Article 47 — City of Pacifica Below Market Rate (Inclusionary) Program.

It is the intent of this article to establish requirements for the provision of housing units for very low, lower and moderate income households in residential development projects of a certain size.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

For the purposes of this article, unless otherwise apparent from the context, the following words and phrases are defined as set forth below:

(a)

"Affordability agreement" means an agreement, running with the land assuring that a housing unit will be maintained and sold or leased at an affordable housing cost as required by this article and City policies. It may be a covenant, deed restriction, performance deed of trust, or such other document or documents as are satisfactory to the City Attorney.

(b)

"Affordable housing cost" means an "affordable housing cost" as defined in Section 50052.5 of the California Health and Safety Code.

(c)

"Affordable rent" means an "affordable rent" as defined in Section 50053 of the California Health and Safety Code.

(d)

"Area median income" means the median household income for the San Francisco Primary Metropolitan Statistical Area (PMSA) as determined annually by the U.S. Department of Housing and Urban Development.

(e)

"BMR unit" means a dwelling unit that must be offered at an affordable rent or affordable housing cost to a very low, lower or moderate income household.

(f)

"City" means the City of Pacifica.

(g)

"Compliance agreement" means an agreement between a developer and the City describing the terms and conditions under which the BMR unit requirement for a residential development will be met and shall be in a form satisfactory to the Planning Director and City Attorney.

(h)

"Density bonus" means entitlement to build additional residential units above the maximum number of units permitted pursuant to the existing General Plan, applicable specific plan and/or zoning designation, and as further specified in Article 41 of this chapter.

(i)

"Developer" means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which holds fee title to the land on which the residential development is located.

(j)

"Eligible household" means a very low, lower or moderate income household approved by the City in accordance with this article.

(k)

"For-sale BMR unit" means a BMR unit offered for sale, including, but not limited to, single-family homes, condominiums, other common interest developments and mutual housing associations.

(l)

"Household" means one person living alone or two (2) or more persons sharing residency whose income is considered for housing payments.

(m)

"Lower income household" means a household whose annual income does not exceed the qualifying limits set for "lower income households" in Section 50079.5 of the California Health and Safety Code.

(n)

"Market rate unit" means a dwelling unit where the rental rate or sales price is not restricted by this article.

(o)

"Moderate income household" means a household whose annual income does not exceed the qualifying limits set for "persons and families of low or moderate income" in Section 50093 of the California Health and Safety Code.

(p)

"Off-site" means located outside the residential development.

(q)

"On-site" means located on or in the residential development.

(r)

"Redevelopment project area" means the area designated by the City Council of the City in Ordinance No. 467-86, adopted on July 14, 1986, as amended as the Rockaway Beach Redevelopment Project Area.

(s)

"Rental BMR unit" means a BMR unit offered for lease or rent.

(t)

"Residential development" means any new construction of dwelling units, subdivision of property for housing development, conversion of rental projects to condominium or other common interest ownership under Article 24.5 or any other creation of dwelling units or lots for housing that is authorized by a discretionary land use. Residential developments include those that are part of a mixed use project with a commercial component.

(u)

"Very low income household" means a household whose annual income does not exceed the qualifying limits set for "very low income households" in Section 50105 of the California Health and Safety Code.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

(a)

Applicability. The requirements of this article shall apply to all residential developments of eight (8) or more units, lots or parcels, including all residential developments in which eight (8) or more units will be added to existing projects.

(b)

Number of BMR units required. Not less than fifteen (15%) percent of all units, lots or parcels in a residential development subject to this article shall be BMR units restricted for occupancy by very low, lower or moderate income households.

(1)

In the City's redevelopment project area, the first required BMR unit, and at least forty (40%) percent of the total number of required BMR units, shall be restricted to occupancy by very low income households. An additional thirty (30%) percent of the required BMR units must be, if not affordable to very low income households, restricted to occupancy for lower income households. Any remaining required BMR units shall be restricted to occupancy by moderate income households.

(2)

Outside the redevelopment project area, the first required BMR unit and at least fifty (50%) percent of the required BMR units shall be restricted to occupancy by lower income households and the remaining required BMR units shall be restricted to occupancy by moderate income households. Provided, the developer has the right but is not required to increase the percentage of lower income household BMR units.

(3)

In determining the number of BMR units required, any decimal fraction below .5 shall be rounded down to the nearest whole number and any decimal fraction .5 or above shall be rounded up to the nearest whole number.

(c)

Exemptions. The requirements of this article do not apply to:

The reconstruction of any structures that have been destroyed by fire, flood, earthquake or other act of nature provided that the reconstruction takes place within three (3) years of the date the structures were destroyed.

Residential developments that already have or will have more units that qualify as BMR units than this article requires.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

(a)

Price of units. The maximum sales price of a for-sale BMR unit shall be an affordable housing cost approved by the City.

