HomeMy WebLinkAbout2020-08-13; Housing Commission; ; New City Council Policy Statement Regarding the Administration of the Carlsbad(i) HOUSING COMMISSION .
Staff Report .
Meeting Date:
To:
From:
Staff Contact:
Subject:
August 13, 2020
Housing Commission
Jeff Murphy, Community Development Director
Jeff Murphy, Community Development Director
Jeff.Murphy@carlsbadca.gov I 760-602-4600
New City Council Policy Statement Regarding the Administration of the Carlsbad
Housing Trust Fund
Recommended Action
Adopt a resolution recommending that the City Council approve a Council Policy Statement
regarding the administration ofthe Carlsbad Housing Trust Fund.
Executive Summary
The Carlsbad Housing Trust Fund is an integral part of the city's inclusionary housing program and
important affordable housing financing tool, responsible for producing many of the approximately
2,300 affordable units in Carlsbad. Appropriate uses of the Housing Trust Fund are outlined in the
General Plan Housing Element and lnclusionary Housing Ordinance (Carlsbad Municipal Code
21.85). However, there is no formal City Council policy to further guide or prioritize its use, or
established guidelines on fund administration. In response to City Council direction, staff has
developed the attached City Council Policy Statement for Housing Commission consideration and
recommendation.
Discussion
Background
The city's lnclusionary Housing Ordinance (Exhibit 2) was established in April 1993 and requires
that all residential developments greater than six units restrict 15 percent of the total number
of homes in a project as affordable to low-income households. This obligation is fulfilled
through construction of a variety of rental or ownership units, both on and off-site. Some
developments have the option to satisfy a portion or all of their affordable housing obligation
through payment of inclusionary housing in-lieu fees or affordable housing credit purchases.
For the city to receive and use these fee payments, an implementation mechanism was needed
to ensure that the funds collected were applied appropriately. As a result, the Carlsbad Housing
Trust Fund was established to confirm that fees collected were applied only towards the
affordable housing needs of lower-income households, and for reasonable costs of
administration consistent with the purposes of the General Plan Housing Element and
lnclusionary Housing Ordinance (Carlsbad Municipal Code Sections 21.85.110 and 21.85.120).
The Housing Trust Fund significantly contributes to the success of the city's inclusionary housing
program. To date, roughly 2,300 affordable housing units have been provided through
implementation of the lnclusionary Housing Ordinance and, in many instances, financial
assistance from the Housing Trust Fund.
At its April 14, 2020 meeting, the City Council received a report on the Carlsbad Housing Trust Fund,
which described sources of its funding and uses in delivering affordable housing projects and
services. The City Council then directed staff to bring back an agenda item for a policy discussion
about the uses of the Housing Trust Fund, with a focus on best practices for using funds for
administrative costs and for rental assistance. The attached draft City Council policy statement
(Attachment A to Exhibit 1) is proposed for City Council's consideration with a recommendation
from the Housing Commission.
Historical Housing Trust Fund Uses
The Housing Trust Fund is used to support a variety of affordable housing development and
services for lower income and homeless individuals and families. As a local fund, the City
Council determines how housing trust fund money can be spent, provided expenditures are
consistent with the purposes of the lnclusionary Housing Ordinance and the policies and
programs in the General Plan Housing Element. The Housing Trust Fund is programmed through
the annual budget appropriation process and at other times during the year as (for-profit or
non-profit) developer requests to assist affordable housing are made, and as other assistance
needs arise.
• Affordable Housing Development
The Housing Trust Fund is predominantly used to subsidize the construction of new
affordable housing in Carlsbad. Over the years, about $29.8 million from the Housing
Trust Fund has been distributed to support land acquisition, predevelopment and
construction costs for affordable housing. Money from the Housing Trust Fund is often
leveraged by other local and non-local sources of subsidy: Community Development
Block Grants, the HOME federal funding program, the city Low and Moderate Income
Housing Fund; federal and state low income housing tax credits and others. Financial
assistance from the Housing Trust Fund is typically made in the form of long-term loans
of 30 to 55 years at an interest rate of generally not more than three percent.
• Low Income and Homeless Services Support
In recent years, the Housing Trust Fund has been used to support a variety of services
for low income and homeless individuals and families. For example, the Housing Trust
Fund has provided funding each year for the regional winter shelter program and more
recently, the year-round Bridge-to-Housing network coordinated by the Alliance for
Regional Solutions. The 2019-20 Housing Trust Fund budget allocated $611,000 for
implementation of the Homeless Response Plan, supporting several initiatives, including
funding case workers on the Homeless Outreach Team, encampment cleanup services,
supplies and other support items.
The Homeless Response Plan support has been absorbed into the Police Department's
general fund budget beginning this fiscal year, and is no longer funded by the Housing
Trust Fund. The City Council did approve $400,000 from the Housing Trust Fund for a
flexible housing pool program that will be administered by the Regional Task Force on
the Homeless. This housing subsidy program combines federal, state and local resources
to provide support and ensure long-term stability for individuals who have experienced
homelessness.
• Administration
The funding activities of the Housing Trust Fund require administrative support.
Administrative costs include staff salaries and benefits, legal support, miscellaneous
professional services, office equipment, maintenance, supplies and other operating
costs. Annual transfers to the Section 8 Rental Assistance Fund have also been included
as needed. The administrative fees received from the federal government are
insufficient to cover the total cost to administer the Section 8 program, that difference
is made up with money from the Housing Trust Fund. Administrative expenses charged
to the Housing Trust Fund have averaged approximately $390,000/year in recent years.
Proposed Housing Trust Fund Uses -Council Policy Statement
While the Housing Trust Fund has been successfully functioning for several years, the program
lacks overall policy direction on how funds should be used. Such a policy will help guide City
Council , staff and public on how eligible projects and programs are identified so they can be
considered for funding as part of the annual budget process. To help in this effort, the proposed
policy addresses several aspects of effective Housing Trust Fund administration (Attachment A to
Exhibit 1):
• Uses of the fund and their relative priorities, consistent with the Housing Element and
lnclusionary Housing Ordinance (policy section #1);
• Housing Trust Fund annual report (policy section #2);
• Criteria for evaluating affordable housing financial assistance requests (policy section #3);
• Requirements for ensuring long-term affordability of housing assisted with Housing Trust
Fund dollars (policy section #4); and,
• Guidelines for use of the Housing Trust Fund for reasonable administrative costs (policy
section #5).
Staff is seeking Housing Commission input and recommendations on each of these policy sections.
Two items of particular interest to the City Council, which are addressed in the proposed policy
include the use of Housing Trust Fund dollars for rental assistance (policy sections #1.i.6) and
administrative costs (draft policy #1.h and #5). More on these points are provided below.
• Rental Assistance
The policy includes the use of Housing Trust Funds for short-term rental assistance
programs that help prevent and reduce homelessness. As stated above, the City Council
allocated $400,000 from the Housing trust Fund to contribute to the Flexible Housing Pool
subsidy program that will be administered by the Regional Task Force on the Homeless.
