The purpose of this article is to implement the requirements of § 65915 of Chapter 4.3 of Division 1 of the California Government Code regarding density bonuses and other incentives and concessions to be awarded to qualifying housing developments. It is the intent of the city council in adopting this article that it be implemented consistent with the applicable policy directives of the state legislature and in a manner consistent with the protection and preservation of the health, safety, and welfare of the citizens of the City of Hemet.

(Ord. No. 1743, § 2)

The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section. Words, terms, and phrases not defined herein shall be as defined in section 90-4 of this Code, or if not defined therein, then first in the Chapter 4.3 of Division 1 of the California Government Code (commencing with § 65915), and then second in a dictionary of common usage in the United States, such as Webster's. These definitions are provided in order to assist in the uniform interpretation and application of the regulations and provisions set forth in this chapter.

Affordable units means a dwelling unit occupied by and available to households of lower, very low, or moderate income, condominium or planned unit development as defined in subsection 90-163(b) of this article.

Approval body means the director, commission, or council to which approval authority is provided for the permit or approval under Chapter 90 of this Code.

Density bonus means a density increase as provided in section 90-163, 90-166, or 90-167 over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and the corresponding land use designation in the general plan.

Housing development means a "housing development" as defined in subdivision (j) of § 65915 of the California Government Code.

Incentives and concessions means at least one additional incentive or concession as described in section 90-164 of this article.

Lower income unit means a dwelling unit targeted for occupancy by a lower income household as defined in § 50079.5 of the California Health and Safety Code.

Moderate income units means a dwelling unit targeted for occupancy by a moderate income household as defined in § 50093 of the California Health and Safety Code.

Very low income units means a dwelling unit targeted for occupancy by a very low income household as defined in § 50105 of the California Health and Safety Code.

(Ord. No. 1743, § 2)

(a)

An applicant for a housing development shall be granted a density bonus, as provided in this section, by the approval body if the housing development meets the following qualifications:

(1)

The applicant has made a written request for grant of a density bonus with its application for the housing development; and

(2)

One of the following is applicable:

a.

The housing development contains at least the minimum qualifying number of affordable housing units required under this section and the applicant agrees to the affordability covenants required under this section as conditions of approval on the housing development; or

b.

The housing development meets the requirements of the land donation provisions of this section; and

(3)

Substantial evidence supports the making of the findings required of the approval body under this subsection (e) below; and

(4)

The applicant satisfies the affordability covenant requirements applicable to the class of affordable units for which the density bonus is granted as provided in section 90-165; and

(5)

The housing development will consist of at least five or more dwelling units.

(b)

The housing development must satisfy the affordable unit requirements of at least one of the categories or the land dedication provisions, provided below. Qualifying housing developments will be granted a density bonus consistent with the provision of the qualifying category.

(1)

Lower income units.

a.

At least ten percent of the total dwelling units in a housing development are lower income units and the applicant agrees to ensure continued affordability of such units to lower income households as defined in § 50079.5 of the California Health and Safety Code.

b.

The base density bonus for housing developments with the qualifying number of lower income units shall be 20 percent over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and the corresponding land use designation in the general plan.

c.

The base density bonus may be increased as provided herein. For each additional one percent increase in the total number of affordable units over ten percent, the density bonus shall increase from the base of 20 percent by 1.5 percent, to a maximum of 35 percent. No density bonus or aggregate of density bonuses for a housing development may exceed 35 percent.

d.

The density bonus shall not be included when determining the number of housing units that is equal to ten percent of the total.

(2)

Very low income units.

a.

At least five percent of the total dwelling units in a housing development are very low income units and the applicant agrees to ensure continued affordability of such units to lower income households as defined in Section 50105 of the California Health and Safety Code.

b.

The base density bonus for housing developments with the qualifying number of very lower income units shall be 20 percent over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and the corresponding land use designation in the general plan.

c.

The base density bonus may be increased as provided herein. For each additional one percent increase in the total number of affordable units over five percent, the density bonus shall increase from the base of 20 percent by 2.5 percent, to a maximum of 35 percent. No density bonus or aggregate of density bonuses for a housing development may exceed 35 percent.

d.

The density bonus shall not be included when determining the number of housing units that is equal to five percent of the total.

(3)

Moderate income condo development or planned unit development.

a.

