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HomeMy WebLinkAbout11-ATTACHMENT BORDINANCE NO. 1491B AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, ADDING CHAPTER 9B TO ARTICLE 9 OF THE TUSTIN CITY CODE ESTABLISHING A VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM. The City Council of the City of Tustin does hereby ordain as follows: SECTION I. The City Council finds and determines as follows: A. That this Ordinance is being adopted pursuant to the City's police power authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. B. That many municipalities have adopted ordinances that require, as a condition of development of residential units, that the development include a certain percentage of owner -occupied or rental units affordable to, and occupied by, extremely low, very low, low, or moderate -income households. C. That the California Supreme Court has affirmed that adopting such housing ordinances is a constitutional exercise of the local police power (CBIA v. City of San Jose, 61 CalAth 435 (2015)). D. That on September 29, 2017, the Governor approved Assembly Bill No. 1505 ("AB 1505"), adding subdivision (g) to Section 65850 of the Government Code. AB 1505 provides additional authorization for municipalities to adopt such housing ordinances. E. That in support of AB 1505, the Legislature noted that since the 1970s, more than 170 jurisdictions have enacted housing ordinances to meet their affordable housing needs. Additionally, the Legislature proclaimed that such housing ordinances have provided quality affordable housing to more than 80,000 Californians, including the production of an estimated 30,000 units of affordable housing in the last decade. F. That the City Council desires to implement a workforce housing incentive program to enhance the public welfare by establishing policies that foster the construction of housing affordable to households of extremely low, very low, low, and moderate incomes, help the City meet the needs of its local workforce, help meet its share of regional housing needs, and implement the City of Tustin General Plan Housing Element's goals and policies. G. That the addition of Chapter 9B — Voluntary Workforce Housing Incentive Program to Article 9 of the Tustin City Code is consistent with AB 1505. 1327272,2 Ordinance No. 1491 Page 2 H. That the addition of Chapter 9B — Voluntary Workforce Housing Incentive Program to Article 9 of the Tustin City Code is consistent with the City of Tustin General Plan Housing Element in that it complies with the following goals and policies: Goal 1: Provide an adequate supply of housing to meet the need for a variety of housing types and the diverse socioeconomic needs of all community residents. Policy 1.1: Promote the construction of additional dwelling units to accommodate Tustin's share of regional housing needs identified by the Southern California Association of Governments (SCAG), in accordance with adopted land use policies. Policy 1.5: Promote the dispersion and integration of housing for low - and very -low income families throughout the community as opposed to within any particular geographic area, neighborhood, or project. 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 3.1: Encourage new housing construction for home -ownership in a mixture of price ranges. I. That on March 27, 2018, a public hearing was duly noticed, called, and held on the addition of Chapter 9B to Article 9 of the Tustin City Code by the Planning Commission. J. That on March 27, 2018, the Planning Commission, by a 3-2 vote, denied by minute order Resolution No. 4358, which if approved would have recommended that the City Council adopt Ordinance No. 1491 adding Chapter 9B to Article 9 of the Tustin City Code. K. That on April 17, 2018, a public hearing was duly noticed, called, and held by the City Council to consider the Planning Commission's action and the addition of the Workforce Housing Incentive Program to Article 9 of the Tustin City Code. L. That on April 17, 2018, the City Council unanimously passed the first reading of Ordinance No. 1491 and scheduled the second reading for June 19, 2018, providing staff with enough time between the first and second reading to meet with building industry officials to review concerns raised in the public hearing. 1327272,2 Ordinance No. 1491 Page 3 M. That on June 5, 2018, a public hearing was duly noticed, called and held by the City Council to consider revisions to Ordinance No. 1491 after the April 17, 2018 public hearing to the Workforce Housing Incentive Program to Article 9 of the Tustin City Code. N. That after the public hearing on June 5, 2018, the City Council unanimously introduced and approved first reading of the revised version of Ordinance 1491, set second reading for the next regular meeting of the City Council, and directed staff to revisit the Ordinance in two years to present an update to the City Council at that time. O. That on June 19, 2018, a public hearing was duly noticed, called and held by the City Council to consider the revisions to Ordinance No. 1491 after the June 5, 2018 public hearing. P. That