Agenda packet, regular meeting — National City City Council, April 18, 2023 (part 9 of 9)

Gates Planning Strategies

M E M O R A N D U M
DA
TE: 3/11/2023
P
REPARED BY: Lara Gates, Planning and Community Engagement Consultant SUB
JECT: House National City Program: Revised Draft Regulations T
he following memorandum provides details for the draft House National City Program regulations. The following sections are included in the draft regulations for consideration:
• P
urpose, Intent, and Definitions
• Application of House National City Regulations
• Required Replacement of Existing Affordable Units
• Tenant Benefits, Rights, and Obligations
• Incentives in Exchange for Transit Priority Area Affordable Housing • Required Provision of Affordable Dwelling Units
• Supplemental Development Regulations
• Proposed Glossary Terms
C
hapter 18.49
F

LOOR AREA RATIO BONUS REGULATIONS
Sec
tions:

18.49.010 Purpose.

18.49.020 Definitions.

18.49.030 Application of House National City Regulations.

18.49.040 Required Replacement of Existing Affordable Units.

18.49.050 Tenant Benefits, Rights and Obligations.

18.49.060 Incentives in Exchange for Transit Priority Area Affordable Housing.

18.49.070 Required Provision of Affordable Dwelling Units.

18.49.080 Supplemental Development Regulations.

18.4 9.10 Purpose.

The purpose of these regulations is to provide a floor area ratio -based density bonus incentive program for development within areas served by transit that provides housing for very low -income or low -income households and other community benefits. These regulations are intended to materially assist in providing adequate housing for the community, to provide a balance of housing opportunities within the City of National City with an emphasis on housing near transit, and to provide community benefits that assist

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with uplifting the quality of life for residents and reducing the impacts of gentrification and tenant displacement. For purposes of this opt-in program, two floor area ratio (FAR) tiers (FAR Tier 1 and FAR Tier 2 , as described below) would apply and would supersede the dwelling unit per acre maximums allowed by the base zones. The following base zones are included as part of this program: MCR-1; MCR-2; MXC-1; MXC-2; MXD-1; MXD-2; RM-1; RM-2; RM -3; MXT . New development shall comply with the underlying development standards of the zone in which the property is located, unless otherwise waived by this chapter.

These regulations do not implement California Government Code Section 65915 ( State
Density Bonus Law), which is implemented through Chapter 18.48 (Density Bonus and Affordable Housing Incentives).

18.4 9.020 Definitions.

A. For purposes of this Division, the following definitions shall apply:

1. FAR Tier 1 means any premises where any portion of the premises is outside the Downtown Specific Plan area.
a. Tier 1: 2.5 FAR Bonus Zones: MCR-1; MCR-2/TOD; RM-1; and MXT b. Tier 1: 4.0 FAR Bonus Zones: MXC-1; MXD-1; RM-2; RM-3; and MXD-2

2. FAR Tier 2 means any premises located on Plaza Bonita Road, within the Hospital District, and along Sweetwater Road/East 30 th Street, as well as the area along 4th Avenue, located south of SR-54.
a. Tier 2: 4.0 FAR Bonus Zone: MXC-2

3. Affordable dwelling units are defined as:
a. Subject to a recorded covenant, ordinance or law that restricts rents to levels affordable to very low income or l ow income households during the five (5) year period preceding the development application.
b. Dwelling units that are or were occupied by v ery low income or low income households during the five (5) year period preceding the development application.

4. Transit Priority Areas (TPA) : Transit priority area means the area defined in California Public Resources Code Section 21099, as may be amended, or an area within one-half mile of a major transit stop that is existing or planned, if the planned major transit stop is scheduled to be co mpleted within the planning horizon included in a Transportation Improvement Program.

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18.49.030 Application of House National City Regulations.

A. At the request of the applicant, the regulations in this Division shall apply to any development within the areas defined as FAR Tier 1 or 2. Parcels shall be zoned for twenty dwelling units per acre or higher. A land use designation that is residential or mixed-use or a residential or mixed-use overlay zone shall be required. Furthermore, all of the following requirements shall be met in order to utilize the House National City Program provisions:

1. The development includes dwelling units affordable to very low-income or low-income households, in accordance with Municipal Code Section 18.48.020 and the following criteria:
(a) Within the categories o f very low -income or low-income households, affordable dwelling units may be further targeted or restricted for senior citizens, as defined in California Civil Code Sections 51.3 and 51.11.
(b) Within the very low -income category, affordable dwelling units may be further targeted or restricted for transitional foster youth, as defined in Section 66025 of the California Education Code; disabled veterans as defined in Section 18541 of the California Government Code; or homeless persons as defined in the McKinney- Vento Homeless Assistance Act.

(c) A portion of the total dwelling units in the development shall be reserved for very low-income or low-income households, in accordance with Municipal Code Section

18.48.020.

2. The dwelling units within the development shall not be used for a rental term of less than 30 consecutive days.

3. The development shall comply with the height limit prescribed by the base zone.

B. The regulations in this Division shall not apply to the following types of development:

1. Development that proposes to concurrently utilize the density bonus provided in Chapter 18.48 (Affordable Housing Regulations). Existing development that was constructed in accordance with the Affordable Housing Regulations and situations in which an applicant proposes to construct additional dwelling units through a new development application may utilize this Division to add gross floor area and density if the existing development was constructed using the maximum density bonus available based on the affordability level of the development.

2. D
evelopment that includes visitor accommodations, except a single room occupancy (SRO) hotel.

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C. The regulations in this Division may be utilized to add gross floor area (GFA) to an existing development through the construction of additional dwelling units. The additional gross floor area allowed shall be determined as follows:

1. The additional GFA is determined by multiplyi ng the remaining lot area by the applicable FAR. The remaining lot area is the difference between the lot coverage of the existing development and the lot area.

2. The minimum number of dwelling units is determined by multiplying the maximum number of dwelling units that could be constructed on the remaining lot area by 0.80.

(a) For this calculation, the maximum number of pre-density bonus dwelling units that could be constructed on the remaining lot area is calculated by dividing the remaining lot area by the maximum permitted density under the base zone.

(b) If the number calculated for the minimum number of dwelling units exceeds a whole number by more than 0.50, the minimum number of dwelling units shall be rounded up to the next whole number.

D. The regulations in this Division may be utilized to add GFA for residential development to an existing non -residential development through the conversion of existing non- residential space to permanent rental or for-sale dwelling units.

E. The required number of affordable dwelling units shall be calculated in accordance with Section 18.49.070. To calculate the required number of affordable dwelling units, all density calculations resulting in fractional units shall be rounded up to the next whole number. Existing covenant -restricted affordable dwelling units shall not be counted towards the affordable housing requirement in this Division.

F. The regulations in this Division shall not supersede the regulations of any other Municipal Code Section unless specified.

18.49.040 Required Replacement of Existing Affordable Units.

A. An
applicant is ineligible for any incentive under this Division if the premises on which the development is proposed contains, or during the seven years preceding the application, contained, rental dwelling units that have had the rent -restricted by law or covenant to persons and families of low income or very low income, or have been occupied by persons and families of low income or very low income unless the proposed development replaces the affordable dwelling units, and either:

1. Provides affordable dwelling units at the percentages set forth in Section 18.48.020 (inclusive of the replacement dwelling units), or

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2. Provides all of the dwelling units in the development as affordable to low-income or very low-income households, excluding any manager’s unit(s).

B. The number and type of required replacement affordable dwelling units shall be determined as follows:

1. The development shall replace all existing and demolished affordable dwelling units on the premises. Affordable dwelling units are defined as:
a. Subject to a recorded covenant, ordinance or law tha t restricts rents to levels affordable to very low income or low income households during the five (5) year period preceding the development application.
b. Dwelling units that are or were occupied by very low income or low income households during the five (5) year period prece ding the development application.

