This section provides incentives for the production of housing for very low-income, low-income, and senior households, and for the production of housing for moderate-income households residing in condominium and planned development projects. In enacting this section, it is the City's intent to facilitate the development of affordable housing and to implement the goals, objectives, and policies of the City's general plan housing element. This section is enacted under the authority of Government Code sections 65915 through 65917.5.

(Ord. 1113 § 1 (Exh. A (part)), 2008)

In this article 36.5, the following definitions apply. For definitions not included here, see Municipal Code, title 10, article 2, Definitions.

"Affordable housing cost" means the cost to rent or purchase a house as defined in section 50052.5 of the Health and Safety Code. (Govt. Code section 65915(d)(1))

"Affordable units" means living units that are required to be rented at affordable rents or available at affordable housing costs to specified households.

"Area median income" means area median income for San Joaquin County as published in title 25, California Code of Regulations, section 6932.

"Child care facility" means a child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and school age child care centers. (Govt. Code sections 65915(i)(4), 65917.5(a)(1))

"Condominium project" means a housing development of two (2) or more units, the interior space of which are individually owned, with the balance of the property owned by the owners of the individual units. See also Civil Code section 1351(f). (Govt. Code section 65915(b)(4))

"Consumer price index" means the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all Urban Consumers for the San Francisco, Oakland, San Jose Metropolitan Statistical Area or if the index is discontinued, a successor index selected by the City Manager.

"Density bonus" means a density increase of at least twenty (20%) percent, unless a lesser percentage is elected by the applicant, over the otherwise maximum allowable residential density. (See article 36.5.) (Govt. Code sections 65915(g)(1) and (d)(1), 65917.5(a)(2))

"Density bonus housing agreement" or "affordable housing agreement" means a recorded agreement between a developer and the city as described in section 10.08.4695 to ensure that the requirements of that subsection are satisfied. The agreement, among other things, shall establish the number of target units, their size, location, terms and conditions of affordability, and production schedule. (See section 10.08.4690.)

"Density bonus units" means those residential units granted pursuant to the provisions of this article which exceed the otherwise allowable maximum residential density for the development site.

"Development standard" means any site or construction condition that applies to a residential development pursuant to any ordinance, general plan element, specific plan, or other local condition, law, policy, resolution, or regulation. (Govt. Code section 65915(o)(1).) An entitlement under the City's growth management ordinance, chapter 10.12, is not considered a development standard.

"Dwelling unit" means one or more rooms designed, occupied or intended for occupancy as separate living quarters, with cooking, sleeping and bathroom facilities.

"Housing development" means construction projects consisting of five (5) or more residential dwelling units, including single-family and multifamily units, for sale or for rent. For the purposes of article 36.5, "housing development" also includes a subdivision, planned unit development, or condominium project consisting of five (5) or more residential dwelling units or unimproved residential lots, the substantial rehabilitation and conversion of an existing commercial building to residential use, and the substantial rehabilitation of an existing multifamily dwelling, where the rehabilitation or conversion would create a net increase of at least five (5) residential units. (Govt. Code sections 65915(j) and (g)(1))

"Incentive" or "concession" means such a regulatory incentive or concession such as those listed in section 10.08.4660. (Govt. Code section 65915(l))

"Low-income household" means a household whose income does not exceed the low-income limits applicable to San Joaquin County, as published and periodically updated by the State Department of Housing and Community Development pursuant to section 50079.5 of the California Health and Safety Code.

"Lower-income household" means a lower-income household as defined in Civil Code sections 51.3 and 51.12. (Govt. Code sections 65915(b)(1) and (c)(1) and Health and Safety Code section 50079.5)

"Maximum allowable residential density" means the maximum number of residential dwelling units permitted by the city's zoning ordinance on the date the application is deemed complete. (Govt. Code section 65915(o)(2))

"Moderate-income household" means households with an annual income between the lower-income eligibility limit (usually eighty (80%) percent of the area median family income) and 120 percent of area median income limits applicable to San Joaquin County, as published and periodically updated by the State Department of Housing and Community Development pursuant to section 50079.5 of the California Health and Safety Code. (Govt. Code section 65915(c)(2), Health and Saf. Code section 50093)

"Planned development" means a development (other than a community apartment project, a condominium project, or a stock cooperative) having either or both of the following features:

(1)

The common area is owned either by an association or in common by the owners of the separate interests who possess appurtenant rights to the beneficial use and enjoyment of the common area.

