HomeMy WebLinkAbout2014-01-28; City Council; 21489; Affordable Housing Agreement Authorizing Valley 17 Subdivision to Utilizie Second Dwelling UnitsCITY OF CARLSBAD - AGENDA BILL
AFFORDABLE HOUSING AGREEMENT AUTHORIZING
THE VALLEY 17 SUBDIVISION TO UTILIZE SECOND
DWELLING UNITS TO SATISFY INCLUSIONARY HOUSING
REQUIREMENTS
DEPT. DIREaOR
CITY ATTORNEY
CITY MANAGER
RECOMMENDED ACTION:
That the City Council adopt Resolution No. 2014-016 approving an affordable housing
agreement authorizing the Valley 17 subdivision (CI 12-07) to utilize second dwelling units to satisfy
Inclusionary Housing Ordinance requirements.
ITEM EXPLANATION:
The Valley 17 subdivision project is located on the southwest corner of the intersection of Oak
Avenue and Valley Street. The Planning Commission has approved development of seventeen single
family dwellings on the 3.76 acres of land, along with three second dwelling units that were proposed
to comply with the City's Inclusionary Housing Ordinance. The developer is seeking City Council
approval of an Affordable Housing Agreement to allow construction of the second dwelling units as a
housing alternative under the City's Inclusionary Housing Ordinance.
The Inclusionary Housing Ordinance allows the Council to approve a housing alternative when that
alternative supports specific housing policies and goals. Alternatives include, but are not limited to,
acquisition and rehabilitation of affordable units, conversion of existing market units to affordable
units, construction of special needs housing projects or programs (shelters, transitional housing, etc.),
and the construction of second dwelling units. Approval of the housing alternative shall be based on
findings that new construction would be infeasible or present unreasonable hardship in light of such
factors as project size, site constraints, market competition, price and product type disparity,
developer capability, and financial subsidies available.
Due to the small size of the development and the very substantial financial subsidy that would be
required to make three market rate units affordable, the developer has indicated that it would
present an unreasonable hardship upon the development to require that three of the units be made
affordable to a low income household. Therefore, the developer is proposing to construct and deed
restrict three second dwelling units within the approved residential development to satisfy the
inclusionary housing requirement. While the proposed second dwelling units will be newly
constructed units and will be located within the market rate development as required, it is
considered to be a housing alternative, as defined by Section 21.85.070 of the Inclusionary Housing
Ordinance. Therefore, the alternative requires City Council approval.
DEPARTMENT CONTACT: Frank Boensch 760-434-2818 frank.boensch@carlsbadca.eov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF •
WITHDRAWN • OTHER-SEE MINUTES •
AMENDED •
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The developer's justification for constructing a housing alternative to satisfy the inclusionary
requirement has been reviewed and is supported by the Housing Policy Team. Staff concurs with the
developer that the small size of the new market rate development and the substantial subsidy
required to make three of the units affordable to low income households would be financially difficult
and present an unreasonable hardship. The Planning Commission has approved the construction of
three second dwelling units in its approval of the development on September 18, 2013. Therefore,
staff recommends that the City Council approve the proposed affordable housing agreement (see
attached) to allow three second dwelling units within the market rate development as an alternative
to satisfy the inclusionary housing requirement for the Valley 17 subdivision.
Prior to the issuance of a final map or issuance of any building permits for the project, the developer
is required to enter into an Affordable Housing Agreement with the City that binds the developer to
the specifics of the affordable housing project. The Agreement will require the second dwelling units
be rented at an amount which is affordable to a low income household earning 70% or less of the San
Diego County Area Median Income (AMI), and the tenant's income does not exceed 80% of AMI. It is
requested that the Affordable Housing Agreement, attached as Exhibit 2, be approved by the Council
in substantially the form presented and subject to final approval by the City Attorney. The approving
resolution authorizes the Housing and Neighborhood Services Director to execute the Agreement on
behalf of the City.
