Rancho Palos Verdes Municipal Code Ch. 17.11 Affordable Housing

This chapter specifies procedures under which applicants for new residential projects shall receive a density bonus or other incentives for providing housing affordable to low and very low income households. Nothing in this chapter shall be construed to prohibit the city from negotiating for greater numbers of dwelling units affordable to low and very low income households or the provision of varying affordable housing incentives.

In order to provide housing affordable to all segments of the community and preserve and maintain low and moderate income housing opportunities in the coastal specific plan district, consistent with the goals of the city's adopted general plan housing element and state law, this chapter further specifies procedures under which applicants for demolition or conversion of residential units occupied by low or moderate income households in the coastal zone, or for new residential projects, shall be required to provide for housing affordable to very low, low and moderate income households.

It is the preference of the city that persons and entities obligated to provide affordable housing provide such affordable units as part of their project. It is not desirable to accept "in lieu of" fees as an alternative to the provision of actual units, and acceptance of in lieu of fees is discouraged. Persons and entities subject to this chapter shall endeavor to design their projects to include affordable units.

In addition, in order to mitigate the impact of local employment generation on the local housing market, consistent with the goals of the city's adopted general plan housing element and statewide housing goals as declared by the state legislature, this chapter specifies procedures under which applicants of new nonresidential development or conversion of existing development to a more intense use, shall be required to make provisions for housing affordable to low and very low income households.

(Code 1981, § 17.11.010; Ord. No. 320, § 7(part), 1997; Ord. No. 437, § 6, 2006)

The requirements of this chapter shall apply to all applications which will result in the creation of five or more dwelling units or residential lots, including, but not limited to, applications for a tentative tract map, parcel map, conditional use permit, coastal permit, building permit or other development entitlement. Where an initial project consists of four or fewer units, and application is made within three years of the initial project approval to further subdivide or expand the initial project such that the total number of dwelling units or residential lots is equal to five or more, sections 17.11.040 (Affordable housing requirement) and 17.11.050 (Fees in lieu of providing affordable housing units) of this chapter shall apply.

The requirements of this chapter shall also apply to all applications for demolition or conversion of three or more dwelling units in the coastal specific plan district described in chapter 17.72 (Coastal Permits), as specified in section 17.11.130 (Coastal specific plan district replacement housing requirement) of this chapter. Where an initial project consists of two or fewer units, and application is made within three years of the initial project approval to further subdivide or expand the initial project such that the total number of dwelling units or residential lots is equal to three or more, this chapter shall apply.

The requirements of this chapter shall also apply to any development project that has been approved prior to adoption of this chapter, which contains a condition requiring the provision of affordable housing.

This chapter shall further apply to conversion of existing residential rental projects to condominium or stock cooperative ownership at any location in the city.

No residents may be evicted for the purpose of avoiding the requirements of this section. Where residents have been evicted in the 12 months prior to filing an application listed in this section, a presumption of avoidance shall be made, unless evidence to the contrary is submitted to, and approved by, the city.

(Code 1981, § 17.11.020; Ord. No. 320, § 7(part), 1997; Ord. No. 474, § 5, 2008; Ord. No. 495, § 3, 10-6-2009)

The requirements of this chapter shall not apply to:

A. The reconstruction of any structure which has been destroyed by fire, flood, earthquake or other act of god or nature; and

B. Projects where the city in its sole and absolute discretion finds the provision of affordable units to be infeasible pursuant to section 17.11.080 (Feasibility) of this chapter.

(Code 1981, § 17.11.030; Ord. No. 320, § 7(part), 1997)

A. Number of affordable units required. Except as provided for in section 17.11.030 (Exemptions) of this chapter, new residential development of five or more dwelling units shall be required to dedicate up to five percent of all units as affordable to very low income households or dedicate up to ten percent of all units as affordable to low income households. Where a mixture of affordability levels is provided, each very low income affordable unit shall be weighted such that it is equivalent to two low income affordable units, resulting in a total weighted count equal to ten percent of total units. The units provided pursuant to this dedication requirement shall be rented or sold only to households whose income is at a level that does not exceed the required affordability level of the unit. Except where it has been demonstrated not to be feasible, the affordable units shall be similar in exterior appearance, configuration and basic amenities (such as storage space and outdoor living areas) to the market rate units in the proposed project.

Prior to the time the affordable units become available for sale or rent, certificates of occupancy shall not be issued for more than 50 percent of the units in the project nor shall more than 50 percent of the individual lots be sold in cases where a tract map is involved. For phased developments, the provision of the affordable units shall also be phased, proportionate to the size of each development phase.

B. Location of affordable housing units.

1. On-site location. The affordable units shall be provided on-site as part of the new residential development, unless the project applicant that is required to provide said units proves to the city council that providing said units on site shall render the project infeasible.

