HomeMy WebLinkAbout02 DENSITY BONUS ORD 09-02-03AGENDA REPORT
Agenda Item 2
Reviewed: ~
City Manager
Finance Director ~/J~
MEETING DATE: SEPTEMBER 2, 2003
TO:
FROM:
SUBJECT:
WILLIAM HUSTON, CITY MANAGER
COMMUNITY DEVELOPMENT DEPARTMENT
ORDINANCE NO. 1279- DENSITY BONUS ORDINANCE
CODE AMENDMENT 03-005
SUMMARY
The proposed Ordinance No. 1279 amends Tustin City Code Article 9, Chapter 1,
governing incentives for the development of affordable housing to comply with the
California Legislature's 2002 amendment of Government Code Section 65915 and to
make other conforming changes to State law. On August 25, 2003, the Planning
Commission adopted Resolution No. 3879, recommending that the City Council adopt
Code Amendment No. 03-005.
RECOMMENDATION
That the City Council introduce and have first reading of Ordinance No. 1279, approving
Code Amendment 03:005, and set for second reading at the City Council's next
scheduled meeting.
BACKGROUND
The City Council continued this item from its August 18, 2003, meeting. The proposed
amendment will affect properties Citywide, including properties at Tustin Legacy.
Lennar Communities and William Lyon Homes (Lennar), property owners at Tustin
Legacy, requested that this item be continued to review the proposed amendments with
staff. Staff met with representatives from Lennar and addressed most of the concerns
raised. The Lennar Communities Comment letter and the City's itemized responses are
attached as Exhibits 4 and 5, respectively.
DISCUSSION
The proposed code amendment amends Tustin City Code Article 9, Chapter 1 to
comply with the California Legislature's amendment to Government Code section 65915
and to conform certain terms with definitions in State law; and, other minor changes to
the existing ordinance are proposed.
City Council Report
Code Amendment - Density Bonus
Page 2
Under existing law, when a developer proposes a housing development and the
developer agrees to provide housing that is affordable to individuals of very Iow or Iow
income or senior citizens eligible to reside in senior citizen housing, the City must either:
(1) grant a density bonus and at least one regulatory concession or incentive (i.e.
reduction in the number of parking spaces required, reduction in setbacks, etc.), unless
the City makes a written finding that the additional concession or incentive is not
required for affordable housing or for rents for targeted units; or (2) provide other
regulatory incentives of equivalent financial value. The City is not required to offer
direct financial assistance but must consider requests for regulatory concessions.
Under existing law, a density bonus is 25 percent of the maximum residential density in
a zone.
The new statute uses the term "applicant" and states that an applicant may also
construct condominium units affordable to persons of moderate income and receive a
density bonus of 10 percent and at least one regulatory concession or incentive
specified by State law or other regulatory incentives of equivalent financial value. The
new law requires the City to ensure the continued affordability of the moderate-income
units in condominium projects for 10 years. The proposed ordinance would amend the
Tustin City Code to require affordability of 45 years for "for sale" products and 55 years
for "for rent" products if the affordable units are in a redevelopment area or proposed
redevelopment area or if the City or Agency provides direct financial aid. This conforms
to State law.
In addition, the new statute permits the applicant to request specific regulatory
concessions or incentives and to request a meeting with the City. The City must grant
the regulatory concession or incentive requested unless the City makes a written
finding, based upon substantial evidence, of either of the following: (1) the concession
or incentive is not required for affordable housing or for rents for targeted units; or (2)
the concession or incentive would have a specific adverse impact upon the public health
and safety, physical environment, or any real property.
Direct financial incentives from the City are optional at the City's discretion and are not
required. Government Code Section 65915 provides:
This subdivision does not limit or require the provision of
direct financial incentives for the housing development,
including the provision of publicly owned land, by the city,
county, or city and county, or the waiver of fees or dedication
requirements.
The new statute allows the developer to initiate judicial proceedings if the City refuses to
grant a requested density bonus, regulatory concession, or incentive as provided by
State law. The court may award attorneys' fees to the developer if the City's refusal to
grant a density bonus, regulatory concession, or incentive was in violation of the statute.
This is a tougher attorneys' fees provision for the City than any other in existing law.
City Council Report
Code Amendment - Density Bonus
Page 3
The new statute authorizes the City to charge a reimbursement fee for any costs
incurred as a result of the amendments to the statute.
2.
3.
4.
5.
Elizabeth A
Community Development Director
Ordinance No. 1279
Planning Commission Resolution No. 3879
Government Code Section 65915
Lennar Communities Comment letter dated July 25, 2003
City Response to July 25, 2003, letter from Lennar Communities
ATTACHMENT 1
ORDINANCE NO. 1279
ORDINANCE NO. 1279
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TUSTIN, CALIFORNIA, AMENDING ARTICLE 9,
CHAPTER I, GOVERNING INCENTIVES FOR THE
DEVELOPMENT OF AFFORDABLE HOUSING.
The City Council of the City of Tustin hereby ordains as follows:
SECTION 1. PURPOSE.
The Purpose of this ordinance is to amend the City's Affordable Housing
Development Incentive provisions: (1) to comply with the California Legislature's
2002 Amendment of Government Code Section 65915 governing incentives for
lower income housing units; and (2) to comply with other changes in state law
applicable to affordable housing.
SECTION 2. Chapter 1 of Article 9 of the Tustin Municipal Code. Title 9,
Chapter 1, of the Tustin Municipal Code entitled, Incentives for the Development of
Affordable Housing, is hereby amended in its entirety as set forth below:
CHAPTER I
INCENTIVES FOR THE DEVELOPMENT OF AFFORDABLE HOUSING
CHAPTER INDEX
PART I GENERAL
9111 PURPOSE AND INTENT
9112 DEFINITIONS
PART 2 INCENTIVES/ASSISTANCE
9121 REQUIRED INCENTIVES
9122 OPTIONAL ADDITIONAL ASSISTANCE
PART 3 DEVELOPMENT REQUIREMENTS
9131 STANDARD REQUIREMENTS
9132 LOCATION OF TARGET UNITS
PART 4 APPLICATION AND REVIEW
9141 APPLICATION REQUIREMENTS AND REVIEW
9142 HOUSING INCENTIVE AGREEMENT
CHAPTER I
INCENTIVES FOR THE DEVELOPMENT OF AFFORDABLE HOUSING
PART I GENERAL
9111 PURPOSE AND INTENT
The purpose of this Chapter is to provide incentives for the production of housing
for very Iow, lower income, moderate income or senior citizens in accordance with
California Law pertaining to Density Bonuses. The intent of this Chapter is to facilitate
the development of affordable housing and to implement the goals, objectives, and
policies of the City's Housing Element.
The regulations and procedures set forth in this Chapter shall apply throughout
the City with the exception of areas identified as "East Tustin Specific Plan" and
"MCAS Tustin Specific Plan Area," except Planning Areas 4, 5, and Parcel 35 of
Planning Area 21. Sections of the California Government Code referenced in this
Chapter and application forms for complying with this Chapter, shall be available to the
public.
9112 DEFINITIONS
Whenever the following terms are used in this Chapter, they shall have the
meaning established by this section:
"Affordable Housing Cosf', means as defined in Health and Safety Code Section
50052.5. The term applies to for-sale units. In the Housing Incentive Agreement, in its
sole discretion, the City or Agency, as applicable, shall exercise the options specified in
Section 50052.5(b)(3) and/or (4), and if the Department of Housing and Community
Development adopts regulations pursuant to Section 50052.5(c), the City or Agency, as
applicable, shall consider the regulations for purposes of determining Affordable
Housing Cost.
''Affordable Rent" means as defined in Health and Safety Code Section 50053.
The term applies to rental units.
"Applicant" means a developer or owner who desires to construct five or more
dwelling units.
"Concession or Incentive" means the concessions and incentives as specified in
California Government Code Section 65915(j):
1. A reduction in site development standards of a modification of zoning code
requirements or architectural design requirements which exceed the minimum
building standards approved by the State 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; or
2. 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, including the City's General Plan, where the proposed housing
project will be located; or
3. Other regulatory incentives or concessions proposed by the Applicant or
the City which result in identifiable and actual cost reductions.
"Density Bonus" means a density increase of twenty-five (25) percent over the
otherwise Maximum Allowable Residential Density, (unless the Applicant elects a lower
percentage) for Housing Developments meeting the criteria of Section 9121a.(1)-(3) and
of at least ten (10) percent, (unless the Applicant elects a lower percentage), for
Housing Developments meeting the criteria of Section 9121a.(4). For purposes of
calculating the number of Density Bonus Units to be granted, the Maximum Allowable
Residential Density for the site shall be multiplied by .25 or by .10 as applicable for
either the twenty-five (25) percent or ten (10) percent density bonus. When calculating
the number of permitted Density Bonus Units, any fractions of units shall be rounded to
the next larger integer.
"Density Bonus Units" means those residential units granted pursuant to the
provisions of this Chapter which exceed the otherwise Maximum Allowable Residential
Density for the development site.
"Development Standards" means any ordinance, general plan element, specific
plan, charter amendment, or other local condition, law, policy, resolution, or regulation,
including minimum lot size, side yard setbacks, and placement of public improvements.
"Director" means the City's Director of Community Development or designee.
"Housing Development' means one or more groups of projects for residential
units constructed in the planned development of the City. "Housing development" also
includes either (1) a project to substantially rehabilitate and convert an existing
commercial building to residential use, or (2) the substantial rehabilitation of an existing
multifamily dwelling, as defined in subdivision (d) of Government Code Section 65863.4,
where the result of the rehabilitation would be a net increase in available residential
units. For the purpose of calculating a density bonus, the residential units do not have
to be based upon individual subdivision maps or parcels. 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 location of units, whether
Target Units or Non-Restricted Units, shall be in conformance with the Specific Plan, or
other zoning regulations, as applicable.
