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HomeMy WebLinkAbout09 VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM ORDINANCE AND IN-LIEU FEE DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 Agenda Item 9 r Reviewed: os AGENDA REPORT City Manager Finance Director N/A MEETING DATE: OCTOBER 19, 2021 TO: CITY COUNCIL FROM: MATTHEW S. WEST, CITY MANAGER SUBJECT: VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM ORDINANCE AND IN-LIEU FEE SUMMARY: Ordinance No. 1491 was adopted in September of 2018 by adding Chapter 913 to the Tustin City Code entitled "Voluntary Workforce Housing Incentive Program". The Ordinance and In-Lieu Fee are applicable only if a developer proposes to "up zone" property using the"Residential Allocation Reservation" process to add residential units on property not currently zoned for residential uses within the Downtown Commercial Core Specific Plan and the Red Hill Specific Plan areas. At its August 17, 2021 meeting, the City Council requested that staff return to the October 5, 2021 meeting for the Council to discuss potential policy direction options regarding the City's Voluntary Workforce Housing Incentive Program Ordinance and In-Lieu Fee. During that meeting, it was moved by Mayor Pro Tem Lumbard and seconded by Council Member Gallagher to continue the item to the October 19, 2021 Council meeting. RECOMMENDATION: Direct staff to do one of the following: 1. Prepare a draft ordinance revision for Council consideration at a future meeting (and provide specific direction on what the revisions should/should not include); or 2. Prepare a draft temporary moratorium on the current ordinance for Council consideration at a future meeting (and clarify whether the City should continue to allow "up-zoning" to residential uses via the Residential Allocation Reservation process while the moratorium is in effect); or 3. Prepare a repeal of the current ordinance for council consideration at a future meeting; or 4. Take no action; or 5. Provide alternative direction at the pleasure of the City Council. FISCAL IMPACT: Not applicable at this time. DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 City Council Report October 19, 2021 VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM ORDINANCE AND IN-LIEU FEE Page 2 CORRELATION TO THE STRATEGIC PLAN: The Voluntary Workforce Housing Incentive Program implements Goal A (Economic and Neighborhood Development) Strategy 15 ("Create affordable and workforce housing options") of the City's current Strategic Plan. BACKGROUND Table 1 provides an overview of Tustin' s Voluntary Housing Incentive Program Ordinance and in-Lieu Fee. TABLE 1 TUSTIN'S VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM Applicable Applicability Affordable Units In-Lieu Fee Fee per unit Tustin City Locations Threshold Requirements Methodology Code Adopted in 2018 Applicable to 15%of the base In-lieu fee $12,946/unit CHAPTER 913 - development units,of which per unit adjusted VOLUNTARY Applies to two areas: approvals that 6%VL,4.5% L, (currently at every year WORKFORCE include a request 4.5% M; or $12,946)x''/2 HOUSING • Redhill Avenue to"up-zone" of total base INCENTIVE Specific Plan property to add 12.5%of the units PROGRAM I residential uses base units of Code of • Downtown to property not whichOrdinances I Commercial currently zoned M or VL, Tustin, CA I Core Specific for residential 5/ M; or Municode Plan. use via the City's Library "Residential One of the Allocation following: Reservation" 5%of the base process. units for VL(on- site or off-site); or Less than 20 10%the base units may pay in- units for L (on- lieu fees for site or off-site) affordable units PLUS not provided on- Payment of In site or off-site Lieu Fee More than 20 units must comply with affordable units requirements. DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 City Council Report October 19, 2021 VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM ORDINANCE AND IN-LIEU FEE Page 3 The Voluntary Workforce Housing Incentive Program requirements may be satisfied through the following means: 1. Provide Voluntary Workforce Housing Incentive Program units on-site or offsite as follows: a. Fifteen percent (15%) of the base units onsite 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 b. Twelve and one-half percent (12.5%) of the base units onsite 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; or c. Any residential project providing Voluntary Workforce Housing Incentive units pursuant to either subsection (i) or(ii) below must also pay an in-lieu fee calculated by multiplying the Voluntary Workforce Housing Incentive Program In-Lieu Fee by half the number of base residential units provided on-site. Must provide one of the following options: i. Five percent (5%) of base units in the residential project provided on-site or off-site, and made available to very low income households; or ii. Ten percent (10%) of the base units in the residential project provided on- site or off-site, and made available to low income households. Projects of fewer than 20 total residential