2. Off-site location. If, as stated above in subsection (B)(1) of this section, the project applicant files a request supported by a feasibility study conforming to the requirements set forth in section 17.11.080, and the city council makes a finding pursuant to section 17.11.080(D)(5) that on-site units would render the project infeasible, the project applicant may then provide said units off site provided that:

a. The off-site unit would not cause the existing development wherein the off-site unit is to be located to exceed the minimum number of affordable housing units required pursuant to subsection (A) of this section if the development were considered a new development. For the purposes of this section, the term "existing development" shall mean a tract of residential homes (either condominium, townhome, single-family detached or single-family attached) or an existing residential apartment development; and

b. The off-site unit is not within an existing development of less than five residential units; and

c. The off-site unit is a newly constructed unit, unless the following occurs:

i. The project applicant files a request supported by a feasibility study conforming to the requirements set forth in section 17.11.080, and the city council makes a finding pursuant to section 17.11.080(D)(3) that said off-site unit provided as a new construction unit would render the project infeasible, and thus, conversion units may be provided. The term "conversion unit" means an existing developed market-rate unit that has been converted to an affordable housing unit and meets all applicable requirements of chapter 17.11; and

ii. The city council determines that in meeting its affordable housing construction needs per the regional housing needs assessment as described in the city's current general plan housing element, there are, per the requirements of state law, a sufficient number of conversion units available to allow the project applicant to utilize one of the limited number of conversion units available to the city in meeting its affordable housing construction need. In determining whether there is a sufficient number of conversion units available, the city council shall first consider the city's own needs and/or plans to utilize any available conversion units, then secondly, shall consider any existing agreements/approvals from the city to allow other applicants the ability to utilize a conversion unit. If after considering these two priority positions, there are still available conversion units, then the city council may grant the project applicant the use of any remaining conversion units available.

C. Timing of providing affordable housing units. Prior to the time the affordable units become available for sale or rent, certificates of occupancy shall not be issued for more than 50 percent of the units in the project nor shall be more than 50 percent of the individual lots sold in cases where a tract map is involved. For phased developments, the provision of the affordable units shall also be phased, proportionate to the size of each development phase.

(Code 1981, § 17.11.040; Ord. No. 320, § 7(part), 1997; Ord. No. 474, § 6, 2008)

To help meet the city's affordable housing obligation, the payment of fees in lieu of providing one or more affordable housing units shall be permitted only if the applicant proves, to the satisfaction of the city council, that provision of affordable housing units renders the project infeasible. Fees, in an amount set by city council resolution, may be paid in lieu of providing affordable housing units required by section 17.11.040 or 17.11.030, only if the project applicant files a request supported by a feasibility study conforming to the requirements set forth in section 17.11.080, and the request is approved by the city council. In order to grant a request to allow an applicant to pay fees in lieu of providing affordable housing units, the city council must make, in writing, the finding set forth in section 17.11.080(D)(3). The foregoing notwithstanding, an applicant shall provide the maximum number of the required affordable units feasible and shall only be permitted to pay in-lieu fees for that number of the required affordable units that render the project infeasible.

(Code 1981, § 17.11.050; Ord. No. 320, § 7(part), 1997; Ord. No. 437, § 7, 2006)

A. Density bonus.

1. A density bonus, as defined in section 17.96.550 of this Code, shall be provided by the city when a developer of a housing development consisting of five or more dwelling units agrees to construct that housing development to contain at least any one of the following:

a. Ten percent of the total units of a housing development for lower income households, as defined in Health and Safety Code § 50079.5.

b. Five percent of the total units of a housing development for very low income households, as defined in Health and Safety Code § 50105.

c. A senior citizen housing development as defined in Civil Code § 51.3, or mobilehome park that limits residency based on age requirements for housing for older persons pursuant to Civil Code § 798.76 or 799.5.

d. Ten percent of the total dwelling units in a common interest development as defined in Civil Code § 4100 for persons and families of moderate income as defined in Health and Safety Code § 50093, provided that all units in the development are offered to the public for purchase.

2. In calculating the percentage of units for either a density bonus or an increase in a density bonus, the following shall apply:

a. The units resulting from the density bonus shall be excluded from the calculation when determining the number of affordable housing units for each income level.

b. The units set aside as affordable for very low income households or low income households, or both, that are required pursuant to section 17.11.040 of this chapter, shall be counted as part of the total units or total dwelling units in the housing development; however, those section 17.11.040 units shall not be counted as units reserved for very low income households or lower income households, or both, for purposes of calculating whether a developer qualifies for a density bonus or an increase in a density bonus.

c. The residential units do not have to be based upon individual subdivision maps or parcels.

3. The amount of density bonus to which the developer is entitled shall vary according to the amount by which the percentage of affordable housing units exceeds the percentage established in subsection (A)(1)(a), (b), (c), or (d) of this section. The applicant may elect to accept a lesser percentage of density bonus. The density bonus shall be permitted in geographic areas of the housing development other than the areas where the units for the lower income households are located. The density bonus shall be calculated as follows:

a. For housing developments meeting the criteria of subsection (A)(1)(a) of this section, the density bonus shall be 20 percent. For each one percent increase in the number of affordable units above the initial ten percent threshold of units affordable to lower income households, the density bonus shall be increased by 1½ percent up to a maximum of 35 percent.

b. For housing developments meeting the criteria of subsection (A)(1)(b) of this section, the density bonus shall be 20 percent. For each one percent increase in the number of affordable units above the initial five percent threshold of units affordable to lower income households, the density bonus shall be increased by 2½ percent up to a maximum of 35 percent.

c. For housing developments meeting the criteria of subsection (A)(1)(c) of this section, the density bonus shall be 20 percent of the number of senior housing units.

d. For housing developments meeting the criteria of subsection (A)(1)(d) of this section, the density bonus shall be 20 percent. For each one percent increase in the number of affordable units above the initial ten percent threshold of units affordable to persons and families of moderate income, the density bonus shall be increased by one percent up to a maximum of 35 percent.

e. The city has the authority but not the obligation to grant a density bonus in excess of 35 percent if the applicant provides benefits in the form of additional affordable units beyond the minimums required by this chapter.

f. For housing developments that will contain a mixture of units restricted by income level, but which will not meet the specified criteria to qualify for a density bonus in each income category, if the development qualifies under one category pursuant to subsection (A)(1)(a), (b), or (d) of this section (the qualifying category), the developer may elect to add the percentages of qualifying and nonqualifying affordable housing units together and apply that percentage to the formula for the highest income units that will be built in order to calculate the density bonus.

g. All density calculations resulting in fractional units shall be rounded up to the next whole number.