after the public hearing on June 19, 2018, the City Council directed staff to make further revisions to Ordinance No. 1491 to: (a) require that it apply only to projects in which the applicant has elected to request a Residential Allocation Reservations (RARs); and (b) require all required workforce housing to be constructed on-site with the project. Q. That on July 3, 2018, a public hearing was duly noticed, called and held by the City Council to consider Ordinance No. 1491 as further revised after the June 19, 2018 public hearing. SECTION II. Chapter 9B — Voluntary Workforce Housing Incentive Program is hereby added to Article 9 of the Tustin City Code to read as follows: CHAPTER 9B — VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM PART 1 - GENERAL B9911 - PURPOSE The purpose of this Chapter is to enhance the public welfare by establishing policies which require the development of housing affordable to households of extremely low, very low, low, and moderate incomes, help meet the needs of the City's local workforce, help meet the City's regional share of housing needs, and implement the goals and objectives of the Tustin General Plan Housing Element, through the development of workforce housing incentive program units within new residential developments when a developer makes the voluntary election to request the benefit of Residential Allocation Reservations (RARs). B9912 - DEFINITIONS 1327272,2 Ordinance No. 1491 Page 4 Whenever the following terms are used in this Chapter, they shall have the meaning established by this Section: "Affordable housing cost" means the housing cost for dwelling units as defined by California Health and Safety Code Section 50052.5 for owner -occupied housing and the affordable rent for rental units as defined by California Health and Safety Code Section 50053, as applicable. "Applicant" or "developer" means a person, persons, or entity that applies for a residential project and also includes the owner or owners of the property if the applicant does not own the property on which development is proposed. "Density bonus units" means dwelling units approved in a residential development pursuant to California Government Code Section 65915 et seq. and Tustin City Code Section 9111 et seq., that are in excess of the maximum residential density otherwise permitted by the City of Tustin General Plan or Tustin City Code. "Development approval" means a tentative map, parcel map, conditional use permit, development agreement, or any other discretionary permit. "Extremely low-income household" shall have the definition given in California Health and Safety Code Section 50106. "For -sale" means and refers to any dwelling unit, including a condominium, stock cooperative, community apartment, or attached or detached single family home, for which a parcel or tentative and final map is required for the lawful subdivision of the parcel upon which the dwelling unit is located or for the creation of the unit in accordance with the Subdivision Map Act (California Government Code Section 66410 et seq.), or any residential development including such for -sale dwelling units. "Low income household" shall have the definition given in California Health and Safety Code Section 50079.5. "Market rate unit" means a new dwelling unit in a residential project that is not an workforce housing incentive program unit as defined by Section B9912 of this Chapter. "Mixed use residential development" means any development that combines residential land uses with office, commercial, light industrial, or business park land uses. "Moderate income household" shall have the definition given in California Health and Safety Code Section 50093(b). "Rental" means and refers to a dwelling unit that is not a for -sale dwelling unit, and does not include any dwelling unit, whether offered for rental or sale, that may be sold as a result of the lawful subdivision of the parcel upon which the dwelling unit is located or creation of the unit in accordance with the Subdivision Map Act (California Government 1327272,2 Ordinance No. 1491 Page 5 Code Section 66410 et seq.), or any residential development including such rental dwelling units. "Residential project" means any residential development, including any mixed use residential development, requiring a development approval for which an application has been submitted to the City for a project that will utilize a Residential Allocation Reservation, "Very low-income household" means a household earning no more than the amount defined by California Health and Safety Code Section 50105. "Workforce housing incentive program agreement" means an agreement in conformance with Section B9932 of this Chapter between the City and an applicant, governing how the applicant shall comply with this Chapter. "Workforce housing incentive program which all fees collected in compliance with Section B9929 of this Chapter. fund" means the fund created by the City in this Chapter shall be deposited pursuant to "Workforce housing incentive program guidelines" means the requirements for implementation and administration of this Chapter as