"Housing Incentive Agreement' means a legally binding agreement between an
Applicant and the City and/or the Redevelopment Agency to ensure that the
requirements of this Chapter are satisfied. The agreement among other things, shall
establish the number of Target Units, size, location, terms and conditions of
affordability, and production schedule and may be part of a larger Disposition and
Development or Regulatory Agreement.
"Incentives or Concessions of Equivalent Financial Value" means a regulatory
incentive approved by the City Council based on the land cost per dwelling unit of
development. The value of the density bonus with the one regulatory Incentive or
Concession is determined by the difference in the costs of the land with and without the
density bonus and regulatory Incentive or Concession.
"Lower Income Household" means persons and families whose income does not
exceed the qualifying limits for lower income families as established and amended from
time to time pursuant to Section 8 of the United States Housing Act of 1937. The limits
shall be published in the California Administrative Code as soon as possible after
adoption by the Secretary of Housing and Urban Development ("HUD") or, in the event
such federal standards are discontinued, as established by regulation of the California
Department of Housing and Community Development ("HCD").
"Maximum Allowable Residential Density'' means the maximum number of
residential units permitted by the Land Use Element of the City's General Plan and
Zoning Ordinance, with the exception of the East Tustin Specific Plan and as applicable
to certain parcels only in the MCAS Tustin Specific Plan, as of the date of Applicant's
application to the City, excluding the Density Bonus allowed by this Chapter. If the
housing development is within a planned development overlay zone, the maximum
residential density shall be determined on the basis of the general plan and the
maximum density of the underlying zone as of the date of application to the City. If a
range of density is permitted in a zone or Planning Area of a Specific Plan, the
Maximum Allowable Residential Density is the maximum number of residential units for
the specific zoning range or planning area applicable to the project.
"Non-Restricted Uni¢' means all units within a Housing Development excluding
the Target Units.
"Persons and Families of Moderate Income" means persons and families of Iow
or moderate income whose income exceeds the income limit for Lower Income
Households. "Persons and Families of Low or Moderate Income" means persons and
families whose income does not exceed 120 percent of area median income, as defined
in Health and Safety Code Section 50093, adjusted for family size by HCD in
accordance with adjustment factors adopted and amended from time to time by HUD
pursuant to Section 8 of the United States Housing Act of 1937.
"Qualifying Resident" or "Senior Citizen" means, a person 62 years of age or
older, or 55 years of age living in a Senior Citizen Housing Development.
"Senior Citizen Housing Development" means, as more fully defined in Civil Code
Section 51.3, a residential development that was or is proposed to be developed,
substantially rehabilitated, or substantially renovated for Senior Citizens that has at least
35 dwelling units and has applied for or has been issued a public report pursuant to
Business and Professions Code Section 11010.05.
"Target Uni¢' means a dwelling unit within a Housing Development which will be
reserved for sale or rent to, and, occupancy by Very Low or Lower Income Households,
Qualifying Residents, or moderate income households, in the case of a condominium
project.
"Very Low Income Households" means persons and families whose incomes do
not exceed the qualifying limits for very Iow income families as established and
amended from time to time pursuant to Section 8 of the United States Housing Act of
1937. Such limits shall be published in the California Administrative Code as soon as
possible after adoption by HUD, or in the event such federal standards are
discontinued, as established by regulation of HCD.
PART 2 INCENTIVES
9121 REQUIRED INCENTIVES
(a) When an Applicant agrees to provide:
(1) At least twenty (20) percent of the total units (excluding the density bonus)
of the Housing Development as Target Units affordable to Lower Income
Households; or
(2) At least ten (10) percent of the total units (excluding the density bonus) of
the Housing Development as Target Units affordable to Very Low Income
Households; or
(3) At least fifty (50) percent of the total units (excluding the density bonus),
for Qualifying Resident or Senior Citizen; or
(4) At least twenty (20) percent of the total units (excluding the density bonus)
in a Condominium Project as defined in Civil Code section 1351, subdivision (f),
as Target Units affordable to Persons and Families of Moderate Income.
The City shall either:
(i)
Grant a Density Bonus, and at least one Concession or Incentive;
(ii) Provide other Incentives or Concessions of Equivalent Financial
Value based upon the land cost per dwelling unit.
The City shall grant the additional Concession or Incentive required by this
section unless the City makes a written finding, based upon substantial evidence, that
the additional Concession or Incentive is not required in order to provide for affordable
housing costs; as defined in Health and Safety Code section 50052.5, or for rents for
the targeted units as specified in Government Code section 65915, subdivision (c).
(b) An Applicant may submit to the City a proposal for the specific Incentives
or Concessions that the Applicant requests pursuant to this section, and the Applicant
may request a meeting with the City. The City must grant the Concession or Incentive
requested by the Applicant unless the City makes a written finding, based upon
substantial evidence, of either of the following:
(1) The Concession or Incentive is not required in order to provide for
affordable housing costs, as defined in Health and Safety Code section 50052.5, or for
rents for the targeted units to be set as specified in Government Code section 65915,
subdivision (c).
(2) The Concession or Incentive would have a specific adverse impact, as
defined in Government Code section 65589.5, subdivision (d), paragraph (2), upon
public health and safety or the physical environment or on any real property that is listed
in the California 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 Iow- and moderate- income households.
(c) If an Applicant agrees to construct both twenty (20) percent of the total
units for Lower Income Households and ten (10) percent of the total units for Very Low
Income Households, the Applicant is entitled to only one density bonus and at least one
Concession or Incentive.
(d) In cases where a density increase of less than twenty-five (25) percent for
Housing Developments with Very Low or Lower Income Households or of less than ten
(10%) for a Condominium Project, as defined in Section 9121a.(4) of this Chapter, is
requested, no reduction will be allowed in the number of Target Units required to be
restricted pursuant to Section 9131(b) in order to obtain the authorized density bonus.
(e) In cases where the Applicant agrees to construct more than twenty (20)
percent of the total units for Lower Income Households, or more than ten (10) percent of
the total units for Very Low Income Households, the Applicant is entitled to only one
Density Bonus and one Concession or Incentive.
(f) An Applicant who agrees to construct a Senior Citizen Housing
Development with twenty (20) or ten (10) percent of the units reserved for Lower Very
Low-Income Households, respectively, is only entitled to one Density Bonus and one
Concession or Incentive.
9122 OPTIONAL ADDITIONAL ASSISTANCE
The City may approve additional assistance to facilitate the inclusion of more
Target Units than are required by this Chapter. The City Council may approve any of
the following in its sole discretion, including, but not limited to:
(a) A Density Bonus of more than twenty-five (25) percent, or more than ten
(10) percent for Condominium Projects, as defined in Section 9121a.(4) of this
Chapter.
(b) Waived, reduced, or deferred planning, plan check, building permit and/or
development impact fees.
(c) Direct financial aid (e.g., redevelopment housing set-aside funds,
Community Development Block Grant funds) in the form of a loan or a grant to
subsidize or provide Iow interest financing for on or off site improvements,
contribution to land or construction costs.
None of the above are Concessions or Incentives as defined in Section 9112.
PART 3 DEVELOPMENT REQUIREMENTS
9131 STANDARD REQUIREMENTS
(a) Target Units shall be constructed concurrently with Non-Restricted Units
unless both the City and the Applicant agree in the Housing Incentive Agreement
described in Section 9142 to an alternative schedule for development.
(b) An Applicant shall agree to and the City shall insure that Target Units shall
remain affordable to the designated group for a period of thirty (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, except where the units are
located within a redevelopment area or proposed redevelopment area or if the City or
Tustin Community Redevelopment Agency has decided that the applicant will receive
direct financial aid as described in Section 9122(c) herein, the units shall remain
affordable for a period of forty-five (45) years for for-sale units and fifty-five (55) years
for rental units. Those units targeted for-sale shall be sold at and remain affordable at
an Affordable Housing Cost to the applicable group. Those units targeted for rent shall
be rented at an Affordable Rent to the applicable group.
(c) The design and appearance of the Target Units shall be consistent with
the design of the total Housing Development. Housing Developments shall comply with
all development standards applicable to housing in the City, except those which may be
modified as provided by this Chapter.
(d) Unless the City Council makes the written finding specified in Section
9121(a), a Housing Incentive Agreement shall be entered into between the Applicant
and City and/or the Redevelopment Agency to memorialize among other things, the
Applicant's commitment to provide Target Units in accordance with this Chapter and
other applicable provisions of State Law. The Agreement shall be made a condition of
the development permits (e.g., tract maps, parcel maps, site plans, planned
development or conditional use permits, etc.) for all Housing Developments pursuant to
this Chapter.
9132 LOCATION OF TARGET UNITS
Target Units shall be built on-site, and be integrated within the Housing
Development. Except for a Senior Citizen Housing Development, the number of
bedrooms of the Target Units shall be generally equivalent to the bedroom mix of the
Non-Restricted Units of the Housing Development, as determined by the Director and
embodied in a Housing Incentive Agreement. Notwithstanding the foregoing, the
Applicant may include a higher proportion of Target Units with more bedrooms than the
Non-Restricted Units.
PART 4 APPLICATION AND REVIEW
9141 APPLICATION REQUIREMENTS AND REVIEW
(a) An Applicant proposing a Housing Development pursuant to this Chapter,
may submit a preliminary application prior to the submittal of any formal request for
approval of a permit for a Housing Development. Applicants are encouraged to
schedule a pre-application conference with the Director to discuss and identify potential
application issues. No charge will be required for the pre-application conference. A
preliminary application shall include the following information:
(1) A description of the proposed Housing Development including the total
number of units, Target Units by income category, and Density Bonus Units.
(2) The zoning and general plan designations and assessors parcel
number(s) of the project site.
(3) The location of the Target Units within the housing development.
(4) The number of additional "housing units" requested as the "density bonus"
for the housing development.
(5) A vicinity map and preliminary site plan, drawn to scale, including building
footprints, driveway, and parking layout.
