Loading...
HomeMy WebLinkAbout06 SECOND READING & ADOPTION OF ORDINANCE NO. 1484MEETING DATE TO: FROM: SUBJECT: SUMMARY: AGENDA REPORT OCTOBER 17, 2017 JEFFREY C. PARKER, CITY MANAGER ERICA N. RABE, CITY CLERK Agenda Item 6 Reviewed: City Manager Finance Director N/A SECOND READING AND ADOPTION OF ORDINANCE NO. 1484 Ordinance No. 1484 amends Article 9 (Land Use) Chapter 1 of the Tustin City Code, related to Incentives for the Development of Affordable Housing to comply with recent updates of State law. RECOMMENDATION: Have second reading by title only and adoption of Ordinance No. 1484. BACKGROUND: On October 3, 2017, the City Council had first reading by title only of the following Ordinance: ORDINANCE NO. 1484 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA AMENDING TUSTIN CITY CODE ARTICLE 9, CHAPTER 1, IN ITS ENTIRETY RELATING TO INCENTIVES FOR THE DEVELOPMENT OF AFFORDABLE HOUSING Attachment: Ordinance No. 1484 DRAFT ORDINANCE NO. 1484 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, AMENDING TUSTIN CITY CODE ARTICLE 9, CHAPTER 1, IN ITS ENTIRETY RELATING TO INCENTIVES FOR THE DEVELOPMENT OF AFFORDABLE HOUSING. The City Council of the City of Tustin does hereby ordain as follows: Section 1. The City Council finds and determines as follows: A. That the State of California identifies affordable housing and special needs housing as a statewide priority. The legislature has created new incentives to facilitate and expedite housing production. Recent legislation expands prior State law requiring local agencies to grant density bonuses and development incentives, concessions and waivers to reduce the cost of providing affordable housing. B. That on September 28, 2016, Governor Brown signed Assembly Bills AB 744, AB 2501, AB 2556, AB 2442 and AB 1934, to amend Government Code Sections 65915-65915.7 (State Density Bonus Law), which allows more dwelling units than otherwise allowed on a site in exchange for providing affordable housing within their projects. C. That Tustin City Code (TCC), Article 9, Chapter 1 contains provisions for density bonus and development concessions, incentives and waivers for affordable housing in accordance with prior State law and this amendment will update the TCC to comply with current State law pursuant to Assembly Bill (AB) 744, AB 2501, AB 2556, AB 2442, and AB 1934 as codified in Government Code Sections 65915-65915.7. D. That on September 12, 2017, the Planning Commission adopted Resolution No. 4348, and recommended that the City Council adopt Ordinance No. 1484, approving CA 2017-006 to amend Article 9, Chapter 1, in its entirety, relating to Incentives for the Development of Affordable Housing. E. That on October 3, 2017, a public hearing was duly noticed, called, and held on Code Amendment 2017-006 by: the City Council. F. That the proposed amendments are consistent with the Tustin General Plan in that they comply with the following goal: Housing Element Goal 1 to provide an adequate supply of housing to meet the need for a variety of housing types and the diverse socio-economic needs of all community residents. Ordinance No. 1484 Page 2 Policy 1.2: Pursue smart growth principles by supporting the construction of higher density housing, affordable housing, and mixed use development (the vertical and horizontal integration of commercial and residential uses) in . proximity to transit, services, shopping, schools, senior centers and recreational facilities, where possible. Policy 1.4: Preserve affordable units, where possible, through actions such as the maintenance of a mobile home park zone, restrictions on R-3 zone uses to preserve the multiple family residential characters, facilitate resident access to funding sources for preservation of low income and assisted housing. Policy 1.7: Utilize various resources, where feasible, to assist in creating opportunities which will expand opportunities for development of affordable housing in the community. Policy 1.11: Encourage the availability of affordable housing for special needs households, including large, low-income families. Special needs households include the elderly, large families, female -headed households with children, households with a disabled person and the homeless. Policy 1.12: Encourage incentives to assist in the preservation and development of affordable housing such as 1) reducing permit processing time and waiving or reducing applicable permit fees; 2) on-site density bonuses when appropriate; 3) tax exempt financing including continuingto make sure of the City's membership in the California Statewide Communities Development Authority to provide opportunities for developer assistance in pre -development and development financing of affordable housing programs; 4) flexibility in zoning or development standards; and 5) other financial incentives using a variety of special State and Federal grand and housing programs. G. That the proposed amendments are consistent with Government Code Sections 65915-65915.7. H. That the proposed code amendment is not subject to the California Environmental Quality Act (CEQA) pursuant to California Code of Regulations, Title 14, Chapter 3, Sections 15060 (c) (2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) because it has no potential. for resulting in a physical change to the environment, directly or indirectly and will not result in any physical development in and of itself. Any future development which utilizes these provisions will require CEQA review specific to the site and proposed development. In addition, the new State Ordinance No. 1484 Page 3 statutes contain mandatory provisions which the City must implement, whether or not it adopts its own ordinance, therefore the amendment does not create a new land use regulation. Section 2. Section 9111 PURPOSE AND INTENT of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: The purpose of this Chapter is to provide incentives for the production of housing for very low-, low-, moderate -income, senior citizens, transitional foster youth, disabled veterans and homeless persons in accordance with California Law pertaining to density bonuses. In addition, it contains provisions for a density bonus or development incentive/concession when a child care facility is to be included in an affordable housing development, or when land is donated for affordable housing under specified conditions. 