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HomeMy WebLinkAboutORD-02-08 Title 17 Amendment Reflecting State Density Bonus LawORDINANCE NO. 2- 08 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ORANGE APPROVING AN AMENDMENT TO TITLE 17 OF THE ORANGE MUNICIPAL CODE TO REFLECT THE STATE DENSITY BONUS LAW WHEREAS, the California Legislature enacted major revisions to the State's long-standing Density Bonus Law (Government Code Section 65915), providing density bonuses as high as 35 percent and regulatory concessions for new housing developments with as little as five percent affordable housing; and WHEREAS, the State's Density Bonus Law now requires that local governments adopt an ordinance implementing the Density Bonus Law that includes a procedure for evaluating preliminary applications and to specify which concessions will be offered developers of qualified development projects; and WHEREAS, by the adoption of Ordinance No. 1-93 on August 17, 1993, the City Council of the City of Orange implemented the State's former Density Bonus Law by adding Density Bonus Sections 17.14.270-17.14.330 (Senior Citizen Housing) and Sections 17.14.340-17 .14.420 (Affordable Housing) to the Orange Municipal Code (herein referred to collectively as the City's Density Bonus Ordinance); and WHEREAS, the City of Orange supports the development of affordable housing in the City to meet the housing needs of its citizens; and WHEREAS, on August 24, 1994, the City adopted the Affordable Housing Plan (AHP)which specifies density bonuses as the principal tool to be used to reach the City's affordable housing goals; and WHEREAS, the Planning Commission is authorizedpursuant to Section 17.10.020 of the Orange Municipal Code to make recommendations to the City Council regarding revisions to the City's Density Bonus Ordinance; and WHEREAS, in accordance with State and local law, the Planning Commission conducted one duly-noticed public hearing on December 3, 2007 to consider the proposed amendment to the City's Density Bonus Ordinance to implement the California Legislature's revisions to the State's Density Bonus Law, considered information presented by City staff and public testimony regarding the proposed amendment to the City's Density Bonus Ordinance,and by a vote of not less than a majority of its total membership recommended that the City Council approve the proposed amendment in the form of this ordinance; and WHEREAS, in accordance with State and local law, the City Council conducted a duly noticed public hearing on January 8, 2007 on the proposed amendment to the City's Density Bonus Ordinance to implement the California Legislature's revisions Bonus Law, reviewed and considered the recommendation of the Planning Commission, the proposed amendment in the form of this ordinance, the information presented by City staff, and public testimony regarding the proposed ordinance. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES ORDAIN AS FOLLOWS: SECTION I: Sections 17.14.270-17.14.420 of the Orange Municipal Code are hereby deleted in their entirety.SECTION II:The definition of "Density Bonus" in Section 17.04.023 of the Orange Municipal Code is hereby amended to read as follows:DENSITY BONUS means a density increase over the otherwise maximum allowable residential density under the applicable Zoning Ordinance regulations and land use element of the General Plan as of the date of application by the applicant to the City under and pursuant to Chapter 17.15 of this code.SECTION III:The definitions of "Manufactured Home", "Mobilehome" and "Mobilehome Park" in Section 17.04.032 of the Orange Municipal Code are hereby amended to read as follows:MANUF ACTURED HOME means a structure, transportable in one or more sections, which, in the traveling mode, is at least eight feet wide, forty feet long, and three hundred twenty square feet in area, which is built on a permanent chassis and designed to be used as a dwelling unit with or without a permanent foundation when connected to the required utilities, and which includes its own plumbing, heating, air conditioning, and electrical systems. Manufactured home includes a mobilehome but does not include a recreational vehicle (as defined in California Health and Safety Code Section 18010).MOBILEHOME is a structure designed for human habitation and for being moved on a street or highway under permit pursuant to Section 35790 of the California Vehicle Code. Mobilehome includes a manufactured home but,except as provided in subdivision (b) of Section 798.3 of the California Vehicle Code for certain specified trailers and recreational vehicles, does not include a recreational vehicle (as defined in Section 18010 of the California Health and Safety Code) or a commercial coach or commercial modular (as defined in Section 18001.8 of the California Health and Safety Code). MOBILEHOME PARK is any area or tract of land where two or more lots are rented or leased, held out for rent or lease, or were formerly held out for rent or lease and later converted to a subdivision, cooperative, condominium, or other form of resident ownership, to accommodate manufactured homes or mobilehomes used for human habitation. SECTION IV: The following definition shall be added to Section 17.04.036 of the Orange Municipal Code: QUALIFYING RESIDENT means a person fifty-five (55) years of age or older in a Senior Citizen Housing Development and includes other persons eligible to reside in a Senior Citizen Housing Development, as defined in Section 51.3 of the California Civil Code.SECTION V:The definitions of "Senior Citizen Apartment Project" and "Senior Citizen Housing,Congregate Care" in Section 17.04.038 of the Orange Municipal Code are hereby deleted in their entirety.SECTION VI:The definition of Senior Citizen Housing Development in Section 17.04.038 of the Orange Municipal Code is hereby amended to read as follows:SENIOR CITIZEN HOUSING DEVELOPMENT means a residential development developed, substantially rehabilitated, or substantially renovated for,Qualifying Residents that has at least thirty-five (35) dwelling units and otherwise meets the requirements of Section 51.3 of the California Civil Code. SECTION VII:Sections 17.34.170 of the Orange Municipal Code IS hereby amended to read as follows:17.34.170 Loading Areas for Residential Uses.Loading areas shall be required only for Senior Citizen Housing Developments, as defined by Section 17.04.038 of this Title. Loading area shall be provided as specified in Table 17. 