While addressing homelessness remains a high priority for the city, the relative priority of
rental assistance in this policy is reflective of the primary focus of the Housing Trust Fund
to facilitate construction of new affordable housing throughout the city. It is important to
note that a primary source of Housing Trust Fund revenue comes from developer
payments to satisfy their inclusionary housing obligation in lieu of on-site affordable
housing construction. Project financial assistance from the Housing Trust Fund is a
powerful tool to attract other funding to an affordable housing project, as described
above. Also, there are other funding sources the city utilizes to provide both long-term
(Section 8) and short-term (CDBG) rental assistance, and which are not directly available to
assist construction of new affordable housing.
• Administrative Costs
The City Council requested information about best practices regarding the use of housing
trust fund monies for administrative costs. City staff sampled other California jurisdictions
about their policies for covering administrative costs of their housing trµst funds. None of
the responding agencies reported having a formal cap on an administration, either as a
percentage of their housing trust budget or fixed dollar amount. All but one agency
reported that they budget administrative expenditures from their housing trust funds,
ranging from approximately 4.3 to 11 percent of the housing trust fund balance. Several
agencies stated they attempt to keep administrative costs to a minimum. San Diego County
staff stated that costs of administering the County Housing Trust Fund is borne entirely by
the General Fund.
Carlsbad's practice has been to set administrative spending from the Housing Trust Fund
through the annual budget process, rather than according to a fixed formula. The proposed
policy would continue that practice, but it identifies the appropriate administrative
expense categories and provides a general guideline than no more than 3 to 5 percent of
the Housing Trust Fund available balance be spent on administration in a given year.
Next Steps
Staff intends to share the Housing Commission's recommendation with the City Council Carlsbad
Municipal Code and Policy Subcommittee (Councilmembers Blackburn and Schumacher) in
September. Staff will then present the final draft Council policy statement to the full City Counci l,
reflecting the recommendations of the Housing Commission and the Council Policy Subcommittee.
Environmental Evaluation (CEQA)
Pursuant to Public Resources Code section 21065, this action does not constitute a "project"
within the meaning of CEQA in that it has no potential to cause either a direct physical change
in the environment, or a reasonably foresee able indirect physical change in the environment,
and therefore does not require environmental review.
Public Notification
This item was noticed in accordance with the Ralph M. Brown Act and was available for public
viewing and review at least 72 hours prior to the scheduled meeting date.
Exhibits
l. Housing Commission resolution, including Attachment A (Council Policy Statement)
2. lnclusionary Housing Ordinance (CMC 21.85)
RESOLUTION NO. 2020-003
A RESOLUTION OF THE HOUSING COMMISSION OF THE CITY OF CARLSBAD,
CALIFORNIA, RECOMMENDING THAT THE CITY COUNCIL APPROVE A
COUNCIL POLICY STATEMENT REGARDING THE ADMINISTRATION OF THE
CARLSBAD HOUSING TRUST FUND
Exhibit 1
WHEREAS, the city's lnclusionary Housing Ordinance was established in April 1993 and requires
that all residential developments greater than six units restrict 15 percent of the total number of homes
in a project as affordable to low-income households; and
WHEREAS, while this obligation is fulfilled through construction of a variety of rental or
ownership units, some developments have the option to satisfy a portion of or all of their affordable
housing obligation through payment of inclusionary housing in-lieu fees or affordable housing credit
purchases; and
WHEREAS, to ensure that funds for affordable housing are collected and applied appropriately,
the Carlsbad Housing Trust Fund was established to confirm that fees collected are applied only
towards the affordable housing needs of lower-income households, and for reasonable costs of
administration, consistent with the purposes of the General Plan Housing Element and lnclusionary
Housing Ordinance (Carlsbad Municipal Code Sections 21.85.110 and 21.85.120); and
WHEREAS, Housing Trust Fund monies are appropriated through the annual budget process and
as-needed at other times of the year; and
WHEREAS, at their April 14, 2020 meeting, the City Council directed staff to bring back an
agenda item for a policy discussion about the uses of the Carlsbad Housing Trust Fund, with a focus on
best practices for using funds for administrative costs and for rental assistance; and
WHEREAS, the Council Policy Statement regarding the administration of the Carlsbad Housing
Trust, shown in Attachment A to this resolution, was prepared by Community Development
Department staff to provide additional guidance in the planning and administration of the Carlsbad
Housing Trust Fund.
NOW, THEREFORE, BE IT RESOLVED by the Housing Commission of the City of Carlsbad,
California, as follows:
1. That the above recitations are true and correct.
2. That, based on information provided in the Housing Commission staff report and
considering testimony of all persons desiring to be heard at the Aug. 13, 2020 public
meeting, the Housing Commission hereby recommends that the City Council approve
the Council Policy Statement -Administration of the Carlsbad Housing Trust Fund,
attached hereto as Attachment A.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Housing Commission of the City
of Carlsbad on the 13th day of August 2020, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
JOHN NGYUEN-CLEARY, Chairperson
CARLSBAD HOUSING COMMISSION
ATTEST:
DAVID DE CORDOVA
Housing Services Manager
Attachment A
{city of
Carlsbad
Policy No.
Date Issued:
Effective Date: DRAFT
Council Policy Statement
Category: AFFORDABLE HOUISNG
Specific Subject: Administration of the Housing Trust Fund
PURPOSE:
Resolution No.
Cancellation Date:
Supersedes No.
Pursuant to Carlsbad Municipal Code (CMC) §21.85.110 and §21.85.120, all fees coll ected under the
lnclusionary Housing Ordinance sha ll be deposited into a housing trust fund and expended for the
affordable housing needs of lower-income households, consistent with the General Plan Housing Element
and the CMC.
21.85.110 In-lieu fees. (D) All in-lieu fees collected hereunder shall be deposited in a
housing trust fund. Said fund shall be administered by the city and shall be used only for
t he purpose of providing funding assistance for the provision of affordable housing and
reasonable costs of administration consistent with the policies and programs contained
in the housing element of the general plan.
21.85.120 Collection of fees. All fees collected under this chapter sha ll be deposited
into a housing trust fund and shall be expended only for the affordable housing needs of
lower-income house holds, and reasonable costs of administration consist ent with the
purpose of this chapter.
Funding from the fund, which should be leveraged to the extent feasible with state, federal and private
sector subsidy capital, is intended to aid in the production, acquisition, rehabilitation and preservation of
housing affordable to extremely low-, very low-and low-income households, and those suffering from
homelessness.
BACKGROUND:
The city's lnclusionary Housing Ordinance was estab lished in April 1993 and requires that all residential
developments greater than six units restrict 15 percent of the total number of homes in a project as
affordable to lower income household s. This obligation is fulfilled through construction of a variety of
rental or ownership units, both on and off-site. Some developments have the option to satisfy a portion or
all of their affordable housing obligation through payment of inclusionary housing in-lieu fees or by
purchasing affordable housing credits, when available.
For the city to receive and use these fee payments, an implementation mechanism was needed to ensure
that the funds collected were app lied appropriately. As a result, the housing trust fund was established to
confirm that fees collected were applied only towards the affordable housing needs of lower income
households, and for reaso nable costs of administration consistent with the purposes of the General Plan
Housing Element and lnclusionary Housing Ordinance (Carlsbad Municipal Code Sections 21.85.110 and
21.85.120). The housing trust fund receives revenue from other sources, including interest from loans,
housing credit purchases, housing impact fees, and interest earned on the fund ba lance.
Page 1 of 4
Policy No.