4. The affordable housing units shall be rented or sold only to households whose income is at a level that does not exceed the required affordability level of the unit.

5. The affordable housing units shall be similar in exterior appearance, configuration and basic amenities (such as storage space and outdoor living areas) to the market rate units in the proposed project.

6. The granting of a density bonus shall not be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval.

B. Condominium conversion. In lieu of subsection (A) of this section, an applicant may elect, at the time of the application, to have the density bonus governed by this subsection if the housing development is eligible for a density bonus pursuant to this subsection.

1. Where an applicant for a conversion of an apartment project to a condominium project, as defined in Civil Code § 4125(a), agrees to provide at least 33 percent of the total proposed condominium units to persons and families of low and moderate income as defined in Health and Safety Code § 50093, or at least 15 percent of the total units of the proposed condominium project to lower income households as defined in Health and Safety Code § 50079.5, and agrees to pay reasonably necessary administrative costs incurred by the city, the city shall either grant a density bonus, or provide other incentives of equivalent financial value pursuant to subsection (E) of this section. The city shall determine whether a density bonus or an incentive is provided, and at the city's sole discretion, may provide both a density bonus and an incentive.

2. For the purpose of this subsection:

a. The term "density bonus" means an increase in units of 25 percent over the number of apartments, to be provided within the existing structure or structures to be converted; and

b. The term "other incentives of equivalent financial value" shall not be construed to require the city to provide cash transfer payments or other monetary compensation but may include the reduction or waiver of requirements that the city might otherwise apply as conditions of conversion approval.

3. The units shall be sold only to households whose income is at a level that does not exceed the required affordability level of the unit. Except where it has been demonstrated not to be feasible, the affordable housing units shall be similar in appearance, configuration and amenities to the market rate units in the proposed project.

4. An applicant for approval to convert apartments to a condominium project may submit a preliminary proposal pursuant to this subsection B prior to the submittal of any formal requests for subdivision map approvals pursuant to the requirements of title 16 of this Code. The city shall, within 90 days of receipt of a written proposal, notify the applicant in writing of the manner in which it will comply with this subsection.

5. An apartment project originally developed with a density bonus or other incentive pursuant to subsection (A)(1) or (E) of this section shall not be eligible for a further density bonus or incentive under this subsection.

6. Nothing in this section shall be construed to require the city to approve a proposal to convert apartments to condominiums.

C. Land donation.

1. When an applicant for a tentative subdivision map, parcel map, or other residential development approval donates land to the city, the applicant shall be entitled to a density bonus pursuant to subsection (C)(2) of this section, if all of the following conditions are met:

a. The applicant donates and transfers the land no later than the date of approval of the final subdivision map, parcel map, or residential development application.

b. The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households as defined in Health and Safety Code § 50105 in an amount not less than ten percent of the number of residential units of the proposed development.

c. The transferred land is at least one acre in size or of sufficient size to permit development of at least 40 units, has the appropriate general plan designation, is appropriately zoned for development as affordable housing at the density described in Government Code § 65583.2(c)(2), and is or will be served by adequate public facilities and infrastructure. The land shall have appropriate zoning and development standards to make the development of the affordable housing units feasible. No later than the date of approval of the final subdivision map, parcel map, or of the residential development, the transferred land shall have all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land, except that the city may subject the proposed development to subsequent design review to the extent authorized by Government Code § 65583.2(i) if the design is not reviewed by the city prior to the time of transfer.

d. The transferred land and the affordable housing units shall be subject to a deed restriction ensuring continued affordability of the units consistent with section 17.11.070(A), which shall be recorded on the property at the time of the transfer.

e. The land is transferred to the city or to a housing developer approved by the city. The city may require the applicant to identify and transfer the land to the developer.

f. The transferred land shall be within the boundary of the proposed development or, if the city agrees, within one-quarter mile of the boundary of the proposed development.

g. A proposed source of funding for the very low income units shall be identified not later than the date of approval of the final subdivision map, parcel map, or residential development application.

2. For land donations meeting the criteria of subsection (C)(1) of this section, the applicant shall be entitled to a 15 percent increase above the otherwise maximum allowable residential density under the applicable zoning ordinance and land use element of the general plan for the entire development. For each one percent increase in the number of affordable units above the initial ten percent threshold of units affordable to very low income households, the density bonus shall be calculated by adding five percent to the percentage of units affordable to very low income households, up to a maximum of 35 percent.

3. This increase shall be in addition to any increase in density mandated by subsection (A) of this section, up to a maximum combined mandated density increase of 35 percent if an applicant seeks both the increase required pursuant to this subsection C and subsection (A) of this section. All density calculations resulting in fractional units shall be rounded up to the next whole number.