34.160. SECTION VIII:Subparagraph "G" of Section 17.14.060 of the Orange Municipal Code is hereby amended to read as G. Senior Citizen Housing Development. A Senior Citizen Housing Development shall be developed in accordance with the requirements contained in Chapter 17.15 of this Title. SECTION IX: Title 17 of the Orange Municipal Code is hereby amended by adding Chapter 17.15 thereto, to read in full as follows: Sections: 17.15.010 17.15.020 17.15.030 17.15.040 17.15.050 17.15.060 17.15.070 17.15.080 17.15.010 Chapter 17.15 DENSITY BONUS ORDINANCE Purpose. Definitions. Projects Eligible for Density Bonus. Calculation of Density Bonus. Concessions and Incentives; Waivers and Reductions; Reduced Parking Standards. Application Requirements and Review. Density Bonus Housing Agreement. General Standards and Requirements. Purpose. This chapter is intended to comply with the State Density Bonus Law (Government Code Section 65915), which provides that a local government shall grant a Density Bonus and regulatory Concessions and Incentives to a developer of a Housing Development, Child Care Facilities, or for the donation of land for housing, where the developer agrees to construct a specified percentage of housing for Lower Income Households, Very Low Income Households, Moderate Income Households or.Qualifying Residents. 17.15.020 Definitions. For the purpose of carrying out the intent of this chapter, the following words, phrases and terms shall have the meaning ascribed to them in this section. A. AFFORDABLE HOUSING COST means monthly Housing Cost payments for any owner-occupied Affordable Unit which are not less than 28% of the gross income of the household and may not exceed the following: (i) for a Very Low Income Household, the product of thirty percent (30%) times fifty percent (50%) of the Area Median Income adjusted for family size appropriate for the Affordable Unit and divided by twelve (12); (3) for a Lower Income Household, whose gross income exceeds the maximum income for Very Low Income Households and does not exceed seventy percent (70%) of the Area Median Income adjusted for family size, the product of thirty percent (30%) times seventy percent (70%) of the Area Median Income adjusted for family size appropriate for the Affordable Unit and divided by twelve (12); and (iii) for a Moderate Income Household, the product of thirty-five percent 35%) times one hundred ten percent (11 0%) of the Area Median Income adjusted for family size appropriate for the Affordable Unit and divided by twelve ( 12).B. AFFORDABLE RENT means monthly housing expenses, including a reasonable allowance for utilities paid for by the tenant, that does not exceed the following calculations: (i) for a Very Low Income Household, the product of thirty percent (30%) times fifty percent (50%) of the Area Median Income adjusted for family size appropriate for the Affordable Unit and divided by twelve (12); (ii) for a Lower Income Household whose gross income exceeds the maximum income for Very Low Income Households, the product of thirty percent (30%) times sixty percent (60%) of the Area Median Income adjusted for family size appropriate for the Affordable Unit and divided by twelve (12); and (iii) for a Moderate Income Household, the product of thirty percent (30%) times one hundred ten percent ( 110%)of the Area Median Income adjusted for family size appropriate for the Affordable Unit and divided by twelve ( 12).C. AFFORDABLE SALES PRICE means a sales price at which a Lower Income Household or a Very Low Income Household can qualify for the purchase of an Affordable Unit, calculated on the basis of underwriting standards of mortgage financing available for the Housing Development.D. AFFORDABLE UNIT means a housing unit, both single and multiple family,within a Housing Development, which will be reserved for sale or rent to, and affordable to, a Lower Income Household, a Very Low Income Household, a Moderate Income Household, or a Qualifying Resident.E. AREA MEDIAN INCOME means the median family income of the County of Orange, as annually estimated by the United States Department of Housing and Urban Development (HUD) pursuant to Section 8 of the United States Housing Act of 1937 or the California Department of Housing and Community Development in the event HUD discontinues its determination of Area Median Income.F. CHILD CARE FACILITY means a child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities,and school-age child care centers.G. COMMON INTEREST DEVELOPMENT means a community apartment project, a condominium project, a planned development or a stock cooperative, as defined by Section 135l of the California Civil Code, provided that all units in the development are offered to the public for H. CONCESSIONS AND INCENTIVES means any of the following: l. A reduction in site Development Standards or a modification of Zoning Ordinance requirements or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission as provided in Part 2.5 commencing with Section l890l) of Division 13 of the Health and Safety Code, including, but not limited to, the following: a. A reduction in: (1) mInImUm lot setbacks and mInImUm lot sizes and/or dimensions, (2) open space requirements, (3) minimum outdoor and/or private outdoor living area, (4) the ratio of vehicular parking spaces that would otherwise be required, (5) on-site parking standards, including the number or size of spaces and garage requirements, (6) minimum building separation requirements, and/or (7) street standards (e.g., reduced minimum street widths);and/ or b. an increase in: (l) maximum lot coverage, and/or (2) maximum building height and/or stories.Such Concessions and Incentives must result in identifiable, financially sufficient, and actual cost reductions for the Housing Development.2. Approval of mixed use zoning in conjunction with the Housing Development 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 Development and the existing or planned development in the area where the proposed Housing Development will be located.3. Other regulatory incentives or concessions proposed by the applicant or the City that result in identifiable, financially sufficient and actual cost reductions for the Housing Development.The term "Concessions and Incentives" does not limit or require the provision of direct financial incentives for the Housing Development, including the provision of publicly-owned land, by the City, or the waiver of fees or dedication requirements.A Housing Development that provides Affordable Units must show that the requested Concessions and Incentives directly affect the economic feasibility of including the Affordable Units in the Housing Development and will result in identifiable, financially sufficient and actual cost reductions for the Housing Development.1. DENSITY BONUS shall have the same meanIng assigned to that term In Section 17. 