FISCAL IMPACT:
The Developer has made no request for financial assistance for this project. Therefore, there will be
no fiscal impact to the City.
ENVIRONMENTAL REVIEW:
The approval of an agreement to use second dwelling units for the Valley 17 subdivision is a
ministerial process and is exempt from the requirements of the California Environmental Quality Act
(CEQA) pursuant to Carlsbad Municipal Code Section 19.04.070A.l.a.
EXHIBITS;
1. City Council Resolution No. 2014-016 , approving an affordable housing
agreement authorizing the Valley 17 subdivision (CT 12-07) to utilize second dwelling units to
satisfy Inclusionary Housing Ordinance requirements
2. Affordable Housing Agreement.
1 RESOLUTION NO. 2014-016
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2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA APPROVING AN AFFORDABLE HOUSING AGREEMENT
AUTHORIZING THE VALLEY 17 SUBDIVISION TO UTILIZE SECOND
4 DWELLING UNITS TO SATISFY INCLUSIONARY HOUSING
REQUIREMENTS.
5 CASE NO: CT 12-07
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WHEREAS, on September 18, 2013, the Planning Commission approved the Valley 17
subdivision (CT 12-07) for the development of 17 single family residences on property located
on the southwest corner of the intersection of Oak Avenue and Valley Street, including a
proposal to provide three second dwelling units affordable to low income households per the
City of Carlsbad's Inclusionary Housing Ordinance; and
WHEREAS, the developer of the Valley 17 subdivision (CT 12-07) has proposed to meet
the project's Inclusionary Housing Ordinance requirement with an alternative housing solution
which would result in the developer providing three second dwelling units within the market
rate development which will be affordable to low income households; and
WHEREAS, the Inclusionary Housing Ordinance allows, at the discretion of the City
Council, a housing alternative when the proposed alternative supports specific housing policies
and goals and a determination is made that the new construction would be infeasible or
present unreasonable hardship; and
WHEREAS, based upon the City Council's determination that it would be financially
infeasible and would represent an unreasonable hardship upon the subject developer to make
three of the single family residences within the subject development affordable to low income
households and the proposed alternative to satisfy the inclusionary requirement through the
construction of three second dwelling unit on the site of the market rate development does
meet the goals of the Inclusionary Housing Ordinance and the City's Housing Element; and
WHEREAS, the City Council did hold a public meeting to consider the developer's
request to approve an affordable housing agreement to allow three second dwelling units to
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1 satisfy the inclusionary housing requirement for the Valley 17 subdivision (CT 12-07) located on
2 the southwest corner of the intersection of Oak Avenue and Valley Streret; and
3 WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring to
4 be heard, said City Council considered all factors relating to the proposed inclusionary housing
5 alternative.
6 NOW, THEREFORE, BE IT HEREBY RESOLVED that the City Council of the City of Carlsbad,
7 California, does hereby find as follows:
8 1. The above recitations are true and correct.
9 2. The developer's proposal to provide three second dwelling units affordable to
10 low income households on the site of the market rate development as an alternative to
11 constructing three single family residences and making them affordable to low income
12 households to satisfy the inclusionary housing requirement for the Valley 17 subdivision (CT 12-
13 07) is consistent with the goals and objectives, and serves the priorities of, the City of Carlsbad's
14 Housing Element, Consolidated Plan, the Inclusionary Housing Ordinance, and the Carlsbad
15 General Plan.
16 3. As required by Section 21.85.070 of the Carlsbad Municipal Code, the City
17 Council hereby finds that the requirement to construct three single family residences and make
18 them affordable to low income households within the Valley 17 market rate development (CT
19 12-07) would be financially infeasible and would present an unreasonable hardship on the
20 developer due to the development's small project size of 17 units and the substantial subsidy
21 required to make those three units affordable to a low income household.