8
(6) A description of the development and zoning standards requested to be
modified or waived and an explanation of why they are needed.
(7) In requesting the one Incentive or Concession of Equivalent Financial
Value for a waiver or modification of development standards or zoning code
requirements, the Applicant shall provide substantial facts in the form of a
development pro-forma that the waiver or modification is necessary to make the
Target Units and other units in the Housing Development economically feasible.
At a minimum, the development pro-forma shall include information identifying
capital costs, equity investment, debt service, discount rate, revenues, vacancy
allowance, operating expenses, net income or net operating income, pre-tax
cash flow, after-tax cash flow, and return on investment.
(8) If the Applicant requests to receive other Incentives or Concessions of
Equivalent Financial Value other than a grant of a Density Bonus and one
Concession or Incentive as defined by Section 9112, the Applicant shall provide
a description of the Concessions or Incentives requested, their financial value
based upon the land cost per dwelling unit, an explanation of why they are
needed, and how they will be utilized. The Applicant shall also provide
substantial facts in the form of a development pro-forma that the Concessions or
Incentives are necessary to make the Housing Development economically
feasible. At a minimum, the development pro-forma shall include information
identifying capital costs, equity investment, debt service, discount rate, revenues,
vacancy allowance, operating expenses, net income or net operating income,
pre-tax cash flow, after-tax cash flow, and return on investment.
(9) The Applicant shall acknowledge in writing that a Housing Incentive
Agreement is required.
(b) An application for a Density Bonus and/or Concession or Incentive
pursuant to this Chapter shall be processed concurrently with any other permit
application(s) required for the Housing Development. At a minimum, the application
shall contain all the information described in Section 9141(a) plus all other required
information. Final approval or disapproval of an application shall be made by the City
Council and (i) in the case of Housing Developments within Redevelopment Project
Areas, also by the Tustin Community Development Agency ("Agency"); (ii) upon
recommendation of the Planning Commission for those Housing Developments which
require Planning Commission entitlements; except that no approval shall be effective
until the City or Agency (as applicable) and Applicant have executed a Housing
Incentive Agreement.
(c) Within sixty (60) days of receipt of the preliminary application, the City
shall provide the Applicant with a letter which identifies project issues of concern and
the proposed Concession or Incentive that the Director would recommend to the
Planning Commission and City Council and the procedures for compliance with this
Chapter.
(d) Where the Applicant proposes that the City provide Optional Additional
Assistance as described in Section 9122 herein, the proposal shall be considered by the
Planning Commission for recommendation to the City Council, or Tustin Community
Redevelopment Agency ("Agency") where Agency funds are requested, for their
preliminary approval unless such Housing Development does not require Planning
Commission entitlements in which case, the City Council or Agency, as applicable, can
authorize such assistance. A preliminary approval shall indicate the City Council's
approval of the proposal for processing, but no Optional Additional Assistance shall be
deemed approved until embodied in the Housing Incentive Agreement.
9142 HOUSING INCENTIVE AGREEMENT
(a) Once an application for a Density Bonus and/or Concession(s) or
Incentive(s) is approved pursuant to Section 9141(b), a Housing Incentive Agreement
shall be prepared consistent with any conditions of approval related thereto subject to
review and approval as to form by the City Attorney. The City (or Agency) approval and
execution responsibilities for such Agreement shall be as identified in the approval of
the Housing Development application pursuant to Section 9141(b). Where such
identification is not made by the City Council, such Agreement shall be subject to
approval by the City Council.
(b) The final approval of any documents as required by the Agreement shall
take place prior to final map approval, or, where a map is not being processed, prior to
issuance of building permits for any parcels in the Housing Incentive Agreement. The
Agreement shall be binding to all future owners and successors in interest.
(c) The Agreement shall include at least the following:
(1) The total number of units approved for the Housing Development including
the number of Target Units.
(2) A description of the household income group to be accommodated by the
Housing Development, and the standards for determining the corresponding
Affordable Rent or Affordable Housing Cost.
(3) The location, unit sizes (square feet), and number of bedrooms of Target
Units.
(4) Affordability restrictions for Target Units of at least ten (10), thirty (30)
years or forty-five (45) for for-sale units and fifty-five (55) for rental units, as
applicable, in accordance with this Chapter.
(5) A schedule for completion and occupancy of Target Units.
10
(6) A description of the Concession or Incentive, Incentives or Concessions of
Equivalent Financial Value, or Optional Additional Assistance being provided by
the City or Agency.
(7) A description of remedies for breach of the Agreement by either party (the
City may identity tenants or qualified purchasers as third party beneficiaries
under the agreement).
(8) Other provisions to ensure implementation and compliance with this
Chapter and State Law.
(d) In the case of for-sale Housing Developments, the Agreement shall
provide for the following regarding the initial sale and use of Target Units during the
applicable use restriction period and for the respective affordability period:
(1) Target Units shall, upon initial sale, be sold to eligible Very Low, Lower
Income Households or Moderate Income Households consistent with this
Chapter or as approved by the City Council at an Affordable Housing Cost or be
made available to Qualified Residents in a Senior Citizen Housing Development.
(2) Target Units shall be initially owner-occupied by eligible Very Low, Lower
Income, or Moderate Income Households, or by Qualifying Residents in the case
of a Senior Citizen Housing Development.
(3) The Agreement shall provide for the continued affordability of the Target
Units for the applicable affordability period.
(e) In the case of rental Housing Developments, the Agreement shall provide
for the following conditions governing the use of Target Units during the affordability
period:
(1) The rules and procedures for qualifying tenants, establishing Affordable
Rent, filling vacancies, and maintaining Target Units for qualified tenants;
(2) Provisions requiring the owner to verify tenant incomes and maintain
books and records to demonstrate compliance with this Chapter and State Law.
SECTION 3. If any section, subsection, sentence, clause, phrase or portion of
this ordinance is for any reason held to be invalid or unconstitutional by the decision of
any court of competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this ordinance. The City Council of the City of Tustin hereby
declares that it would have adopted this ordinance and each section, subsection,
sentence, clause, phrase or portion thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
11
PASSED AND ADOPTED, at a regular meeting of the City Council for the City of
Tustin on this day of ,2003.
TRACY WILLS WORLEY, Mayor
PAMELA STOKER, City Clerk
12
ORDINANCE CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF TUSTIN )
ORDINANCE NO.
PAMELA STOKER, City Clerk and ex-officio Clerk of the City Council of the City
of Tustin, California, does hereby certify that the whole number of the members of the
City Council of the City of Tustin is five; that the above and foregoing Ordinance No.
__ was duly and regularly introduced and read at the regular meeting of the City
Council held on the ~ day of ,200._, and was given its
second reading, passed and adopted at a regular meeting of the City Council held on
the day of ,200_, by the following vote:
COUNCILPERSONS AYES:
COUNCILPERSONS NOES:
COUNClLPERSONS ABSTAINED:
COUNCILPERSONS ABSENT:
PAMELA STOKER, City Clerk
Published:
13
ATTACHMENT 2
PLANNING COMMISSION RESOLUTION NO. 3879
RESOLUTION NO. 3879
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF
TUSTIN RECOMMENDING THAT THE CITY COUNCIL ADOPT CODE
AMENDMENT NO. 03-005, AMENDING THE DENSITY BONUS
ORDINANCE ARTICLE 9, CHAPTER 1 OF THE TUSTIN CITY CODE.
The Planning Commission of the City of Tustin does hereby resolve as follows:
I. The Planning Commission finds and determines as follows:
That it is necessary for the City to establish a policy to comply with the
California Planning and Zoning Law (Government Code Section 65915
through 65918).
That said policy shall comply with Section 65915 of the Government Code
by either granting a density bonus and a concession or incentive, providing
other incentives of equivalent financial value or a combination thereof,
whichever is deemed by the City Council to be appropriate and as required
by State law.
Any adclitio~en~i~veS'of non-monetary-~a~e s~alFbe' determFned and
stipulated by the City Council upon recommendation by the Planning
Commission as it deems reasonable and appropriate to the case.
That the provision of bonus units shall not exempt a project from complying
with all applicable development standards of the zoning district in which it is
located, unless development standards are relaxed as additional incentives.
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 by the Density Bonus Ordinance.
That provision of affordable housing units shall be assured through
recordation of a Development Agreement as required by the Density Bonus
Ordinance.
That the proposed density bonus ordinance is consistent with the Tustin
General Plan Housing Element in that it provides for new affordable
housing, encourages incentives to assist in the development of affordable
housing, and encourages the availability of affordable housing for large Iow
income families.
That a Public Hearing was duly noticed, called, and held on by the
Planning Commission on August 25, 2003.
Resolution No. 3879
Page 2
The project is exempt pursuant to Section 21080(b)(10) of the California
Environmental Quality Act.
II,'
The Planning Commission hereby recommends that the City Council adopt
Ordinance No. 1279 attached hereto as Exhibit A.
PASSED AND ADOPTED at a regular meeting of the Tustin Planning Commission, held
On the 25th day of August, 2003.
ELIZABETH A. BINSACK
Planning Commission Secretary
:Linda-C: Jenning~
Chairperson
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF TUSTIN )
I, ELIZABETH A. BINSACK, the undersigned, hereby certify that I am the Secretary of the
Planning Commission of the City of Tustin, California; that Resolution No. 3879 was duly
passed and adopted at a regular meeting of the Tustin Planning Commission, held on the
25TM day of August, 2003.
ELIZABETH A. BI'SACK
Planning Commission Secretary
EXHIBITA
ORDINANCE NO. 1279
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF TUSTIN, CALIFORNIA, AMENDING ARTICLE 9,
CHAPTER I, GOVERNING INCENTIVES FOR THE
DEVELOPMENT OF AFFORDABLE HOUSING.
The City Council of the City of Tustin hereby ordains as follows:
SECTION1. PURPOSE.