04. J. DENSITY BONUS HOUSING AGREEMENT means a legally binding agreement between an applicant for a Housing Development and the City to ensure that the requirements of this chapter are satisfied. The agreement, among other things, shall establish the number of Affordable Units, their size, location, terms and conditions of affordability, and production schedule. K. DEVELOPMENT STANDARD means site or construction conditions that apply to a Housing Development affecting the physical location or type of construction (such as drainage, grading, the placement of public works improvements, and utilities) pursuant to any ordinance, a General Plan element, specific plan, or other City condition, law, policy, resolution or regulation, but do not include the modification of Zoning Ordinance requirements or architectural design requirements, procedural requirements, and development impact fees. L. EXTREMEL Y LOW INCOME HOUSEHOLDS means persons and families whose annual income does not exceed thirty percent (30%) of the Area Median Income adjusted for family size, as established and amended from time to time by HUD. M. HOUSING COST means the following for a person or family purchasing an Affordable Unit in a Housing Development: a) Principal and interest on a mortgage loan including any rehabilitation loans, and any loan insurance fees associated therewith. b) Property taxes and assessments. c) Fire and casualty insurance coverIng replacement value of property improvements. d) Property maintenance and repairs. e) A reasonable allowance for utilities, including garbage collection, sewer, water, electricity, gas, and other heating, cooking, and refrigeration fuels. "Utilities" does not include telephone service. Such an allowance shall take into consideration the cost of an adequate level of service. f) Homeowner association fees. g) Space rent, if the housing unit is situated on rented land. Monthly Housing Cost of a purchaser shall be an average of estimated costs for the next twelve months. N. HOUSING DEVELOPMENT means (1) one or more groups of projects of five 5) or more residential units constructed in a planned development; (2) a subdivision or Common Interest Development approved by the City and consisting of five (5) or more residential units or unimproved residential lots; and (3) either a project to substantially 7 rehabilitate and convert an existing commercial building to residential use or the substantial rehabilitation of an existing Multifamily Dwelling where the result of the rehabilitation would be a net increase in available residential units of five (5) or more. O. LOWER INCOME HOUSEHOLDS means persons and families whose incomes do not exceed the qualifying limits for lower income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 applicable to the County or Orange. Lower Income Households includes Very Low Income Households and Extremely Low Income Households. P. MAXIMUM ALLOWABLE RESIDENTIAL DENSITY means the maximum number of residential units permitted by the City's Zoning Ordinance at the time of application excluding the provisions of this chapter), or if a range of density is permitted, means the maximum allowable density for the specific zoning range applicable to the Housing Development. Q. MOBILE HOME PARK shall have the same meaning assigned to that term in Section 17.04.032 but, for purposes of this chapter, shall be limited to a mobile home park that limits residency based on age requirements for housing for older persons pursuant to Sections 798.76 or 799.5 of the California Civil Code. R. MODERATE INCOME HOUSEHOLDS means persons and families of low or moderate income whose income exceeds the income limits for Lower Income Households. S. MULTIFAMILY DWELLING means any structure designed for human habitation that has been divided into two or more legally created independent living quarters. T. OTHER INCENTIVES OF EQUIVALENT FINANCIAL VALUE means, for purposes of the conversion of apartments to a condominium project, the reduction or waiver of requirements which the City might otherwise apply as conditions of conversion approval, the value of which would be generally equivalent to the value of a Density Bonus for which the proposed conversion project would be eligible under paragraph "D" of Section 17.15.030. U. QUALIFYING RESIDENT shall have the same meaning assigned to that term in Section 17.04.036. V. SENIOR CITIZEN HOUSING DEVELOPMENT shall have the same meaning assigned to that term in Section 17.04.038. W. VERY LOW INCOME HOUSEHOLDS means persons and families whose incomes do not exceed the qualifying limits for very low income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 applicable to the County of Orange. Very Low Income Households includes Extremely Low Income Households. x. WAIVERS AND REDUCTIONS means modifications to Development Standards that would otherwise preclude construction of the Housing Development with the 8 Density Bonus and Concessions and Incentives to which the Housing Development is entitled and that are needed to make the Housing Development economically feasible. Waivers and Reductions are not limited to Housing Developments containing Affordable Units and may be requested by any applicant requesting a Density Bonus, including bonuses for a Senior Housing Development, a condominium conversion and a Child Care Facility. 17.15.030 Projects Eligible for Density Bonus. Density bonuses are available to five (5) categories of Housing Developments: A. Affordable Housing. All Housing Developments consisting of five (5) or more dwelling units (excluding any units permitted by the Density Bonus awarded pursuant to this chapter) are eligible for one Density Bonus, the amount of which shall be as specified in Section 17.15.040, and Concessions and Incentives, as described in Section 17.15.050, when an applicant for a Housing Development seeks and agrees to construct a Housing Development that will contain at least anyone of the following: 1. Five percent (5%) of the total units of a Housing Development are affordable to Very Low Income Households. 2. Ten percent (10%) of the total units of a Housing Development are affordable to Lower Income Households. 