San Luis Obispo Municipal Code Ch. 17.140 Affordable Housing Incentives

The purpose and intent of this chapter are to encourage housing projects which incorporate units affordable to very low-, lower-, and moderate-income households, and qualifying seniors, or the donation of land for affordable housing within the city, and which conform to city development policies and standards, by providing density bonuses, or other equivalent incentives, as required by Government Code Section 65915 et seq. This chapter is a summary of Government Code Sections 65915 through 65918. Where there is a conflict between the State Density Bonus Law and the zoning regulations, the State Density Bonus Law shall prevail. (Ord. 1650 § 3 (Exh. B), 2018)

For the purposes of this chapter, the following words and phrases shall have the meanings set forth below. For all other definitions, the provisions of Article 9 (Definitions) of this title shall apply.

A. “Affordable” shall mean residential rent costs or sales prices which conform to the standards issued by the director and updated periodically to reflect state and/or federal housing cost indices.

B. “Common interest development” means any of the following: a community apartment project, a condominium project, a planned development, or a stock cooperative as set forth in Civil Code Section 1351.

C. “Density” means residential density as defined in Section 17.70.040 (Density).

D. “Density bonus” means a density increase over the maximum density otherwise allowable under the zoning regulations and land use element of the general plan.

E. “Housing development” means a development project for five or more residential units; also includes a subdivision or common interest development.

F. “Maximum allowable residential density” means the maximum density allowed under the zoning regulations and land use element of the general plan.

G. “Senior citizen housing development” means a residential development developed, substantially rehabilitated, or substantially renovated for senior citizens (fifty-five years or older) that has at least thirty-five dwelling units. (Ord. 1650 § 3 (Exh. B), 2018)

A. The developer may submit a preliminary proposal for the development of affordable housing prior to the submittal of any formal requests for general plan amendments, zoning amendments, or subdivision map approvals.

B. Any request for a density bonus or other incentives shall be in writing, and shall include the following information, as well as any additional information required by the director:

1. The name of the developer;

2. The location of the proposed project;

3. The density allowed under the zoning regulations, as well as the proposed density;

4. The number and type (bedroom count) of dwellings and identification of those dwellings which are to be affordable to each household income category;

5. Whether the dwellings will be offered for sale or for rent;

6. The proposed sales price, financing terms, rental rates or other factors which will make the dwellings affordable to very low-, lower-, and moderate-income households. (Ord. 1650 § 3 (Exh. B), 2018)

A. This section shall apply only to housing projects consisting of five or more dwelling units, including mixed-use developments. Per state law, projects that provide affordable housing are allowed up to a fifty percent density bonus based on the tables outlined below for the respective affordability levels. In addition, the director may approve a density bonus in excess of fifty percent at the request of the developer, as well as other concessions and incentives outlined in Section 17.140.070.

B. Density bonus calculations that use fractional density (see Section 17.70.040) shall apply fractional density consistently for both the market rate and affordable units within a project. The application of fractional density shall only be utilized in favor of producing the maximum number of affordable housing units.

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

D. For the purpose of this section, “total units” or “total density units” does not include units added by a density bonus awarded pursuant to this section or any local law granting a greater density bonus.

E. Ten Percent Low-Income Dedication. When a developer agrees to construct at least ten percent of the total units of a housing development for persons or families of lower income, the director shall grant the developer, upon the developer’s request, a density bonus; the density bonus shall be calculated as follows:

Table 8-3: Density Bonus for Percentage of Low-Income Dedicated Units

Table 8-3: Density Bonus for Percentage of Low-Income Dedicated Units

F. Five Percent Very Low-Income Dedication. When a developer agrees to construct at least five percent of the total units of a housing development for very low-income households, the director shall grant the developer, upon the developer’s request, a density bonus; the density bonus shall be calculated as follows:

Table 8-4: Density Bonus for Percentage of Very Low-Income Dedicated Units

Table 8-4: Density Bonus for Percentage of Very Low-Income Dedicated Units

G. Twenty Percent Senior Citizen Housing Development Dedication. When a developer agrees to construct a senior citizen housing development, or mobile home park that limits residency based on age requirements for housing for older persons, the director shall grant the developer, upon the developer’s request, a density bonus; the density bonus shall be twenty percent of the number of senior housing units.