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 area identified as the "MCAS Tustin Specific Plan." Sections of the Government Code referenced in this Chapter and application forms for complying with this Chapter, shall be made available to the public. Section 3. Section 9112 DEFINITIONS of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: Whenever the following terms are used in this Chapter, they shall have the meaning established by this section: "Affordable Housing Cost", 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 the Housing Authority, 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 the Housing Authority shall consider the regulations for purposes of determining Affordable Housing Cost. "Specific Adverse impact" means a significant, quantifiable, direct or unavoidable impact based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete. "Affordable Rent" means as defined in Health and Safety Code Section 50053. The term applies to rental units. Ordinance No. 1484 Page 4 "Applicant" means a developer or owner who desires to construct five (5) or more dwelling units. "Child Care Facility" means a child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and school age child care centers. "Common Interest Development" means a community apartment project, a condominium project, a planned development, or a stock cooperative as defined in Section 1351 of the Civil Code. "Concession or Incentive" means the concession(s) and incentive(s) as specified in Government Code Section 65915(k) and Section 9123. "Density Bonus" means a density increase over the otherwise maximum allowable residential density, as of the date of application by the applicant to the City. The applicant may elect to accept a lesser percentage of density bonus. The amount of density bonus to which the applicant is entitled shall vary according to the amount by which the percentage of affordable housing units exceeds the percentage established in Section 9121. "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. When calculating the number of permitted density bonus units, any fractions of units shall be rounded to the next whole number. "Development Standards" includes a site including, but not limited to, a height limitation, area ratio, an onsite open space requirement, to a residential development pursuant to element, specific plan, charter, or other resolution, or regulation. or construction conditions, a setback requirement, a floor or a parking ratio that applies my ordinance, general plan local condition, law, policy, "Director" means the City's Director of Community Development or designee. "Housing Authority" means the Tustin Housing Authority. "Housing Development" means construction projects consisting of five (5) or more residential units, including single-family, multi -family units, and mixed- use developments for sale or for rent. "Housing development" also includes a subdivision or common interest development, approved by the City and consists of residential units or unimproved residential lots and either a project to substantially rehabilitate and convert an existing commercial building to residential use or the substantial rehabilitation of an existing multifamily dwelling, as defined in subdivision (d) of Section 65863.4 of the Government Code, where the result of the rehabilitation would be a net increase of at least five (5) or more residential units. The residential units shall be on contiguous sites that are the subject of one development application, but do not have to be based upon individual subdivision maps or parcels. The density bonus shall be permitted in geographic areas of the Ordinance No. 1484 Page 5 housing development other than the areas where the units for the lower income households are located. "Housing Incentive Agreement" means a legally binding agreement between an applicant and the City and/or the Housing Authority to ensure that the requirements of this Chapter are satisfied. The agreement among other things shall establish the number of targeted units, size, location, terms and conditions of affordability, production schedule, and may be part of a larger disposition and development or regulatory agreement. "Lower Income Household" means households whose income does not exceed the lower income limits applicable to Orange County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50079.5 of the Health and Safety Code. "Major Transit Stop" means a site containing an existing rail station or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods, and includes any major transit stop that is included in an applicable regional transportation plan. "Maximum Allowable Residential Density" means the density allowed under the zoning ordinance and land use element of the general plan, or if a range of density is permitted, means the maximum allowable density for the specific zoning range and land use element of the general plan applicable to the project. Where the density allowed under the zoning ordinance is inconsistent with the density allowed under the land use element of the general plan, the general plan density shall prevail with the exception of the MCAS Tustin Specific Plan, which excludes the density bonus allowed by this Chapter. "Non -Restricted