Over the past 20-years, the housing trust fund has been used to support a variety of affordable housing
development and services for lower income and homeless individuals and families. As a local fund, the City
Council determines how housing trust fund money can be spent, provided expenditures are consistent
with the purposes of the lnclusionary Housing Ordinance and the policies and programs in the General Plan
Housing Element.
POLICY:
It is the policy of the City Council that the housing trust fund shall be administered as follows:
l. Usa~
0
~,:;:~:::e housing" as used In this policy shall h;i.itJJ;l!:=me meaning as in CMC
§21.85.020(A}. ..::/@()=:}\:-.
b. Housing Trust Fund dollars may be used fQ.f:::~;$11:·~st;·:1¥it~.i. .. acquisition and/or
rehabilitation, subsidy or other means tcfMliti other gover~ffiint~I agencies, nonprofit groups
and private organizations or individu~~JWheating or maintai~mtittordab1e housing.
c. For new construction, acquisition/reh·:mti~tjpn proj~~~J. Housing··;m~fµnd dollars are
intended to offer "gap" fin~.P:fing. The substift~.m:~:!f:fijM1ould be the rifi~T:W:!Jm amount
necessary to both ensure tl.Jff.~~~.i_bility of a prof.ij~(~na the affordability ofthe units. Projects
are expected to support as'Hjij~ii=~.t:>tas feasibltNin:~Jo attract as much equity investment as
is typical for similar projects. \}\ ·-··::\@:.\:::... ··:\ft ..
d. Low interest lq.~ns::~rn. the gen~:;Ji:i&::pr~·;;~~~ijJ~tm fo;:d1i~~tUuJting Housing Trust Fund dollars
for work in ~J@llii&i~itt:i.ousing d~\i1.Qpme.r:@liiW~l1~r, gr~ttts may a1so be considered. {tt:::=·· ··=~ttt ==t\ .. ilW::·· ··'.·==:\\\:::::·
e. Housing TfU~H\md dolla{$)nay be us·e(dl<ftfrovide neilaffordable rental or ownership housing
units. \ :1b::.. _):ij!!l~':=:<-,. "'\(it\.
f. ,,::::~!M'.M!~t~~~istanc~J~ij~~f1~foij~j~_g.Trus(f:t!r1d dollars shall not be used to satisfy a
.·:=:=f@~teio·1itH~nf:~Jnc1u~l~m,w housirlg:=t.ijg~!r~·,y;:~·nt but may be used to assist in exceeding the
=t@i(requirement.by)i'.l~.reasfr:fg}IJ.~ numbe?M=~ffordable units and/or expanding affordability to
·-:::\)~ry low or ext~'Mi!,.Y. low··mi~m~ households, or to encourage a preferable product type.
g. ·:;~w~:f:iti~I assistanc:\~'.~l)ests ·:mit~ evaluated by the Affordable Housing Policy Team and ...... ·.···•·· ......... ·. prese~tM .. to the Hou~~ijg. Commission for review and recommendation to the City Council. The
City Co°i:t~l!hi.~ the fina{[~~cision-maker for financial assistance requests.
··:?1?::::.. ..imr
h. Housing Trust)~~n~l~~~fars may be used to cover reasonable costs to administer the fund. Such
allowable adml°ritijf~tive costs include personnel expenses and maintenance and operations
(M&O} costs such .. as office equipment and supplies, utilities, noticing, dues and subscriptions,
travel and training, miscellaneous studies, audit, legal support, information technology
support, interdepartmental charges, and supplemental administrative support to the Section 8
rental assistance program. Contributions to service providers who provide direct assistance to
low income and homeless persons, while budgeted as M&O expenses, are not considered
administrative costs for purposes of this policy. The level of administrative expenses will be
determined by the City Council as part of the annual budget. As a general guide however,
administrative expenses should not exceed three to five percent of the available HTF balance
as of the end of the prior fiscal year.
Page 2 of 4
Policy No.
i. The annual budget process for the housing trust fund shall be guided by Housing Element
policies and programs, the lnclusionary Housing Ordinance, and the following general
affordable housing priorities, in descending order:
1. Construction of new affordable housing;
2. Preservation of housing at-risk of conversion to market rate;
3. Conversion of market rate units to affordable housing;
4. Acquisition/rehabilitation of distressed/at-risk affordable housing; and/or,
5. Land acquisition for future affordable units.
6. Short-term rental assistance programs to prevent and reduce homelessness.
2. H:~si::a:~:a:u:r:::::~~::~n: Trust Fund AnnuaJ~tf tf !'.:~e City Council. The report shall
include the following: ·=:t_r==·· ··:\(_(:_}_.(:_·:·.·:.· .. •. :::-~ .-::::~:;:~:;:i:~. ·-:~:;~~~}:::: ..
1. Summary of the use of the fund$::~¥1sistent with this'.:p,aUcy.
2. Summary of the projects assi~t~i~ith Housing Trust Fii~mg._g_llars over the past year.
3. Financial status of the Housing::f:fb,st Fund. ·~::~f}=::-
4. A summary of administrative an"J:l~i~J.~roj~.~lM~enses mad'lijJ~~ prior year.
5. Review of prior yetf:;funding prioriti~nd{a:et:-omplishments. ··::t:::;:
6. Summary of pendr(if~f~nce reque:f/@f.a\:onfirmation of upc~~ing year funding . . • ~]:::?;:».·. :~x.:·.
pnont,es. '\tt::~::===(ttr~:::-;-. ::-~w~tt: ..
b. The Housing Trust Fund Annuaf·:rt~ort s'fiaJtJ?.f:,r.eviewetlj~:-lhe Affordable Housing Policy
Team and th~:t:lf«.sJ.b.JJ;:ommissidij~\fhe Ho:@Jijg/~.r:nmis~itt:shall make a recommendation to the Ci",fif'~'-i::tjJh.. °t~~f~,·,<«ftff;fo,. .,,
3. Affordable Housing:~oject Eva{ijation ·'.~~tt··
··=-=-=~-=·· ···=-=-=·· ~::::»:-.
a. lr);~dd!!jgn to ;Jf}~y1~411~mr:~o.t~nts ~W!t~~aluation criteria specified under CMC
.;;::::£;dmm~§21.8S:i~if~dcfWi~l:l<::il Pdli&57 -Off-site and Combined lnclusionary
;:::df.Jffri.using .. P}&jij~~. pr~Ji=i~:that pr~Jfa'Mite.Jci:flowing will be given additional consideration •: ...... ·.');/;"/ . .,.~i'I:-~'2":::,:-:,, ~'%7
··===/~~=:~hen ranked agij~.t otheft:[P.t;~jects. ·
··=:::;:~=~====·· -~~~~:;:;::::~. ··=:::~:;:~:::: .•
··==\t}. Projects thatei~vide tnij).ieatest benefit per dollar of funds spent.
··::;::=:::::.. ~::::::::::. ·-:::-·
2~::ft?.(ojects that dlmonstrate higher equity in the project.
··==tt=-.. rm
3. Proj~~lS thatj'.fijwonstrate a lower loan to value ratio.
4. Proj:~it}tjif:I~I:e other funding sources identified and committed. ·~:::::::=·~·
5. Projects which benefit the highest percentage of lower income families, provide the
lowest affordability, include the greater percentage of affordable units or will maintain
longer periods of affordability.
6. Projects that use Housing Trust Fund dollars as a match or to leverage other
conventual and below-market resources, including tax credits, state.and federal
funding programs and other funding sources.