units are provided alternative options for compliance. DISCUSSION: The Voluntary Workforce Housing Incentive Program Ordinance and In-Lieu Fee becomes applicable if a developer proposes to "up zone" property to seek residential units on property not currently zoned for residential within the Downtown Commercial Core Specific Plan and the Red Hill Specific Plan areas. If the subject property already provides residential zoning, unlike other cities' ordinances, Tustin does not require inclusionary housing. Inclusionary Housing vs. Voluntary Workforce Housing Incentive Program: Most cities' "Inclusionary housing" ordinances require affordable housing to be included in residential developments on property already zoned for residential uses. This results in an economic burden on property owners whose property is already zoned for the residential uses. When the Tustin City Council approved the existing "Voluntary Workforce Housing Incentive DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 City Council Report October 19, 2021 VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM ORDINANCE AND IN-LIEU FEE Page 4 Program" in 2018, the Council limited its applicability to those situations where a developer's property was going to receive the economic benefit of up-zoning to allow residential uses where the property was not already zoned residential. This means the developer who opts to pursue the program receives an economic benefit in exchange for the agreement to include some affordable units. In this respect, Tustin's Voluntary Workforce Housing Incentive Program Ordinance proposes a voluntary trade of sorts to developers: receive a new and valuable right to build residential units in exchange for including some affordable units. THE FUNDS FROM THE IN-LIEU FEES The funds collected from the In-Lieu Fees are not intended for the City to build affordable housing projects. The funds are however restricted for uses which facilitate development of affordable housing for extremely low, very low, low, and moderate-income households in the City of Tustin, along with administration and compliance monitoring of the Voluntary Workforce Housing Incentive Program which includes the following: • Assistance with affordable housing projects with "gap" financing, and • Assistance with funding to preserve affordable units by extending deed restrictions on applicable units when they expire To date, the 140 market rate residential units in the Vintage project located in the Downtown Commercial Core Specific Plan resulted in collection of almost $2 million in In-Lieu fees. The Vintage project began making In-Lieu payments in April 2018 and the final payment was made in February 2020. In addition, the City recently approved a development application within the Red Hill Specific Plan which is expected to result in six new very low income units and add approximately $730k to the fund. In the approximately 18 - months the City has had these funds, there have not been any new 100% affordable housing developments proposed. Typical gap financing required for an affordable unit costs approximately $80,000 - 100,000/ per unit, with most 100% affordable housing developments containing at least 50 units. Attachments: Attachment A: Ordinance No. 1491 Attachment B: Resolution No. 18-61 DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 ORDINANCE NO. 1491 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 1. 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 Cal.41435 (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 voluntary 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 Pian 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. Ordinance No. 1491 Page 1 of 16 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 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, 2918, a public nearing 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, 2918, 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 Voluntary Workforce Housing Incentive Program to Article 9 of the Tustin City Code. L. That on April 17, 2918, 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. 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, ` Ordinance No. 1491 Page 2 of 16 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 2018 public hearing to the Voluntary 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 voluntary 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. R. That.on July 17, 2018, a public hearing was duly noticed, called and held by the City Council to consider Ordinance No. 1491 as further revised after the July 3, 2018 public hearing, and adjourned the matter and the meeting to and adjourned regular meeting scheduled for August 11, 2018. S. That on August 11, 2018, a public hearing was duly noticed, called and held by the City Council at an adjourned regular meeting to consider Ordinance No. 1491 as further revised after the July 17, 2018 public hearing. SECTION ll. 