Unit" means all units within a housing development excluding the targeted units. "Persons and Families of Moderate Income" means persons and families of low or moderate income whose income exceeds the income limit for lower income households and as defined in Health and Safety Code Section 50093. "Persons and families of Low or Moderate Income" means persons and families whose income does not exceed one hundred twenty (120) percent of area median income adjusted for family size by the State Department of Housing and Community Development in accordance with adjustment factors adopted and amended from time to time by the United States Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937. "Senior Citizen" means, a person sixty-two (62) years of age or older, or fifty- five (55) years of age living in a senior citizen housing development. Ordinance No. 1484 Page 6 "Senior Citizen Housing Development" means, as more fully defined in Civil Code Section 51.3 and 51.12, a residential development developed, substantially rehabilitated, or substantially renovated for senior citizens that has at least thirty-five (35) dwelling units. "Special Needs Housing" means any housing, including supportive housing, intended to benefit, in whole or in part, persons identified as having special needs relating to any of the following: mental health; physical disabilities; developmental disabilities, including, but not limited to intellectual disability, cerebral palsy, epilepsy, and autism; and risk of homelessness, or housing intended to meet the housing needs of persons eligible for mental health services funded in whole or in part by the Mental Health Services Fund, created by Section 5890 of the Welfare and Institutions Code. "Targeted Unit(s)" means a dwelling unit(s) within a housing development which will be reserved for sale or rent to, and is made available at an affordable rent or affordable housing cost to very low, low, or moderate households, or is(are) units in a senior housing development. "Unobstructed Access" means a resident is able to access a major transit stop without encountering natural or constructed impediments. "Very Low Income Households" means households whose income does not exceed the very low income limits applicable to Orange County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50105 of the California Health and Safety Code. Section 4. Section 9121 IMPLEMENTATION of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: A housing development meeting the requirements of this section is eligible for a density bonus. The granting of a density bonus shall not be interpreted, in and of itself, to require a general plan amendment, zoning change, or other discretionary approval. (a) The City shall grant one (1) density bonus, the amount of which shall be as specified in Section 9122, concession(s) or incentive(s), as described in Section 9123, waivers or reductions of development standards, as described in Section 9124, and parking ratios, as described in Section 9131(h), when an applicant seeks and agrees to construct a housing development, excluding any units permitted by the density bonus awarded pursuant to this Chapter, that will contain at least any one (1) of the following: (1) Ten (10) percent of the total units of the housing development as targeted units affordable to lower income households; or (2) Five (5) percent of the total units of the housing development as targeted units affordable to very low income households; or Ordinance No. 1484 Page 7 (3) Senior citizen housing development or mobile home park that limits residency based on age requirements for housing for older persons pursuant to Section 798.76 or 799.5 of the Civil Code. For housing developments meeting such criteria, the: density bonus shall be twenty (20) percent of the number of senior housing units; or (4) Ten (10) percent of the total units in a common interest development for persons and families of moderate income, provided that all units in the development are offered to the public for purchase. (5) Ten percent of the total units of a housing development for transitional foster youth as defined in Section 66025.9 of the Education Code, disabled veterans, as defined in Section 18541 of the Government Code, or homeless persons, as defined in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.). The units described in this subparagraph shall be subject to a recorded affordability restriction of 55 years and shall be provided at the same affordability level as very low income units. (6) For purposes of calculating the amount of the density bonus pursuant to Section 9121, the applicant who requests the density bonus pursuant to this subsection shall elect whether the bonus shall be awarded on the basis of subparagraph (1), (2), (3), (4) or (5) of this subsection. (7) For the purposes of this Section, "total units" or "total dwelling units" do not include units added by a density bonus awarded pursuant to this Section or any local law granting a greater density bonus. (b) When an applicant for a tentative subdivision map, parcel map, or other residential development approval donates land to the City as provided for in this subsection, the City shall grant a density bonus, the amount of which shall be as specified in Section 9122. This increase shall be in addition to any increase in density mandated by subsection (a), up to a maximum combined mandated density increase of thirty-five (35) percent if an applicant seeks both the increase required pursuant to this subsection and subsection (a). All density calculations resulting in fractional units shall be rounded up to the next whole number. Nothing in this subsection shall be construed to enlarge or diminish the authority of the City to require a developer to donate land as a condition of development. An