(b)

Deed and resale restrictions.

(1)

For-sale BMR units shall remain available at an affordable housing cost to an eligible household for a minimum of forty-five (45) years. Resale controls shall be by legal agreement approved as to form by the City Attorney and shall be in the form of affordable housing covenants, deed restrictions, covenants and/or resale restriction and refinance limitation agreements. Such documents shall provide that the City has an option to purchase the for-sale BMR unit. The City's option to purchase may be assigned to a qualifying eligible household, a nonprofit housing organization, other government entity, or other entity that will ensure the continuation of the affordability of the BMR unit.

(2)

In order to maintain the affordability of the for-sale BMR units constructed pursuant to this article, the purchase price paid by each subsequent purchaser shall be limited to the lesser of:

(i)

The original purchase price, plus the percentage increase in Area Median Income from the date of original purchase, plus the cost of any capital improvement expenditures approved by the City and greater than one percent of the original purchase price, minus any costs necessary to bring the unit into conformity with City building regulations in the event that the occupant has allowed the unit to deteriorate due to deferred maintenance; or

(ii)

The fair market value as determined by an appraiser approved by the City.

(c)

Administration. The City intends to contract with an outside agency, which shall be responsible for selection and qualification of buyers in accordance with City-approved policies, and continuing monitoring for compliance. The developer or subsequent seller shall pay all costs associated with this service for the for-sale BMR unit.

(d)

Occupancy restrictions. For-sale BMR units shall only be occupied by their owners. Renting, leasing, subleasing or subletting shall not be permitted for more than two (2) months in any year. Violation of these occupancy restrictions will be grounds for termination of the occupancy.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

(a)

Rental rates. The maximum rent of a rental BMR unit shall be an affordable rent approved by the City.

(b)

Rental restrictions. Rental BMR units shall remain available at an affordable rent to an eligible household for a minimum of fifty-five (55) years. Rent controls shall be by legal agreement approved as to form by the City Attorney and shall be in the form of affordable housing covenants, deed restrictions and/or covenants.

(c)

Administration. The rental of rental BMR units shall be administered according to City-approved policies by the developer or a nonprofit housing organization, government entity or entity approved by the City. The City may charge a fee to cover the costs of administration of this program, in an amount set from time to time by City Council resolution.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

(a)

BMR unit requirements. BMR units shall:

(1)

Have exterior design and appearance compatible with and substantially the same as market rate units within the residential development, including landscaping;

(2)

Be distributed throughout the residential development;

(3)

Have similar access from the exterior as market rate units;

(4)

Contain proportionately the same or a larger number of bedrooms as market rate units;

(5)

Generally be of comparable size to similar market rate units, although the size of BMR units may be reduced if the project is in a very high or high density zone;

(6)

Have access to all on-site amenities; and

(7)

Be constructed prior to or concurrently with market rate units in the residential development or applicable phase of the residential development.

(b)

Interior amenities. Interior unit amenities, such as floor covering, appliances, and other fixtures, shall be specified within the BMR proposal submitted at the time of planning application, as required by Section 9- 4.4709(a), and may differ from market rate units, but must at a minimum be UL (Underwriters Laboratories) or AGA (American Gas Association) listed.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

A developer may propose an alternative means of complying with this article as set forth below. The Planning Commission may approve, conditionally approve or reject any alternative proposed by the developer. The Planning Commission may only approve or conditionally approve a proposed alternative if the Planning Commission finds that the purposes of this article would be better served by implementation of the proposed alternative and that the proposed alternative meets the greatest community needs at that time.

(a)

Off-site construction. Off-site construction of BMR units may be allowed if the developer demonstrates, and the Planning Commission finds that on-site construction is infeasible. If allowed, off-site BMR units shall be constructed within the City of Pacifica, shall be occupied prior to occupancy of the residential development, and shall be consistent and comply with the standards and requirements specified in this article.

(b)

Land dedication. In lieu of building BMR units, the developer may propose to dedicate land to the City suitable for the construction of BMR units, provided that the Planning Commission reasonably determines that the land is of equivalent or greater value than the required BMR units and that the land has the equivalent or greater development potential of the residential development.

(c)

Payment in lieu of providing a unit. For any residential development that is not located within the redevelopment project area, the developer may propose to pay the City an amount of money in lieu of

providing a unit. The in-lieu payment for each BMR unit shall reflect the estimated cost to provide the BMR unit and shall be set forth in a resolution adopted by the City Council. In-lieu payments shall be paid prior to occupancy of the first market rate unit to be developed within the residential development. In-lieu payments collected under this article shall be deposited into a housing trust fund and shall be used only for the purpose of providing funding assistance for the provision of affordable housing and reasonable administration costs, including, but not limited to, a buyer's assistance program for eligible households.

