Base Density. Except as otherwise provided in subsection B.8 of this section, AHOZ Sites must be developed to a minimum density of 25 units per acre. The computation of the minimum required density shall be based on the Net Buildable Area of the properties identified in Figure 1 and Table 5. Where the computation of the minimum required density results in a fraction of a number, the minimum number of units required shall be rounded to the closest whole number.

Inclusionary Requirement. Not less than 20% of all new and Substantially Rehabilitated dwelling units in Residential Projects undertaken by a Developer (other than the Agency) shall be developed with Affordable Units, and not less than 30% of all new and Substantially Rehabilitated dwelling units undertaken by the Agency shall be developed with Affordable Units. Except as otherwise provided in subsections B.7 and 8 of this section, all of the Affordable Units required by this subsection shall be developed on-site as part of each Residential Project.

Affordable Unit Distribution. Affordable Units required under this section shall be allocated among the Target Households in proportion to Net RHNA Goals as set forth in Table 4 of Section 19.12.020, but in no event shall the percentage allocated to Very Low Income be less than 40%. In addition, at least 50% of all Affordable Units developed by the Agency shall be reserved for Very Low Income and the balance shall be allocated to Lower and Moderate Income in proportion to Net RHNA Goals.

Density Bonus. All Residential Projects to which this section applies shall be granted a Density Bonus of two Non-Restricted Units for each Affordable Unit that is produced or required for a Lower or Very Low Income household, up to a maximum combined density of 50% above the base density.

Illustrative Calculation. By way of example, for illustrative purposes only, where a proposed AHOZ Site consists of one acre of land and is proposed to be developed with a total of 20 dwelling units (and the project is to be undertaken by a private Developer without the Agency's involvement), the base density, inclusionary requirement, affordable unit distribution and Density Bonus would be calculated as follows:

Production Requirement. Except as otherwise provided in subsections B.7 and 8 of this section, the Affordable Units required under this section shall be constructed concurrent with the Non-Restricted Units developed as part of the Residential Project. For fractions of Affordable Units, including fractions resulting from construction of less than ten dwellings and fractions of Affordable Units allocated among the Target Households, the Developer may elect, at his or her option, to construct the next higher whole number of Affordable Units or pay a Housing In-Lieu Fee for the fractional amount.

Equivalent Action. Subject to the provisions of subsection B.10 of this section, the city council (at its sole discretion) may allow a Developer to dedicate vacant land in lieu of constructing Affordable Units on-site as part of a Residential Project otherwise required by subsections B.2 and B.6 of this section. All of the units developed on land donated pursuant to this section shall be Affordable Units distributed among the Target Households pursuant to subsection (B)(3) of this section.

Exceptions.

Retention Period. Except to the extent a longer period of time may be required by other provisions of law, all Affordable Units required under this section shall remain available at affordable housing costs to, and occupied by, the Target Households for the longest feasible time, but for not less than the following: (a) 55 years for renter-occupied dwelling units; and (b) 45 years for owner-occupied dwelling units. Under terms and conditions of the Affordable Housing Agreement, the city may permit sale of owner-occupied Affordable Units prior to the expiration of the 45 year period pursuant to an adopted program which protects the city's investment of moneys from the Housing Trust Fund, including, but not limited to, equity sharing that permits retention by the seller of a portion of sales proceeds based on the length of occupancy. The remainder of the excess proceeds of the sale shall be allocated to the city and deposited in the Housing Trust Fund.

Mandatory Findings.