3. Ten percent (10%) of the total units in a Common Interest Development for Moderate Income Households where all of the units in the Housing Development, including the moderate income units, are available for sale to the public. These required percentages of Affordable Units apply only to the Housing Development without any Density Bonus units, not the entire Housing Development. For example, assume that a 100-unit Housing Development is entitled to a twenty percent ( 20%)Density Bonus, giving a total of 120 units. To qualify for the twenty percent (20%) Density Bonus, the Housing Development need only provide five (5) units affordable to Very Low Income Households (5% of 100) or ten (10) units affordable to Lower Income Households 10% of 100).B. Senior Citizen Housing Development or Mobile Home Park. A Senior Citizen Housing Development or a Mobile Home Park are eligible for a Density Bonus, as calculated in Table I of this chapter, even if none of the units are affordable. The Density Bonus for a Senior Citizen Housing Development or a Mobile Home Park shall be permitted in geographic areas of the Housing Development other than the areas where the Qualifying Resident or Mobile Home units are located.C. Donations of Land. An applicant for a tentative subdivision map, parcel map, or other residential development approval, who donates land to the City in accordance with this paragraph "C", shall be entitled to a Density Bonus for the entire Housing Development, as calculated in Table I of this chapter, provided the parcel is large enough to accommodate at least ten percent (10%) of the market rate units at densities suitable for housing affordable to Very Low Income Households. In other words, a 500-unit market rate Housing Development is eligible to receive a Density Bonus by donating land zoned at densities that can accommodate, and are suitable for, 50 units of housing affordable to Very Low Income Households. The Density Bonus required by this paragraph "C" may be combined with the Density Bonuses given for Affordable and Senior Housing mandated by paragraphs "A" or " B"of this Section 17.15.030, provided, however, that in no event can the total Density Bonus for a Housing Development that donates land for Very Low Income housing exceed thirty-five percent (35%). An applicant shall be eligible for the increased Density Bonus described in this paragraph "C" if all of the following conditions are met:I. The applicant donates and transfers the land no later than the date of approval of the final subdivision map, parcel map or residential development application.2. The land being transferred has all permits and approvals, other than building permits necessary for the development of housing units affordable to Very Low Income Households.3. The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to Very Low Income Households in an amount not less than ten percent (10%) of the number of residential units of the proposed Housing Development.4. The transferred land is at least one (1) acre in size or of sufficient size to permit development of at least forty (40) units, has the appropriate General Plan designation, is appropriately zoned for development as affordable housing, and is or will be served by adequate public facilities and infrastructure. The land shall have appropriate zoning and Development Standards to make the development of the units affordable to Very Low Income Households feasible.No later than the date of approval of the final subdivision map, parcel map, or of the residential development, the transferred land shall have all of the permits and approvals, other than building permits, necessary for the development of the units affordable to Very Low Income Households on the transferred land, except that the City may subject the proposed Housing Development to subsequent design review to the extent authorized by subdivision "(i)" of Section 65583.2 of the California Government Code if the design is not reviewed by the City prior to the time of transfer.5. The land is transferred to the City or the Orange Redevelopment Agency or to a housing developer approved by the City. The City may require the applicant to identify and transfer the land to the developer.6. The transferred land shall be within the boundary of the proposed Housing Development or, if the City agrees, within one-quarter (114) mile of the boundary of the proposed 7. The transferred land and the Affordable Units shall be subject to a Density Bonus Housing Agreement ensuring continued affordability of the Affordable Units pursuant to Section 17.15.070, which Density Bonus Housing Agreement or a memorandum thereof) shall be recorded in the Official Records of the County of Orange prior to final map approval or, where a map is not being processed, prior to the issuance of building permits for such Affordable Units. D. Condominium Conversions. A condominium conversion is eligible for either 1) a Density Bonus of twenty-five percent (25%) over the number of apartments to be provided within the existing structure or structures proposed for conversion (meaning that additional units must be added on the site either by subdividing existing units or adding units on the site), or (2) Other Incentives of Equivalent Financial Value, so long as (1) the applicant agrees to pay for the reasonably necessary administrative costs incurred by the City, and (2) the condominium conversion includes either thirty-three percent (33%) of the units affordable to Moderate Income Households or fifteen percent (15%) of the units affordable to Lower Income Households. 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 purchases who are Lower Income Households or Moderate Income Households.An applicant shall submit to the City a preliminary proposal pursuant to this Section 17.15.030 prior to the submittal of any formal request for approval to convert apartments to a condominium project pursuant to Section 17.30.040. The City shall, within thirty (30) days of receipt of a written proposal, notify the applicant in writing of the manner in which it will comply with this paragraph "D".An applicant shall be ineligible for a Density Bonus under this paragraph "D" if the apartments proposed for conversion received a Density Bonus or other Concessions and Incentives when they were originally constructed.E. Child Care Facilities. A Housing Development is eligible for an additional Density Bonus that will be located on the premises of, as part of, or adjacent to, the Housing Development if it includes a Child Care Facility and either qualifies as a Senior Citizen Housing Development or includes enough Affordable Units to be eligible for a Density Bonus under paragraph "A" of thisSection 17.15.030. When an applicant proposes to construct such a Housing Development, the City shall grant either of the following:1. An additional Density Bonus that is an amount of square feet of residential space equal to or greater than the amount of square footage in the Child Care Facility; or 2. An additional Concession or Incentive that contributes