2. The affordable dwelling units shall be replaced as follows:

a. For a development containing any occupied affordable dwelling units, the development must:
(a) Contain at least the same number of replacement affordable dwelling units, of equivalent size and bedrooms, and must be made affordable to and occupied by persons and families in the same or a lower income category as the occupied affordable dwelling units.
(b) For unoccupied affordable dwelling u nits in the development, the replacement affordable dwelling units shall be made affordable to and occupied by persons and families in the same or lower income category as the last household in occupancy.
(c) If the income category of the last household is unknown, it is presumed that the affordable dwelling units were occupied by very low-income and low-income renter households in the same proportion of very low-income and low-income renter households to all renter households within the City of National City, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database, and replacement affordable dwelling units shall be provided in that same percentage.

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the same or a lower income category as those in occupancy at that same time.
(b) If all of the affordable dwelling units are vacant or have been demolished within the seven years preceding the application, the development must contain at least the same number of replacements affordable dwelling units, of equivalent size and bedrooms, as existed at the high point of those units in the seven-year period preceding the application and must be made affordable to and occupied by persons and families in the same.
(c) If the income categories are unknown for the high point, it is presumed that the dwelling units were occupied by very low -income and low-income renter households in the same proportion of very low-income and low-income renter households to all renter households within the City of National City, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing
Affordability Strategy database, and replacement dwelling units shall be provided in that same percentage.

3. All replacement affordable dwelling unit calculations resulting in fractional units shall be rounded up to the next whole number.

4. All rental replacement affordable dwelling units shall be affordable for at least 55 years through a recorded affordability restriction documented by written agreement, and a deed of trust securing the agreement, entered into by the applicant and the National City Housing Authority.

5. Any existing residents will be allowed to occupy their dwelling units until six months before the start of construction activities with proper notice, which shall occur at least 12 months prior to the anticipated date of termination. The property owner shall deliver a written notice of intent to terminate to the Housing Authority and to each tenant household as part of the development permit application.

6. The applicant agrees to provide relocation ben efits to the occupants of those affordable residential dwelling units, and the right of first refusal for a comparable dwelling unit available in the new housing development at a rent affordable to very low- or low income households.

(a) The displaced occupants are entitled to payment for actual moving and related expenses that the Housing Authority determines to be reasonable and necessary.

(b) For any very low- or low income household displaced by conversion, the applicant shall pay to such household an amount in accordance with Chapter 16

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(commencing with Section 7260) of Division 7 of Title 1 of the California Government Code.

(c) For a development, residents living in the jurisdictional boundary limits of National City at the time of application shall receive priority for 75 percent of the affordable dwelling units in the development that are reserved for very low-income or low- income households. For National City residents who may have been displaced from their rental units in the preceding ten (10) year time frame and can demonstrate proof of National City residency from those ten years, those residents shall be eligible to receive priority for 75 percent of the new affordable dwelling units.

7. All for -sale replacement affordable dwelling units shall be subject to the following provisions:

(a) The initial occupant of all for -sale affordable dwelling units shall be a very low - income or low-income household.

(b) Prior to, or concurrent with, the sale of each affordable dwelling unit, the applicant shall require the buyer to execute and deliver a promissory note in favor of the National City Housing Authority so that the repayment of any initial subsidy is ensured.

(c) Each for-sale affordable dwelling unit shall be occupied by the initial owner at all times until the resale of the affordable dwelling unit.

(d) Upon the first resale of a affordable dwelling unit, the seller shall comply with all conditions regarding the sale of a dwelling unit, as applied by the National City Housing Authority, and as set forth in California Government Code Section 65915(c)(2).

8. Development shall comply with the California Department of Housing and Community Development Tenant Preference policies contained withi n Government Code Section 7061. Furthermo re, development shall comply wit h the City of National City Preference Policy a s stipulated in Reso lution 2016-38.

C. The applicant shall provide existing residents of affordable dwelling units with all of the following:

1. The ability to occupy their existing units until six months before the start of construction activities with proper notice, pursuant to California Government Code Sections 7260 through 7277. Any existing residents will be allowed to occupy their existing dwelling units until six months before the start of construction activities with proper notice, which shall occur at least 12 months prior to the anticipated date of termination of tenancy. The property owner shall deliver a written notice of intent to

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terminate tenancy to the National City Housing Authority and to each tenant household as part of the development permit application.

2. To those households that remain in a n affordable dwelling unit, the applicant shall provide:

(a) Relocation benefits pursuant with the requirements of California Government Code Sections 7260 through 7277 for public agencies. The applicant or applicant’s agent shall engage a qualified third -party contractor or consultant to oversee the provision of the required relocation benefits. The third -party contractor or consultant shall provide a letter to the National City Housing Authority certifying compliance with the relocation benefits requirements after completion of the relocation process.

(b) A right of first refusal for a comparable dwelling unit available in the new development affordable to the household at an affordable rent or affordable housing cost based on household income in accordance with Table 143-12A.

(c) Residents living within one mile of the development at the time of application shall receive priority for 75 percent of the affordable dwelling units in the development that are reserved for very low-income or low-income households. For National City residents who resided in National City for a period of three months or lo nger and who may have been displaced from their rental units in the preceding ten (10) year time frame and can demonstrate proof of National City residency from those ten years, those residents shall be eligible to receive priority for 75 percent of the new affordable dwelling units.

18.49.50 Tenant Benefits, Rights, and Obligations.

A. The subdivider of a condominium conversion project shall provide the benefits specified in Section 18.30.090 (C) to persons whose tenancy in very low- and low-income units is in a project the subdivider terminates due to the condominium conversion.

B. The applicant shall provide a relocation assistance payment to all tenants of the project including:
a. A relocation payment of three months’ rent based on the current National City “fair market rent” for apartment size, as established by the U.S. Department of Housing and Urban Development. The relocation payment shall be paid no later than the day on which the applicant gives notice to the t enant to vacate the premises and shall be based upon the fair market rent at the time of the notice. b. The applicant shall provide relocation benefits pursuant to California Government Code Sections 7260 through 7277 for public agencies.
c. The applicant or applicant’s agent shall engage a qualified third-party contractor or consultant to oversee the provision of the required relocation benefits.

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d. The third-party contractor or consultant shall provide a letter to the National City Housing Authority certifying compliance with the relocation benefits requirements after completion of the relocation process.

C. Any existing tenants in the project will be allowed to occupy their existing dwelling units until six months before the start of construction activities with proper notice, which shall occur at least 12 months prior to the anticipated date of termination of tenancy. The property owner shall deliver a written notice of intent to terminate tenancy to the National City Housing Authority and to each tenant household as part of the submission of a development permit.

D. Displaced residents may relocate to a dwelling unit in National City or outside of the city’s jurisdiction and remain eligible to apply for affordable housing opportunities within a ten year period of vacating the affordable dwelling unit in which the resident established residency for a period of at least three (3) months in National City.

18.49.060 Incentives in Exchange for Transit Priority Area Affordable Housing.

An applicant proposing development that is consistent with the criteria in Section 18.49.030(A)(C) shall be entitled to the following incentives:

A. Waiver of the existing FAR , and implementation of a new FAR based upon whether the development is located in FAR Tier 1 or FAR Tier 2 as specified in Section 18.49.020.

B. Waiver of the maximum permitted residential density of the land use designation(s) in the applicable land use plan. Density shall be limited by the al lowable floor area ratio of the affordable density bonus in FAR Tier 1 and FAR Tier 2 and the requirements of the California Building Code as adopted and amended by the City of National City, unless otherwise specified.

C. Waiver of Development Impact Fees for all covenant-restricted affordable units and units exceeding 800 SF.

D. Waiver of the following applicable base zone regulations:

1. Minimum lot area if a qualifying development is proposed in a lot with an area of 5,000 square feet or less.

2. Street frontage requirements, if safe and adequate access to the premises can be provided to the satisfaction of the Fire Department.

3. Maximum lot coverage if a qualifying development is proposed in a lot with a maximum lot coverage of 75 percent or less.

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4. Floor Area Ratio (FAR) Bonus for Residential Mixed -Use. Development utilizing the regulations in this Division shall not be eligible for other FAR or density bonuses.

