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HomeMy WebLinkAboutORD 1279 (2003)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 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 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. Ordinance No. 1279 Page 1 of 9 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 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. Ordinance No. 1279 Page 2 of 9 "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 subdivisio~ (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 isthe 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. "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, Ordinance No. 1279 Page 3 of 9 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 Unit' 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 (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). Ordinance No. 1279 Page 4 of 9 (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 Ordinance No. 1279 Page 5 of 9 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 Ordinance No. 1279 Page 6 of 9 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. Ordinance No. 1279 Page 7 of 9 (b) The final approval of any documents as required by the Agreement shall take place prior to tidal 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. (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 fo~ 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 Ordinance No. 1279 Page 8 of 9 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. PASSED AND ADOPTED, at a regular meeting of the City Council for the City of Tustin on this 15th day of September, 2003. '~'RACY/.~ LLS WORLEY ~ Mayor City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF TUSTIN ) SS CERTIFICATION FOR ORDINANCE NO. 1279 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 5; that the above and foregoing Ordinance No. 1279 was duly and regularly introduced at a regular meeting of the Tustin City Council, held on the 2"d day of September, 2003 and was given its second reading, passed, and adopted at a regular meeting of the City Council held qn the 15th day of September, 2003 by the following vote: COUNCILMEMBER AYES: Worle¥, COUNCILMEMBER NOES: None COUNCILMEMBER ABSTAINED: None COUNCILMEMBER ABSENT: !~one Kawashima, Bone, Davert, Thomas (5) (0) (0) City Clerk Ordinance No. 1279 Page 9 of 9