HomeMy WebLinkAboutLCPA 95-01; Affordable Housing II; Local Coastal Program Amendment (LCPA) (11)-- A
DATE: OCTOBER 28,1992
TO: PLANNING COMMISSION
FROM: PLANNING DEPARTMENT
SUBJECT: ZCA 91-05 CITY OF CARLSBAD - DENm BONUS - An Amendment to the Carlsbad Municipal Code (Title 21) by the addition of Chapter 21.86 to
establish requirements for the reservation and affordability of housing units
for Lower-Income and Moderate-Income Households and Senior Citizens in residential projects under a Citywide Density Bonus Program.
That the Planning Commission ADOPT Planning Cornmission Resolution No. 3422
recommending APPROVAL, of the Negative Declaration issued by the Planning Director and
ADOPT Planning Commission Resolution No. 3423 recommending APPROVAL, of
ZCA 91-05, based on the findings contained therein.
II. PRWCX DESCRWII ON AND BACKGROUND
Program 3.7.a. of the City's Housing Element (October 22, 1991), specifies that the City
shall adopt an Ordinance which implements State Government Code Sections 65915, and
65915.5 (State Density Bonus Law).
Government Code Section 65915 requires the City to grant either: (1) a minimum of a
25 percent density bonus over the othenvise maximum allowable residential density, and
at least one additional incentive (Le.; (a) the reduction of site development standards, or,
architectural design requiremem, @) approval of mixed use zoning, (c) an additional
density bonus above the minimum 25%), (d) other regulatory incentives which result in
identifiable cost reductions) or (2) other in-lieu incentives of equivalent financial value
(based upon the land cost per dwelling unit), in retum for a developer guaranteeing that
a residential project will reserve either 20% of the total units as affordable to low-income
households, or 10% of the total units as affordable to very low-income households, or 50% of the total units for qualified (senior) residents.
ZCA 9145 - OF CkdSBAD
DENSlTYBONUS
OCXlBER~1993 PAGE 2
Government Code Section 65915.5 (relating to condominium conversions) requires the City to either (1) grant a minimum of a 25% density bonus over the number of apartment
units within an existing apartment project which is proposed for conversion or (2) provide other incentives of equivalent financial value (i.e.; the reduction or waiver of requirements
which the City might otherwise apply as conditions of condominium conversion approval),
in retum for a developer guaranteeing to reserve either: 33% of the converted
condominium units of the proposed condominium project for low or moderate-income
households, or 15% of the total units of the proposed condominium project for lower income households.
The primary objective of State Density Bonus Law is to require local govemments to offer the private sector sufficient economic incentives to encourage and enable the development
of affordable housing. This State Law differs somewhat from the City's proposed Inclusionary Ordinance, which mandates that affordable housing be provided by the private
sector without guarantee of any City incentives.
This project is a Zone Code Amendment (ZCA 91-05) to the Carlsbad Municipal Code,
(Title 21) to establish a Citywide Density Bonus Ordinance (Chapter 21.86), consistent
with the above mentioned sections of State Code.
A draft of the Density Bonus Ordinance was distributed at a Planning Commission
workshop on July 15,1992. Since that workshop, the draft ordinance has been revised.
In order to clarify for the Planning Commission what those specific revisions are, the draft
ordinance is in a strike-outhighlight format. Text to be deleted is in a strike-out type; new
text is in highlighted type. Prior to taking the draft ordinance forward to the City Council,
it will be cleaned up to remove the strike outbigfight format.
In that many of the sections of the Density Bonus Ordinance are substantially the same
sections that are included within the proposed new Inclusionary Housing Ordinance (See
Table-1 ), reference should be made to the Inclusionary Housing Program staff report for discussion of those particular sections. Included herein is a brief synopsis of those sections
or provisions of sections of the proposed Density Bonus Ordinance which vary from the
rnclusionary Ordinance. Refer to Exhibit 'X" to review in detail all definitions and text
additions of the proposed Density Bonus Ordinance.
ZcA9145-QIyOpCt~~h&D
DENmBoNus
ocloBeR2&1992 PAGE 3
TABLE - 1
21.86.060
21.86.070
21.86.080
21.86.090
21.86.100
21.86.1 10
21.86.120
21.86.130
21.86.140
21.86.150
21.86.160
21.86.170
21.86.180
PlanninF Issues
21.85.160
21.85.120
21.85.130
21.85.140
21.85.150
21.85.170
21.85.180
21.85.190
21.85.200
21.85.210
21.85.220
21.85.230
21.85.240
1.