5. Maximum front setback or street side setback if the maximum is 20 feet or less.

E. Waiver of the personal storage area requirement in Section 18.42.070 (A)(7) and the private exterior open space requirement in Section 18.41.040 for all dwelling units in the development.

F. Use of up to four Affordable Housing Incentives. An applicant utilizing the regulations in this Division shall be entitled to incentives for any development for which a written agreement and a deed of trust securing the agreement is entered into by the applicant and the National City Housing Authority.

1. An incentive means any of the following:

(a) A deviation to a development regulation, with the exception of any regulations or requirements of this Division;

(b) Any other incentive proposed by the applicant that results in identifiable, actual cost reductions.

2. Items not considered incentives by the City of National City include but are not limited to the following:

(a) A waiver of any required permit;

(b) A waiver of fees or dedication requirements with the exception of Devel opment Impact Fees and TDIF for restricted affordable units and units exceeding 800 square feet;

(d) A waiver of any of the requirements, regulations, or standards of this Division;

(e) A waiver of the height limit.

3. An incentive requested as part of a development meeting the requirements of this Division shall be processed according to the following:

(a) Upon an applicant’s request, a development that meets the applicable requirements of this Division shall be entitled to incentives unless the City makes a written finding of denial based upon substantial evidence, of any of the following:

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i. The incentive is not required in order to provide for affordable housing costs, as defined in California Health and Safety Code Sections 50052.5 and 50053;

ii. The incentive would have a specific adverse impact upon public health and safety as defined in Government Code Section 65589.5, the physical environment, including environmentally sensitive lands for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to very low-income and low-income households;

iii. The incentive would be contrary to state or federal law. Requested incentives shall be analyzed in compliance with the California Environmental Quality Act (CEQA) and no incentive shall be granted without such compliance.

(b) The granting of an incentive shall not require a General Plan amendment, zoning change, a development permit, or other discretionary approval.

(c) When a development permit is otherwise required, the decision to deny a requested incentive shall be made by City staff responsible for processing the development permit.

4. The number of incentives available is as follows:

(a) Three incentives for a development that includes at least 10 percent of the post-density dwelling units for very low-income households at or below 50 percent area median income (AMI).

(b) Four incentives for a development in which at least 10 percent of the post- density bonus covenant-restricted dwelling units are three bedrooms at or below 80 percent AMI.

G. Affordable Housing waivers may be granted, except that waivers cannot be used to deviate from the requirements of this Division. An applicant utilizing the regulations in this Division shall be entitled to a waiver for any development for which a written agreement and a deed of trust securing the agreement is entered into by the applicant and the National City Housing Authority.

1. A waiver means a request by an applicant to waive or reduce a development standard that physically precludes construction of development meeting the criteria of this Division.

2. U
pon an applicant’s request, a development that meets the applicable requirements of this Division shall be entitled to a waiver unless the City staff responsible for

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processing the development permit makes a written finding of denial based upon substantial evidence that is in compliance with State of California Affordable Housing Density Bonus Government Code, of any of the following:

(a) The waiver would have a significant, quantifiable, direct, and unavoidable impact upon health, safety, or the physical environment for which there is no feasible method to mitigate or avoid the impact;

(b) The waiver would be contrary to state or federal law. Requested waivers shall be analyzed in compliance with CEQA as set forth in Chapter 12, Article 8, and no waiver shall be granted without such compliance; or,

3. The granting of a waiver shall not require a General Plan amendment, zoning change, development permit, or other discretionary approval.

4. There is no limit on the number of waivers an applicant may request.

18.49.070 Required Provision of Affordable Dwelling Units.

A. An applicant requesting the application of the regulations in this Division shall agree to the City of National City’s written agreement to provide affordable dwelling units, entered into by the applicant and the National City Housing Authority and secured by a deed of trust, that meets the following requirements:

1. Provides at least 10 percent of the post -density bonus rental dwelling units in the development, excluding any additional dwelling units allowed under a floor area ratio bonus, for rent by very low-income households at a cost, including an allowance for utilities, which does not exceed 30 percent of 50 percent of the AMI, as adjusted for household size.

2. Provides at least 10 percent of the post-density bonus rental dwelling units in the development as three-bedroom units, excluding any additional dwelling units allowed under the FAR bonus, for rent by low-income households, including an allowance for utilities, which does not exceed 30 percent of 80 percent of the AMI, as adjusted for household size.

3. F
or rental dwelling units to be counted as affordable and meet the requirements of this Division, the following qualifying criteria shall be met:

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development. The square footage and interior features of the affordable units shall be good quality and consistent with current building standards for new housing in the City of National City.

(b) The affordable dwelling units shall remain available and affordable for a period of at least 55 years, unless 100 percent of the dwelling units in the development are affordable and the development is owned and operated by an institution of higher education, including a community or junior college, college or university, or a religious institution-affiliated housing development project, as defined in California Government Code Section 65913.6, in which case the affordable dwelling units shall remain available and affordable for a period of at least 25 years.

B. Nothing in this Division shall preclude an applicant from using affordable dwelling units constructed by a nother applicant to satisfy the requirements of this Division, including contracting with an affordable housing developer with experience obtaining tax -exempt bonds, low-income housing tax credits, and other competitive sources of financing, upon approval by the National City Housing Authority.

18.49.080 Supplemental Development Regulations

Development utilizing the regulations in this Division must comply with the following Supplemental Development Regulations and may not utili ze incentives or waivers provided in Section 18.49.060 to deviate from the requirements in Section 18.48.080.

a) Pedestrian Circulation Space. All development shall include the following pedestrian circulation improvements:

1. Sidewalk Widening. A sidewalk widening enlarges a pre-existing or required sidewalk to a minimum of 10 feet in width measured perpendicular to the street. For a premise that is less than 25,000 square feet, an applicant may elect to provide public seating and pedestrian-oriented lighting, in lieu of a sidewalk widening.

2. At least one, 24-inch box canopy tree is required for each 25 feet of street frontage on each side of the required sidewalk. See National City Street Tree guidelines for list of approved street trees.

3. Above-ground utility placement within the sidewalk and/or pedestrian path is prohibited.

4. Gated entryways and street yard fencing are prohibited.

5. Green or cool roofs are defined as a roof with high reflectivity and emissivity that improves the energy efficiency of a building that has minimum reflectance of 0.70 and a minimum emittance of 0.75

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b) Buffer from Adjacent Freeways. Development on premises within 1 00 feet of a freeway shall comply with the following:

1. A 10-foot minimum landscaped buffer shall be provided between the residential and commercial uses and any freeway; and

2. Outdoor areas such as balconies, patios, parks, plazas, and other spaces occupied by residents, customers, or members of the public shall be oriented away from the freeway.

c) Transition to Adjacent Residential Single -Unit Zones. Development on premises directly adjacent to a Residential Single-zoned parcel, including RS-1; RS-2; RS-3, and RS-4, where an existing dwelling unit is located on the adjacent premises, shall comply with the following criteria:

1) Incorporate a transition plane in the development that does not exceed a 65 -degree angle.
a. The transition plane for the development shall start from the shared property line with the RS zone and extend 1/3 of the lot depth.

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Proposed Glossary Terms:

Low Income: Low income means any household whose income exceeds 50 percent but does not exceed 80 percent of the median income as adjusted for household size as defined by the U.S.

Department of Housing and Urban Development for the San Diego Standard Metropolitan Statistical Area.

Very Low Income: Very low income means any household whose income does not exceed 50 percent of median income as adjuste d for household size as defined by the U.S. Department of Housing and Urban Development for the San Diego Standard Metropolitan Statistical Area.