applicant shall be eligible for the increased density bonus described in this subsection if all of the following conditions are met: Ordinance No. 1484 Page 8 (1) The applicant donates and transfers the land no later than the date of approval of the final subdivision map, parcel map, or residential development application. (2) The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households in an amount not less than ten (10) percent of the number of residential units of the proposed development. (3) The transferred land is at least one (1) acre in size or of sufficient size to permit development of at least forty (40) units, has the appropriate general plan designation, is appropriately zoned at the density described in paragraph (3) of subdivision (c) of Government Code Section 65583.2 for development of affordable housing on land suitable for residential development, and is or will be served by adequate public facilities and infrastructure. The land shall have appropriate zoning and development standards to make the development of affordable units feasible. No later than the date of approval of the final subdivision map, parcel map, or of the residential development, the transferred land shall have all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land, except that the City may subject the proposed development to subsequent design review to the extent authorized by subdivision (i) of Government Code Section 65583.2 if the design is not reviewed by the City prior to the time of transfer. (4) The transferred land and the affordable units shall be subject to a deed restriction ensuring continued affordability of the units consistent with subsections 9131(d) and (e) which shall be recorded on the property at the time of dedication. (5) The land is transferred to the City or to a housing developer approved by the City. The City may require the applicant to identify and transfer the land to the developer. (6) The transferred land shall be within the boundary of the proposed development or, if the City agrees, within one-quarter ('/) mile of the boundary of the proposed development. (7) A proposed source of funding for the very low income units shall be identified not later than the date of approval of the final subdivision map, parcel map, or residential development application. (c) When an applicant agrees to construct a housing development that. conforms to the requirements of Section 9121(a) and includes a child Ordinance No. 1484 Page 9 care facility that will be located on the premises of, as part of, or adjacent to, the project, the following shall apply: (1) The City shall grant either of the following, unless it finds, based upon substantial evidence, that the community has adequate child care facilities: (i) An additional density bonus that is an amount of square feet of residential space that is equal to or greater than the amount of square feet in the child care facility, or (ii) An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the child care facility. (2) The City shall require, as a condition of approving the housing development that the following occur: (i) The child care facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the targeted units are required to remain affordable pursuant to Section 9131(d) and (e). (ii) Of the children who attend the child care facility, the children of very low income households, low income households, or families of moderate income shall equal a percentage that is equal to or greater than the percentage of dwelling units that are required for very low income households, low income households, or families of moderate income pursuant to Section 9121(a). (d) When an applicant to convert apartments to a condominium project pursuant to Section 9274 of this Code 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, or 15 percent of the total units of the proposed condominium project to lower income households, and agrees to pay reasonably necessary administrative costs incurred by the City, the City shall grant either of the following, unless the apartments proposed for conversion constitute a housing development for which a density bonus or other incentives were previously provided under Government Code Section 65915: (1) a density bonus to increase the number of units by 25 percent over the number of apartments within the existing structure(s) proposed for conversion; or (2) other incentives of equivalent financial value, which may include the reduction or waiver of requirements which the City may otherwise apply as conditions of conversion approval. Ordinance No. 1484 Page 10 (3) The City may place such reasonable conditions on the granting of a density bonus or other incentives of equivalent financial value including, but not limited to, conditions which assure continued affordability of units to subsequent purchasers who are persons and families of low and moderate income or lower income households. (4) The application to convert apartments to a condominium project may be submitted to the City for preliminary review prior to submittal of formal request for subdivision map approvals pursuant to Section 9141. The City shall notify applicant in writing of the manner in which City will comply with this subsection (d) within 90 days of receipt of a written proposal. (5) An applicant shall be ineligible for a density bonus or other incentives or concessions under this subsection (d) if the apartment complex proposed for conversion includes a parcel(s) on which rental dwelling units are or, if the dwelling units have been vacated or demolished in the five-year period preceding the application, have been subject to a recorded covenant, ordinance or law that restricts rents to a level affordable to persons and families of lower or very low income; are subject to any form of rent or