The Purpose of this ordinance is to amend the City's Affordable Housing
Development Incentive provisions: (1) to comply with the California Legislature's
2002 Amendment of Government Code Section 65915 governing incentives for
lower income housing units; and (2) to comply with other changes in state law
applicable to affordable housing.
SECTION 2. Chapter 1 of Article 9 of the Tustin Municipal Code. Title 9,
Chapter 1, of the Tustin Municipal Code entitled, Incentives for the Development of
Affordable Housing, is hereby amended in its entirety as set forth below:
CHAPTERI
INCENTIVES FOR THE DEVELOPMENT OF AFFORDABLE HOUSING
CHAPTERINDEX
PART
9111
9112
GENERAL
PURPOSE AND INTENT
DEFINITIONS
PART
9121
9122
2 INCENTIVES/ASSISTANCE
REQUIRED INCENTIVES
OPTIONAL ADDITIONAL ASSISTANCE
PART
9131
9132
3 DEVELOPMENT REQUIREMENTS
STANDARD REQUIREMENTS
LOCATION OF TARGET UNITS
PART
9141
9142
4 APPLICATION AND REVIEW
APPLICATION REQUIREMENTS AND REVIEW
HOUSING INCENTIVE AGREEMENT
CHAPTER I
INCENTIVES FOR THE DEVELOPMENT OF AFFORDABLE HOUSING
PARTI GENERAL
9111 PURPOSE AND INTENT
The purpose of this Chapter is to provide incentives for the production of housing
for very Iow, lower income, moderate income or senior citizens in accordance with
California Law pertaining to Density Bonuses. The intent of this Chapter is to facilitate
the development of affordable housing and to implement the goals, objectives, and
policies of the City's Housing Element.
The regulations and procedures set forth in this Chapter shall apply throughout
the City with the exception of areas identified as "East Tustin Specific Plan" and
"MCAS Tustin Specific Plan Area," except Planning Areas 4, 5, and Parcel 35 of
Planning Area 21. Sections of the California Government Code referenced in this
Chapter and application forms for complying with this Chapter, shall be available to the
public.
9112 DEFINITIONS
Whenever the following terms are used in this Chapter, they shall have the
meaning established by this section:
"Affordable Housing Cos/", means as defined in Health and Safety Code Section
50052.5. The term applies to for-sale units. In the Housing Incentive Agreement, in its
sole discretion, the City or Agency, as applicable, shall exercise the options specified in
Section 50052.5(b)(3) and/or (4), and if the Department of Housing and Community
Development adopts regulations pursuant to Section 50052.5(c), the City or Agency, as
applicable, shall consider the regulations for purposes of determining Affordable
Housing Cost.
"Affordable Rent" means as defined in Health and Safety Code Section 50053.
The term applies to rental units.
"Applicant" means a developer or owner who desires to construct five or more
dwelling units.
"Concession or Incentive" means the concessions and incentives as specified in
California Government Code Section 85915(j):
1. A reduction in site development standards of a modification of zoning code
requirements or architectural design requirements which exceed the minimum
building standards approved by the State 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; or
2. 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, including the City's General Plan, where the proposed housing
project will be located; or
3. Other regulatory incentives or concessions proposed by the Applicant or
the City which result in identifiable and actual cost reductions.
"Density Bonus" means a density increase of twenty-five (25) percent over the
otherwise Maximum Allowable Residential Density, (unless the Applicant elects a lower
percentage) for Housing Developments meeting the criteria of Section 9121a.(1)-(3) and
of at least ten (10) percent, (unless the Applicant elects a lower percentage), for
Housing Developments meeting the criteria of Section 9121a.(4). For purposes of
calculating the number of Density Bonus Units to be granted, the Maximum Allowable
Residential Density for the site shall be multiplied by .25 or by .10 as applicable for
either the twenty-five (25) percent or ten (10) percent density bonus. When calculating
the number of permitted Density Bonus Units, any fractions of units shall be rounded to
the next larger integer.
"Density Bonus Units" means those residential units granted pursuant to the
provisions of this Chapter which exceed the otherwise Maximum Allowable Residential
Density for the development site.
"Development Standards" means any ordinance, general plan element, specific
plan, charter amendment, or other local condition, law, policy, resolution, or regulation,
including minimum lot size, side yard setbacks, and placement of public improvements.
"Directo/" means the City's Director of Community Development or designee.
"Housing Development' means one or more groups of projects for residential
units constructed in the planned development of the City. "Housing development" also
includes either (1) a project to substantially rehabilitate and convert an existing
commercial building to residential use, or (2) the substantial rehabilitation of an existing
multifamily dwelling, as defined in subdivision (d) of Government Code Section 65863.4,
where the result of the rehabilitation would be a net increase in available residential
units. For the purpose of calculating a density bonus, the residential units do not have
to be based upon individual subdivision maps or parcels. 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 location of units, whether
Target Units or Non-Restricted Units, shall be in conformance with the Specific Plan, or
other zoning regulations, as applicable.
"Housing Incentive Agreement' means a legally binding agreement between an
Applicant and the City and/or the Redevelopment Agency to ensure that the
requirements of this Chapter are satisfied. The agreement among other things, shall
establish the number of Target Units, size, location, terms and conditions of
affordability, and production schedule and may be part of a larger Disposition and
Development or Regulatory Agreement.
"Incentives or Concessions of Equivalent Financial Value" means a regulatory
incentive approved by the City Council based on the land cost per dwelling unit of
development. The value of the density bonus with the one regulatory Incentive or
Concession is determined by the difference in the costs of the land with and without the
density bonus and regulatory Incentive or Concession.
"Lower Income Household" means persons and families whose income does not
exceed the qualifying limits for lower income families as established and amended from
time to time pursuant to Section 8 of the United States Housing Act of 1937. The limits
shall be published in the California Administrative Code as soon as possible after
adoption by the Secretary of Housing and Urban Development ("HUD") or, in the event
such federal standards are discontinued, as established by regulation of the California
Department of Housing and Community Development ("HCD").
"Maximum Allowable Residential Densitj/' means the maximum number of
residential units permitted by the Land Use Element of the City's General Plan and
Zoning Ordinance, with the exception of the East Tustin Specific Plan and as applicable
to certain parcels only in the MCAS Tustin Specific Plan, as of the date of Applicant's
application to the City, excluding the Density Bonus allowed by this Chapter. If the
housing development is within a planned development overlay zone, the maximum
residential density shall be determined on the basis of the general plan and the
maximum density of the underlying zone as of the date of application to the City. If a
range of density is permitted in a zone or Planning Area of a Specific Plan, the
Maximum Allowable Residential Density is the maximum number of residential units for
the specific zoning range or planning area applicable to the project.
"Non-Restricted Unit' means all units within a Housing Development excluding
the Target Units.
"Persons and Families of Moderate Income" means persons and families of Iow
or moderate income whose income exceeds the income limit for Lower Income
Households. "Persons and Families of Low or Moderate Income" means persons and
families whose income does not exceed 120 percent of area median income, as defined
in Health and Safety Code Section 50093, adjusted for family size by HCD in
accordance with adjustment factors adopted and amended from time to time by HUD
pursuant to Section 8 of the United States Housing Act of 1937.
4
"Qualifying Resident" or "Senior Citizen" means, a person 62 years of age or
older, or 55 years of age living in a Senior Citizen Housing Development.
"Senior Citizen Housing Development" means, as more fully defined in Civil Code
Section 51.3, a residential development that was or is proposed to be developed,
substantially rehabilitated, or substantially renovated for Senior Citizens that has at least
35 dwelling units and has applied for or has been issued a public report pursuant to
Business and Professions Code Section 11010.05.
"Target Uni~' means a dwelling unit within a Housing Development which will be
reserved for sale or rent to, and, occupancy by Very Low or Lower Income Households,
Qualifying Residents, or moderate income households, in the case of a condominium
project.
"Very Low Income Households' means persons and families whose incomes do
not exceed the qualifying limits for very Iow income families as established and
amended from time to time pursuant to Section 8 of the United States Housing Act of
1937. Such limits shall be published in the California Administrative Code as soon as
possible after adoption by HUD, or in the event such federal standards are
discontinued, as established by regulation of HCD.
PART 2 INCENTIVES
9121 REQUIRED INCENTIVES
(a) When an Applicant agrees to provide:
(1) At least twenty (20) percent of the total units (excluding the density bonus)
of the Housing Development as Target Units affordable to Lower Income
Households; or
(2) At least ten (10) percent of the total units (excluding the density bonus) of
the Housing Development as Target Units affordable to Very Low Income
Households; or
(3) At least fifty (50) percent of the total units (excluding the density bonus),
for Qualifying Resident or Senior Citizen; or
(4) At least twenty (20) percent of the total units (excluding the density bonus)
in a Condominium Project as defined in Civil Code section 1351, subdivision (f),
as Target Units affordable to Persons and Families of Moderate Income.
The City shall either:
(i) Grant a Density Bonus, and at least one Concession or Incentive;
or
5
(ii) Provide other Incentives or Concessions of Equivalent Financial
Value based upon the land cost per dwelling unit.
The City shall grant the additional Concession or Incentive required by this
section unless the City makes a written finding, based upon substantial evidence, that
the additional Concession or Incentive is not required in order to provide for affordable
housing costs, as defined in Health and Safety Code section 50052.5, or for rents for
the targeted units as specified in Government Code section 65915, subdivision (c).
(b) An Applicant may submit to the City a proposal for the specific Incentives
or Concessions that the Applicant requests pursuant to this section, and the Applicant
may request a meeting with the City. The City must grant the Concession or Incentive
requested by the Applicant unless the City makes a written finding, based upon
substantial evidence, of either of the following:
(1) The Concession or Incentive is not required in order to provide for
affordable housing costs, as defined in Health and Safety Code section 50052.5, or for
rents for the targeted units to be set as specified in Government Code section 65915,
subdivision (c).