At least ten percent of the total dwelling units in a housing development that qualifies as a condominium project, as defined in subdivision (f) of § 50093 of the California Health and Safety Code, or a planned unit development, as defined in subdivision (k) of § 50093 of the California Health and Safety Code are moderate income units and the applicant agrees to restrict purchase of such units to moderate-income household, as defined in § 50093 of the California Health and Safety Code.

b.

The base density bonus for housing developments with the qualifying number of moderate income units shall be five percent over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and the corresponding land use designation in the general plan.

c.

The base density bonus may be increased as provided herein. For each additional one percent increase in the total number of affordable units over ten percent, the density bonus shall increase from the base of five percent by one percent, to a maximum of 35 percent. No density bonus or aggregate of density bonuses for a housing development may exceed 35 percent.

d.

The density bonus shall not be included when determining the number of housing units that is equal to ten percent of the total.

(4)

Land donation.

a.

An applicant for a residential tentative tract map, parcel map, or other residential development approval will qualify for grant of a density bonus if the applicant makes a legally binding commitment to donate land and the land to be donated meets the requirements set forth in subsection (b) below. The density bonus to be granted shall be consistent with the provisions of subsection (c) below.

b.

The applicant must make a legally binding commitment to donate and transfer the land requiring the land to be donated and transferred by no later than the date of approval of the final subdivision map, parcel map or residential development approval for which application has been made. The land must meet all of the following criteria:

1.

It must be within the boundary of the proposed development or, if the city agrees, within one-quarter mile of the boundary of the proposed development;

2.

It must be at least one acre in size or of sufficient size to permit development of at least 40 affordable units;

3.

It must have a developable acreage of sufficient size to accommodate a number of very low income units equal to at least ten percent of the total units in the entire proposed development;

4.

It must have the appropriate general plan designation and zoning classification for construction of very low income units (although other affordable units may ultimately be constructed) and it must have appropriate zoning and development standards to make development of very low income units feasible (although other affordable units may ultimately be constructed);

5.

It must be, or will be by the time of transfer, served by adequate public facilities and infrastructure;

6.

It must have all of the permits and approvals, necessary for the development of the very low income units (except that design review and the issuance of building permits need not have been completed) on the transferred land by no later than the date of approval of the final residential subdivision map, parcel map or of the residential development;

7.

It must be transferred to the city or to a housing developer approved by the city. The city may require the applicant to identify and transfer the land to the selected developer;

8.

It (and any units to be constructed thereon) must be subject to a deed restriction recorded against the property at the time of transfer ensuring continued affordability of the units consistent with subsections (b)(1), (b)(2) or (b)(3) of this section;

9.

In the event the project qualifies for a density bonus under subdivision (b)(4) of this section, then the approval body shall grant a density bonus as follows:

i.

The base density bonus shall be 15 percent over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and the corresponding land use designation in the general plan for the entire development.

ii.

The base density bonus may be increased as provided herein. For each additional one percent increase in the total number of affordable units that can be accommodated on the land to be donated above the ten percent minimum provided in subsection (b)(4)b.3., the density bonus shall increase from the base of 15 percent by one percent, to a maximum of 35 percent. This increase shall be in addition to any increase mandated by the other provisions of this section provided however, that no density bonus or aggregate of density bonuses for a project may exceed a maximum of 35 percent.

(c)

The density bonuses provided for under subsections 90-163(b)(1) through 90-163(b)(4) shall be cumulative. No housing development shall receive or be entitled to receive a density bonus or aggregate of density bonuses that would result in the density of the project exceeding 35 percent over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and the corresponding land use designation in the general plan.

(d)

Density bonus units shall be generally disbursed throughout a residential planned development and shall not differ in design and exterior appearance from other units in the project.

(e)

In order to grant a density bonus, the city shall make the following findings:

(1)

The housing development meets the qualifications of section 90-163.

(2)

The granting of the density bonus and award of incentives and concession will not have a specific, adverse impact upon the public health or safety.

(3)

The granting of the density bonus and award of incentives and concession will not have a specific adverse impact on any real property listed in the California Register of Historical Resources.

(4)

The housing development satisfies the affordability covenant requirements as provided in section 90-165.