price control through the City's valid exercise of its police power; or are occupied by lower or very low income household unless the proposed condominium project replaces those units in accordance with Section 65915(c)(3)(B) of the Government Code and either of the following applies: (i) The proposed condominium project, inclusive of the units replaced, contains affordable units at the percentages set forth in Section9121(a), or (ii) Each unit in the development, exclusive of manager's unit or units, is affordable to, and occupied by, either a lower or very low income household. (e) When an applicant for a commercial development has entered into an agreement for partnered housing as described in paragraph (2) below, the City shall grant a development bonus to the commercial developer in accordance with Section 65915.7 of the Government Code and the following shall apply: (1) Housing shall be constructed either on the site of the commercial development or on a site that meets the following criteria: (i) Within the City of Tustin limits, (ii) In close proximity to public amenities such as schools and employment centers, Ordinance No. 1484 Page 11 (iii) Within one-half mile of a major transit stop, and (2) The agreement for partnered housing shall be between the commercial developer and the housing developer, shall identify how the commercial developer will contribute affordable housing, and shall be approved by the City. (3) Affordable housing may be contributed by the commercial developer in one of the following manners: (i) The commercial developer may directly build the units. (ii) The commercial developer may donate a portion of the site or property elsewhere to the affordable housing developer for use as a site for affordable housing. (iii) The commercial developer may make a cash payment to the affordable housing developer that shall be used toward the cost of constructing the affordable housing project. (4) In order to qualify for a development bonus under this section, a commercial developer shall partner with a housing developer that provides at least 30 percent of the total units for low-income households or at least 15 percent of the total units for very -low income households. (5) A development bonus pursuant to this section shall not include a reduction or waiver of any City requirement for payment of any fee payable by a commercial developer for the promotion or provision of affordable housing. (6) The development bonus granted to the commercial developer shall mean incentives, mutually agreed upon by the developer and the City and may include any of the following: (i) Up to a 20 -percent increase in maximum allowable intensity in the General Plan. (ii) Up to a 20 -percent increase in maximum floor area ratio. (iii) Up to a 20 -percent increase in maximum height requirements. (iv) Up to a 20 -percent reduction in minimum parking requirements. (v) Use of a limited-use/limited-application elevator for upper floor accessibility. (vi) An exception to the zoning ordinance or other land use regulation. Ordinance No. 1484 Page 12 (vii) Other allowances or incentives offered to developers by the City pursuant to law or regulation. {7) If the developer of the affordable units does not commence with construction of those units in accordance with the timelines provided in the agreement for partnered housing, the City may withhold certificates of occupancy for the commercial development under construction until the developer has completed construction of the affordable units. (8) For purposes of this section, "partner" shall mean formation of a partnership, limited liability company, corporation or other entity recognized by the State of California in which the commercial development applicant and the affordable housing developer are each partners, members, shareholders or other participants, or a contract or agreement between a commercial development applicant and affordable housing developer for the development of both the commercial and affordable housing properties. (9) This section shall be applicable to development projects submitted prior to January 1, 2022. As of January 1, 2022, Section 9121(e) is repealed in accordance with Section 65915.7 of the Government Code, as may be amended. (f) A proposed housing development which includes a parcel or parcels which rental dwelling units are or, if the dwelling units have been vacated or demolished in the five (5) year period preceding the application, have been subject to a recorded covenant, ordinance, or law that restricts rents to persons or families of lower or very low income shall be ineligible for a density bonus, or any other incentives or concessions under this Part unless the proposed housing development replaces those units in accordance with Government Code Section 65915(c)(3)(B), and either of the following applies: (1) The proposed housing development, inclusive of the units replaced pursuant to this paragraph, contains affordable units at the percentages set forth in Section 9121(a), or (2) Each unit in the development, exclusive of a manager's unit or units, is affordable to, and occupied by, either a lower or very low income household. Section 5. Section 9122 Density Bonus of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: Ordinance No. 1484 Page 13 (1) The amount of density bonus to which the applicant is entitled shall vary according to the amount by which the percentage of affordable housing units exceeds the percentage established in Section 9121(a) as follows: Targeted Percentage Density Additional Additional Group of Bonus Targeted Density Targeted Units Bonus Units (excluding Density Bonus Units) Low -Income' 10 percent 20 Each 1 percent increase 1.5 percent, percent maximum 35 percent Very Low Income 5 percent 20 Each 1 percent increase 2.5 percent, percent