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HomeMy WebLinkAboutORD-11-93 Add Ch 17.37 Density Bonus and Incentives for Affordable HousingORDINANCE NO. 11- 93 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ORANGE AMENDING THE ORANGE MUNICIPAL CODE TO ADD CHAPTER 17. 37 PERMITTING A DENSITY BONUS AND OTHER INCENTIVES FOR AFFORDABLE HOUSING PURSUANT TO STATE LAW.CITY OF ORANGE WHEREAS, state law mandates that the City provide density bonuses and other development incentives for the development of housing affordable to lower and very low income households; and WHEREAS, the Planning Commission has, after duly noticed public hearing, recommended adoption of this ordinance; and WHEREAS, after duly noticed public hearing, the city Council has found that adoption of this ordinance is in the best interests of the city and the public by complying with state law while providing needed flexibility for consideration of local needs.NOW THEREFORE, the City Council of the City of Orange does hereby ordain.Section I:CHAPTER 17. 37 INCENTIVES FOR AFFORDABLE HOUSING Sections:17.37.010 Purpose and Intent.17.37.020 Definitions.17.37.030 Eligibility.17.37.040 Development Incentives.17.37.050 Application Procedure.17.37.060 Affordable Unit Distribution and Product Mix.17.37.070 Affordability Agreement.17.37.080 Findings.17.37.090 Enforcement.17.37.010. Purpose and Intent. The purpose of this chapter is to provide incentives to developers for the production of lower income housing units in order to meet the affordable housing goals of the city's General Plan Housing Element. These provisions are based upon Section 65915 of the California Government Code that requires local governments to adopt provisions for the granting of density bonuses and additional concessions as incentives for the development of affordable 17.37.020. Definitions. Affordable units - Housing units, both single and multiple family, to be rented or sold to lower income or very-low income households, as set forth in section 17.37.070. Area median income - Median income figures published annually by the State Department of Housing and Community Development (HCD),and are based upon annual income limits established by the Federal Department of Housing and Urban Development (HUD).Density Bonus - An increase in the proposed number of units over the number permitted pursuant to the current general plan designation of the project site.Housing Development - One or more groups of projects for residential units, planned as one project, such as projects planned under a specific plan, or within a Planned Community (PC)zone when defined by a single development plan.Lower Income Households - Persons and families whose income does not exceed 80% of the area median income, as adjusted for family size (Section 50079.5 of the California Health and safety Code).Very Low Income Households - Persons and families whose income does not exceed 50% of the area median income, as adjusted for household size (Section 50105 of the California Health and safety Code) .17.37.030. Eliaibilitv. This Chapter shall apply to a qualifying housing development, which is defined as the new construction of rental or for- sale housing developments consisting of five or more dwelling units, provided the zoning and general plan designations for the subject project site allow a minimum of five, when at least 10% of the units are provided for "very low income" households, or 20% of the units are provided for "lower income" households.17.37.040. Development Incentives. Pursuant to Section 65915 of the California Government Code, the proponent of a qualifying housing development project shall be eligible for a density bonus of at least 25% over the otherwise maximum allowable density permitted by the city' s General Plan for the project site and one additional incentive, unless the reviewing body makes a written finding that additional concessions or incentives are not necessary for the project' s affordability. The project proponent may propose the particular incentive or concession desired, but the reviewing body shall determine which incentive or concession is most appropriate considering the economic feasibility of the development project, and impacts on the city's budget, public health, safety and welfare and surrounding properties. At least one of the following incentives may be requested:A. A reduction in one site development standard which exceeds minimum State building code requirements such as, lot Ord. No. 11-93 2- coverage, frontage, or depth, building setback or height, or a substitution of covered parking for enclosed parking, public recreational amenities for private open space; B. Allow for mixed use in conjunction with the housing development upon properties zoned for commercial, office, or industrial use; c. A regulatory incentive or concession resulting in identifiable cost reductions such as a reduction, waiver or reimbursement of planning review fees, development fees, or building plan check and permit fees; D. Allow for a density bonus greater than 25% or more than one regulatory incentive provided a higher percentage of units are designated as affordable; E. other incentives of equivalent financial value based upon the land cost per dwelling unit. ILLUSTRA T1VE DENSITY BONUS CALCULATION Land Use Designation Multiple Family Residential Maximum Permitted Density 24 dwelling units/acre Property Size 2 acres Maximum Units at Permitted Density 48 units Units Affordable to Target Households 20% for lower-income households)48 x .20 = 9.6 or 10]10 units Density Bonus Units (@ 25%)48 x .25 = 12]12 units Total Project Units with 