Chapter 18.86 — INCLUSIONARY HOUSING

This chapter is intended to assist in the provision of affordable housing for persons of moderate, low, and very low income. Public housing programs and housing subsidy programs can meet only a small portion of the need for low- and moderate-income housing. The majority of housing units has been, and will continue to be, produced by the private housing industry. Private industry has the capability to assist in providing affordable housing given supportive government policies and programs, including incentives and public investment, as appropriate. This program is designed to promote a full range of housing choices, to require construction and continued existence of affordable dwelling units, to provide for a program of incentives and local public subsidy, and to implement the housing element of the city's general plan. (Ord. 738 § 1 (Exh. A) (part), 2013)

The requirements of this chapter apply to all newly constructed dwelling units within the city of Patterson. At least fifteen percent of all newly constructed dwelling units in a residential project shall be developed, offered to, and sold or rented to very low-, low-, and moderateincome households, at an affordable housing cost, according to Section 18.86.030 (Inclusionary unit requirement).

(Ord. 738 § 1 (Exh. A) (part), 2013)

• A. Requirements for Owner-Occupied Developments. Sixty percent of the affordable units, which are required to be constructed in connection with the construction of market-rate units intended for owner occupancy, shall be available at affordable sales prices to moderate-income households. The remaining forty percent of the required affordable units shall be available at affordable sales prices to low-income households.

• B. Requirements for Renter-Occupied Unit Developments. Forty percent of the affordable units, which are required to be constructed in connection with construction of rental market-rate units, shall be available at affordable rents to very low-income households. The remaining sixty percent of the required affordable units shall be available at affordable rents to low-income households.

• C. The affordable units shall be constructed on site not later than the related market-rate units, unless one of the alternative actions set forth in Section 18.86.060 (Affordable housing concessions and incentives) is performed. Such dwelling units shall include a covenant that each dwelling unit shall be affordable for thirty years. For fractions of affordable units, the owner of the property must either construct the next higher whole number of affordable units or perform an alternative action as specified in Section 18.86.060.

• D. On-site inclusionary units shall have access to common amenities in development projects.

• E. Affordable units are subject to annual reporting requirements to ensure continued compliance.

• (Ord. 738 § 1 (Exh. A) (part), 2013)

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City of Patterson, CA

ZONING

§ 18.86.040

§ 18.86.050

All inclusionary units shall be comparable with the market-rate units in terms of the size, base design, appearance, materials, and finished quality, and shall be proportional in number, size, and location. Affordable units shall be comparable in number of bedrooms, exterior appearance, and overall quality of construction to first-class quality affordable housing found elsewhere in the city. Subject to the approval of the planning director, square footage of affordable units and interior features in affordable units need not be the same as, or equivalent to, those in market-rate units in the same residential project, so long as they are of good quality and are consistent with contemporary standards for new housing.

Affordable units shall be dispersed throughout the residential project, or, subject to the approval of the planning director, may be clustered within the residential project when this furthers affordable housing opportunities.

All affordable units in a residential development shall be constructed concurrently with or prior to the construction of the market-rate units. In the event that the city approves a phased project, the inclusionary units required by this chapter shall be proportionately provided within each phase of the residential development. (Ord. 738 § 1 (Exh. A) (part), 2013)

In lieu of including the affordable housing units on-site, the requirements of this chapter may be satisfied through the alternatives discussed below. If the planning director finds that on-site units are infeasible, the developer shall submit an equivalency proposal to the planning commission for approval. Such proposals shall show why compliance with this chapter is not financially or otherwise feasible and how the alternative proposed will further affordable housing opportunities in the city to an equal or greater extent than compliance with the express requirements set forth under Section 18.86.030 (Inclusionary unit requirement). A proposal for an alternative equivalent action may include, but is not limited to, the construction of affordable units on another site, dedication of land, the acquisition or rehabilitation of existing substandard dwelling units and the enforcement of required rental/sales price restrictions, and/or an in-lieu fee.

Applicants proposing to construct rental affordable units in lieu of owner-occupied affordable units as permitted by California Government Code Section 65589.8 (or its successor provision) shall submit an equivalency proposal pursuant to this section.

• A. Alternative Equivalency Proposals.

  1. Off-Site Housing. In the event that on-site inclusionary housing is infeasible, upon application of the developer and at the discretion of the planning commission, the developer may satisfy the requirements of providing inclusionary units as part of the residential development, in whole or in part, by constructing or substantially rehabilitating units equal to or greater than the required inclusionary units at a site different than the site of the residential development.

  2. Dedication of Land for Housing. In the event that on- or off-site inclusionary housing is infeasible, upon application of the developer and at the discretion of the planning commission, 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.

