HomeMy WebLinkAboutDI 10-02; SDU Rent Restrictions; Discussion Item (DI)CITY OF
CARLSBAD
Memorandum
July 21, 2010
To: Planning Commission
From: Scott Donnell, Senior Planner
Via: Don Neu, City Planner
Re: Second Dwelling Unit Rent Restrictions
On June 2, 2010, Commissioners voted to discuss at a future meeting excluding homeowner-
built second dwelling units from low income rent restrictions. This vote and future discussion
came about because of a proposed Zone Code Amendment to change how the affordable rent
restriction is imposed on individual builders of second dwelling units.
This memorandum provides helpful information to assist the Commission in its discussion.
Additionally, it explains that the current requirements enable Carlsbad to maximize the number
of second dwelling units it counts toward meeting affordable housing needs.
Currently, homeowners constructing second dwelling units must sign an affidavit declaring they
agree to not charge rent exceeding that considered affordable to a low income household (see
Zoning Ordinance Section 21.10.030 D.7). The low income rent restriction has been a city
requirement since 1994, ten years after Carlsbad adopted its first second dwelling unit
ordinance; in 2003, the city amended its second dwelling unit standards to require property
owners to agree with the rent restriction by affidavit.
The proposed Zone Code Amendment would change the manner in which agreement is made
from an affidavit to a Notice of Restriction recorded against the property. This change would
apply most commonly to homeowners; usually, developers of new home communities
proposing second dwelling units to help satisfy their inclusionary requirement must also agree
to low income rent restrictions and typically do so through an affordable housing agreement
versus an affidavit.
While there is no requirement to rent second dwelling units, ensuring their affordability with an
affidavit or notice of restriction if they are rented is very important to helping Carlsbad meet its
low income, or affordable, housing need. This need, identified by the state Department of
Housing and Community Development (HCD) through SANDAG, is met in Carlsbad through
inclusionary requirements, high density vacant land, and second dwelling units. Rarely, if ever,
are market rate rents or sale prices considered affordable to low income households.
Furthermore, because the low income housing need is typically achieved only through these
means, any contribution toward it is critical.
Community & Economic Development
1635 Faraday Ave. I Carlsbad, CA 92008 I 760-602-2710 I 760-602-8560 fax
Planning Commission
Second Dwelling Unit Rent Restrictions
July 21, 2010
Page 2
HCD approves Carlsbad counting all of its second dwelling units as low income rental housing
because of the affidavit requirement. (The proposed Notice of Restriction would also be
acceptable). Without the affidavit, HCD would require the city to survey second dwelling unit
owners to determine the units' affordability. If the survey determines rents are appropriate for
low income households or units are occupied without charge to the occupant (such as a family
member), then those units can be counted as low income housing. However, second dwelling
units could not be counted if their owners failed to respond to the survey or charged a rent
exceeding low income thresholds. Therefore, the affidavit or proposed Notice of Restriction
provides the maximum benefit toward helping Carlsbad count second dwelling units as
affordable housing.
Annually, the city's Housing Department surveys second dwelling unit owners according to city
records. Based on the 2009 survey (the latest data available) here are some survey results:
1. Number of homeowners of properties with units contacted: 204
2. Number and percentage of contacted property owners responding: 145 or 71%
3. Number and percentage of units being rented: 33 or 23%
4. Average rent charged: $945 per month
5. Number and percentage of units used as housing for extended family with no rent being
paid: 63 or 43%
6. Number of units (rented only) occupied by more than one person: 8
7. Number and percentage of units used for other than housing purposes (e.g., home
office): 45 or 31%
For purposes of counting second dwelling units as low income housing, survey results would
yield fewer units than is achieved by the current affidavit requirement. For example, the city
could not count units for which no survey response was received and could not count units
used for other than housing purposes. Further, while the average rent of $945 would comply
with low income housing rent limitations, it is possible some units would not. The maximum
rent in 2009 considered affordable to a one person low income household was $1,156.
Surveyed property owners charging rents in excess of the low income threshold receive letters
from the Housing Department reminding them of their obligation under the affidavit.
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