D. Childcare facility.

1. When an applicant proposes to construct a housing development that conforms to the requirements of subsection (A)(1) of this section and includes a childcare facility that will be located on the premises of, as part of, or adjacent to, the project, the city shall grant the applicant one of the following:

a. An additional density bonus that is an amount of square feet of residential space that is equal to or greater than the amount of square feet in the childcare facility.

b. An additional concession or incentive as set forth in subsection (E) of this section that contributes significantly to the economic feasibility of the construction of the childcare facility. The city is not required to grant the requested additional concession or incentive if written findings are made pursuant to section 17.11.080(D)(2).

2. The following conditions shall be imposed prior to approving the housing development:

a. The childcare facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the density bonus units are required to remain affordable pursuant to section 17.11.070 of this chapter.

b. Of the children who attend the childcare facility, the children of very low income households, lower income households, or families of moderate income shall equal a percentage that is equal to or greater than the percentage of dwelling units that are required pursuant to subsection (A) of this section for very low income households, lower income households, or families of moderate income.

3. Notwithstanding any other provision of this subsection D, the city shall not be required to provide a density bonus or concession for a childcare facility if it finds, based upon substantial evidence, that the community has adequate childcare facilities.

E. Incentives or concessions.

1. The applicant for a density bonus shall receive the following number of incentives or concessions, in addition to the density bonus provided pursuant to subsection (A) of this section, unless the city makes written findings pursuant to section 17.11.080(D)(2) of this chapter:

a. One incentive or concession for projects that include at least ten percent of the total units for lower income households, at least five percent for very low income households, or at least ten percent for persons and families of moderate income in a common interest development.

b. Two incentives or concessions for projects that include at least 20 percent of the total units for lower income households, at least ten percent for very low income households, or at least 20 percent for persons and families of moderate income in a common interest development.

c. Three incentives or concessions for projects that include at least 30 percent of the total units for lower income households, at least 15 percent for very low income households, or at least 30 percent for persons and families of moderate income in a common interest development.

2. Affordable housing incentives or concessions include, but are not limited to:

a. A reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards approved by the state building standards commission as provided in Health and Safety Code div. 13, pt. 2.5 (Health and Safety Code § 18901 et seq.), including, but not limited to, a reduction in setback and square footage requirements and in the ratio of vehicular parking spaces that would otherwise be required that results in identifiable, financially sufficient, and actual cost reductions.

b. Approval of mixed use zoning in conjunction with the housing project if commercial, office, industrial, or other land uses will reduce the cost of the housing development and if the commercial, office, industrial, or other land uses are compatible with the housing project and the existing or planned development in the area where the proposed housing project will be located.

c. Other regulatory incentives or concessions proposed by the developer or the city that result in identifiable, financially sufficient, and actual cost reductions.

3. An applicant may request incentives in addition to the mandatory incentives or concessions provided pursuant to this section or incentives in lieu of a density bonus. The city may grant, at its sole discretion, such additional or in-lieu incentives.

4. This subsection E does not limit or require the provision of direct financial incentives for the housing development by the city, including the provision of publicly owned land, or the waiver of fees or dedication requirements.

5. If any incentive or concession is granted pursuant to another provision of this Code other than this section, or prior to applying for a density bonus, each such incentive or concession shall be counted as one of the incentives or concessions required pursuant to this section.

F. Parking ratio.

1. In the event an applicant requests a reduced vehicular parking ratio pursuant to this subsection, the city shall grant the following vehicular parking ratio, inclusive of handicapped and guest parking, if the development qualifies for a density bonus pursuant to subsection (A)(1) of this section:

a. Zero to one bedroom: one on-site parking space.

b. Two to three bedrooms: two on-site parking spaces.

c. Four and more bedrooms: 2½ parking spaces.

2. If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subsection, a development may provide on-site parking through tandem parking or uncovered parking, but not through on-street parking.

3. An applicant may request additional parking incentives or concessions as provided in subsection (E) of this section.

G. Application. Applicants for density bonuses shall file an application for a density bonus with the director at the time when the initial application for the project is filed. The application shall specify the following information for the proposed housing development: the total number of dwelling units, the number of units for lower income households, the number of units for very low income households, the number of qualifying senior units, the number of common interest development units for persons and families of moderate income, the rent or price of the units, the location of the units, and the means of administering the units. The application shall also specify such other information as may be required by the director. The applicant shall designate whether the density bonus is requested on the basis of subsection (A)(1)(a), (b), (c), or (d), of this section. If an additional incentive is requested, beyond that required pursuant to this section, or if an in-lieu incentive is requested, the feasibility study requirements of section 17.11.080 of this chapter shall also apply. The application shall be accompanied by a fee, to be established by resolution of the city council, to cover the city' s cost of reviewing and administering the proposed density bonus project. Any request for a density bonus or additional affordable housing incentive or concession, which is submitted after the time when the initial project application is submitted, shall be considered to be a major revision to the project and shall be treated as a new application.

H. If a housing development is eligible for any density bonus, incentive, concession, waiver or reduced parking ratio pursuant to this section (a "bonus") when sections 17.11.070, 17.11.080, 17.11.110, and 17.11.120 of this chapter are applied to that housing development for any purpose related to a bonus, or for any purpose related to the affordable housing units that make the housing development eligible for a bonus, the definitions of the terms "low income," "moderate income," and "very low income," as defined in sections 17.96.960, 17.96.970, and 17.96.980, shall not apply, and the phrases "low income households," "very low income households," "persons and families of low or moderate income," and "persons and families of moderate income" shall have the meaning assigned to those phrases by this section 17.11.060.

