HomeMy WebLinkAboutORD 1222 (1999) ORDINANCE NO. 1222
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, ESTABLISHING THE METHOD OF
PROVIDING DEVELOPER INCENTIVES FOR THE
DEVELOPMENT OF HOUSING AS REQUIRED BY STATE
LAW
The City. Council of the City of Tustin does ordain as follows:
Section 1. PURPOSE.
The State Planning and Zoning law requires that when a developer of
housing agrees to include a certain amount of housing for specified low income or
senior households in a housing development~ the City must provide the developer
with incentives to develop the housing for low income or senior households. The
City is required by Government' Code Section 65915 to adopt an ordinance
specifying the method of providing developer incentives.
Section 2. Chapter 1 is added to Article 9 (Land Use) of the Tustin City Code to
read as follows:
CHAPTER1
INCENTIVES FOR THE DEVELOPMENT
OF AFFORDABLE HOUSING
PART 1 - GENERAL
,-- 9111 PURPOSE AND INTENT
The purpose of this Chapter is to provide incentives for the production of housing for
very low, Lower Income, or older persons in accordance with California Law pertaining
to Density Bonuses. The intent of this Chapter is to facilitate the development of
affordable housing and to implement the goals, objectives, and policies of the City's
Housing Element.
The regulations and procedures set forth in this Chapter shall apply throughout the City
with the exception of areas identified as "East Tustin Specific Plan" and "MCAS-Tustin".
Sections of the California Government Code referenced in this Chapter and application
forms for complying with this Chapter, shall be available to the public.
Ordinance No. 1222
Page 2 of 12
9112 DEFINITIONS
Whenever the following terms are used in this Chapter, they shall have the meaning
established by this section: .'
"Affordable Rent" means monthly' housing expenses, including a reasonable
allowance for utilities, for rental Target Units reserved for Very Low or Lower Income
Households, not exceeding the following calculations:
(1) Very Low Income: 50 percent of the area median income for Orange
County, adjusted for household-size, multiplied by 30 percent and divided by 12.
(2) Lower income: 60 percent of the area median income for Orange County,
adjusted for household size, multiplied by 30 percent and divided by 12.
"Affordable Sales Price" means a sales price at which Lower or Very Low Income
Households can qualify for the purchase of Target Units, calculated on the basis of
underwriting standards of mortgage financing available for the development.
"Concession or Incentive" means the concessions and incentives as specified in
California Government Code Section 65915(h):
1. A reduction in site development standards of a modification of zoning code
requirements or architectural design requirements which exceed the minimum
building standards approved by the State Building Standards Commission as
provided in Part 2.5 (commencing with Section 18901) of Division 13 of the
Health and Safety' Code, including, but not limited to, a reduction in setback and
square footage requirements and in the ratio of vehicular parking spaces that
would otherwise be required; or
2. Approval of mixed use zoning in conjunction with the housing project if
commercial, office, industrial, or other land uses will reduce the cost of the
housing development and if the commercial, office, industrial, or other land uses
are compatible with the housing project and the existing or planned development
in the area, including 'the City's General Plan, where the proposed housing
project will be located; or
3. Other regulatory incentives or concessions proposed by the developer or the city
which result in identifiable cost reduction.
"Density Bonus" means a density increase of at least 25 percent over the otherwise
Maximum Residential Density. For purposes of calculating the minimum number of
Density Bonus Units to be granted, the Maximum Residential Density for the site shall
Ordinance No. 1222
Page 3 of l2
be multiplied by .25. WIden calculating the number of permitted Density Bonus Units,
any fractions of units shall be rounded to the next larger integer.
"Density Bonus Units" means those. residential units granted pursuant to the
provisions of this Chapter which exceed the otherwise Maximum Residential Density for
the development site. ' '
"Developer" an applicant who desires to construct five or more dwelling units.
"Direct Financial Incentive" means the donation of land or city financial assistance for
a land purchase, the waiver of city fees, the waiver of dedication requirements or other
financial assistance by the city Housing Incentive Agreement.
"Director" means the City's Director of Community Development or designee.