(2)

A power exists in the association to enforce an obligation of an owner of a separate interest with respect to the beneficial use and enjoyment of the common area by means of an assessment which may become a lien upon the separate interests in accordance with Civil Code section 1367 or 1367.1. (Govt. Code section 65915(b)(4); Civil Code section 1351(k))

This meaning is distinguished from a "planned unit development" under section 10.88.740.

"Senior citizen housing development" means a housing development as defined in California Civil Code section 51.3(b)(4). (Govt. Code section 65915(b)(3))

"Target unit" means a dwelling unit within a housing development which will be reserved for sale or rent to, and is made available at an affordable rent or affordable ownership cost to, very low, low, or moderate-income households, or is a unit in a senior citizen housing development.

"Very low-income household" means households whose income does not exceed the very low-income limits applicable to San Joaquin County, as published and periodically updated by the State Department of Housing and Community Development pursuant to section 50105 of the California Health and Safety Code. (Govt. Code sections 65915(b)(2) and (c)(1))

(Ord. 1113 § 1 (Exh. A (part)), 2008)

(a)

General. The City shall grant a density bonus and other incentives to an applicant for a housing development of five (5) or more units. Neither the granting of an incentive nor the granting of a density bonus shall be interpreted, in and of itself, to require a general plan amendment, zoning change, or other discretionary approval. (Govt. Code sections 65915(g)(5) and (k))

(b)

Density bonus—Minimum requirement (target units). The City shall grant a density bonus to an applicant for a housing development of five (5) or more units who seeks a density bonus and agrees to construct at least one of the following:

(1)

Very low-income. Five (5%) percent of the total units of the housing development as target units affordable to very low-income households; or

(2)

Low-income. Ten (10%) percent of the total units of the housing development as target units affordable to low-income households; or

(3)

Moderate-income. Ten (10%) percent of the total units of a newly constructed condominium project or planned development as target units affordable to moderate-income households, provided all the units are offered for purchase; or

(4)

Senior. A senior citizen housing development of thirty-five (35) units or more, or a mobilehome park that limits residency based on age requirements for housing older persons under Civil Code section 798.76 or 799.5. (Govt. Code section 65915(b))

(c)

Density bonus—Calculation of bonus units. In determining the number of density bonus units to be granted under subsection (b) of this section, the maximum residential density for the site shall be multiplied by 0.20 for subsections (b)(1)(2) and (4) of this section and 0.05 for subsection (b)(3) of this section, unless a lesser number is selected by the developer.

(1)

Very low-income. For each one percent increase above five (5%) percent in the percentage of units affordable to very low-income households, the density bonus is increased by 2.5 percent up to a maximum of thirty-five (35%) percent;

(2)

Lower-income. For each one percent increase above ten (10%) percent in the percentage of units affordable to lower-income households, the density bonus is increased by 1.5 percent up to a maximum of thirty-five (35%) percent;

(3)

Moderate-income. For each one percent increase above ten (10%) percent of the percentage of units affordable to moderate-income households, the density bonus is increased by one percent up to a maximum of thirty-five (35%) percent. (Govt. Code sections 65915(g)(1) and (2))

The density bonus units shall not be included when determining the number of target units required to qualify for a density bonus. When calculating the required number of target units, any calculations resulting in fractional units shall be rounded to the next larger number. (Govt. Code sections 65915(b)(1) and (g)(1))

The developer may request a lesser percentage of density bonus than the project is entitled to. Regardless of the number of target units, no housing development is entitled to a density bonus of more than thirty-five (35%) percent. (Gov't. Code section 65915(g))

(d)

Density bonus summary. The following table summarizes the density bonus information:

Density Bonus Summary Table

(e)