General Guidelines. The Affordable Units required under this section:

Commercial Priority. AHOZ Sites with frontage upon Avenue of Flags or Highway 246 are expressly subject to General Plan Land Use Element policies that give commercial uses priority over residential. In compliance with these policies, AHOZ Sites with frontage upon Avenue of Flags or Highway 246 are subject to the following development parameters: (i) the Maximum Residential Density may be computed on the basis of the gross area of the AHOZ Site; (ii) the minimum required density, for purposes of subsection B.1 of this section and computing inclusionary requirements pursuant to subsection B.2 of this section, shall be based on Net Buildable Area of the AHOZ Site, exclusive of the portion of property devoted to or supporting commercial uses (e.g., building space, parking areas, and drive aisles); and (iii) new development shall conform to the development standards prescribed in Land Use Policy L-23 of the General Plan. Exceptions to the development standards set forth in Land Use Policy L-23 of the General Plan may be considered on a case-by-case basis and may only be approved by majority vote of the city council when all of the findings set forth in Land Use Policy L-23 can be made.

Development Review. All Residential Projects shall comply with adopted community design guidelines of the city, provided such guidelines are not unreasonably imposed as to render a project infeasible. Furthermore, discretionary authority under a development plan or conditional use permit shall not be unreasonably exercised to impose standards or criteria for the purpose of rendering infeasible the development of housing for any and all economic segments of the community as prohibited in Section 65913.2 of the California Government Code.

Environmental Review. All Residential Projects shall be subject to the requirements of the California Environmental Quality Act (California Public Resources Code Section 21000 et seq., and its implementing regulations), if applicable, and shall adhere to mitigation measures prescribed in the Buellton General Plan and companion environmental impact report, as updated and amended from time to time.

Application Processing. Applications for development of AHOZ Sites under the provisions of this section shall be processed as follows:

Affordable Housing Agreement. An Affordable Housing Agreement shall be made a condition of land use permit approval for all Residential Projects pursuant to this section. The Affordable Housing Agreement shall: (a) be recorded as a restriction on the parcel or parcels on which the Affordable Units will be constructed; and (b) be consistent with Section 19.16.022B of this chapter.

Project Entitlements. Every Entitlement for a Residential Project that is granted under the provisions of this section shall contain a condition detailing the method of compliance with this section, as applicable. Every final and parcel map shall bear a note indicating whether compliance with the requirements of this section must be met prior to issuance of a building permit for each lot created by such map.

Requirements for Certificate of Occupancy/Final Inspection. No temporary or permanent certificate of occupancy shall be issued, final inspection approved or release of utilities authorized for any new dwelling unit in a residential project until the developer has satisfactorily completed the requirements of this section and conditions of approval.

Accessory Dwelling Units. Accessory dwelling units (ADUs) constructed by a Developer (other than the Agency) shall be exempt from the inclusionary housing requirements of this section provided that such dwellings are affirmatively marketed to income qualifying tenants under the Federal Section 8 Housing Assistance Payments Program. The requirements for affirmative marketing shall be deemed satisfied by one of the following means: (a) the Developer occupies the ADU with a family member; or (b) the Developer shall, in addition to other means of advertising as determined at the Developer's sole discretion, provide written notice to the Santa Barbara County housing authority and Santa Ynez Valley People Helping People each time the ADU becomes vacant and available for occupancy. The requirement for affirmative marketing shall be evidenced by deed restriction on the parcel recorded with the county of Santa Barbara prior to and as condition precedent to issuance of a certificate of occupancy, and shall remain in full force and effect until the ADU is no longer used or occupied. The form and content of the deed restriction shall be determined by the city.

Special Needs Housing. Special needs housing (as defined in Section 19.16.012) constructed by a Developer (other than the Agency) shall be exempt from the inclusionary requirements of this section. Special needs housing developed by the Agency shall be governed by applicable redevelopment statutes.

Production Alternatives. As an alternative to constructing Affordable Units as part of a Residential Project, a Developer may satisfy the inclusionary requirements of this section by one of the following means:

Target Households. Affordable Units required under this section shall be allocated among the Target Households in proportion to Net RHNA Goals as set forth in Table 4 of Section 19.16.012, but in no event shall the percentage allocated to Very Low Income be less than 40%. In addition, at least 50% of all Affordable Units developed by the Agency shall be reserved for Very Low Income and the balance shall be allocated to Lower and Moderate Income in proportion to Net RHNA Goals. (Note: Section 19.16.013(B)(5) provides an illustration of how proportionality is calculated.)