22 4. That based on the information provided within the City Council staff report and
23 testimony presented during the public meeting of the City Council, the City Council hereby
24 approves an Affordable Housing Agreement, in substantially the form presented and subject to
25 final approval by the City Attorney, to allow three second dwelling units on the site of the
26 market rate development as an acceptable housing alternative to providing three single family
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1 residences affordable to low income households to satisfy the Inclusionary Housing
2 requirement for the Valley 17 subdivision.
3 5. That the Housing and Neighborhood Services Director or his or her designee is
4 authorized by the City Council to execute all documents related to approval of the subject
5 alternative inclusionary housing proposal, including but not limited to an Affordable Housing
6 Agreement in substantially the form presented to the City Council and subject to final approval
7 of said Agreement by the City Attorney.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City
of Carlsbad on the 28*^ day of January, 2014, by the following vote to wit:
AYES:
NOES:
Council Members Hall, Wood, Blackburn, Douglas.
None.
ABSENT: Council Member Packard.
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ATTEST:
BARBARA ENGLESON, Cit? Clerk
K: JO ~
Recording Requested by:
City of Carlsbad
When Recorded Mail to:
City of Carlsbad
City Clerk's Office
Attn: City Clerk
1200 Carlsbad Village Drive
Carlsbad, California 92008
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENT
(Second Dwelling Units)
THIS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into this
day of , 20 , by and between the CITY OF CARLSBAD, a
municipal corporation ("City"), and CITY VENTURES HOMEBUILDING, LLC, a a Delaware
limited liability company ("Developer"), with reference to the following:
RECITALS
A. Developer is the owner of certain real property in the City of Carlsbad, County of San
Diego, State of California, described in "Exhibit A", which is attached hereto and incorporated
herein by this reference, and which is the subject of a Tentative Map CT 12-07, and Site
Development Plan CT 12-07, which provides conditional approval of the construction of 17
single family dwelling units ("Project").
B. Condition No. 14 of Planning Commission Resolution No. 7009, states that this
Affordable Housing Agreement shall be entered into between the City and the Developer as a
means of satisfying the Developer's affordable housing obligation, as such is defined under
Chapter 21.85 of the Carlsbad Municipal Code ("Affordable Housing Obligation"). Planning
Commission Resolution No.7009 provides that the affordable housing obligation will be satisfied
by applying the requirements set forth in this Agreement for construction of second dwelling
units on affordable housing lots ("Affordable Housing Lots"). The Affordable Housing Lots
which are subject to this Agreement are:
Lots 3, 5 and 9 of Carlsbad Tract No, CT 12-07 in the City of Carlsbad, County of
San Diego, State of California, according to Map No. filed
with the County Recorder of San Diego County on .
C. Developer intends to construct the required inclusionary units concurrent with the
project's market units that are also identified on Exhibit "A". The Affordable Housing Lots shall
be subject to this Agreement and this Agreement shall be recorded on the title for each
Affordable Housing Lot.
NOW, THEREFORE, incorporating the foregoing Recitals and in consideration of the
mutual covenants contained herein, the parties agree as follows:
1 C A 2/5/2013
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1. The Recitals Are True And Correct.
2. THE AFFORDABLE HOUSING OBLIGATION SHALL BE SATISFIED
BY CONSTRUCTION OF SECOND DWELLING UNITS.
Performance under this Agreement satisfies the Developers' obligation for affordable
housing under Chapter 21.85 of the Carlsbad Municipal Code as applied to the land in Tentative
Map CT 12-07, by Condition No. 14 in Planning Commission Resolution No. 7009 and any other
applicable condition of approval.
3. SECOND DWELLING UNITS.
(a) Construction of Second Dwelling Units. Developer shall at the time a residential
structure is constructed on the Affordable Housing Lot, include in such residential structure a
Second Dwelling Unit as defined under and subject to the requirements contained in Municipal
Code Section 21.850.070.