Incentives. Subject to the findings included in section 10.08.4690, when a developer seeks a density bonus, the City shall grant incentives listed in section 10.08.4685 as follows:

(1)

One incentive for a project that includes at least ten (10%) percent of the total units for low-income households, at least five (5%) percent for very low-income households, or at least ten (10%) percent for persons and families of moderate income in a condominium or planned development;

(2)

Two (2) incentives for a project that includes at least twenty (20%) percent of the total units for low-income households, at least ten (10%) percent for very low-income households, or at least twenty (20%) percent for persons and families of moderate income in a condominium or planned development;

(3)

Three (3) incentives for a project that includes at least thirty (30%) percent of the total units for low-income households, at least fifteen (15%) percent for very low-income households, or at least thirty (30%) percent for persons and families of moderate income in a condominium or planned development. (Govt. Code sections 65915(b) and (d)(2))

An incentive may be requested only if an application is also made for a density bonus, except for child care facilities under section 10.08.4670. (Govt. Code section 65915(a))

(f)

Incentives—Summary. The following table summarizes the incentives:

Incentives Summary Table

(Ord. 1113 § 1 (Exh. A (part)), 2008)

(a)

When an applicant for a housing development donates land to the City as provided for in this section, the applicant is entitled to a fifteen (15%) percent increase above the otherwise maximum allowable residential density under the zoning ordinance and general plan land use element for the entire development. For each one percent increase above the minimum ten (10%) percent land donation described in section (b)(2) of this section, the density bonus shall be increased by one percent, up to a maximum of thirty-five (35%) percent. This increase shall be in addition to any increase in density required by section 10.08.4660, up to a maximum combined density bonus of thirty-five (35%) percent if an applicant seeks both the increase required under this section 10.08.4665 and section 10.08.4660. When calculating the number of permitted density bonus units, any calculations resulting in fractional units shall be rounded to the next larger number. (Govt. Code section 65915(h)) An applicant is not eligible for an increase in density bonus for the donation of land required by the City's parkland dedication ordinance or for any other legally required land dedication.

(b)

A housing development applicant is eligible for the density bonus described in this section 10.08.4665 if the City makes all of the following findings:

(1)

The applicant will donate and transfer the land no later than the date of approval of the final subdivision map, parcel map, or residential development application.

(2)

The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low-income households in an amount of at least ten (10%) percent of the number of residential units of the proposed development, or will permit construction of a greater percentage of units if proposed by the developer.

(3)

The transferred land is at least one acre in size or of sufficient size to permit development of at least forty (40) units, has the appropriate general plan designation, is appropriately zoned for development as very low-income housing, and is now or at the time of construction will be served by adequate public facilities and infrastructure. The land must also have the appropriate zoning and development standards to make the development of the very low-income units feasible. No later than the date of approval of the final subdivision map, parcel map, or residential development, the transferred land will have all of the permits and approvals, other than building permits, necessary for the development of the very low-income housing units on the transferred land.

(4)

The transferred land and the affordable units constructed on the land will be subject to a deed restriction ensuring continued affordability of the units consistent with sections 10.08.4680(b) and (c), which restriction will be recorded on the property at the time of dedication.

(5)

The land will be transferred to the City, redevelopment agency, or to a housing developer approved by the City. The City may require the applicant to identify a developer of the very low-income units and to require that the land be transferred to that developer.

(6)

The transferred land is within the boundary of the proposed housing development.

(Ord. 1113 § 1 (Exh. A (part)), 2008)

(a)

When an applicant proposes to construct a housing development that includes target units as specified in section 10.08.1660 and includes a child care facility that will be located on the premises of, as part of, or adjacent to the housing development, the City shall grant either of the following if requested by the developer:

(1)

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 child care facility;

(2)

An additional incentive that contributes significantly to the economic feasibility of the construction of the child care facility. (Govt. Code section 65915(i)(1))

(b)

A housing development is eligible for the density bonus or incentive described in this section if the City makes both of the following findings:

(1)

The child care facility will remain in operation for a period of time that is as long as or longer than the period of time during which the target units are required to remain affordable under sections 10.08.4680(b) and (c).