(2) The Concession or Incentive would have a specific adverse impact, as
defined in Government Code section 65589.5, subdivision (d), paragraph (2), upon
public health and safety or the physical environment or on any real property that is listed
in the California 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 Iow- and moderate- income households.
(c) If an Applicant agrees to construct both twenty (20) percent of the total
units for Lower Income Households and ten (10) percent of the total units for Very Low
Income Households, the Applicant is entitled to only one density bonus and at least one
Concession or Incentive.
(d) In cases where a density increase of less than twenty-five (25) percent for
Housing Developments with Very Low or Lower Income Households or of less than ten
(10%) for a Condominium Project, as defined in Section 9121a.(4) of this Chapter, is
requested, no reduction will be allowed in the number of Target Units required to be
restricted pursuant to Section 9131 (b) in order to obtain the authorized density bonus.
(e) In cases where the Applicant agrees to construct more than twenty (20)
percent of the total units for Lower Income Households, or more than ten (10) percent of
the total units for Very Low Income Households, the Applicant is entitled to only one
Density Bonus and one Concession or Incentive.
(f) An Applicant who agrees to construct a Senior Citizen Housing
Development with twenty (20) or ten (10) percent of the units reserved for Lower Very
Low-Income Households, respectively, is only entitled to one Density Bonus and one
Concession or Incentive.
9122 OPTIONAL ADDITIONAL ASSISTANCE
The City may approve additional assistance to facilitate the inclusion of more
Target Units than are required by this Chapter. The City Council may approve any of
the following in its sole discretion, including, but not limited to:
(a) A Density Bonus of more than twenty-five (25) percent, or more than ten
(10) percent for Condominium Projects, as defined in Section 9121a.(4) of this
Chapter.
(b) Waived, reduced, or deferred planning, plan check, building permit and/or
development impact fees.
(c) Direct financial aid (e.g., redevelopment housing set-aside funds,
Community Development Block Grant funds) in the form of a loan or a grant to
subsidize or provide Iow interest financing for on or off site improvements,
contribution to land or construction costs.
None of the above are Concessions or Incentives as defined in Section 9112.
PART 3 DEVELOPMENT REQUIREMENTS
9131 STANDARD REQUIREMENTS
(a) Target Units shall be constructed concurrently with Non-Restricted Units
unless both the City and the Applicant agree in the Housing Incentive Agreement
described in Section 9142 to an alternative schedule for development.
(b) An Applicant shall agree to and the City shall insure that Target Units shall
remain affordable to the designated group for a period of thirty (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, except where the units are
located within a redevelopment area or proposed redevelopment area or if the City or
Tustin Community Redevelopment Agency has decided that the applicant will receive
direct financial aid as described in Section 9122(c) herein, the units shall remain
affordable for a period of forty-five (45) years for for-sale units and fifty-five (55) years
for rental units. Those units targeted for-sale shall be sold at and remain affordable at
an Affordable Housing Cost to the applicable group. Those units targeted for rent shall
be rented at an Affordable Rent to the applicable group.
(c) The design and appearance of the Target Units shall be consistent with
the design of the total Housing Development. Housing Developments shall comply with
all development standards applicable to housing in the City, except those which may be
modified as provided by this Chapter.
(d) Unless the City Council makes the written finding specified in Section
9121(a), a Housing Incentive Agreement shall be entered into between the Applicant
and City and/or the Redevelopment Agency to memorialize among other things, the
Applicant's commitment to provide Target Units in accordance with this Chapter and
other applicable provisions of State Law. The Agreement shall be made a condition of
the development permits (e.g., tract maps, parcel maps, site plans, planned
development or conditional use permits, etc.) for all Housing Developments pursuant to
this Chapter.
9132 LOCATION OF TARGET UNITS
Target Units shall be built on-site, and be integrated within the Housing
Development. Except for a Senior Citizen Housing Development, the number of
bedrooms of the Target Units shall be generally equivalent to the bedroom mix of the
Non-Restricted Units of the Housing Development, as determined by the Director and
embodied in a Housing Incentive Agreement. Notwithstanding the foregoing, the
Applicant may include a higher proportion of Target Units with more bedrooms than the
Non-Restricted Units.
PART 4 APPLICATION AND REVIEW
9141 APPLICATION REQUIREMENTS AND REVIEW
(a) An Applicant proposing a Housing Development pursuant to this Chapter,
may submit a preliminary application prior to the submittal of any formal request for
approval of a permit for a Housing Development. Applicants are encouraged to
schedule a pre-application conference with the Director to discuss and identify potential
application issues. No charge will be required for the pre-application conference. A
preliminary application shall include the following information:
(1) A description of the proposed Housing Development including the total
number of units, Target Units by income category, and Density Bonus Units.
(2) The zoning and general plan designations and assessors parcel
number(s) of the project site.
(3) The location of the Target Units within the housing development.
(4) The number of additional "housing units" requested as the "density bonus"
for the housing development.
(5) A vicinity map and preliminary site plan, drawn to scale, including building
footprints, driveway, and parking layout.
(6) A description of the development and zoning standards requested to be
modified or waived and an explanation of why they are needed.
(7) In requesting the one Incentive or Concession of Equivalent Financial
Value for a waiver or modification of development standards or zoning code
requirements, the Applicant shall provide substantial facts in the form of a
development pro-forma that the waiver or modification is necessary to make the
Target Units and other units in the Housing Development economically feasible.
At a minimum, the development pro-forma shall include information identifying
capital costs, equity investment, debt service, discount rate, revenues, vacancy
allowance, operating expenses, net income or net operating income, pre-tax
cash flow, after-tax cash flow, and return on investment.
(8) If the Applicant requests to receive other Incentives or Concessions of
Equivalent Financial Value other than a grant of a Density Bonus and one
Concession or Incentive as defined by Section 9112, the Applicant shall provide
a description of the Concessions or Incentives requested, their financial value
based upon the land cost per dwelling unit, an explanation of why they are
needed, and how they will be utilized. The Applicant shall also provide
substantial facts in the form of a development pro-forma that the Concessions or
Incentives are necessary to make the Housing Development economically
feasible. At a minimum, the development pro-forma shall include information
identifying capital costs, equity investment, debt service, discount rate, revenues,
vacancy allowance, operating expenses, net income or net operating income,
pre-tax cash flow, after-tax cash flow, and return on investment.
(9) The Applicant shall acknowledge in writing that a Housing Incentive
Agreement is required.
(b) An application for a Density Bonus and/or Concession or Incentive
pursuant to this Chapter shall be processed concurrently with any other permit
application(s) required for the Housing Development. At a minimum, the application
shall contain all the information described in Section 9141(a) plus all other required
information. Final approval or disapproval of an application shall be made by the City
Council and (i) in the case of Housing Developments within Redevelopment Project
Areas, also by the Tustin Community Development Agency ("Agency"); (ii) upon
recommendation of the Planning Commission for those Housing Developments which
require Planning Commission entitlements; except that no approval shall be effective
until the City or Agency (as applicable) and Applicant have executed a Housing
Incentive Agreement.
(c) Within sixty (60) days of receipt of the preliminary application, the City
shall provide the Applicant with a letter which identifies project issues of concern and
the proposed Concession or Incentive that the Director would recommend to the
Planning Commission and City Council and the procedures for compliance with this
Chapter.
(d) Where the Applicant proposes that the City provide Optional Additional
Assistance as described in Section 9122 herein, the proposal shall be considered by the
Planning Commission for recommendation to the City Council, or Tustin Community
Redevelopment Agency ("Agency") where Agency funds are requested, for their
preliminary approval unless such Housing Development does not require Planning
Commission entitlements in which case, the City Council or Agency, as applicable, can
authorize such assistance. A preliminary approval shall indicate the City Council's
approval of the proposal for processing, but no Optional Additional Assistance shall be
deemed approved until embodied in the Housing Incentive Agreement.
9142 HOUSING INCENTIVE AGREEMENT
(a) Once an application for a Density Bonus and/or Concession(s) or
Incentive(s) is approved pursuant to Section 9141(b), a Housing Incentive Agreement
shall be prepared consistent with any conditions of approval related thereto subject to
review and approval as to form by the City Attorney. The City (or Agency) approval and
execution responsibilities for such Agreement shall be as identified in the approval of
the Housing Development application pursuant to Section 9141(b). Where such
identification is not made by the City Council, such Agreement shall be subject to
approval by the City Council.
(b) The final approval of any documents as required by the Agreement shall
take place prior to final map approval, or, where a map is not being processed, prior to
issuance of building permits for any parcels in the Housing Incentive Agreement. The
Agreement shall be binding to all future owners and successors in interest.
(c) The Agreement shall include at least the following:
(1) The total number of units approved for the Housing Development including
the number of Target Units.
(2) A description of the household income group to be accommodated by the
Housing Development, and the standards for determining the corresponding
Affordable Rent or Affordable Housing Cost.
(3) The location, unit sizes (square feet), and number of bedrooms of Target
Units.
(4) Affordability restrictions for Target Units of at least ten (10), thirty (30)
years or forty-five (45) for for-sale units and fifty-five (55) for rental units, as
applicable, in accordance with this Chapter.
(5) A schedule for completion and occupancy of Target Units.
10
(6) A description of the Concession or Incentive, Incentives or Concessions of
Equivalent Financial Value, or Optional Additional Assistance being provided by
the City or Agency.
(7) A description of remedies for breach of the Agreement by either party (the
City may identity tenants or qualified purchasers as third party beneficiaries
under the agreement).
(8) Other provisions to ensure implementation and compliance with this
Chapter and State Law.
(d) In the case of for-sale Housing Developments, the Agreement shall
provide for the following regarding the initial sale and use of Target Units during the
applicable use restriction period and for the respective affordability period:
(1) Target Units shall, upon initial sale, be sold to eligible Very Low, Lower
Income Households or Moderate Income Households consistent with this
Chapter or as approved by the City Council at an Affordable Housing Cost or be
made available to Qualified Residents in a Senior Citizen Housing Development.