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City of Patterson, CA

PATTERSON CODE

§ 18.86.050

§ 18.86.050

3. Payment of an In-Lieu Fee. In exceptional cases where the developer finds on-site inclusionary housing, off-site inclusionary housing, or the dedication of land is infeasible, upon application of the developer, and at the discretion of the planning commission, a fee in lieu of all or some of the inclusionary units may be paid by the developer.

4. The housing in-lieu fee shall be charged on a percentage basis of the projected construction costs of market-rate dwelling units. The amounts and calculation of the housing in-lieu fee shall be established by resolution of the city council. Construction costs of market-rate dwelling units are determined in accordance with the definition in Division V (Definitions), which states "Construction costs shall mean the estimated cost per foot of construction, as established by the building department of the city of Patterson for use in the setting of regulatory fees and building permits, multiplied by the total square footage to be constructed for each dwelling unit, minus square footage for garage area." For attached single-family residential and rental residential development projects, construction costs shall be separately calculated for each dwelling unit and the appropriate fee paid for each unit within the residential project. The housing in-lieu fee required by this section may be satisfied either by cash payment or, upon the recommendation of the planning director and approval of the city council, by an alternative which will provide the city with a value equal to or greater than the amount of the required in-lieu fee.

• B.

• Further Specifications for Alternative Equivalency Proposals.

1. Standard for Approval. The planning commission may approve an equivalency proposal only if it is not financially or otherwise feasible to construct the units within the development and the alternative provides a more cost-efficient solution to the inclusionary housing component than the standard approach set forth in this document, or if the location of off-site development would be superior to on-site development from the perspective of access to transportation, services, public facilities, or other applicable residential planning criteria in the general plan.

2. Affordable Units Off Site. An applicant may propose to meet its obligation under the ordinance through new construction, substantial rehabilitation of dwelling units, or adaptive reuse of an existing structure(s) at a location off site from the proposed residential development.

3. Number of Inclusionary Units Credited to the Dedication of Land. The number of inclusionary units credited to the dedication of land will be determined based on the total development cost to provide the inclusionary dwelling units, including the land and construction costs, so that the appraised value of the land that is dedicated to the city is equivalent to the total development costs of the inclusionary requirement. If the appraised value of the dedicated land is less than the total development costs, the developer will be credited for inclusionary units to the extent that the appraised value covers any portion of the development costs of the inclusionary requirement. Any fractions of a unit will be rounded down to the nearest whole unit.

With respect to dedicated land, the city, upon acceptance of an offer of dedication, shall publish a request for proposal for development of the site(s) which will result in at least the number of units credited to the site(s).

4. Site Suitability. The land proposed for dedication must be suitable from the

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City of Patterson, CA

ZONING

§ 18.86.050

§ 18.86.050

perspective of size, configuration, physical characteristics, physical and environmental constraints, access, location, adjacent use, and other relevant planning criteria.

5. Site Identification and Regulatory Status. The developer must identify the proposed dedicated site and the number of proposed units to be credited thereby as part of the equivalency proposal required in this document. At the same time or before the development project receives its legislative entitlements, the dedicated land shall have received all the legislative entitlements necessary for development of the inclusionary units on such land. Unless the phasing plan requires otherwise, at the same time or before a residential project records a final map, or is issued a building permit, whichever is earlier, the dedicated land shall have received all the necessary projectlevel approvals necessary for development of the inclusionary units on such land, and prior to the issuance of any certificate of occupancy for a residential project, the dedicated land shall be fully served with the infrastructure necessary for residential development.

6. Planning Commission Review. If the equivalency proposal is accepted or accepted as modified by the planning commission, the relevant elements of the equivalency proposal shall be included in the applicable legislative approvals for both the residential development generating the requirement for the inclusionary housing component and, if applicable, the dedicated site, off-site development, or rehabilitation project where all or part of that requirement is proposed to be met. If the equivalency proposal is rejected, the inclusionary housing component shall be provided as set forth in this document within the development project.

7. Implementation. As early as possible in the regulatory process, the owner of the residential project must: (a) in the case of land dedication, provide an irrevocable offer of dedication for the dedicated site at no cost to the city or to a developer of affordable housing approved by the city; and (b) in the case of off-site development, demonstrate to the planning commission that the off-site location is, and will remain committed to, the timely development of the inclusionary units; and (c) in the case of new construction or substantial rehabilitation of rental units, assure that the units will be rent restricted for thirty years with respect to each affordable unit. The commitment of off-site land may be demonstrated through ownership of the off-site location, or through adequate control of the use of the off-site location through joint ownership, joint venture or other contractual means. If necessary to ensure that inclusionary housing units are developed or rehabilitated contemporaneously with the market-rate units, the city may require the offer of dedication, evidence of off-site control, or commencement of rehabilitation as early as the recording of a final map or issuance of a building, whichever occurs first.

