Chapter 18.70 — INCLUSIONARY HOUSING PROGRAM

The provisions of this chapter are to establish standards and procedures that encourage the development of housing affordable to a range of households with varying income levels. The purpose of this chapter is also to encourage the development and availability of such housing by ensuring that the addition of affordable housing units to the City's housing stock is in proportion with the overall increase in new housing units.

(Ord. 1083 Sec. 1, 2022)

For purposes of this chapter, the following definitions shall apply. Unless specifically defined below, words or phrases shall be interpreted as to give this chapter its most reasonable interpretation.

• A. "Adjusted for household size appropriate for the unit" means a household of one person in the case of a studio unit, two persons in the case of a one-bedroom unit, three persons in the case of a two-bedroom unit, four persons in the case of a three-bedroom unit, and five persons in the case of a four-bedroom unit.

• B. "Affordable housing cost" means the total housing costs paid by a qualifying household, which shall not exceed a specified fraction of their gross income, adjusted for household size appropriate for the unit, as follows:

  1. Very low-income households, rental units: 30 percent of 50 percent of the Riverside County median income;

  2. Low-income households, rental or for-sale units: 30 percent of 80 percent of the Riverside County median income;

  3. Moderate-income households, for-sale units: 40 percent of 110 percent of the Riverside County median income.

  4. Moderate-income households, rental units: 30 percent of 120 percent of the Riverside County median income.

• C. "Developer" means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities, which seeks City approvals for all or part of a residential development.

• D. "Director" means the City's Planning Director or his or her designee.

• E. "Discretionary approval" means any entitlement or approval pursuant to Title 18, including but not limited to a use permit, variance, design approval, and subdivision map.

• F. "Inclusionary housing agreement" means a legally binding agreement between a developer and the City, in form and substance satisfactory to the Director and City Attorney, setting forth those provisions necessary to ensure that the requirements of this chapter, whether through the provision of inclusionary units or through an alternative method, are satisfied.

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City of Norco, CA

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§ 18.70.04

§ 18.70.06

• G. "Inclusionary housing plan" means the plan referenced in Section 18.70.14 and further described in the regulations, which sets forth the manner in which the requirements of this chapter will be implemented for a particular residential development.

• H. "Inclusionary housing trust fund" shall have the meaning set forth in Section 18.70.22.

• I. "Inclusionary units" means a dwelling unit that will be offered for rent or sale to low- and moderate-income households, at an affordable housing cost, pursuant to this chapter.

• J. "Low-income households" means households whose gross income does not exceed 80 percent of the median income for Riverside County as determined annually by the U.S. Department of Housing and Urban Development.

• K. "Low-income units, moderate-income units, and very low-income units" means inclusionary units restricted to occupancy by low, moderate, or very low-income households, respectively, at an affordable housing cost.

• L. "Market rate units" means those dwelling units in a residential development that are not inclusionary units.

• M. "Moderate-income households" means households whose gross income does not exceed 120 percent of the median income for Riverside County as determined annually by the U.S. Department of Housing and Urban Development.

• N. "Regulations" means the regulations adopted by the City Council and amended from time to time for the implementation and enforcement of the provisions of this chapter.

• O. "Residential development" means the new construction of projects consisting of:

  1. Five or more single-family units; or
  • Five or more multifamily dwelling units.

• P. "Substantial rehabilitation or substantially rehabilitated" means the rehabilitation of a dwelling unit(s) that has substantial building or other code violations, and has been vacant for at least six months, such that the unit is returned to the City's housing supply as decent, safe, and sanitary housing, and the cost of such work exceeds $40,000 per unit, as that amount may be adjusted for inflation pursuant to the regulations.

• Q. "Total housing costs" means the total monthly or annual recurring expenses required of a household to obtain shelter. For a rental unit, "total housing costs" include the monthly rent payment and utilities. For an ownership unit, "total housing costs" include the mortgage payment (principal and interest), utilities, homeowner's association dues, taxes, mortgage insurance and any other related assessments.

• R. "Very low-income households" means households whose gross income is equal to 50 percent or less of the median income for Riverside County as determined annually by the U.S. Department of Housing and Urban Development.