(2) Target Units shall be initially owner-occupied by eligible Very Low, Lower
Income, or Moderate Income Households, or by Qualifying Residents in the case
of a Senior Citizen Housing Development.
(3) The Agreement shall provide for the continued affordability of the Target
Units for the applicable affordability period.
(e) In the case of rental Housing Developments, the Agreement shall provide
for the following conditions governing the use of Target Units during the affordability
period:
(1) The rules and procedures for qualifying tenants, establishing Affordable
Rent, filling vacancies, and maintaining Target Units for qualified tenants;
(2) Provisions requiring the owner to verify tenant incomes and maintain
books and records to demonstrate compliance with this Chapter and State Law.
SECTION 3. If any section, subsection, sentence, clause, phrase or portion of
this ordinance is for any reason held to be invalid or unconstitutional by the decision of
any court of competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this ordinance. The City Council of the City of Tustin hereby
declares that it would have adopted this ordinance and each section, subsection,
sentence, clause, phrase or portion thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
11
PASSED AND ADOPTED, at a regular meeting of the City Council for the City of
Tustin on this day of ,2003.
TRACY WILLS WORLEY, Mayor
PAMELA STOKER, City Clerk
12
ORDINANCE CERTIFICATION
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF TUSTIN
SS.
ORDINANCE NO.
PAMELA STOKER City Clerk and ex-officio Clerk of the City Council of the City
of Tustin, California, does hereby certify that the whole number of the members of the
City Council of the City of Tustin is five; that the above and foregoing Ordinance No.
__ was duly and regularly introduced and read at the regular meeting of the City
Council held on the ~ day of ,200__, and was given its
second reading, passed and adopted at a regular meeting of the City Council held on
the day of ,200_, by the following vote:
COUNCILPERSONS AYES:
COUNCILPERSONS NOES:
COUNCILPERSONS ABSTAINED:
COUNCILPERSONS ABSENT:
PAMELA STOKER, City Clerk
Published:
13
ATTACHMENT 3
GOVERNMENT CODE SECTION 65915
%'AIS Document Petrievat Pa~¢ I of ~
65V15. (a) When an applicant proposes a housing development within
the Jurisdiction of a city, county, or city and county, that local
g~ver~m~nt shall provide the applicant incentives or concessions for
the production of housing units as prescribed in this chapter. Ail
cities, counties, or cities and counties shell adopt an'ordinance
that specifies how compliance with this section will be implemented.
(b) A city, county, or city an~ county shall either grant
density bonus and at least one of the concessions or incentives
identified in s~bdivision (j), or provide o~her incentives or
concessions of equivalent financial value based upon the land cost
per dwelling unit, when the applicant for the housing development
agrees or proposes to construct at least any one of the following:
(1) Twenty percent of the total units of a housing development for
lower income households, as defined in Section 50079.5 of the Health
and Safety
(2) Ten percent of the total Units of a housing development for
very low income households, as defined in Section 50105 of the Health
and Safety
(3) Fifty percent of the total dwelling units of a housing
development for qualifying residents, as defined in Section 51.3 of
the Civil Code.
(4) Twenty percent of the total dwelling ~nits in a cond0~ninium
project as defined in subdivision (f) of Section 1351 of the Civil
Co~m, for persons and families of moderate income, as defined in
Section 50093 of the Health and Safety Co~e.
The city, county, or city and county shall grant the additional
concession or incentive required by this subdivision unless the city,
county, or city and county makes a written finding, based upon
substantial evidence, that the additional concession or incentive is
not required in order to provide for affordable housing costs, as
defined in Section 50052.5 of the Health and Safety Co~e, or for
rents for the targeted units to be set as specified in subdivision
(¢) (1) An applicant shall agree to, and the city, county, or city
and county shall ensure, continued affordability of all lower income
density bonus units for 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.
Those units targeted for lower income households, as defined in
Section 50079,5 of the Health and Safety ~de, shall be affordable at
a rent that does not exceed 30 percent of 60 percent of area median
income. Those units targeted for very low income households, as
defined in Section 50105 of the Health and Safety Cod~, shall be
affordable at a rent that does not exceed 30 percent of 50 percept of
area median income.
(2) An applicant shall agree to, and the city, county, or city and
county shall ensure, continued affordabili~y of the moderate-income
units that are directly related to the receipt of the density bonus
for 10 years if the housing is in a condominium project as defined in
subdivision (f) of Section 1351 of the Civil Tx)de.
(d) An applicant may submit to a city, county, or city and county
e proposal for the specific incentives or concessions that ~he
applicant requests pursuant to this section, and may request e
meeting with the city, county, or city and county. The city, county,
or city and county shall grant the concession or incentive requested
by the applicant unless the city, county, or city and county makes a
written finding, based upon substantial evidence, of either of the
following:
(1} The concession or incentive is not required in order to
http'.//www.leginfo.ca, gov/cgi-bin/waisgate?WAISdoclD=67868311613+0+0+0&WAISa~ti... 7/8/2003
WAIS Do~um~ Rm/~val Page 2 of 5
provide .for affordable housing costs, as defined in Section 50052.5
of the Health and Safety Co~, or for rents for the targa=ed units to
be set as specified in subdivision (c).
.(2) The concession or incentive would have a specific adverse
impact, as defined in paragraph (2) of subdivision (d) of Section
65589.5, upon public health and safety or the physical environment or
on any real property that is listed in the California 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 unaffordabte to iow- end moderate-income
households.
The applicant may initiate judicial proceedings if the city,
county, or city and county refuses to grant a requested density
bonus, incentive, or concession. If a court finds that the refusal
to grant a requested density bonus, incentive, or concession is in
violation of this section, the court shall award the plaintiff
reasonable attorney's fees and costs of suit. Nothing in this
subdivision shall be interpreted to require a local g~veznmm~t to
grant an incentive or concession that has a specific, adverse impact,
as defined in paragraph (2) of s~bdivision (d) of Section 65589.5,
upon health, safety, or the physical environment, and for which there
is nc feasible method to satisfactorily mitigate or avoid the
specific adverse impact. Nothing in this subdivision shall be
interpreted to require a local g~ve~ to grant an incentive or
concession that would have an adverse ~pact on any real property
that is listed in the California Register cf Historical Resources.
The city, county, or city and county shall establish procedures for
carrying out this section, that shall include legislative body
approval of the means of compliance with this section. The city,
county, or city and county shall also estaDlish procedures for
waiving or modifying development and zoning standards that would
otherwise i~hibit the utilization of the density bonus on specific
sites. These procedures shall include, but not be limited to, such
items as minimum lot size, side yard setbacks, and placement of
public works improvements.
(e) In no case may a city, county, or city and county apply any
develol:ment standard that will have the effect of precluding the
construcWcion of a developmen= meeting the criteria of subdivision (b)
at the densities or with the concessions or incentives permitted by
this section. An applicant may s,,~-~it to a city, county, or city and
county e proposal for the waiver or reduction of development
standards and may request a meeting with the city, county, or city.
and county. If a court finds that the refusal to grant a waiver or
reduction of development standards is in violation of this section,
the court shall award the plaintiff reasonable attorney's fees and
costs of suit. Nothing in this subdivision shall be interpreted to
require a local gov~L~ua~n~ to waive or reduce development s~andards
if the waiver or reduction would have a specific, adverse impact, as
defined in paragraph (2) of subdivision (d) of Section 65589.5, 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 subdivision shall be interpreted to
require s local government to waive or reduce development
that would have an adverse impact on any real property that is listed
in the'California Register of Historical Resources.
(f) The applican: shall show that the waiver or modification is
necessary to make the housing units economically feasible.
(g) (1) For the purposes of this =hapter, except as provided in
paragraph (2), "den=ity bonus" means a density increase cf at least
25 percen%, u~less a lesser percentage is elected by the applicant,
h~://www.leginfo.ea, gov/cgi-bi~waiagate?WAISdoclD=6786831 t 613+0+(N-0~WAISacti,., 7/8/2003
WAI$ Do~-'mnm~ ~hi~ Pag~ 3 of 5
over the otherwise maximum allowable resign=iai d~nsity under the
applicable zoning ordinance and land use element of the general plan
es of the date of application by the applicant to the city, county,
or city and county. All density calculations resulting in fractional
units shall be rounded up to the next whole n~A~er. The granti,g of
a density bonus shall not be interpreted, in end of itself, to
require a general plan amendment, local coastal plan amendment,
zoning change, or other discretionary'approval. The density bonus
shall not be included when determining the n,,~er of housing units
wh/oh is equal to 10, 20, or 50 percent of the total. The density
bonus shall apply, to housing developments consisting .of five or more
dwelling units.
(2) For the purposes of this chapter, if a development does not
meet the requirements of paragraph (1), (2), or (3) of subdivision
(b), but the applicant agrees or proposes to oonstr~ct a condominium.
project as defined in subdivision (f) of Section 1351 of the Civil
¢o~m, in which at least 20 percent of =he =cOal dwelling units are
reserved for persons and families of moderate income, es defined in
Section 50093 of the Health and Safety C~, a 'density bonus" of at
least 10 per~ent shall be grante~, unless a lesser percentage is
elected by the applicant, over the otherwise maximu~ allowable
residentlal density under the applicable zoning ordinance and land
use element of the general plan as of the date of application by the
applicant to the city, county, or city and county. Ail density
calculations resulting in fractional units shall be rounded up to the
ne~t whole number. The granting of s density bonus shall not be
interpreted, in and of i~self, to require a general plan amendment,
local coastal plan amendment, xoning change, or other discretionary
approval. The d~nsity bonus shall no= be included when determining
the number of housing units which is equal to 20 percent cf
total. The density bonus shall apply to housing developments
consisting of five or more dwelling units.