Production Schedule. For Affordable Units that are constructed as part of a Residential Project, such dwellings shall be completed and occupied concurrent with the Non-Restricted Units. Where the requirements of this section are satisfied either through Equivalent Action or the payment of Housing In-Lieu Fees, the time period for compliance shall be governed by the city's Housing Element and Agency's Implementation Plan, but in no event longer than ten years from the date of approval of the Residential Project except as allowed pursuant to California Health and Safety Code Section 33413(b)(4).

Retention Period. Except to the extent a longer period of time may be required by other provisions of law, all Affordable Units required under this section shall remain available at affordable Housing Costs to, and occupied by, the Target Households for the longest feasible time, but for not less than the following: (i) 55 years for renter-occupied dwelling units; and (ii) 45 years for owner-occupied dwelling units. Under terms and conditions of the Affordable Housing Agreement, the city may permit sale of owner-occupied Affordable Units prior to the expiration of the 45-year period pursuant to an adopted program which protects the city's investment of moneys from the Housing Trust Fund, including, but not limited to, equity sharing which that permits retention by the seller of a portion of sales proceeds based on the length of occupancy. The remainder of the excess proceeds of the sale shall be allocated to the city and deposited in the Housing Trust Fund.

Density Bonus. All Residential Projects to which this section applies shall be granted a Density Bonus of two Non-Restricted Units for each Affordable Unit that is produced or required for a Lower or Very Low Income Household, up to a maximum combined density (inclusive of Density Bonus Units) of: (i) 50% above the base density for property zoned multifamily residential (RM): and (ii) 25 units per acre for property zoned general commercial (CR). To further induce the production of Affordable Units, and subject to development plan approval under the provisions of Section 19.02.120(E)(2), an Additional Incentive for multifamily dwellings on property zoned multifamily residential (RM) may be granted pursuant to Section 19.16.018(B)(1)(a).

Affordable Housing Agreement. An Affordable Housing Agreement shall be made a condition of land use permit approval for all Residential Projects pursuant to this section. The Affordable Housing Agreement shall: (i) be recorded as a restriction on the parcel or parcels on which the Affordable Units will be constructed; and (ii) be consistent with Section 19.16.022(B) of this chapter.

Project Entitlements. Every Entitlement for a Residential Project that is subject to the provisions of this chapter shall contain a condition detailing the method of compliance with this section, as applicable. Every final and parcel map shall bear a note indicating whether compliance with the requirements of this section must be met prior to issuance of a building permit for each lot created by such map.

Requirements for Certificate of Occupancy/Final Inspection. No temporary or permanent certificate of occupancy shall be issued, final inspection approved or release of utilities authorized for any new dwelling unit in a Residential Project until the Developer has satisfactorily completed the requirements of this section (e.g., on-site construction of Affordable Units, alternative equivalent action(s) or payment of the Housing In-Lieu Fee).

Owner-Occupied Dwellings. The Conversion or Demolition of a residential structure which is: (i) owned and occupied by the Developer a minimum of 90 consecutive days prior to the date an application is filed with the city for a land use permit; and (ii) is not destroyed or removed as part of a redevelopment project that is subject to a written agreement with the Agency or where financial assistance has been provided by the Agency.

Public Nuisances. The Demolition of any residential structure which: (i) has been declared to be a public nuisance under the provisions of Division 13 (commencing with Section 17000) of the Health and Safety Code, or any local ordinance enacted pursuant to those provisions; (ii) results from an order to abate or correct substandard conditions issued by a government agency having jurisdiction; (iii) is not destroyed or removed as part of a redevelopment project that is subject to a written agreement with the Agency or where financial assistance has been provided by the Agency; and (iv) has not been occupied by a Target Household for a period of 90 or more consecutive days as of the date of declaration of a public nuisance.