7. Projects proposed by an applicant with a successful history of project development
and/or property management, as appropriate.
Page 3 of 4
Policy No.
4. Affordability Covenant & Form of Financial Assistance
a. Whenever Housing Trust Fund dollars are used for the creation, acquisition, and/or
rehabilitation of affordable housing, the city shall impose enforceable requirements on the
owner of the housing units that the units remain affordable for a period of not less than 55
years for rental units, or 30 years for ownership units, in accordance with CMC Chapter 21.85.
1. When Housing Trust Fund dollars are used to create affordable rental housing, long-
term affordability shall be enforced by restricting rents that may be charged to
tenants.
2. When Housing Trust Fund dollars are used tg;:~t~~j~ affordable housing for-sale, long-
term affordability shall be enforced by imp~jfofre-sale restrictions that maintain an
equitable balance between the interest$MM¥M~n,vner-occupant and the city.
3. When Housing Trust Fund dollars .~f9.:l~;\~: fu~Jf~t~grams which are not described
above, the city shall develop agpj;ijpti"ate mechanisrrt~J~::~nsure ongoing affordability.
b. The affordability restriction require~Jti[~escribed in this sec;;:!~))~fi~!I be enforced by a
covenant running with the land. ··==((::;; .. :::::=::::·.. ··\)\ ..
. ··===tfa::,. .l:mr:· ··===\\::;,
c. The financial assistance sttf.!9~J:~ may take sev.~JiJlq.(ms and are tailorecf::t9:the financial
needs of the individual proj(~l~h~t~.re negotiaf(ar.,fl an individual basis depending upon
project cash-flow and the se'fflf:r:)inij~r:~.;-~.mderwritiijg:gµidelines. Example forms of assistance
may include but are not limiteaJ~; fix°~lim~.r:~st rate"fo\o.~, interest-only, deferred payment
'.".""" •.-••••;;:;•. .. ....
and/or res id u,:t:r:~~~~.P..~s loans, la~ij?:~cqu isitfqdl~~~J~ro unciJt:~~e-back.
5. Administration <)i!lil!'.vf=:::i(f::::It. ··ttt1utf f ;;w==;:;¥\tt::t ··:,:,,,,.
a. The annual Hcfij~!,:,g Trus(f::Qnd budge(~ijijJI be administered by the Community Development
Director, or de·~rg'.ij~~ w~~!jl)~tb.ave the=:@l~ority to govern the fund consistent with housing
,.;::.¢!lfilJijfa~~.IJ.cies a:ffij)p.f~gijffiWijM:§..11.S%ijn.d this policy.
,'.{:(:]:)t:::::•'.• ...... ·.·.-:·:~::l/f:::;;.. ··::::f:\.. . ··=:=:=tt1::::,.. ··=::/'
jij()Housing Trustfgnd doll~:tf~re held irf~:\~p,arate account until disbursed consistent with this ·s,:<l;tf ,'.icy. ·.·,==wrtL. ''.~rr ifh. . ..
c. ff\e.:~.Qmmunity DeveJppment ·otr.e~tor, in coordination with the Finance Director, shall ensure
thittij~~~ing Tru~t FJ:ijf~ollars ~:t~ awarded, encumbered or otherwise obligated for uses
consisl~ntwith housirif~Jement policies and programs, CMC 21.85, and this policy, and in a
manner ~JMJstent ~iifothe city's financial policies and ordinances.
6. Related Policies''\{j]\'::f !ff/
a. City Council Policy=·No. 57 -Off-site and Combined lnclusionary Housing Projects
b. City Council Policy No. 73 -City Option to Purchase Resale Affordable Housing
Page 4 of 4
3/25/2020 Chapter 21.85 INCLUSIONARY HOUSING EXHIBIT 2
Carlsbad Municipal Code
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Title 21 ZONING
Chapter 21.85 INCLUSIONARY HOUSING*
* CodeAlert: This topic has been affected by Ordinance No. CS-368. To view amendments and newly added provisions,
please refer to the CodeAlert Amendment List.
J_ 21.85.010 Purpose and intent.
The purpose and intent of this chapter is as fo llows:
A. lt is an objecti ve of the city, as established by the housing element of the city's general plan, to ensure that all
residential development, inc luding all master planned and specific planned communities and all residential
subdivis ions provide a range of housing opportunities for a ll identifiable economic segments of the population,
including households of lower and moderate income. It is a lso the policy of the city to:
I. Require that a minimum of fifteen percent of all approved ownershi p and qualifying rental units as set
forth in Section '!-1.85.0JO(A) be restricted to and affordable to lower-i ncome households; subject to
adj ustment based on the granting of an inclusionary credit;
2. Require that for those developments which provide ten or more units affordable to lower-income
households, at least ten percent of the lower-income units shall have three or more bedrooms;
3. Under certain conditions, allow alternatives to on-site construction as a means of providing affordable
units; and
4. In specific cases, all ow inclusionary requirements to be satisfied through the payment of an in-lieu fee as
an alternati ve to requiring inclusionary units to be constructed.
8. It is the purpose of this chapter to ensure the implementation of the city objective and policy stated in
subsection A.
C. Nothing in this chapter is intended to create a mandatory duty on the part of the city or its employees under the
Government Tort Claims Act and no cause of action against the city or its employees is created by this chapter that
would not arise independently of the provisions of this chapter. (Ord. CS-I 09 § I I, 20 IO; Ord. NS-794 § 2, 2006;
Ord. NS-535 § I, 2000)
21.85.020 Definitions.
Whenever the fo llowing terms are used in this chapter, they shall have the meaning established by this section:
A. "Affordable housing" means housing for which the a llowable housi ng expenses paid by a qualifying household
shall not exceed a specified fraction of the county median income, adjusted for household size, as follows:
I. Extremely low-income, rental or ownership units: the product of thirty percent times thirty percent of the
county median income, adjusted for household size;
2. Very low-income, rental and ownership uni ts : the product of thirty percent times fifty percent of the
county median income, adjusted for household size;
3. Low-i ncome, ownershi p units: the product of thirty percent times eighty percent of the county median
income, adjusted for household size; and
4. Low-income, rental units: the product of thirty percent times seventy percent of the county median
income, adj usted for household size.
8. "Affordable housing agreement" means a legally binding agreement between a developer and the city to ensure
that the inclusionary requirements of this chapter are satisfi ed. The agreement establishes, an10ng other things, the
number ofrequired inclusionary units, the unit sizes, location, affordability tenure, terms and conditions of
affordability and unit production schedule.
www.qcode.us/codes/carlsbad/ 1/10
3/25/2020 Chapter 21.85 INCLUSIONARY HOUSING
C. "Allowable housing expense" means the total monthly or annual recurring expenses required of a household to
obtain shelter. For an ownership unit, allowable housing expenses include loan principal and interest at the time of
initial purchase by the homebuyer, allowances for property and mortgage insurance, property taxes, homeowners'
association dues and a reasonable allowance for utilities as defined by the Code of Federal Regulations (24 CPR
982). For a rental unit, allowable housing expenses include rent and a utility allowance as established and adopted
by the City of Carlsbad housing authority, as well as all 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.
D. "Affordable housing policy team" shall consist of the community and economic development director, city
planner, housing and neighborhood services director, administrative services director/finance director and a
representative of the city attorney's office.