maximum 35 percent Moderate Income3 10 percent 5 Each 1 percent increase _ I 1.0 percent, percent maximum 35 percent Senior Citizen 20 N/A N/A Housing' percent Transitional foster 10 percent 20 youth, disabled percent veterans or homeless persons5 i Very Low Income 10 percent 15 Each 1 percent increase 1.0 percent, under Land percent maximum 35 percent Donation' i 1 For housing development meeting the criteria of Section 9121(a)(1) 2 For housing development meeting the criteria of Section 9121(a)(2) 3 For housing development meeting the criteria of Section 9121(a)(3) 4 For housing development meeting the criteria of Section 9121(a)(4) 5 For housing development meeting the criteria of Section 9121(a)(5) 6 For housing development meeting the criteria of Section 9121(b) Ordinance No. 1484 Page 14 Section 6. Section 9123 INCENTIVES OR CONCESSIONS of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: (a) An applicant for a density bonus may submit to the City a proposal for the specific concession(s) or incentive(s) that the applicant requests pursuant to this Chapter, and may request a meeting with the City. The City must grant the concession(s) or incentive(s) requested by the applicant unless the City makes a written finding, based upon substantial evidence, of any of the following: (1) The concession or incentive does not result in identifiable and actual cost reductions to provide for affordable housing costs or for rents for the targeted units to be set as specified in Section 9131. (2) The concession(s) or incentive(s) would have a specific adverse impact 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 low- and moderate- income households. (3) The concession or incentive would be contrary to state or federal law. (b) The applicant shall be entitled to receive the following number of concessions or incentives: Targeted Group Targeted Units (Percent) Maximum Incentives/Concessions Very Low Income 5 1 10 2 15 3 Lower Income 10 1 20 2 30 3 Ordinance No. 1484 Page 15 Moderate Income (Condominium only) 10 1 20 2 30 3 (c) Incentives or concessions may include the following: (1) A reduction of site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission as provided in Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code, which result in identifiable, financially sufficient, and actual costs reductions, including, but not limited to: (a) Reduced minimum lot size. (b) Reduced minimum setbacks. (c) Reduced minimum street standards such as reduced minimum street width. (d) Increased maximum lot coverage. (e) Increased building height. (f) Reduced ratio of vehicular parking spaces that would otherwise be required. (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 that result in identifiable, financially sufficient, and actual cost reductions. (4) The granting of a concession or incentive shall not be interpreted, in and of itself, to require a general plan amendment, zoning change, or other discretionary approval. This provision is declaratory of existing law. Ordinance No. 1484 Page 16 Section 7. Section 9124 WAIVERS OR REDUCTIONS of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: (a) An Applicant may submit to the City a proposal for the waiver or reduction of development standards and may request a meeting with the City. A proposal for the waiver or reduction of development standards pursuant to this section shall neither reduce nor increase the number of incentives or concessions to which the applicant is entitled pursuant to Section 9123. (b) The waiver or reduction shall be granted unless the City Council adopts a written finding, based on substantial evidence, of either the following: 1. The waiver or reduction of development standards would have a specific adverse impact upon health, safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. 2. The waiver or reduction of development standards would have a specific adverse impact on any real property that is listed in the California Register of Historical Resources. Section 8. Section 9125 OPTIONAL ADDITIONAL ASSISTANCE of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: The City may approve additional assistance to facilitate the inclusion of more Targeted 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 greater than that required in Section 9121 of this Chapter. (b) A proportionately lower density bonus than what is required by this Chapter when the housing development does not meet the requirements of this Chapter. (c) Waived, reduced, or deferred planning, plan check, building permit and/or development impact fees. (d) Direct financial aid (e.g., housing set-aside funds, community development block grant funds) in the form of a loan or a grant to subsidize. or provide low interest financing for on or off site improvements, contribution to land, or construction costs. Ordinance No. 1484 Page 17 Section 9. Section 9131 STANDARD REQUIREMENTS of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: (a) Targeted units shall be built on-site, and be integrated within the housing development except those units built in conjunction with the donation and transfer of land pursuant to Section 9121(b). (b) Targeted 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. (c) Except for a senior citizen housing development, the number of bedrooms of the targeted 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 targeted units with more bedrooms than the non -restricted units. (d) An applicant shall agree to, and the City shall ensure, continued affordability of all low- and very low income units that qualified the applicant for the award of the density bonus for at least fifty five (55) years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. Rents for the lower income density bonus units shall be set at an affordable rent. Owner -occupied units shall be available