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Gates Planning Strategies

M E M O R A N D U M
DA
TE: 2/123/11/2023
P
REPARED BY: Lara Gates, Planning and Community Engagement Consultant SUB
JECT: House National City Program: Revised Draft Regulations T
he following memorandum provides details for the draft House National City Program regulations. The following sections are included in the draft regulations for consideration:
• P
urpose, Intent, and Definitions;
• Application of House National City Regulations;
• Required Replacement of Existing Affordable Units;
• Tenant Benefits, Rights, and Obligations;
• Incentives in Exchange for Transit Priority Area Affordable Housing; • Required Provision of Affordable Dwelling Units;
• Supplemental Development Regulations
• Proposed Glossary Terms
C
hapter 18.49
F

LOOR AREA RATIO BONUS REGULATIONS
Sec
tions:

18.49.010 Purpose.

18.49.020 Definitions.

18.49.030 Application of House National City Regulations.

18.49.040 Required Replacement of Existing Affordable Units.

18.49.050 Tenant Benefits, Rights and Obligations.

18.49.060 Incentives in Exchange for Transit Priority Area Affordable Housing.

18.49.070 Required Provision of Affordable Dwelling Units.

18.49.080 Supplemental Development Regulations.

18.4 9.10 Purpose.

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A. These regulations do not implement California Government Code Section 65915 (State Density Bonus Law), which is implemented through Chapter 18.48 (Density Bonus and Affordable Housing Incentives).

18.49.020 Definitions.

A. For purposes of this Division, the following definitions shall apply:

1. FAR Tier 1 means any premises where any portion of the premises is outside the Downtown Specific Plan area.
a. Tier 1: 2.5 FAR Bonus Zones: MCR-1; MCR-2/TOD; RM-1; and MXT

1.b. Tier 1: 4.0 FAR Bonus Zones: MXC-1; MXD-1; RM-2; RM-3; and MXD-2

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2. 18.49.030 Application of House National City Regulations.

18.48.020.

2. The dwelling units within the development shall not be used for a rental term of less than 30 consecutive days.

2.3. The development shall comply with the height limit prescribed by the base zone.

3. Projects will be required to hold a minimum of one publicly-noticed community workshop to solicit input on the proposed development.

B. The regulations in this Division shall not apply to the following types of development:

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2. Development that includes visitor accommodations, except a single room occupancy (SRO) hotel.

2. The minimum number of dwelling units is determined by multiplying the maximum number of dwelling units that could be constructed on the remaining lot area by 0.80.

(b) If the number calculated for the minimum number of dwelling units exceeds a whole number by more than 0.50, the minimum number of dwelling units shall be rounded up to the next whole number.

F. The regulations in this Division shall not supersede the regulations of any other Municipal Code Section unless specified.

18.4 9.040 Required Replacement of Existing Affordable Units.

A. An applicant is ineligible for any incentive under this Division if the premises on which the development is proposed contains, or during the seven years preceding the application, contained, rental dwelling units that have had the rent -restricted by law or covenant to persons and families of low income or very low income, or have been occupied by persons and families of low income or very low income unless the proposed development replaces the affordable dwelling units, and either:

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1. Provides affordable dwelling units at the percentages set forth in Section 18.48.020 (inclusive of the replacement dwelling units), or

2. Provides all of the dwelling units in the development as affordable to low-income or very low-income households, excluding any manager’s unit(s).

B. The number and type of required replacement affordable dwelling units shall be determined as follows:

1. The development shall replace all existing and demolished affordable dwelling units on the premises. Affordable dwelling units are defined as:The development shall replace all existing or demolished protected dwelling units on the premises.

1. a. Subject to a recorded covenant, ordinance or law tha t restricts rents to levels affordable to very low income or low income households during the five (5) year period preceding the development application.
b. Dwelling units that are or were occupied by very low income or low income households during the five (5) year period prece ding the development application.

2. The protected affordable dwelling units shall be replaced as follows:

a. For a development containing any occupied protected affordable dwelling units, the development must:
(a) Contain at least the same number of replacement protected affordable dwelling units, of equivalent size and bedrooms, and must be made affordable to and occupied by persons and families in the same or a lower income category as the occupied protected affordable dwelling units.
(b) For unoccupied protected affordable dwelling u nits in the development, the replacement protected affordable dwelling units shall be made affordable to and occupied by persons and families in the same or lower income category as the last household in occupancy.
(c) If the income category of the last household is unknown, it is presumed that the protected affordable dwelling units were occupied by very low-income and low-income renter households in the same proportion of very low-income and low-income renter households to all renter households within the City of National City, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing Affordability Strategy database, and replacement protected affordable dwelling units shall be provided in that same percentage.

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b. If all of the affordable dwelling units are vacant or have been demolished within the last seven (7) years preceding the application, the development must:
(a) Contain at least the same number of replacement affordable dwelling units, of equivalent size and bedrooms, as existed at the high point of those units in the seven -year period preceding the application, and must be made affordable to and occupied by persons and families in the same or a lower income category as those in occupancy at that same time.
(b) If all of the protected affordable dwelling units are vacant or have been demolished within the seven years preceding the application, the development must contain at least the same number of replacements protected affordable dwelling units, of equivalent size and bedrooms, as existed at the high point of those units in the seven- year period preceding the application and must be made affordable to and occupied by persons and families in the same.
(c) If the income categories are unknown for the high point, it is presumed that the dwelling units were occupied by very low -income and low-income renter households in the same proportion of very low-income and low-income renter households to all renter households within the City of National City, as determined by the most recently available data from the United States Department of Housing and Urban Development’s Comprehensive Housing
Affordability Strategy database, and replacement dwelling units shall be provided in that same percentage.

3. All replacement affordable dwelling unit calculations resulting in fractional units shall be rounded up to the next whole number.

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(a) The displaced occupants are entitled to payment for actual moving and related expenses that the Housing Authority determines to be reasonable and necessary.

(b) For any very low- or low -income household displaced by conversion, the applicant shall pay to such household an amount in accordance with Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of the California Government Code.

7. All for- sale replacement prote cted affordable dwelling units shall be subject to the following provisions:

(a) The initial occupant of all for- sale affordable protected affordable dwelling units shall be a very low-income or low-income household.

(b) Prior to, or concurrent with, the sale of each protected affordable dwelling unit, the applicant shall require the buyer to execute and deliver a promissory note in favor of the National City Housing Authority so that the repayment of any initial subsidy is ensured.

(c) Each for -sale protected affordable dwelling unit shall be occupied by the initial owner at all times until the resale of the protected affordable dwelling unit.

(d) Upon the first resale of a protected affordable dwelling unit, the seller shall comply with all conditions regarding the sale of a dwelling unit, as applied by the National City Housing Authority, and as set forth in California Government Code Section 65915(c)(2).
(d)8. Development shall comply with the California Department of Housing and Community Development Tenant Preference policies contained withi n Government Code Section 7061. Furthermore, development shall comply wit h the City of National City Preference Policy as stipulated in Resolution 2016-38.

C. The applicant shall provide existing residents of protected affordable dwelling units with all of the following:

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2. To those households that remain in a n protected affordable dwelling unit, the applicant shall provide:

(a) Relocation benefits pursuant to consistent with the requirements of California Government Code Sections 7260 through 7277 for public agencies. The applicant or applicant’s agent shall engage a qualified third-party contractor or consultant to oversee the provision of the required relocation benefits. The third -party contractor or consultant shall provide a letter to the National City Housing Authority certifying compliance with the relocation benefits requirements after completion of the relocation process.

18.49.50 Tenant Benefits, Rights, and Obligations.

B. The applicant shall provide a relocation assistance payment to all tenants of the project including:
a. The A relocation payment shall be of three months’ rent based on the current National City “fair market rent” for apartment size, as established by the U.S.

Department of Housing and Urban Development.

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b.a. The relocation payment shall be paid no later than the day on which the applicant gives notice to the tenant to vacate the premises and shall be based upon the fair market rent at the time of the notice.
c.b. The applicant shall provide relocation benefits consistent pursuant to with the requirements of California Government Code Sections 7260 through 7277 for public agencies.
d.c. The applicant or applicant’s agent shall engage a qualified third-party contractor or consultant to oversee the provision of the required relocation benefits. e.d. The third -party contractor or consultant shall provide a letter to the National City Housing Authority certifying compliance with the relocation benefits requirements after completion of the relocation process.