(b) Restriction on Rental of Second Dwelling Unit. The maximum monthly rent for any
Second Dwelling Unit, subject to this Agreement, which becomes rented or leased shall not
exceed an amount of 1/12th of thirty percent (30%) of the gross monthly income of a low-income
household, adjusted for household size, at seventy percent (70%) of the San Diego County
median income, as such median income is published by the United States Department of Housing
and Urban Development from time to time. For purposes of this Agreement, "Rent" shall
include a utility allowance as established and adopted by the City of Carlsbad Housing Authority,
as well as all required monthly payments made by the tenant to the lessor in connection with use
and occupancy of a housing unit and land and facilities associated therewith, including any
separately charged fees, utility charges, or service charges assessed by the lessor and payable by
the tenant (but not including fees and charges resulting from any default by the tenant or damage
caused by the tenant, or fees or charges paid by the tenant to third party utilities or other
providers). A sample schedule showing the calculation of the maximum rental amount as for
2011 is attached to this Agreement as Exhibit "B".
(c) Restriction on Tenant Income. The Affordable Units shall be available to households
with incomes not exceeding 80% of the median income for San Diego County, adjusted for
actual household size.
(d) Declaration. Developer shall require the purchaser from Developer of an Affordable
Housing Lot upon which a Second Dwelling Unit has been constructed to sign an affidavit or
declaration under penalty of perjury, in a form prescribed by the City Housing and Neighborhood
Services Director, which states that if the Second Dwelling Unit on the affordable housing lot is
rented that it shall be rented at a monthly rental rate not to exceed the rate set forth in paragraph
3(b). Developer shall forward the original declaration to the City Housing and Neighborhood
Services Director for maintenance in the City's files, and retain a copy for its own files in the
event proof becomes necessary.
(e) Deed Restriction. Prior to the sale of an affected lot, the Developer shall provide
proof to the City Housing and Neighborhood Services Director that the language contained in
Exhibit "C" has been included in each deed prior to the sale of an affected property and will run
with the land so as to restrict subsequent transfers.
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4. REMEDIES
Failure by the Developer to perform in accordance with this Agreement will constitute
failure to satisfy the requirements of Chapter 21.85 of the Carlsbad Municipal Code and
Condition No.l4 of Planning Commission Resolution No. 7009. Such failure will allow the
City to exercise any and all remedies available to it including but not limited to withholding the
issuance of building permits for the lots shown on Carlsbad Tract No. CT 17.^67-
5. HOLD HARMLESS
Developer will indemnify and hold harmless (without limit as to amount) City and its
elected officials, officers, employees and agents in their official capacity (hereinafter collectively
referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all
damage (including attorneys' fees and expenses) sustained or incurred because of or by reason of
any and all claims, demands, suits, and/or actions, allegedly caused by, arising out of or
pertaining in any manner to Developer's actions or defaults pursuant to this Agreement, and
Developer shall protect and defend Indemnitees, and any of them with respect theretoThis
provision shall survive the term of this Agreement.
6. INSURANCE
Developer shall obtain, at its expense, commercial general liability insurance for
development of the Project naming Indemnities as additional insureds with aggregate limits of
not less than one million dollars ($1,000,000) purchased by Developer from an insurance
company duly licensed to engage in the business of issuing such insurance in the State of
California, with a current Best's Key Rating of not less than A-:VII, such insurance to be
evidenced by an endorsement which so provides and deliver to the City Clerk prior to the
issuance of any building permit for the Project.
7. NOTICES
All notices required pursuant to this Agreement shall be in writing and may be given by
personal delivery or by registered or certified mail, return receipt requested to the party to receive
such notice at the address set forth below:
TO THE CITY: City of Carlsbad
Housing & Neighborhood Services Department
Attn: Housing & Neighborhood Services Director
1200 Carlsbad Village Drive
Carlsbad, California 92008
TO THE DEVELOPERS: City Ventures Homebuilding, LLC
1900 Quail Street
Newport Beach, CA 92660
Any party may change the address to which notices are to be sent by notifying the other parties of
the new address, in the manner set forth above.
8. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties and no modification
hereof shall be binding unless reduced to writing and signed by the parties hereto.
