a. Three percent (3%) of the total number of the proposed dwelling units are reserved for very-low-income household as defined in Health and Safety Code Section 50105; or
b. Six percent (6%) of the total number of the proposed dwelling units are reserved for low-income households as defined in Health and Safety Code Section 50079.5; and
c. In addition to either subsection (a) or (b) above, an additional ten percent (10%) of the total number of the proposed dwelling units are reserved for moderate-income households as defined in Health and Safety Code Section 50093.
2. Alternative Inclusionary Housing. If authorized by the Review Authority, inclusionary housing requirements may be met by one of the following:
a. Fifty percent (50%) of the total number of the proposed dwelling units are reserved for qualifying senior citizens households; or b. Fifty percent (50%) of the total number of the proposed dwelling units are reserved for qualifying disabled households as defined by Section 12926 of the California Government Code.
B. Exempt residential development. The following types of development are exempt from this Chapter and have no obligation to provide inclusionary housing units:
1. A residential project proposed to contain thirty (30) or fewer residential dwelling units at one location provided that the project exceeds 75 percent of the maximum density for the zoning district as required by this code. In zoning districts that do not have a maximum density, the project must contain thirty (30) or fewer residential dwelling units and exceed 38 units per acre to be exempt from inclusionary housing requirements. If a project does not exceed the density specified, the required number of inclusionary units shall be based on the potential future build-out at the respective density threshold;
2. The creation of twenty (20) or fewer dwelling units through the adaptive reuse or conversion on the upper floors of a non-residential existing structure to a residential use; and
3. The creation of twenty (20) or fewer dwelling units on the upper floors or rear of commercial or industrial zoned properties where uninterrupted commercial or industrial uses are maintained at the street level and any residential uses shall be not more than 25% of the first-floor area.
9.32.040 - Standards for Inclusionary Units
A. Location of inclusionary units. Inclusionary units shall be constructed on the same site as the market rate units in the project. The Affordable Housing Plan shall provide for the dispersal of buildings containing inclusionary units to the maximum extent feasible, taking into account the funding and financing environments applicable to inclusionary housing development. The Director may allow for variation from these principles, but only to the extent necessary, if the Director determines that an alternative configuration of inclusionary units is required by funding or financing considerations associated with the development of the inclusionary units or by the applicable residential land use designations within and adjacent to the residential project.
B. Timing of construction. The Affordable Housing Plan and Inclusionary Housing Regulatory Agreement required by Section 9.32.090 shall include a phasing plan that provides for the timely construction of the inclusionary units as the project is completed. The phasing plan shall provide for development of the inclusionary units concurrently with the market rate units; provided that the phasing plan may be adjusted by the Director away from strict concurrence where necessary to account for changes in financing and funding environments, economies of scale, and infrastructure needs applicable to development of the market rate and the inclusionary units.
D. Unit types. The unit size, bedroom mix, and amenities for inclusionary units shall be proportional to the market rate units in the project.
E. Exterior appearance. Inclusionary units shall be visually comparable with the market rate units. External building materials and finishes shall be the same type and quality for inclusionary units as for market rate units. Interior materials finishes may vary in compliance with Section 9.32.050.A.6. No reduction in insulation, windows, heating systems, and other improvements relating to energy efficiency or safety of the units is allowed.
F. Development standards. Except as provided in the Affordable Housing Regulatory Agreement in compliance with Subsections 9.32.090.E, inclusionary units shall comply with all applicable development standards of this Land Use Code.
G. Rounding. The calculation of the inclusionary units in compliance with this Subsection that results in fractional units shall be rounded up to the next whole number. For the purposes of calculating a bonus, the residential units do not have to be based upon individual subdivision maps or parcels.
9.32.050 – Concession and Incentives
The developer of a residential project subject to the requirements of this Chapter may request that the City provide inclusionary incentives in compliance with this Section and State law. The goal of the inclusionary incentives is to apply available incentives to qualifying projects in a manner that, to the extent feasible, offsets the cost of providing the inclusionary units. The Director shall respond to a request for incentives in compliance with Section 9.32.090 and shall determine Inclusionary incentives appropriate for the inclusionary units after a review of the Affordable Housing Plan. The City shall grant
concessions and incentives necessary to offset the cost of developing inclusionary units.