'"Housing Cost" means the sum of actual or projected monthly payments for all of the
following associated with for-sale Target Units: principal and interest on a mortgage
loan, including any loan insurance fees, property taxes and assessments, fire and
· casualty insurance, property maintenance and repairs, homeowner association fees,
and a reasonable allowance for utilities.
"Housing Development" means construction projects consisting of five or more
residential units, including single family, multifamily, and mobile-homes for sale or rent
pursuant to this Chapter.
"Housing Incentive Agreement" means a legally binding agreement between a
developer and the City and/or the Redevelopment Agency to ensure that the
requirements of this Chapter are satisfied. The agreement among other things, shall
establish the number 0f Target Units, size, location, terms and conditions of
affordability, and production schedule.
"Incentive of Equivalent Financial Value" means an incentive approved by the City
Council based on the land cost per dwelling unit of development. The value of density
bonus is determined by the difference in the costs of the land with and without the
density bonus.
"'Lower Income Household" means households whose income does not exceed the
low or 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 50079.5 of the California Health and Safety Code.
"Maximum Residential Density" means the maximum number of residential units
permitted by the Land Use Element of the City's General Plan and Zoning Ordinance
with the exception of "East Tustin Specific Plan" and "MCAS-Tustin" as of the date of
Ordinance No. 1222
Page 4 of 12
application to the City, excluding the Density Bonus allowed by this Chapter. If the .
housing: development is within a planned development overlay zone, the maximum
residential density shall be determined on the basis of the general plan and the
maximum density of the underlying zone as of the date of application to the City.
"Non-Restricted Unit" means all units within a Housing Development excluding the
-Target Units.
"Qualifying Resident', means senior citizens eligible to reside in Senior Citizen
Housing.
"Ser~ior Citizen Housing" means a housing development consistent with the California
Fair Employment and Housing Act (Government COde' Section 12900 et. seq., including
12955.9 in particular), which has been "designed to meet the physical and social needs
of senior citizens," and which otherwise qualifies as "housing for older persons" as that
phrase is used in the federal Fair Housing Amendments Act of 1988 (P.L. 100-430) and
implementing regulations (24 CFR, part I 00, s.ubpart E), and as that phrase is used in
California Civil Code Section 51.2 and 51.3.
"Target Unit" means a dwelling unit within a Housing Development which will be
reserved for sale or rent to, and affordable to, Very Low or Lower Income Households,
or Qualifying Residents. in determining the number of Target Units, the Maximum
Residential Density shall be multiplied by .10 where Very Low Income Households are
targeted, o~ by .20 where Lower Income Households are targeted. The Density Bonus
Units shall not be included when determining the total number of Target Units in the
Housing Development. When calculating the required number of Target Units, any
resulting decimal fraction shall be rounded to the next larger integer.
"Very Low Income Household" means households whose incom. e 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.
PART 2 - INCENTIVES
9121 REQUIRED INCENTIVES
a. Housing Development
When a developer agrees to provide:
(1) At least 20 percent of the total units of the Housing Development as
Target Units affordable to Lower Income Households; or
Ordinance No~ 1222
Page 5 of 12
(2) At least 10 percent of the total units of the Housing Development as
Target Units affordable to Very Low Income Households; or
(3) At least 50 percent Senior citizen housing;
The City shall either:
(a) Grant a Density Bonus, and at least one Concession or Incentive, unless
~"'""" the City Council makes. a written finding that the additional concession or
incentive is not required in order to provide for affordable housing; as
defined in Section 50052.5 of the Health and Safety Code, or for rents for
the targeted units to be set as specified in .Government Code Section
65915(c), or
(b) Provide other Incentives of Equivalent Financial Value based upon the land
.cost per dwelling unit.
If a developer agrees to construct both 20 percent of the total units 'for lower
income households and 10 percent of the total units for very low income
households, the developer is entitled to only one density bonus and at least one
Concession or Incentive.
In cases where a density increase of less than 25 percent is requested, no
reduction will be allowed in the number of Target Units required.
in cases where the developer agrees to construct more than 20 percent of the
total units for Lower Income Households, or more than 10 percent of the total
units for Very Low Income Households, the developer is entitled to only one
Density Bonus and one Concession or Incentive. The density increase of more
than 25 percent if granted, shall be considered a Concession or Incentive.