E. "Combined inclusionary housing project" means separate residential development sites which are linked by a
contractual relationship such that some or all of the inclusionary units which are associated with one development
site are produced and operated at a separate development site or sites.
F. "Conversion" means the change of status of a dwelling unit from an ownership unit to a rental unit or vice
versa and/or a market-rate unit to a unit affordable to lower-income households.
G. "Development revision" means revisions to development permits, entitlements, .and/or related maps.
H. "Density bonus" shall have the same meaning as defined in Section 21.86.020(A)(7) of this title.
I. "Extremely low-income household" means those households whose gross income is equal to or less than thirty
percent of the median income for San Diego County as determined by the U.S. Department of Housing and Urban
Development.
J. "Financial assistance" means assistance to include, but not be limited to, the subsidization offees,
infrastructure, land costs, or construction costs, the use of redevelopment set-aside funds, community development
block grant (CDBG) funds, or the provision of other direct financial aid in the form of cash transfer payments or
other monetary compensation, by the City of Carlsbad.
K. "Growth management control point" shall have the same meaning as provided in Chapter 21.90, Section
21.90.045 of this title.
L. "Incentives or concessions" shall have the same meaning as defined in Section t1.:~6-:.Q]..Q(A)(12) of this title.
M. "lnclusionary credit" means a reduction in the inclusionary housing requirement granted in return for the
provision of certain desired types of affordable housing or related amenities as determined by the city council.
N. "Inclusionary housing project" means a new residential development or conversion of existing residential
buildings which has at least fifteen percent of the total units reserved and made affordable to lower-income
households as required by this chapter.
0. "Inclusionary unit" means a dwelling unit that will be offered for rent or sale exclusively to and which shall be
affordable to lower-income households, as required by this chapter.
P. "Income" means any monetary benefits that qualify as income in accordance with the criteria and procedures
used by the City of Carlsbad housing and redevelopment department for the acceptance of applications and
recertifications for the tenant based rental assistance program, or its successor.
Q. "Low-income household" means those households whose gross income is more than fifty percent but does not
exceed eighty percent of the median income for San Diego County as determined annually by the U.S. Department
of Housing and Urban Development.
R. "Lower-income household" means low-income, very low-income and extremely low-income households,
whose gross income does not exceed eighty percent of the median income for San Diego County as determined
annually by the U.S. Department of Housing and Urban Development.
S. "Market-rate unit" means a dwelling unit where the rental rate or sales price is not restricted either by this
chapter or by requirements imposed through other local, state, or federal affordable housing programs.
T. "Offsets" means concessions or assistance to include, but not be limited to, direct financial assistance, density
increases, standards modifications or any other financial, land use, or regulatory concession which would result in an
identifiable cost reduction enabling the provision of affordable housing.
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U. "Ownership unit" means a residential unit with a condominium or other subdivision map allowing units to be
sold individually.
V. "Rental unit" means a residential unit with no condominium or other subdivision map allowing units to be sold
individually.
W. "Residential development" means any new residential construction of ownership or rental units; or
development revisions, including those with and without a master plan or specific plan, planned unit developments,
site development plans, mobile home developments and conversions of apartments to condominiums, as well as
dwelling uni ts for which the cost of shelter is included in a recurring payment fo r expenses, whether or not an initial
lump sum fee is also required.
X. "Target income level" means the income standards for extremely low, very low and low-income levels within
San Diego County as determined annually by the U.S. Department of Housing and Urban Development, and
adjusted for family size.
Y. "Total residential units" means the total units approved by the final decision-making authority. Total residential
units are composed of both market-rate units and inclusionary units.
Z. "Very low-income household" means a household earn ing a gross income equal to fifty percent or less of the
median income for San Diego County as determined annually by the U.S. Department of Housing and Urban
Development. (Ord. CS-164 §§ I 0, 12, 14, 2011 ; Ord. CS-I 09 § lll, 20 IO; Ord. NS-794 § 3, 2006; Ord. NS-535 § 1,
2000)
~ 21.85.030 Inclusionary housing requirement.
The inclusionary housing requirements of this chapter shall apply as follows:
A. This chapter shall apply to all residential market-rate dwelling units resulting from new construction of
ownership units, including the conversion of apartments to condominiums and to new construction of rental units
where the developer receives direct financial assistance, offsets, or any incentive of the type specified in density
bonus law pursuant to the provisions of Chapter 21.86 of this code, and the developer agrees by contract to limit
rents for below market-rate rental units. Any developer not receiving direct financial assistance, offsets, or other
incentives may voluntarily agree to provide inclusionary rental units.
B. For any residential development or development revision of seven or more units as set forth in subsection A,
not less than fifteen percent of the total units approved shall be constructed and restricted both as to occupancy and
affordability to lower-income households.
C. For those developments which are required to provide ten or more units affordable to lower-income
households, at least ten percent of the lower-income units shall have three or more bedrooms.
D. This chapter shall not apply to the fo llowing:
I. Existing residences whi ch are altered, improved, restored, repaired, expanded or extended, provided that
the number of units is not increased, except that this chapter shall pertain to the subdivision ofland for the
conversion of apartments to condominiums;
2. Conversion of a mobile home park pursuant to Section 2_1_.37._1_20 of the code;
3. The construction of a new residential structure which replaces a residential structure that was destroyed or
demolished within two years prior to the application for a building permit for the new residential structure,
provided that the number of residential units is not increased from the number of residential units of the
previously destroyed or demolished residential structure;
4. Any residential unit which is accessory as defined in Section 2_]_.04.020 of this code;
5. Accessory dwelling units not constructed to fulfill inclusionary housing requirements and developed in
accordance with Section 2 1: I 0.030 of this code;
6. Any project or portion of a project which is a commercial living unit as defined in Section 2_1_.04.093 of
this code;
7. Any rental uni t where the developer does not obtain direct financial assistance, offset, or any other
incentive or concession of the type specified in density bonus law, although a mandatory density bonus may
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have been applied pursua nt to the provisions of Chapter 2_1 _.86 of this code; and
8. Those residentia l units which have obtained affordable housing approvals prior to the effective date of the
ordinance codified in this chapter, as set forth in Section 2_1_.85 .. 160 of this chapter. (Ord. CS-324 § 2, 20 17;
Ord. CS-109 §§ IV-VI, 20 10; Ord. NS-535 § I, 2000)
21.85.035 New master plans or specific plans.
New master plans and specific plans shall submit an inclusionary housing plan as follows:
A. All master plans and specific plans approved on or after the effective date of the ordinance cod ified in this
chapter are required by this chapter to provide an inc lusionary housing plan within the master plan or specific plan
document. This inc lusionary housi ng plan will include appropriate text, maps, tables, or figures to establish the basic
framework for implementing the requirements of this chapter. It shall establish, as a minimum , but not be limited to,
the fo llowing:
I. The number of market-rate units in the master plan or specific plan;
2. The number of req uired inclusionary units for lower-income households over the entire master plan or
specific plan;
3. The designated sites fo r the location of the inclusionary units, inc luding but not limited to any sites for
locating off-site inclusionary housing projects or combined inclusionary housing projects;
4. A general provi sion stipulating that an affordable housing agreement shall be made a condition of all
futu re discretionary permits fo r development within the master or specific plan area such as tentative maps,
parcel maps, planned unit developments and site development plans. The provision shall establish that all
relevant terms and conditions of any affordable housing agreement shall be filed and recorded as a restriction
on the project as a whole and those indiv idual lots, uni ts or projects which are designated as inclusionary units.