A. Concessions. The following concessions and incentives shall be available to the applicant without any requirement that the applicant demonstrate to the City that the requested concession or incentive results in identifiable, financially sufficient, and actual cost reductions to the project:
1. General density bonus. The City shall grant a 25 percent increase in the number of dwelling units normally allowed by the applicable General Plan designation and/or zoning. All standards associated with bulk and massing, including but not limited to, setbacks, floor area ratio, and maximum building height, may be exceeded by up to 1.5 times the district standard to accommodate the additional units. No additional parking is required for the additional units authorized under this section.
2. Interior finish reductions. The City may, to the maximum extent appropriate in light of project design elements as determined by the Director, allow builders to finish out the interior of inclusionary units with less expensive finishes and appliances.
3. Site Standards. The City shall grant exceptions to up to five (5) site and development standards required in this Land Use Code unless the exception causes a health and safety violation.
B. Incentives. The City may grant financial incentives to encourage the development of inclusionary units.
1. Public Financial Assistance. The developer may request the City participate in local, State, and federal public funding in compliance with Section 9.32.090 to assist in the financing and development of the inclusionary units. The City may facilitate applying for State allocation of tax credits, mortgage revenue bond funds, or State or Federal assistance to the project ("External Subsidy").
2. Fee Waivers. The City may grant a package of fee waivers for projects that exceed the minimum inclusionary requirement by at least two times the number of units required by Section 9.32.030.A.1.
3. State Waivers. Waivers of development standards as authorized by State law.
C. Effect of incentive or concession. The granting of a concession or incentive shall not be interpreted, in and of itself, to require a General Plan amendment, zoning change, or other discretionary permit approval.
9.32.060 - Term of Affordability for Rental Inclusionary Units - Rent Costs A. Term. Each rental inclusionary unit shall remain affordable for a period of no less than 55 years from the recordation of the Affordable Housing Regulatory Agreement.
B. Rent cost requirements. Rents for the inclusionary housing units shall be limited to the rates published annually by either the United States Department of Housing and Urban Development or the California Tax Credit Allocation Committee, as approved in the Affordable Housing Plan, as applicable to Humboldt County adjusted for household size, less a reasonable allowance for utilities as may be published by the Housing Authority of the City of Eureka and County of Humboldt or the City of Arcata. Rent limits shall be documented in the Affordable Housing Regulatory Agreement.
9.32.070 - Term of Affordability and Resale of For-Sale Units A. Term. Each for-sale inclusionary housing unit shall remain affordable for a period of no less than 45 years from the recordation of the Affordable Housing Regulatory Agreement.
B. Sale to an income eligible household. The purchase price charged for the Inclusionary housing units in the development shall be financed so that the monthly payments on the 30-year fixed interest rate private mortgage, City second mortgage, property taxes, and property insurance do not exceed the following amounts during the initial sale of the Inclusionary housing:
1. Very low-income households. Thirty percent of 50 percent of the area median income, for units designed for very low-income households, as defined in Health and Safety Code Section 50052.5;
2. Low-income households. Thirty percent of 70 percent of the area median income, for units designed for low-income households, as defined in Health and Safety Code Section 50052.5.
3. Moderate income households. Thirty-five percent of 110 percent of the area median income, for units designed for moderate income households, as defined in Health and Safety Code Section 50052.5.
4. Other Income limits. Other Income limits that may be required by the City's Single-Family Housing Guidelines or other local, State, or federal agencies that are providing financial assistance to the project and are included in the Inclusionary Housing Agreement.
9.32.080 - Income, Occupancy, Hazard Insurance, and Maintenance Requirement A. Income Requirement. Only households that meet the income eligibility requirements upon occupancy shall occupy inclusionary units.
B. Occupancy. Households must occupy inclusionary housing units as a Primary Residence.
C. Insurance. Owners shall maintain insurance for at least the replacement cost of inclusionary housing units throughout the entire affordability period established in the Affordable Housing Regulatory Agreement.
D. Maintenance. Owners shall maintain inclusionary housing units, common areas, and the properties they are situated sufficiently to preserve health and safety of occupants and property value.