{h) "Housing de?elopment," as used in this section, means one or
more groups of projects for residential units constructed in the
planned development of a city, county, or city and county. For the
purposes of this section, "housing development" also includes either
{1) a project to substantially rehabilitate and convert an existing
commercial building to residential use, or 12} the substantial
rehabilitation of an ex!stin~ multifamily dwelling, as defined in
subdivision (d) of Section 65863.4, where the result of ~he
rehabilitation would be a ne= increase in available residential
units. For the purpose of calculating a density bonus, the
residential units do not have to be based upon individual subdivision
· aps o= parcels. The density bonus shall be permitted tn geograeh/c
areas o~ the housing development other =hen the areas where the
units for the lower income households are located.
(i) The granting of a concession Or incentive shall not be
interpreted, in and of itself, to require a general plan amendment,
local coastal plan emenchment, zoning change, or other discretionary
approval. This provision is declaratory of existing law.
(j) For the purposes of this chapter, con0ession or incentive
means any of the following:
(1) A reduction in site development standards or a modification of
zoning o~ requirements or architectural design requirements ths~
exceed the minimum b~ilding standards approved by the California
Building Standards Commission as provided in Part 2.5 (commencing
with Section 18901) 0f Division 13 of the Health and Safety
including, but not limited to, a reduction in setback and s=uare
footage requirements and in the ratio of vehicular parking ~paces
that would otherwise be required.
http:~/www.~-~mf~.~a.g~v~bia/v~sga~?WA~d~ID=67~6~3~ ~6~3+~+~+~&WA~Saet~... 7/g/2003
WAI~ Doc,,,~-~ Re=ieval Pag~ 4 ors
(2) Approval of mixed use zoning in conjunction with the housing
project if commercial, office, industrial, or other lend uses will
reduce =he 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) Other regulatory incentives or concessions proposed by the
developer or the city, county, or city and county that result in
identifiable and actual cost reductions.
This subdivision does not limit or require the provision of direct
financial incentives for the housing development, including the
provision of publicly owned land, by the city, county, or city and
county, or the waiver of fees or dedicstion requirements.
(k) If an applicant agrees to construct both 20 percent of the
total units for lower income households and 10 percent of the total
units for very iow income households, the developer is entitled to
only one density bonus and at least one additional concession or
incentive identified in Section 65913.4 under this section although
the city, city and county, or county may, at its discretion, grant
more than one density bonus.
(1) Nothing in this section shall be construed to supersede or in
any way alter or lessen the effect or application of the California
Coastal Act (Division 20 (commencing with Section 30000) of the
Public Resources
(m) A local agency may charge a fee to reimburse it for costs it
incurs as a result of amendments to this section enacted during the
2001-02 Regular Session of the Legislature.
(n) For purposes of this section, the following definitions shall
apply:
{1) "Development standard" means any ordinance, general plan
element, specific plan, charter amendment, or other local condition,
law, policy, resolution, or regulation.
(2) "Maximum allowable residential density" means the density
allowed under the zoning ordinance, or if a range of density is
permitted, means the maximum allowable density for the specific
zoning range applicable to the project.
65915.5. (a) When an applicant for approval to convert apartments
to a condominium project agrees to provide at least 33 percent of the
total units of the proposed condominium project to persons and
families of low or moderate income as defined in Section 50093 of the
Health and Safety Code, or 15 percent of the total units of the
proposed condominium project to lower income households as defined in
Section 50079.5 of the Health and Safety Code, and agrees to pay for
the reasonably necessary administrative costs incurred by a city,
county, or city and county pursuant to this section, the city,
county, or city and county shall either (1) grant a density bonus or
(2) provide other incentives of equivalent financial value. A city,
county, or city and county may place such reasonable conditions on
the granting of a density bonus or other incentives of equivalent
financial value as it finds appropriate, including, but not limited
to, conditions which assure continued affordabi!ity of units to
subsequent purchasers who ere persons and families of low and
moderate income or lower income households.
(b) For purposes of this section, "density bonus" means an
increase in units of 25 percent over the number of apartments, to be
provided within the existing structure or structures proposed for
conversion.
httP://www, leginfo.ea.gov/egi-bin/waisga*.e?WAlSdoclD=678683 i 1613 +0+0+0&WAi Saeti... 7/8/2003
WAIS Doe--~-at P,.etfieval Page 5 of 5
{¢) For purposes of this section, "other incentives of equivalent
financial value" shall not be construed to require a city, county, or
city and county to provide cash transfer payments or other monetary
compensation but may include the reduction or waiver of reguirements
which the city, county, or city end county might otherwise apply as
conditions of conversion approval.
(d) An applicant for approval to convert apart~ents to a
condominium project may s~nlt to a city, county, or city and county
a preliminary proposal pursuant to this section prior to the
submittal of any formal requests for subdivision map approvals. The
city, county, or city and county 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 section. The city, county, or city
and county shall establish procedures for carrying out this section,
which shall include legislative body approval of the means of
compliance with this section.
[e) Nothing in this section shall be construed to require a city,
county, or city and county to approve a proposal to convert
apartments to condominiums.
If) An applicant shall be ineligible for a density bonus or other
incentives under this section if the apar=ments proposed for
conversion constitute a housing development for which a density bonus
or other incentives were provided under Section 65915.
http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdodD=67868311613+0+0+0&WAISa¢fi... 7/8/2003
ATTACHMENT 4
LENNAR COMMUNITIES COMMENT LETTER DATED
JULY 25, 2003
July25,2003
Ms. Christine SMngleton
Assistant City Manager
City o f Tustin
300 Centennial Way
Tustin, CA 92780
Subject: Comments to Housing Incentive Ordinance
Dear Ms. Shingtcton:
Thank you for the opporOmlty to meet with you, Lois Jcffcrics and your staffr~garding
the draft Housing Incentive Ordinance. We appreciate the fact that you are willing to
listen to our concerns and address them where poss~lc. As we discussed in our m~ting,
we w~rc to provide you input and suggested language on several of the itm~s. For ease of
reference, the item numbers below relate to our prior letter dated .July 14, 2003.
Overall Commen(
As we discussed, it would be very helpful to have the ordinance provid~ some
flexibility in key areas. At the early stages of a development's planning process, it is
difficult to forecast precisely how the affordable housing will be met (poss~le
alternatives include for sale housing, seniors housing (for sale or rental), or special
needs housing, etc.) and the financial impact of the affordable housing requirement.
In particular, the proposed requirement that the affordable units be dispvrsed through
thc development provides unique opportun/ties as well as challenges in understanding
the impact of the requirement during early planning stages. Later in the planning
process, the plan for meeting the affo~oble housing requirement can be defined
precisely. The financial impact of the affordable housing mquirememt can vary widely
depending on the precise t~'ms of the requir~nent and the methods used to meet the
requirement Wc recommend that the Ordinance retain the necessary flexibility
through language similar to the following:
"The provisions of this Ordinance may be modified by the terms ora Developmc~nt
Agreement or by the Housing Incentive Agreement to be entered into pursuant to
Section 9142."
1. Section 9112 - Affordable Housing Cost
As wo discussed, tho cost of providing affordable housing can vary widdy d~cuding
on how the requirement is defined. Our belief is that the State Dendty Bonus statute
does not expressly require the use of the income levels and housing allowano~ ratios
sot forth in Section $0052.5. The only reference to Section 50052.$ is to cases whom
the jurisdiction makes a finding that an additional incentive or concession is not
required. As we noted, the State Model Density Bonus Ordinance (prepared in 1996)
does not use the income levels and housing allowance ratios set forth in Section
50052.$; our rzscarcb indicates that there am no amendments to the Density Boiius
law that would explain this difference.
We appreciate the flexibility that you offered during our mcefing with respect to the
Low and Moderate Income levels. However, the impact of the language dted in Sec.
50052.5(bX2) and (3) is thai units could be of T~l at differing prices to Low Income
or Moderate income buyers, depending on the income level of the buy~rs. For
example, a unit sold to a buyer canting 71% of Area Median Income could be sold at a
different price than a unit sold to a buyer earning 69% of Area Median Income. We
would greatly prefer to work with you to establish a pricing policy in the Housing
Incentive Agreement, which would establish uniform pricing for each income level
(Low vs. Mod~'at~). This would be much easier to administer and would minimize
confusion when the units am offered for salt,
In order to maintain the flexibility rextuired, we recommend that if Affordable Housing
Cost needs to be defined in the Ordinance, that language from the State model
ordinance be used, with a re4uirement that details of the Affordable Housing Cost
assumptions a~ to be included in the Housing Incentive Agreement.
2. Section 9112 - Housing Development
It is our understanding that you are making a change to this section to provide that a
Housing Development can be defined as a group of projects.
,~. Section 9131 (c) - Household and Unit Size Assumptions
This is an ~ea where flexibility may be warranted. Pless~ note that the household size
assumption contained in thc City of Carlsbad Afford_~ble Housing Agreement is two
per b~lroom. While this may or may not be applicable to the City of Tustin, it
illustrates the point that variations are possible and that it may be more appropriate to
define at the time of the Affordable Housing Agreement. We would prefer to have the
ability to discuss this item further with you when our products are defined in terms of
square footages and bedroom counts and we can justify (or not justify) an increase in
the household size standards from those in the draft Ordinance.
$. Section 9132 - Location of Target Units
For purposes of this para/raph, Development Product should be defined as a single
housing d~velopment, containing units of similar characte~istlcs (atlached vs.
detached), marketed by a single merchant builder under a single marketing name.