H. Ten Percent Common Interest Development for Moderate-Income Dedication. If a developer agrees to construct at least ten percent of the total dwelling units in a common interest development for persons or families of moderate income; provided, that all units in the development are offered to the public for purchase, the director shall grant the developer, upon the developer’s request, a density bonus; the density bonus shall be calculated as follows:

Table 8-5: Density Bonus for Percentage of Moderate-Income Dedicated Units

Table 8-5: Density Bonus for Percentage of Moderate-Income Dedicated Units

I. Land Donation Dedication. If a developer for a tentative subdivision map, parcel map, or other residential development approval donates land to the city for affordable housing in accordance with this chapter and the provisions set forth in Government Code Sections 65915 through 65918, the applicant shall be entitled to a fifteen percent increase above the otherwise maximum allowable residential density for the entire development. The director shall grant the applicant, upon the applicant’s request, a density bonus; the density bonus shall be calculated as follows:

Table 8-6: Density Bonus for Land Donation Dedication for Affordable Housing

Table 8-6: Density Bonus for Land Donation Dedication for Affordable Housing

J. Housing for Transitional Foster Youth, Disabled Veterans, and Homeless Persons. If a developer agrees to construct at least ten percent of the total dwelling units in a housing development for transitional foster youth, as defined in Education Code Section 66025.9, or for disabled veterans, as defined in Government Code Section 18451, or for homeless persons, as defined in the Federal McKinney-Vento Homeless Assistance Act, the director shall grant the developer, upon the developer’s request, a density bonus of twenty percent. The units shall be subject to a recorded affordability restriction of fifty-five years and shall be provided at the same affordability level as very low-income units.

K. An applicant may elect to accept a lesser percentage of density bonus.

L. Parking Requirements.

1. Upon the request of the developer, parking ratios of a development meeting the criteria of this section, inclusive of handicapped and guest parking, shall be as follows:

a. Studio to one bedroom: one on-site parking space per unit.

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

c. Four or more bedrooms: two and one-half parking spaces per unit.

d. Senior housing: one-half space per bedroom.

2. Housing developments occupied exclusively by extremely low, very low, or low income households, as defined by the state, may provide one car and one bicycle space per dwelling unit.

3. 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.

4. For purposes of this section, a development may provide on-site parking through tandem or uncovered parking, but not through on-street parking.

5. An applicant may request additional parking incentives or concessions beyond those provided in this section. (Ord. 1757 § 17, 2026; Ord. 1719 § 3, 2022; Ord. 1705 §§ 80—83, 2021; Ord. 1657 § 22, 2019; Ord. 1650 § 3 (Exh. B), 2018)

When an applicant for a commercial development partners with a housing developer proposing to provide affordable housing, the city shall grant to the commercial developer a development bonus pursuant to Government Code Section 65915.7 (Commercial development incentives for affordable housing). (Ord. 1650 § 3 (Exh. B), 2018)

A. For the purposes of this section, “other incentives of equivalent financial value” shall not be construed to require the city to provide cash transfer payments or other monetary compensations but may include the reduction or waiver of requirements which the city might otherwise apply as conditions of conversion approval.

B. For purposes of this section, “density bonus” means an increase in units of twenty-five percent over the number of apartments to be provided within the existing structure or structures proposed for conversion.

C. When an applicant for approval to convert apartments to condominium units agrees to provide at least thirty-three percent of the total units of the proposed condominium project to persons and families of low or moderate income, or fifteen percent of the total units of the proposed condominium project to lower-income households, and agrees to pay for the reasonable, necessary administrative costs incurred by the city pursuant to this section, the director shall grant a density bonus or provide other incentives of equivalent financial value as it finds appropriate.

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

E. An applicant shall not be eligible for a density bonus under this section if the apartments proposed for conversion constitute a housing development for which a density bonus or other incentives were provided under Section 17.140.040, 17.140.050, or 17.140.070.

F. The city shall grant the developer’s request for development incentive(s) unless the review authority makes written findings of fact that the additional incentive(s) are not required to achieve affordable housing objectives as defined in Section 50062.5 of the Health and Safety Code, or to ensure that sales prices for the targeted dwelling units will be set and maintained in conformance with city affordable housing standards. (Ord. 1705 § 84, 2021; Ord. 1650 § 3 (Exh. B), 2018)

A. When a developer agrees to construct housing for households of very low-, lower-, or moderate-income households, or for qualifying senior households, or for qualifying transitional foster youth, disabled veterans, or homeless persons, and desires an incentive other than a density bonus as provided in Section 17.140.040 (Standard Incentives for Housing Projects), or when an applicant for approval to convert apartments to a condominium project agrees to provide housing for households of very low, lower, or moderate income, or for qualifying senior households, the developer shall receive the following number of incentives or concessions:

1. One incentive or concession for housing developments that include at least ten percent of the total units for lower-income households, at least five percent for very low-income households, at least ten percent for persons and families of moderate income in a common interest development, or at least ten percent for qualifying transitional foster youth, disabled veterans, or homeless persons,

2. Two incentives or concessions for housing developments that include at least twenty percent of the total units for lower-income households, at least ten percent for very low-income households, at least twenty percent for persons and families of moderate income in a common interest development, or at least twenty percent for qualifying transitional foster youth, disabled veterans, or homeless persons,