9.32.090 - Administration of Inclusionary Units
A. Affordable Housing Plan. The application for the first legislative entitlement for a residential project shall include a draft Affordable Housing Plan, which shall contain at least the following information:
1. Project Proponent. The name and address of the property owner, developer, and authorized agent;
2. Developer. The name and address of the entity that will develop the inclusionary units, if not the developer
3. Project Description. Narrative project description; site plans, floor plans, elevation schematics, and details of phasing of the residential project as a whole including the inclusionary units;
4. Number of dwelling units. The total number of dwelling units approved for the housing development project, including the number of inclusionary units;
5. Description of targeted income group. A description of the household income group to be accommodated by the housing development project, and the standards and methodology for determining the corresponding initial and long-term affordable rent or affordable sales price and housing cost consistent with HUD Guidelines;
6. Marketing plan. The marketing plan and applicant selection procedures for the affordable dwelling units;
7. Description and location of affordable units. The location (fixed and/or floating), unit sizes (in square feet), and number of bedrooms of the affordable dwelling units and market rate units;
8. Term and type of use restrictions. Term of the affordability restrictions for the affordable dwelling units in compliance with Sections 9.32.060 and
9.32.070;
9. Completion and occupancy schedule. A schedule for completion and occupancy of the affordable dwelling units;
10. Description of concessions and/or incentives. A description and Land Use Code citation of the additional concessions and/or incentives being requested by the applicant; and
11. Other provisions. Other information required by the Director or local, State, or federal funding agencies to ensure successful implementation and compliance with this Chapter.
B. Action on Affordable Housing Plan. The Review Authority shall approve each Affordable Housing Plan that meets the requirements of Section 9.31 and/or Section
9.32. No development entitlement shall be granted without an approved Affordable Housing Plan. The elements of the Affordable Housing Plan shall be incorporated into the terms and conditions of the applicable entitlements and Affordable Housing Regulatory Agreement, which shall be recorded on title.
C. Affordable Housing Regulatory Agreement. The City Manager is authorized to execute an Affordable Housing Regulatory Agreement that satisfies the requirements of this Chapter, including any concessions or incentives authorized under Section 9.32.050. The Affordable Housing Regulatory Agreement shall be recorded prior to issuance of a certificate of occupancy.
1. Timing. An Affordable Housing Regulatory Agreement shall be developed concurrently with the processing of an application for the first project approval.
2. Contents. The agreement shall be consistent with the Affordable Housing Plan, and shall indicate ownership or rental project, the number and size of very low-, low-, and moderate-income units, the developer of the inclusionary units, the phasing and construction scheduling of the units, commitments for Inclusionary incentives, including City commitments for local public subsidy, and any other information required by the City relative to the inclusionary units.
3. Continuing right-of-first-refusal. The developer shall give the City the continuing right-of-first-refusal to lease or purchase any or all of the affordable dwelling units.
4. Written approval of City required prior to transfer of unit. The deeds to the affordable dwelling units shall contain a covenant stating that the developer or successors-in-interest shall not assign, lease, rent, sell, sublet, or otherwise transfer any interests for the affordable dwelling units without the prior written approval of the City;
5. Confirmation of price by City. When providing the written approval, the City shall confirm that the price (rent or sale) of the affordable dwelling unit is consistent with the limits by this Chapter;
6. Continuously occupied by eligible households. The City shall have the authority to enter into other agreements with the developer, or purchasers of the affordable dwelling units, to ensure that the required dwelling units are continuously occupied by eligible households;
7. Enforcement of compliance. Applicable deed restrictions, in a form satisfactory to the City Attorney, shall contain provisions for the enforcement of owner or developer compliance;
8. Failure to comply. Any default or failure to comply may result in daily penalties, liens, foreclosure, specific performance, or withdrawal of the Certificates of Occupancy; and
9. Recovery of all City-related costs. In any action taken to enforce compliance with deed restrictions, the City Attorney shall, if compliance is ordered by a court of competent jurisdiction, take all action that may be allowed by law to recover all of the City's costs of action including legal services.