(2)

Of the children who attend the child care facility, the percentage of children of very low-income households, low-income households, or moderate-income households shall be equal to or greater than the percentage of dwelling units that are proposed to be affordable to very low-income households, low-income households, or moderate-income households.

Notwithstanding any requirement of this section, the City is not required to provide a density bonus or incentive for a child care facility if it finds, based upon substantial evidence, that the community already has adequate child care facilities. (Govt. Code section 65915(i)(2))

(Ord. 1113 § 1 (Exh. A (part)), 2008)

(a)

The City shall grant either a density bonus or other incentives of equivalent financial value if the applicant for a conversion of existing rental apartments to condominiums agrees to provide thirty-three (33%) percent of the total units of the proposed condominium project as target units affordable to low- or moderate-income households, or to provide fifteen (15%) percent of the total units in the condominium conversion project as target units affordable to low-income households. All such target units shall remain affordable for the period specified in section 10.08.4680. (Govt. Code section 65915.5)

(b)

For purposes of this section, a "density bonus" means an increase in units of twenty-five (25%) percent over the number of apartments to be provided within the existing structure or structures proposed for conversion.

(c)

No condominium conversion is eligible for a density bonus if the apartments proposed for conversion constitute a housing development for which a density bonus or other incentives were previously provided under this section or Government Code section 65915.

(Ord. 1113 § 1 (Exh. A (part)), 2008)

(a)

Timing of construction. Target units shall be constructed concurrently with nonrestricted units or pursuant to a schedule included in the density bonus housing agreement.

(b)

Continued affordability—Rent. Target units offered for rent for low-income and very low-income households shall be made available for rent at an affordable rent and shall remain restricted and affordable to the designated income group for a minimum period of fifty-five (55) years. A longer period of time may be specified if required by any construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program applicable to the housing development. (Gov't. Code section 65915(c)(1))

(c)

Continued affordability—For sale. Target units offered for sale to very low-, low-, or moderate-income households in condominiums and planned developments shall be sold at an affordable ownership cost.

The maximum resale price homes to very-low or low-income households shall be the lower of (1) fair market value, or (2) the seller's initial purchase price, increased by the lesser of (i) the rate of increase of area median income during the seller's ownership, or (ii) the rate at which the consumer price index increased during the seller's ownership. The seller of the unit shall retain the market value at the time of sale of any capital improvements made by the seller, the down payment, and the seller's proportionate share of appreciation.

If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value. (Govt. Code section 65915(c))

(d)

Initial occupant of moderate-income unit in condominium project or planned unit development. The initial occupant of the moderate-income units that are directly related to the receipt of the density bonus units in a condominium project or a planned unit development must be persons or families of moderate income. Upon resale, the seller of the unit shall retain the value of any improvements, the down payment, and the seller's proportionate share of appreciation. The City shall recapture any initial subsidy and its proportionate share of appreciation, equal to (1) the fair market value of the home at the time of initial sale minus the initial sales price to the moderate-income household, plus the amount of any downpayment assistance or mortgage assistance ("initial subsidy") plus (2) the ratio of the initial subsidy to the fair market value of the home at the time of initial sale ("proportionate share of appreciation"). (Govt. Code section 65915(c)(2))

(e)

Location and design. Target units shall be built on site and shall be dispersed within the housing development. The number of bedrooms of the target units shall be equivalent to the bedroom mix of the nontarget units of the housing development, except that the developer may include a higher proportion of target units with more bedrooms. The design and appearance of the target units shall be compatible with the design of the total housing development. Housing developments shall comply with all applicable development standards, except those which may be modified as provided by this section.

(f)

Parking.

