§ 19.24

A.

Purpose. The purpose of this Division (19.24) is to enhance the public welfare and ensure that further housing developments contribute to the attainment of the city's housing goals by increasing the production of units affordable by households of moderate, low and very low income, and additionally stimulating funds or development of moderate, low and very low income housing.

B.

Findings. The council finds that the citizens of the city are experiencing a housing shortage for moderate, low and very low income households. A goal of the city is to achieve a balanced community with housing available for households of a range of income levels. Increasingly, persons with moderate, low and very low incomes who work and/or live within the city are unable to locate housing at prices they can afford and are increasingly excluded from living in the city. Federal and state housing subsidy programs are not sufficient by themselves to satisfy the housing needs of moderate, low and very low income households. The city finds that the high cost of newly constructed housing does not, to any appreciable extent, provide housing affordable by moderate, low and very low income households while at the same time generates increased demand for lower wage service jobs to maintain public and/or common infrastructure, and that continued new development which does not include lower cost housing will serve to further aggravate the current housing shortage by reducing the supply of developable land. The city further finds that the housing shortage for persons of moderate, low and very low incomes is detrimental to the public health, safety and welfare, and further that it is a public policy of the state of California as mandated by the requirements for a housing element of the General Plan, to make available an adequate supply of housing for persons of all economic segments of the community.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

A.

Requirement. All residential projects of seven (7) or more residential units shall be designed and constructed to include the number of affordable units required by Section 19.24.030 unless the City Council has approved an in-lieu fee pursuant to Section 19.24.040. Residential projects of six (6) or fewer units shall be designed and constructed to include the number of affordable units required by Section 19.24.030 or provide in-lieu fees pursuant to Section 19.24.040. No application for a rezoning, tentative map, master plan precise development plan, use permit, design review or building permit for a residential project shall be approved without compliance with this section 19.24.

B.

Exemptions. This Section 19.24 shall not apply to:

1.

The reconstruction of any dwelling units that were destroyed by fire, flood, earthquake or other act of nature.

2.

Accessory Dwelling Units subject to Section 19.34.030 (Accessory Dwelling Units) and Junior Accessory Dwelling Units subject to Section 19.34.031 (Junior Accessory Dwelling Units) of Division 19.34.

3.

Housing constructed or rehabilitated within a redevelopment project area if the Redevelopment Agency of the City of Novato imposes its own affordability requirements for housing constructed or rehabilitated within the project area pursuant to Section 33413 of the Health and Safety Code.

4.

Projects consisting, in whole or in part, of new or rehabilitated dwelling units developed by the City of Novato's Redevelopment Agency.

5.

Residential Care Facilities for the Elderly in compliance with Section 19.34.160 of Division 19.34.

6.

A land use application that has been accepted by the department as complete prior to October 9, 2007 shall be processed in accordance with the affordable housing requirements in effect when the application was determined complete.

7.

Single or two unit projects with residences of 3000 sq. ft. or less.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012; Ord. No. 1676, Exh. A, 3-8-2022; Ord. No. 1718, § 3(Exh. A), 9- 10-2024)

A.

Base Requirement. The number of affordable units required in a residential project are as follows:

* See Fractional Units, Section 19.24.030(B)

1.

Rental Projects. A rental project shall include fifty percent (50%) of the required number of affordable units for rent to households earning not more than Low Income at monthly rents not to exceed 1/12 of 30% of the maximum annual income for households earning 60% of area Median Income, less a monthly utility allowance, and 50% of the dwelling units for rent to households earning not more than Very Low Income at monthly rents not to exceed 1/12 of 30% of the maximum annual income for households earning 50% of area Median Income less a monthly utility allowance.

2.

Ownership Projects. An ownership project shall include fifty percent (50%) of the required number of affordable units for sale to households earning nor more than Moderate Income at a price as set forth in subsection 2.a 1, below and fifty percent (50%) of the required number of affordable units for sale to households earning not more than Low Income at a price as set forth in subsection 2.a.2, below.

a.

Affordable Sales Price Calculation.

(1)

Moderate Income Units. In order to qualify as an affordable unit for sale to a Moderate Income Household, average monthly housing payments after factoring in a maximum ten percent down-payment, including interest, principal, mortgage insurance, property taxes, homeowners insurance, property maintenance and repairs, a reasonable allowance for utilities, and homeowner association dues, if any, shall not exceed onetwelfth ( 1/12 ) of thirty-five percent (35%) of the maximum annual household income for households earning not more than 90% of area Median Income, adjusted for assumed household size. The Application material required by Section 19.24.090 shall include documentation which demonstrates, to the satisfaction of the Community Development Director, that average monthly housing payments shall not exceed the standards specified herein.

(2)

Low Income Units. In order to qualify as an low income affordable unit for sale to a Low Income Household, average monthly housing payments after factoring in a maximum ten percent down-payment, including interest, principal, mortgage insurance, property taxes, homeowners insurance, property maintenance and repairs, a reasonable allowance for utilities, and homeowner association dues, if any, one-twelfth ( 1/12 ) of thirty percent (30) of the maximum annual household income for households earning not more than 65% of area median income, adjusted for assumed household size. The Application material required by Section 19.24.090 shall include documentation which demonstrates, to the satisfaction of the Community Development Director, that average monthly housing payments shall not exceed the standards specified herein.