significantly to the economic feasibility of the Child Care As a condition of approving a Housing Development that includes a Child Care Facility, the City shall require the following: 1. The Child Care Facility shall remain in operation for a period of time that is as long or longer than the period of time during which the Affordable Units are required to remain affordable (i.e., thirty (30) years in the case of Very Low Income and Lower Income Households); 2. Of the children who attend the Child Care Facility, the children of Very Low Income Households, Lower Income Households or Moderate Income Households shall equal a percentage that is equal to or greater than the percentage of Affordable Units that are required in the Housing Development for Very Low Income Households, Lower Income Households or Moderate Income Households. In other words, if the Housing Development qualified for a Density Bonus because ten percent (10%) of the units were affordable to Moderate Income Households, then ten percent (10%) of the children at the Child Care Facility must come from Moderate Income Households. Notwithstanding the foregoing, the City shall not be required to provide a Density Bonus or Concession for a Child Care Facility if it finds, based upon substantial evidence, that the community has adequate Child Care Facilities. 17.15.040 Calculation of Density Bonus. A. For the purpose of calculating the amount of the Density Bonus under paragraphs "A" or "B" of Section 17.15.030, an applicant requesting a Density Bonus shall elect whether the Density Bonus shall be awarded on the basis of the particular affordability category set forth in subparagraphs 1, 2 or 3 of paragraph "A" of Section 17.15.030 or on the basis of paragraph "B" of Section 17.15.030. The amount of the Density Bonus shall be as calculated in Table 1 of this chapter. The amount of the Density Bonus to which the applicant is entitled shall vary according to the amount by which the percentage of Affordable Units exceeds the percentage established in subparagraphs 1, 2 or 3 of paragraph "A" of Section 17.15.030. B. All density calculations resulting in fractions shall be rounded up to the next whole number. For example, a Housing Development with 102 units, ten percent (10%) of which are affordable to Lower Income Households, is entitled to 21 bonus units (i.e., 20% X 102 = 20.4, or 21 bonus units). The number of Affordable Units must also be rounded up. Thus, in a 102-unit Housing Development, an applicant would need to provide 11 units to meet the ten percent (10%) requirement (i.e., 10% X 102 = 10.2, or 11 units affordable to Lower Income Households).C. The applicant may elect to accept a lesser percentage of Density Bonus. Table I- Calculating Density Bonuses Additional Bonus for Each 1 % % Units in Minimum Increase in Category Affordable Units % Units in Bonus Affordable Required or Category Category Granted Units in for Maximum Category 35% Bonus Very Low Income 5% 20% 2.5% 11%Lower Income 10% 20% 1.5% 20%Moderate Income 10% 5% 1% 40%ownership only)Senior Citizen Housing Entire No sliding scale Development or Mobile development 20% provided -- Home Park No affordable units required) 10% of Land donation for market rate 15% 1% 30% Very-Low Income Housing units Condominium Conversion - 33% 25% -- --Moderate Income Condominium Conversion - 15% 25% -- --Lower Income Child Care Facility -- Sq. ft. -- -- in day care center Notes: A Density Bonus may be selected from only one category, except that Density Bonuses for land donation may be combined with others, up to a maximum of 35%, and an additional square foot bonus may be granted for a Child Care Facility.13 17.15.050 Concessions and Incentives; Waivers and Reductions; Reduced Parking Standards. A Housing Development eligible for a Density Bonus is also eligible for three types of regulatory concessions: (A) Concessions and Incentives, (B) Waivers and Reductions, and (C) reduced parking standards. An applicant may request a meeting with the Director of Community Development (or his/her designee) to discuss his/her proposal for one or more of those regulatory concessions. The granting of a Concession or Incentive shall not be interpreted, in and of itself, to require a General Plan amendment, zoning change or other discretionary approval. A. Concessions and Incentives. An applicant for a Density Bonus may submit to the City a proposal for one to three Concessions and Incentives depending upon the percentage of Affordable Units provided, as shown in Table 2 of this chapter, and may request a meeting with the Director of Community Development (or his/her designee). The City shall grant the Concessions and Incentives requested by the applicant unless the City makes a written finding, based upon substantial evidence, of any of the following: 1. The application for Concessions and Incentives fails to meet the threshold requirements of the definition of Concessions and Incentives set forth in Section 17.15.020, in particular, that they do not result in identifiable, financially sufficient, and actual cost reduction" for the Housing Development; or 2. The Incentives and Concessions are not required in order to provide for Affordable Housing Costs or for Affordable Rents for the Lower Income Density Bonus units proposed by the applicant; or 3. The Incentives and Concessions would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5 of the Government Code, upon public health, safety or the physical environment for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the Housing Development unaffordable to Low- and Moderate-Income Households; or 4. The Incentives and Concessions would have an adverse impact on any real property that is listed in the California Register of Historical Resources; or 5. The Incentives and Concessions would have an adverse effect on any real property that qualifies for inclusion in a local, state or federal listing of historically significant resources. An adverse effect is found when a project eligible for a Density Bonus may alter, directly or indirectly, any of the characteristics of any real property that qualifies for inclusion in a local, state or federal listing of historically significant resources in a manner that would diminish the integrity of the property's location, design, setting, materials,workmanship, feeling, or association. Table 2 - Maximum Incentive(s)/ Concessions(s)Target Units or Affordability Categorv % of Target Units Very low-income 5% 10% 15% Lower-income 10% 20% 30%Moderate-income (ownership units 10% 20% 30%only)Condominium Conversion - ( d)33% Moderate income Condominium Conversion - (d) 25% Lower income Child