at an affordable housing cost. (e) An applicant shall agree to, and the City shall ensure that, the initial occupant of all for -sale units that qualified the applicant for the award of the density bonus are persons and families of very low, low .or moderate -income, as required, and that the units are offered at an affordable housing cost. The City shall enforce an equity -sharing agreement, unless it is in conflict with the requirements of another public funding source or law. The following apply to the equity -sharing agreement: (1) Upon resale, the seller of the unit shall retain the value of any improvements, the down payment, and the seller's proportionate share of appreciation. The City shall recapture any initial subsidy and its proportionate share of appreciation, which shall then be used within five (5) years for any of the purposes described in subdivision (e) of Section 33334.2 of the Health and Safety Code that promote homeownership. (2) For purposes of this subsection, the City's initial subsidy shall be equal to the fair market value of the home at the time of initial sale minus the initial sale price to the moderate -income Ordinance No. 1484 Page 18 household, plus the amount of any down payment assistance or mortgage assistance. If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value. (3) For purposes of this subdivision, the City's proportionate share of appreciation shall be equal to the ratio of the initial subsidy to the fair market value of the home at the time of initial sale. (f) The design and appearance of the targeted 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. (g) A housing incentive agreement shall be entered into between the applicant and City and/or the Housing Authority to memorialize among other things, the applicant's commitment to provide targeted 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, conditional use permits, etc.) for all housing developments pursuant to this Chapter. (h) Upon the request of the developer, the vehicular parking ratio, inclusive of disabled access and guest parking, of a development meeting the criteria of Section 9121(a), shall not exceed the following ratios: Number of Bedrooms Parking Ratio 0-1 1 space 2-3 2 spaces 4 or more 2.5 spaces (i) Notwithstanding paragraph (h) above, if a development includes the maximum percentage of low- or very low income units provided for in Section 91.22 and is located within one-half mile of a major transit stop and there 'is unobstructed access to the major transit stop from the development, the developer may request the City not impose a vehicular parking ratio that exceeds 0.5 spaces per bedroom, including handicapped and guest parking. Ordinance No. 1484 Page 19 (j) If the development consists solely of rental units with an affordable housing cost to low income families, exclusive of a manager's unit(s), then the developer may request the City not impose a vehicular parking ratio, including handicapped and guest parking that exceeds the following ratios, if the development is: Located within one-half mile of a major transit stop with unobstructed access to the major transit stop from the development Not to Exceed 0.5 spaces per unit For -rent Senior Citizen Housing Not to Exceed 0.5 spaces per unit Development as defined in Section 9112, and has either paratransit service or unobstructed access, within one-half mile to fixed bus route service that operates at least eight times per day Special Needs Housing, as defined in Not to exceed 0.3 spaces per unit Section 9112, and has either paratransit service or unobstructed access, within one-half mile to fixed bus route service that operates at least eight times per day (k) If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this section, a development may provide on-site parking through tandem parking or uncovered parking, but not on -street parking. (1) If the development meets the requirements of Section 9121, an applicant may request parking incentives or concessions beyond those provided in Section 9122. A request pursuant to this subdivision shall not increase the number of incentives or concessions to which the applicant is entitled pursuant to Section 9123(b). (m) The City may, in its discretion, reduce or eliminate a parking requirement for developments of any type in any location. (n) The City may impose a higher parking ratio not to exceed the ratio described in Section 9131(h)(1) if, based on substantial evidence found in a parking study prepared by the City within seven (7) years preceding the proposed project and which includes an analysis of parking availability, differing levels of transit access, walkability access to transit services, the potential for shared parking, the effect of Ordinance No. 1484 Page 20 parking requirements on the cost of market -rate and subsidized developments, and the lower rates of car ownership for low- and very low income individuals, including seniors and special needs individuals. The City shall make findings, based on the parking study supporting the need for a higher parking ratio. Section 10. Section 9141 APPLICATION REQUIREMENTS AND REVIEW of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: (a) An applicant proposing a housing development pursuant to this Chapter, shall 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) Existing land uses on the property, including any existing rental unit(s). (2) A request for density bonus by specifying the code section of which the density bonus shall be awarded. (3) A description of the proposed housing development including the total number of units, targeted units by income category, and density bonus units bedroom mix. (4) The zoning and general plan designations and assessor's parcel number(s) of the project site. (5) The location of the targeted units within the