Nonconforming Uses. The Conversion or Demolition of a residential structure that: (i) constitutes a nonconforming use; and (ii) is not destroyed or removed as part of a redevelopment project that is subject to a written agreement with the Agency or where financial assistance has been provided by the Agency. For purposes of this section, nonconforming uses include motels and hotels with guestrooms that are used, rented or occupied as primary residences; provided, however, that the replacement housing requirements of this chapter expressly apply to the Demolition of each motel or hotel guestroom that has been occupied by a Target Household for a period of 90 or more consecutive days as of the date on which Entitlements or zoning clearances have been obtained.

Production Alternatives. As an alternative to constructing Affordable Units as part of a Residential Project in which new dwelling units are created, or where the Conversion or Demolition is not undertaken in conjunction with a new Residential Project, a Developer may satisfy the replacement housing requirements of this section by one of the following means:

Target Households. All replacement dwelling units shall be developed as Affordable Units and shall be available to persons and families in the same or a Lower Income category (Very Low, Lower, or Moderate), as the persons and families displaced from those destroyed or removed units. The Developer shall bear the burden of proving the status of occupancy at the time application is filed with the city for a land use permit allowing such Conversion or Demolition. Data shall be obtained and verified by such methods as may be necessary and reasonable to ensure full, true and complete information from which to base determinations in accordance with the standards set forth in Section 19.16.022(C) of this chapter. In the absence of such data, or where occupancy cannot be established at the time of Conversion or Demolition: (i) all displaced dwellings shall be deemed Inhabited by Target Households; and (ii) all replacement Affordable Units shall be in proportion to the needs identified in the city's Housing Element for Very Low, Lower and Moderate Income.

Production Schedule. Where Conversion or Demolition is undertaken in conjunction with a Residential Project in which new dwelling units are developed and the replacement Affordable Units are constructed on the site of the Residential Project, such dwellings shall be completed and occupied concurrent with the Non-Restricted Units. Where the requirements of this section are satisfied either through Equivalent Action or the payment of Housing In-Lieu Fees, the time period for compliance shall be governed by the city's Housing Element and Agency's implementation plan, but in no event longer than ten years from the date of approval of the Residential Project except as allowed pursuant to California Health and Safety Code Section 33413(b)(4). In all cases where dwellings inhabited by Very Low, Lower and Moderate Income Households are destroyed or removed as part of a redevelopment project that is subject to a written agreement with the Agency or where financial assistance has been provided by the Agency, replacement Affordable Units shall be completed and occupied by Target Households within four years of such destruction or removal.

Retention Period. Except to the extent a longer period of time may be required by other provisions of law, all Affordable Units required under this section shall remain available at affordable housing costs to, and occupied by, the Target Households for the longest feasible time, but for not less than the following: (i) 55 years for renter-occupied dwelling units; and (ii) 45 years for owner-occupied dwelling units. Under terms and conditions of the Affordable Housing Agreement, the city may permit sale of owner-occupied Affordable Units prior to the expiration of the 45 year period pursuant to an adopted program which protects the city's investment of moneys from the Housing Trust Fund, including, but not limited to, equity sharing which that permits retention by the seller of a portion of sales proceeds based on the length of occupancy. The remainder of the excess proceeds of the sale shall be allocated to the city and deposited in the Housing Trust Fund.

Inclusionary Offset. Affordable Units required under Section 19.16.014 may offset replacement housing requirements on a 2:1 basis (i.e., a reduction of two replacement units for each inclusionary unit) subject to the following provisions:

Affordable Housing Agreement. An Affordable Housing Agreement shall be made a condition of land use permit approval for all Residential Projects pursuant to this section. The Affordable Housing Agreement shall: (i) be recorded as a restriction on the parcel or parcels on which the Affordable Units will be constructed; and (ii) be consistent with Section 19.16.022(B) of this chapter.