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 89911 - 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 Ordinance No. 1491 Page 3 of 16 DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 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 voluntary ` 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) pursuant to a Specific Plan. 69912- DEFINITIONS 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. "Base units" means the total number of units in a residential project obtained via a Residential Allocation Reservation pursuant to a Specific Plan, excluding any density bonus units. "Density bonus units" means dwelling units approved in a residential development calculated by applying the formulas set forth in California Government Code Section 85915 et seq. and Tustin City Code Section 9111 et seq. to the base units as permitted pursuant to any existing or future-adopted Specific Plan, that are in excess of the base units and maximum residential density otherwise permitted by the applicable Specific Plan, the City of Tustin General Plan, and Tustin City Code. "Development approval" means a tentative map, parcel map, conditional use permits development agreement, or any other discretionary permit_ "Extremely low-income household" shall have the definition given in California Health and Safety Code Section 50105. "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 55410 et seq.), or any residential development including such for-sale dwelling units. L ; Ordinance No. 1491 Page 4 of 16 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 "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 a voluntary 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). "Residential area" means the area of base units within a residential project made available for occupancy and use as a dwelling unit, including private open space and excluding common open space. "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 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. "Residential Allocation Reservation" means the process described in any existing or future-adopted Specific Play by which residential units are allocated by the City to a residential project. "Very low-income household" means a household earning no more than the amount defined by California Health and Safety Code Section 50105. "Voluntary 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. "Voluntary workforce housing incentive program fund" means the fund created by the City in which all fees collected in compliance with this Chapter shall be deposited pursuant to Section B9929 of this Chapter. Ordinance No. 1491 Page 5 of 16 I DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 i I "Voluntary 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. I "Voluntary workforce housing incentive program in-lieu fee" means a fee payable per base unit or per square foot of residential area, as may be established by resolution of the City Council, and as specified by this Chapter, payable to the City prior to the issuance of a building permit for the residential project, unless the timing of payment is otherwise specified in an approved voluntary workforce housing incentive agreement pursuant to Section 89932 of this Chapter, or the conditions of approval for the residential project. I "Voluntary 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. "Voluntary 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: (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 voluntary 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. Ordinance No. 1491 Page 6 of 16 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 (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 a voluntary 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 voluntary workforce housing incentive program units. Calculations of the number of voluntary workforce housing incentive program units required by this Section shall be based on the number of base units in the residential project. (a) On-site voluntary workforce housing requirement. Except as provided in Subsection(a)(3)below or when otherwise exempted from this Chapter, residential projects shall include voluntary workforce housing incentive program units upon the same site as the residential project. The number and type of voluntary workforce housing incentive program units required for the residential project shall be either: (1) Fifteen percent (15%) of the base 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 base 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 Ordinance No. 1491 Page 7 of 16 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 to very low-income households, and five percent (5%) shall be made available to moderate-income households; or (3) One of the following: a. Five percent(5%) of base units in the residential project provided on-site or off-site, and made available to very low income households; or b. Ten percent (10%) of the base units in the residential project provided on-site or off-site, and made available to low income households. (b) Any residential project providing voluntary workforce housing incentive units pursuant to Subsection (a)(3) above must also pay to City a voluntary workforce housing incentive program in-lieu fee