C.D. Displaced residents may relocate to a dwelling unit in National City or outside of the city’s jurisdiction and remain eligible to apply for affordable housing oppor tunities within a ten year period of vacating the affordable dwelling unit in which the resident established residency for a period of at least three (3) months in National City.

18.49.060 Incentives in Exchange for Transit Priority Area Affordable Housing.

An applicant proposing development that is consistent with the criteria in Section 18.49.030(A)(C) shall be entitled to the following incentives:

A. Waiver of the existing FAR , and implementation of a new FAR based upon whether the development is located in FAR Tier 1 or FAR Tier 2 as specified in Section 18.49.020. If a mixed-use development is proposed, the floor area ratio of the non-residential portion of the development shall not exceed the maximum floor area ratio of the applicable base zone.

C. Waiver of Development Impact Fees for all covenant-restricted affordable units and units exceeding exceeding 800 SF.

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D. Waiver of the following applicable base zone regulations:

1. Minimum lot area if a qualifying development is proposed in a lot with an area of 5,000 square feet or less.

2. Street frontage requirements, if safe and adequate access to the premises can be provided to the satisfaction of the Fire Department.

3. Maximum lot coverage if a qualifying development is proposed in a lot with a maximum lot coverage of 75 percent or less.

4. Floor Area Ratio (FAR) Bonus for Residential Mixed -Use. Development utilizing the regulations in this Division shall not be eligible for other FAR or density bonuses.

5. Maximum front setback or street side setback if the maximum is 20 feet or less.

E. Waiver of the personal storage area requirement in Section 18.42.070 (A)(7) and the private exterior open space requirement in Section 18.41.040 for all dwelling units in the development.

F. Use of up to four Affordable Housing Incentives. An applicant utilizing the regulations in this Division shall be entitled to incentives for any development for which a written agreement and a a deed of trust securing the agreement is entered into by the applicant and the National City Housing Authority.

1. An incentive means any of the following:

(a) A deviation to a development regulation, with the exception of any regulations or requirements of this Division;

(b) Any other incentive proposed by the applicant that results in identifiable, actual cost reductions.

2. Items not considered incentives by the City of National City includee, but are not limited to the following:

(a) A waiver of any required permit;

(b) A waiver of fees or dedication requirements with the exception of Devel opment Impact Fees and TDIF for restricted affordable units and units exceeding 800 square feet;

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(d) Approval of mixed-use zoning in conjunction with a residential development;

(d) A waiver of any of the requirements, regulations, or standards of this Division;.

(e) A waiver of the height limit.

3. An incentive requested as part of a development meeting the requirements of this Division shall be processed according to the following:

i. The incentive is not required in order to provide for affordable housing costs, as defined in California Health and Safety Code Sections 50052.5 and 50053;

(b) The granting of an incentive shall not require a General Plan amendment, zoning change, a development permit, or other discretionary approval.

(c) When a development permit is otherwise required, the decision to deny a requested incentive shall be made by the City staff responsible for processing decision maker for the development permit.

4. The number of incentives available is as follows:

(a) Three incentives for a development that includes at least 10 percent of the post-density dwelling units for very low-income households at or below 50 percent area median income (AMI).

(b) Four incentives for a development in which at least 10 percent of the post- density bonus covenant-restricted dwelling units are three bedrooms at or below 80 percent AMI.

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1. A waiver means a request by an applicant to waive or reduce a development standard that physically precludes construction of development meeting the criteria of this Division.

2. Upon an applicant’s request, a development that meets the applicable requirements of this Division shall be entitled to a waiver unless the City staff responsible for processing the development permit City makes a written finding of denial based upon substantial evidence that is in compliance with State of California Affordable Housing Density Bonus Government Code, of any of the following:

3. The granting of a waiver shall not require a General Plan amendment, zoning change, development permit, or other discretionary approval.

4. There is no limit on the number of waivers an applicant may request.

18.49.070 Required Provision of Affordable Dwelling Units.

A. An applicant requesting the application of the regulations in this Division shall provide agree to the City of National City’s a written agreement to provide affordable dwelling units, entered into by the applicant and the National City Housing Authority and secured by a deed of trust, that meets the following requirements:

2. Provides at least 10 percent of the post-density bonus rental dwelling units in the

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development as three-bedroom units, excluding any additional dwelling units allowed under the FAR bonus, for rent by low-income households, including an allowance for utilities, which does not exceed 30 percent of 80 percent of the AMI, as adjusted for household size.

3. For rental dwelling units to be counted as affordable and meet the requirements of this Division, the following qualifying criteria shall be met:

(a) The affordable dwelling units shall be comparable in bedroom mix and amenities to the market -rate dwelling units in the development, as determined by the National City Housing Authority, except that the affordable dwelling units shall not be required to exceed three bedrooms per dwelling unit. The affordable dwelling units shall have access to all common areas and amenities provided by the development. The square footage and interior features of the affordable units shall be good quality and consistent with current building standards for new housing in the City of National City.

18.49.080 Supplemental Development Regulations

a) Pedestrian Circulation Space. All development shall include the following pedestrian circulation improvements:

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2. At least one, 24-inch box canopy tree is required for each 25 feet of street frontage on each side of the required sidewalk. Palm trees are prohibited. See National City Street Tree guidelines for list of approved street trees.

3. Above-ground utility placement within the sidewalk and/or pedestrian path is prohibited.

4. Gated entryways and street yard fencing are prohibited.

b) Buffer from Adjacent Freeways. Development on premises within 1 00 feet of a freeway shall comply with the following:

1. A 10-foot minimum landscaped buffer shall be provided between the residential and commercial uses and the any freeway; and

2. Outdoor areas such as balconies, patios, parks, plazas, and other spaces occupied by residents, customers, or members of the public shall be oriented away from the freeway.

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Proposed Glossary Terms:

Low Income: Low income means any household whose income exceeds 50 percent but does not exceed 80 percent of the median income as adjusted for household size as defined by the U.S.

Department of Housing and Urban Development for the San Diego Standard Metropolitan Statistical Area.

Transit Priority Areas (TPA): Transit priority area means the area defined in California Public Resources Code Section 21099, as may be amended, or an area within one -half mile of a major transit stop that is existing or planned, if the planned major transit stop is scheduled to be completed within the planning horizon included in a Transportation Improvement Program.

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HOUSE NATIONAL CITY

OPT-IN DENSITY PROGRAM
Floor Area Ratio
Information Guide
January 2022
(FAR)

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Contents
What is House National City? ......................................................................... 1 What is Flo
or Area Ratio?

................................................................................. 1 Comparison of FAR Opt-In Program to Existing Dwelling Unit per Acre Code Requirements

.......................................................................................... 2 Development Calculation Examples

................................................................ 2

2.5 FAR ............................................................................................................................... 2

4.0 FAR................................................................................................................................. 3 House National City Proposed Tiers Map ....................................................... 4 P
arking

............................................................................................................. 5 Existing National City Multi-Family Parking Ratios ......................................................... 5 House National City P
arking Ratios

.................................................................................. 5 State of California Affordable Housing Density Bonus Maximum Parking Requirements

...................................................................................................................... 5 State of California Affordable Housing Density Bonus Special Parking Requirements

...................................................................................................................... 5 For-Sale Housing .............................................................................................. 6

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FLOOR AREA RATIO INFORMATION GUIDE
1 What is House National City?
House National City is a new program to incentivize affordable and mixed- income housing in strategic areas across the city. In exchange for affordable housing, qualifying projects receive a Floor Area Ratio (FAR) bonus.

What is Floor Area Ratio?
Cities regulate future development in a variety of ways, including density and intensity. Density is calculated by dividing the total number of units by a project’s acreage resulting in dwelling units per acre (du/ac). Another method of regulating density is FAR.

The floor area ratio (FAR) is the measurement of a building’s floor area in relation to the size of the lot or parcel that the building is located on. FAR is expressed as a decimal number and is derived by dividing the total area of the building by the total area of the parcel.