Care Facility (d) Maximum Incentives/ 1 2 3 Concessions (a) (b) (c) Notes: a) A Concession or Incentive may be requested only if an application is also made for a Density Bonus. b) Concessions and Incentives may be selected from only one category Very Low, Lower or Moderate). c) No Concessions and Incentives are available for land donation or market rate Senior Citizen Housing Development or Mobile Home Park. d) Condominium conversions and Child Care Facilities may have one Concession or a Density Bonus at the City's option, but not both. 15 B. Waivers and Reductions. In addition to requesting Concessions and Incentives, an applicant for a Density Bonus may submit to the City a proposal for the Waiver or Reduction of an unlimited number of Development Standards that would otherwise preclude or inhibit construction of a Housing Development with the Density Bonus and Concessions and Incentives to which the Housing Development is entitled and that are needed to make the Housing Development economically feasible. The applicant is required to show to the satisfaction of the City that the Development Standard being waived will preclude or inhibit the construction of the Housing Development with the Density Bonus and Concessions and Incentives requested and, secondly, that the Waiver or Reduction is necessary to make the Housing Development economically feasible. The applicant must submit a project financial report (pro forma) and any further revisions thereto that the City may request from time to time to allow the City to evaluate the financial need for the request for a Waiver or Reduction. The City may retain a consultant to review the financial report. The cost of the City's consultant shall be borne by the applicant, unless the applicant is a non-profit organization, in which event the cost of the consultant may be paid by the City upon prior approval of the City Council.Waivers and Reductions may also be requested by any applicant requesting a Density Bonus for a Senior Citizen Housing Development, a Mobile Home Park, a condominium conversion or a Child Care Facility.Following the review process as set forth for Major Site Plan Review in Section 17.10.060, the City shall waive or reduce Development Standards requested by the applicant unless the City determines that the application for a Waiver or Reduction (1) fails to meet the threshold requirements of the definition of Waiver or Reduction set forth in Section 17.15. 020,or (2) would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5 of the Government Code, upon health, safety or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact; or (3) would have an adverse impact on any real property that is listed in the California Register of Historical Resources.C. Reduced Parking Standards. Upon the request of an applicant for a Housing Development that qualifies for a Density Bonus because it is a Senior Housing Development or provides Affordable Units, the City must reduce the required parking for the entire Housing Development, including the market rate units, to the following:Zero to one bedroom:Two to three bedrooms:Four or more bedrooms:one on-site parking space two on- site parking spaces two and one- half on-site parking spaces These numbers include guest parking and handicapped parking. These reduced parking standards will be treated as a Concession or Incentive if they are lower than normally required by the Zoning Ordinance.If the total number of parking spaces required for a qualified Housing Development is other than a whole number, the number shall be rounded up to the Housing Development may provide on-site parking through tandem parking or uncovered parking, but not through on- street parking.17.15.060 Application Requirements and Review.All applicants proposing to construct a Housing Development, a Senior Citizen Housing Development, a Mobile Home Park, a condominium conversion or a Child Care Facility, who are eligible to utilize the provisions of this chapter, are subject to the following application procedures:A. Preliminary Application. An applicant shall submit a preliminary application to the City's Department of Community Development prior to the submittal of any formal application. Applicants are encouraged to schedule a pre-application conference with the City's Director of Community Development or designated staff to discuss and identify potential application issues. A preliminary application shall include a preliminary site plan including building footprints, driveway and parking layout) and narrative description of the Housing Development.The description shall detail the general scope of the proposed project, zoning and General Plan designation of the property, assessor's parcel numbers of the project site, and,based upon the site constraints and proposed housing product type, the maximum possible density permitted under the current Zoning Ordinance and General Plan designation, and specifying the total number of units, Affordable Units, Density Bonus units proposed, the Concessions and Incentives, Waivers and Reductions and reduced parking standards requested.Within thirty (30) days of receipt of the preliminary application, the City shall provide to the applicant a letter which identifies project issues of concern.B. Formal Application. Formal application for a Density Bonus shall follow the review process for Major Site Plan Review as set forth in Section 17.10.060 and shall be processed concurrently with any other discretionary or ministerial entitlement applications required for the Housing Development, which shall be processed in accordance with the requirements set forth in this code for such other entitlements. Final approval or disapproval of an application for a Density Bonus (with right of appeal to the City Council) shall be made by the Planning Commission, unless direct financial assistance is requested. If direct financial assistance is requested (for example, a loan or a grant to subsidize or provide low interest financing for on- or off-site improvements, land or construction costs), the Planning Commission shall make a recommendation to the City Council, who will have the authority to make the final decision on the application.In addition to all of the documentation and information required to be submitted by the applicant when seeking a preliminary determination, the applicant shall submit the same documentation and information with such refinements, modifications and supplemental information that is responsive to the letter issued by the City' s Director of Community Development in response to the applicant's preliminary application, along with the following additional 