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O 595 . ' ORDINANCE NO. 595 • AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE REPEALING AND REPLACING CHAPTER 16.80 OF TITLE 16 OF THE ARROYO GRANDE MUNICIPAL CODE REGARDING THE CITY'S INCLUSIONARY AFFORDABLE HOUSING REQUIREMENTS THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES HEREBY ORDAIN AS FOLLOWS: - SECTION 1. FINDINGS AND PURPOSE The City Council finds and declares: A. Rental and owner-occupied housing in the City has become steadily more expensive. Housing costs have gone up faster than incomes for many groups in the community. B. Many persons who work in the City, who have grown up or have family ties in the City, who already live in the City but must move, or who wish to live in the City for other reasons, cannot afford housing in the City. C. Federal and State government programs do not provide nearly enough affordable housing or subsidies to satisfy the housing needs of moderate, low or very low income households. D. Rising land prices have been a key factor in preventing development of new affordable housing. New housing construction in the City that does not include affordable units aggravates the existing shortage of affordable housing by absorbing the supply of available residential land. This reduces the supply of land for affordable housing and increases the price of remaining residential land. At the same time, new housing contributes to the demand for goods and services in the City, increasing local service employment at wage levels which often do not permit employees to afford housing in the City. Providing the affordable units required by this chapter will help to insure that part of the City's remaining developable land is used to provide affordable housing. , u E. The City wishes to retain an economically balanced community, with housing available to very low income, low income and moderate income households. The City's General Plan implements the established policy of the State of California that each community should foster an adequate supply of housing for persons at all economic levels. ORDINANCE NO. 595 PAGE 2 F. An economically balanced community is only possible if part of the new housing built in the City is affordable to households with limited incomes. Requiring builders of new housing to include some housing affordable to households at a range of incomes is fair, not only because new development without affordable units contributes to the shortage of affordable housing but also because zoning and other ordinances concerning new housing in the City should be consistent with the community's goal to foster an adequate _ supply of housing for persons at all economic levels. SECTION 2. CHAPTER 16.80 "Affordable Housing Requirements" Chapter 16.80 of Title 16 of the Arroyo Grande Municipal Code, entitled "Affordable Housing Requirements", is hereby repealed and replaced in its entirety as follows: Chapter 16.80 Inclusionary Affordable Housing Requirements 16.80.010 Purpose 16.80.020 Definitions 16.80.030 Applicability 16.80.040 Provision of Housing, In-lieu Fee, or Dedication of Land 16.80.050 Calculation of Housing or In-lieu Fee 16.80.060 Implementation 16.80.070 Affordable Housing Trust Fund — Deposit 16.80.080 Affordable Housing Trust Fund —Administration • 16.80.090 Project Approvals 16.80.100 Regulations 16.80.120 Application To Density Bonus Calculations 16.80.130 Adjustment to Avoid Unlawful Exaction or Taking 16.80.010 Purpose. The purpose of this chapter is to provide a continuing supply of affordable housing units to meet the needs of existing and future Arroyo Grande residents in all income categories pursuant to the requirements of California state law, and as outlined in the city's adopted housing element. j . 16.80.020 Definitions. The definitions of this section and of Section 16.04.070 shall govern this chapter. "Affordable housing cost"_has the same meaning as defined in Section 50052.5(b) of the California Health and Safety Code. In addition, the City Council may adjust the definition of "affordable housing costs" as it applies to owner-occupied housing in the regulations, provided that such adjustments are consistent with the optional provisions of Sections 50052.5(b)(3) and/or 50052.5(b)(4) of the California Health and Safety ORDINANCE NO. 595 PAGE 3 Code. Those expenses listed in Title 25 of the California Code of Regulations, Section 6920, shall be deducted from the affordable housing costs for owner-occupied housing. For tenant-occupied rental housing, "affordable housing cost" shall have the same meaning as the term "affordable rent" as that term is used for each income level in Section 50053(b) of the California Health and Safety Code. Affordable housing costs for rental housing shall include a reasonable utility allowance, as such utility allowance may be adopted by the City Council from time to time in the regulations. In addition, the City Council, in the regulations, may adjust the definition of "affordable housing costs" as it applies to rental