Similarly, a developer who agrees to construct Senior Citizen Housing with 20 or
10 percent of the 'units reserved for Low- or Very Low-Income Households,
respectively, is only entitled to one Density. Bonus and one Concession or
Incentive.
b. Condominium Conversion
When an applicant for approval to convert apartments to a condominium project
agrees to provide:
(1) At least 33 percent of the total units of the proposed condominium project
to persons and families of Low or Moderate Income; or
Ordinance No. 1222
Page 6 oft2
(2) At least 15 percent of the total units of the proposed condominium project
to Lower Income Households; and
(3) Agrees to pay for the reasonably administrative costs incurred by the City
pursuant to this section;
the City shall either:. '
(1) Grant a d'ensity bonus; or
(2). Provide other incentives of equivalent value.
The City may place such reasonable conditions on the granting of a density
bonus or other incentives of equivalent financial value as it finds appropriate,
including, but not limited to, conditions which assure continued affordability of
units to subsequent purchasers who are persons and families of Low and
Moderate Income or Lower Income Household.s-
For purposes of this section, "density bonus" means an increase in units of 25
percent over the number of apartments, to be provided within the existing
structure or structures proposed for conversion.
For purpose of this section, "other incentives of equivalent financial values" shall
not be construed to require the'City to provide cash transfer payments or other
monetary compensation but may include the reduction or waiver of requirements
which the City otherwise apply as conditions of conversion approval.
9122 OPTIONAL INCENTIVES
The City may grant multiple additional Concession and Incentives to facilitate the
inclusion of more Target Units than are required by this Chapter. The City Council may
approve any incentive is its sole discretion, in addition to those listed in Section 6213(a)
or to comply with Section 6213(b), including, but not limited to:
(a) A Density Bonus of more that 25 percent
(b) Waived, reduced, or deferred planning, plan check, building permit and/or
development impact fees.
(c) Direct financial aid (e.g., redevelopment housing set-aside funds, Community
Development Block Grant funds) in the form of a loan or a grant to subsidize or
provide low interest financing for on or off site improvements, contribution to land
or construction costs.
Ordinance No. 1222
Page 7 of 12
PART 3 DEVELOPMENT REQUIREMENTS
9131 STANDARD REQUIREMENTS
(a) Target Units shall be constructed concurrently with Non-Restricted Units unless
both the City and the developer agree in the Housing Incentive Agreement
--" described in Section 6218 to an alternative schedule for development.
(b) If the City complies with Section 9121, Target Units shall remain affordable to the
designated group for a period of 30 years or a longer period of time if required by
the construction or mortgage financing assistance program, mortgage insurance
program, or rental subsidy program. Those units targeted for sale or rental to
lower income or very low income households shall. be affordable at an "Affordable
Sales Price" or "Affordable Rent" as specified in Section 9112.
(c) If the City does not grant a Concession or Incentive in addition to a density bonus,
the Target Units shall remain affordable to the designated group for a period of 10
years.
(d) In determining the maximum Affordable Rent or Affordable Sales Price of Target
Units the following household and unit size assumptions shall be used by the City,
unless the Housing Development is subject to different assumptions imposed by
other applicable governmental regulations:
SRO (residential hotel) unit 75% of I person
0 bedroom (studio) I person
I bedroom 2 person
2 bedroom 3person
3 bedroom 4 person
4 bedroom 6 person
(e) The design and appearance of the Target Units shall be compatible 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.
(f) Unless the City Council makes the finding specified in Section 9121(a), A Housing
Incentive Agreement shall be entered into between the Developer and City and/or
the Redevelopment Agency to memorialize among other things, the Developer's
commitment to provide Target Units in accordance with this Chapter and other
applicable provisions of State Law. The Agreement shall be made a condition of
the development permits (e.g., tract maps, parcel maps, site plans, planned
Ordinance No. 1222
Page 8 of 12
development or conditional use permits, etc.) for all HOusing Developments
pursuant to this Chapter.