The affordable housing agreement shall be consiste nt with Secti on 2_1_.85 .. 140 of this chapter.
B. The location and phasing of inclusionary dwelling units may be mod ified as a minor amendment to the master
plan pursuant to Section 2 l_.38.1 20 of this title if the city council authorizes such modifications when approving the
master plan.
C. All existing master plans or specific plans proposed for major amendment, pursuant to Section 2_1 _ _.38._)_20 of
this code, shal l incorporate into the amended master plan or specific plan document an inclusiona,y housing plan,
consistent wi th this section of this chapter. (Ord. NS-535 § I, 2000)
! 21.85.040 Affordable housing standards.
The affordable housing standards are as follows:
A. All qualifying residential developments pursuant to Section ~ .. \J .tQ.J.9..(A) are subject to and must satisfy the
inclusionary housing requirements of this chapter, notwithstandi ng a developer's request to process a residential
development under other program requirements, laws or regulations, including but not limited to Chapter 2_1_.86
(Residential Density Bonus) of this code. If an appli cant seeks to construct affordable housing to qualify for a
density bonus in accordance with the provisions of Chapter 2_1_._86 (Residential Density Bonus), those affordable
dwelling units that qualify a residential development for a density bonus are in addition to, and do not count toward
satisfying, the inclusionary housing requirements of thi s chapter.
B. Whenever reasonably possible, inclusionary units should be bui lt on the residential development project site.
C. The required inclusionary units shall be constructed concurrently with market-rate units unless both the final
decision-making authority of the city and developer agree within the affordable housing agreement to an alternative
schedule for development.
D. lnclusionary rental units shall remain restricted and affordable to the designated income group fo r fifty-five
years. In addition to the income ofa targeted group, limitations on assets may also be used as a factor in determi ning
eligibility for rental or ownership units. Notwithstanding anything to the contrary in this chapter, no inclusionary
un it shall be ren ted fo r an amount which exceeds ninety percent of the actual rent charged for a com parable market
un it in the same development, if any.
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E. After the initial sale of the inclusionary ownership units at a price affordable to the target income level group,
inclusionary ownership units shall remain affordable to subsequent income eligible buyers pursuant to a resale
restriction with a term of thirty years or ownership units may be sold at a market price to other than targeted
households provided that the sale shall result in the recapture by the city or its designee of a financial interest in the
units equal to the amount of subsidy necessary to make the unit affordable to the designated income group and a
proportionate share of any appreciation. Funds recaptured by the c ity shall be used in assisting other eligible
households with home purchases at affordable prices. To the extent possible, projects using ownership units to
sati sfy inclusionary requirements shall be designed to be compatible with conventional mortgage fi nancing
programs including secondary market requirements.
F. Inc lusionary units should be located on sites that are in proximity to or will provide access to employment
opportunities, urban services, or major roads or other transpo1iation and commuter rail facilities and that are
compatible with adjacent land uses.
G. The design of the inclusionary units shall be reasonably consistent or compatible with the design of the total
project development in terms of appearance, materials and finished quality.
H. lnclusionary projects shall provide a mix ofnw11ber of bedrooms in the affordable dwelli ng units in response
to affordable housing demand priorities of the city.
l. No building permit shall be issued, nor any develo pment approval granted for a development which does not
meet the requirements of this chapter. No inclusionary unit shall be rented or sold except in accordance with this
chapter. (Ord. CS-I 09 §§ VII-IX, 20 IO; Ord. NS-794 § 4, 2006; Ord. NS-535 § 1, 2000)
~ 21.85.050 Calculating the required number of inclusionary units.
Subject to adjustments for an inclusionary credit, the required number of lower-income inclusionary units shall be fifteen
percent of the total residential units, approved by the final decision-making authority. If the inclusionary units are to be
provided withi n an off-site combined or other project, the required number of lower-income inclusionary units shall be
fifteen percent of the total residential units to be provided both on-site and/or off-s ite. Subject to the maximum density
allowed per the growth management control point or per specific authorization granted by the planning commission or
city council, fractional units fo r both market rate and inclusionary units of 0.5 will be rounded up to a whole unit. lf the
rounding calculation results in a total residential unit count which exceeds the maximum allowed, neither the market rate
nor the inclusionaty unit count will be increased to the next whole number.
Example I: Total residential units= fifteen percent inclusionai·y units plus eighty-five percent market-rate units. If the
final decision-making authority approves one hundred total residential units, then the inclusionai·y requirement equals
fifteen percent of the "total" or fifteen units ( l 00 x .15 = 15). The allowable market-rate units would be eighty-five
percent of the "total" or e ighty-fi ve units.
Example 2: If the inclusionary units are to be provided off-site, the total number ofinclusionary units shall be calculated
according to the total number of market-rate units approved by the final decision-making authority. If one hundred
mar ket-rate units are approved, then this total is divided by .85 which provides a total residenti al unit count ( I 00 -;-.85 =
117). The fifteen percent requirement is applied to this "total" (one hundred seventeen units) which equals the
inclusionary unit requirement ( 117 x .15 = 17.6 units). (Ord. NS-794 § 5, 2006; Ord. NS-535 § I, 2000)
21.85.060 Inclusionary credit adjustment.
Certain types of affordable housing are relatively more desirable in satisfying the city's state-mandated affordable housing
requirement as well as the city's housing element goals, objectives and policies, and these may change over time.
To assist the city in providing this housing, developers may receive additional (more than one unit) credit for each of such
units provided, thereby reducing the total inclusionary housing requirement to less than fifteen percent of all residential
units approved. A schedule of inclusionai·y housing credit specifying how credit may be earned shall be adopted by the
city council and made available to developers subject to this chapter. (Ord. NS-794 § 6, 2006; Ord. NS-535 § I, 2000)
21.85.070 Alternatives to construction of inclusionary units.
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Notwithstanding any contrary provisions of this chapter, at the sole discretion of the city council, the city may determine
that an alternative to the construction of new inclusionary units is acceptable.
A. The city council may approve alternatives to the construction of new inclusionary units where the proposed
alternative supports specific housing element policies and goals and assists the city in meeting its state housing
req uirements. Such determinati on shall be based on fi ndi ngs 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. Alternatives may include, but not be limited
to, acquisition and rehabi I itation of affordable units, conversion of existing market-rate units to affordable units,
construction of special needs housing projects or programs (shelters, transitional housing, etc.), and the construction
of accessory dwelling units.
B. Accessory dwe lling units constructed to satisfy an inclusionary housing requirement shall be rent restricted to
affordabl e rental rates, and renters shall be income-qualified , as specified in the applicable affordable housing
agreement. In no event shal I a developer be allowed to construct more than a total of fifteen accessory dwelling units
in any given development, master plan, or specifi c plan, to satisfy an inclusionary requirement.
