HomeMy WebLinkAboutNB 4 DENSITY BONUS 08-15-88qG .E q DA
NEW BUSINESS
TO:
FROM:
SUBJECT:
WILLIAM A. HUSTON, CITY MANAGER
COI41~NITY DEVELOPI~IENT DEPART~E#T
DENSITY BONUS POL]~CY
RECOIdHEIlDATION:
___
_
It is recommended that the City Council adopt Resolution No. 88-92, as presented
or amended, establishing a Density Bonus Policy for the City of Tustin.
BACKGROUND:
Staff has been contacted by a developer who proposes to construct an apartment
project in the City for which he intends to request a 25% density bonus, with
~.5% of the normally allowed units being set aside for low or moderate income
.'esi dents . The State Planning and Zoning Law (Chapter 4.3, Sections 65915
through 65918) requires cities to grant either density bonuses or other
incentives of equivalent financial value when a developer agrees to construct
houstng, of which at least:
®
25% of the units are for low or moderate income households; or
10% of the units are for lower income households; or
50% of the units are for senior citizens;
or to convert apartments to a condominium project of which at least:
®
33% of the total units are for low or moderate income households; or
15% of the total units are for lower income households.
State law further states that a City shall establish procedures for processing
such proposals and that said procedures shall involve the legislative body in
the decision making process. Consequently, on June 27, 1988, staff brought the
issue of density bonuses before the Planning Commission seeking their input on a
policy which they would review and make a recommendation on to the City Council
for determination. At that time the Commission emphasized that ownership units
should be weighted over rental units, that units should not be too small, and
that standard zoning requirements for parking, openspace, setbacks, etc. should
be met. On July 25, 1988, the Planning Commission adopted Resolution No. 2518,
recommending a density bonus policy to the City Council.
J
gity Councll Report
Density Bonus Policy
August 15, 1988
Page two
DISCUSSION:
Staff's approach on preparing the density bonus policy has been to review
pertinent legislation, survey other agencies to determine how they deal with
density bonuses and financial incentives and to identify and investigate issues
associated with density bonuses and financial incentives.
After reviewing pertinent legislation, staff surveyed nine (9) Orange County
Agencies and three (3) non-County Agencies to determine how they deal wi th
density bonuses and financial incentives. While each agency varied in its
methods, staff found that there remained a number of points in common namely,
use of Development Agreements and use of standard zoning requirements. A
synopsis of the survey is attached (see Attachment I).
Having reviewed State legislation and surveyed other agencies to see how they
implement such programs, staff then evaluated how the City of Tustin might
approach the issue of density bonuses. This involved reviewing existing City
goals and the zoning requirements for attaining those goals, and then evaluating
how density bonus policies would work within our existing development review
process. Three questions emerged; 1) Would density bonuses be subject to
existing development requirements? 2) When is it preferrable to increase density
rather than offer financial incentives? and 3) What incentives of equivalent
financial value is the City able to offer?
In staff's opinion, density bonuses should indeed be subject to existing City
development requirements. At a minimum, proposed projects should meet existing
development requirements, although some latitude could be granted to senior
citizen projects which can demonstrate cause {for example, there may be fewer
cars and reduced needs for on-site parking).
Since the City has the discretion to offer either financial incentives or
increased density, additional criteria can be developed to determine when there
are added benefits to increasing density vs. offering financial incentives.
Staff believes that this determination can be most effectively made in the
design review process. Granting a density bonus may be more desireable than
offering incentives of equivalent financial value, because other than in the
South Central Redevelopment Project Area (where housing set-aside funds are
available), the City's ability to provide financial incentives may be limited.
In practice, possible financial incentives will vary from project to project and
will likely be a function of negotiation.
Some of these incentives of equivalent financial value might include:
° Support for participation in County Bond financing;
° Waiving planning fees;
Cornrnunity Development Department J
Ct ty Council Report
Densi l:y Bonus Poltcy
August 15, 1988
Page three
Waiving building fees;
Reducing fees;
° Deferring payment of fees;
° Waiving, reducing or deferring other fees (such as a monitoring fee);
° Subsl dt zing publ i c improvements;
° Wai vi ng publ i c improvements;
Direct financial contribution (such as the use of housing set-aside funds
to buy down price of land); and
° Expediting processing with regard to both time and costs.
When determining financial value, the City may require a developer to provide
and/or fund supporting information, such as an independent appraisal or an
analysis of value of an expeditious processing. Again, it must be noted that
there are fiscal limitations to offering only incentives of equivalent financial
value. Also, in the event of direct financial contributions by the City, the
"affordable" units shall remain as such for a period of 30 years, pursuant to
State and/or Federal statutes.
Having completed a review of State law, other agencies' procedures and potential
financial i ncenti yes, staff devised the foll owl ng procedures to review proposal s
for density bonuses, which were included in Resolution No. 2518 and have been
included in Resolution No. 88-92, as they were modified by the Planning
Commi s si on'
Step One - Preliminary Design Review/Feasibility Determination. When a proposal
is ini~(ated for a Density Bonus, the City will use the Design Review process to
determine development standards compliance, design appropriateness (i.e., scale
and mass), and overall feasibility. Where a density bonus is feasible, the
bonus shall be an automatic ten percent (10~) for rental units and fifteen
percent (15~) for ownership units. For purposes of calculating density and
density bonuses for dwelling units, fractions shall be rounded down through the
process in those cases where calculations result in a fractional number.
The following criteria shall be used to evaluate a project's eligibility for
bonus units beyond the automatic base, up to 25~'
1. The provision of at least 750, 900 and 1,100 square feet per one, two and
three bedroom dwelling units respectively (larger unit sizes will diminish
the effects of increased density);
Corn rnunity Developrnen~ Depar~rnen~
,;ity Council Report
Density Bonus Policy
August ].5, 1988
Page four
e
The provision of at least 54 square feet of private open space, such as a
yard, patio or balcony for each one bedroom unit and 144 square feet for a
two or three bedroom unit;
o
The provision of extra guest parking at the ratio of one additional space
for every four units (over and above required guest parking);
The provision of on-site recreation amenities such as a pool, spa, and/or
sunning area;
The provision of on-site laundry facilities at the ratio of at least one
washer and one dryer for every ten units;
6,
The provision of at least 50 cubic feet of secured storage space for each
unit; and
.. 7. The proposed project will provide Senior Citizen housing.
In all instances, standard zoning requirements shall be met, regardless of the
number of dwelling units in the project (except possibly Senior housing). A
minimum of three (3) criteria shall be met in order for a density bonus to even
be considered beyond the automatic base of ].0% for rentals and 15% for ownership
as an alternative to or in combination with offering incentives of equivalent
financial value. Criteria No. 1, for minimum unit sizes, shall be a required
criteria to go beyond the automatic base.
It shall be up to the discretion of the City Council as to whether a project
will receive bonus units above the automatic base noted above, up to a 254
density bonus, and the type of any incentives of equivalent financial value that
would be provided, or a combination thereof.
Step Two - Verification of Section 8 Housing Certificates In the case of
6ental' units, following the determination from Step One that 'ix" number of bonus
units are permissible, the developer shall obtain verification from the Orange
County Housing Authority that the appropriate number of Section 8 Housing
Certificates have been set aside for the subject project.
Step Three - Formal Design Review Submittal The developer shall make a formal
submitl~al of plans accompanied a Letter o~ Verification as per Step Two (if
applicable) for review and approval. This review shall be conducted based upon
established Design Review procedures. Any additional discretionary approvals
required for the project would also be processed during Step Three. Conditions
of approval for Design Review and/or any discretionary approval will require the
~eveloper/property owner to enter into a Development Agreement with the City.
Corn rnunity Developmen~ Departrnen~ .~
Density Bonus Poltcy
August 15, 19e8
Page ftve
step Four - Execute Development Agreement. The developer shall enter into a
Development Agreement with the City which shall be approved by the City
Council. The Development Agreement shall stipulate the following: compliance
with a submitted development plan and all Design Revtew and other discretionary
conditions of approval, the total number of allowed dwelling units (including
bonus untts), the number of units to be set astde as "affordable", the
definition of affordable, the duration of the agreement (15 year minimum term,
30 years where mandated by State and/or Federal statute), annual certification
of compliance, requirement for recorded deed restrictions regulating resale of
ownership units, relief for failure to comply, the requirement for owner
occupancy on ownership units and other information as determined necessary by
the Director of Community Development and City Attorney's office.
Step Five - On-Going Monitoring. A Certificate of Compliance to the Development
Agreement on an annual basis, as prescribed in the Development Agreement.
Both the Development Agreement and the recorded deed restrttlons used to control
)wnership units will be of a standardized form. Neither of the documents have
been prepared to date. Following the Council's action, staff will begin their
preparation with the City Attorney.
CONCLUSION
Staff believes that the procedures {Steps 1 - 5), discussed above address the
concerns and issues raised by the Planning Commission at their June 27th meeting
and establish a policy for density bonuses that retains a high level of
discretion by the City, while still complying with Chapter 4.3 of the State
Planning and Zoning Law.
