Chapter 17.42 — Inclusionary Housing Requirements

Editor's note— The Title of Chapter 17.42 was amended by Ord. 7056 § 2.

This Chapter establishes standards and procedures to encourage the development of housing that is affordable to a range of households with varying income levels. The purpose of this Chapter is to encourage the development and availability of affordable 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.

The requirements of this Chapter shall apply to all new residential projects, all subdivisions maps approved after the date of this Ordinance, and all single room occupancy projects, except as noted in Subsection B. The requirements of this Chapter shall apply to all developers and their agents, successors-in-interest, and assigns proposing a residential project. All inclusionary units required by this Chapter shall be sold or rented in compliance with this Chapter and the City's regulations for the implementation of this Chapter (see Subsection A).

A.

Additional regulations. The Council shall by resolution establish regulations for the implementation of this Chapter. (These regulations were first adopted by the Council on September 10, 2001 and are entitled "City of Pasadena Inclusionary Housing Regulations.") All references to "Director" in said regulations shall mean the City Manager or the Assistant City Manager.

B.

Exempt projects. The following are exempt from the requirements of this Chapter.

Project with discretionary approvals. A residential project that has obtained:

a.

Discretionary approval (e.g., a Conditional Use Permit, Variance, or Design Review approval) in compliance with this Zoning Code before the effective date of this Chapter; and

b.

A Building Permit in compliance with the discretionary approval within 12 months of the effective date of this Chapter; and

c.

A Certificate of Occupancy in compliance with the same discretionary approval.

Exempt by State law. A residential project that is exempt from this Chapter by State law, including a project for which the City enters into a development agreement.

Project with Redevelopment Agreement. A residential project for which the Community Development Commission has executed a Redevelopment Agreement, provided that the Redevelopment Agreement is effective at the time the residential project would otherwise be required to comply with the requirements of this Chapter, and there is no uncured breach of the Redevelopment Agreement before issuance of a Certificate of Occupancy for the project.

(Ord. 7028 § 1, 2006; Ord. 7020 § 1, 2005)

All of the terms used in this Chapter are defined in Article 8 (Glossary of Specialized Terms and Land Use Types) under the term "Affordable Housing Definitions."

A.

Minimum number of units required. A minimum of 20 percent of the total number of dwelling units in a residential project shall be developed, offered to, and sold or rented to households of very low, low, and moderate-income, at an affordable housing cost, as follows.

Units for sale. If the project consists of units for sale, a minimum of 20 percent of the total number of units in the project shall be sold to very low, low, or moderate-income households.

Rental units. If the residential project consists of rental units, a minimum of five percent of the units shall be rented to very low-income households, five percent of the units shall be rented to very low or low-income households, and 10 percent of the units shall be rented to very low, low, or moderate-income households.

B.

Rounding of quantities in calculations. In calculating the required number of inclusionary units, fractional units of 0.75 or above shall be rounded-up to a whole unit if the residential project consists of 10 to 20 units; and fractional units of 0.50 or above shall be rounded-up to a whole unit if the project consists of 21 or more units. Notwithstanding the foregoing, the minimum requirement for any project shall not be less than one unit for very low, low or moderate-income households and one unit for very low or low-income households.

(Ord. No. 7353, § 2 (Exh. 1), 11-4-2019)

As an alternative to developing required inclusionary units within an affected residential project in compliance with Section 17.42.040 (Inclusionary Unit Requirement), the requirements of this Chapter may be satisfied through one or more of the following alternatives, in compliance with the City's regulations for the implementation of this Chapter (see Section 17.42.020.A).

A.

In lieu fee. The developer may choose to pay a fee in lieu of providing all or some of the inclusionary units, as follows.

Amount of fee. The amount of the fee shall be as required by the Council's Fee Resolution.

Special adjustment for first 12 months. For 12 months from the effective date of this Chapter, the fee shall be 40 percent of that required by the Council's Fee Resolution.

Timing of payment. One-half of the in-lieu fee required by this Subsection shall be paid (or a letter of credit posted) before issuance of a Building Permit for any part of the residential project. The remainder of the fee shall be paid before a Certificate of Occupancy is issued for any unit in the project.

Housing Trust Fund. Fees collected in compliance with this Section shall be deposited in the Inclusionary Housing Trust Fund.

B.

Off-site units. Upon application by the developer and at the discretion of the City Manager or the Assistant City Manager, the developer may satisfy the inclusionary unit requirements for the project, in whole or in part, by constructing or substantially rehabilitating the required number of units on a site other than that of the affected residential project.

C.

Land donation. Upon application by the developer and at the discretion of the City Manager or the Assistant City Manager, the developer may satisfy the project inclusionary unit requirements, in whole or in part, by dedicating land to the City for the construction of the inclusionary units.

D.

On-site inclusionary units required when very low, low, and/or moderate income households are displaced. Any other provision of this chapter, notwithstanding, any project subject to this chapter which results in the displacement of very low, low, and/or moderate income household(s) shall be required to provide on-site inclusionary units as required by this chapter.

(7028 § 2, 2006; Ord. 7020 § 2, 2005)

A.