FAR
Building Area
Lot Area
=
FAR helps regulate building bulk and mass. A higher FAR indicates greater building volume. FAR can be used with other development standards, such as building heights, lot coverage, and lot area to reflect the community’s desired arrangement and form of development. FAR creates development flexibility for much needed housing units.

Street Street
Street
FAR = 1.0
10,000 sf building
covering 100% of lot
FAR = 1.0
10,000 sf building
covering 25% of lot
FAR = 1.0
10,000 sf building
covering 50% of lot
How will FAR be used for the House National City Program? Projects that qualify under House National City will use this FAR calculation method for regulating development intensity instead of a dwelling unit per acre basis, which limits the number of new houses that can be built and creates a challenge to providing affordable housing. Allowable heights will be dictated by the maximum limits in National City’s adopted zoning code.

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HOUSE NATIONAL CITY OPT-IN DENSITY BONUS PROGRAM
2 Comparison of FAR Opt-In Program to Existing Dwelling Unit per Acre Code Requirements
The FAR calculation is based on two tiers that include three different levels of FAR intensity. Based on the location in National City, Tiers 1 and 2 include FARs of 2.5 and 4.0.

Development Calculation Examples
The following examples show how the new development calculation will work.

2.5 FAR
This Tier will be focused on lots within the Westside Specific Plan where existing densities allow 24 dwelling units per acre and 45 dwelling units per acre based on the zone. The maximum FAR under the zoning code is 0.6 FAR.

For this tier, it will include the following zones:
¸ MCR-11 zone which has a maximum height limit of 3 stories and 50 feet. ¸ MCR-2
1 zone which has a maximum height limit of 5 stories and 65 feet. ¸ RM-12 zone which has a maximum height limit of 4 stories and 45 feet. ¸ Proposed Mix
ed-Use Transition (MXT) which would have a maximum
height limit of 4 stories and 45 feet.
¸ Proposed mix
ed-use overlay zone of 24 du/ac which would have a
maximum height limit of 5 stories and 65 feet.

Development comparison for a 10,000 square foot lot or 0.23 acres Under existing zoning on a 10,000 SF lot the following would be allowed:

Lot Area Allowed Density Maximum Number of Units
10,000 sf 24 du/ac 6 units
10,000 sf 45 du/ac 10 units
Under the proposed 2.5 FAR program:
¸ On a 10
,000 square foot lot, the maximum size of the building cannot exceed 25,000 square feet.3
¸ If the average unit size is 800 square feet, the typical project could average 20 units.4
1 The MCR-1 and MCR-2 zones provide an area within the Westside Specific Plan area for either commercial or multi-family residential development or a commercial and multi-family development constructed on a single parcel or as components of a single development on an assemblage of parcels.
2 The RM-1 zone provides for low-rise, medium density multiple family residential areas and is a transitional zone between higher density residential uses and lesser intensity single-family areas. 3 This is derived by multiplying the lot size of 10,000 sf by 2.5 FAR which equals 25,000 sf and typically is built within a building that is 2 to 5 stories in height. 4 The project’s area is reduced by 35% for non-habitable areas such as hallways, open space, etc, (maximum 16,250 sf).

20 units
10,000 sf
2-5

2.5 800 sf
25,000 sf
35%
lot size
stories
FAR
unit size
building size
non-habitable areas

AT A GLANCE

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FLOOR AREA RATIO INFORMATION GUIDE
3 4.0 FAR
This Tier will be focused in the areas around 18th Street, Highland Avenue, Civic Center Drive, and Hoover Avenue where existing densities allow up to 48 dwelling units per acre. The maximum FAR under the zoning code is

1.0 FAR for single-use and 2.0 FAR for mixed-use.

For this tier, it will include the following zones:
¸ MX
C-15 zone which has a maximum height limit of 3 stories and 50 feet. ¸ MXD-16 zone which has a maximum height limit of 5 stories and 65 feet. ¸ RM-27 zone which has a maximum height limit of 6 stories and 65 feet. ¸ RM-38 zone which has a maximum height limit of 9 stories and 95 feet. ¸ MX
C-29 and MXD-2 10 zones which have a maximum height limit of 5 stories and 65 feet.

Development comparison for a 10,000 square foot lot or 0.23 acres Under existing zoning on a 10,000 SF lot, the following would be allowed:

Lot Area Allowed Density Maximum Number of Units
10,000 sf 48 du/ac 11 units
Under the proposed 4.0 FAR program:
¸ On a 10
,000 square foot lot, the maximum size of the building cannot exceed 40,000 square feet.11
¸ If the average unit size is 800 square feet, the typical project could average 33 units.12
5 The MXC-1 zone supports the creation of mixed-use corridors at a scale compatible with adjacent single-family residential neighborhoods and creates a pedestrian-oriented development that enhances the quality of life within the corridor and for adjacent residential neighborhoods. 6 The MXD-1 zone supports the creation of mixed-use districts at a scale compatible with adjacent single-family residential neighborhoods. A mixture of land uses within the zone will support a neighborhood feel and increase the ability for workers and residents to walk to destinations. 7 The RM-2 zone provides for low- to mid-rise, high density (24 to 48 dwelling units per acre) multiple family residential.
8 The purpose of the RM-3 zone is to provide for mid- to high-rise, very high density (49 to 75 dwelling units per acre) multiple family residential.
9 The MXC-2 zone supports the creation of mixed-use corridors that function as important activity centers within the community. Development in the zone is intended to create vibrant places at an urban scale.
10 The MXD-2 zone supports the creation of mixed-use districts that serve as primary activity centers within the city. These activity centers will function as twenty-four-hour neighborhoods for residents, workers, and visitors.
11 This is derived by multiplying the lot size of 10,000 by 4.0 FAR which equals 40,000 and typically is built within a building that is 3 to 5 stories in height. 12 The project’s area is reduced by 35% for non-habitable areas such as hallways, open space, etc, (maximum 26,000 sf).

33 units
10,000 sf
3-5

4.0 800 sf
40,000 sf
35%
lot size
stories
FAR
unit size
building size
non-habitable areas

AT A GLANCE

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HOUSE NATIONAL CITY OPT-IN DENSITY BONUS PROGRAM
4 House National City Proposed Tiers Map
5 805
54 E PLAZA BLVD
E 24TH ST
E 30TH ST
E 18TH ST

NATIONAL CITY BLVD

HIGHLAND AVE
E 8TH ST
E 4TH ST

SWEETWATER RD

PLAZA BONITA RD

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FLOOR AREA RATIO INFORMATION GUIDE
5 Parking
The following is a comparison of parking ratios under the existing National City Parking requirements, the State of California’s Affordable Housing bonus programs as well as the proposed House National City program:

EXISTING NATIONAL CITY MULTI-FAMILY PARKING RATIOS

1.3 spaces 1.5 spaces
1-bedroom 2-bedrooms
*Conveniently located guest parking of
½ space per unit for 20 units or less, plus
¼ space for each unit over 20. Half of the
required guest parking spaces may include
parking spaces on dedicated public streets
along the sides of the streets that are
adjacent to the site.

HOUSE NATIONAL CITY PARKING RATIOS
800 sf
or less
800 sf
or more

0.5 parking space
per unit
1 parking space
per unit

STATE OF CALIFORNIA AFFORDABLE HOUSING DENSITY

BONUS MAXIMUM PARKING REQUIREMENTS
1 space 1 space 1.5 spaces 1.5 spaces 2.5 spaces
studio 1-bedroom 2-bedrooms 3-bedrooms 4-bedrooms

STATE OF CALIFORNIA AFFORDABLE HOUSING DENSITY

BONUS SPECIAL PARKING REQUIREMENTS
¸ R ental/for sale projects with at least 11% very low income or 20% lower- income units, within 1/2 mile of accessible major transit stop: .5 spaces The following allow for no parking to be included in a project:
¸ R
ental projects 100% affordable to lower-income, within 1/2 mile of an accessible major transit stop
¸ R
ental senior projects 100% affordable to lower-income, either with paratransit service or within a 1/2half-mile of accessible bus route (operating at least eight times per day)
¸ R
ental special needs projects 100% affordable to lower-income households, either with paratransit service or within 1/2half-mile of accessible bus route (operating at least eight times per day) ¸ R
ental supportive housing developments 100% affordable to lower- income households

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HOUSE NATIONAL CITY OPT-IN DENSITY BONUS PROGRAM
6 For-Sale Housing
During the December 8, 2021 Community Workshop, community members inquired about including incentives to promote for-sale housing as part of the House National City program. Typically, the decision whether to develop rental or for-sale housing is not included in this type of regulatory framework and other tools may be provided through the City’s Housing Authority to promote new for-sale housing development.