(Code 1981, § 17.11.060; Ord. No. 320, § 7(part), 1997; Ord. No. 394, §§ 4—6, 2003; Ord. No. 474, § 7, 2008; Ord. No. 495, §§ 4—8, 10-6-2009)

A. Units required at specified affordability levels shall remain available and affordable for the longest feasible period of time, as determined by the city. However, where a density bonus, or incentives or concessions of equivalent financial value based upon the land cost per dwelling unit, are provided, units of a housing development for lower income households, very low income households, or persons and families of low and moderate income, shall remain available and affordable for a period of at least 30 years, or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. In no event may a housing development be converted to a common interest development as defined in Civil Code § 4100 for a period of 30 years from first occupancy if the housing development includes affordable housing units for rent.

1. Rents for the units for lower income households or very low income households shall be set at an affordable rent as defined in Health and Safety Code § 50053.

2. Owner-occupied units shall be available at an affordable housing cost as defined in Health and Safety Code § 50052.5.

B. Notwithstanding the provisions of subsection (A) of this section, the following shall apply to section 17.11.060(A)(1)(d) units:

1. The initial occupant of the moderate income units that are directly related to the receipt of the density bonus in the common interest development, as defined in Civil Code § 1351, shall be persons and families of moderate income, as defined in Health and Safety Code § 50093, and the units shall be offered at an affordable housing cost, as that cost is defined in Health and Safety Code § 50052.5. An equity-sharing agreement shall be entered into for each unit, unless such an agreement is in conflict with the requirements of another public funding source or law.

2. The following shall apply to the equity-sharing agreement:

a. Upon resale, the seller of the unit shall retain the value of any improvements, the down payment, and the seller's proportionate share of appreciation. The city shall recapture any initial subsidy and its proportionate share of appreciation, which shall then be used within five years for any of the purposes described in Health and Safety Code § 33334.2(e) that promote homeownership.

b. For purposes of this subsection B, the city's initial subsidy shall be equal to the fair market value of the home at the time of initial sale minus the initial sale price to the moderate income household, plus the amount of any down payment assistance or mortgage assistance. If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value.

c. For purposes of this subsection, the city's proportionate share of appreciation shall be equal to the ratio of the city's initial subsidy to the fair market value of the home at the time of initial sale.

3. In lieu of the provisions of subsection (B)(1) of this section, where there is a direct financial contribution to a housing development through the city's participation in cost of infrastructure, write-down of land costs, or subsidizing the cost of construction, low and moderate income units shall remain available and affordable for 30 years, and the equity sharing agreement shall specify the mechanisms and procedures necessary to carry that out.

C. A senior citizen housing development, as defined in Civil Code § 51.3, or mobilehome park that limits residency based on age requirements for housing for older persons, pursuant to Civil Code § 798.76 or 799.5 shall remain available to qualifying senior residents for a period of at least 15 years.

(Code 1981, § 17.11.070; Ord. No. 320, § 7(part), 1997; Ord. No. 394, § 7, 2003; Ord. No. 474, § 8, 2008; Ord. No. 495, §§ 9, 10, 10-6-2009)

A. Applicability. A feasibility study shall be required when:

1. Provision of units affordable to low and very low income households in accordance with section 17.11.040 of this chapter is not contemplated;

2. An existing development in the coastal specific plan district meets the criteria of section 17.11.130 of this chapter and the provision of replacement units affordable to low and moderate income households is not contemplated;

3. A developer has requested one or more incentives or concessions in addition to the density bonus, pursuant to section 17.11.060 of this chapter;

4. A developer has requested to pay a fee in lieu of providing affordable housing units pursuant to section 17.11.050;

5. A developer has requested to provide required affordable housing units per section 17.11.040 as off-site units;

6. A developer has requested that proposed off-site units be conversion units as opposed to newly constructed units; or

7. A developer has requested one or more waivers or reductions of development standards pursuant to subsection (F) of this section.

B. Application.

1. Submission of a feasibility study per subsections (A)(1) through (A)(3) of this section shall be as follows: The applicant shall deposit with the city a fee adequate to compensate for the cost of the study in addition to an administrative fee at a level to be established by resolution of the city council. The applicant shall provide a project proforma, data regarding existing rents and existing tenant income for existing residential projects to be converted or demolished, and any other information deemed necessary by the director. The application package shall not be deemed complete until the feasibility study is completed to the satisfaction of the director.

2. Submission of a feasibility study pursuant to subsection (A)(4) of this section shall be as follows: The applicant shall submit a letter requesting to pay a fee in lieu of providing one or more affordable units and shall deposit with the city a fee to cover the costs of reviewing and processing such request at a level to be established by resolution of the city council. The letter shall include the reason why the request is being made, address all of the items noted in subsection (C)(2) of this section and describe how the request satisfies the finding set forth in subsection (D)(3) of this section. Additionally, the applicant shall provide a project proforma, and/or any other information deemed necessary by the director.