Submittal and execution. The developer shall comply with the following requirements at the times and in compliance with the standards and procedures in the City's regulations for the implementation of this Chapter (see Section 17.42.020.A).

Housing Plan. The developer shall submit an Inclusionary Housing Plan for approval by the City Manager or the Assistant City Manager, detailing how the provisions of this Chapter will be implemented for the proposed project.

Housing Agreement. The developer shall execute and cause to be recorded an Inclusionary Housing Agreement, unless the developer is complying with this Chapter as provided in Sections 17.42.050.A. (In lieu fee) or C. (Land donation).

B.

Discretionary approvals. No discretionary approval shall be issued for a residential project subject to this Chapter until the developer has submitted an Inclusionary Housing Plan.

C.

Issuance of Building Permit. No Building Permit shall be issued for a residential project subject to this Chapter unless the City Manager or the Assistant City Manager has approved the Inclusionary Housing Plan, and any required Inclusionary Housing Agreement has been recorded.

D.

Issuance of Certificate of Occupancy. A Certificate of Occupancy shall not be issued for a residential project subject to this Chapter unless the approved Inclusionary Housing Plan has been fully implemented.

(Ord. 7020 §§ 3, 4, 2005)

A.

Location within project, relationship to non-inclusionary units. All inclusionary units shall be:

Reasonably dispersed throughout the residential project;

Proportional, in number, bedroom size, and location, to the market rate units; and

Comparable with the market rate units in terms of the appearance, base design, materials, and finished quality.

B.

Timing of construction. All inclusionary units in a residential project shall be constructed concurrent with, or before the construction of the market rate units. If the City approves a phased project, the required inclusionary units shall be provided within each phase of the residential project.

C.

Time limit for reserving units. All required inclusionary units shall be reserved for low and moderate-income households at the applicable affordable housing cost for the following minimum time periods.

Units for sale - 45 years. A unit for sale shall be reserved for the target income level group at the applicable affordable housing cost for a minimum of 45 years.

Rental units - Reserved in perpetuity. A rental unit shall remain reserved for the target income level group at the applicable affordable housing cost in perpetuity.

D.

Recapture of financial interest. Notwithstanding Subsection C. 1., above, inclusionary units for sale may be sold to an above-moderate-income purchaser in compliance with the City's regulations for the implementation of this Chapter (see Section 17.42.020.A); provided that the sale shall result in a recapture by the City, or its designee, of a financial interest in the unit equal to:

Difference between price and value. The difference between the initial affordable sales price and the appraised value at the time of the initial sale; and

Proportionate share of appreciation. A proportionate share of any appreciation.

E.

Preference and priority system. The preference and priority system set forth in the City's Inclusionary Housing Regulations shall be used for determining eligibility among prospective beneficiaries for inclusionary units created through this Chapter.

(Ord. 7028 §§ 3, 4, 2006)

A.

Forfeiture of funds. Any individual who sells or rents an inclusionary unit in violation of this Chapter shall be required to forfeit all money so obtained. Recovered funds shall be deposited into the Inclusionary Housing Trust Fund.

B.

Legal actions. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this Chapter, including actions:

To disapprove, revoke, or suspend any permit, including a Building Permit, Certificate of Occupancy, or discretionary approval; and

For injunctive relief or damages.

C.

Recovery of costs. 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.

A.

Determination of a taking of property without just compensation.  

Initiated by request from developer. Commencing upon the approval or disapproval of the Inclusionary Housing Plan by the City Manager or the Assistant City Manager, in compliance with the City's regulations for the implementation of this Chapter (see Section 17.42.020.A), 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 the residential project, would legally constitute a taking of property of the residential project without just compensation under the California or Federal Constitutions.

Burden on developer. 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 project would constitute a taking of the property of the proposed project without just compensation.

City Manager or the Assistant City Manager's determination subject to appeal. City Manager or the Assistant City Manager shall make the determination, which may be appealed in compliance with Chapter 17.72 (Appeals) except that the Council shall serve as the applicable review authority.

B.

Presumption of facts. In making the taking recommendation or determination, the review authority shall presume each of the following facts:

Application of requirements. Application of the inclusionary housing requirement to the residential project;

Incentives. Application of the inclusionary incentives;

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

External funding. External funding where reasonably likely to occur.

C.

Modifications to reduce obligations. 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 though application of this Chapter to the residential project, the requirements of this Chapter remain applicable.

(Ord. 7020 § 5, 2005)

There is hereby established a separate fund of the City, to be known as the Inclusionary Housing Trust fund. All monies collected in compliance with Subsections 17.42.050 A. (In lieu fee), 17.42.080.D.(Recapture of financial interest), or 17.42.090 (Enforcement), above, shall be deposited in the Inclusionary Housing Trust Fund.

(Ord. 7056 § 2(c) (part), 2006)

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

(Ord. 7056 § 2(c) (part), 2006)

Within 15 calendar days after the date of the City Manager or Assistant City Manager's decision, an appeal may be filed in compliance with Chapter 17.72 (Appeals and Calls for Review).

(Ord. 7056 § 2(c)(part), 2006; Ord. 7020 § 6, 2005)