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HomeMy WebLinkAboutPC Reso 23-12 PLPA-2023-00032 Inclusionary Zoning RegulationsReso. No. 23-12, Item 6.2, Adopted 12/12/2023 Page 1 of 2 RESOLUTION NO. 23 12 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF DUBLIN RECOMMENDING CITY COUNCIL APPROVAL OF AMENDMENTS TO DUBLIN MUNICIPAL CODE CHAPTER 8.68 (INCLUSIONARY ZONING REGULATIONS) EFFECTIVE CITYWIDE PLPA-2023-00032 WHEREAS, the City occasionally initiates amendments to the Dublin Municipal Code to clarify, add, or amend certain provisions to ensure that it remains current with federal and state law, internally consistent, simple to understand and implement, and relevant to changes occurring in the community; and WHEREAS, Staff initiated amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) consistent with the City of Dublin Two-Year Strategic Plan, which zoning regulations incentivize targeted housing production and Objective 2c: Prepare a nexus study to evaluate the affordable housing commercial linkage; and WHEREAS, the City selected the consulting firm Economic and Planning Systems (EPS) to prepare an Inclusionary Zoning and Affordable Housing In-Lieu Fee Feasibility Study and Commercial Linkage Fee Nexus Study to inform the proposed amendments; and WHEREAS, on August 15, 2023, and September 19, 2023, the City Council received informational reports on the Commercial Linkage Fee and Inclusionary Zoning and In-Lieu Fee programs and provided direction to staff to prepare updates to the programs; and WHEREAS, proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) include changes to the affordability requirements for rental and ownership development projects, modifications to the provisions for the payment of fees in-lieu of constructing affordable units, revisions to the allocation of units to income levels, and revisions to the exceptions to the affordability requirements; and WHEREAS, the California Environmental Quality Act (CEQA), together with the State Guidelines and City of Dublin CEQA Guidelines and Procedures require that certain projects be reviewed for environmental impacts and that environmental documents be prepared; and WHEREAS, the Planning Commission recommends that the City Council find the proposed amendments exempt from the requirements of CEQA pursuant to CEQA Guidelines Section 15061(b)(3) as the amendments would not result in any physical changes and it can be seen with certainty that the amendments would not have a significant effect on the environment; and WHEREAS, the Planning Commission held a duly noticed public hearing on December 12, 2023, during which all interested persons were heard; and WHEREAS, proper notice of said hearing was given in all respects as required by law; and Reso. No. 23-12, Item 6.2, Adopted 12/12/2023 Page 2 of 2 WHEREAS, a Staff Report dated December 12, 2023, was submitted to the Dublin Planning Commission recommending approval of the proposed amendments to Dublin Municipal Code Chapter 8.68; and WHEREAS, the Planning Commission did hear and consider all said reports, recommendations and testimony herein above set forth and used its independent judgment to evaluate the recommendations. NOW, THEREFORE, BE IT RESOLVED that the foregoing recitals are true and correct and made a part of this Resolution. BE IT FURTHER RESOLVED that the City of Dublin Planning Commission does hereby recommend that the City Council adopt the Ordinance attached hereto as Exhibit A, and incorporated herein by reference. PASSED, APPROVED AND ADOPTED this 12th day of December 2023, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Planning Commission Chair ATTEST: ______________________________________ Assistant Community Development Director Aini, Grier, Thalblum, Tyler, Wright Attachment 2 Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 1 of 10 ORDINANCE NO. XX – 23 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING AMENDMENTS TO DUBLIN MUNICIPAL CODE CHAPTER 8.68 (INCLUSIONARY ZONING REGULATIONS) PLPA-2023-00032 The Dublin City Council does ordain as follows: SECTION 1. RECITALS A. The City occasionally initiates amendments to the Dublin Municipal Code to clarify, add, or amend certain provisions to ensure that it remains current with federal and state law, internally consistent, simple to understand and implement, and relevant to changes occurring in the community. B. Staff initiated amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) consistent with the City of Dublin Two-Year Strategic Plan, which includes Strategy 2: Housing Affordability, Objective 2b: Ensure the City’s inclusionary zoning regulations incentivize targeted housing production and Objective 2c: Prepare a nexus study to evaluate the affordable housing commercial linkage. C. The City selected the consulting firm Economic and Planning Systems (EPS) to prepare an Inclusionary Zoning and Affordable Housing In-Lieu Fee Feasibility Study and Commercial Linkage Fee Nexus Study to inform the proposed amendments. D. On August 15, 2023, and September 19, 2023, the City Council received informational reports on the Commercial Linkage Fee and Inclusionary Zoning and In-Lieu Fee programs and provided direction to staff to prepare updates to the programs. E. The proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) include changes to the affordability requirements for rental and ownership development projects, modifications to the provisions for the payment of fees in-lieu of constructing affordable units, revisions to the allocation of units to income levels, and revisions to the exceptions to the affordability requirements. F. The Planning Commission held a duly noticed public hearing on December 12, 2023, during which all interested persons were heard, and adopted Resolution No. 23-xx recommending that the City Council approve the proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations). G. A Staff Report was submitted to the Dublin City Council recommending approval of the proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations). Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 2 of 10 H. The City Council held a public hearing on the proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) on _________, at which time all interested persons had an opportunity to be heard. I. Proper notice of said hearing was given in all respects as required by law. J. The City Council did hear and consider all said reports, recommendations and testimony herein above set forth and used its independent judgement to evaluate the project. SECTION 2. FINDINGS A. Pursuant to Dublin Municipal Code Section 8.120.050.B., the City Council hereby finds that the amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) are consistent with the General Plan and any applicable Specific Plan in that they would provide an update to the City’s affordable housing requirements. Specifically, the amendments would implement Housing Element Program B.4, which calls for a review of the Inclusionary Zoning Regulations and preparation of a nexus study reviewing the affordable housing in-lieu fee. B. The California Environmental Quality Act (CEQA), together with the State Guidelines and City of Dublin CEQA Guidelines and Procedures require that certain projects be reviewed for environmental impacts and that environmental documents be prepared. The City Council hereby finds that the amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) are exempt from the requirements of CEQA pursuant to CEQA Guidelines Section 15061(b)(3) as the amendments would not result in any physical changes and it can be seen with certainty that the amendments would not have a significant effect on the environment. SECTION 3. AMENDMENT OF CHAPTER 8.68. Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) is amended to read as follows: “Inclusionary Zoning Regulations” 8.68.010 Purpose. The purpose of this Chapter is to: A. Enhance the public welfare and assure that further housing development contributes to the attainment of the City’s housing goals by increasing the production of residential units affordable by households of very low, low, and moderate income. B. Assure that the limited remaining developable land in the City’s planning area is utilized in a manner consistent with the City’s housing policies and needs. 8.68.020 Definitions. As used in this Chapter, each of the following terms shall be defined as follows: Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 3 of 10 A. “Affordable unit” means an ownership or rental-housing unit, affordable to households with very low-, low-, or moderate-incomes as defined in this Chapter. 1. Rental units are deemed affordable units if the annual rent does not exceed 30% of maximum income level for very low-, low- and moderate-income households, adjusted for household size and as defined below. 2. Owner-occupied units are deemed affordable units if the sales price results in annual housing expenses that do not exceed 35% of the maximum income level for very low-, low-, and moderate-income households, adjusted for household size and as defined below. B. “Applicant” means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities that seeks city real property development permits or approvals. C. “Dwelling unit” means a dwelling designed and intended for occupancy by one household. D. “Very low-, low-, and moderate-income levels” means those income and eligibility levels determined periodically by the California Department of Housing and Community Development based on Alameda County median income levels adjusted for family size. Such levels shall be calculated on the basis of gross annual household income considering household size and number of dependents, income of all household members eighteen years of age and older, and all other sources of household income and will be recertified as set forth by local standards, and state and federal housing law. 1. “Very low-income” means 50% or less of the median income, adjusted for actual household size. 2. “Low-income” means more than 50% and up to 80% of the median income, adjusted for actual household size. 3. “Moderate-income” means more than 80% and up to 120% of the median income, adjusted for actual household size. E. “Resale controls and/or rent restrictions” means legal restrictions by which the affordable units shall be restricted to ensure that the unit remains affordable to very low-, low-, or moderate-income households, as applicable, for a period of not less than 55 years. The 55 year period will reset each time ownership of the unit is transferred through a bona fide sales transaction with a third party during the resale restriction period. With respect to rental units, such rent restrictions shall be in the form of a regulatory agreement recorded against the applicable property. With respect to owner-occupied units, such resale controls shall be in the form of resale restrictions, deeds of trust, and/or other similar documents recorded against the applicable property. F. “Residential development” includes, without limitation, detached single-family dwellings, multiple-dwelling structures, groups of dwellings, condominium or townhouse developments, condominium conversions, cooperative developments, mixed use developments that include housing units, and residential land subdivisions intended to be sold to the general public. Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 4 of 10 8.68.030 General Requirements. A. Affordability Requirement for Rental Units. All new rental residential development projects with 10 units or more designed and intended for permanent occupancy shall construct 10.0% of the total number of dwelling units within the development as affordable units, except as otherwise provided by this Chapter, and except when all of the dwelling units (excluding units reserved for property management) within the project are affordable. The foregoing requirement shall be applied no more than once to an approved residential development (and generally at the tentative map stage), regardless of the changes in the character or ownership of the development, except as provided by this Chapter, provided the total number of units does not change. In applying and calculating the affordability requirement, any decimal fraction less than or equal to 0.50 may be disregarded, and any decimal fraction greater than 0.50 shall be construed as one unit. B. Affordability Requirement for Ownership Units. All for-sale (ownership) residential development projects of 10 units or more designed and intended for permanent occupancy shall construct 12.5% of the total number of dwelling units within the development as affordable units, except as otherwise provided by this Chapter. The foregoing requirement shall be applied no more than once to an approved residential development (and generally at the tentative map stage), regardless of the changes in the character or ownership of the development, except as provided by this Chapter, provided the total number of units does not change. In applying and calculating the affordability requirement, any decimal fraction less than or equal to 0.50 may be disregarded, and any decimal fraction greater than 0.50 shall be construed as one unit. C. Allocation of Units to Income Levels. Affordable units provided pursuant to this section shall be allocated as follows: Rental Units Owner-Occupied Units Very low-income households 0% 0% Low-income households 100% 40% Moderate-income households 0% 60% Where the calculation of the allocation results in fewer units than would otherwise be required, one additional unit should be allocated to the income level with a decimal fraction closest to 0.50. D. Conditions of Approval: Any tentative map, conditional use permit, or site development review approving residential development projects subject to this Chapter shall contain conditions sufficient to ensure compliance with the provisions of this Chapter. Such conditions shall detail the number of affordable units required, set forth the applicant’s manner of compliance with this Chapter, and require the execution of an agreement imposing appropriate resale controls and/or rental restrictions on the affordable units. E. Concurrent Construction. All affordable units in a project or phase of a project shall be constructed concurrently with market-rate units, unless the City Manager determines in writing that extenuating circumstances exist that make concurrent construction infeasible or impractical. Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 5 of 10 F. Design and Distribution of Affordable Units. All affordable units shall reflect the range of numbers of bedrooms provided in the project as a whole and shall not be distinguished by exterior design, construction, or materials. Affordable units may be of smaller size than the units in the project and may have fewer amenities than the market rate units in the project. All affordable units shall be reasonably dispersed throughout the project. 8.68.040 Exceptions to Affordability Requirement. Developers of projects subject to Sections 8.68.030A and 8.68.030B shall construct the total number of affordable dwelling units within the development, unless subject to an exception set forth in this section. All exceptions require City Council approval. A. Payment of Fees In Lieu of Constructing Affordable Units. Upon request, the applicant shall be permitted to pay a fee in lieu of constructing up to 40% of the affordable units that the developer would otherwise be required to construct pursuant to Sections 8.68.030A and 8.68.030B. The amount of the fee shall be as set forth in a resolution of the City Council, which may be amended from time to time to reflect inflation and changed conditions in the City and the region. In lieu fees shall be paid at the time and in the amount set forth in the in lieu fee resolution in effect at the time of issuance of the building permit. B. Off-Site Projects. An applicant may construct the affordable units not physically within the development in lieu of constructing some or all of the affordable units within the development, with the approval of the City Council, if the City Council finds: 1. Construction of the units off-site in lieu of constructing units on-site is consistent with the Chapter’s goal of creating, preserving, maintaining, and protecting housing for very low-, low- and moderate-income households. 2. Units to be constructed off site are consistent with Section 8.68.030F above. 3. Would be infeasible or impractical to construct affordable units on-site. 4. Conditions of approval for the project require that the off-site affordable units would be governed by the terms of a deed restriction and, if applicable, rental restrictions similar to that used for the on-site affordable units. 5. Conditions of approval for the project, or other security such as a cash deposit, bond, or letter of credit, are adequate to require the construction of the off-site affordable units concurrently with the completion of the construction of the residential development or within a reasonable period (not to exceed five years). C. Land Dedication. An applicant may dedicate land to the City or city-designated local non- profit housing developer in lieu of construction of some or all of the required affordable units, if the Council finds: 1. Dedication of land in lieu of constructing units is consistent with the Chapter’s goal of creating, preserving, maintaining, and protecting housing for very low-, low- and moderate- income households. Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 6 of 10 2. The dedicated land is useable for its intended purpose, is free of toxic substances and contaminated soils, and is fully improved, with infrastructure, adjacent utilities, grading, and all development-impact fees paid excluding any inclusionary zoning ordinance fees. 3. The proposed land dedication is of sufficient size to meet the following requirements: a. The dedication includes land sufficient to construct the number of units that the applicant would otherwise be required to construct by Section 8.68.030.A, based on the size of lots in the subdivision for which the applicant is meeting its obligation; and b. In addition, the dedication includes such additional land the market value for which is equal to or exceeds the difference between the value of a market-rate, 1200-square foot unit and the price at which such a unit could be sold as an Affordable Unit (which amount shall be set forth in a resolution adopted from time to time by the City Council) times the number of units required. D. Credit Transfers. An applicant may fully or partially satisfy the requirements of Sections 8.68.030A and 8.68.030B through the use of transfer credits created pursuant to Section 8.68.060. Credit certificates shall be presented to the Community Development Director, who shall note at the time of project approval the credit certificate by number. Credit certificates may only be used to satisfy the requirements for Inclusionary Units for the income category (i.e., very low-, low-, or moderate-income) and number of bedrooms for which they are issued. E. Waiver of Requirements. The City Council, at its discretion, may waive, wholly or partially, the requirements of this ordinance and approve alternate methods of compliance with this Chapter if the applicant demonstrates, and the City Council finds, that such alternate methods meet the purposes of this Chapter. 8.68.050 General Procedures for Implementing Inclusionary Zoning Requirements. A. Agreements. Prior to the issuance of a building permit for an affordable unit, resale restrictions or rental controls, or both, as the case may be, shall be set forth in an agreement between the City and the developer, in a form consistent with the City Council-adopted form agreement, which agreement shall be recorded against the property containing the affordable units. The agreement shall be executed by the City Manager, and its requirements shall run with the land and bind the applicant’s successors. B. Rental Units; Occupancy; Annual Report. Agreements involving rental units shall require the owner of the affordable units to ensure that the units are occupied by tenants whose monthly income levels do not exceed very low-, low-, or moderate-income levels, as the case may be, and shall preclude tenants from subletting or subleasing the unit. The agreement shall also require the owner of the affordable unit to submit an annual report to the City Manager, in a format approved by the City. The report shall include, but not be limited to the following information: an identification of the affordable units within the project; the monthly rents charged and proposed to be charged; vacancy information for the prior year; and the monthly income for tenants of each affordable unit throughout the prior year. C. Ownership Units; Occupancy; City’s Right of First Refusal. Agreements for ownership units shall specify that the inclusionary units must be occupied by the owner or owners and may not be leased or rented without the written approval of the City. The resale restrictions Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 7 of 10 shall provide that in the event of the sale of an affordable unit, the City shall have the right to purchase any affordable owner-occupant unit at the maximum price that could be charged to an eligible household. D. Selection Criteria. No household shall be permitted to occupy a unit that is required under this Chapter to be affordable unless the City or its designee has approved the household’s eligibility. Eligible potential occupants of affordable units will be qualified on the basis of household income as defined by this Chapter. The selection criteria for a qualified household may not distinguish between adults and children. Selection of qualified person should be based on priorities established using the point system described below: • Employed within the boundaries of the City of Dublin (3 points maximum, one per household member) • Public Service employee working in the City of Dublin (1 point) • Dublin resident (3 points maximum, one per household member) • Seniors (1 point, one per household) • Permanently disabled (1 point, one per household) • Immediate family member of Dublin resident (1 point, one per household) • Required to relocate from current Dublin residence due to demolition of dwelling or conversion of dwelling from rental to for-sale unit (1 point, one per household) To qualify as a “Public Service Employee”, the person shall be employed by a Public Agency. To qualify as “Employed within the boundaries of the City of Dublin”, the person shall have been employed within the City of Dublin for at least six months. To qualify as a “Dublin resident,” the person shall have been a resident of the City of Dublin for at least a one-year period prior to the eligibility determination. 