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HomeMy WebLinkAbout2004-10-19; City Council; 17846; Inclusionary housing incentive credit schedule4B# 17,846 VITG. 1011 9/04 IEPT. H/RED CITY OF CARLSBAD - AGENDA BILL TITLE: Approval of City Council Policy No. =to adopt lnclusionary Housing Incentive Credit Schedule DEPT.HD. /# CITY ATTY. CITY MGR. ZL RECOMMENDED ACTION: ADOPT City Council Resolution No. 336 approving City Council Policy No. 68 providing a schedule of inclusionary housing incentive credit to specify developer eligibility for extra credit to reduce the total inclusionary housing requirement to less than 15% of all approved residential units. 2004- ITEM EXPLANATION: When the City of Carlsbad’s lnclusionary Housing Ordinance (CMC 21.85) was amended in 2000, the City Council expressed its intent within the Ordinance to allow housing developers to reduce their total inclusionary housing obligation to less than 15% if the developers provided a more desirable product or otherwise made a proposal which went above and beyond the intent of the Ordinance in terms of product type or affordability of units. At the time of the Ordinance development, this schedule for incentive credits (giving more than one credit for each unit) was not adopted because staff wanted some additional time to research this concept before making a recommendation on the actual incentive schedule. Because staff has found that there is at least one circumstance at this time where an incentive credit would be beneficial to the accomplishment of City goals as related to affordable housing, staff is now recommending adoption of the incentive schedule as indicated in the attached City Council Policy. Staff is recommending that 1.2 in incentive credit with a minimum inclusionary requirement of 12.5% be granted if a housing developer proposes to construct a new for-sale town home, condominium or single family home and make it affordable to a very low income or extremely low income household. Additional conditions to obtain this credit are 1) the unit must be located on the same site as the development that has the inclusionary requirement; and 2) the developer is not obtaining financial assistance from the City. This incentive would mean that for each 1 unit meeting the above noted conditions, the developer will receive a credit of 1.2 units towards satisfaction of the project’s inclusionary housing requirement. Examples are provided in the attached policy. The request for affordable housing incentive credit will be processed together with all other entitlements to allow for development of a housing project. As long as a project is consistent with the City Council policy, the incentive credit may be granted by the Planning Commission, Design Review Board, Housing and Redevelopment Commission, and/or City Council (whichever legislative body has final approving authority). Environmental Review: The project has been analyzed for compliance with the California Environmental Quality Act (CEQA). A Notice of Intent to issue a Negative Declaration was issued by the Planning Director on July 8, 2004 for a 20 day comment period. No comments were received. Page 2 of AB # 17,846 FISCAL IMPACT: The proposed action would have no financial impact on the City in terms of expenditures. There are no additional costs to implement. This Council policy simply provides guidance for the implementation of the inclusionary housing ordinance. EXHIBITS: 1. City Council Resolution No. 2004-336 adopting City Council Policy on lnclusionary Housing Incentive Credit Schedule. 2. City Council Policy on lnclusionary Housing Incentive Credit Schedule. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 2004- 336 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD APPROVING A CITY COUNCIL POLICY PROVIDING A SCHEDULE OF INCLUSIONARY HOUSING INCENTIVE CREDIT TO SPECIFY DEVELOPER ELIGIBILITY FOR EXTRA CREDIT TO REDUCE THE INCLUSIONARY HOUSING REQUIREMENT TO LESS THAN 15% OF ALL APPROVED RESIDENTIAL UNITS. WHEREAS, the City of Carlsbad adopted an Inclusionary Housing Ordinance in 1993 to require housing developers to provide 15% of their total housing units in a manner which was affordable to low income households; and WHEREAS, when the Inclusionary Housing Ordinance was amended in 2000, the City Council expressed its intent to allow housing developers to reduce their total inclusionary housing obligation to less than 15% if the developers provided a more desirable product or otherwise made a proposal which went above and beyond the intent of the Ordinance in terms of product type or affordability of those units; and WHEREAS, the City Council expressed its intent to adopt an incentive credit schedule to guide the City in its application of the requirements for affordable housing development; and WHEREAS, the City Council did hold a public meeting to consider the proposed City Council Policy on the Inclusionary Housing Incentive Credit Schedule; and WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said City Council considered all factors relating to the proposed inclusionary housing incentive credit schedule; and WHEREAS, the City Council hereby sets forth the incentive credit schedule by City Council Policy Ill/ Ill/ Ill/ 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CC Resolution No. 2004-336 Page 2 NOW, THEREFORE, BE IT HEREBY RESOLVED that the City Council of the City of Carlsbad, California, does hereby find as follows: 1. The above recitations are true and correct. 2. The City Council does hereby approve and adopt the City Council Policy on Inclusionary Housing Incentive Credit and authorizes the developer requests to be processed together with all other entitlements to allow for development of a housing project. 3. That as long as a project is consistent with the subject City Council Policy, the incentive credit may be granted by the Planning Commission, Design Review Board, Housing and Redevelopment Commission and/or City Council, and set forth within an Affordable Housing Agreement to be executed by the Community Development Director. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad, California, held on the 19th day of October ~ 2004, by the following vote, to wit: AYES: Council Members Lewis, Finnila, Kulchin, Hall and Packard NOES: None ABSENT: None ABSTAIN: None ATTEST: (SEAL) CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Affordable Housing Page 1 Policy No. 68 Specific Subject: lnclusionary Housing Incentive Credit Schedule Copies to: City Council, City Manager, City Attorney, Department Heads and Division Heads, Employee Bulletin Boards, Press, File PURPOSE: Pursuant to 21.85.060 of the Carlsbad Municipal Code, the City Council shall adopt a schedule of inclusionary housing incentive credit to specify developer eligibility for extra credit to reduce hidher total inclusionary housing requirement to less than 15% of all residential units approved. The noted schedule is set forth within this City Council Policy, and it may be amended from time to time to reflect any changes in the incentive credit(s) policy. BACKGROUND: When the lnclusionary Housing Ordinance (CMC 21.85) was adopted in 1993, and then amended in 2000, it was the City Council’s expressed intent to allow housing developers to reduce their total inclusionary housing obligation to less than 15% the developers provided a more desirable product or otherwise made a proposal which went above and beyond the intent of the Ordinance in terms of product type or affordability of those units. At the time of the Ordinance development, this policy on the schedule for incentive credits (giving more than one unit credit) was not adopted. The schedule is being adopted at this time to guide the City in its application of the requirements for affordable housing development. POLICY: The City Council will grant incentive credit based on the criteria and conditions set forth in the chart below. The project must meet all of the noted product criteria and development conditions to qualify for the incentive credit. CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Affordable Housing Page 2 Policy No. 68 Date Issued 1 011 9/04 Effective Date 10/19/04 Cancellation Date N/A Supersedes No. N/A Specific Subject: lnclusionary Housing Incentive Credit Schedule Copies to: City Council, City Manager, City Attorney, Department Heads and Division Heads, Employee Bulletin Boards, Press, File lnclusionary Housing Incentive Credit Schedule Desirable Product 81 Development Conditions Product: Newly Constructed For-Sale Town Home, Condominium, or Single Family Home Development Conditions: 1. 2. 3. 4. The unit must be affordable to very low (50% or below AMI) or extremely low income (30% or below AMI) households. The unit is a for-sale product. The unit must be located on the same site as the development that has the inclusionary requirement. 1 from the Cit . The developer must not be obtaining any financial assistance Incentive Credit 1.2 per unit Minimum lnclusionary Housing Requirement 12.5% CITY OF CARLSBAD COUNCIL POLICY STATEMENT General Subject: Affordable Housing Page 3 Policy No. 68 Date Issued 1 0/19/04 Effective Date 10/19/04 Cancellation Date N/A Supersedes No. N/A Specific Subject: lnclusionary Housing Incentive Credit Schedule Copies to: City Council, City Manager, City Attorney, Department Heads and Division Heads, Employee Bulletin Boards, Press, File To assist with application of the above noted incentive credit schedule, the following examples are provided for further explanation purposes. Example 1 - Small to Medium Size Proiect: Developer proposes to build a total of 78 for-sale town homes within a new development, which has an inclusionary housing requirement. Per current lnclusionary Housing requirements, the developer must provide 12 of those units (15%) as affordable to low income households (80% of the AMI or below). Under the above noted credit schedule, the developer could receive extra credit if 1) the affordable product within that development is also a for-sale town home, 2) it will be affordable to very low or extremely low income households (50% of AMI or below), and 3) the developer obtains no financial assistance from the City. The credit would work as follows: 12 low income for-sale affordable units + 1.2 unit credit = 10 very low income units (Developer could provide 10 very low income units rather than 12 low income units) 10 units + 78 total housing units = 12.8% of the total units 12.8% exceeds the 12.5% minimum Under this scenario, the developer meets all of the extra credit criteria and could be allowed to construct 10 units rather than 12 units (2 fewer units), and would satisfy the City’s inclusionary housing requirements. Example 2 - Large Size Proiect: Developer proposes to build a total of I078 for-sale town homes within a development. Per current lnclusionary Housing Ordinance requirements, the developer must provide 162 of those units (1 5%) as affordable to low income households (80% of the AMI or below). Under the noted credit policy above, the developer would receive extra credit if 1) the affordable product within that development is also a for-sale town home, and 2) it will be affordable to very low or extremely low income households (50% of AMI or below), and 3) the developer obtains no financial assistance from the City. The credit would work as follows: 7 COUNCIL POLICY STATEMENT Effective Date 1011 9/04 Cancellation Date NIA General Subject: Affordable Housing Specific Subject: lnclusionary Housing Incentive Credit Schedule Copies to: City Council, City Manager, City Attorney, Department Heads and Division Heads, Employee Bulletin Boards, Press, File 162 low income for-sale affordable units + 1.2 unit credit = 135 units (Developer could provide 135 very low income units rather than 162 low income units) 135 + 1078 total housing units = 12.5% 12.5% is the minimum inclusionary housing requirement permitted under this policy Under this scenario, the developer meets all of the extra credit criteria and could be allowed to construct 135 units rather than 162 units (27 fewer units), and would satisfy the City’s inclusionary housing requirements. PROCEDURE: The request for affordable housing incentive credit will be processed together with all other entitlements to allow for development of a housing project. As long as a project is consistent with this City Council policy, the incentive credit may be granted by either the Planning Commission, Design Review Board, Housing and Redevelopment Commission, and/or City Council.