housing, provided that such adjustments are consistent with the optional provisions of Sections 50053(b)(3) and/or 50053(b)(4) of the California Health and Safety Code. "Affordable housing units" means units governed by a legal covenant or other restriction enforceable by the city restricting the availability of the units to lower income and very low income residents, which units are rented or sold to lower income or very low income households, as defined in this subsection. "Developer" means an applicant for an approval or a permit required for a residential subdivision or to construct a residential development project. "Housing unit" means one or more rooms, designed, occupied or intended for occupancy as separate living quarters, with full cooking, sleeping and bathroom facilities for the exclusive use of a single household. "In-lieu fee" means a fee paid to the city by a developer subject to this chapter in-lieu of providing the required affordable housing units. "Lower income households" means those households defined in Section 50079.5 of the California Health and Safety Code. "Moderate Income" or"persons and families of moderate income" means those middle- income families as defined in Section 50093 of the California Health and Safety Code. "Project" means a residential development or land subdivision proposal for which city permits and approvals are required. "Redevelopment Agency" means the Arroyo Grande Redevelopment Agency, a public body, corporate and politic, organized and existing under ttie California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.). "Regulations" means the adopted regulations implementing this Chapter as provided in Section 16.80.100. "Substantial rehabilitation" or "substantially rehabilitated" means the substantial rehabilitation of a dwelling unit(s) as defined in section 33413(b)(2)(iv) of the California Health and Safety Code. ORDINANCE NO. 595 PAGE 4 • "Very low income household" means those households defined in Section 50105 of the California Health and Safety Code. 16.80.030 Applicability of Inclusionary Affordable Housing Requirements. This chapter shall apply to the construction of any new residential project of two (2) or more housing units, or the substantial rehabilitation of two (2) or more housing units, and shall also apply to any development that results from the conversion of two (2) or more existing rental housing units to ownership units or from such conversion of two (2) or more existing housing units from an exempt use to a nonexempt use. A project consisting of one (1) single family residence and/or a secondary dwelling on the same existing parcel shall be exempt from the requirements set forth in this chapter. , 16.80.040 Provision of Affordable Housing, In-lieu Fee, or Dedication of Land. The developer shall meet affordable housing requirements by providing on-site affordable housing units meeting the standards set forth in this chapter, or paying a fee in-lieu of providing such housing, or dedicating land to the city to be used for development of affordable housing. Payment of an in-lieu fee or the dedication of land shall be allowed pursuant to this chapter if the city council finds that any of the following circumstances apply: A. The provision of the required affordable housing units on the site is impractical for physical reasons including, but not limited to, the following: utility infrastructure ' limitations, traffic safety or traffic capacity limitations, site design constraints which preclude the development of the property to city standards at the density permitted pursuant to the general plan or zoning district in which the property is located; or B. The city council determines that the payment of in-lieu fees or the dedication of land will provide a superior opportunity to satisfy the goals and policies of the general plan; or C. The payment of in-lieu fees or the dedication of land to the city will provide an equivalent level of mitigation to that of on-site production of the required affordable housing units; or _ D. Notwithstanding the foregoing, a project consisting ,of two (2) to four (4) residential units may satisfy the inclusionary requirements by payment of an in-lieu fee as established by city council. 16.80.050 Calculation of Inclusionary Affordable Housing Requirement or In-lieu Fee Or Dedication. A. Housing unit projects to which this chapter applies must provide for the following number of affordable housing units: ORDINANCE NO. 595 PAGE 5 '1. Provision of affordable housing units of at least 5% very-low income units; or 2. Provision of at least 10% lower income units; or 3. , Provision of at least 15% moderate income units where the proposed project is planned for rental units or units-that are not developed as a common interest development pursuant to Civil Code section 1351; or 4. An equivalent combination as determined by the community development director. B. In-lieu of including the affordable housing units in the project pursuant to paragraph A of this Section 16.80.050, an applicant for a housing unit project may meet the requirements of this chapter by payment of an in-lieu fee in accordance with fee amounts and standards adopted by the city council in the regulations implementing this chapter. Payment of the in-lieu fee shall be made as follows: 1. The amount of the fee shall be calculated using the fee schedule established by resolution of the city council. 