all of the following requirements:

A. Occupied Units. For rental dwelling units that are occupied on the date of the application,
the housing development shall provide at least the same number of affordable units of
equivalent size at affordable rent or affordable housing cost to, and occupied by, persons or

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City of Newport Beach, CA § 20.32.120 PLANNING AND ZONING § 20.32.140

families in the same or lower-income category as the existing occupants.

B. Vacant or Demolished Units. For rental dwelling units that have been vacated or
demolished within the five years preceding the application, the housing development shall
provide at least the same number of affordable units of equivalent size as existed at the
highest occupancy point for those units in the five years preceding the application at
affordable rent or affordable housing cost to, and occupied by, persons and families in the
same or lower-income category as the persons or families that occupied the units
immediately preceding the vacancy or demolition.

C. Unknown Household Income. If the income of the existing occupants or occupants within
the past five years is unknown to the City or the applicant, it shall be rebuttably presumed
that the rental dwellings units were occupied by low-income and very low-income renter
households as determined by the most recently available data from the United States
Department of Housing and Urban Development’s Comprehensive Housing Affordability
Strategy database.
(Ord. 2022-18 § 1 (Exh. A), 2022)

The units that qualified the housing development for a density bonus and other incentives shall continue to be available as affordable and/or senior units in compliance with the following requirements:

A. Duration of Availability. The applicant shall record a covenant on the property that the
units that qualified the housing development for a density bonus and other incentives are
restricted as affordable units for at least fifty-five (55) years, or a longer time if required by
the construction or mortgage financing assistance program, mortgage insurance program,
or rental subsidy program.

B. Affordable Costs. The rents and owner-occupied costs charged for the housing units shall
not exceed the following amounts during the period of continued availability required by
this section:

1. Rental Units. Rents for density bonus units shall be set at an affordable rent as defined
in California Health and Safety Code Section 50053; and

2. Owner-Occupied Units. Owner-occupied units shall be available at an affordable
housing cost as defined in California Health and Safety Code Section 50052.5.
(Ord. 2022-18 § 1 (Exh. A), 2022; Ord. 2023-22 § 910, 2023)

A housing development that includes for-sale units that are restricted and affordable to moderate- income households shall limit the occupancy and resale of the units as set forth in this section.

A. Initial Occupancy. A for-sale unit, which qualified the applicant for the award of the
density bonus, shall meet either of the following requirements:

1. The unit is initially occupied by a very low-, low-, or moderate-income household,
offered at an affordable housing cost as defined in California Health and Safety Code
Section 50052.5, and subject to an equity sharing agreement.

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City of Newport Beach, CA § 20.32.140 NEWPORT BEACH CODE § 20.32.140

2. The unit is purchased by a qualified nonprofit housing corporation pursuant to a
contract that is recorded on the property, and all of the following are satisfied:

a. The nonprofit housing corporation is organized pursuant to Internal Revenue
Code Section 501(c)(3) and has received a welfare exemption under California
Revenue and Taxation Code Section 214.15 for properties intended to be sold to
low-income households who participate in a special nointerest loan program;

b. The contract restricts the use of the land for at least thirty (30) years to owner-
occupied housing that is available at an affordable housing cost;

c. The contract includes a deed of trust on the property in favor of the nonprofit
corporation to ensure compliance with the terms of the program, which has no
value unless the owner fails to comply with the covenants and restrictions of the
terms of the home sale;

d. The City Attorney finds that the long-term deed restrictions in the contract serve
a public purpose;

e. A repurchase option that requires a subsequent purchaser of the property that
desires to sell or convey the property to offer the qualified nonprofit corporation
the right to repurchase the property prior to selling or conveying that property to
any other purchaser; and

f. Affordability restrictions on the sale and conveyance of the property that ensure
that the property will be preserved for lower-income housing for at least forty-
five (45) years for owner-occupied housing units and will be sold or resold only
to very low-, low-, or moderate-income households.

B. Resale. As part of the affordable housing agreement required pursuant to Section 20.32.160, the applicant shall enter into an equity sharing agreement with the City for the resale of affordable common interest units, unless it would be in conflict with the requirements of another public funding source or law. In lieu of an equity sharing agreement, the housing project could sell the units to a nonprofit housing corporation pursuant to subsection (A)(2) of this section. The following requirements apply to the equity sharing agreement:

1. 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; and

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

a. The City’s initial subsidy shall be equal to the fair market value of the home at
the time of initial sale, minus the initial sale price, 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 the resale shall
be used as the initial market value;

b. The City’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; and

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City of Newport Beach, CA § 20.32.140 PLANNING AND ZONING § 20.32.160

c. The initial subsidy shall include any incentives granted by the City and shall be
equal to the monetary equivalent of the incentives.
(Ord. 2022-18 § 1 (Exh. A), 2022; Ord. 2023-22 § 911, 2023)