Project Entitlements. Every Entitlement for a Residential Project that is subject to the provisions of this chapter shall contain a condition detailing the method of compliance with this section, as applicable. Every final and parcel map shall bear a note indicating whether compliance with the requirements of this section must be met prior to issuance of a building permit for each lot created by such map.

Requirements for Permit Issuance. The Conversion or Demolition of existing housing shall be allowed in all zone districts subject to: (i) a zoning clearance as provided in Section 19.08.100 of this title; and (ii) adherence to the terms and conditions of this section. No Demolition permit shall be issued and no land use approval shall be granted for any Residential Project involving the Conversion or Demolition of any residential dwelling until the Developer has satisfactorily completed the requirements of this section (e.g., on-site construction of Affordable Units, alternative equivalent action(s) or payment of the Housing In-Lieu Fee).

Timing of Payments. The relocation benefits required by this section shall be paid by the Developer or designated agent to the tenant within ten days after the date that the order to vacate is first mailed to the tenant and posted on the premises, or at least 20 days prior to the vacation date set forth in the order to vacate, whichever occurs later. If there are fewer than ten days between the first posting and mailing of the order to vacate and the vacation date, the relocation benefits shall be paid by the Developer or designated agent to the tenant within 24 hours after the notice is posted and mailed. The Local Enforcement Agency shall attempt to provide telephonic or written notice to the owner to notify the owner that the benefits are payable immediately. Failure to provide the notice as specified in this section shall not relieve the Developer of any obligations imposed by this section.

Noticing Requirements. If a tenant is entitled to relocation benefits pursuant to this section, the Developer shall provide either telephonic or written notice to the tenant of his or her entitlement to the benefits. Written notice may be satisfied by posting a bilingual (English/Spanish) written notice on the premises stating that tenants may be entitled to relocation benefits. Any order by a Local Enforcement Agency that requires a tenant's displacement and is issued to an owner, designated agent, or tenant, shall be accompanied by a summary of the provisions of this section. Failure to provide a summary shall not relieve any person of the obligations imposed by this section.

Relocation Benefits. A relocation payment shall be made available by the Developer or designated agent to the tenant in each residential unit and shall be a sum equal to the greater of: (i) two times the actual monthly rent; or (ii) six times the monthly difference between the Affordable Housing Price (rent) and the current fair market rent published by the Santa Barbara County housing authority in conjunction with the Federal Section 8 Housing Assistance Payments Program (determined by the Department of Housing and Urban Development pursuant to Section 1437f of Title 42 of the United States Code). In addition, the relocation payment shall include an amount, as determined by the Local Enforcement Agency, sufficient for utility service deposits. The relocation benefits shall be paid by the owner or designated agent in addition to the return, as required by law, of any security deposits held by the owner. The relocation benefits shall be payable on a per residential unit basis.

Cost Recovery. Any amounts paid by the Local Enforcement Agency, except pursuant to subsection (C)(3) of this section, and any applicable penalties and actual costs may also be placed as a lien against the property by the Local Enforcement Agency by recording the lien in the recorder's office of the county of Santa Barbara. Prior to instituting any action to collect from the Developer or designated agent relocation benefits paid pursuant to this section, or to impose a lien therefor, send to the Developer or designated agent by first-class mail, postage prepaid, at the owner's address as shown on the last equalized assessment roll, an itemized accounting of all benefits paid by the Local Enforcement Agency to the Developer's tenants, and any penalties or costs the Local Enforcement Agency is seeking to recover. If the Developer or designated agent contends that not all of the benefits are chargeable to the Developer or designated agent because the recipients were not displaced tenants, no benefits were payable pursuant to subsection (B)(3)(b) of this section, or on other grounds, the Developer or designated agent shall submit a written appeal to the city within 20 days after receipt by the owner or designated agent of the itemized accounting. The appeal shall be filed and processed in the time and manner stipulated in Section 19.16.022(D). The final decision of the local appellate body shall be subject to Section 1094.5 of the Code of Civil Procedure. If the Developer fails to obtain a more favorable decision than that set forth in the itemized accounting, the Developer or designated agent shall be liable to the Local Enforcement Agency for the costs of the administrative hearing and appeal, not to exceed $5,000. The failure to receive the itemized accounting shall not relieve the Developer of any obligation to reimburse the Local Enforcement Agency.