In order to respond to the community, as part of the House National City regulations, the State of California’s affordable housing density bonus incentives for for-sale housing have been included to provide information and a framework for potential for-sale housing developers.

The following is stipulated in State Government Code but is included in the House National City regulations listed below.

Affordable for sale units must be sold to the initial buyer at an affordable housing cost. Housing-related costs include mortgage loan payments, mortgage insurance payments, property taxes and assessments, homeowner association fees, reasonable utility allowance, insurance premiums, maintenance costs, and space rent.

Very low-income units
Housing costs may not exceed 30% to 50% of
the area median income for a household size
suitable for the unit
Lower-income units
Housing costs may not exceed 30% to 70% of
the area median income for a household size
suitable for the unit
Moderate-income units
Housing costs may not exceed 30% to 110%
of the area median income for a household
size suitable for the unit
Buyers must enter into an equity sharing agreement with the city or county unless the equity sharing requirements conflict with the requirements of another public funding source or law. The equity sharing agreement does not restrict the resale price but requires the original owner to pay the city or county a portion of any appreciation received on resale.

The city/county percentage of appreciation is the purchase price discount received by the original buyer, plus any down payment assistance provided by the city/county. (For example, if the original sales price is $300,000, and the original fair market value is $400,000, and there is no city/county down payment assistance, the city/county subsidy is $100,000, and the city/county’s share of appreciation is 25%).

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EXHIBIT E

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House National City
City Council
April 18, 2023

EXHIBIT F

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SLIDE 2
Scope of the Focused
General Plan Update
— Focused Policy Updates
— Supporting Updates to Codes,
O
rdinances, and Development
Standards
— Environmental Review
Policies
— Housing Element
— Land Use Element
— Transportation Element
— Safety Element
— Climate Action Plan
Codes, Ordinances, &
Development Standards
— Zoning Code
— Specific Plans
— Objective Design Standards
Environmental Review
— Supplemental Program Environmental Impact Report (SEIR)

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SLIDE 3
Project
Timeline

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SLIDE 4
House National City (Floor Area Ratio Bonus)
• Incentivize construction of new affordable
h
ousing
• Meet needs of National City residents:
• 10% of post density units for 50% area median income or less • 10% of post density three-b edroom units at 80% area median income or less
• 75% of new units to National City residents
• City of National City Local Preference Policy
• Relocation and replacement
• Create transit-s upportive development
• Reduce reliance on cars
• Promote community serving businesses

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SLIDE 5
House National City:KMA Analysis & Findings
• Reviewed multi-f amily rental development concepts
for six test sites
• Conducted multi-f amily rental market research
• Prepared financial pro forma models for two
d
evelopment scenarios
• Base case (existing or proposed FGPU zoning)
• Bonus (House National City Program)
• Prepared alternative models reflecting potential
ad
ditional incentives

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SLIDE 6
EXHIBIT F Page 865 of 876
SLIDE 7
KMA Analysis and Findings

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Requirements
• Located on a multi-f amily
or mixed-use parcel
• Within Transit Priority
Ar
ea (TPA)
• Allows at least 20
dw
elling units per acre.
• FAR T ier 1: Any portion
of premises outside
the Downtown Specific Pl
an
• FAR Tier 2: Located on
P
laza Bonita Road, within
the Hospital District and
along Sweetwater
Road/East 30th, along 4th
Avenue south of SR-54
that is zoned MXC-2

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SLIDE 9
Proposed Development Waivers
• Waiver of existing FAR
• Waiver of maximum permitted residential density of land use designation(s) • Waiver of Development Impact Fees and Transportation Development Impact F
ees for all covenant-restricted affordable units and units exceeding 800 SF • Base Zone Regulations:
• Maximum lot area
• Street frontage requirements, if safe and adequate access to premises can be provided to th
e satisfaction of Fire Department
• Maximum lot coverage
• FAR Bonus for Residential Mixed-U se. Development utilizing regulations shall not be eligible for other FAR or density bonuses
• Maximum front setback/street side setback if max is less than 20 feet. • Personal storage area requirement
• Private exterior open space requirement
NO
TE: NO WAIVER OF INCENTIVE FOR HEIGHT

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SLIDE 10
Proposed Incentives
• Up to three incentives for development that
i
ncludes:
• At least 10% of the post-d ensity dwelling units for very low-income households at or below 50% area median
income.
• Up to four incentives for development that
i
ncludes:
• At least 10% of post density bonus covenant-r estricted dwelling units are three bedrooms at or below 80% area median income

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SLIDE 11
Questions?

EXHIBIT F

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AGENDA REPORT

Department: Administrative Services - Finance
Prepared by: Janel Pehau, Financial Analyst
Meeting Date: Tuesday, April 18, 2023
Approved by: Brad Raulston, City Manager

SUBJECT:

Fiscal Year 2023 Mid-Year Budget Status Report

RECOMMENDATION:

Accept the report and adopt the resolution authorizing budget adjustments as detailed in Exhibit A.

BOARD/COMMISSION/COMMITTEE PRIOR ACTION:

Not Applicable.

EXPLANATION:

Summary
This report provides a mid-year look at the status of the City’s fiscal year 2023 General Fund Budget.

A first quarter status report was provided on February 7, 2023 . The report recommends various budget adjustments for fiscal year 2023.

The adopted fiscal year 202 3 General Fund budget was balanced with no use of unassigned fund balance for the first time in several years. In fact, budgeted revenues exceeded expenditures by $364,000, which means that if all of the b udgeted expenditures and revenues were realized as adopted, $364,000 would be added to the City’s General Fund unassigned fund balance at year end.

Based on a revised analysis of year -to-date actual revenues and expenditures and projected financial activity through year -end, approximately $4.3 million is projected to be added to the unassigned fund balance at year-end. The following sections of this report will discuss the significant factors leading to this outcome.

Revenues
For fiscal year 202 3, General Fund revenues are expected to be greater overall than amounts budgeted by $2.6 million. The projected variances by revenue category are shown in Table A.

Table A
General Fund Revenues Fiscal Year 2023

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General Fund Revenues Fiscal Year 2023

The General Fund’s primary sources of revenue are the sales & use tax, the district transactions & use tax, property tax in lieu of vehicle license fees, and property taxes. Projections are based on a combination of year-to-date and historical data, input from the City’s sales tax consultant, and information obtained from the State of California and County of San Diego:
 Sales & Use Tax and District Transactions & Use Tax: The adopted budget for these two major funding sources antici pated a moderate growth during the post -pandemic period .

Retail sales have turned out to be stronger than anticipated, however, resulting in these revenues trending above actual amounts for the sa me period as last fiscal year. Based on projections provided by the City’s sales tax consultant, Sales Tax revenues are expected to exceed the adopted budget by $0.77 million. The District Transactions & Use Tax is currently expected to finish the year at $ 0.25 million above the budgeted level. Staff is working on a continuing basis with the City’s sales tax consultant to ensure that we have the latest information for each of these funding sources.
 Property Tax revenue is expected to be above budget by approximately $ 7,000. Assessed values that apply to the General Fund are in line with the assumptions in the adopted budget.  Property Tax in Lieu of Vehicle License Fees (VLF) is based on a formula that applies the City-wide increase in assessed property values to the prior year’s allocation. The exact increase in assessed values was not known at the time the budget was p repared, but the actual amount will be $21,000 less than budgeted.