3. Three incentives or concessions for housing developments that include at least thirty percent of the total units for lower-income households, at least fifteen for very low-income households, at least thirty percent for persons and families of moderate income in a common interest development, or at least thirty percent for qualifying transitional foster youth, disabled veterans, or homeless persons,

B. Alternative incentive proposals shall include information set forth in Section 17.140.030 (Application process), as well as a description of the requested incentive. Alternative incentive proposals shall be considered by the review authority and may include but are not limited to one or more of the following:

1. A reduction in site development standards or modification of Title 17 requirements or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission as provided in Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code, 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 and actual cost reductions to provide for affordable housing costs;

2. Approval of mixed-use zoning in conjunction with the housing project if commercial, office, industrial, or other land use 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;

3. Density bonus in excess of that provided in Section 17.140.040;

4. Deferral of application and development review processing fees;

5. Deferral of park land in-lieu fees or park land dedication requirement; and

6. Other regulatory incentives or concessions proposed by the developer or the city that result in identifiable, financially sufficient, and actual cost reductions shall also include provisions for assuring continued availability of designated units at affordable rents or sales prices as required by state law.

C. Proposals for approval to convert apartments to a condominium project shall include those relevant items set forth in Section 17.140.030(B), plus the requested incentive, an estimate of the incentive’s financial value in comparison with the financial value of the density bonus as set forth in Section 17.140.060, and the basis for the comparison estimate. Nothing in this section shall be construed to require the city to provide cash transfer payments or other monetary compensation. The city may reduce or waive requirements which the city might otherwise apply as conditions of conversion approval.

D. Proposals to construct a housing development that includes affordable units and includes a childcare facility that will be located on the premises of, as part of, or adjacent to the housing development shall comply with Government Code Section 65915(h)(1).

E. The review authority shall approve the requisite number of incentives or concessions afforded by this section. The review authority shall grant the specific concession or incentive requested by the applicant unless it can make a written finding, based upon substantial evidence, that the incentive or concession does not result in cost reductions, or would have a specific adverse impact upon public health and safety or the environment or on historical properties that cannot be mitigated, or would be contrary to state or federal law (Government Code Section 65915(d)(1).

F. The review authority’s action on any alternative incentive proposal shall be by resolution. Any such resolution shall include findings relating to the information required in subsection B or C of this section. (Ord. 1705 §§ 85—87, 2021; Ord. 1657 § 23, 2019; Ord. 1650 § 3 (Exh. B), 2018)

Prior to the issuance of construction permits for any project incorporating a density bonus or other concession or incentive as provided in this chapter, the city and the project owner(s) shall enter into an agreement in a form acceptable to the city attorney, to be recorded in the office of the county recorder. The agreement shall specify mechanisms or procedures to assure the continued affordability and availability of the specified number of dwelling units to very low-, lower-, and moderate-income households, and/or qualifying seniors, and/or qualifying transitional foster youth, disabled veterans, or homeless persons. The agreement shall also set forth those items required by this section. The agreement shall run with the land and shall be binding upon all heirs, successors or assigns of the project or property owner, and shall ensure affordability for the maximum period established by state law. (Ord. 1650 § 3 (Exh. B), 2018)

A. No fee in addition to normal project application fees shall be charged for a request for a density bonus pursuant to the provisions of Section 17.140.040, 17.140.050, or 17.140.060, except for reasonable, necessary administrative costs incurred by the city.

B. A fee not to exceed the amount charged for “preapplication concept review” may be charged for proposals submitted pursuant to the provisions of Section 17.140.070. (Ord. 1650 § 3 (Exh. B), 2018)

A. The city shall publish and revise as needed a schedule of rental rates and sales prices for dwellings which will be affordable to households with incomes as provided in this chapter. The schedule shall substantially conform with the affordability standards as established by state or federal law.

B. The maximum rental rates and sales prices as revised, generally on an annual basis, shall remain in effect for projects receiving density bonuses or additional incentives under this chapter as provided in the affordable housing agreement, but in no case less than the minimum term required by state law. (Ord. 1650 § 3 (Exh. B), 2018)

A. The affordable dwellings developed pursuant to this chapter shall be available to qualified occupants without regard to race, religion, national origin, sex, occupation or other affiliation. Occupants may be screened on the basis of age only to qualify those occupants seeking housing designed for the elderly.

B. The city housing authority or other third party acceptable to the community development director shall screen prospective occupants so that dwellings developed pursuant to this chapter shall be occupied by households with the appropriate qualifying incomes, ages, or other qualifying status. Owners of projects shall enter into agreements with the housing authority for such screening services.

C. Preference in occupant screening shall be given to those employed within the city or the immediately surrounding area, to the extent that this provision does not conflict with state or federally funded housing assistance programs which may apply to a particular project or other applicable law. This section is to ensure that those households having the greatest difficulty obtaining housing at market value within the city shall be able to occupy affordable housing made available pursuant to this chapter. (Ord. 1650 § 3 (Exh. B), 2018)