calculated by either: (1) Multiplying the voluntary workforce housing incentive program in-lieu fee by one-half(11/2) the number of base units provided on-site, or one-half (112) the residential project's total square feet of residential area (as established by resolution of the City Council); or (2) For residential projects where an application was received but not r deemed complete on or before April 17, 2018, multiplying the voluntary workforce housing incentive program in-lieu fee by one-half (112) the residential project's total square feet of residential area (as established by resolution of the City Council). (c) For residential projects providing a mix of on-site voluntary workforce housing program units and paying a voluntary workforce housing incentive program in-lieu fee calculated pursuant to Subsection (b) of this Section, the voluntary workforce housing incentive program unit requirements of Section B9923 may be satisfied in part by payment to the City of a voluntary workforce housing incentive program in-lieu fee calculated pursuant to that Subsection, provided that such fee is received by the City prior to the issuance of a building permit for the residential project, unless the timing of payment is otherwise specified in an approved voluntary workforce housing incentive agreement pursuant to Section B9932 of this Chapter, or the conditions of approval for the residential project. (d) Any off-site units provided pursuant to Subsection (a)(3)above shall comply with the requirements for off-site units set forth in Section B9925(b)(1) through (b)(7). 89924- FRACTIONAL UNITS F I Ordinance No. 1491 Page 8 of 16 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 In computing the total number of voluntary 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 VOLUNTARY 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. (a) On-site units. The primary means of complying with the voluntary workforce housing incentive program unit requirements of this Chapter shall be the provision of on- site voluntary 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 voluntary 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 voluntary workforce housing incentive program unit requirements of Section B9923 may be satisfied, in whole or in part, by the construction of new voluntary workforce housing incentive Program units, or the conversion of existing market rate units to voluntary 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; (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 voluntary workforce housing incentive program units shall be included in the voluntary workforce housing incentive program plan and the voluntary workforce housing incentive program agreement; Ordinance No. 1491 Page 9 of 16 DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 1 I (5) Any off-site voluntary 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 139927- (6) Any off-site voluntary 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 voluntary 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 voluntary workforce housing incentive program unit requirements of Section B9923 may be satisfied, in whole or in part, by payment to the City of a voluntary workforce housing incentive program in-lieu fee, as established by resolution of the City Council, provided that such fee is received by the City prior to the issuance of a building permit for the residential project, unless the timing of payment is otherwise specified in an approved voluntary workforce housing incentive agreement pursuant to Section B9932 of this Chapter, or the conditions of approval for the residential project. All voluntary workforce housing incentive program in-lieu fees collected under this Subsection shall be deposited in the voluntary workforce housing incentive program fund. r (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 park, by an alternative option acceptable to the City, which may include without limitation the dedication of land for affordable housing. B9926 - Density Bonuses and Other Incentives All residential projects as defined in Section 69912 and subject to the voluntary workforce housing incentive program established by this Chapter shall be eligible for the density bonuses and other incentives, and for the waivers and reductions in development standards identified by State law as set forth in Government Code Section 65915 et seq. and Tustin City Code Section 9111 et seq., so long as the residential project provides voluntary workforce housing incentive program units in accordance with this Chapter. All calculations with respect to density bonuses, other incentives, and waivers or reductions in development standards provided pursuant to this Section B9926 shall be calculated by applying the provisions of Government Code Section 65915 to the proposed base units of the residential project. 