25% Density Bonus:48 base units 12 density bonus units 60 Total Units 50 units at market rate, 10 units at affordable rate)17.37.050. Application Procedure. All applicants/owners who are proposing to construct housing developments eligible to utilize the provisions of this chapter are subject to the following application procedures:3-Ord. No. A. Preliminary Application Required. A preliminary application shall be submitted to the Community Development Department to include a site plan and narrative description of the project. The description shall detail the general scope of the proposed project, zoning and general plan designation of the property, and based upon the site constraints and proposed housing product type, the maximum possible density permitted under the current zoning and general plan designation, and when utilizing the provisions of this Chapter. When requesting the City to modify any development standard as an incentive, the applicant/owner shall include in the narrative a detailed explanation as to how the requested incentive is necessary to achieve the affordability goal of this Chapter. In evaluating such preliminary applications, the City may require an independent appraisal and/or financial analysis of the subject property with and without a density bonus, and with and without the proposed concession or incentive of equivalent financial value to be performed by an appraiser or financial analyst deemed acceptable by the Community Development Department and at the expense of the applicant/ owner. Pursuant to section 65915 of the California Government Code, the City shall, within 90 days of receipt of the site plan and written proposal, notify the applicant/owner in writing of the procedures which will apply to the review process. B. Conditional Use Permit Required. Subsequent to the preliminary application process, a conditional use permit application, in conjunction with any corresponding development applications necessitated by the project, shall be submitted for review to the Community Development Department. An evaluation using the criteria set forth by this Chapter and a recommendation shall be forwarded to the Planning Commission. Final determination of the request shall be made by the Planning commission as provided for in section 17.92.020 through 17.92.140, unless financial assistance is requested, in which case the Planning Commission shall make a recommendation to the City council, who shall make the final determination. The reviewing body may place reasonable conditions on the granting of a density bonus and any other incentives as proposed by the applicant. However, such conditions must not have the effect, individually or cumulatively, of impairing the goal of section 65915 of the California Government Code, and this Chapter, to make the development of affordable housing for very-low or lower income households economically feasible.17.37.060. Affordable unit Distribution and Product Mix.Affordable units shall be distributed throughout the project and shall include a mixture of unit types (floor area, number of bedrooms/baths, etc.) and amenities representative of and similar in character to the entire project.Ord. No. 11- 17.37.070. Affordabi1itv Aareement. The project proponent/owner shall agree to construct, operate and maintain the required number of affordable units in accordance with a written agreement between the applicant and the City, approved in form and content by the City Attorney, and recorded, as a deed restriction, with the Orange County Recorders Office, prior to the issuance of any building permits for such eligible housing development. The agreement shall include the following: A. Identification of Affordable units. units shall be identified by address and legal description, type (floor area, number of bedrooms/baths, etc.), and designated household income category. The Agreement shall also identify the total number of affordable units to market rate units within the development project. B. Terms of Affordability. Pursuant to section 65915 of the California Government Code, the affordable units shall be reserved for a minimum of 30 years when a density bonus and an additional incentive or concession is granted, and a minimum of 10 years when only either a density bonus, or a concession is granted. 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. 1. Rental Projects. a. Determination of Rent. A maximum rent schedule shall be submitted to the community Development Department prior to the issuance of an occupancy permit for the affordable units, and updated annually on the anniversary date of occupancy. Pursuant to Section 65915, the maximum monthly rent to be charged for very-low income households cannot exceed 30% of 50% of the area median income, and for lower income households, 30% of 60% of the area median income, as adjusted for family size.b. 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.c. "Upward Mobility" Allowance. When a tenant occupying an affordable unit no longer qualifies under the income provisions, as defined in Section 17.37.020 and verified through the monitoring program required as part of Affordability Agreement, that tenant may then be charged market rate rent. If this occurs, any currently-vacant 5- unit of similar type to the affordable unit shall then be designated as an affordable unit, and the applicant/owner shall immediately attempt to secure tenants in accordance with this Chapter. The applicant/owner is required to maintain the total number of affordable units identified in the Agreement. d. Subletting of Rental Units. No subletting of designated affordable units shall be allowed unless the following conditions are met: i) written permission is obtained from the applicant/owner and submitted to the Community Development Department; and, ii) the subletee qualifies as a very-low or lower income household and the combined income of all potential tenants, adjusted for family size, does not exceed the income limits set forth in section 17.37. 