may be promulgated by the City Manager pursuant to Section B9942 of this Chapter. "Workforce housing incentive program plan" means a plan containing all of the information specified in and submitted in conformance with Section B9932 of this Chapter specifying the manner in which workforce housing units will be provided in conformance with this Chapter and the workforce housing incentive guidelines, and consistent with the City of Tustin General Plan and Article 9 of the Tustin City Code. "Workforce housing incentive program unit" means a dwelling unit required by this Chapter to be affordable to very low, low, or moderate -income households. PART 2 - APPLICABILITY AND VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM UNIT REQUIREMENTS B9921 -APPLICABILITY The provisions of this Chapter shall apply to all residential projects, as defined in Section B9912 of this Chapter, except for any residential project exempt under Section B9922 of this Chapter. B9922 - EXEMPTIONS This Chapter shall not apply to any of the following: 1327272.2 Ordinance No. 1491 Page 6 (a) Applications for a development approval that include a residential project for which an application has been deemed complete prior to the effective date of the ordinance codified in this Chapter. (b) A residential project that is the subject of a development agreement under applicable provisions of the California Government Code that expressly provide for an exclusion to this Chapter or provide for a different amount of workforce housing incentive program units from that specified by this Chapter, provided the development agreement was executed by the City prior to the effective date of the ordinance codified in this Chapter. (c) A residential project for which a housing incentive agreement has been approved pursuant to Section 9142 of Article 9, Chapter 1, Part 4 of this Code, provided that the housing incentive agreement is effective prior to the effective date of the ordinance codified in this Chapter, and there is no uncured breach of the housing incentive agreement before issuance of a certificate of occupancy for the project. (d) A residential project for which a development approval has been approved by the City by no later than the effective date of the ordinance codified in this Chapter. Upon expiration of any development approval, and unless otherwise exempted, the residential project shall be subject to the requirements of this Chapter, and shall not proceed until such time as an workforce housing incentive program plan is approved in conjunction with any other required development approval or amendment thereto. The exemption set forth in this Subsection shall not apply to any discretionary extension of a development approval or land use approval beyond its initial term granted after the effective date of the ordinance codified in this Chapter. B9923 — VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM UNIT REQUIREMENTS All new residential projects, as defined in Section B9912 and as specified in Section B9921, shall include workforce housing incentive program units. Calculations of the number of workforce housing incentive program units required by this Section shall be based on the number of dwelling units in the residential project, excluding any density bonus units as defined in Section B9912 of this Chapter. (a) On-site workforce housing requirement. Unless otherwise exempted from this Chapter, residential projects shall include workforce housing incentive program units upon the same site as the residential project. The number and type of workforce housing incentive program units required for the residential project shall be either: 1327272,2 Ordinance No. 1491 Page 7 (1) Fifteen percent (15%) of the total dwelling units in the residential project made available at an affordable housing cost. Of these affordable housing units, six percent (6%) shall be made available to very low-income households, four and a half percent (4.5%) shall be made available to low-income households, and four and a half percent (4.5%) shall be made available to moderate -income households; or (2) Twelve and one-half percent (12.5%) of the total dwelling units in the residential project made available at an affordable housing cost. Of these affordable housing units, seven and one-half percent (7.5%) shall be made available to very low-income households, and five percent (5%) shall be made available to moderate -income households. B9924 - FRACTIONAL UNITS In computing the total number of workforce housing incentive program units required in a residential project, fractions shall be rounded up to the next whole number. B9925 - OPTIONS FOR PROJECTS OF FEWER THAN 20 UNITS TO SATISFY WORKFORCE HOUSING INCENTIVE PROGRAM REQUIREMENTS Subsections (a) through (d) of this Section B9925 shall apply only to residential projects of fewer than twenty (20) units. Residential projects of 20 units or more shall provide all workforce housing incentive program units on-site. (a) On-site units. The primary means of complying with the workforce housing incentive program unit requirements of this Chapter shall be the