17.15.070 1.A development pro-forma with the capital costs, operation expense, return on investment, loan-to-value ratio and the debt coverage ratio including the contribution(s) provided by any applicable subsidy program( s), and the economic effects created by the minimum thirty (30) year use and income restriction on the Affordable Units;2.An appraisal report indicating the value of the Density Bonus and of the Incentive( s )/Concession( s);3.A use of funds statement identifying the financing gaps for the Housing Development with the Affordable Housing units. The analysis shall show how much the funding gap is covered by the Density Bonus and how much by the Incentive(s)/ Concession(s); and 4.Any other information requested by the City's Director of Community Development.Density Bonus Housing Agreement.The applicant requesting a Density Bonus under this chapter shall agree to construct,operate and maintain the Affordable Units for Lower and Very Low Income Households in accordance with a Density Bonus Housing Agreement with the City. The applicant shall draft the Density Bonus Housing Agreement. The terms of the Density Bonus Housing Agreement shall be reviewed and revised as appropriate by the City's Director of Community Development and City Attorney. Once determined acceptable by the City Attorney and the Director of Community Development, the Director of Community Development shall formulate a recommendation to the Planning Commission for final approval.Following execution by all parties, the Density Bonus Housing Agreement (or memorandum thereof) shall be recorded on the parcel or parcels designated for the construction of the Affordable Units. The approval and recordation shall take place prior to final map approval, or, where a map is not being processed, prior to the issuance of building permits for the Housing Development. The Density Bonus Housing Agreement shall be binding upon all future owners and successors in interest.The City may establish fees associated with the setting up and monitoring of the Affordable Units.The Density Bonus Housing Agreement shall include at least the following:A. Identification of Affordable Units. Affordable Units shall be identified by address and legal description, type (floor area, number of bedrooms/baths, unit size, etc.), and designated household income category. The Density Bonus Housing Agreement shall also identify the total number of Affordable Units and the total number of units approved for the B Terms of Affordability. Tenure of use restrictions for the Affordable Units ofa minimum of thirty (30) years or a longer period of time if required by the construction or mortgage financing assistance program, or mortgage insurance program or rental subsidy program. Such reservation period shall begin on the date a certificate of occupancy is granted for the Affordable Units. C. Maximum Allowable Rent or Sales Price. I. Rental Housing Developments. In the case of rental Housing Developments, the Density Bonus Housing Agreement shall provide for the following conditions governing the use of the Affordable Housing units during the use restriction period: a. The rules and procedures for qualifying tenants, establishing Affordable Rent, filling vacancies, and maintaining the Affordable Units for qualified tenants; b. Provisions requmng owners to verify tenant incomes and maintain books and records to demonstrate compliance with this chapter. c. Provisions requiring owners to submit an annual report to the City, which includes the name, address and income of each person occupying each Affordable Unit, and which identifies the bedroom size and monthly rent or cost of each Affordable Unit. d. Determination of Rent. A maximum rent schedule shall be submitted to the Department of Community Development prior to the issuance of an occupancy permit for the Affordable Units, and updated annually on the anniversary date of occupancy. e. Deposit Amount. Total move-in costs for eligible tenants occupying Affordable Units shall be limited to first month's rent plus a security/cleaning deposit not to exceed one month's rent.f. Upward Mobility Allowance. When a tenant occupying an Affordable Unit no longer qualifies under the income requirements, verified through the monitoring program required as part of the Density Bonus Housing Agreement, that tenant may then be charged market rate rent. If this occurs, any currently vacant unit of similar type to the Affordable Unit in question shall then be designated as an Affordable Unit, and the owner shall immediately attempt to secure tenants in accordance with this chapter. The owner is required to maintain at all times during the use restriction the minimum number of Affordable Units identified in the Density Bonus Housing Agreement.g. Subletting of Affordable Units. No subletting of designated Affordable Units shall be allowed unless the following conditions are met: 1. Written permission is obtained from the City's Director of Community Development; and, 11. The sublessee qualifies as a Very Low or Lower Income Household. 111. The rent collected shall not exceed the maximum Affordable Rent. 2. Ownership Projects. In the case of for-sale Housing Developments, the Density Bonus Housing Agreement shall provide for the following conditions governing the initial sale and use of Affordable Units during the applicable use period:a Affordable Units shall, upon initial sale, be sold to eligible Very Low and Lower Income Households at an Affordable Sales Price and Housing Cost, or to Qualifying Residents in the case of a Senior Citizen Housing Development.b. Affordable Units shall be initially owner-occupied by eligible Very Low or Lower Income Households, or by Qualifying Residents in the case of a Senior Citizen Housing Development.c. The initial purchaser of each Affordable Housing Unit shall execute an instrument or agreement approved by the City restricting the sale of the Affordable Housing Unit in accordance with this chapter during the applicable use restriction period. Such instrument or agreement shall be recorded against the parcel containing the Affordable Housing Unit and shall contain such provisions as the City may require to ensure continued compliance with this chapter and the state Density Bonus Law.d. Sale Clause. The Density Bonus Housing Agreement shall stipulate that, when the terms of affordability have expired on an Affordable Unit, the City, its redevelopment agency and/or a non-profit housing organization shall have a first right of purchase option sixty (60) days prior to the Affordable Unit being advertised on the market.e. Rental of For-Sale Units. Rental of Affordable Units