2.
3.
4.
5.
6.
7.
What is the minimum-sized residential project (number of units) which may qualify
for a 25% density bonus and additional incentive?
What is the methodology for calculating the required number of density bonus units
and affordable units?
Are density bonus units and/or affordable units permitted to be located offsite?
What economic incentives is the City obligated to provide a project which is approved under Density Bonus Law?
What an the density bonus housing standards regarding: (1) tenure of affordability,
and (2) location of units?
What standards shall apply to a project which is subject to the Inclusionary
Ordinance and also requests a Density Bonus?
Is the proposed Zone Code Amendment consistent with the various elements of the
General Plan?
c
DISCUSSION
Section 21.86.010 purpoSe and intent. - This section includes specific Objective and
Program statements from the City's Housing Element relative to the City's commitment to adopt an Ordinance which implements State Density Bonus Law and to promote housing
opportunities for lower-income, moderate-income and senior households.
Section 21.86.020 Wtiuns. - This section proposes several new definitions for new tenns which are included within the Density Bonus Chapter of Title 21. This section also duplicates a number of terms and definitions which are proposed under ZCA 91-06
(Inclusionary Ordinance). The new terms include the following: Additional Incentives,
Affordable Housing (Density Bonus), Housing Development, In-Lieu Incentives, Incentives,
Maximum Allowable Residential Yield, Partial Density Bonus, Density Bonus Dwelling
Units, Qualifying Resident, and Target Dwelling Unit. The majority of the new terms and
definitions are taken directly from State Law. One new term, "Maximum Allowable Residential Yield", means the maximum number of residential units permitted on a project site and is calculated by multiplying the net developable acreage of a site times the Growth
Management Control Point of that site. Any density bonus units granted would be in
addition to those achievable under the Maximum Allowable Residential Yield for a site.
Section 21.86.030 Regulatiolls for new residential CoIlStNctl *on. - This section establishes
the regulations and requirements for residential development applications for new
residential projects processed under the Density Bonus Ordinance. The City shall be required to grant either: a 25% density bonus at least one additional incentive a in-
lieu incentives of equivalent financial value (based upon the land cost per dwelling unit)
to an applicant who agrees to construct and reserve as affordable housing either: 1) 10%
of the units for very low-income households; a 2) 20% of the units for low-income
households; ~f 3) 50% of the total units for senior households. The other key provisions
of this section are described below.
IbImnmmsizeQfResidentlal project - Consistent with State Density Bonus Law, in
order to qualify for a 25% density bonus and an additional incentive or in-lieu
incentives, a residential project must be at least 5 units in size (excluding the
density bonus units).
.. k
8. DedtyBm~~Cddath~ - State Government Code Section 65915(f) mandates
that the base density for calculating a density bonus is,... "the otherwise maximum
allowable residential density under the applicable zoning ordinance and land use
dement of the general plan...". Accordingly, Section 21.86.030 of this ordinance
specifies that the number of density bonus dwelling units to be granted is equal to
the product of the Maximum Allowable Residential Yield of the project site times
.25. It is important to understand that "density bonus", as defmed by State Law,
means that a density increase of "at least" 25% must be provided. Since State Law
1
ZCA 9145 - OP
DENSlTY w)MJs
PAGE 5
-BER-1992
C.
only establishes a minimum density bonus stanud (25%) for local programs, a
developer of affordable housing may request a density bonus greater than 25%.
Any density bonus granted above 25% shall be considered as an additional incentive
as defined within this Ordinance.
In that State Law also specifies that the City shall provide a density increase of "at least" 25%, it has been interpreted by the State Department of Housing and
Community Development (HCD) that any resulting fraction of a density bonus unit shall be rounded up and counted as a whole unit.
Number of Req\rired Af€ordable Units - The methodology for calculating the number
of required affordable units under Density Bonus Law, is similar to the method used
for calculating the required number of density bonus units (Mhum Allowable
Residential Yield) times .10 (very-low), or .20 (low), or .SO (senior)), with the
exception that the calculation is based upon the Maximum Allowable Residential Yield of the project prior to the addition of any bonus Units. As illustrated in the
following example, of the six (6) bonus units required to be granted, only five (5)
are required to be restricted to low-income households. It appears to be the intent
of State Law that the purpose of the one bonus market-rate unit which this project
would be granted is to help the developer to finance the 5 required affordable units.