housing development. (6) The number of additional housing units requested as the density bonus for the housing development. (7) A vicinity map and preliminary site, floor, and elevation plans, drawn to scale, including building footprints, driveway, and parking layout. (8) A description of any requested concession(s), incentive(s), waiver(s), modified parking standards, and/or development bonus requested and an explanation of why each is needed. In requesting a concession, incentive, waiver, modified standard of parking or waiver or reduction of development standards, the, applicant shall provide substantial facts in the form of a development pro -forma that the waiver or modification will result in identifiable and actual cost reductions. At a minimum, the Ordinance No. 1484 Page 21 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 and the actual cost reductions to be achieved. (9) if a density bonus is requested for a land donation, the application shall show the location of the land to be dedicated and provide evidence that each of the conditions included in Section 9121(b) can be met. (10) If an additional density bonus or concession or incentive is requested for a child care facility, the application shall show the location and square footage of the child care facility and provide evidence that each of the conditions in Section 9121(c) can be met. (11) 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; 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 the Housing Authority (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 9125 herein, the proposal shall be considered by the Planning Commission for recommendation to the City Council, or the Housing Authority where the Housing Authority funds are requested, for their preliminary approval unless such housing development does not require Planning Commission entitlements in which case, the City Council or the Housing Authority, as applicable, can authorize such assistance. A preliminary approval shall indicate the City Council's approval of the proposal for Ordinance No. 1484 Page 22 processing, but no optional additional assistance shall be deemed approved until embodied in the housing incentive agreement. Section 11. Section 9142 HOUSING INCENTIVE AGREEMENT of Part 1 of Chapter 1 of Article 9 of the Tustin City Code is hereby amended to read as follows: (a) Once an application for a density bonus and/or concession or incentive 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 the Housing Authority) 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 or concurrent with 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 recorded with the Orange County Recorder concurrent with the recording of the final map or within thirty days of approval if a map is not processed and 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 targeted 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 targeted units. (4) Affordability restrictions for low and very low income targeted units for at least fifty five (55) years from the date the building(s) is first occupied or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, rental subsidy program. (5) A schedule for completion and occupancy of the targeted units. (6) A description of the concessions or incentive(s), or optional additional assistance being provided by the City or the Housing' Authority. Ordinance No. 1484 Page 23 (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 or conversion of apartments to a condominium project consistent with this Chapter, the agreement shall provide for the following regarding the initial sale and use of targeted units during the applicable use restriction period and for the respective affordability period: (1) Targeted units shall, upon initial sale, be sold to eligible very low income households, low income households or persons and families of moderate income 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) Targeted units shall be initially owner -occupied by eligible very low, low income, or moderate income households, or by senior citizens in the case of a senior citizen housing development or mobile home park that limits residency based on age requirements for housing for older persons. (3) The agreement shall provide for the continued affordability of the low income and very low income targeted units for the applicable affordability period. (4) The agreement shall provide for the recapture by the City of its proportionate share of appreciation upon resale of moderate income targeted units in accordance with this Chapter. (e) In the case of rental housing developments, the agreement shall provide for the following conditions governing the use of targeted units during the affordability period: (1) The rules and procedures for qualifying tenants, establishing affordable rent, filling vacancies, and maintaining targeted 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 12: 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 Ordinance No. 1484 Page 24 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 of the City of Tustin on this 3rd day of October, 2017. DR. ALLAN BERNSTEIN, Mayor ATTEST: ERICA N. RABE, City Clerk APPROVED AS TO FORM: DAVID E. KENDIG, City Attorney Ordinance No. 1484 Page 25 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF TUSTIN ) CERTIFICATION FOR ORDINANCE NO. 1484 Erica N. Rabe, 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. 1484 was duly and regularly introduced and read by title only at the regular meeting of the City Council held on the 3rd day of October, 2017, and was given its second reading, passed and adopted at a regular meeting of the City Council held on the 17th day of October, 2017, by the following vote: COUNCILPERSONS AYES: COUNCILPERSONS NOES: COUNCILPERSONS ABSTAINED: COUNCILPERSONS ABSENT: Erica N. Rabe, City Clerk