89927 - STANDARDS (a) Location within the residential project. All voluntary workforce housing � incentive program units shall be: Ordinance No. 1491 Page 10 of 16 DocuSign Envelope ID:33026D4A-D1 130-4357-13931D-A371D78246F46 (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 voluntary workforce housing incentive program units in a residential project 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 voluntary 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 voluntary 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 voluntary 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 voluntary workforce housing incentive program unit to obtain occupancy of housing for which the person is not eligible. B9928-VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM FUND (a) All monies collected pursuant to this Chapter, including all voluntary workforce housing incentive program in-lieu fees, shall be deposited into a separate account to be designated as the City of Tustin voluntary workforce housing incentive program fund. Ordinance No. 1491 { Page 11 of 16 DocuSign Envelope ID:33026D4A-D1 130-4357-13931D-A371D78246F46 (b) The monies in the voluntary workforce housing incentive program fund shall F be expended exclusively to provide housing affordable to extremely low, very low, low, and moderate-income households in the City of Tustin, and administration and compliance monitoring of the voluntary workforce housing incentive program. PART 3 - CONTINUING AFFORDABILITY BB9931 - 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 voluntary workforce housing incentive program units, and any site subject to the provisions of this Chapter. Affordability documents for for-sale owner-occupied voluntary 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 voluntary 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 f necessary by the City to replace the voluntary workforce housing incentive program unit. (b) Affordability periods. All voluntary 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 voluntary workforce housing incentive program fund. (d) Any household that occupies a voluntary 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 voluntary workforce housing incentive program guidelines. (e) No household may begin occupancy of a voluntary workforce housing incentive program unit until the household has been determined to be eligible to occupy that unit. Rental voluntary workforce housing incentive Ordinance No. 1491 Page 12 of 16 DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 program units shall continue to be rented to income eligible households at an affordable housing cost for the entire term of the voluntary workforce housing incentive program restriction. The voluntary workforce housing incentive program guidelines shall establish standards for determining household income, maximum occupancy, affordable housing cost, provisions for continued monitoring of tenant eligibility, and other eligibility criteria. B9932 - VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM PLAN AND VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM AGREEMENT (a) Voluntary Workforce Housing Incentive Program Plan. The developer shall submit a voluntary workforce housing incentive program plan in a form specified by the Director of Community Development or designee and consistent with this Chapter, detailing how the provisions of this Chapter will be implemented for the proposed residential project. The voluntary 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 voluntary workforce housing incentive program plan is complete and conforms to the provisions of this Chapter and, if applicable, the voluntary workforce housing incentive program guidelines_ No project approval shall be issued for a residential project subject to this Chapter until a voluntary workforce housing incentive program plan has been approved as compliant with this Chapter. Any person may appeal any decision of the Director of Community Development in accordance with Section 9294 of this Code. (b) Voluntary 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 voluntary workforce housing incentive program units, prior to the approval of any final or parcel map or issuance of any building permit for a residential project subject to this Chapter, the City and Developer shall execute and cause to be recorded a voluntary workforce housing incentive program agreement containing those provisions necessary to ensure the requirements of this Chapter are satisfied. The voluntary workforce housing incentive program agreement shall be recorded against the entire residential project property and any other property used for the purposes of providing voluntary workforce housing pursuant to this Chapter. PART 4- ADMINISTRATION AND ENFORCEMENT B9941 - MONITORING OF COMPLIANCE Ordinance No. 1491 ! Page 13 of 16 E i. t DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 The voluntary workforce housing incentive program guidelines may, and each -. voluntary workforce housing incentive program agreement shall, include provisions for the monitoring by the City of each residential project and each voluntary workforce housing incentive program unit for compliance with the terms of this Chapter, the voluntary workforce housing incentive program guidelines, and the applicable voluntary 