General Plan Designation:
Permitted Density:
Prom Size:
~ ~~
Maximum Units at Permitted Density:
Density Bonus Units at 25%
(23 DU x 1.25 = 28.75); round UP:
Required Affordable Units at 20% Low-Income
(23 DU x .20 = 4.6): round UP:
Total Project Units:
- 11.5 DU/AC
2Acres B
23 Units I
29 Units I
24 Market Rate Units
5 Low-Income units
29 Total Units I
Because State Density Bonus Law specifies that any density bonus granted shall be in addition to the maximuxu density permitted undex the!. General Plan (the City's Growth
Management Control Points), it is important to understand that any bonus units granted would need to be withdrawn from the City's Excess Unit Bank. In addition, because State
ZCA 91-05 - OF DENSTYBONUS
PAGE 6 OClXlBER28.1992
Density Bonus Law requires the provision of economic incentives (density bonuses) in
exchange for affordable units, that between 20% and 60% of the bonus units granted (withdrawn from the Excess Unit Bank) would be permitted to be developed as market rate
units. As an example, a 25% density bonus added to a property which could achieve, by right, 100 units would yield 125 total units (100 X 1.25 = 125 DU's). Ofthe 25 bonus
units, either 10 (100 X 10%) or 20 (100 X 20%) would be required to be reserved for low
or very low income households, respectively. The balance of the bonus units, either, 15/25
(60%) or 5/25 (2046) would be market rate units.
Under the proposed Ordinance, and consistent with State guidelines for density bonuses,
any resulting decimal fraction of an affordable dwelling unit shall be counted as a whole
unit.
Won 21.86.040 Regulations for condominium eOIIVefSiOILS, - State Density Bonus Law
(Government Code Section 65915.5) also applies to condominium conversions. This
section establishes the regulations and requirements for condominium conversions
processed under the Density Bonus Ordinance. The City shall be required to grant eithw
a 25% density bonus or in-lieu incentives of equivalent financial value (based upon the
land cost per dwelling unit) to an applicant proposing to convert apartments to condominiums who agrees to reserve as affordable either: 1) 33% of the units for low or moderate-income households; 3 2) 15% of the units for lower-income households. The
other key provisions of this section are described below.
A Density Bonus Calculation. -Consistent with Government Code Section 65915.5, the
number of density bonus dwelling units to be granted would be equal to the number
of existing, apartment units within an apartment project, multiplied by .25. While
it may not be feasible to add the density bonus to an existing apartment project,
State Law, and therefore, the Density Bonus Ordinance would allow the bonus units to be developed on a separate site controlled by the applicant.
It is more likely that an applicant pursuing a condominium conversion under the
Density Bonus Ordinance, would request from the City other incentives of equivalent financial value, instead of a density bonus. A financial incentive, such as
modifications of development standards (modifying standards of the Planned
Development Ordinance), would enable an existing apartment project to be converted to a condominium. Any resulting decimal fraction of a density bonus unit
would be counted as a whole unit.
B. Number ofreqrrired -bl& units. -The methodology for calculating the number
of required affordable units, is similar to the means for calculating the number of required bonus units (number of existing apartment units times .33 low/ moderate,
or .15 lower income). Any resulting decimal fraction of an affordable dwelling unit
would be counted as a whole unit.
c
ZCA91-06-UWoP~
DEN= BONUS
-28.1992 PAGE 7
!kticm 21.86.060 (banbmd density bonus busing pmjects - State Density Bonus Law,
Section 659150 speciiies that "the density bonus shall be permitted in geographic areas
of the housing development other than the areas where the units for the lower-income
households are located". This section of State Law goes on to define housing development
as "one or more groups of projects for residential units constructed in the planned development of a jurisdiction". Consistent with this wording, Section 21.86.050, Combined
Density Bonus Housing Projects would allow income restricted target dwelling units and non-income restricted density bonus units to be produced and operated at a second site
(through a Combined Density Bonus Housing Project).