(1)

Upon the request of the applicant, the City may not require a vehicular parking ratio, inclusive of handicapped and guest parking, of a development meeting the criteria of section 10.08.4660 that exceeds the following ratios:

(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. For purposes of this section, a development may provide "on-site parking" through tandem parking or uncovered parking, but not through on-street parking. (Govt. Code section 65915(p))

(Ord. 1113 § 1 (Exh. A (part)), 2008)

(a)

Incentives requested under sections 10.08.4660 and 10.08.4670 may include the following:

(1)

A reduction of a site development standard or a modification of a zoning code requirement which exceeds the minimum building standards provided in Health and Safety Code section 18901 and following and which result in identifiable, financially sufficient, and actual cost reductions, including, but not limited to:

(Govt. Code section 65915(l)(1))

(2)

Approval of mixed use zoning in conjunction with the housing development if nonresidential land uses will reduce the cost of the housing development and if the City finds that the proposed nonresidential uses are compatible with the housing development and with existing or planned development in the area where the proposed housing development will be located. (Approval of mixed use zoning is considered six (6) incentives.) (Govt. Code section 65915(l)(2));

(3)

Other regulatory incentives proposed by the developer or the City which result in identifiable, financially sufficient, and actual cost reductions. The City has the right to establish the incentive value for any other incentive proposed by an applicant.

(b)

An applicant may seek a waiver or modification of development standards that will have the effect of precluding the construction of a housing development meeting the criteria of section 10.08.4660 at the densities or with the incentives permitted by this section. The developer shall show that the waiver or modification is necessary to make the housing units economically feasible. (Govt. Code sections 65915(e) and (f))

(Ord. 1113 § 1 (Exh. A (part)), 2008)

(a)

Application. An application for a density bonus, incentive, waiver, modification, or revised parking standard under this section shall be submitted with the first application for approval of a housing development and processed concurrently with all other applications required for the housing development. The application shall be submitted on a form prescribed by the City and shall include at least the following information:

(1)

Site plan showing total number of units, number and location of target units, and number and location of proposed density bonus units;

(2)

Level of affordability of target units and proposals for ensuring affordability (See section 10.08.4680.);

(3)

Description of any requested incentives, waivers or modifications of development standards, or modified parking standards.

(i)

For all incentives, the application shall include substantial evidence that the requested incentives result in identifiable, financially sufficient, and actual cost reductions (Govt. Code section 65915(l)(3)),

(ii)

For waivers or modifications of development standards, the application shall provide substantial evidence to show that the waiver or modification is necessary to make the housing units economically feasible and that the development standards, without waiver or modification, will have the effect of precluding the construction of a housing development meeting the criteria of section 10.08.4660 at the densities or with the incentives permitted by this section. (Govt. Code sections 65915(e) and (f))

The applicant shall submit a development pro forma in a form prescribed by the City or the City's Economic Consultant. The applicant shall pay the cost of peer review of the development pro forma;

(4)

If a density bonus or concession is requested for a land donation, the application shall show the location of the land to be dedicated and provide evidence that each of the findings included in section 10.08.4665 can be made;

(5)

If a density bonus or incentive is requested for a child care facility, the application shall show the location and square footage of the child care facility and provide substantial evidence that each of the findings included in section 10.08.4670 can be made.

(b)

Approval body. An application for a density bonus, incentive, waiver, modification, or revised parking standard under this section shall be considered by and acted upon by the approval body with authority to approve the housing development. Any decision regarding a density bonus, incentive, waiver, modification, or revised parking standard may be appealed from the Planning Commission to the City Council. Neither the granting of an incentive, waiver, or modification nor the granting of a density bonus shall be interpreted, in and of itself, to require a general plan amendment, zoning change, variance, or other discretionary approval. (Govt. Code sections 65915(g)(1) and (2) and (k))

(c)

Findings for approval. Before approving an application for a density bonus, incentive, waiver, or modification, the approval body shall make the following findings:

(1)

If the density bonus is based all or in part on donation of land, the findings included in section 10.08.4665;

(2)

If the density bonus, incentive, or concession is based all or in part on the inclusion of a child care facility, the findings included in section 10.08.4670;

(3)

If the incentive or concession includes mixed use development, the findings included in section 10.08.4685;

(4)

If a waiver or modification is requested, the developer has shown by substantial evidence that the waiver or modification is necessary to make the housing units economically feasible. (Govt. Code section 65915(f))

(d)

Findings required for denial of incentive. If a request for an incentive is otherwise consistent with this section, the approval body may deny an incentive if it makes a written finding, based upon substantial evidence, of either of the following:

(1)

The incentive is not required to provide for affordable rents or affordable ownership costs.