provision of on-site workforce housing incentive program units in accordance with Section B9923. A developer of a residential project of fewer than twenty (20) units may only satisfy the requirements of this Chapter by means of an alternative to on-site workforce housing incentive program units in accordance with the requirements and procedures of this Section. (b) Off-site units. For residential projects of fewer than twenty (20) units, the workforce housing incentive program unit requirements of Section B9923 may be satisfied, in whole or in part, by the construction of new workforce housing incentive program units, or the conversion of existing market rate units to workforce housing incentive program units, offsite within the City's jurisdictional boundary. All workforce housing incentive program units developed off-site of the residential project in accordance with this Subsection shall comply with the following criteria: (1) The off-site location has a general plan designation that authorizes residential uses and is zoned for residential development at a density to accommodate at least the number of otherwise required workforce housing incentive program units within the residential project; 1327272.2 Ordinance No. 1491 Page 8 (2) The off-site location is suitable for development of the workforce housing incentive program units in terms of configuration, physical characteristics, location, access, adjacent uses, and other relevant planning and development criteria; (3) Environmental review for the off-site location has been completed for the presence of hazardous materials and geological review for the presence of geological hazards and all such hazards are or shall be mitigated to the satisfaction of the City prior to acceptance of the site by the City; (4) The construction schedule for the off-site workforce housing incentive program units shall be included in the workforce housing incentive program plan and the workforce housing incentive program agreement; (5) Any off-site workforce housing incentive program units shall be constructed and made available for occupancy prior to or concurrently with the market rate residential project pursuant to Section B9926; (6) Any off-site workforce housing incentive program housing units shall be substantially comparable to the market rate units included in the residential project in terms of quality of design, materials and finish; and (7) Any off-site workforce housing incentive program housing units shall be substantially comparable to the market rate units included in the residential project in terms of gross floor area of habitable space and number of bedrooms per unit. (c) In -lieu fee. For residential projects of fewer than twenty (20) units, the workforce housing incentive program unit requirements of Section B9923 may be satisfied, in whole or in part, by payment to the City of a workforce housing incentive program in -lieu fee, as may be established by resolution of the City Council, provided that such fee is received by the City after the issuance of the development approval for the residential project, but prior to the issuance of the certificate of occupancy for the first market rate unit in the residential project. All in -lieu fees collected under this Subsection shall be deposited in the workforce housing incentive program fund. (d) Alternative option. For residential projects of fewer than twenty (20) units, the workforce housing incentive program unit requirements of Section B9923 may be satisfied, in whole or in part, by an alternative option acceptable to the City, which may include without limitation the dedication of land for affordable housing. B9926 - STANDARDS (a) Location within the residential project. All workforce housing incentive program units shall be: 1327272,2 Ordinance No. 1491 Page 9 (1) Reasonably dispersed throughout the residential project; (2) Proportional, in number of bedrooms, gross floor area of habitable space, and location, to the market rate units; (3) Comparable to the market rate units in terms of quality of design, materials, finish and appearance; (4) Permitted the same access to community amenities and recreational facilities, as the market rate units; and (5) Provided functionally equivalent parking when parking is offered to the market rate units. (b) Timing of construction. All workforce housing incentive program units in a residential project, or any off-site workforce housing incentive program units, shall be constructed and made available for occupancy prior to or concurrently with the market rate units. If the City approves a phased project, a proportional share of the required workforce housing incentive program units shall be provided within each phase of the residential project. (c) General Prohibitions (1) No person shall sell or rent a workforce housing incentive program unit at a price or rent in excess of the maximum amount allowed by any restriction placed on the unit in accordance with this Chapter. (2) No person shall sell or rent a workforce housing incentive program unit to a person or persons that do not meet the income restrictions placed