This section of the Density Bonus Ordinance is similar to Section 21.85.110 - Combined
Inclusionary Housing Project of the Indusionary Ordinance with the exception that through
a Combined Density Bonus Housing Project, non-income restricted density bonus units
would be allowed to be transferred to another site.
section 21.86.060 Density bornrs, eqrriralent in-lim iIEem=# andadditionalinc+mtiv;pn_-
This section identifies what economic incentives the City is obligated to provide a project which is approved under the proposed Density Bonus Ordinance. It is important to
understand that State Law does not require that a project be approved just because it complies with density bonus requirements. However, a housing development which seeks and qualifies for a density bonus and additional incentives, or in-lieu incentives, cannot be
approved without granting the density bonus and incentive or in-lieu incentives.
In addition to providing a minimum 25% density bonus, the City shall provide at least one additional incentive, which may include, but not be limited to the following:
1) Modification of development standards, Le.; street widths, structural
setbacks, parking requirements, minimum lot sizes, open space/recreational
requirements or landscaping.
2) Reduction or elimination of design requirements which exceed State building
codes, including restrictions on roofing materials.
3) Mow non-residential uses to be developed in conjunction with residential
uses if the mixed use project would reduce the cost of the target units.
4) Provide other concessions which will result in identifiable cost reductions,
i.e.; additional density bonus, or direct financial aid (subsidized permit fees,
redevelopment set aside funds, or Community Development Block Grant
funds), subsidizing infrastructure, land costs or construction costs.
Section 65917 of State Law places the burden on the City for the additional incentive to "contribute significantly to the economic feasibility of lower-income housing in propod
housing developments". This means that the incentives must directly affect the financial
feasibility of including the target units in proposed projects. The additional incentive must be provided by the City unless the City makes a Written finding that the additional
incentive is not required to make the target units affordable. In this situation, the City would assume the burden of establishing that the project, with the affordable units, would
be feasible without the incentive.
tf the City chooses not to offer a 25% density bonus, then the City shall offer in-lieu
incentives of equivalent financial value (based upon the land cost per dwelling unit).
These in-lieu incentives could include, but are not limited to the additional incentives
discussed above.
Whatever incentives are granted, it is important that the incentives be regarded as
sufficiently compelling to motivate incorporating affordable units within projects. tn theory, the benefits of the incentive(s) should balance the long-term (30 year) use and
income restrictions on the affordable units.
Section 21.86.070 Wty bonus housing standards.
A Tewre of Af€urdab%ty - Consistent with State Law, when the City grants both a
density bonus and an additional incentive, or in-lieu incentives of equivalent
financial value in the form of direct financial contributions, the target units must be
maintained as affordable for a minimum 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. If only a density bonus is
granted, without an additional incentive, or in-lieu incentives, other than direct
financial contributions are granted, affordability of the target units is required for
a minimum of 10 years.
Section 65915.5 of Government Code specifies, with respect to condominium
conversions, processed under State Density Bonus Law, that the City may place such
reasonable conditions on the granting of a density bonus, including, " ... conditions which assure continued affordability of units to subsequent purchasers". In
accordance, it is recommended that all target units, created through condominium
conversion, shall be reserved as affordable for a minimum period of 30 years.
B. heath stzmdard fbr Mble units. - While State Density Bonus Law would
allow density bonus units and/or affordable kits to be developed on a site separate
from the market rate units, the Density Bonus Ordinance includes affordable housing
location standards applicable to all projects, with the highest priority being,
'location within the same project site of the proposed market rate units". While all
residential projects shall be tasked to comply with this location standard, master and
specific plan areas in particular, because they include large tracts of land, often
under single ownership, should be more able to provide a comprehensive affordable
housing solution, which incorporates integration of required affordable units.
ZCA 91-05 - ClTy OP
DENSITYBONUS
(XXN3ER28p1992 PAGE 9
This section of the Density Bonus Ordinance also requires that master and specific
plan developers proposing to satisfy Citywide Inclusionaxy requirements through requesting a density bonus, shall be required to provide an affordable housing
proposal which disperses the target units throughout the master/specific plan area.
This standard is recommended to emphasize the Civs objective of fully integrating
affordable units with market rate units.
It is however, important to understand that in the interest of providing prospective
developers of affordable housing with sufficient flexibility to achieve the affordable
units, this Ordinance would allow Combined Density Bonus Housing Projects (Section 21.86.050) to be pursued.
This section also clarifies that while a developer may request to process a residential
project pursuant to the standards and requirements of the Density Bonus Ordinance,
all residential projects within the City are subject to and must satisfy all
requirements of the Inclusionary Ordinance (Chapter 21.85).