(d)

Combination. Developer may propose any combination of on-site construction, off-site construction, land dedication and/or in-lieu payments that the City determines to be at least equal to the cost of providing the required BMR units on-site.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007, as amended by § I, Ord. 752-C.S., eff. August 9, 2007)

Any residential development providing all required BMR units on-site shall automatically qualify for the density bonus and additional incentive available for an affordable housing project under Section 9- 4.4102(b)(1). When determining if the residential development would qualify for a larger density bonus under Article 41 of this chapter, on-site BMR units shall be counted in determining the percentage of units in the project that are affordable.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

Only eligible households may occupy BMR units. No household may occupy a BMR unit unless the City or its designee has approved the household's eligibility in accordance with City-approved policies. Preference shall be given to persons residing or working within Pacifica.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

(a)

Application process. At the time of filing a planning application for a residential development subject to this article, the developer shall provide, in addition to information specified elsewhere for the applicable planning permit(s), the following information:

(1)

The number of BMR units proposed;

(2)

The unit sizes and the number of bedrooms per dwelling unit;

(3)

The proposed location of the BMR units;

(4)

The interior unit amenities which would differ from market rate units, including, but not limited to, floor coverings, appliances, plumbing and electrical fixtures;

(5)

The schedule for production of BMR units in phased residential developments; and

(6)

Any alternatives proposed to comply with this article, including reasons why the findings required to approve such an alternative can be met.

(b)

Condition of approval. As part of the approval of any residential development subject to the requirements of this article, the Planning Commission shall approve a program for compliance with it. The developer shall execute an inclusionary zoning compliance agreement prior to recordation of any map, or if there is no map, prior to issuance of any building permit. Recordation of affordability agreements for each BMR unit shall be a condition of approval.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

(a)

Process. The requirements of this article may be waived, adjusted or reduced if the developer shows that there is not a reasonable relationship between the impact of a proposed residential development 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. Such a request shall be made in writing and filed with the City Manager at the time of submittal of an initial application for approval of the residential development and/or as part of any appeal that the city provides as part of the process of approval. The request shall state completely and in detail: (i) the requested waiver, adjustment or reduction of the requirements, (ii) the factual basis for the request, and (iii) the legal basis of this request. The City Manager, in consultation with the City Attorney, shall consider the request and render a decision in writing within thirty (30) days. If the City Manager determines that the requirements of this article lack a reasonable relationship to the impact of a proposed residential development on demand for affordable housing in the City or that those requirements constitute a taking in violation of the United States or California Constitutions, the requirements of this article shall be modified, adjusted or waived to the extent necessary to avoid an unconstitutional result or illegal outcome. If the City Manager determines that no violation of the United States or California Constitutions would occur through application of this article, the requirements of this article shall remain applicable unless the City Manager's determination is overruled or modified by the City Council on appeal.

(b)

Appeal procedure. A decision of the City Manager on a request for a reduction or waiver pursuant to subsection (a) above shall be appealable in accordance with this section. A person seeking judicial review of a decision shall first complete an appeal under this section. Any person wishing to appeal a decision of the City Manager shall file an appeal to the City Council in writing with the City Clerk not later than ten (10) days from the date of the written decision of the City Manager. The written appeal shall state completely and in detail the factual and legal grounds for the appeal. The City Council shall consider the appeal at a public hearing within sixty (60) days after the filing of the request. The decision of the City Council is final.

(c)

Fee for adjustment request or appeal. The cost of the request for adjustment or waiver of the requirements of this article and appeal shall be borne by the applicant in an amount set forth in a resolution adopted by the City Council.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

Nothing in this article is intended to nor shall it supersede the provisions of the Hillside Preservation District (HPD) or B-lot size overlay district (B-district). Residential developments located within HPD and/or B- district land that provide BMR units in accordance with this article shall be subject to all regulations and standards of Article 22.5, regarding the HPD district, including applicable lot coverage limitations, and Article 20, regarding the B-district.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)

(a)

Penalty for violation. It shall be a misdemeanor to violate any provision of this article. Without limiting the generality of the foregoing, it shall also be a misdemeanor for any person to sell or rent to another person a BMR unit under this article at a price or rent exceeding the maximum allowed under this article or to sell or rent a BMR unit to a household that does not qualify under this article. It shall further be a misdemeanor for any person to provide false or materially incomplete information to the City or to a seller or lessor of a BMR unit to obtain occupancy of housing for which he or she is not eligible.

(b)

Legal action. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this article. Failure of any official or agency to fulfill the requirements of this article shall not excuse any person, owner, household or other party from the requirements of this article.

(§ 2 (part), Ord. 746-C.S., eff. May 9, 2007)