(3)

Land Subdivisions and Parcel Maps. Residential lots created from a subdivision or parcel map application for rental projects and/or ownership projects shall, through conditions of approval, incorporate the requirements of this Division.

B.

Fractional Units. When the application of the percentages specified above results in a number that includes a fraction, the fraction shall be rounded up to the next whole number if the fraction is 0.70 or more. If the result includes a fraction below 0.70, the developer shall have the option of rounding up to the next whole number and providing the affordable unit on-site, or paying an in lieu fee instead of providing an additional affordable unit. The in lieu fee shall be calculated in accordance with Section 19.24.040.

C.

Replacement Units. If a proposed residential project would result in the elimination of existing deed restricted affordable dwelling units, the affordable dwelling units must be replaced on a one-for-one basis with equally affordable or more affordable deed restricted units.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

A.

As provided in Section 19.24.020A, an in-lieu fee may be paid instead of providing affordable units in a residential project of six (6) or fewer units. As provided in Section 19.24.030B, if the number of affordable units results in a fractional unit below 0.70 an in-lieu fee may be paid instead of providing an affordable unit. In-lieu fees shall be paid prior to issuance of the building permit(s) for the project. The in-lieu fees shall be paid into a separate city fund earmarked for the advancement and development of very-low, low, and moderate income housing. The City Council shall, from time to time, adopt a resolution setting forth the amount of the fees.

B.

A developer proposing to construct a residential project may apply for payment of a fee in lieu of providing some or all of the affordable units required by Section 19.24.030. Application for payment of a fee in lieu of providing some or all of the affordable units required by Section 19.24.030 shall be made in the form of a written request at the time the developer submits the application for the residential project. Final decision of whether to approve the payment of an in-lieu fee shall be at the discretion of the City Council. The decision of whether or not to authorize the payment of an in-lieu fee shall be based on factors including but not limited to,

location, development density, accessibility to public transportation, environmental conditions, and whether the payment of fees would better serve city housing goals, obligations and the production of affordable housing. If an in-lieu fee is approved, the fee shall be determined and paid as provided in Section 19.24.040A.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

A.

The developer may request an alternate means of compliance with this Article other than the provision of the affordable units required by Section 19.24.030 or the payment of in-lieu fees provided for by Section 19.24.040 as part of the application required by Section 19.24.100 in accordance with the following provisions:

1.

Off-Site Construction of Affordable Units. Affordable units may be constructed on a site or sites not contiguous to the residential project at the discretion of the City Council with review authority over the residential project upon a finding that off-site construction equally or better serves city interests because of factors involving the residential project including, but not limited to, overall project size, density, character and location, accessibility to public transportation, and proximity to retail and service establishments. The approval of off-site construction of affordable units shall be subject to Section 19.24.070D, and such terms and conditions as may be imposed by the applicable city body with review authority.

2.

Land Dedication. In lieu of building affordable units, the developer may apply for authorization to dedicate to land within the city provided that the land is suitable for the construction of at least the required number of affordable units pursuant to Section 19.24.030 and is as least equal in value to the cost of providing the affordable units as part of the residential project. The value of a proposed land dedication as compared to the cost of providing the affordable units within the project shall be determined by an appraiser and/or financial analyst appointed by the city and paid for by the developer.

The decision of whether to approve a land dedication in lieu of the building of affordable units shall be based on the factors included in Section 19.24.050(A)(1) above. Alternatively, a land dedication may be authorized based on a finding that the dedication of land in this instance would better serve the best interests of the city in terms of city housing goals, obligations, and the production of affordable housing. The approval of a land dedication shall be at the discretion of the Planning Commission or the City Council, which ever serves as the final review authority over the residential project, and shall be dedicated prior to or concurrent with the residential project's final map or parcel map recordation or issuance of the first building permit, whichever comes first. The approval of a land dedication shall also be subject to such terms and conditions as may be imposed by the city body with review authority.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

19.24.060 - Credit for Additional Affordable Units.

A.

If the developer completes construction on site of a greater number of affordable units in the project than required by this Article, the additional units may be credited toward meeting the requirements of this Article for a future project. The Developer may use the credits in a future project or transfer the credits in writing to another developer. Credits will only be counted toward required affordable units with the same bedroom count, the same tenure (rental or ownership), and equivalent affordability targets. The credits must be used within 10 years of issuance. Projects which have obtained a density bonus pursuant to Section 19.24.100 or which receive a government subsidy in any form, financial or other, for purposes of construction shall not be eligible for credits.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

A.

Mix, Size and Number of Bedrooms.

1.

Affordable units in an ownership project shall be proportional in unit mix including but not limited to the number of bedrooms and unit size as the market rate units. The affordable ownership units need not exceed 1,400 square feet and three bedrooms when included in a development of market rate units for ownership that exceed 1,400 square feet and three bedrooms.

2.