For example, a developer requesting a 25% density bonus and no additional incentives (under Density Bonus Law this would require a 10 year affordability
tenure) in exchange for resenring 10% of the units for very low-income households
or 50% of the units for senior households would still have an obligation under the
Inclusionary Ordinance to provide 15% of the project's base units as affordable to
a low-income household, for a minimum tenure of 30 years.
The Citfs proposed Inclusionary Ordinance mandates that affordable dwelling units be
produced (15% low income) without a guarantee of any City economic incentives. State
Density Bonus Law Men from the Citfs proposed Inclusionary Ordinance in that it requires local governments to offer economic incentives (i.e.; 25% density bonus and an
additional incentive or in-lieu incentives) to private develop to encourage and enable
the production of affordable housing (either 10% very-low income, or 20% low income or
50% senior).
As discussed der, a developer may request to process a residential application under the
proposed Density Bonus Ordinance. Consistent with the proposed ordinance, the developer
would be entitled to a density bonus and an additional incentive in exchange for reserving
a percentage of the total units as affordable or for senior households.
However, since all residential projects within the City shall be subject to inclusionary
requirements (i.e.; 15% of the base units of a project reserved as affordable to low-income
households for a minimum tenure of 30 years), any ddoper proposing to satisfy
inclusionary requirements through use of the Density Bonus Ordinance, shall be subject to
the minimum standards and requirements of the Inclusionary Ordinance. Otherwise, where
there is a codkt in requirements between the two ordinances9 the more restricted requirement shall apply.
The Housing Element of the General Plan sets forth a goal, objective and program which
are supported by the proposed Density Bonus Ordinance, including the following:
GOAL 3 - (Groups with Special Needs, Including Low and Moderate Income
Households)
Sufficient new, &ordable housing opportunities in all quadrants of the City
to meet the needs of groups, with special requirements, and, in particular, the needs of current lower and moderate income households and a fair share
proportion of hture lower and moderate income households.
omm 3 .7 - (Lowe!r Income Development and Incentives)
provide incentives, housing type alternatives, and City initiated developments
and programs for the assistance of lower-income households.
PROGRAM 3.7~ - (Density Bonus)
Develop an ordinance that implements Government Code Section 6913.4
and 65915. (Density Bonus) These sections require the City to grant a
minimum of a 25 percent bonus over the otherwise allowed density, AND one or more additional economic incentives or concessions that may include but are not limited to: fee waivers, reduction or waiver of development
standards, in-kind infrastructure improvements, an additional density bonus
above the minimum 25 percent, mixed use development, or other finanad
contributions in return for the developer guaranteeing that the project will
restrve a minimum of 50 percent of the units for senior or other special need
households, or 20 percent of the units for low-income households or 10
percent of the units for very-low income households. These units must
ranain affordable for a period of 30 years. Under the city's program each
project should enter into an agreement with the City and this agreement will
be monitored by the Housing and Reddopment Department for
compliance.
Consistent with the intent of this goal, objective, and program, the proposed Density Bonus
Ordinance would: 1) provide for affordable housing opportunities for lower-income,
moderate-income and senior households; 2) provide incentives for the assistance of lower-
income households; and 3) satism the City's commitment to develop an ordinance that
implements Government Code Sections 65915455917.
ZCA 91-05 - QTY OF
DENSTY BONUS
PAGE 11
-BER2&1992
tn that this zone code amendment implements this goal, objective and program of the City's
Housing Element, it is consistent with the General Plan.
SUMMARY
In summary, since the proposed Density Bonus Ordinance is consistent with the various
elements of the General Plan and implements State Govemment Code Sections 65915 -
65917, staff recommends approval of ZCA 91-05.
Iv. E"MENTALREvIEw
The Planning Director has determined that this zone code amendment, to add a Density
Bonus Chapter to Carlsbad's Zoning Ordinance, will not have a Sisnificant impact on the
environment and therefore has issued a Negative Declaration on June 25, 1992. The
environmental analysis concluded that since: (1) this zone code amendment is not
associated with any specific development project; (2) will not directly result in any
significant physical, biological or human environmental impacts, and that; (3) any future
residential development processed pursuant to the Density Bonus Program shall be required to undergo detailed environmental review, no project specific impacts are anticipated.
There were no letters of comment received during the public review period for this Negative Declaration.
A'ITACH MEWS
1.
2.
3. Government Code Sections 65915-65917.
Planning Commission Resolution No. 3422 Planning Commission Resolution No. 3423
CDD:lun:Vd:lh July 16,1992