shall not be allowed unless the proposed renter(s) qualifies as a Very Low or Lower Income Household.f. Monitoring of Compliance to Agreement. A monitoring program shall be required, specifying the party responsible for certifying tenant incomes and rent levels or sales price, maintaining the required number of Affordable Units and each Affordable Unit's property, and marketing and 3. Equity Sharing Agreements. In the case of moderate income units in a Common Interest Development that are directly related to the receipt of a Density Bonus and offered for sale to Moderate Income Households at an Affordable Housing Cost, the initial occupants shall be required to enter into an equity sharing agreement with the City, unless such an agreement would be in conflict with the requirements of another public funding source or law, in accordance with the following: a. Upon resale, the seller of the Affordable Housing Unit shall retain the value of any improvements, the down payment, and the seller's proportionate share of appreciation. The City shall recapture any initial subsidy and its proportionate share of appreciation, which shall then be used within three years for any of the purposes described in subdivision (e) of Section 33334.2 of the Health and Safety Code that promote homeownership. b. The City's initial subsidy shall be equal to the fair market value of the Affordable Unit at the time of initial sale minus the initial sale price to the Moderate-Income Household plus the amount of any down- payment assistance or mortgage assistance. If, upon resale, the market value is lower than the initial market value, the value at the time of the resale shall be used as the initial market value.c. The City's proportionate share of appreciation shall be equal to the ratio of the initial subsidy to the fair market value of the Affordable Unit at the time of initial sale.D. Description of remedies for breach of the Density Bonus Housing Agreement by either party (the City may identify tenants or qualified purchasers as third party beneficiaries under the agreement).E. the City.A description of the Incentives and/or Concessions, if any, being provided by F.A schedule for completion and occupancy of the Affordable Units.G.Other provisions to ensure implementation and compliance with this chapter.H. An approved Density Bonus application that is not used within the time specified in the Density Bonus Housing Agreement, shall within two years after the granting of such approval, become null and void and of no effect except, where an application requesting an extension is filed prior to such expiration date, the Director of Community Development may extend such 17.15.080 General Standards and Requirements. A. Affordable Units in a Housing Development and phases of a Housing Development shall be constructed concurrently with or prior to the construction of market rate units, unless the applicant agrees within the Density Bonus Housing Agreement to an alternative schedule for development. B. First priority for the Affordable Units shall be given to eligible persons and families who reside, work, go to school or have family in the City of Orange. C. Affordable Units shall be dispersed throughout the Housing Development. The number of bedrooms of the Affordable Units should be equivalent to the bedroom mix of the market rate units of the Housing Development, except that the applicant may include a higher proportion of Affordable Units with more bedrooms. The design and appearance of the Affordable Units shall be compatible with the market rate units, except for the reduction of interior amenities for the Affordable Units, which will be permitted upon prior approval of the Planning Commission as necessary to retain project feasibility. D. Any Affordable Units in a Housing Development in the City's redevelopment project area (or areas) provided by an applicant to comply with the redevelopment affordable housing production requirements of Section 33413(b) of the California Health and Safety Code will count toward meeting the Density Bonus requirements of this chapter. E. If a tenant is displaced so that an applicant may perform any construction, renovation or addition pursuant to a Density Bonus application, then each such tenant shall be given a right of first refusal to occupy any unit for which the tenant qualifies in the newly constructed or renovated Housing Development. The tenants shall be offered the units in the following order of priority: 1. Households in which at least one member is sixty-two (62) years of age or older.2. Households with the lowest annual income.F. Nothing in this chapter shall be construed to prohibit the City from granting a Density Bonus greater than what is described in Table 1 for a Housing Development that meets the requirements of this chapter or from granting a proportionately lower Density Bonus than what is required by this chapter for a Housing Development that does not meet the requirements of this chapter. Thirty-five percent (35%) represents the maximum amount of a Density Bonus the City is required to provide, not the maximum amount an applicant can ever obtain. An applicant may negotiate with the City to obtain a Density Bonus for a Housing Development higher than the maximum amount set forth in Table I in exchange for including even more Affordable Units than is provided in Table 1 and/or the provision of other amenities or SECTION X: A summary of this Ordinance shall be published and a certified copy of the full text of this Ordinance shall be posted in the Office of the City Clerk at least five (5) days prior to the City Council meeting at which this Ordinance is to be adopted. A summary of this Ordinance shall also be published once within fifteen (15) days after this Ordinance's passage in a newspaper of general circulation, published, and circulated in the City of Orange. The City Clerk shall post in the Office of the City Clerk's a certified copy of the full text of such adopted Ordinance along with the names of those City Council members voting for and against the Ordinance in accordance with Government Code Section 36933. ADOPTED this 22nd day of January, 2008. ATTEST: 23 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF ORANGE ) I, MARY E. MURPHY, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the 8th day of January, 2008, and thereafter at the regular meeting of said City Council duly held on the 22nd day of January, 2008, was duly passed and adopted by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: COUNCILMEMBERS: Smith, Murphy, Cavecche, Dumitru, Bilodeau COUNCILMEMBERS: None COUNCILMEMBERS: None COUNCILMEMBERS: None o 24