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9. DURATION OF AGREEMENT
This Agreement shall terminate and become null and void upon repeal, termination, or
modification of any applicable ordinance which act would render the Affordable Housing
Obligation unnecessary or unenforceable. The restriction set forth in Paragraph 3(b) above shall
terminate as to the Affordable Housing Lot at such time as the Second Dwelling Unit on the
Affordable Housing Lot has reached the end of its useflil life, which is assumed to be not less
than 55 years fi-om the date of completion of original construction.
10. SUCCESSORS
This Agreement shall benefit and bind Developers and any successive owners of
Affordable Housing Lots.
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4 C A 2/5/2013
COPY
11. SEVERABILITY
In the event any provision contained in this Agreement is to be held invalid, void or
unenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement
shall nevertheless, be and remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as
of the day and year first above written.
DEVELOPER CITY OF CARLSBAD
CITY VENTURES HOMEBUILDING. LLC
a Delaware limited liability companv
a Delaware limited liability company
By: City Ventures Communities. LLC
a Delaware limited liability companv.
its Sole Member
By:,
Its:
By:
Debbie Fountain
Housing & Neighborhood Services Director
Dated:
Dated:
By:
Name:
Title:
Dated:
(Chairman, president or vice-president and secretary, assistant secretary, CFO or assistant
treasurer must sign for corporations. Otherwise, the corporation must attach a resolution
certified by the secretary or assistant secretary under corporate seal empowering the office(s)
signing to bind the corporation.)
(If signed by an individual partner, the partnership must attach a statement of partnership
authorizing the partner to execute this instrument.)
(Proper notarial acknowledgment of execution by Developer must be attached,)
APPROVED AS TO FORM:
Celia A. Brevv^r, Gity Attorney
By: Dated
JanfM^bbaldi, Assistant City Attorney
CA 2/5/2013
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
CA 2/5/2013
EXHIBIT B
MAXIMUM MONTHLY RENTAL AMOUNT
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San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area (MSA)
Household Income Limits HUD Method
Note: The following household income limits are adjusted for a high cost area as
per the Federal Housing Act of 1937 and calculated using HOD methodology to
comply with Health and Safety Code Sections 50052.5 and 50093.
San Diego-Carlsbad-San Marcos, CA MSA
U.S. Department of Housing and Urban Development
December 11, 2012 Effective Date
2013
$ 72,300
Extremely Low Income Very Low Income
30% 35% 40% 50%
Hshold
Size Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00%
Income Income Monthly Income Income Monthly Income Income Monthly Income Income Monthly
ONE $16,950 $1,413 $423 $19,750 $1,646 $493 $22,600 $1,883 $565 $28,250 $2,354 $706
TWO $19,400 $1,617 $485 $22,600 $1,883 $565 $25,800 $2,150 $645 $32,250 $2,688 $806
THREE $21,800 $1,817 $545 $25,400 $2,117 $635 $29,050 $2,421 $726 $36,300 $3,025 $908
FOUR $24,200 $2,017 $605 $28,200 $2,350 $705 $32,250 $2,688 $806 $40,300 $3,358 $1,008
FIVE $26,150 $2,179 $653 $30,500 $2,542 $762 $34,850 $2,904 $871 $43,550 $3,629 $1,089
SIX $28,100 $2,342 $702 $32,750 $2,729 $818 $37,450 $3,121 $936 $46,750 $3,896 $1,169
SEVEN $30,050 $2,504 $751 $35,000 $2,917 $875 $40,000 $3,333 $1,000 $50,000 $4,167 $1,250
EIGHT $31,950 $2,663 $798 $37,250 $3,104 $931 $42,600 $3,550 $1,065 $53,200 $4,433 $1,330