Bernard Chase
Planner
SR:BC:CAS:ts:pef
Attachment: Resolution No. 88-92
Attachment I
Acting Director of Community Development
Community Development Department
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
RESOLUTION NO. 88-92
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, ESTABLISHING A DENSITY BONUS
POLICY FOR THE CITY TO COMPLY WITH CHAPTER 4.3,
SECTIONS 65915-65918, OF THE STATE PLANNING AND ZONING
LAW. '
·
The City Council of the City of Tustin does hereby resolve as follows:
I. The City Council finds and determines as follows:
A. That it is necessary for the City to establish a policy to
comply with California Planning and Zoning Law, Chapter 4.3,
Sections 65915 through 65918, generally providing that when a
developer of housing agrees to construct at least:
lo
25% of the units for low or moderate income households; or
10% of the units for lower income households; or
50% of the units for senior citizens;
or to convert apartments to a condominium project of which at
least:
·
·
33% of the total units are for low or moderate income
households; or
15% of the total units are for lower income households;
then the City shall either grant a density bonus or provide
other incentives of equivalent financial value·
B. That said policy shall comply with the State law, Chapter 4.3 by
either granting a density bonus, providing other incentives of
equivalent financial value or a combination thereof, whichever
is deemed by the City Council to be in the best interests of the
City of Tustin.
C ·
That the provision of bonus units shall not exempt a project
from complying with all applicable development standards
of the zoning district in which is located. -
D ·
That such development proposals shall be designed to be
consistent with the character of the surrounding neighborhood
and shall be processed in the manner described herein.
E. That provision of affordable housing units, shall be assured
through the recordation of a Development Agreement as required
herein.
1
2
3
4
5
6
7
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Resolul:ton No. 88-92
Page ~o
F®
That any incentives of equivalent financial value shall be
determined and stipulated by the .City Council as it deems
reasonable and appropriate to the case, and may include but not
be limited to:
1. Support for participation in County Bond financing program;
2. Wai vi ng pl anning fees;
3. Waiving building fees;
4. Reducing fees;
5. Deferring payment of fees;
e
Waiving, reducing or deferring other fees (such as a
monitoring fee);
7. Subsi di ztng publ t c improvements;
8. Waiving public improvements;
Direct financial contributions (such as the use of housing
set-aside funds to buy down price of land); and
Go
10. Expediting processing with regard to both time and costs.
That when determining financial value, the City may require a
developer to provide and/or fund supporting information such as
an independent appraisal or an analysis of value of an
expeditious processing. In the event of direct financial
contributions by the City, the "affordable" units shall remain
as such for a period of 30 years as stipulated by State and/or
Federal statutes.
H. That all density bonus proposals shall be reviewed according to
the procedures described immediately below:
Step, One - Preli mi nary Design Revi ew/Feasi bi 1 i ty
Det6rmi'nation When a proposal is initiated for a Density
Bonus, the City will use the Design Review process to
determi ne development standards compl iance, design
appropriateness (i.e., scale and mass), and overall
feasibility. Where a density bonus is feasible, the bonus
shall be an automatic ten percent {10%) for rental units
and fifteen percent (15%) for ownership units. For
purposes of calculating density and density bonuses for
dwelling units, fractions shall be rounded down throughout
the process in those cases where calculations result in a
fractional number.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
17
18
19
2O
21
22
23
24
25
26
27
28
Resolution No. 88-92
Page three
The following criteria shall be used to evaluate a project's
eligibility for bonus units beyond the automatic base, up to 25~:
a. The provision of at least 750, 900 and 1,100 square feet per one,
two and three bedroom dwelling units respectively (larger unit
sizes will diminish the effects of increased density);
b®
The provision of at least 54 square feet of private open space,
such as a yard, patio or balcony for each one bedroom unit and
144 square feet for a two or three bedroom unit;
c. The provision of extra guest parking at the ratio of one
additional space for every four units (over and above required
guest park i rig);
d. The provision of on-site recreation amenities such as a pool,
spa, and/or sunning area;
e. The provision of on-site laundry facilities at the ratio of at
least one washer and one dryer for every ten units;
f. The provision of at least 50 cubic feet of secured storage space
for each unit; and
g. The proposed project will provide Senior Citizen housing.
In all instances, standard zoning requirements shall be met,
regardless of the number of dwelling units in the project (except
possibly Senior housing). A minimum of three (3) criteria shall
be met in order for a density bonus to even be considered beyond
the automatic base of 10~ for rentals and 15~ for ownership as an
alternative or in combination with offering incentives of
equivalent financial value. Criteria No. 1, for minimum unit
sizes, shall be a required criteria to go beyond the automatic
base.
It shall be up to the discretion of the City Council as to
whether a project will receive bonus units above the automatic
base noted above, up to a 25~ density bonus, and the type of any
incentives of equivalent financial value that would be provided,
or a combination thereof.
2. Step Two - Verification of Section 8 Housing Certificates. In
the case of rental units, following the determination from Step
One that "x" number of bonus units are permissible, the developer
shall obtain verification from the Orange County Housing
Authority that the appropriate number of Section 8 Housing
Certificates have been set aside for the subject project.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
lg
19
2O
21
22
23
24
25
26
27
28
Resolution No. 88-92
Page four
3. Step Three - Formal Design Review Submittal. The developer shall
make a formal submittal of plans accompanied by a Letter of
Verification as per Step Two (if applicable) for review and
approval. This review shall be conducted based upon established
Design Review procedures. Any additional discretionary approval s
required for the project will also be processed during Step
Three. Conditions of approval for Design Review and/or any
discretionary approval will require the developer/property owner
to enter into a Development Agreement with the City.