on the unit in accordance with this Chapter. (3) No person shall provide false or materially incomplete information to the City or to a seller or lessor of a workforce housing incentive program unit to obtain occupancy of housing for which the person is not eligible. B9927 - WORKFORCE HOUSING INCENTIVE PROGRAM FUND (a) All monies collected pursuant to this Chapter shall be deposited into a separate account to be designated as the City of Tustin workforce housing incentive program fund. (b) The monies in the workforce housing incentive program fund shall be expended exclusively to provide housing affordable to extremely low, very low, low, and moderate -income households in the City of Tustin, and 1327272,2 Ordinance No. 1491 Page 10 administration and compliance monitoring of the workforce housing incentive program. PART 3 - CONTINUING AFFORDABILITY B9931 - CONTINUING AFFORDABILITY (a) Execution and recording of documents. The Director of Economic Development or designee may require execution and recording of documents necessary to ensure enforcement of this Chapter, including but not limited to promissory notes, deeds of trust, resale restrictions, rights of first refusal, options to purchase, and/or other documents, which shall be recorded against the residential project, all workforce housing incentive program units, and any site subject to the provisions of this Chapter. Affordability documents for for -sale owner -occupied workforce housing incentive program units may also include subordinate shared appreciation documents permitting the City to capture at resale the difference between the market rate value of the workforce housing incentive program unit and the affordable housing cost, plus a share of appreciation realized from an unrestricted sale in such amounts as deemed necessary by the City to replace the workforce housing incentive program unit. (b) Affordability periods. All workforce housing incentive program units shall remain affordable to the targeted income groups for no less than the time periods set forth in California Health and Safety Code Sections 33413(c)(1) and (2), as may be amended. (c) Unless otherwise required by law, all promissory note repayments, shared appreciation payments, or other payments collected under this Section shall be deposited in the workforce housing incentive program fund. (d) Any household that occupies a workforce housing incentive program unit must occupy that unit as its principal residence, unless otherwise approved in writing by the Director of Economic Development or his or her designee for rental to a third party for a limited period of time due to household hardship, as specified in the workforce housing incentive program guidelines. (e) No household may begin occupancy of a workforce housing incentive program unit until the household has been determined to be eligible to occupy that unit. Rental workforce housing incentive program units shall continue to be rented to income eligible households at an affordable housing cost for the entire term of the workforce housing incentive program restriction. The workforce housing incentive program guidelines shall establish standards for determining household income, maximum 1327272.2 Ordinance No. 1491 Page 11 occupancy, affordable housing cost, provisions for continued monitoring of tenant eligibility, and other eligibility criteria. B9932 — WORKFORCE HOUSING INCENTIVE PROGRAM PLAN AND WORKFORCE HOUSING INCENTIVE PROGRAM AGREEMENT (a) Workforce Housing Incentive Program Plan. The developer shall submit a workforce housing incentive program plan in a form specified by the Director of Community Development or designee, detailing how the provisions of this Chapter will be implemented for the proposed residential project. The workforce housing incentive program plan and its supportive documents, plans, and details shall be submitted at the same time as the development approval application materials for the residential project. Upon submittal, the Director shall determine if the workforce housing incentive program plan is complete and conforms to the provisions of this Chapter and, if applicable, the workforce housing incentive program guidelines. No project approval shall be issued for a residential project subject to this Chapter until a workforce housing incentive program plan has been approved. Any person may appeal any decision of the Director of Community Development in accordance with Section 9294 of this Code. (b) Workforce Housing Incentive Program Agreement. Where the workforce housing incentive program requirements of this Chapter will be satisfied through the provision of on-site or off-site workforce housing incentive program units, prior to the approval of any final or parcel map or issuance of any building permit or certificate of occupancy for a residential project subject to this Chapter, the City and Developer shall execute and cause to be recorded a workforce housing incentive program agreement containing those provisions necessary to ensure the requirements of this Chapter are satisfied. The workforce housing incentive program agreement