Nonreimbursable Payments. If there are fewer than ten days between the first posting and mailing of the order to vacate and the vacation date as provided in subsection (B)(1) of this section, and if the Local Enforcement Agency advances relocation benefits to any tenants prior to the expiration of the ten-day period, the Developer shall not be required to reimburse the Local Enforcement Agency for a charge identified on the itemized accounting described in subsection (C)(1) of this section, if the Developer contests the charge within 30 days after the itemized accounting is mailed to the Developer or designated agent pursuant to subsection (C)(1) of this section. The Developer or designated agent shall pay the charge that was the subject of the appeal pursuant to subsection (C)(1) of this section within 30 days after an adverse decision by the city on the appeal is mailed to the Developer.

Optional Benefits. In the situations described in subsection (B)(3)(b) of this section, the Local Enforcement Agency, at its sole discretion, may pay relocation payments to the tenants of units within a multi-unit structure who did not cause or substantially contribute to the uninhabitable condition.

Voluntary Payments. Nothing in this section shall be construed to require the Local Enforcement Agency to pay any relocation benefits to any tenant, or assume any obligation, requirement, or duty of the Developer pursuant to this section.

Pursuant to eligibility defined in Government Code Section 65915, the city shall grant a density bonus, the amount of which shall be as specified in Government Code Section 65915, and incentives or concessions, the amount of which shall be as specified in Government Code Section 65915.

The applicant for a density bonus may submit a proposal for the waiver or reduction of development standards that have the effect of physically precluding the construction of a housing development incorporating the density bonus and any incentives or concessions granted to the applicant, except as restricted by Government Code Section 65915.

The applicant may request a reduction in parking requirements in accordance with Government Code Section 65915.

The density bonus units shall not be included when calculating the total number of housing units that qualify the housing development for a density bonus, except as otherwise required by Government Code Section 65915.

The amount of the density bonus shall not exceed the percentages established in Government Code Section 65915.

An applicant shall not receive a density bonus or any other incentive or concession if the housing development would be excluded under Government Code Section 65915, which includes projects that fail to "replace" existing housing units, as required by state law.

A development application within the Avenue of Flags Specific Plan area which has been granted density bonus requests under this section shall be eligible for the Development Opportunity Reserve (DOR) program, as defined in the specific plan, on a project-specific basis, under the discretion of the city council, per the Avenue of Flags Specific Plan.

Applications for a density bonus shall be filed with the planning director on a form approved by the director.

The density bonus application shall be filed and processed concurrently with an application for a land use permit and the applicant shall pay the density bonus application fee, established by the city council.

The application shall clearly indicate the number of base units allowed by the General Plan and zoning regulations, the number of density bonus units requested, the number of affordable units, and the affordability levels that will be included in the proposed project.

The application shall specify requested incentives or concessions, waivers or reductions of development standards, and parking ratios.

The application shall include reasonable documentation to establish eligibility for a requested density bonus, incentives or concessions, waivers or reductions of development standards, and parking ratios, to the satisfaction of the planning director.

A request for a waiver or reduction of development standards shall be accompanied by documentation demonstrating that the waiver or reduction is physically necessary to construct the housing development with the additional density allowed pursuant to the density bonus and incorporating any incentives or concessions required to be granted.

The application shall be processed in a manner consistent with the timelines specified in Government Code Section 65943.

For any development project that is granted a density bonus or other benefit pursuant to this chapter, the affordable units shall be integrated with the market rate units so that there is a mix of affordable and market rate units, if any, in each building of the development project.