C. Contribution to a special needs housing project or program may also be an acceptable alternative based upon
such findings. The requisite contribution shall be calculated in the same manner as an in-lieu fee per Section
21.85._1_1_0. (Ord. CS-324 § 2, 2017; Ord. CS-I 09 § X, 20 IO; Ord. NS-535 § I, 2000)
21.85.080 Combined inclusionary housing projects.
An affordable housing requirement may be satisfied with off-site construction as fo llows:
A. When it can be demonstrated by a developer that the goals of this chapter and the city's housing element would
be better served by all owi ng some or all of the inclusionary units associated with one residential project site to be
produced and operated at an alternative site or sites, the resulting linked inclusionary project site(s) is a combined
inclusionary housing project.
B. It is at the sole discretion of the city council to authorize the residential site(s) which fo rm a combined
inclusionary housing project. Such decision shall be based on findi ngs that the combined project represents a more
effective and feasible means of implementing this chapter and the goals of the city 's housing element. Factors to be
weighed in this determination include: the feasi bili ty of the on-site option considering project size, site constraints,
competition from other projects, difficulty in integrating due to signifi cant price and product type dispari ty, and lack
of capacity of the on-site development enti ty to deliver affordable housing. Also to be considered are whether the
off-site option offers greater feasibili ty and cost effecti veness, particularly regarding potential local public ass istance
and the city's affordable housing financial assistance poli cy, location advantages such as proximity to jobs, schools,
transpo1tation, and services, diminished impact on other existi ng developments, capacity of the development entity
to deliver the project, and satisfaction of multiple developer obligations that would be difficult to satisfy with
multiple projects.
C. All agreements between parties to form a combined inclusionary housing project shall be made a part of the
affordab le housing agreement required for the site(s), which affordable housing agreement(s) shall be approved by
council.
D. Location of the comb ined inclusionary housing project is limited to sites within the same city quadrant in
which the market-rate units are located, or sites which are contiguous to the quadrant in which the market-rate uni ts
are proposed. (Ord. NS-535 § I, 2000)
21.85.090 Creation of inclusionary units not required.
Inclusionary uni ts created whi ch exceed the fi nal requirement for a proj ect may, subject to city council approval in the
affo rdable housing agreement, be utilized by the developer to satisfy other inclusionary requirements fo r which it is
obligated or market the units to other deve lopers as a combined project subject to the requirements of Section 2_1_.85.080.
(Ord. NS-535 § I, 2000) .
21.85.100 Offsets to the cost of affordable housing development.
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A. The city shall consider making offsets available to developers when necessary to enable residential projects to
provide a preferable product type or affordability in excess of the requirements of this chapter.
B. Offsets will be offered by the city to the extent that resources and programs for this purpose are available to the
city and approved for such use by the city council, and to the extent that the residential development, with the use of
offsets, assists in achieving the city's housing goals. To the degree that the city makes available programs to provide
offsets, developers may make application for such programs.
C. Evaluation of requests for offsets shall be based on the effectiveness of the offsets in achieving a preferable
product type and/or affordability objectives as set forth within the housing element; the capability of the
development team; the reasonableness of development costs and justification of subsidy needs; and the extent to
which other resources are used to leverage the requested offsets.
D. Nothing in this chapter establishes, directly or through implication, a right to receive any offsets from the city
or any other party or agency to enable the developer to meet the obligations established by this chapter.
E. Any offsets approved by the city council and the housing affordability to be achieved by use of those offsets
shall be set out within the affordable housing agreement pursuant to Section 21.85.140 or, at the city's discretion in a
subsequent document.
F. Developers are encouraged to utilize local, state or federal assistance, when available, to meet the affordability
standards set forth in Sections 21.85.030 and 21.85.040.
G. For development located in the coastal zone, any offset provided pursuant to this section shall be consistent
with the applicable provisions of the certified Carlsbad Local Coastal Program Land Use Plan(s), with the exception
of density. (Ord. NS-889 § I, 2008; Ord. NS-794 § 7, 2006; Ord. NS-535 § 1, 2000)
21.85.110 In-lieu fees. -------~-------··--·-
Payment of a fee in lieu of construction of affordable units may be appropriate in the following circumstances:
A. For any qualifying residential development or development revision pursuant to Section 21.85.0JO(A) of less
than seven units, the inclusionary requirements may be satisfied through the payment to the city of an in-lieu fee.
B. The in-lieu fee to be paid for each market-rate dwelling unit shall be fifteen percent of the subsidy needed to
make affordable to a lower-income household one newly constructed, typical attached-housing unit. This subsidy
shall be based upon the city council's determination of the average subsidy that would be required to make
affordable typical, new two-bedroom/one-bath and three-bedroom/two-bath ownership units and rental units, each
with an assumed affordability tenure of at least fifty-five years.
C. The dollar amount and method of payment of the in-lieu fees shall be fixed by a schedule adopted, from time to
time, by resolution of the city council. Said fee shall be assessed against the market-rate lots/units of a development.
D. All in-lieu fees collected hereunder shall be deposited in a housing trust fund. Said fund shall be administered
by the city and shall be used only for the purpose of providing funding assistance for the provision of affordable
housing and reasonable costs of administration consistent with the policies and programs contained in the housing
element of the general plan.
E. At the discretion of the city council, where a developer is authorized to pay a fee in lieu of development, an
irrevocable dedication of land or other non-monetary contribution of a value not less than tl)e sum of the otherwise
required in-Heu fee may be accepted as an alternative to paying the in-lieu fee if it is determ_ined that the non-
monetary contribution will be effectual in furthering the goals and policies of the housing element and this chapter.
The valuation of any land offered in-lieu shall be determined by an appraisal made by an agent mutually agreed
upon by the city and the developer. Costs associated with the appraisal shall be borne by the developer.
F. Where a developer is authorized to pay a fee in lieu of development of affordable housing units, any approvals
shall be conditioned upon a requirement to pay the in-lieu fee in an amount established by resolution of the city
council in effect at the time of payment.
G. As an alternative to paying an in-lieu fee(s), inclusionary housing requirements may be satisfied either through
a combined inclusionary housing project, pursuant to Section 21.85.080 of this chapter or new construction of
inclusionary units subject to approval of the final decision-making authority. (Ord. CS-109 §§ XI, XII, 2010; Ord.
NS-535 § l, 2000)
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21.85.120 Collection of fees.
All fees collected under this chapter shall be deposited into a housing trust fund and shall be expended only for the
affordable housing needs of lower-income households, and reasonable costs of administration consistent with the purpose
of this chapter. (Ord. NS-535 § 1, 2000)
21.85.130 Preliminary project application and review process.
The preliminary project application/review process shall be as follows:
A. A develo per of a res idential development not subject to a master plan or specific plan, proposing an
inclusionary housing project shall have an approved site development plan prior to execution of an affordable
housing agreement fo r the project. The developer may submit a preliminary application to the housing and
neighborhood services director prior to the submittal of any fo rmal applicati ons fo r such housi ng development. The
preliminary application shall include the fo llowing information if applicable:
I. A brief description of the proposal including the number of inclusionary units proposed;
2. The zoni ng, general plan designations and assessors parcel number(s) of the project site;
3. A site plan, drawn to scale, which includes: building footprints, dri veway and parking layout, buildi ng
elevations, existing contours and proposed grading; and
4. A letter identifying what specific offsets and/or adj ustments are being requested of the city. Justification
for each request should also be included.