3. Submission of a feasibility study pursuant to subsection (A)(5) of this section shall be as follows: The applicant shall submit a letter requesting to provide required affordable housing units as off-site units instead of on-site units and shall deposit with the city a fee to cover the costs of reviewing and processing such request at a level to be established by resolution of the city council. The letter shall include the reason why the request is being made, address all of the items noted in subsection (C)(3) of this section and describe how the request satisfies the finding set forth in subsection (D)(5) of this section. Additionally, the applicant shall provide a project proforma, and/or any other information deemed necessary by the director.

4. Submission of a feasibility study pursuant to subsection (A)(6) of this section shall be as follows: The applicant shall submit a letter requesting to provide required affordable housing units off-site as converted units instead of newly constructed units and shall deposit with the city a fee to cover the costs of reviewing and processing such request at a level to be established by resolution of the city council. The letter shall include the reason why the request is being made, address all of the items noted in subsection (C)(4) of this section and describe how the request satisfies the finding set forth in subsection (D)(5) of this section. Additionally, the applicant shall provide a project proforma, and/or any other information deemed necessary by the director.

C. Study contents. The study shall examine the feasibility of providing affordable units in accordance with sections 17.11.040 and 17.11.130 of this chapter, as applicable. Additionally:

1. If an application has been filed for an affordable housing incentive or concession in addition to a density bonus, the study shall examine the feasibility of providing the affordable housing without the additional affordable housing incentive. If this is demonstrated not to be feasible, the study shall examine other affordability scenarios at the discretion of the director. These may include the feasibility of providing fewer units affordable to low and very low income households and units affordable to progressively higher income households, as approved by the director;

2. If an application has been filed requesting to pay a fee in lieu of providing affordable housing units, then the feasibility study shall evaluate:

a. The specific economic, environmental or technical factors that may render infeasible the provision of any or all new affordable units required pursuant to section 17.11.040 of this chapter;

b. The impacts to the development project if the city council denies the applicant's request to pay a fee in lieu of providing affordable housing as part of the development;

c. The project's profit margin if the applicant is required to provide affordable units compared to the profit margin if the applicant is allowed to pay the in-lieu fees; and

d. The feasibility of providing some, but not all, of the required affordable housing units, with payment of in-lieu fees paid for the units not provided.

3. If an application has been filed requesting to provide affordable housing units off-site as opposed to providing them on site as part of the project development, then the feasibility study shall evaluate:

a. The specific economic, environmental or technical factors that may render infeasible the provision of affordable units on site as part of the project development;

b. The impacts to the development project if the city council denies the applicant's request to provide units off site as opposed to on site;

c. The project's profit margin if the applicant is allowed to provide the units off site compared to the profit margin if the applicant is required to provide the units on site;

d. The feasibility of providing some, but not all, of the required affordable housing units on site.

4. If an application has been filed requesting that a required affordable housing unit that is to be provided off-site be a conversion unit as opposed to a newly constructed unit, then the feasibility study shall evaluate:

a. The specific economic, environmental or technical factors that may render infeasible the provision of a newly constructed unit as opposed to a conversion unit;

b. The impacts to the development project if the city council denies the applicant's request to provide a conversion unit as opposed to a newly constructed unit;

c. The project's profit margin if the applicant is required to provide a newly constructed unit compared to the profit margin if the applicant is permitted to provide a conversion unit;

d. The feasibility of providing some, but not all, of the required affordable housing units as newly constructed units.

D. Written findings required.

1. Approval of a lesser amount of housing affordable to the specified income groups than would otherwise be required under the provisions of sections 17.11.040 and 17.11.130 of this chapter may be approved by the city council upon adoption of the following findings:

a. That specific economic, environmental or technical factors render infeasible the provision of new dwelling units affordable to low and/or very low income households, pursuant to the requirements of section 17.11.040 of this chapter, or of replacement units affordable to low and/or moderate income households pursuant to the requirements of section 17.11.130 of this chapter;

b. That these factors are documented in a feasibility study which has been prepared for the proposed project, which study has been reviewed and approved by the city and is part of the public record for the project.

2. Approval of an applicant's requested concession or incentive required pursuant to section 17.11.060, or a waiver or modification of development standards in addition to a density bonus or both shall be approved by the city council unless, based on substantial evidence, including a feasibility study that has been reviewed and approved by the city and is part of the public record for the project, one or both of the following written findings is made:

a. That the concession or incentive is not required in order to provide for affordable housing costs, as defined in Health and Safety Code § 50052.5, or for rents for the targeted units to be set as specified in Government Code § 65915(c);

b. That the concession or incentive would have a specific adverse impact, as defined in Government Code § 65589.5(d)(2), upon the public health and safety or the physical environment or on any real property that is listed in the state register of historical resources, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low and moderate income households; or

c. That the concession or incentive would be contrary to state or federal law.

3. Approval of an applicant's request to pay a fee in lieu of providing affordable housing units shall be approved by the city council provided the following finding is made:

a. Specific economic, environmental or technical factors render infeasible the provision of any or all of the new affordable units required pursuant to section 17.11.040 of this chapter.

4. Approval of an applicant's request pursuant to section 17.11.060(E)(3) for one or more concessions or incentives that are in addition to mandatory concessions required pursuant to section 17.11.060(E)(1) may be granted if the findings of subsection (D)(2) of this section are made. However, the fact that these findings can be made shall not be construed to require approval of the additional requested concessions or incentives.