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 voluntary workforce housing incentive program unit owners or tenants are required to cooperate with the City in promptly providing all information requested by the City in monitoring compliance with program requirements. B9942- ADMINISTRATIVE PROCEDURES The City Manager may promulgate and amend voluntary 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 voluntary 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 voluntary 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 voluntary 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 voluntary 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 Ordinance No. 1491 Page 14 of 16 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 (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 voluntary workforce housing incentive program agreement approved hereunder, the City shall be entitled to recover its reasonable attorney's fees and costs. SECTION Ill. Effective Date. This Ordinance shall take effect on the 31St day after its adoption. The City Cleric 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 Califomia 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 voluntary 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 4th day of September, 2018. Ordinance No. 1491 Page 15 of 16 i DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 ELWYN,ar:�. , Mayor ATTEST: ERICA N. Y UDA, City Clerk APPROVED AS TO FORM: DAVID E. K NDIG, City Attorney STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF TUSTIN } CERTIFICATION FOR ORDINANCE NO. 1491 I, 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 and regularly introduced and read by title only at the regular adjourned meeting of the City Council held on the 1111 day of August, 2018, and was given its second reading, passed and adopted at a regular meeting of the City Council held on the 4th day of September, 2018, by the following vote: COUNCILMEMBER AYES: Murray. Gomez, Clark COUNCILMEMBER NOES: Puckett Bernstein 2 COUNCILMEMBER ABSTAINED' COUNCILMEMBER ABSENT: {p} Erica N. Yas ; , City Clerk Ordinance No. 1491 Page 16 of 16 DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 RESOLUTION NO. 18-61 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, ADOPTING THE VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM IN-LIEU FEE AND INCORPORATING THE FEE INTO THE CITY'S COMPREHENSIVE SCHEDULE OF FEES I. The City Council of the City of Tustin hereby finds, determines and declares as follows: A. Tustin City Code Chapter 9B — Voluntary Workforce Housing Incentive Program requires developers to provide affordable housing units in conjunction with new residential projects involving an application to develop residential uses within an existing or future-adopted specific plan area by means of a Residential Allocation Reservation; and B. The City's voluntary workforce housing incentive program unit requirements may be satisfied in whole, or in part, by the payment to the City of a voluntary workforce housing incentive program in-lieu fee, as may be established by resolution of the City Council; and C. The City retained Keyser Marston Associates ("KMA") to analyze and provide recommendations on the fees residential developers should have to pay in lieu of providing affordable housing units; and D. The May 22, 2017 report prepared by KMA ("KMA Report"), retained on file by the City Clerk and incorporated herein, recommends such an in-lieu fee of$17,600 per ownership or rental unit or, alternatively, $17 per square foot of gross building area for projects that include twenty or more residential units; and E. The City may, at its discretion, set the in-lieu fee at less than the amount recommended by the KMA Report; and F. Based on the recommendations of the KMA Report, and in an effort to provide an equitable in-lieu fee option to residential developers, and to account for the economics of varying project sizes, the City Council finds appropriate the adoption of a voluntary workforce housing incentive program in-lieu fee ranging from $8,000/unit (projects consisting of 1-4 units) to $12,000/unit (projects consisting of 20 units or more); where the average size of units in a project is less than 800 square feet, a fee ranging from $10/sq ft (projects consisting of 1-4 units) to $15/sq ft (projects consisting of 20 or more units) would apply; and for projects for which applications have been received but not yet deemed complete by the City on or before April 17, 2018, a fee of$81 sq ft would apply; and Resolution 18-61 Page 1 of 4 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 G. The proposed voluntary workforce housing incentive program fee is reasonably related to the cost of providing the affordable units foregone by a developer's election to pay the fee in lieu of providing affordable housing units; and H. All in-lieu fee monies will be placed in the City's voluntary workforce housing incentive program fund and expended exclusively to provide affordable housing to extremely low, very low, low, and moderate income households in the City of