9132 LOCATION OF TARGET UNITS
(a) Target Units should be .built on-site wherever possible and, when practical, be
dispersed within the Housing Development. Where feasible, the number of
bedrooms of the Target Units should be 'equivalent to the bedroom mix of the non- . .
Target units of the Housing Development; except that the Developer may include a
higher proportion of Target Units with more bedrooms.
(b) Circumstances may arise in which the public interest would be served by allowing
some or all of the Target Un. its associated with' one Housing Development to be
constructed at an alternative development site. Where the developer and the City
agree in the Housing Incentive Agreement, the resulting linked developments shall
be considered a single Housing Development for purposes of this Chapter. Under
these circumstances, the developer shall be subject to the same requirements of
this Chapter for the Target Units to be provided on the alternative site.
PART 4 APPLICATION AND REVIEW
9141 Application Requirements and Review
(a) A developer proposing a Housing Development pursuant to this Chapter, may
submit a preliminary application prior to the submittal of any formal request for
approval of a permit for a Housing Development. Applicants are encouraged to
schedule a pre-application conference with the Director to discuss and identify
potential application issues. No charge 'will be required for the pre-application
conference. A preliminary application shall include the following information:
1. A description of the proposed Housing Development including the total number
of units, Target Units by income category, and Density Bonus Units.
2. The zoning and general plan designations and assessors parcel number(s) of
the project site.
3. The location of the target units within the housing development.
4. A plan by which the developer intends to ensure the continued affordability of
all Lower Income units for 30 years or longe. r if required by the construction or
mortgage financing assistance program, mortgage insurance program or rental
subsidy program.
Ordifiance No. 1222
Page 9 of 12
5. A plan by which the developer intends to ensure that the units 'intended for
Lower Income HousehOlds, as defined in the Health and Safety Code §
50079.5, shall be affordable at a rent that does not exceed 30 percent of 60
percent of the area median income.
6. A plan by which the developer intends to ensure'that the units intended for Very
Low Income Households, as defined in the Health and Safety Code § 50105.5,
shall be affordable at a rent that does not exceed 30 percent of 50 percent of
the area median income.
7. The number of additional "housing units" requested as the "density bonus" for
the housing development.
8. A descriptioh of all other incentives requested, their financial value based upon
the land cost per dwelling unit, an explanation of why they are needed and how
they will be utilized.
9. A description of the development and zoning standards requested to be
modified or waived and an explanation of why they are needed.
10.A vicinity map and preliminary site plan, drawn to scale, including building
footprints, driveway and parking layout.
11. If the developer requests to receive {he benefits of this Chapter, in the form of a
Waiver or. modification of a development standards or zoning code
requirements, the developer shall provide substantial facts in the form of a
development pro-forma that the waiver or modification is necessary to make the
,.... Target Units and other units in the Housing Development economically feasible.
: At a minimum, the development pro-forma shall include information identifying
capital costs,'equity investment, debt service, discount rate, revenues, vacancy
allowance, operating expenses, net income or net operating income, pre-tax
cash flow, after-tax cask flow, and return on investment.
12. The developer shall acknowledge in writing that a Housing Incentive Agreement
is required.
(b) An application for a Housing 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 6217(a)(1)-(12) 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, except that no approval shall be
effective until the City and Developer have executed a Housing Incentive
Agreement.
Ordinance No. I222
Page JO of 12
(c) Within 60 days of receipt of the preliminary application the City shall provide the
developer, a letter which identifies project issues of concern and the proposed
incentive that the Director would recommend to the Planning Commission and City
Council and the procedures for compliance with this Chapter.
(d) Where the developer proposed that the City provide direct financial incentives, the
proposal shall be considered by the Planning Commission for recommendation to
the City Council for their preliminary approval. A preliminary approval shall indicate
the City Council's approval of the proposal for processing, but no direct financial
incentives shall be deemed approved until embodied in the Housing Incentive
Agreement.