• (Ord. 1083 Sec. 1, 2022)

This chapter shall apply to all residential development, except those that are exempt pursuant to Section 18.70.12. Further, residential development of five and six units shall be exempt from the

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City of Norco, CA

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§ 18.70.06

§ 18.70.10

requirement to provide affordable housing and any associated obligations set forth in this chapter or the implementing regulations, and instead shall be required to pay an in-lieu fee as described in Section 18.70.10 and as set by City Council resolution. (Ord. 1083 Sec. 1, 2022)

• A. A total of 15 percent of all newly constructed dwelling units in residential developments shall be developed, offered to and sold or rented to low- and moderate-income households, at an affordable housing cost, as per the following breakdown:

  1. Nine percent of all newly constructed dwelling units shall be sold or rented to lowincome households;

  2. Six percent of all newly constructed dwelling units shall be sold or rented to moderate-income households.

• B. The inclusionary unit requirement set forth in subsection (A) of this section may be reduced as follows:

  1. If very low-income units are provided in lieu of required low-income units, a credit of 1.5 units to every one unit shall be provided;

  2. If very low-income units are provided in lieu of required moderate-income units, a credit of two units to every one unit shall be provided;

  3. If low-income units are provided in lieu of required moderate-income units, a credit of 1.5 units to every one unit shall be provided.

• C. In calculating the required number of inclusionary units, fractional units of 0.75 or above will be rounded up to a whole unit if the residential development consists of 10 to 20 units; fractional units of 0.50 or above will be rounded up to a whole unit if the residential development consists of 21 or more units.

• (Ord. 1083 Sec. 1, 2022)

In lieu of including inclusionary units in the residential development, the requirements of this chapter may be satisfied through one or more of the alternatives set forth in this section, in accordance with procedures and standards set forth in the regulations.

• A. In-Lieu Fee. At the discretion of the developer, if a residential development consists of 20 units or less, payment of a fee in lieu of all or some of the inclusionary units as follows:

  1. The amount of the fee shall be calculated using the fee schedule established by resolution of the City Council.

  2. One-half of the in-lieu fee required by this subsection shall be paid (or a letter of credit posted) prior to issuance of a building permit for all or any part of the residential development. The remainder of the fee shall be paid before a certificate of occupancy is issued for any unit in the residential development.

  3. The fees collected shall be deposited in the inclusionary housing trust fund.

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City of Norco, CA

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§ 18.70.10

§ 18.70.16

• B. Off-Site Units. Upon application by the developer and at the discretion of the Director, the developer may satisfy the requirement of providing inclusionary units as part of the residential development, in whole or in part, by constructing or substantially rehabilitating the required number of inclusionary units at a site different than the site of the residential development.

• C. Land Donation. Upon application by the developer and at the discretion of the Director, the developer may satisfy the requirement of providing inclusionary units as part of the residential development, in whole or in part, by a conveyance of land to the City for the construction of the required inclusionary units.

• (Ord. 1083 Sec. 1, 2022)

The following residential developments are exempt from the requirements of this chapter:

• A. Residential developments that obtained a discretionary approval from the City prior to the effective date of this chapter, which obtain a building permit pursuant to that discretionary approval within one year of the effective date of this chapter, and which obtain a certificate of occupancy pursuant to that same discretionary approval.

• B. Residential developments that are exempt from this chapter pursuant to State law. (Ord. 1083 Sec. 1, 2022)

• A. At the times and in accordance with the standards and procedures set forth in the regulations, developers shall:

  1. Submit an inclusionary housing plan for approval by the Director, setting forth in detail the manner in which the provisions of this chapter will be implemented for the proposed residential development;

  2. Execute and cause to be recorded an inclusionary housing agreement, unless developer is complying with this chapter pursuant to Section 18.70.10(A) or (C).

• B. No discretionary approval shall be issued for all or any portion of a residential development subject to this chapter until the developer has submitted an inclusionary housing plan.

• C. No building permit shall be issued for all or any portion of a residential development subject to this chapter unless the Director has approved the inclusionary housing plan, and the inclusionary housing agreement (if required) is recorded.