(2)

The incentive would have a specific adverse impact upon: (i) public health or safety; or (ii) the physical environment: or (iii) on any real property that is listed in the California Register of Historical Resources; and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low- and moderate-income households.

For the purpose of this subsection, "specific adverse impact" means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, written public health or safety standards, policies, or conditions as they existed on the date that the application was deemed complete. (Govt. Code sections 65589.5, 65915(d)(1))

(e)

Findings required for denial of waiver or modification. If a request for a waiver or modification is otherwise consistent with this section, the approval body may deny the waiver or modification only if it makes a written finding, based upon substantial evidence, of either of the following:

(1)

The waiver or modification would have a specific adverse impact upon health, safety, or the physical environment, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low- and moderate-income households.

For the purpose of this subsection, "specific adverse impact" means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, written public health or safety standards, policies, or conditions as they existed on the date that the application was deemed complete. (Govt. Code sections 65589.5, 65915(e))

(2)

The waiver or modification would have an adverse impact on any real property that is listed in the California Register of Historical Resources.

(f)

Findings required for denial of bonus or incentive for child care facility. If a density bonus or concession is based on the provision of child care facilities, the approval body may deny the bonus or concession if it finds, based on substantial evidence, that the City already has adequate child care facilities. (Govt. Code section 65915(i)(3))

(Ord. 1113 § 1 (Exh. A (part)), 2008)

(a)

Agreement required. An applicant requesting a density bonus shall agree to enter into a density bonus housing agreement (or affordable housing agreement, or other appropriate title) with the City. The agreement shall be made a condition of each discretionary planning permit for the housing development under this subsection. (Govt. Code section 65917)

(b)

Recordation. The density bonus housing agreement shall be recorded as a restriction on any parcel on which the target units or density bonus units will be constructed. It shall be recorded before or concurrently with final or parcel map approval, or, where the housing development does not include a map, before issuance of a building permit for any structure in the housing development. The density bonus housing agreement shall run with the land and bind all successors in interest.

(c)

Contents. The density bonus housing agreement shall include but not be limited to the following:

(1)

The total number of units approved for the housing development, the number, location, and level of affordability of target units, and the number of density bonus units;

(2)

Standards for determining affordable rent or affordable ownership cost for the target units;

(3)

The location, unit size in square feet, and number of bedrooms of target units;

(4)

Provisions to ensure affordability in accordance with sections 10.08.4655 and 10.08.4675;

(5)

A schedule for completion and occupancy of target units in relation to construction of nonrestricted units;

(6)

A description of any incentives, waivers, or reductions being provided by the City;

(7)

A description of remedies for breach of the agreement by either party. The City may identify tenants or qualified purchasers as third party beneficiaries under the agreement;

(8)

Procedures for qualifying tenants and prospective purchasers of target units;

(9)

Other provisions to ensure implementation and compliance with this section.

(d)

For-sale housing provisions. In the case of for-sale housing developments, the density bonus housing agreement shall include the following conditions governing the sale and use of target units during the applicable use restriction period:

(1)

Target units shall be owner-occupied by eligible very low-, low-, or moderate-income households, or by qualified residents in the case of senior citizen housing developments.

(2)

The purchaser of each target unit shall execute an instrument approved by the City and to be recorded against the parcel including such provisions as the City may require to ensure continued compliance with this section.

(e)

Rental housing provisions. In the case of rental housing developments, the density bonus housing agreement shall provide for the following:

(1)

Procedures for establishing affordable rent, filling vacancies, and maintaining target units for eligible tenants;

(2)

Provisions requiring verification of household incomes;

(3)

Provisions requiring maintenance of records to demonstrate compliance with this subsection.

(f)

Child care facility or land dedication provisions. A density bonus housing agreement for a child care facility or land dedication shall ensure continued compliance with all conditions included in sections 10.08.4670 and 10.08.4665, respectively.

(Ord. 1113 § 1 (Exh. A (part)), 2008)