9142 HOUSING INCENTIVE AGREEMENT
(a) The terms of the draft Housing Incentive Agreement shall be reviewed and
approved by the Planning Commission and the City Attorney. The Planning
Commission shall provide recommendation to the City Council for final approval.
Final approval of such Agreement shall be a condition of issuance of any city
permit.
(b) The final approval of any documents as required by the Agreement shall take
place prior to final map approval, .or, where a map is not being processed, prior to
issuance of building permits for any parcels in the Housing Incentive Agreement.
The Agreement shall be binding to all future owners and successors jn interest.
(c) The Agreement shall include at least the following:
(1) The total number of units approved for the Housing Development
including the number of Target Units.
(2) A description of the household income group to be accommodated by the
Housing Development, and the standards for determining the
corresponding Affordable Rent or Affordable Sales Price.
(3) The location; unit sizes (square feet), and number of bedrooms of Target
Units.
(4) Affordability restrictions for Target Units of at least 10 or 30 years, as
applicable in accordance with this Chapter.
(5) A schedule, for completion and occupancy of Target Units.
Ordinance No. 1222 ' '
Page 11 oj'12
(6) A description of the Concession or Incentive or other Incentive of
Equivalent being provided by the City.
(7) A description of remedies for breach of the Agreement by either party (the
City may identify tenants or qualified purchasers as third party
beneficiaries under the agreement).
"""'" (8) Other provisions to .ensure implementation and compliance with this
Chapter and State Law.
(d) In the case of for-sale Housing Developments, the Agreement shall provide for the
following regarding the initial sale and use of Target Units during the applicable
use restriction period and for the respective affordability period:
(1) Target Units shall, upon initial sale, be sold to eligible Very Low or Lower
Income Households consistent with this Chapter or as approved by the City
Council at an Affordable Sales Price and Housing 'Cost or to Qualified
Residents (i.e., maintained as Senior citizen housing) as defined by this
Chapter.
(2) Target Units shall be initially owner-occupied by eligible Very Low or Lower
Income Households, o~: by Qualified Residents in the case of Senior citizen
housing.
(3) The Agreement shall provide for the continued affordability of the Target
Units for the applicable affordability pedod.
~.,. (e) In the case of rental Housing Developments, the Agreement shall provide for the
following conditions governing the use of Target Units during the affordability
period:
(1) The rules and procedures for qualifying tenants, establishing Affordable
Rent, filling vacancies, and maintaining Target Units for qualified tenants;
(2) Provisions requiring the owner to verify tenant incomes and maintain books
and records to demonstrate compliance with this Chapter and State Law.
(3) Provisions requiring owners to submit an annual report to the City/County,
which includes the name, address, and income of each person occupying
Target Units, and which identifies the bedroom size and monthly rent or
cost of each Target Unit.
Ordinance No. 1222
Page 12 of 12
Section 4. SEVERABILITY
if any section, subsection, sentence, clause, phrase or portion of this ordinance is for
any reason held to be invalid or-unconstitutional by the decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this ordinance. The City Council of the City of Tustin hereby declares that it
would have adopted this ordinance and each section, subsection, sentence, clause,
phrase or portion thereof irrespective of the fact that any one or more sections,
subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
PASSED AND ADOPTED by the City Council of the City of Tustin at a regular meeting
on the 15th day of Nov. ,1999. "
T~e!,//L/jay'o(~r ("d//~~'
Pamela Stoker
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF TUSTIN )
CERTIFICATION FOR ORDINANCE NO. 1222
PAMELA STOKER, City Clerk and ex.officio of the City Council of the City of Tustin,
California, does hereby certify that the .whole number of the members of the City
· Council if five; that the above and foregoing ordinance No. 1222 was duly and regularly
introduced at a regular meeting of the Tustin City Council, held on ls.t. day of Nov ,
1999 and was given its second reading, passed and adopted at a regular meeting of
the City Council held on the 15thof Nov..., 1999 by the following vote:
COUNCILPERSONSAYES: WORLEY, THOMAS, DOYLE, POTTS, SALTARELLI
COUNCILPERSONS NOES: NONE
COUNCILPERSONS ABSTAINED: NONE
Pamela Stoker, City Clerk
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