• D. No certificate of occupancy shall be issued for all or any portion of a residential development subject to this chapter unless the approved inclusionary housing plan has been fully implemented.

• (Ord. 1083 Sec. 1, 2022)

• A. All inclusionary units shall be reasonably dispersed throughout the residential development; shall be proportional, in number, bedroom size and location, to the market rate units; and shall be comparable with the market rate in terms of the base design,

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City of Norco, CA § 18.70.16

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§ 18.70.22

appearance, materials and finished quality.

• B. All inclusionary units in a residential development shall be constructed concurrently with or prior to the construction of the market rate units. In the event the City approved a phased project, some inclusionary units as required by this chapter shall be provided within each phase of the residential development.

• C. Inclusionary units shall be reserved for low- and moderate-income households at the ratios established pursuant to Section 18.70.08 and shall be provided at the applicable affordable housing cost.

  1. An inclusionary unit that is for rent shall remain reserved for the target income level group at the applicable affordable housing cost in perpetuity.

  2. An inclusionary unit that is for sale shall remain reserved for the target income level group at the applicable affordable housing cost for a period of 45 years.

• D. Notwithstanding subsection (C)(2) of this section, inclusionary units for sale may be sold to an above moderate-income purchaser in accordance with procedures set forth in the regulations; provided, that the sale shall result in a recapture by the City or its designee of a financial interest in the unit equal to (1) the difference between the initial affordable sales price and the appraised value at the time of the initial sale, and (2) a proportionate share of any appreciation.

• (Ord. 1083 Sec. 1, 2022)

• A. The provisions of this chapter shall apply to all developers and their agents, successors and assigns proposing a residential development. All inclusionary units shall be rented or sold in accordance with this chapter and the regulations adopted pursuant to Section 18.70.20.

• B. Any individual who sells or rents an inclusionary unit in violation of the provisions of this chapter shall be required to forfeit all monetary amounts so obtained. Recovered funds shall be deposited into the inclusionary housing trust fund.

• C. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this chapter, including but not limited to: (1) actions to revoke, deny or suspend any permit, including a building permit, certificate of occupancy, or discretionary approval; and (2) actions for injunctive relief or damages.

• D. In any action to enforce this chapter or an inclusionary housing agreement recorded hereunder the City shall be entitled to recover its reasonable attorney's fees and costs.

• (Ord. 1083 Sec. 1, 2022)

The City Council shall by resolution establish regulations for the implementation of this chapter. (Ord. 1083 Sec. 1, 2022)

There is hereby established a separate fund of the City, to be known as the inclusionary housing trust fund. All monies collected pursuant to this chapter shall be deposited in the inclusionary

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City of Norco, CA

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§ 18.70.22

§ 18.70.26

housing trust fund. (Ord. 1083 Sec. 1, 2022)

The City Council may by resolution establish reasonable fees and deposits for the administration of this chapter.

(Ord. 1083 Sec. 1, 2022)

• A. Commencing upon the approval or disapproval of the inclusionary housing plan by the Director pursuant to the regulations, and within 15 days thereafter, a developer may request a determination that the requirements of this chapter, taken together with the inclusionary incentives, as applied to residential development, would legally constitute a taking of property of the residential development without just compensation under the California and Federal Constitutions. The developer has the burden of providing economic information and other evidence necessary to establish that application of the provisions of this chapter to the residential development would constitute a taking of the property of the proposed residential development without just compensation. The Director shall make the determination, which may be appealed in the manner and within the time set forth in Chapter 18.43.

• B. In making the taking recommendation or determination, the decision maker shall assume each of the following:

  1. Application of the inclusionary housing requirement to the residential development;

  2. Application of the inclusionary incentives;

  3. Utilization of the most cost-efficient product type for the inclusionary units; and

  4. External funding where reasonably likely to occur.

• C. If it is determined that the application of the provisions of this chapter would be a taking, the inclusionary housing plan shall be modified to reduce the obligations in the inclusionary housing component to the extent and only to the extent necessary to avoid a taking. If it is determined no taking would occur through application of this chapter to the residential development, the requirements of this chapter shall remain applicable.

• (Ord. 1083 Sec. 1, 2022)

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City of Norco, CA