Tustin, and for administration and compliance monitoring of the voluntary workforce housing incentive program; and I. On September 2, 2008, the City Council adopted Resolution No. 08-60, amending the City-wide Comprehensive Schedule of Fees; and J. It is not the City Council's intention to repeal previously adopted fees but to add the voluntary workforce housing incentive program in-lieu fee into the City-wide Comprehensive Schedule of Fees; and K. The voluntary workforce housing incentive program in-lieu fee amount set forth in Exhibit "A" of this Resolution is the same as the in-lieu fee amount adopted by Resolution No. 18-28; and L. A duly noticed Public Hearing was held on August 11, 2018 in accordance '�'• with State Law, at which oral or written presentations could be made, as part of the adjourned regular meeting; and M. Evidence, both written and oral, was duly presented to and considered by the City Council at the aforesaid public hearing; and N. The proposed resolution is not subject to the California Environmental Quality Act (CEQA) because it involves the creation of a government funding mechanism expressly excluded from CEQA's definition of"project." (CEQA Guidelines 15352) Even if the resolution where construed to be a project, it can be seen with certainty that there is no possibility that the resolution may have a significant effect on the environment and thus falls within CEQA's "common sense" exemption. (CEQA Guidelines § 15061(b)(3).) II. The City Council hereby does resolve as follows: A. The voluntary workforce housing incentive program in-lieu fee, attached hereto as Exhibit "A" is adopted and incorporated into the City's Comprehensive Schedule of Fees. Resolution 18-61 Page 2 of 4 DocuSign Envelope ID:33026D4A-D1 BO-4357-B93D-A37D78246F46 B. This Resolution shall become effective concurrently with the effective date of Ordinance No. 1491, adding Chapter 9B —Voluntary Workforce Housing Incentive Program — to the Tustin City Code. C. This Resolution shall repeal and supersede Resolution No. 18-28, adopted by City Council on April 17, 2018. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 11 th day of August, 2018. ELWYN A MURRAY, Mayor ATTEST: ERICA N. Y' UDA, City Clerk Resolution 18-61 Page 3 of 4 DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 me STATE OF CALIFORNIA } ORANGE COUNTY } Now CITY OF TUSTI N } f, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and forgoing Resolution No. 18-61 was duly passed and adopted at a regular meeting of the City Council of the City of Tustin, held on August 11, 2018, by the following vote: COUNCILMEMBER AYES: Murray, Gomez, Clark (3) COUNCILMEMBER NOES: Bernstein, Puckett (2) COUNCILMEMBER ABSTAINED: (0) COUNCILMEMBER ABSENT: (0) 4 AJ A//141� ERICA N.NU- DA, CITY CLERK Resolution 18-61 Page 4 of 4 DocuSign Envelope ID:33026D4A-D1 130-4357-1393D-A37D78246F46 EXHIBIT A VOLUNTARY WORKFORCE HOUSING INCENTIVE PROGRAM IN-LIEU FEE B. Fee per square foot. i, ot'Linits A. Fee C. Fee per square foot, if per U[lit if average unit size is less projcct applicafion is received (han 800 square feet but not deemed complete on 1 -4 $8,000 $10 $8/sq ft 5-9 $9,000 $11.25 $8/sq ft 10- 14 $10,000 $12.50 $8/sq ft 15- 19 $11,000 $13.75 $8/sq fl 20 units or more 1 $12,000 $15 S8/s5 ft Note: If a project application has been received but not yet deemed complete by the City on or before April 17, 2018, then the fee in the far right column(Column C) is applied. For all project applications received after April 17,2018,either Column A or Column B applies. Beginning January 2019 and annually,hereafter,the fee will be adjusted using the Consumer Price Index (CPI)' for the Los Angeles-Long Beach-Anaheim, CA Metropolitan Statistical Area. The 2019 calculation will use the annual percent change from December 2018. The CPI is typically released 10-15 days into the following month. In each new year, the previous year's fee shall apply for any project approved before the CPI calculation is released and the In-Lieu fee adjusted accordingly. EXAMPLE: 2019 Approval—2018 In-Lieu Fee • January 8,2019—December 2018 annual CPI has not been released ■ January 8,2019—Project approved, 2018 Voluntary Workforce Housing Incentive Program In-Lieu Fee applies 2019 Approval 2019 In-Lieu Fee • January 11, 2019--December 2018 annual CPI released and the 2019 Voluntary Workforce Housing Incentive Program In-Lieu Fee is calculated • January 22, 2019—Project approved, 2019 Voluntary Workforce Housing Incentive Program In-Lieu Fee is applied t"Consumer Price Index"means,for each Fiscal Year,the Consumer Price index published by the U.S. Bureau of Labor Statistics for All items in Los Angeles-Long Beach-Anaheim,CA,all urban consumers, not seasonally adjusted"index(Series Id: CUURS49ASA0,CUUSS49ASA0),measured as of the month of December in the calendar year that ends in the previous Fiscal Year.In the event this index ceases to be published,the Consumer Price Index shall be another index as determined by the City Manager that is reasonably comparable to the Consumer Price Index. Resolution 18-61 Exhibit A