(5)

The affordable units are of comparable quality and offered in a range of sizes comparable to those offered other purchasers or renters (taking into consideration the need to make development of the affordable units feasible) and are dispersed throughout the housing development.

(Ord. No. 1743, § 2)

(a)

In to addition to density bonuses that may be granted pursuant to section 90-163, a housing development providing the qualifying number of lower income units, very low income units, or moderate income units, may request, and the approval body shall grant, the following number of incentives or concessions:

(1)

One incentive or concession if the housing development includes at least:

a.

Ten percent low income units; or

b.

Five percent very low income units; or

c.

Ten percent moderate income condo development units.

(2)

Two incentives or concessions if the housing development includes at least:

a.

Twenty percent low income units; or

b.

Ten percent very low income units; or

c.

Twenty percent moderate income condo development units.

(3)

Three incentives or concessions if the housing development includes at least:

a.

Thirty percent low income units; or

b.

Fifteen percent very low income units; or

c.

Thirty percent moderate income condo developments units.

(b)

For the purpose of this section, the city shall utilize the following incentives and concessions:

(1)

The following are pre-approved city incentives and concessions:

a.

Reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission as provided in Part 2.5 of Division 13 of the Health and Safety Code, including, but not limited to:

1.

A reduction in setback and square footage requirements; and

2.

A reduction in the ratio of vehicular parking spaces.

b.

Approval of mixed use zoning in conjunction with the housing project; and

c.

Other regulatory incentives or concessions proposed by the developer or the city that result in identifiable, financially sufficient, and actual cost reductions.

(2)

In lieu of the incentives and concessions provided for under subsection (1) above, the applicant may submit, at the time of submission of its application for the housing development, to the city a written proposal for specific incentives and concession that it requests. The approval body shall grant the requested incentive or concession unless it finds, based on substantial evidence in the record either of findings required under California Government Code § 65915(d)(1).

(Ord. No. 1743, § 2)

(a)

The following requirements shall apply to any housing development granted a density bonus under section 90-163 based on the inclusion of the required number of lower income units or very low income units.

(1)

Those units targeted for sale and occupancy by lower income households, as defined in California Health and Safety Code § 50079.5, or very low income households, as defined in California Health and Safety Code § 50105, shall not be sold, resold, or offered for sale or resale at more than the affordable housing cost, as defined in California Health and Safety Code § 50052.5 for the corresponding income category.

(2)

Those units targeted for rental and occupancy by lower income households, as defined in California Health and Safety Code § 50079.5, or very low income households, as defined in California Health and Safety Code § 50105, shall not be leased, rented, subleased, or offered for lease, rent, or sublease, at more than the affordable rent, as defined in California Health and Safety Code § 50053, for the corresponding income category.

(3)

Prior to the issuance of a certificate of occupancy for any lower income unit or very low income unit in a housing development for which a density bonus has been granted under section 90-163, the developer shall identify the restricted units and shall enter into a written affordability agreement with the city that shall contain the following terms:

a.

The agreement shall be a covenant running with the land and binding on the developer, and its successors and assigns, tenants, lessees, and other persons claiming an interest in the property by or through them, and shall be recorded in the chain of title for the property in the official records of the Recorder for the County of Riverside in a form acceptable to the city attorney. The agreement shall expressly give the city the right, but not the obligation, to enforce the affordability covenants through such legal and equitable remedies as may be provided by law, including, but not limited to specific performance;

b.

The identified units shall continued to be sold or rented to (as identified) and occupied by lower income households or very low income households (as identified) at an affordable housing cost or affordable rent (as the case may be) for a period of not less than 30 years;

c.

The agreement shall provide the city with the continuing right of first refusal to lease any or all of the designated units at their affordable cost for the targeted income category, which may then be subleased by city to persons and families qualifying a lower, very low or extremely low income households;

d.

For rental properties the developer shall maintain a rental schedule and rent rolls for all identified affordable units and annually provide a copy of such to city with evidences of payments received so that the city may verify that the actual rental charges do not exceed that affordable rent as defined in this section;

e.

For owner-occupied properties, the deed conveying the property shall contain a requirement that prior to the consummation of any resale, the owner shall provide the city with the escrow documents evidencing that the unit will not be sold for more than an affordable housing cost as defined in this section and that the city may take such actions as are provided under this section to stay or prohibit the sale if the sales price exceeds the price required by the affordability covenant; and/or

f.