2. The in-lieu fee required by this section shall be paid prior to issuance of the first ministerial permit, including but not limited to a grading, demolition, or building permit, for all or any part of the project. Payment may be made for each phase of a phased project before the issuance of the grading or building permit for such phase, as applicable. 3. The in-lieu fee collected shall be deposited in the affordable housing trust fund pursuant to Section 16.80.070. C. In-lieu of including the affordable housing units in the project pursuant to paragraph A of this Section 16.80.050, an applicant for a housing unit project may meet the requirements of this chapter by dedicating land to the city when land dedication is deemed suitable by the city council, pursuant to Section 16.80.040. Such land shall be offered in fee to the city or to another public or non-profit agency approved in writing by the city. 16.80.060 Implementation. A. A written housing development agreement, in a form approved by the city, shall be entered into between the city and the developer prior to final approval of a subdivision map, or issuance of a building permit, as applicable. This agreement will set forth the developer's plan to meet the requirements of this chapter, and the city's approval of that plan. Any housing development agreement, deed restriction, or other instrument used to implement this chapter shall be signed by the applicant and by the city as parties. If the housing unit project is located within any redevelopment project area within the city, such housing development agreement, deed restriction, or other ORDINANCE NO. 595 PAGE 6 instrument shall be signed by the Redevelopment Agency as a party or, at the Redevelopment Agency's election, the housing development agreement, deed restriction, or other instrument shall identify the Redevelopment Agency as an express third-party beneficiary with the right to enforce the terms of such.housing development agreement, deed restriction, or other instrument. B. Affordable housing units shall be reserved for very-low, low, and moderate income households at the ratios established pursuant to section 16.80.050, and shall be provided at the applicable affordable housing cost. 1. An affordable housing unit that is for rent shall remain reserved for, and occupied by, the target income level group at the applicable affordable housing cost for a period of at least fifty-five (55) years. 2. An affordable housing unit that is an owner-occupied unit shall remain reserved for, and occupied by, the target income level group at the applicable affordable housing cost for a period of at least forty-five (45) years. C. All affordable housing units (whether required by this chapter or provided on a voluntary basis) shall be reasonably dispersed throughout the project; shall be proportional, in size, bedroom number and location to the market-rate units; and shall be comparable with the market-rate units in terms of the base design, architectural appearance, building materials and finished quality. All affordable housing units in a project shall be constructed concurrently with or prior to the construction of the market- rate units. In the event the city approves a phased project, the affordable housing units required by this chapter shall be provided within each phase of the residential development project unless otherwise approved by the community development director. D. If the number of affordable housing units required for a project includes a fraction of a unit, the developer shall round to the closest whole number unit for purposes of both providing affordable housing units or paying an in-lieu fee. 16.80.070 Inclusionary Affordable Housing Trust Fund — Deposit. Affordable housing in-lieu fees paid pursuant to this chapter shall be deposited in the affordable housing trust fund and used solely to increase the supply of affordable housing units. Funds in the affordable housing trust fund may be used to better facilitate the improvement of the city's affordable housing stock as well as the provision of new affordable units. 16.80.080 Inclusionary Affordable Housing Trust Fund —Administration. Subject to-the limitations set forth in Section 16.80.070, the affordable housing trust fund shall be administered under the general supervision of the community development director, and pursuant to the regulations as the city council shall adopt ORDINANCE NO. 595 PAGE 7 and/or amend from time to time. The community development director shall make annual reports to the city council regarding the administration and status of the affordable housing trust fund. The city council may include in the regulations provisions governing the administration of the affordable housing trust fund consistent with the provisions of this chapter. 