Affordable units in rental projects shall be proportional in unit mix including but not limited to the number of bedrooms and unit size as the market rate units. The affordable rental units need not exceed 900 square feet and two bedrooms when included in a development of market rate rental units that exceed 900 square feet and two bedrooms.

B.

Location and Design. Affordable units shall be dispersed throughout a residential project to the extent feasible and be comparable in construction quality and exterior design to the market rate units.

C.

Equal Access. The affordable units shall have equal access to all on-site amenities available to market rate units.

D.

Timing of Construction. All affordable units must be constructed and occupied prior to or concurrently with the construction and occupancy of market rate units unless an alternative construction timing schedule has been approved by the city body with review authority.

E.

Duration of Affordability Requirement. Affordable units shall be legally restricted to occupancy by households of the income levels for which the units were designated, for a minimum period of 99 years from the date of

first occupancy for rental units, and 99 years from the date of first sale for owner-occupied units, unless the requirements of a California law require a shorter period of duration.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

A.

General Eligibility. No household may occupy an affordable unit unless the city or its designee has approved the household's eligibility, or has failed to make a determination of eligibility within the time or other limits provided by the affordable rental housing agreement or affordable ownership and resale restrictions provided for in this Article. If the city or its designee maintains a list or identifies eligible households, initial and subsequent occupants shall be selected first from the list of identified households, in compliance with any rules approved by the city.

B.

Occupancy as Principal Residence. A household who occupies a rental affordable unit or who purchases an affordable unit in an ownership project shall, at all times during that household's occupancy, occupy the unit as a principal residence.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

A.

Developer Housing Agreement. Each developer, as a condition of approval for a residential project, shall be required to execute an Inclusionary Housing Agreement in a form provided by the city. The contents of the agreement may vary depending on the manner in which the provisions of this Article are satisfied for a particular residential project. However, each Inclusionary Housing Agreement shall include the following:

1.

A description of the residential project, including whether the affordable units will be rented or owner-occupied;

2.

The number, size and location of the affordable units;

3.

Provisions and/or documents for resale restrictions, deeds of trust, right of first refusal or rental restrictions;

4.

Provisions for monitoring the ongoing affordability of the affordable units, and the process for qualifying prospective resident households for income eligibility;

Any additional obligations relevant to the compliance with this Article; and

6.

Provision for the city to recoup costs for implementation and monitoring of the agreement(s).

B.

Recording of Agreement. Each Inclusionary Housing Agreement shall be recorded against owner-occupied affordable units and the residential projects containing rental affordable units. Additional rental or resale restrictions, deeds of trust, rights of first refusal and/or other documents acceptable to the city shall also be recorded against owner-occupied affordable units. In cases where the requirements of this Article are satisfied through the development of off-site affordable units, the Inclusionary Housing Agreement shall simultaneously be recorded against the property where the off-site units are to be developed.

C.

Time of Recordation. For residential projects for which a parcel or tentative map has been approved, the Inclusionary Housing Agreement shall be recorded concurrent with the recording of the final map for the residential project. For residential projects not subject to parcel or tentative maps, the Inclusionary Housing Agreement shall be recorded prior to the issuance of a building permit.

D.

Purchasers of Affordable Units. Each purchaser of an affordable unit in an ownership project, whether that purchaser bought the affordable unit from the developer or from a previous owner of the affordable unit, shall be required to execute an agreement in a form provided by the city which contains resale restrictions including, but not limited to, restrictions on who may purchase the affordable unit and restrictions on the maximum sales price permitted on resale. The resale restrictions may also allow the city a right of first refusal to purchase the affordable unit at the maximum price which could be charged to a purchaser household at the time the owner proposes sale. This agreement shall be recorded against the affordable unit as part of the closing documents for the sales transaction.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

A.

Applications. Applications for residential projects subject to this Article shall include an Affordable Housing Plan. The Affordable Housing Plan shall include the following information in addition to information otherwise required under this Code. The city may require additional information deemed necessary to clarify that the proposed Residential Project and Affordable Housing Plan are consistent with the requirements of this Article.

Required Affordable Housing Plan Information:

1.

The location, structure, proposed occupancy (rental or ownership) and size of the proposed market rate and affordable units;

2.

The calculations used to determine the number of required affordable units;

3.

A floor plan or site plan depicting the location of the affordable units;

4.

The income level targets for each affordable unit;

5.

For phased developments, a phasing plan;

6.

A marketing plan stating how qualified households will be reviewed and selected to either purchase or rent affordable units; and

7.

Any other information requested by the Community Development Director to assist in the evaluation of the plan for compliance with the standards of this Article.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

A.

Waiver. Notwithstanding any other provision in this Article, the requirements of this Article shall be waived, adjusted or reduced if the developer demonstrates that there is no reasonable relationship between the impact of a proposed residential project and the requirements of this Article, or that applying the requirements of this Article would take property in violation of the United States or California Constitutions. To receive an adjustment or waiver, the developer must include all relevant information in support of a waiver or adjustment at the time the developer submits the application for the residential project. The developer shall also present all arguments in support of a waiver or modification before the city body with review authority over the residential project.

(Ord. No. 1576, § 2 (Exh. A, amd.), 10-23-2012)

DIVISION 19.25 - DENSITY BONUS