An applicant requesting a density bonus, incentive, concession, or waiver pursuant to this chapter shall require approval of an Affordable Housing Implementation Plan pursuant to Sections

The applicant approved for a density bonus, concession, incentive, or waiver under this chapter shall agree to construct, operate and maintain the affordable units in accordance with an affordable housing agreement. The affordable housing agreement shall be executed in a recordable form prior to the issuance of a building permit for any portion of a housing development subject to the requirements of this chapter. The affordable housing agreement shall be binding upon all future owners and successors in interest.

A. Review. The terms of the affordable housing agreement shall be reviewed and revised as
appropriate by the Director and City Attorney.

B. Fees. The City may establish fees associated with the setting up and monitoring of the
affordable units.

C. Contents. The affordable housing agreement shall include at least the following:

1. Identification of Affordable Units. Affordable units shall be identified by address and
legal description, type (floor area, number of bedrooms/ baths, unit size, etc.), and
designated household income category. The affordable housing agreement shall also
identify the total number of affordable units and total number of units approved for
the housing development.

2. Term of Affordability. Unless specified elsewhere in this chapter, a minimum term of
fifty-five (55) years of the specified affordability shall be required. Such reservation
period shall begin on the date a certificate of occupancy is granted for the affordable
units.

3. Maximum Allowable Rent or Sales Price.

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

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

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

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City of Newport Beach, CA § 20.32.160 NEWPORT BEACH CODE § 20.32.160

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

iv. A maximum rent schedule shall be submitted to the City prior to the
issuance of an occupancy permit for the affordable units, and updated
annually on the anniversary date of occupancy.

v. Total move-in costs for eligible tenants occupying affordable units shall be
limited to first month’s rent plus a security/cleaning deposit not to exceed
one month’s rent.

vi. When a tenant occupying an affordable unit no longer qualifies under the
income requirements, verified through the monitoring program required as
part of the affordable housing agreement, that tenant may then be charged
market rate rent. If this occurs, any currently vacant unit of similar type to
the affordable unit in question shall then be designated as an affordable
unit, and the owner shall immediately attempt to secure tenants in
accordance with this chapter. The owner is required to maintain at all times
during the use restriction the minimum number of affordable units
identified in the affordable housing agreement.

vii. No subletting or short-term occupancy of designated affordable units shall
be allowed.

b. Ownership Projects. In the case of for-sale housing developments, as a condition
of approval of the housing development, the City shall require an affordable
housing agreement that includes the following conditions governing the initial
sale and use of affordable units during the applicable use period:

i. Affordable units shall, upon initial sale, be sold to eligible very low- and
low-income house-holds at an affordable sales price and housing cost, or
to qualifying residents in the case of a senior citizen housing development.

ii. Affordable units shall be initially owner-occupied by eligible very low- or
low-income house-holds, or by qualifying residents in the case of a senior
citizen housing development.

iii. The initial purchaser of each affordable housing unit shall execute an instrument or agreement approved by the City restricting the sale of the affordable housing unit in accordance with this chapter during the applicable use restriction period. Such instrument or agreement shall be recorded against the parcel containing the affordable housing unit and shall contain such provisions as the City may require to ensure continued compliance with this chapter and State Density Bonus Law.

iv. The affordable housing agreement shall stipulate that, when the terms of affordability expire on an affordable unit, the City and/or a nonprofit housing organization shall have a first right of purchase option sixty (60) days prior to the affordable unit being advertised on the market.

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City of Newport Beach, CA § 20.32.160 PLANNING AND ZONING § 20.32.160

v. Rental of affordable units shall not be allowed.

vi. When an equity sharing agreement is required by this chapter, the
affordable housing agreement shall specify the equity sharing agreement
comply with Section 20.32.140.

4. Monitoring of Compliance to Agreement. A monitoring program shall be required,
specifying the party responsible for certifying tenant incomes and sales price,
maintaining the required number of affordable units for the property, marketing and
filling unit vacancies.

5. Remedies. Description of remedies for breach of the affordable housing agreement by
either party (the City may identify tenants or qualified purchasers as third-party
beneficiaries under the agreement).

6. Description of Density Bonus. A description of the incentives and/or concessions, if
any, being provided by the City.

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

8. Other Provisions. Other provisions to ensure implementation and compliance with
this chapter.
(Ord. 2022-18 § 1 (Exh. A), 2022)

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City of Newport Beach, CA § 20.36.010 PLANNING AND ZONING § 20.36.050