5. Approval of an applicant's request to provide affordable housing units off-site of the project site, and/or to provide any off-site affordable housing units as conversion units as opposed to newly constructed units shall be approved by the city council provided the following finding is made:

a. Specific economic, environmental or technical factors render infeasible the provision of any or all of the new affordable housing units required pursuant to section 17.11.040 of this chapter as being constructed on-site and therefore warrants the provision of said required units off-site; and/or

b. Specific economic, environmental or technical factors render infeasible the provision of any or all of the new off-site affordable housing units required pursuant to section 17.11.040 of this chapter as being newly constructed units, and therefore warrant the provision of conversion units.

E. Public hearing. A noticed public hearing shall be held before the city council prior to adoption of any finding regarding feasibility. This hearing may be held concurrently with any hearing required for the project application.

F. Waiver or reduction of development standards.

1. Any development standard set forth in this Code, general plan, any specific plan, condition, policy, law, resolution or regulation that has the effect of physically precluding the construction of a development meeting the criteria of section 17.11.060(A)(1) of this chapter shall be waived or modified pursuant to a request from the applicant, except however nothing in this subsection shall be interpreted to require the city to waive or reduce development standards if the waiver or reduction would have a specific adverse impact, as defined in Government Code § 65589.5(d)(2), upon health, safety, or the physical environment and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Nothing in this subsection shall be interpreted to require the city to waive or reduce development standards that would have an adverse impact on any real property that is listed in the state register of historical resources. Nothing in this subsection shall be interpreted to require the city to waive or reduce development standards that would be contrary to state or federal law. A proposal for the waiver or reduction of development standards pursuant to this subsection shall neither reduce nor increase the number of incentives or concessions to which the applicant is entitled pursuant to section 17.11.060(E).

2. The applicant shall include any request for waiver or reduction of development standards in the application required by subsection B of this section. Further, the study required by subsection C of this section shall study the feasibility of providing affordable housing in a manner that does not require waiver or reduction of the city's development standards.

(Code 1981, § 17.11.080; Ord. No. 320, § 7(part), 1997; Ord. No. 394, §§ 8—9, 2003; Ord. No. 437, § 8, 2006; Ord. No. 474, § 9, 2008; Ord. No. 495, §§ 11, 12, 10-6-2009)

The applicant shall sign an agreement binding the property owner and their successors in interest to provide the agreed upon number of units as affordable units or affordable housing units for the time prescribed, and agreeing to other conditions governing the affordable units or affordable housing units as may be required by ordinance or by the planning commission or city council. These conditions may address unit configuration and size, reporting requirements, city processing fees for unit monitoring or such other matters that may be deemed appropriate by the city council.

The agreement shall be recorded against the property subject to the affordability requirement prior to the recordation of a tract or parcel map or issuance of any certificate of occupancy for the project subject to the original application. Should the applicant or their successors in interest fail to abide by the terms of the agreement, the city shall have the authority to revoke certificates of occupancy and/or place liens against the properties involved, in addition to any other remedy allowed by law.

(Code 1981, § 17.11.090; Ord. No. 320, § 7(part), 1997; Ord. No. 474, § 10, 2008)

Tenant and/or buyer selection shall be the right and responsibility of the applicant or their successors in interest subject to the approval of the city. The applicant and/or their successors in interest shall certify that household income of tenants and/or buyers complies with the prescribed income level. In addition, no tenant or buyer of a for-sale affordable unit shall hold title to any real property. Total household assets for prospective tenants shall not exceed the combined total of the required security deposit, plus 12 months' rent. Total household assets for any buyer of a for-sale unit shall not exceed the combined total of unit closing costs, plus 12 months' housing payments, including principal, interest, taxes and insurance.

In no case shall the tenant or buyer be a family member, to include parents, offspring, siblings, spouses, uncles, aunts, cousins, nieces, nephews and grandchildren of the applicant or their successor in interest, unless otherwise approved by the city council. No finder's fee, signing bonus or other similar consideration shall be required or accepted by the project applicant, or their successors in interest, in return for selecting a given tenant or buyer.

(Code 1981, § 17.11.100; Ord. No. 320, § 7(part), 1997)

Where the units are provided as rental units, the applicant or their successor in interest shall provide an annual report to the city documenting that rents and tenant incomes are in accordance with the agreement.

Where the units are provided as for-sale units, the purchaser of the unit who qualified as a lower income household, very low income household, person and family of low and moderate income, or persons and families of moderate income, shall annually certify that they continue to own the unit and document that the unit is owner occupied or rented to tenants whose incomes are in accordance with the agreement. The seller shall notify the director by certified mail of any change in property title, prior to completion of escrow.

(Code 1981, § 17.11.110; Ord. No. 320, § 7(part), 1997; Ord. No. 474, § 11, 2008)

When the for-sale units for lower income households, very low income households, persons and families of low and moderate income, or persons and families of moderate income are sold, the units shall be sold for no more than the affordability level specified in the agreement. All sales commissions, escrow fees and other property transfer costs shall be the responsibility of the seller and/or buyer. The units shall be sold to households whose income does not exceed the affordability level specified in the agreement, subject to the review and approval of the director. The new buyer of the unit shall provide documentation of income level to the director prior to entering escrow.

(Code 1981, § 17.11.120; Ord. No. 320, § 7(part), 1997; Ord. No. 474, § 12, 2008)

This section is in addition to the requirements of section 17.11.020 of this chapter.