The city shall have the authority to enter into such other agreements with the developer, renters, and subsequent owners of the dwelling units as may be necessary to assure that the required dwelling units are continuously occupied by eligible households.

(b)

The following requirements shall apply to any housing development granted a density bonus under section 90-163 based on the inclusion of the required number of moderate-income units.

(1)

Those units targeted for sale and occupancy by persons and families of moderate income, as defined in California Health and Safety Code § 50093, shall not be sold, resold, or offered for sale or resale at more than the affordable housing cost, as defined in California Health and Safety Code § 50052.5.

(2)

Prior to the issuance of a certificate of occupancy for any moderate income condo development or planned development units in a development for which density bonus units have been granted pursuant to section 90-163, the developer shall identify the restricted units and shall enter into a written affordability agreement with the city that shall contain the following terms:

a.

The agreement shall be a covenant running with the land and binding on the developer, and its successors and assigns, tenants, lessees, and other persons claiming an interest in the property by or through them, and shall be recorded in the chain of title for the property in the official records of the Recorder for the County of Riverside in a form acceptable to the city attorney. The agreement shall expressly give the city the right, but not the obligation, to enforce the affordability covenants through such legal and equitable remedies as may be provided by law, including, but not limited to specific performance;

b.

The identified units shall continued to be sold to and occupied by persons and families of moderate income at an affordable housing cost for a period of not less than 30 years;

c.

The affordability restrictions for the moderate-income condominium or planned development units shall be compromised of both initial occupancy restrictions on the purchasers as well as initial restricted sales prices;

d.

Prior to the closing of the initial sale by the developer to persons or families of moderate income, the developer shall cause the purchaser to execute and deliver to the city a promissory note, secured by a deed of trust against the property, in favor of the city. The promissory note and deed of trust shall protect the city's right to recapture its proportionate share of appreciation in the property as provided in Government Code § 65915(c)(2). The promissory note and deed of trust shall be in a form acceptable to the city in its sole and reasonable discretion. The deed of trust may be subordinated, in the discretion of the city, to legitimate and reasonable purchase money mortgages or permanent financing, but shall not have less than second priority about non-tax liens and encumbrances against the property;

e.

Upon the first resale by the initial moderate-income purchaser ("homeowner"), the city shall be entitled to recapture its proportionate share of appreciation, to the extent of available excess equity (as defined herein) in the property. The city shall use funds received from the recapture, net of reasonable expenses, within three years for any of the purposes described in subdivision (e) of § 33334.2 of the Health and Safety Code that promote homeownership;

f.

Upon the first resale by the homeowner, the distribution of sales proceeds shall be as follows: (i) First to discharge liens for taxes and/or assessment, due or delinquent; (ii) Second to discharge the lien of the first deed of trust holder; (iii) Third to pay the reasonable and customary costs of sale shown on the good faith estimate as adjusted by the final statement of closing costs; (iv) Fourth to repay the homeowner's original down payment (without interest); (v) Fifth to pay to the homeowner the assessed value of improvements made by the homeowner that are fixtures to the real property; (vi) The resulting residual amount shall be the "excess equity" and shall be distributed to pay the city and homeowner their respective proportionate shares of appreciation;

g.

For purposes of this section, the following definitions shall apply:

1.

City's proportionate share of appreciation shall be calculated as follows: The qualifying affordable sales price for moderate income persons at the time of homebuyer's purchase of the property (ModP) shall be subtracted from the fair market value of the property as existing at the time of its purchase by homeowner (FMV). The resulting amount (D) shall be divided by FMV to equal the city's proportionate share (C%). This can be expressed in the following formula: FMV - ModP = D. D/FMV + C%.

2.

The homeowner's proportionate share shall be calculated as follows: 1 - C% = H%.

3.

The city's share of the excess equity (EE) shall be calculated as follows: EE × C%. The homeowner's share of excess equity shall be calculated as follows: EE × S%.

4.

For example: If the homeowner buys the home for $200,000.00 but the fair market value is $300,000.00, then $300,000.00 (FMV) minus $200,000.00 (ModP) equals $100,000.00 (D). $100,000.00 (D) divided by $300,000.00 (FMV) equals 0.33 (C%). The city's proportionate share of the excess escrow will be 33 percent. The homeowner's proportionate share would be one minus 0.33 = 0.67 or 67 percent. If the homeowner later resells that home for $400,000.00 and the excess equity is $100,000.00 after applying subsection f. above, then the city's share would be $100,000.00 × 0.33 or $33,000.00 and the homeowner's share would be $100,000.00 × 0.67 or $67,000.00.

h.