Revenues in the “Other Revenues” category are expected to end the year above budget by $ 1.6 million, which is attributable to a combination of projected positive and negative variances in the various individual accounts. Contributing significantly to the positive variance are $1.1 million in unrealized gains on investments, $200,000 from the transient lodging tax, and $150,000 in refunds and reimbursements.

Expenditures
Expenditure totals at year-end are currently projected to be below budget by $ 1.4 million. The variances by expenditure category are shown in Table B.

Table B
General Fund Expenditures Fiscal Year 2023

Expenditure Category
Adopted
Budget
Adjusted
Budget
Projected
Actuals
Variance
Above/(below)
Adjusted
Budget
Personnel 45,410,886$ 45,295,890$ 44,538,663$ (757,227)$ Maintenance & Operations 7,697,495 8,644,557 7,966,000 (678,557) Capital Outlay 143,500 338,743 338,743 - Capital Improvement Program 1,900,000 7,667,649 7,667,649 - Internal Serv Charges & Reserves 8,506,822 8,506,822 8,506,822 - Transfers Out 2,557,210 2,557,210 2,557,210 - Total 66,215,913$ 73,010,871$ 71,575,087$ (1,435,784)$
Note: The Adjusted Budget equals the Adopted Budget plus any year to date amendments to the budget, as w ell as appropriations carried over from the prior year for contracts and capital projects.

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Personnel costs make up about 68% of the General Fund’s adopted budget. At fiscal-year-end they are projected to be less than budgeted by approximately $0.8 million. The projection is result of a combination of savings of approximately $2.5 million associated with vacant authorized positions offset by costs for overtime requirements, primarily in the Police and Fire departments, which are expected to exceed budgeted amounts by $1.7 million.

Maintenance & Operations expenditures are projected to be $0.7 million below budget overall, due to a combination of anticipated savings in various accounts partially offset by unanticipated expenses in others.

All appropriations for Capital Outlay and Capital Improvements are being projected as being entirely spent, because none of the current projects are expected to yield any savings from the amounts budgeted. It is likely, however, that some portion of the current year’s appropriations will be unspent at year-end and will be carried over to next fiscal year.

For Internal Service Charges and Transfers Out, all amounts budgeted are projected to be spent, although at year-end actual expenditures of the service provider funds will be reviewed for savings and charges will be adjusted accordingly. Similarly, the Parks Maintenance and Library funds, the primary recipients of Transfers Out from the General Fund, will be reviewed at year-end to determine whether a portion of the transfer amounts can be reduced.

Staff will continue to monitor all revenues and expenditures and will provide updates in the third quarter budget status report and in conjunction with the fiscal year 2024 budget development process.

Net Impact on Unassigned Fund Balance
Table C below co mbines the revenue and expenditure projections discussed above to display the impact of those projections on unassigned fund balance. Unassigned fund balance is considered to be one of the City’s reserves and has a maintenance target level of 10% of the City’s General Fund operating budget. Amounts above the target level may be used to augment other reserves or for one-time expenditures. As noted in the summary at the beginning of this report, the FY 2023 adopted budget was balanced with no use of unassigne d fund balance. The adjusted budget column, however, shows a use of $6.2 million in fund balance, but that is a combination of both assigned and unassigned fund balances. Assigned fund balance is the sum of non-revenue offset appropriations that were carried over from unspent amounts from the prior fiscal year for contracts for work that was in progress in the prior year as well as for unspent appropriations for capital projects. For fiscal year 2023 that amount is $6.5 million. After adjusting for the difference between the projected actual revenues and expenditures for those appropriations offset by assigned fund balance, the result is a projected $4.3 million (shown in bold) augmentation of unassigned fund balance at fiscal year-end.

Table C
General Fund Impact on Fund Balance Fiscal Year 2023
Gain in (Use of) Fund Balance 363,664$ (6,233,266)$ (2,170,220)$ 4,063,046$ Fund Balance (FB) by Category
Gain in (Use of) Assigned FB - (6,518,177) (6,518,177) - Gain in (Use of) Unassigned FB 363,664 284,911 4,347,957 4,063,046 Total 363,664$ (6,233,266)$ (2,170,220)$ 4,063,046$

BUDGET ADJUSTMENTS
During the mid-year budget review process, the Finance Department, in conjunction with City department staff, identified budget adjustments necessary due to expenses unanticipated during

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the annual budgeting process. The attached schedule (“Exhibit ‘A’”) details the recommended adjustments. The recommendation section below provides a summary of those adjustments by fund.
 General Fund
Expenditures
□ $325,784 Maintenance & Operations
Revenues
□ $307,988 Other Revenue

 Office Equipment Depreciation
Revenues
□ $19,750 Capital

 Section 8 Fund
Expenditures
□ $150,000 Capital

FINANCIAL STATEMENT:

The recommended budget adjustments will result in additional appropriations of $325,784 in the General Fund with offsetting revenue of $307,998, $19,750 in the Office Equipment Depreciation Fund from the available fund balance, and $150,000 in Section 8 Fund from available fund balance.

RELATED CITY COUNCIL 2020-2025 STRATEGIC PLAN GOAL:

Balanced Budget and Economic Development

ENVIRONMENTAL REVIEW:

This is not a project under CEQA and is therefore not subject to environmental review.CCR15378; PRC 21065.

PUBLIC NOTIFICATION:

Agenda Report posted within 72 hours of meeting date and time in accordance with Brown Act.

ORDINANCE:

Not Applicable

EXHIBITS:

Exhibit A – Budget Adjustment Detail
Exhibit B - Resolution

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Exhibit A
Fund Expenditure Revenue Net
General Fund
Fire
Purchase two recliners  & matresses to replace old items 7,952 $                           7,952 $ Purchase of narcotic safes reimbured by Lower Sweetwater Fire Protection District 14,998$                         14,998 $                  ‐ $ Ladder and hose testing performed by DCS 9,834 $                           9,834 $ Fire Total 32,784$                         14,998 $                  17,786 $ Planning
Estimated increase in EsGil invoices for plan checks offset by plan check fees 293,000$                       293,000 $                ‐ $ Planning Total 293,000$                       293,000 $                ‐ $ General Fund Total 325,784$                       307,998 $                17,786 $ Fund Expenditure Revenue Net
Office Equipment Depreciation
Citywide
Citywide furniture purchases 19,750$                         19,750 $ Citywide Total 19,750$                         19,750 $ Office Equipment Depreciation Total 19,750 $                         19,750 $ Fund Expenditure Revenue Net
Section 8 Fund
Housing
Construction Management, furniture and contingency 150,000$                       150,000 $ Housing Total 150,000$                       150,000 $ Section 8 Fund Total 150,000$                       150,000 $ Q2 SUPPLEMENTAL APPROPRIATION REQUESTS -Summary
Fiscal Year 2023

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RESOLUTION NO. 2023-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA, AUTHORIZING VARIOUS FISCAL YEAR 2023 2nd QUARTER BUDGET ADJUSTMENTS WHEREAS, on June 7, 20 22, the City Council of the City of National City adopted Resolution No. 2022-97, adopting the budget for fiscal year 2023; and WHEREAS, as part of the 2nd quarter review process, the Finance Department reviewed the first six months for actual revenues and expenditures; and WHEREAS, the 2nd quarter budget review was presented to the City Council and members of the public on April 18, 2023; and
WHEREAS, the City Manager has requested approval of the Recommended 2nd quarter Budget Adjustments (“Exhibit ‘A”); and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby approves the fiscal year 2023 Recommended 2nd quarter Budget Adjustments (“Exhibit ‘A’”) and authorizes the City Manager to make the associated adjustments to the Fiscal Year 2023 Budget.

PASSED and ADOPTED this 18th day of April, 2023.

______________________________
Ron Morrison, Mayor
ATTEST:
_________________________
Shelley Chapel, MMC, City Clerk

APPROVED AS TO FORM
__________________________
Barry J. Schultz, City Attorney

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National City City CouncilApril 18, 2023

National City City Council
April 18, 2023