16.80.090 Project Approvals And Enforcement. A. No new housing unit project, residential subdivision, general plan amendment and/or rezoning of land for residential purposes, or other land use authorization related thereto, may be approved unless the requirements of this chapter have been met. B. The city may institute any appropriate legal actions or proceedings necessary to ensure compliance with this chapter, including but not limited to: (i) actions to revoke, deny, or suspend any permit, including a building permit, certificate of occupancy, or discretionary approval, and (ii) actions for injunctive relief or damages. In any action to enforce this chapter or a housing development agreement entered hereunder, the city shall be entitled to recover its costs, including but not limited to attorney's fees and litigation costs. 16.80.100 Regulations. The city council shall adopt regulations for the implementation of this chapter. The city council may also include in the regulations provisions allowing for the city's recovery of reasonable fees and deposits for the administration of this chapter. 16.80.120 Application To Density Bonus Calculations. In the case of a housing unit project for which a density bonus is sought pursuant to California Government Code section 65915 and Chapter 16.82 of this Code, the construction and reservation of inclusionary affordable housing pursuant to this chapter shall apply to the base number of units proposed, exclusive of the units that would be added by the density bonus. Inclusionary housing units provided pursuant to this chapter, however, will only count towards the qualification of a density bonus under Government Code section 65915 if such inclusionary units otherwise qualify under the terms of that Government Code section. 16.80.130 Adjustment to Avoid Unlawful Exaction or Taking. A. A developer of any project subject to the requirements of this chapter may appeal to the City Council for a reduction, adjustment, or waiver of the requirements of this chapter based upon the absence of any reasonable relationship or nexus between the impact of the development and either the amount of the fee charged or the inclusionary requirement. The purpose of this section is to ensure that no unlawful exactions or takings occur as a result of implementing the terms of this chapter. " ORDINANCE NO. 595 PAGE 8 , B. Any such appeal shall be made in writing and filed with the city clerk not later than ten (10) days after imposition of the fees or imposition of the inclusionary affordable housing requirements objected to. The appeal shall set forth in detail the factual and legal basis for the claim of waiver, reduction, or adjustment. The City , Council shall consider the appeal at the public hearing within sixty (60) days after the filing of the appeal. The appellant shall bear the burden of presenting substantial evidence to support the appeal including comparable technical information to support appellant's position for reduction, adjustment or waiver. The decision of the City Council shall be final. SECTION 3: A summary of this Ordinance shall be published in a newspaper published and circulated in the City of Arroyo Grande at least five (5) days prior to the City Council meeting at which the proposed Ordinance is to be adopted. A certified copy of the full text of the proposed Ordinance shall be posted in the office of the City Clerk. Within fifteen (15) days after adoption of the Ordinance, the summary with the names of those City Council Members voting for and against the Ordinance shall be published again, and the City Clerk shall post a certified copy of the full text of such adopted Ordinance. SECTION 4: This Ordinance shall become effective thirty (30) days after the date of its adoption. On motion of Council Member Fellows, seconded by Mayor Pro Tern Arnold and on the following roll call vote, to-wit: AYES: Council Members Fellows, Arnold, Guthrie, Costello, and Mayor Ferrara NOES: None ABSENT: None the foregoing Ordinance was adopted this 11th day of December 2007. • • ORDINANCE NO.545 PAGE 9 TONY FER � MAYOR ATTEST: KELLY W=TM; -E, CITY CLERK APPROVED AS TO CONTENT: STEVE ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMO' HY J. CA , CITY ATTORNEY - j , OFFICIAL CERTIFICATION • I, KELLY WETMORE, City Clerk of the City of Arroyo Grande, County of San Luis Obispo, State of California, do hereby certify under penalty of perjury, that the attached is a true, full, and correct copy of Ordinance No. 595 which was introduced at a regular meeting of the City Council on November 27, 2007; was passed and adopted at a regular meeting of the City Council of the City of Arroyo Grande on the 11th day of December 2007; and was duly published in accordance with State law (G.C. 40806). WITNESS my hand and the Seal of the City of Arroyo Grande affixed this- 13th day of December 2007. . LA L 4 , KELLY E/ ORE, CITY CLERK •