020.iii)the rent collected shall not exceed the maximum monthly rent allowed to be charged as specified in section 17.37. 070-C.2. Ownership Projects.a. Determination of Sales Price. A maximum sale price shall be submitted to and verified by the Community Development Department for the initial and subsequent resale of affordable units where very-low income or lower income households could qualify for a fixed-rate 30-year mortgage for 90%of the purchase price under current conventional home mortgage lending criteria and interest rates,or under the lending criteria and interest rates of a below-market rate home mortgage lending program for which such household actually qualifies and receives a loan.b. Sale Clause. The Affordability Agreement shall stipulate that when the terms of affordability have expired on a dwelling unit that the City of Orange and regional non-profit housing organizations shall have a first right of purchase option 60 days prior to the unit being advertised on the market.c. Rental of For-sale Units. Rental of designated affordable for-sale units shall not be allowed unless the renter(s) qualifies as a very- low or lower income household as set forth in Section 17. 37.020, and the rent to be charged is D. Monitoring of Compliance to Agreement. Monitoring program shall include specifying the party responsible for certifying tenant incomes and rent levels or sales price, maintaining the required number of affordable units and each unit's property, and marketing and filling unit vacancies. E. Where a demonstrable need can be shown in order to comply with affordable housing financing programs, in place of the provisions required by subsections A (Identification of Affordable Units and Cl(c) ("Upward Mobility" Allowance), the project proponent/owner may propose, as part of the conditional use permit application, alternative provisions for assuring compliance with the requirements for maintaining the affordability of the specified number of units, which may be approved or denied by the Planning Commission or city Council as part of the conditional use permit process. To approve such alternative provisions the determining body shall make a finding based on substantial evidence in the record of the hearing that the alternative provisions will reasonably assure the continued affordability of the specified number of units for the time prescribed in this Chapter. F. Disclosure of project Approval. For purposes of notice to third parties, the Agreement shall reference or delineate all conditions imposed upon the project or any incentive by the final approval of the project. 17.37.080. Findinqs. In addition to the criteria used for consideration of conditional use permit applications, the reviewing body shall make the following findings when considering housing development projects that utilize this Chapter. A. The project provides a quality living environment for very low income and lower income households. B. The project fulfills a demand for affordable housing which is currently not provided for by the existing housing stock. C. The project conforms to the goals set forth in the General Plan Housing Element. D. The project can be adequately serviced by the City and County water, sewer, and storm drain systems, without significantly impacting the overall service or system. E. The project will not have a significant adverse impact on traffic volumes and road capacities, school enrollment, or recreational resources. F. The density bonus and additional incentive(s) are necessary in order to achieve the affordability of the units and will not impose an undue financial hardship on the City, or adversely impact public health, safety and welfare and surrounding properties. 7-Ord. No. 11- 17.37.090. Enforcement. Violation of any prov1s1on of this Chapter or of any provision of the Affordable Housing Agreement required under section 17.37.060, shall be a misdemeanor with each day of the continuance of the violation a separate offense, and shall be punishable by a fine not to exceed $500.00 or imprisonment for not more than six months or by both such fine and imprisonment. SECTION II: Severability - Should any sentence, section, clause, part or provision of this ordinance be declared invalid, the same shall not affect the validity of the ordinance as a whole or any other part thereof.SECTION III: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 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. This Ordinance shall take effect thirty ( 30) days from and after the date of its final passage.Adopted this 17th day of Auqust 1993.GENE BEYER Mayor of the City of orange ATTEST: ffrA/ f1r'-ri-jlfptt1~ity C rk f e City of r~?u4Ma Orange STATE OF CALIFORNIA) COUNTY OF ORANGE ) CITY OF ORANGE ) I, MARILYN J. JENSEN, 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 10th day of August , 1993, and thereafter at the regular meeting of said city Council duly held on the 17th day of August , 1993, was duly passed and adopted by the following vote, to wit: Ord. No. 11-93 AYES: NOES: ABSENT: ABSTAIN: dg COUNCIL MEMBERS: SPURGEON, BARRERA, MAYOR BEYER, COONTZ, MURPHY COUNCIL MEMBERS: NONE COUNCIL MEMBERS: NONE COUNCIL MEMBERS: NONE rJe?J'~ city Cle of e ~y of orange 9-Ord. No. 11-