With respect to an off-site location, the planning commission may also condition development or occupancy of the residential project on development or occupancy of the off-site inclusionary units, and the inclusionary housing agreement must apply to and be recorded against both the residential project and the off-site development. With respect to dedicated land, the city, upon acceptance of the offer of dedication, shall publish a request for proposal for development of the site(s) which will result in the production of at least the number of inclusionary units credited to the site(s).

8. Appeals. An applicant or any aggrieved person may appeal decisions of the planning

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City of Patterson, CA § 18.86.050

PATTERSON CODE

§ 18.86.060

director and the planning commission as provided the Patterson city zoning ordinance.

• (Ord. 738 § 1 (Exh. A) (part), 2013)

The developer may request that the city provide inclusionary incentives as set forth in this section. The goal of these inclusionary incentives is to apply available incentives to qualifying projects in a manner that, to the extent feasible, offsets the cost of providing the inclusionary housing component. The planning director shall respond to that request and make a recommendation to the appropriate review authority (planning commission or city council) regarding a determination as to a package of inclusionary incentives.

• A. Fee Waivers or Deferrals. Upon application as provided herein, the city shall make available a program of waiver, reduction, or deferral of development fees, administrative fees, and financing fees for affordable units. Such a program may include a fifty percent waiver of development-related application and processing fees for affordable units constructed in connection with such residential project. In addition, the planning commission may consider, on a case-by-case basis, the provision of additional incentives as provided by law or in the housing element of the Patterson general plan.

• B. Modification of Planning and Public Works Development Standards. Upon application as provided herein, the city may modify for affordable units, to the extent feasible, in light of the uses, design, and infrastructure needs of the development, standards relating to road widths, curbs, and gutters, parking, lot coverage, and minimum lot sizes.

• C. Interior Finish Reductions. Upon application as provided herein, the city may, to the maximum extent appropriate in light of project design elements, allow builders to finish the interior of affordable units with less expensive finishes and appliances, subject to approval by the planning director.

• D. Streamlining and Priority Processing. The planning director shall review and modify, as appropriate, procedures for streamlining and priority processing which relieve affordable units of permit processing requirements to the maximum extent feasible consistent with the public health, safety, and welfare.

• E. Density Bonus. The city shall make available to the developer a density bonus as provided in state density bonus law (Government Code Section 65915); however, the affordability requirements to qualify for a density bonus shall be those stated in Section 18.86.030 (Inclusionary unit requirement) and the other provisions of this chapter. Units produced as part of such a density bonus do not give rise to an inclusionary housing requirement.

• F. Local Public Funding. If available, the developer may apply for local public funding to assist in the financing and development of the inclusionary housing component. Local public funding may serve to facilitate state allocation of tax credits, mortgage revenue bonds, or other state or federal assistance. However, the provision of local subsidies requires that the developer also diligently pursue other external state and federal subsidies.

• G. The city council may consider, on a case-by-case basis, at its sole discretion, the provision of additional concessions or incentives consistent with state law and the housing element of the city of Patterson general plan for residential development projects which provide at least fifteen percent of the total dwelling units as affordable units.

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City of Patterson, CA

ZONING

§ 18.86.060

§ 18.86.090

• (Ord. 738 § 1 (Exh. A) (part), 2013)

No temporary or permanent certificate of occupancy for any new dwelling unit in a residential project shall be issued until the permittee has met the on-site construction inclusionary requirement of the residential development or has satisfactorily performed one of the alternative actions set forth in this document.

(Ord. 738 § 1 (Exh. A) (part), 2013)

Any monies contributed to the city pursuant to the provisions of this chapter shall be payable to the city of Patterson for the purpose of providing affordable housing. Payment of the fee shall be made in full prior to the issuance of building permits or recordation of final maps.

Any fees collected and interest accrued pursuant to this chapter shall be committed within five years after the payment of such fees.

(Ord. 738 § 1 (Exh. A) (part), 2013)

The following development projects are exempt from this chapter and generate no obligation to provide an inclusionary housing component:

• A. Residential projects proposed to contain ten or fewer residential dwellings at one location.

• B. Rehabilitation of existing residential dwellings.

• C. Units produced as a density bonus.

• D. Any residential project for development of single-family residential units or subdivision lots created pursuant to a final map recorded on or before September 2006, subdivision lots created pursuant to a final map recorded on or before September 2006, where the only remaining discretionary entitlements required to develop the project are one or more of the following nonlegislative entitlements: variance, plan review, or design review.

• E. Replacement of dwelling units destroyed by natural disaster or accidental loss.