Low Income
60% 65% 70% 80%
Hshold
Size Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00%
Income Income Monthly Income Income Monthly Income Income Monthly Income Income Monthly
ONE $33,900 $2,825 $847 $36,700 $3,058 $917 $39,500 $3,292 $987 $45,150 $3,763 $1,128
TWO $38,700 $3,225 $967 $41,950 $3,496 $1,048 $45,150 $3,763 $1,128 $51,600 $4,300 $1,290
THREE $43,560 $3,630 $1,089 $47,200 $3,933 $1,180 $50,800 $4,233 $1,270 $58,050 $4,838 $1,451
FOUR $48,360 $4,030 $1,209 $52,400 $4,367 $1,310 $56,400 $4,700 $1,410 $64,500 $5,375 $1,612
FIVE $52,260 $4,355 $1,306 $56,600 $4,717 $1,415 $60,950 $5,079 $1,523 $69,700 $5,808 $1,742
SIX $56,100 $4,675 $1,402 $60,800 $5,067 $1,520 $65,450 $5,454 $1,636 $74,850 $6,238 $1,871
SEVEN $60,000 $5,000 $1,500 $65,000 $5,417 $1,625 $69,950 $5,829 $1,748 $80,000 $6,667 $2,000
EIGHT $63,840 $5,320 $1,596 $69,200 $5,767 $1,730 $74,450 $6,204 $1,861 $85,150 $7,096 $2,128
Moderate Income
90% 100% 110% 120%
Hshold
Size Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00%
Income Income Monthly Income Income Monthly Income Income Monthly Income Income Monthly
ONE $45,550 $3,796 $1,138 $50,650 $4,221 $1,266 $55,700 $4,642 $1,392 $60,750 $5,063 $1,518
TWO $52,050 $4,338 $1,301 $57,850 $4,821 $1,446 $63,650 $5,304 $1,591 $69,400 $5,783 $1,735
THREE $58,550 $4,879 $1,463 $65,100 $5,425 $1,627 $71,600 $5,967 $1,790 $78,100 $6,508 $1,952
FOUR $65,050 $5,421 $1,626 $72,300 $6,025 $1,807 $79,550 $6,629 $1,988 $86,750 $7,229 $2,168
FIVE $70,300 $5,858 $1,757 $78,100 $6,508 $1,952 $85,950 $7,163 $2,148 $93,700 $7,808 $2,342
SIX $75,500 $6,292 $1,887 $83,900 $6,992 $2,097 $92,300 $7,692 $2,307 $100,650 $8,388 $2,516
SEVEN $80,700 $6,725 $2,017 $89,700 $7,475 $2,242 $98,650 $8,221 $2,466 $107,600 $8,967 $2,690
EIGHT $85,900 $7,158 $2,147 $95,450 $7,954 $2,386 $105,050 $8,754 $2,626 $114,550 $9,546 $2,863
Note: Income levels 80% and below are adjusted by a HUD high cost area allowance.
This general income infomiation is calculated from the U.S. Department of Housing and Urban
Development (HUD) income figures. Specific program requirements may vary.
Prepared by Affordable Housing Services Information, LLC Web: www.AHSinfo.com Phone (858) 832-1460
EXHIBIT C
DEED RESTRICTION
A Second Dwelling Unit has been constructed as part of this property, and shall be maintained
and utilized in accordance with the requirements of Carlsbad Municipal Code Section 21.85.070
for the useful life of the main structure (estimated to be 55 years). The maximum monthly rent
for the Second Dwelling Unit, if rented or leased, shall not exceed an amount equal to thirty
percent (30%) of the gross monthly income of a low-income household, adjusted for household
size, at seventy percent (70%) of the San Diego County median income as such median income is
published by the United States Department of Housing and Urban Development from time to
time ("Affordable Units"). The Affordable Units shall be available to households with
incomes not exceeding 70% of the median income for San Diego County, adiusted for
actual household size. Prior to subsequent transfers of the property, seller shall require the
purchaser to submit a signed affidavit or declaration under penalty of perjury on a form
satisfactory to the City Housing and Neighborhood Services Director, to the Housing and
Neighborhood Services Department, which acknowledges that the purchaser has read and
understand the restrictions as they relate to the Second Dwelling Unit.
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