10. Remedies for breach of the agreement. A description of the remedies for breach of the density bonus agreement by the owners, developers, and/or successors-in-interest of the development project; and
11. Other provisions. Other provisions to ensure successful implementation and compliance with this Chapter.
D. For-sale housing conditions. In the case of for-sale housing developments, the agreement shall provide for the following conditions governing the initial sale and use of the affordable dwelling units during the applicable affordability restriction period:
1. Eligible and qualified residents. The affordable dwelling units shall be owner-occupied by eligible very low-, low-, or moderate-income households, or by qualified residents in the case of senior or disabled housing;
2. Mandatory contents of instrument or agreement. The initial purchaser of each affordable dwelling unit shall execute an instrument or agreement approved by the City which:
a. Restricts the sale of the unit in compliance with this Chapter during the applicable affordability restriction period;
b. Contains provisions as the City may require to ensure continued compliance with this Chapter and State law; and
c. Shall be recorded against each parcel containing an affordable dwelling unit.
E. Rental housing conditions. In the case of rental housing developments, the agreement shall provide for the following conditions governing the use of the affordable dwelling units during the affordability restriction period:
1. Rules and procedures. The rules and procedures for qualifying tenants, establishing affordable rent, filling vacancies, and maintaining the affordable dwelling units for qualified tenants;
2. Annually verify tenant incomes. Provisions requiring owners to annually verify tenant incomes and maintain books and records to demonstrate compliance with this Chapter;
3. Submittal of annual report to the City. Provisions requiring owners to submit an annual report to the City, which includes the name, address, and income of each person occupying the affordable dwelling units, and which identifies the bedroom size and monthly rent or cost of each unit; and
4. Use restriction period. The applicable affordability restriction period shall be in compliance with Section 9.32.060 (Term of Affordability for Rental Inclusionary Units), above.
9.32.100 - Administrative Fees
The Council may by resolution establish reasonable fees and deposits for the administration of this Chapter.
9.32.110 - Takings Determination
Within a maximum of 15 days of the execution of an Inclusionary Housing Agreement, a Developer may request a determination that the requirements of this Chapter, taken together with the Inclusionary Incentives, as applied to the residential project through the Affordable Housing Regulatory Agreement, would legally constitute a taking of the property of the residential project without just compensation under the California or Federal Constitutions.
A. If the developer and the City have been unable to reach agreement on the terms of an Inclusionary Housing Agreement, the applicable draft for purposes of the takings determination shall be the final draft proposed by the City, which the developer may execute under protest without recordation.
B. The developer has the burden of providing economic information and other evidence necessary to establish that application of the provisions of the Affordable Housing Regulatory Agreement to the residential project would constitute a taking of the property of the proposed residential project without just compensation. The Director shall perform an independent evaluation and make a recommendation to the City Manager. The City Manager shall make the determination, which may be appealed in the same manner as Director decisions as provided in Chapter 9.76 (Appeals), provided that the decision of the City Manager shall be subject to appeal to the Council. In making the taking recommendation or determination, the decision maker shall assume each of the following:
1. Incorporation of the inclusionary units in the residential project;
2. Application of Inclusionary incentives;
3. Incorporation into the residential project of the most cost- efficient product type for the inclusionary units; and
4. External funding where reasonably likely to occur.
If it is determined that the application of the provisions of this Chapter through the Inclusionary Housing Agreement would be a taking, the Affordable Housing Plan and the Inclusionary Housing Agreement shall be modified to reduce the obligations for inclusionary units to the extent, and only to the extent necessary to avoid a taking. If it is determined no taking would occur though application of the Inclusionary Housing Agreement to the residential project, the requirements of this Chapter remain applicable, and no project-level approval shall be issued unless the developer has executed and recorded the Inclusionary Housing Agreement as proposed by the City.
9.32.120 - Enforcement and Penalties
A. No legislative entitlement and no master parcel map shall be issued or valid without an Affordable Housing Plan as required by this Chapter.
B. No project-specific approval nor development agreement shall be issued for any residential project unless an Inclusionary housing agreement has been approved and executed, and no building permit or certificate of occupancy shall be issued until the Inclusionary Housing Agreement has been recorded as required by this Chapter.
C. The City may bring civil and criminal enforcement actions as are provided by the Municipal Code.