Fair market values, if and when required to calculate shares of appreciation, shall be determined by an appraisers licensed by the State of California.

(c)

The certificate of occupancy for a density bonus unit will automatically expire upon vacation of the unit. Prior to the reissuance of a certificate of occupancy for the unit, the director shall determine that it will be occupied pursuant to the requirement of this chapter.

(Ord. No. 1743, § 2)

(a)

In order to encourage the provision of housing for senior citizens, an applicant for a residential planned development may request, and the approval body may grant, with applicable findings as set forth in subsection 90-163(e), a density bonus under the following circumstances:

(1)

Market rate senior citizen housing development. If an applicant has made a written request for grant of a density bonus with its application to build market-rate senior citizen housing development as defined in § 51.11 of the Civil Code, then the approval body shall grant a density bonus of 20 percent over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and corresponding land use designation in the general plan.

(2)

Low income senior citizen housing development. If an applicant has made a written request for grant of a density bonus with its application and if at least 25 percent of the total units in a development are restricted to the rental or purchase by low income senior citizens, then the approval body shall grant, with appropriate finding, a density bonus of at least 20 percent but not more than 35 percent over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and corresponding land use designation in the general plan.

(3)

Very low income senior citizen housing development. If an applicant has made a written request for grant of a density bonus with its application and if at least ten percent of the total units in a development are restricted to rental or purchase by very low income senior citizens, then the approval body shall grant, with appropriate findings, a density bonus of least 20 percent but not more than 35 percent over the otherwise maximum allowable residential density under the applicable zoning classification on the city's zoning map and corresponding land use designation in the general plan.

(4)

This section shall be applicable only to projects which contain at least 20 units.

(b)

An applicant qualifying for a density bonus under this section may submit to the city a proposal for specific incentives and concessions as set forth in section 90-164.

(c)

Prior to the issuance of a certificate of occupancy for any dwelling unit in a development for which density bonus units have been awarded or incentives have been received, the developer shall identify the restricted units and shall enter into a written agreement, as set forth in section 90-165, with the city to guarantee, for 30 years, their continued use and availability to senior citizens. The terms and conditions of such agreement shall run with the land which is to be developed, shall be binding upon the successor in interest of the developer, and shall be recorded in the office of the county recorder.

(d)

The agreement shall include a provision that the city shall have the authority to enter into such with the developers and with the renters or purchasers of the dwelling units as may be necessary to assure that the required dwelling units are continuously occupied by senior citizen households or renters.

(e)

Density bonus units for senior citizens shall have design features appropriate to their occupancy by the elderly.

(Ord. No. 1743, § 2)

(a)

Childcare facilities.

(1)

An applicant, who proposes to construct a housing development that conforms to this section that includes a childcare facility that will be located on the premises of, as part of, or adjacent to, the project, may request either of the following:

a.

An additional density bonus that is an amount of square feet of residential space that is equal to or greater than the amount of square feet in the childcare facility;

b.

An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the childcare facility.

(2)

If a childcare facility is included and given an additional density bonus, the developer shall require:

a.

The childcare facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the density bonus units are required to remain affordable.

b.

Of the children who attend the childcare facility, the children of very low-income households, lower income households, or families of moderate income shall equal a percentage that is equal to or greater than the percentage of dwelling units that are required for very low income households and lower income households.

(Ord. No. 1743, § 2)

(a)

Parking spaces.

(1)

Upon request of the developer, the city shall require the following vehicular parking ratio, inclusive of handicapped and guest parking, of a development that is entitled to receive a density bonus under section 90-163 or section 90-166:

a.

Zero to one bedrooms: One onsite parking space.

b.

Two to three bedrooms: Two onsite parking spaces.

c.

Four and more bedrooms: Two and one-half parking spaces.

(2)

If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number.

(3)

For purposes of this subdivision, a development may provide "onsite parking" through tandem parking or uncovered parking, but not through on street parking.

(Ord. No. 1743, § 2)