0
Step Four - Execute Development Agreement. The developer shall
enter into a Development Agreement with the City which shall be
approved by the City Council. The Development Agreement shall
stipulate the following: compliance with a submitted development
plan and all Design Review and other descretionary conditions of
approval, the total number of allowed dwelling units (including
bonus units), the number of units to be set aside as
"affordable", the definition of affordable, the duration of the
agreement (15 year minimum term, 30 years where mandated by State
and/or Federal statute), annual certification of compliance,
requirement for recorded deed restrictions regulating resale of
ownership units, relief for failure to comply, the requirement
for owner occupancy on ownership units and other information as
determined necessary by the Director of Community Development and
City Attorney' s office.
5. Step Five - On-Going Monitoring.. A Certificate of Compliance to
the DeVelopment Agreement shall be submitted to the Community
Development Department on an annual basis, as prescribed in the
Development Agreement.
II. The City Council hereby approves the Density Bonus Policy as contained
herein.
PASSED AND ADOPTED at a regular meeting of the City Council on the
day of , 1988.
Ronald B. Hoesterey,
Mayor
~ary wynn,
City Clerk
ATTACHMENT
SURVEY OF OTHER AGENCIES
City of Anaheim:
Uses Affordable Houslng Agreements;
Does not have established equivalent financial value policies;
Allo~s modifications of Development Standards through variances,
although care ts given regarding impacts to traffic and to the
proximity of stngle family housing;
Uses variable ttme periods, but typically 30 years for senior citizen
houstng and 20 years for others; and
Requtres annual recertiflcation wtth a monitoring form.
Ctty of Brea:
Uses Zoning Regulations and Development Standards;
Does not have established equivalent financial value policies;
Allows modification of Development Standards (for things like elevator
shaft height);
Standards are modifted in Development Agreements;
Uses vartable time periods (often 30 years or perpetuity);
Requires annual compliance certification by developer; and
The number of bonus units is specified tn Development Agreements.
City of Buena Park:
Uses Zoning Regulations and Development Standards;
Uses financial incentives only for Economic Development projects with
at least 50% of its units classified as "affordable";
Development Standards must be met, with potential for rounding density
ca 1 cul ati on s;
Bonuses and terms are stipulated in Development Agreements;
Uses 15 year time period; and
Requires annual compliance certification by developer.
City of Costa Mesa:
Uses Zoning Regulations, recorded Land Use Restrictions, and Density
Bonus Agreements;
Does not have established equivalent financial value policies; and
Does not modify Development Standards, although there is potential for
relaxing amenity requirements.
City of Huntington Beach:
Uses Zoning Regulations and Affordable Housing Restrictions and
Covenants;
Does not have established equivalent financial value policies;
Uses an unclassified Conditional Use Permit system rather than
variances for any modifications; and
Uses 15 year time periods.
Survey of Other Agenctes
Page two
Ctty of Irvlne:
Uses Zoning Regulations and Development Agreements tf applicable;
Financial involvement can be through bond financing of ownership
untts;
Fee watvers can constitute financial value; and
Relaxes some standards, such as parklng and setbacks.
City of San Clemente:
Uses Zoning Regulations, Development Agreements and Conditions of
Approval;
Does not have established equivalent financial value policies, but can
assign processing priorities and allow County bond financing;
Requires compliance certification by developer;
Uses 10 year time periods; and
Marketing approval and unit mix are stipulated.
Clty of Santa Ana:
Uses Zoning Regulations, developer's Letter of Understanding, and
Affordable Development Agreements;
Allows but does not have established equivalent financial value;
Program includes ownership housing;
Requires annual compliance certification by developer with assistance
from the City's Housing Department; and
Charges compliance monitoring fee.
County of Orange:
Uses Zoning Regulations and implementing Agreements;
Development Standards Modifications are stipulated in Affordable
Housing Incentive Permits; and
Uses five year time periods.
City of Davis:
Requires provision of affordable housing;
Recently reduced densities, but allows density bonuses if feasible;
and
Uses Planned Development processing which can informally relax
regul ati ons.
City of Palo Alto:
Has allowed some very densely built affordable housing; and
Typically will negotiate regarding using extra, smaller bedrooms in
larger units which rent at Below Market Rates.
Survey of Other Agencies
Page three
City of Pasadena'
Bonus units allowed by right if zoning standards are met;
Uses Covenants;
Impetus is toward condominiums; and
Does not rely upon Conditional Use Permits.