Alternative:
As discussed at our m~exing, the requirement that the Target Un/ts contain the same
bedroom mix as Non Restricted Units in the same project is too broad, There may be
compelling reasons why the City may wish to treat affordable for sale and for rent
differently. The general practice in thc affordable for sale housing projects which
have been implemented thus far is ~o have a lesser bedroom count for affordable units
than adjacent market rate units. For rent units have not had quite the same challenge
in meedng this goal. We believe that the requirement should be met for family housing
with a mix of one, two and three bedroom units~ For senior housing; the requirement
could be met with one and two bedroom units. These determinations should be made
at the t/me the Affordable Housing AIFc~ment is entered into. We therefore suggest
that Section 9132 be revised as follows:
"In general, the number of bedrooms of Target rental units should be equivalent or on
average, greater than, the bedroom mix of the Non-Restricted Units of the
Development Product. For purposes of this paragraph, Development Pwduct is
defined as a single housing clevelopmen~ conta/ning ,mits of similar characteristics
marketed by a single builder or developer und~ a single mark~ing name. The
bedroom mix for Target Un/ts that are for sale units shall be set forth in the Housing
Incentive AgrceraenC'
6. hcenfivcs and Concessions
As wc sugg~ted, there am several ar~as in the proposed ordinance that nell
clarification to address the fact that the City may offer more than one incentive to the
developer. These areas include the following with proposed changes underlined:
Section 9112 - "incentives or Concessions of Fxluivalent Financial Value". ....... The
value of the density bonus with the [dcleted onc] regulatory inccnfive(l)_or
Concessio~ is der,refined by the difference in the costs of the land with and without
thc density bonus and regulatory IncantiveLs.) or Concession(si.
Section 9121 (a) (Last Para, apb) .......... The City shall grant the additional
Concession(s) or Incentivefll ........
Section 9121 (b) ........ TI~ City must ~rant the Concession/s) or ln~entive/!l.unless
the City makes a writte~ finding, based upon substantial evidence, of either of the
following:
(1) The Conc~ss/onis) or Incentive/t.~ is not required_..: ............
(2) The Concession{s) or Inc~ntive/!l.would have a specific ..........
(e) In cases where .......... the Applicant is entitled to only one Density Bonus
or more Concession(s) or Incentives{il.
(f) An Applicant who agrees to construct .......... is only entitled to one
Density Bonus and one or more Concessions/il.or Inc~tive(s).
Section 9141(?) In requesting the one Or more Incentive/fl or Concession.(~l .........
Section 9142(b)(6)A description of the Concession(s) or Incemive(~/ .....
7. Application and Review
As we discussed, we feel that the specific listing of items to be included in the
development proforma may not address the City's actual needs when evaluating
the need for additional Concessions or Incentives. We would instead propose the
following language be substituted in Section 9141(a)(7) and 9141(a)($):
Section 9141(a)(7):
In requesting the one.or more Inoe~tive(s) or Concession(s) of Equivalent
Financial Value ........... [Delete last sentence and substitute: The development
pro-retina shall include such information as determined by City staff to be
necessm'T to evaluate the Applicant's request.]
Section 9141(a)(8):
If the Applicant ~quests ............ [Delete last sentence and substitute: Thc
development pro-retina shall include such information as determined by City
to be necessary to evaluate the Applicant's request.]
In Lieu Fees
We believe that in lieu fees should be treated similarly to on-site units tn
determine the total affordable housing requirement. As we have discussed, some
providers, when faced with the alternative of having thdr.units provided on site,
prefer the in lieu fee alternative for various financial and operational reasons. If
the transitional unit in lieu fees are not credited toward the developers' affordable
housing obligation, the developer will need to provide the transition units onsite,
which may be undesirable to both the transitional housing pwvider and to the
developer.
We greatly appreciate the opportunity to discuss this item with you, Lois Jvffcries and
your staff. Please contact us with any comments or quesfiom you may h~ve.
Ki~hard Knowland
Vice Prcsidont
Lennar Communities
cc: Bob Santos
Elizabeth Binsack
Lois ~ffries
Tom Sakai
ATTACHMENT 5
CITY RESPONSE TO JULY 25, 2003, LETTER FROM
LENNAR COMMUNITES
Response to July 25, 2003 Letter from Lennar Communities
1. Lennar objects to the definition of Affordable Housing Cost for
determining the sale price of Affordable Housing Units. The definition is
found in State law (Health and Safety Code Section 5005Z.5), but Lennar
recommends a flexible pricing policy to be determined in a Housing
Incentive Agreement. In other words, affordable housing costs would not
be defined in the ordinance but rather would be negotiated in the Housing
Incentive Agreement.
Response:
In administering the City's and Agency's Affordable Housing Program, it is
important that the City/Agency have uniform standards and criteria that apply
throughout the City and are not dependent upon whether a density bonus has
been requested, in redevelopment areas, which includes Tustin Legacy, 15% of
all new and rehabilitated housing provided by persons other than the Agency
"shall be available at [an] Affordable Housing Cost~ to persons or families of Iow
or moderate income. [Health & Safety Code §33413(b)(1).] "Affordable Housing
Cost" has the same meaning as Section 50052.5. [Health & Safety Code
· {}33411.2.] Accordingly, the City's use of §50052.5 is not only consistent with the
State density bonus law but is consistent with the Health & Safety Code
provisions regarding the provision of affordable housing in redevelopment areas.
In summary, in redevelopment areas such as Tustin Legacy, the Agency does
not have the ability to vary from the definition of Affordable Housing Cost in
Section 50052.5. There is no sound reason to have different criteria for non-
redevelopment areas of the City. However, within Section 50052.5 there is
flexibility for the City Or the Agency in determining sale price, and we have added
that flexibility to the definition of Affordable Housing Cost.
2. Lennar requested that the definition of Housing Development be
revised to track the definition in State density bonus law.
Response:
We have amended the definition. We have added some language to the
definition that clarifies that the geographic location of units shall be in
conformance with the applicable specific plan or zoning regulations.
4? Lennar objects to having assumptions about household and unit size
in determining Affordable Housing Cost in the ordinance. They would
prefer to have the ability to discuss this further in negotiating the Housing
Incentive Agreement.
1 The numbering of this Response tracks the numbering in the letter from Lennar, They
inadvertently omitted an Item 3.
172291.1 1
8/18/2003
,Response:
We have deleted §9131(c). This removes any reference to household and
unit size assumptions. Although the State's model density bonus ordinance
contains such assumptions, the Department of Housing and Community
Development (HCD) informs Us that they may revise this section of the model
ordinance in the near future. We note that the definition of Affordable Housing
Cost in State law that we are using in this ordinance requires that the sales price
be determined based on the income of the buyer "adjusted for family size
appropriate for the unit." The Agency or City, as applicable, in the Housing
Incentive Agreement will determine in conjunction with the developer how to
arrive at reasonable assumptions for family size vis ~ vis the units in question.
This provides both the City and Agency as well as the developer more flexibility
to ensure an affordable product.
5. Lennar objects to.the requirement in the draft ordinance that the
number of bedrooms of the affordable units be equivalent to the bedroom
mix of the non-restricted units. Lennar proposes language that would
maintain equivalency for rental units but for for-sale units, bedroom mix
would be negotiated in the Housing Incentive Agreement.
Response:
The proposed ordinance has been revised to provide more flexibility. The
applicable section now reads: "Target Unit shall be built on-site, and be
integrated within the Housing Development. Except for a senior citizen housing
development, the number of bedrooms of the Target Units shall generally be
equivalent to the bedroom mix of the non-restricted units of the Housing
Development as shall be determined by the Director and reflected in a Housing
Incentive Agreement. Notwithstanding the foregoing, the applicant may include a
higher proportion of Target Units with more bedrooms than the non-restricted
units."
6. Lennar wishes to modify the ordinance "to address the fact that the
City may offer more than one incentive to the developer".
Resoonse:
While the City may, in its discretion, offer the developer more than one
Incentive or Concession besides a density bonus, the City is not obligated to do
so under State law. The singular wording in the proposed ordinance tracks the
singular wording in State law. The wording of the ordinance does not preclude
the City from approving more than one concession or incentive in its sole
discretion, but the ordinance is intended to track State law requirements that
require the City to do certain things under certain conditions. We thihk the
172291.1
8118/2003 2
ordinance could become ambiguous as to the City's obligations under State law if
Lennar's recommendations for changes in the wording were followed.
7. Lennar objects to the detailed description of the development pro
forma that the City requires in evaluating a request for an Incentive or
Concession of equivalent financial value Or other Incentives or
Concessions of equivalent financial value other than a grant of a density
bonus. Lennar wishes to delete the detail in the City's description and
leave it up to the City on a case by case basis to decide what it wants in
terms of a pro forma.
Response:
Based on the City's extensive experience in considering assistance to
affordable housing developments, the detailed description of the contents of the
pro forma in the ordinance are precisely the kind of information that the City has
needed each and every time it has evaluated a developer's proposal. We do not
recommend changing the language. Rather, the language puts a developer on
notice as to what information is going to be requested and evaluated and
eliminates arguments by the developer over what is needed and what is not
needed.
8. Lennar wishes to have the option of applying for a density bonus
based on payments to transitional housing providers. In such an event
Lennar would not build transitional housing on site but would rather
provide a financial equivalent to non-profit providers.
Response:
State law does not address Lennar's proposal. The payment of"in lieu
fees" is not contemplated as a substitute for the building of affordable units.
However, under State law and under the City's ordinance, the cost of providing
equivalent financial assistance to non-profits who are providing affordable
housing is a development cost that could support the developer's argument as to
why the developer needs a particular Incentive or Concession in order to provide
the affordable housing that they intend to provide on site. Accordingly, it is our
opinion that such developer already receives credit under the proposed
ordinance in the form of a development cost. We do not recommend any
changes to the ordinance.
Overall Comment
Lennar seeks to insert broad language into the ordinance that would
basically allow the City to ignore the provisions of the proposed ordinance
and enter into either a development agreement or a Housing Incentive
Agreement.
172291.1
8/1812003 3
Response:
City staff has built greater flexibility into the ordinance, while maintaining
compliance with State redevelopment law and State density bonus law. It is our
opinion that the language proposed by Lennar is too broad and, if adopted, would
make the whole process of granting a density bonus and an Incentive or
Concession a case by case negotiation without standards or criteria. It is our
opinion that sufficient flexibility has been built into the City's ordinance to ensure
that affordable housing can be produced by developers within the context of
State law.
172291.1 4
8118/2003