A. Replacement housing requirement. Where units which are located in the coastal specific plan district and occupied by low- or moderate-income households are to be demolished or converted, the units shall be replaced on a one-for-one basis. The replacement units shall be located on the same site as originally provided. If it has been demonstrated that it is not feasible, the replacement units shall be located elsewhere in the coastal specific plan district in the city. If it has been demonstrated that it is not feasible to locate the units within the city's coastal specific plan district, the units shall be located elsewhere in the city within three miles of the coastal specific plan district. Feasibility shall be determined pursuant to the requirements of section 17.11.080 of this chapter.

The units shall be available for occupancy within three years from the date on which work commenced on the conversion or demolition. The city may require the posting of a bond and/or the recordation of a covenant against the site of the new development in order to ensure compliance.

B. Exemptions.

1. In addition to the exemptions established by section 17.11.030 of this chapter, the requirements of this section shall not apply to:

a. The conversion or demolition of two or fewer residential units;

b. The demolition of any structure which has been deemed to be a public nuisance, in accordance with the provisions of section 8.24.070 of this Code, unless the director determines that the creation of the nuisance was intentional.

2. Where it has been demonstrated not to be feasible, the requirements of this chapter shall not apply to:

a. The conversion or demolition of ten or fewer residential units where more than one structure is involved;

b. The conversion or demolition of residential units for purposes of a nonresidential use which is either "coastal dependent," as that term is defined in Public Resources Code § 30101 or "coastal related," as that term is defined in Public Resources Code § 30101.3, provided the coastal dependent or coastal related use is consistent with the provisions of the city's coastal specific plan.

C. Application. Applicants for the demolition or conversion of two or more dwelling units located in the coastal specific plan district shall file an application for a coastal residential demolition/conversion permit. The application shall specify the number of dwelling units to be demolished or converted, the replacement use contemplated and provide documentation of the current rents and income of all tenants. Income data for any tenants evicted in the prior 12 months shall also be provided to the city. The application shall be accompanied by a fee to be established by resolution of the city council.

D. Administration. Where replacement units are required, they shall comply with the provisions of sections 17.11.090 (Agreement), 17.11.100 (Tenant/Owner Qualification), 17.11.110 (Reporting), and 17.11.120 (Resale) of this chapter.

(Code 1981, § 17.11.130; Ord. No. 320, § 7(part), 1997)

A. Applicability. The requirements of this section shall apply to all applications for construction, expansion or intensification of nonresidential uses, including, but not limited to, applications for commercial projects, golf courses, private clubs and institutional developments. Applications to which this section applies include, but are not limited to, applications for a tentative tract map, parcel map, conditional use permit, coastal permit, building permit or other development entitlement whereby more than 30 new full-time and/or part-time jobs are created in the city; or more than 10,000 square feet of space will be created or converted. This requirement shall apply to any jobs or space created or converted within any 12-month period.

B. Exemptions. The following developments shall be exempt:

1. Mixed use developments containing at least one low or very low income affordable housing unit for every ten low or moderate income employees anticipated to be generated, or for every 5,000 square feet of nonresidential space. The residential units shall be available for occupancy within one year of occupancy of the first nonresidential space within the project;

2. Projects where the applicant has agreed to provide at least one low or very low income affordable housing unit for every ten low or moderate income employees anticipated to be generated, or for every 5,000 square feet of nonresidential space either on the site, if residential uses are allowed or conditionally allowed on the site, or at another location in the city. The residential units shall be available for occupancy within one year of occupancy of the first nonresidential space within the project;

3. Projects where the applicant has demonstrated to the satisfaction of the city that less than ten employment opportunities for persons of low or very low income would be created;

4. Projects where the city finds the provision of affordable units to be infeasible pursuant to section 17.11.080 of this chapter;

5. The reconstruction of any structure that has been destroyed by fire, flood, earthquake or other act of God or nature.

C. Fee required. With the exception of development exempted pursuant to subsection (B) of this section and, except where it has been demonstrated not to be feasible pursuant to section 17.11.080 of this chapter, developers of nonresidential development shall pay a residential impact fee to be set by resolution of the city council. The fee shall be adequate to provide one low or very low income affordable housing unit for each ten employees to be generated by the project. The fee per affordable unit to be provided shall be equal to the difference between the median value of market rate housing and the price affordable to low or very low income households. The fee shall be paid prior to issuance of a certificate of occupancy.

D. Number of employees determination. For the purpose of determining the anticipated number of new employees to be generated by a new development, typical employee generation rates for other, similar businesses shall be submitted by the applicant to the city. Where a new development replaces a previously existing nonresidential use, and replacement is commenced within 12 months, credit shall be given for the number of employees employed by the previously existing use.

E. Rebate of fees. If, within one year after the nonresidential project is fully occupied, evidence is submitted to the director that fewer employees have been generated, or that the employees are in higher income groups than had been anticipated, a portion of the residential impact fees may be rebated. Evidence to be submitted may include, but is not limited to, W-2 forms for all employees working within the project.

F. Administration. Nonresidential projects shall comply with the provision of sections 17.11.080 (Feasibility), 17.11.090 (Agreement), 17.11.100 (Tenant/Owner Qualification), 17.11.110 (Reporting), and 17.11.120 (Resale) of this chapter.

(Code 1981, § 17.11.140; Ord. No. 320, § 7(part), 1997; Ord. No. 474, § 13, 2008)