8.68.060 Affordable Unit Credits. A. Creation. Affordable unit credits may be created by the City Council. One affordable unit credit certificate shall be issued for each affordable unit constructed in excess of the number of affordable units required to be constructed for the project by Sections 8.68.030A and 8.68.030B. The certificate shall designate a specific income category (i.e., very low-, low-, or moderate-income) and number of bedrooms for which they are issued. B. Ownership and Use of Credits. Affordable unit credit certificates are issued to and become the possession of the project owner, who may use them to satisfy the requirements of this Chapter for another project in the City. If a project owner proposes to sell credit certificates, the parties shall first obtain the consent of the Finance Director, who will document the transfer by certificate number. 8.68.070 Incentives to Encourage On-Site Construction of Affordable Units. Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 8 of 10 The City may, but shall not be required to, offer incentives or financial assistance to encourage the on-site construction of affordable units in excess of the total number of affordable units required by this Chapter to be included in the project to the extent resources for this purpose are available and approved for such use by the City Council or City Manager. Such incentives may include, but shall not be limited to, the following: A. Fee Deferral. 1. Development Processing Fees. The City Manager may approve deferred payment of City processing fees applicable to the review and processing of the project. The terms and payment schedule of the deferred fees shall be subject to the approval of the City Manager. 2. Development Impact Fees. The City Council may authorize the deferred payment of development impact fees applicable to the affordable units. Approval of this incentive requires demonstration by the Applicant that the deferral increases the project’s feasibility. The applicant must provide appropriate security to ensure future payment of such fees. B. Design Modifications. The City Council may approve design modifications to affordable units that increase the feasibility of the construction of affordable units, including but not limited to, the following: 1. Reduced lot size. 2. Reduced setback requirements. 3. Reduced open space requirements. 4. Reduced landscaping requirements. 5. Reduced interior or exterior amenities. 6. Reduction in parking requirements. 7. Height restriction waivers. Section 8.68.080 Inclusionary Zoning In Lieu Fees. The fund previously known as the “Inclusionary Zoning In Lieu Fee fund” is hereby renamed the “Affordable Housing Fund” (“Fund”) and all In Lieu Fees shall be deposited into the Fund. A. Use. All monies in the Fund, together with any interest earnings on such monies less reasonable administrative charges, shall be used or committed to use by the City for the purpose of providing very low-, low-, and moderate-income ownership or rental housing in the City of Dublin. B. Annual Report. The City Manager shall prepare an annual report to the City Council identifying the balance of monies in the Fund and the affordable units provided and any monies committed to providing very low-, low-, and moderate-income housing. The annual report shall also include a review of administrative charges. Section 8.68.090 Violations. Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 9 of 10 It shall be unlawful for any person, firm, corporation, partnership or other entity that is subject to this ordinance pursuant to Sections 8.68.030A and 8.68.030B to violate any provision or to fail to comply with any of the requirements of this Chapter. A violation of any of the provisions of or failure to comply with any of the requirements of this Chapter shall constitute a misdemeanor; except that notwithstanding any other provisions of this Code, any such violation constituting a misdemeanor under this Chapter, may in the discretion of the enforcing authority, be charged and prosecuted as an infraction. Any person convicted of an infraction under the provisions of this Code shall be punishable as provided by the Government Code of the State of California. 8.68.100 Enforcement. A. General. The City Manager shall enforce this Chapter, and its provisions shall be binding on all agents, successors, and assigns of an applicant. The City Manager may suspend or revoke any building permit or approval upon finding a violation of any provision of this Chapter. No land-use approval, building permit, or certificate of occupancy shall be issued for any residential development unless exempt from or in compliance with this Chapter. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance herewith, including, but not limited to, actions to revoke, deny, or suspend any permit or development approval. B. Excessive Rents/Legal Action. If the City Manager determines that rents in excess of those allowed by operation of this Chapter have been charged to a tenant residing in an affordable unit, the City may take appropriate legal action to recover, and the project owner shall be obligated to pay to the tenant, or to the City in the event the tenant cannot be located, any excess rents charged. Section 8.68.110 Appeals. Decisions of the City Manager under this Chapter may be appealed as provided in Chapter 8.136. SECTION 4. EFFECTIVE DATE. This Ordinance shall take effect and be enforced 30 days following its final adoption. SECTION 5. SEVERABILITY. The provisions of this Ordinance are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words or parts thereof of the Ordinance or their applicability to other persons or circumstances. SECTION 6. POSTING. The City Clerk of the City of Dublin shall cause this Ordinance to be posted in at least three public places in the City of Dublin in accordance with Section 36933 of the Government Code of the State of California. PASSED, APPROVED AND ADOPTED this __th day of _______ 2024, by the following vote: Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 10 of 10 AYES: NOES: ABSENT: ABSTAIN: ______________________________ Mayor ATTEST: _________________________________ City Clerk