B. Within thirty days of receipt of the preliminary application for projects not requesting offsets or inclusionary
credit adjustments, or ninety days for projects requesting offsets or inclusionary credit adjustments, the department
shall provide to an applicant, a letter which identifies project issues of concern, the offsets and inclusionary credit
adjustments that the community and economi c development director can support when making a recommendation to
the final decision-making authority, and the procedures for compliance with this chapter. The applicant shall also be
provided with a copy of thi s chapter and related polic ies, the pertinent sections of the Californi a codes to which
reference is made in this chapter and all required application form s. (Ord. CS-164 §§ 12, 14, 2011 ; Ord. NS-794 § 8,
2006; Ord. NS-535 § I, 2000)
21.85.140 Affordable housing agreement as a condition of development.
This chapter requires the following :
A. Developers subject to this chapter shall demonstrate compliance with th is chapter by executing an affordable
housing agreement prepared by the city housing and neighborhood services director and submitted to the developer
for execution. Agreements which conform to the requirements of this section and which do not involve requests for
offsets and/or an inclusionary credit, other than those permitted by right, if any, shall be reviewed by the affordable
housing policy team and approved by the communi ty and economic development director or designee. Agreements
which involve requests fo r offsets and/or an inclusionary credit, other than those permitted by right, shall require the
recommendation of the housing commission and action by the city council as the fi nal decision-maker. Following
the approval and execution by all parties, the affordable housing agreement with approved site development plan
sha ll be recorded against the entire development, including market-rate lots/units and the relevant terms and
conditions therefrom filed and subsequently recorded as a separate deed restriction or regulatory agreement on the
affordable project individual lots or units of property which are designated for the location of affordable uni ts. The
approval and execution of the affordable housing agreement shall take place prior to fi nal map approval and shall be
recorded upon fi nal map recordation or, where a map is not be ing processed, prior to the issuance of building
permits for such lots/units. The a ffordable housing agreement may require that more specific project and/or unit
restricti ons be recorded at a future time. The affordable housing agreement shall bind all future owners and
successors in interest for the term of years specified therein.
B. An affordable housing agreement, for which the inclusionary housing requirement wil l be satisfied th rough
new construction of incl usionary units, either on-site or off-site, shall establish, but not be limi ted to, the foll owing:
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I. The number of inclusionary dwelling units proposed, with specific calculations detailing the application
of any inclusionary credit adjustment;
2. The unit square footage, and number of bedrooms;
3. The proposed location of the inclusionary units;
4. Amenities and services provided, such as daycare, after school programs, transportation, j ob
training/employment services and recreation;
5. Level and tenure of affordability for inclusionary units;
6. Schedule for production of dwelli ng units;
7. Approved offsets provided by the city;
8. Where applicable, requirements for other documents to be approved by the city, such as marketing,
leasing and management plans; financial assistance/loan documents; resale agreements; and monitoring and
compliance plans;
9. Where applicable, identification of the affordable housing developer and agreements specifying their role
and relationship to the project.
C. An affordable housing agreement, for which the inclusionary housing requirement wi ll be satisfied through
payment to the city of any in-lieu contributions other than fee monies, such as land dedication, shall include the
method of determination, schedule and value of total in-lieu contributions.
D. A n affordable housing agreement will not be required for projects which will be satisfying their inclusionary
housing requirement through payment to the city of an in-lieu fee. (Ord. CS-1 64 §§ 12, 14, 20 l l; Ord. NS-794 §§ 9,
I 0, 2006; Ord. NS-535 § I, 2000)
21.85.145 Agreement processing fee.
The city council may establish by resolution, fees to be paid by the developer at the time of preliminary project
application to defray the city's cost of preparing and/or reviewing all inclusionary housing agreements. (Ord. NS-535 § I,
2000)
21.85.150 Agreement amendments.
Any amendment to an affordable housing agreement shall be processed in the same manner as an original application fo r
approval, except as authorized in Section 2 l_.85.035(8). Amendments to affordable housing agreements initially approved
prior to the effective date of the ordinance codified in this chapter shall be entitled to consideration under the ordinance
provisions superseded by the ordinance codified in this chapter. (Ord. NS-535 § I, 2000)
21.85.155 Expiration of affordability tenure.
The city or its designee shall have a one-time first right of refusal to purchase any project containing affordable units
offered for sale at the end of the minimum tenure of affordability fo r rental projects. The first right ofrefusal to purchase
the rental project shall be submitted in writing to the housing and neighborhood services director. Within ninety days of
its receipt, the city shall indicate its intent to exercise the first right of refusal for the purpose of providing affordable
housing. (Ord. CS-1 64 § 12, 201 1; Ord. NS-535 § I, 2000)
21.85.160 Pre-existing approvals.
Any residential developments for which a site development plan for the affordable housing component of the
development was approved prior to the effective date of the ordinance codified in this chapter shall be subject to the
ordinance in effect at the time of the approval. (Ord. NS-535 § I, 2000)
21.85.170 Enforcement.
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Enforcement provisions are as follows:
A. The provisions of this chapter shall apply to all developers and their agents, successors and ass igns proposing a
quali fy ing residenti al development governed by this chapter pursuant to Section 2_1_.85.0JO(A). No building permit
or occupancy permit shal l be issued, nor any entitlement granted, for a project which is not exempt and does not
meet the req uirements of this chapter. All inc lusionary units shall be rented or owned in accordance with this
chapter.
B. The city may institute any appropriate legal actions or proceedings necessary to ensure compliance with th is
chapter, including but not limited to actions to revoke, deny or suspend any permit or development approval.
C. Any individual who sell s or rents a restricted unit in violati on of the provisions of this chapter shall be required
to forfeit all monetary amounts so obtained. Such amounts shall be added to the city's housing trust fund. (Ord. CS-
109 § XIII, 2010; Ord. NS-535 § I, 2000)
21.85.180 Savings clause.
All code provisions, ordinances, and parts of ordinances in conflict with the provisions of th is chapter are repealed. The
provisions of th is chapte r, insofar as they are substantially the same as existing code provisions relating to the same
subject matter shall be construed as restatements and continuations thereof and not as new enactments. With respect,
however, to violations, rights accrued, liabilities accrued, or appeals taken, prior to the effective date of the ordi nance
codifi ed in this chapter, under any chapter, ordi nance, or part of an ordinance shall be deemed to remain in full force for
the purpose of sustaining any proper suit, action, or other proceedings, with respect to any such violation, right, liability
or appeal. (Ord. NS-535 § I, 2000)
21.85.190 Severability.
If any provision of this chapter or the application thereof to any person or circumstances is held invalid, the remainder of
the chapter and the application of the provision to other persons not similarly situated or to other circumstances shall not
be affected thereby. (Ord. CS-I 09 § XIV, 20 IO; Ord. NS-535 § l, 2000)
21.85.195 Fee deferral.
Notwithstanding anything in this chapter to the contrary, all housing in-lieu and housing impact fees for any residential
development that consists of five or more dwell ing units shall only be paid pri or to building permit issuance, or, at the
request of the applicant, deferred until all wo rk required for fi nal inspection has been completed and all department
approvals requ ired for fi nal inspection have been obtained by the applicant.
The amount of the fees shall be based on the fees in effect at the time of the request for the final inspection, not the time
of building permit issuance.
1n the event that the city, fo r any reason, fa ils to collect any or all fees prior to fi nal inspection, such fees shall remain the
obligation of the developer and/or the property owner. (Ord. CS-27 1 § V, 2015; Ord. CS-200 § V, 2013)
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