shall be recorded against the entire residential project property and any other property used for the purposes of providing workforce housing pursuant to this Chapter. PART 4 - ADMINISTRATION AND ENFORCEMENT B9941 - MONITORING OF COMPLIANCE The workforce housing incentive program guidelines may, and each workforce housing incentive program agreement shall, include provisions for the monitoring by the City of each residential project and each workforce housing incentive program unit for compliance with the terms of this Chapter, the workforce housing incentive program guidelines, and the applicable workforce housing incentive program agreement. Such provisions shall require annual compliance reports to be submitted to the City by the owner and the City shall conduct periodic on-site audits to ensure compliance with all applicable laws, policies, and agreements. The developer and workforce housing incentive program unit owners or tenants are required to cooperate with the City in 1327272.2 Ordinance No. 1491 Page 12 promptly providing all information requested by the City in monitoring compliance with program requirements. B9942 - ADMINISTRATIVE PROCEDURES The City Manager may promulgate and amend workforce housing incentive program guidelines for the implementation and administration of all aspects of this Chapter. B9943 - ENFORCEMENT (a) Violation. Any violation of this Chapter, any development approval or entitlement issued pursuant to any provisions of this Code, or the terms of any workforce housing incentive program agreement entered into pursuant to this Chapter constitutes a misdemeanor and is deemed a public nuisance. (b) Forfeiture of funds. Any individual who sells a workforce housing incentive program unit in violation of this Chapter shall be required to forfeit to the City any money and other consideration received for the unit in excess of the affordable housing cost at such time. Any individual who rents out a workforce housing incentive program unit in violation of this Chapter shall be required to forfeit to the City all money and other consideration received for the unit so obtained. Recovered funds shall be deposited into the workforce housing incentive program fund. (c) Legal actions. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this Chapter, including actions: (1) To disapprove, revoke, or suspend any permit, including a building permit, certificate of occupancy, development approval or discretionary approval; and (2) To recover any funds or other consideration due under Section 9943(b); and (3) To enforce this Chapter by means authorized by this Chapter, by the Tustin City Code, and/or by State or Federal law; and (4) For injunctive relief or damages. (d) Recovery of costs. In any action to enforce this Chapter, or a workforce housing incentive program agreement approved hereunder, the City shall be entitled to recover its reasonable attorney's fees and costs. 1327272.2 Ordinance No. 1491 Page 13 SECTION III, Effective Date. This Ordinance shall take effect on the 31St day after its adoption, The City Clerk or his or her duly appointed deputy shall certify to adoption of the Ordinance and cause this Ordinance to be published as required by law. SECTION IV. CEQA Exemption. The City Council finds that this Ordinance is not subject to the California Environmental Quality Act ("CEQA"; Cal. Pub. Resources Code Section 21000 et seq.). The Ordinance does not commit the City to approve any particular project, or any aspect of any particular project, now or any time in the future. Any project subject to the Ordinance will require its own review for CEQA compliance. As a result, the Ordinance does not have any reasonably foreseeable environmental consequences or commit the City to a definite course of action. Thus, the Ordinance is not a "project" subject to CEQA. (Public Resources Code § 21065; CEQA Guidelines § 15378(a); CEQA Guidelines § 15352(a).) Further, to the extent the Ordinance establishes workforce housing incentive program fund, the Ordinance is, a government funding mechanism expressly excluded from CEQA's definition of "project." (CEQA Guidelines § 15378(b)(4).) Even if the Ordinance were construed to be a project, it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment for the foregoing reasons and thus falls within CEQA's "common sense" exemption. (CEQA Guidelines § 15061(b)(3).) SECTION V. Severability. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held out 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, 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 day of 12018. ELWYN MURRAY, MAYOR ATTEST; ERICA N. YASUDA, CITY CLERK 1327272.2 Ordinance No. 1491 Page 14 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF TUSTIN ) CERTIFICATION FOR ORDINANCE NO. 1491 Erica N. Yasuda, 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. 1491 was duly passed, and adopted at a regular meeting of the Tustin City Council held on the _ day of , 2018, by the following vote: COUNCILPERSONS AYES: COUNCILPERSONS NOES: COUNCILPERSONS ABSTAINED: COUNCILPERSONS ABSENT: Erica N. Yasuda, City Clerk Published: 1327272.2