• F. The construction of a single dwelling unit which is the whole of a residential development project and which is built, owned, and after completion, occupied for two years by a moderate-income household verified by the planning director and which meets the requirements established by this chapter. For the purposes of this exemption, a dwelling unit shall be deemed "built" by its owner if it is built by or for a permit holder who intends to reside in the dwelling unit subject to this chapter.

• G. Projects that are the subject of development agreements currently in effect with the city and approved prior to the effective date of this chapter where such agreements expressly preclude the city from requiring compliance with this type of a housing fee program.

• H. A residential development project to the extent it has received a vested right to proceed without payment of housing impact fees pursuant to state law.

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City of Patterson, CA

PATTERSON CODE

§ 18.86.090

§ 18.86.120

• I. Building permits for residential development projects if compliance with this section for such project has already been satisfied including, but not limited to, building permits on newly created lots where the subdivider has built affordable units or otherwise satisfied this section.

• (Ord. 738 § 1 (Exh. A) (part), 2013)

Prior to the issuance of certificates of occupancy for affordable units, regulatory agreements and, if the affordable units are owner-occupied, resale restrictions, deeds of trust, and/or other documents, all of which must be acceptable to the planning director and consistent with the requirements of this chapter, shall be recorded against parcels having such affordable units and shall be effective for at least the period of time required by Health and Safety Code Section 33413 with respect to each affordable unit.

The maximum sales price permitted on resale of an affordable unit intended for owner occupancy shall not exceed the seller's purchase price, adjusted for the percentage increase in median income since the seller's purchase, plus the value of substantial structural or permanent fixed improvements to the property as determined by the county assessor. Median income shall be calculated based on the presumed occupancy levels used to determine affordable sales price.

The resale restrictions shall provide that in the event of the sale of an affordable unit intended for owner occupancy, the city shall have the right to purchase such affordable unit at the maximum price which could be charged by the household.

No household shall be permitted to occupy an affordable unit, or purchase an affordable unit for owner occupancy, 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 a regulatory agreement or resale restrictions. Households selected to occupy affordable units shall be selected from the list of eligible households maintained by the city to the extent provided in the regulatory agreement or resale restrictions.

(Ord. 738 § 1 (Exh. A) (part), 2013)

It shall be a misdemeanor for any person to sell or rent an affordable unit as specified in this chapter at a price or rent exceeding the maximum allowed or to a household not qualified, unless authorized by the regulatory agreement for such unit.

The Patterson city attorney, as appropriate, shall be authorized to enforce the provisions of this document and all regulatory agreements and resale controls placed on affordable units by civil action and any other proceeding or method permitted by law.

Failure of any official to fulfill the requirements of a provision of this document shall not excuse any applicant from fulfilling the remaining requirements of the ordinance codified in this chapter.

(Ord. 738 § 1 (Exh. A) (part), 2013)

A developer of any project subject to the requirements in this chapter may appeal to the city council for a reduction, adjustment, or waiver of the requirements based upon the absence of any

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City of Patterson, CA

ZONING

§ 18.86.120

§ 18.86.120

reasonable relationship or nexus between the impact of the development and either the amount of the fee charged or the inclusionary requirement.

A developer subject to the requirements of this chapter who has received an approved tentative subdivision or parcel map, use permit, or similar discretionary approval and who submits a new or revised tentative subdivision or parcel map, use permit, or similar discretionary approval for the same property may appeal for a reduction, adjustment, or waiver of the requirements with respect to the number of lots or square footage of construction previously approved.

Any such appeal shall be made in writing and filed with the city clerk not later than ten days before the first public hearing on any discretionary approval or permit for the development, or if no such discretionary approval or permit is required, or if the action complained of occurs after the first public hearing on such permit or approval, then the appeal shall be filed within ten days after payment of the fees objected to. The appeal shall set forth in detail the factual and legal basis for the claim of waiver, reduction, or adjustment. The city council shall consider the appeal at the public hearing on the permit application or at a separate hearing within sixty days after the filing of the appeal, whichever is later. The appellant shall bear the burden of presenting substantial evidence to support the appeal, including comparable technical information to support appellant's position. No waiver shall be approved by the city council for a new tentative subdivision or parcel map, user permit, or similar discretionary approval on property with an approved tentative subdivision or parcel map, use permit, or similar discretionary permit unless the council finds that the new tentative subdivision or parcel map, user permit, or similar discretionary approval is superior to the approved project both in its design and its mitigation of environmental impacts. The decision of the council shall be final. If a reduction, adjustment, or waiver is granted, any change in use within the project shall invalidate the waiver, adjustment, or reduction of the fee or inclusionary requirement. (Ord. 738 § 1 (Exh. A) (part), 2013)

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City of Patterson, CA