All affordable units shall be comparable to market rate units with regard to total square footage, bedroom size, amenities, design, use of materials, finish quality, and exterior appearance.

When an applicant proposes to construct a housing development that includes a childcare facility that will be located on the premises of, as part of, or adjacent to, the project, the city and the applicant shall adhere to the requirements of Government Code Section 65915.

The city shall not be required to provide a density bonus or concession or incentive for a childcare facility if it finds, based upon substantial evidence, that the community has adequate childcare facilities.

The city shall approve a request for a concession or incentive, waiver, or reduction of development standards unless it makes one or more of the following findings:

Illustrative Calculation. By way of example, and for illustrative purposes only, where a parcel of ten acres is presently zoned RM-16, the maximum allowed density would be 160 units and the inclusionary requirement is computed as 24 dwellings (i.e., ten acres times 16 du/acre times 15% equals 24 Affordable Units). If a Developer requests a zone change to RS-10, the maximum allowed density would be reduced to 100 units and the resulting inclusionary requirement is computed as 15 dwellings (i.e., ten acres times ten du/acre times 15% equals 15 Affordable Units). The inclusionary differential is computed as nine dwellings (i.e., 24 units minus 15 units equals nine Affordable Units). Except as provided in Section 19.10.013(B)(8)(a)(2), the affordable unit differential shall be satisfied by construction on-site as part of, and concurrent with development of, a Residential Project.

Equivalent Action. Subject to review and approval by the city council, a Developer may satisfy the inclusionary differential through one or more of the following means:

Purposes and Use of Funds. Monies deposited in the Housing Fund along with any interest earnings on such monies shall be used solely to increase and improve the supply of housing affordable to Households of Very Low, Lower and Moderate Income including, including, but not limited to (i) acquisition of real property, buildings and structures; (ii) completion of on and off-site improvements; (iii) donation of real property to private or public entities; (iv) construction and rehabilitation of buildings and structures; (v) payment of insurance premiums, principal and interest, debt financing and carrying charges; (vi) subsidization of market rate housing; (vii) preservation of mobile homes and subsidized housing "at risk" of Conversion to market rates; and (viii) reasonable planning and administrative expenses. In addition, monies deposited in the Housing Fund may be used for the special purposes set forth below.

Planning and Programming. Monies in the Housing Fund shall be used in accordance with the goals, policies, programs and priorities identified in the City's Housing Element and the Agency's Implementation Plan. Monies in the Housing Fund may be disbursed, hypothecated, collateralized or otherwise employed for these purposes from time to time as the city council determines is appropriate to accomplish the purposes of the Housing Fund. These uses include, but are not limited to, assistance to private, public and non-profit housing sponsors, equity participation loans, grants, pre-homeownership co-investment, predevelopment loan funds, participation leases, or other public/private partnership arrangements.

Occupancy Preferences. The city shall have the right of first refusal to occupy any and all Affordable Units with Target Households of its choosing. This right shall be: (i) defined in the Affordable Housing Agreement; and (ii) effective upon issuance of certificates of occupancy and anytime thereafter should any Affordable Unit become vacant. In exchange for the city exercising its right of first refusal, the Developer shall be entitled to a rental loss compensation payable by the city in a sum equal to the total lost rent incurred from the date that an Affordable Unit becomes available until it is occupied. In exercising this prerogative, the city shall give preference to the following Target Households, in the order listed: (i) Displaced Persons whose dislocation involves a Residential Project within the city; (ii) Disabled Persons; (iii) population groups with special needs as identified in the city's Housing Element (e.g., handicapped, elderly, farm workers, and single family Households); and (iv) all other Very Low, Lower and Moderate Income Households. Within these categories, preference will be given to current residents of the city and priority will be assigned based on date of application.

Resale of Affordable Units. The maximum sales price permitted on resale of an Affordable Unit intended for owner-occupancy shall not exceed the seller's purchase price, adjusted for the percentage increase in the Area Median Income since the seller's purchase, plus the value of substantial structural or permanent fixed improvements to the property and the cost of reasonable seller's broker fee as determined by the housing director. For purposes of this subparagraph, Area Median Income shall be calculated based upon the occupancy levels used to determine the original affordable sales price. The resale restrictions shall provide that in the event of the sale of an Affordable Unit intended for owner-occupancy, the city shall have the right to purchase or assign its right to purchase such Affordable Unit at the maximum price that could be charged to an eligible Household. In-lieu of resale and re-occupancy by a Target Household, the city may permit sale of owner-occupied Affordable Units prior to the expiration of the 45 year period pursuant to an adopted program which protects the city's investment of moneys from the Housing Trust Fund, including, but not limited to, equity sharing which that permits retention by the seller of a portion of sales proceeds based on the length of occupancy. The remainder of the excess proceeds of the sale shall be allocated to the city and deposited in the Housing Trust Fund.

Target Household Eligibility. No Household shall be permitted to occupy an Affordable Unit, or purchase an Affordable Unit for owner-occupancy, unless the city has approved the Target Household's eligibility. If the city maintains a list of eligible Households as provided in Section 19.16.22(B)(1) of this chapter, Households selected to occupy Affordable Units shall be selected first from that list to the extent provided in the Affordable Housing Agreement or resale restrictions.

Annual Monitoring and Transfer Fees. For each rental Affordable Unit required under this chapter, the Developer (and his or her successor's and assigns) may be required to pay an annual monitoring fee for the term of required affordability. Such fee shall be specified in the Housing Affordability Agreement. For each owner-occupied Affordable Unit, the current owner may be required to pay a transfer fee for any change of ownership during the term of required affordability. Such fee shall be specified in the resale restrictions required by Section 19.16.022(B)(2) of this chapter.

Deferral of Development Impact Fees. To the maximum extent feasible, the city will defer Development Impact Fees for each Affordable Unit until issuance of certificates of occupancy. The type of Development Impact Fees to be deferred shall be determined on a case-by-case basis taking into account specific costs and impacts uniquely attributable to each Residential Project. In general, the policy of the city shall be to defer payment of Development Impact Fees until the time that actual costs or impacts arise for which the fees are assessed including, for example, delaying payment of sewer and water connection fees until these utilities are actually placed in service.

Fair Employment and Housing Act. The Fair Employment and Housing Act prohibits discrimination in all aspects of housing (rental, lease, terms and conditions, etc.) because of a person's disability. Disabled Persons have the right to use the services of a guide, signal or service dog or other such designated animal and to keep such animals in or around their dwellings. At the request of a Disabled Person (or by someone acting on behalf of such person with his or her written consent), the Developer of each Affordable Unit (and each subsequent owner thereof) must make reasonable accommodations in rules, policies, practices or services when these accommodations may be necessary to afford a Disabled Person equal opportunity to use and enjoy a dwelling. The Developer (and each subsequent owner of an Affordable Unit) must allow a Disabled Person (at the tenant's expense or at the expense of someone acting on behalf of such person with his or her written consent) to reasonably modify existing premises if the modifications are necessary to afford the Disabled Person full enjoyment of the premises. These provisions shall be stipulated in the Affordable Housing Agreement.

Affirmative Marketing. The following requirements shall be incorporated into all Affordable Housing Agreements:

Expiration Notice. Prior to expiration of the retention period for Affordable Units, written notice shall be given by the Developer to the city a minimum of two years before termination of the Affordable Housing Agreement.

Income Basis. If circumstances are such that it is not reasonably feasible to anticipate a level of income over a 12 month period, a different basis may be used including, but not limited to, a shorter time frame of projection for a period of time preceding the date of application. Circumstances wherein an adjustment in the basis of determining Household Income is warranted include:

Verification Standards. The following, although not all inclusive, represent the types of verification required for various sources and elements of Household Income: