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HomeMy WebLinkAboutItem 6.1 Dublin Municipal Code Amendments to the Inclusionary Zoning Regulations (Chapter 8.68) (PLPA-2023-00032)STAFF REPORT Planning Commission Page 1 of 4 Agenda Item 6.1 DATE:May 14, 2024 TO:Planning Commission SUBJECT:Dublin Municipal Code Amendments to the Inclusionary Zoning Regulations (Chapter 8.68)(PLPA-2023-00032)Prepared by:Jason Earl,Senior Management Analyst EXECUTIVE SUMMARY:The City Council’s Two-Year Strategic Plan includes a review of the Inclusionary Zoning Regulations. The City Council received a report on September 19, 2023, and directed Staff to prepare amendments to the Inclusionary Zoning Regulations. The amendments included lowering the applicability of the regulations to residential development projects of 10 or more units, creating separate affordability requirements for ownership and rental units, resetting the 55-year affordable resale restriction upon transfer of ownership, and applying selection criteria to resaleof ownership units. On December 12, 2023, Staff brought these amendments forward to the Planning Commission which unanimously recommended approval to the City Council. On January 9, 2024, the City Council held a public hearing to consider the proposed amendments to the Inclusionary Zoning Regulations. The City Council continued the item and directed Staff to analyzethe feasibility of raising the inclusionary requirements for for-sale units to 15%, increasing the in-lieu fee, differentiating the affordable housing requirement for different ownership product types, and to evaluate the impact of interest rate fluctuations on the proposed Inclusionary Zoning Regulations. On March 19, 2024, the City Council held a Study Session to review the additional information and directed Staff to prepare further amends to the draft regulations to increase the affordable housing requirement for Ownership Units to 15% and to reduce the affordable housing requirement for higher density condominiums to 10%. The Planning Commission is being requested to review the additional amendments to the Inclusionary Zoning Regulations and make a recommendation to the City Council. STAFF RECOMMENDATION:Conduct the public hearing, deliberate and adopt the Resolution recommending City Council approval of amendments to Dublin Municipal CodeChapter 8.68 (Inclusionary Zoning Regulations). DESCRIPTION:Background 9 Page 2 of 4 The City of Dublin Two-Year Strategic Plan includes Strategy 2: Housing Affordability, which includes the following two objectives: Objective 2b: Ensure the City’s inclusionary zoning regulations incentivize targeted housingproduction;and Objective 2c: Prepare a nexus study to evaluate the affordable housing commercial linkagefee and affordable housing in-lieu fee for for-sale and rental housing.TheCity of Dublin hired aconsulting firm,Economic and Planning Systems (EPS), towork with Staff to develop amendments to the Inclusionary Zoning Regulations (IZR) and the Affordable Housing In-Lieu Fee and Commercial Linkage Fee programs. The subject of this Staff Report is the proposed amendments to the IZR addressing the City Council Strategic Plan Objective 2b. These amendments require a review and recommendation to the City Council by the Planning Commission. Staff and EPS are also working with the City Council to address Strategic Plan Objective 2c and potential amendments to the Affordable Housing In-Lieu Fee and Commercial Linkage Fee. OnAugust 15, 2023, and September 19, 2023, the City Council received a informational reportsand directed Staff to prepare amendments to the IZR. These proposed amendments would lower the IZR applicability threshold to projects of 10+ units, establish separate affordability requirements for ownership and rental developments, reset the 55-year affordable resale restriction upon transfer of ownership, and apply selection criteria to resale of ownership units. On December 12, 2023, the Planning Commission reviewed the proposed amendments to the Inclusionary Zoning Regulations and unanimously voted torecommendCity Council adoptionof the regulations with the recommendation that the City Council consider periodically reviewing the inclusionary requirements (Attachment 4). On January 9, 2024, the City Council held a public hearing to consider the proposed amendments. At the conclusion of the public hearing, the City Council continued the item and directed Staff to return with additional information and analysis regarding the feasibility of raising the inclusionary requirements for for-sale units to 15%,increasing the in-lieu fee on for-sale units, differentiating the affordable housing requirements for different ownership product types, and evaluating the impact of interest rate fluctuations on the feasibility of the IZR. On March 19, 2024, the City Council held a Study Session to review the additional information andprovided direction to prepare the following additional amendments to the IZR: Increase the affordable housing requirement for single-family detached units and townhomes from 12.5% to 15%; and Require condominium developments to provide 10% of the units as affordable at the same income levels required for apartments, and ensure these regulations apply to projects with a density consistent with the feasibility analysis.Staff has prepared additional amendments to the IZR based on the direction that was received at the March 19, 2024 Study Session. These additional amendments are the subject of this staff report. The Planning Commission is being requested to review the proposed amendments to the IZR and make a recommendation to the City Council. 10 Page 3 of 4 AnalysisThe following is an overview of the additional amendments to the Inclusionary Zoning Regulationsas directed by the City Council on March 19, 2024. A draft Planning Commission Resolution recommending the City Council approve the proposed amendments to the IZR is included as Attachment 1. Please refer to Attachment 2 for the draft Ordinance and refer to Attachment 3 for the proposed amendments in redline format where underlined text is proposed to be added and text with a strikethrough is proposed to be deleted. Attachments 2 and 3 show the complete set of proposed amendments as directed by the City Council on September 19, 2023 and March 15, 2024. Please refer to Attachment 4 for information regarding the draft amendments previously considered by the Planning Commission.The economics of developing for-sale ownership units such as single-family detached units and townhomes is significantly different from higher density condominium units. There is room to increase the affordable housing requirement for ownership units. Therefore, the proposed ordinance has been revised to increase the affordable housing requirement for ownership units from the current 12.5% to 15%. Higher density condominium development is at the limits of feasibility, and the subsidy required for affordable units pushes that limit even further. Reducing the inclusionary requirement for condominiums would help improve the financial feasibility of such projects. Therefore, the proposed amendments separate condominiums of 30+ units per acre from other ownership units. The proposed ordinance has been revised to include an affordable housing requirement of 10% for thesecondominiumdevelopments. The affordable housing requirement for condominium developments of less than 30 units per acre would be that of Ownership Units. Table 1 summarizes these proposed regulations.Table 1. Ownership and Rental Policy RecommendationsProject Size Threshold OverallAffordability Requirement Very Low Low Moderate Ownership Units 10 Units 15%0%40%60%Rental Units & Condominium Units 10 Units 10%0%100%0% The following are the sections of the draft ordinance that have been revised to incorporate the changes noted above. Section 8.68.020 Definitions was updated with the addition of Subsection C adding the definition for Condominium. o “Condominium” means a development consisting of condominiums. A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan in sufficient detail to locate all boundaries thereof. 11 Page 4 of 4 Section 8.68.030 General Requirements Subsection A was updated to include Condominiums of 30+ units per acre. Section 8.68.030 General Requirements Subsection B was updated to include Condominiums with less than 30 units per acre, and to reflect the new Inclusionary Zoning Requirement of 15% for Ownership(for-sale) Units.The proposed amendments to the Inclusionary Zoning Regulations align the economics of developing affordable housing and the efforts of the City Council to prioritize the collection of fees that can be leveraged to facilitate the production of lower income units to satisfy the City’s RHNA while providing on-site units. ENVIRONMENTAL DETERMINATION:The California Environmental Quality Act (CEQA), together with 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 proposed Zoning Ordinance Amendments 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. NOTICING REQUIREMENTS/PUBLIC OUTREACH:In accordance with State law, a public notice was published in the East Bay Times and posted at several locations throughout the City. The public notice was provided to all people who have expressed an interest in being notified of meetings. The Staff Report for this public hearing was also made available on the City’s website. ATTACHMENTS:1) Resolution Recommending City Council Approval of Amendments to Dublin Municipal CodeChapter 8.68 (Inclusionary Zoning Regulations)2) Exhibit A to Attachment 1 – Ordinance Approving Amendments to the Dublin Municipal CodeChapter 8.68 (Inclusionary Zoning Regulations)3) Strikeout and Underline Version of Amendment to Inclusionary Zoning Regulations4) Planning Commission Staff Report Dated December 12, 20235) City Council Staff Report Dated January 9, 20246) City Council Staff Report Dated March 19, 2024 12 Attachment 1 Reso. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 1 of 2 RESOLUTION NO. XX – 24 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 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; 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, on December 12, 2023, the Planning Commission held a public hearing to consider amendments to the Inclusionary Zoning Regulations; and WHEREAS,on January 9, 2024, the City Council held a public hearing to consider amendments to the Inclusionary Zoning Regulations. City Council directed Staff to return at a future meeting with additional information and analysis regarding increasing the inclusionary zoning requirement for for-sale units to 15%; increasing the in-lieu fee on for-sale units; differentiating the affordable housing requirements for different ownership product types; evaluating the impact of interest rate fluctuations; and a projection of in-lieu fee revenue; and WHEREAS,on March 19, 2024, the City Council held a Study Session and directed Staff to differentiate the affordable housing requirements for different ownership product types, and to increase the inclusionary requirement for certain for-sale product types; and WHEREAS,proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) include changes to the applicability threshold for projects subject to the regulations, affordability requirements for different product types, and revisions to the allocation of units to income levels; 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 13 Reso. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 2 of 2 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 May 14, 2024, during which all interested persons were heard; and WHEREAS, proper notice of said hearing was given in all respects as required by law; and WHEREAS,a Staff Report dated May 14, 2024, 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 14th day of May 2024, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Planning Commission Chair ATTEST: ______________________________________ Assistant Community Development Director 14 Attachment 2 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 1 of 10 ORDINANCE NO. XX – 24 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. On January 9, 2024, the City Council held a public hearing to consider amendments to the Inclusionary Zoning Regulations and Affordable Housing In-Lieu Fee. City Council directed Staff to return at a future meeting with additional information and analysis regarding increasing the inclusionary zoning requirement to 15%; increasing the in-lieu fee; differentiating the affordable housing requirements for different ownership product types; the impact of interest rate fluctuations; and a projection of in-lieu fee revenue. F. On March 19, 2024, the City Council held a Study Session and provided direction to staff regarding increasing the inclusionary zoning requirement to 15%; increasing the in-lieu fee; differentiating the affordable housing requirements for different ownership product types; the impact of interest rate fluctuations; and a projection of in-lieu fee revenue. G. 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. 15 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 2 of 10 H. The Planning Commission held a duly noticed public hearing on May 14, 2024, during which all interested persons were heard, and adopted Resolution No. 24-XX recommending that the City Council approve the proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations). I. 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). J. The City Council held a public hearing on the proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) on June 4, 2024, at which time all interested persons had an opportunity to be heard. K. Proper notice of said hearing was given in all respects as required by law. L. 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: 16 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 3 of 10 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: 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.“Condominium” means a development consisting of condominiums. A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan in sufficient detail to locate all boundaries thereof. D.“Dwelling unit” means a dwelling designed and intended for occupancy by one household. E. “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. 17 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 4 of 10 F. “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 sale. 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. G. “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. 8.68.030 General Requirements. A. Affordability Requirement for Rental Units and Condominium Units.All new rental residential development projects, and all for-sale Condominium development projects (condominium developments with a density of 30 units per acre or more) 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. (Any Condominium development project with a density of less than 30 units per acre shall be required to meet the Affordability Requirement for Ownership Units). 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 (including condominium development projects with a density of less than 30 units per acre), of 10 units or more designed and intended for permanent occupancy shall construct 15.0% 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: 18 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 5 of 10 Rental and Condominium Units Ownership 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. 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 8.68.030.A and 8.68.030.B 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 8.68.030.A and 8.68.030.B. 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. 19 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 6 of 10 2. Units to be constructed off site are consistent with Section 8.68.030.F 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 City Council finds all of the following: 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. 2. The dedicated land is useable for its intended purpose; is free of toxic substances and contaminated soils; 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 and Section 8.68.030.B, based on the size of lots in the subdivision for which the applicant is meeting its obligation; and b.The dedication finds the additional land’s market value 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, times the number of units required. The amount an Affordable Unit may be sold at shall be set forth in a resolution adopted by the City Council as needed. D. Credit Transfers.An applicant may fully or partially satisfy the requirements of Sections 8.68.030.A and 8.68.030.B 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. 20 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 7 of 10 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 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. 21 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 8 of 10 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 8.68.030.A and 8.68.030.B. 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. 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. 22 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 9 of 10 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. It shall be unlawful for any person, firm, corporation, partnership or other entity that is subject to this ordinance pursuant to Sections 8.68.030.A and 8.68.030.B 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. 23 Ord. No. XX-24, Item X.X, Adopted XX/XX/2024 Page 10 of 10 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 thirty (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: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Mayor ATTEST: _________________________________ City Clerk 24 Attachment 3 INCLUSIONARY ZONING REGULATIONS 8.68.010 Purpose. The purpose of this cChapter is to: A. eEnhance 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. aAssure 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.Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 8.68.020 Definitions. As used in this cChapter, each of the following terms shall be defined as follows: A. “Affordable unit” means an ownership or rental-housing unit, including senior housing, 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. “Condominium” means a development consisting of condominiums. A condominium consists of an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map, or condominium plan in sufficient detail to locate all boundaries thereof. CD. “Dwelling unit” means a dwelling designed and intended for occupancy by one household. DE. “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 wage earners household members eighteen years of age and older, elderly or disabled family members, and all other sources of household income and will be recertified as set forth by local standards, and state and federal housing law. 25 Attachment 3 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. EF. “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 with each time ownership of the unit is transferred through a bona fide sales transaction with a third party during the resale restriction period sale of the unit. 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. FG. “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.Rev. Ord. 43-08 (December 2008); Ord. 8-05 (March 2005); Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 8.68.030 General Requirements. A. 12.5% Affordability Requirement for Rental Units and Condominium Units.All new rental residential rental development projects, and all for-sale Condominium development projects (condominium developments with a density of 30 units per acre or more) of with 20 10 units or more designed and intended for permanent occupancy shall construct 12.5 10.0% of the total number of dwelling units within the development as affordable units, except as otherwise provided by this cChapter, and except when all of the dwelling units (excluding units reserved for property management) within the project are affordable. (Any Condominium development project with a density of less than 30 units per acre shall be required to meet the Affordability Requirement for Ownership Units). 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 (including condominium development projects with a density of less than 30 units per acre), of 10 units or more designed and intended for permanent occupancy shall construct 15.0% 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. 26 Attachment 3 BC. Allocation of Units to Income Levels.Affordable units provided pursuant to this section shall be allocated to households with very-low, low-, and moderate-income levels as follows: Rental Units and Condominium Units Ownership Units Very-low-income households 030%0% Low-income households 10020%40% Moderate-income households 050%60% Where the calculation of the allocation results in fewer units than would otherwise be required pursuant to subsection A of this section, one additional unit should be allocated to the income level with a decimal fraction closest to 0.50. CD. Conditions of Approval:Any tentative map, Conditional Use Permit, or Site Development Review Permit approving residential development projects subject to this cChapter shall contain conditions sufficient to ensure compliance with the provisions of this cChapter. Such conditions shall detail the number of affordable units required, specify the schedule of construction of affordable units, set forth the applicant’s manner of compliance with this cChapter, and require the execution of an agreement imposing appropriate resale controls and/or rental restrictions on the affordable units. DE. 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. EF. 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.Rev. Ord. 43-08 (December 2008); Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 8.68.040 Exceptions to 12.5% Affordability Requirement. Developers of projects subject to Sections 8.68.030.A and 8.68.030.B shall construct 12.5% of the total number of affordable dwelling units within the development as affordable units, unless subject to an exception set forth in this section. All exceptions require City Council approval, which shall be obtained at or prior to the last discretionary approval for the project. A. Payment of Fees In Lieu of Creation of Affordable Units. Upon request of the applicant, the City Council shall permit the applicant 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 8.68.030.A and 8.68.030.B. 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: 27 Attachment 3 1. that cConstruction of the units off-site in lieu of constructing units on-site is consistent with the cChapter’s goal of creating, preserving, maintaining, and protecting housing for very low-, low- and moderate-income households. 2. that the uUnits to be constructed off site are consistent with Section 8.68.030.EF above. 3. that it wWould be infeasible or impractical to construct affordable units on-site. 4. that cConditions 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. that the cConditions 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 5 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 City Council finds that all of the following: 1. that dDedication of land in lieu of constructing units is consistent with the cChapter’s goal of creating, preserving, maintaining, and protecting housing for very-low-, low- and moderate- income households. 2. that tThe 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. that tThe proposed land dedication is of sufficient size to meet the following requirements: a. tThe 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 and Section 8.68.030.B, based on the size of lots in the subdivision for which the applicant is meeting its obligation; and b. iIn addition, the The dedication finds the includes such additional land’s 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. The amount an Affordable Unit may be sold at shall be set forth in a resolution adopted by the City Council as needed. D. Credit tTransfers.An applicant may fully or partially satisfy the requirements of Sections 8.68.030.A and 8.68.030.B 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 28 Attachment 3 applicant demonstrates, and the City Council finds, that such alternate methods meet the purposes of this Chapter.Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 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, including condominium 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 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 cChapter 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, the median combined household income statistics for Alameda County published periodically by the California Department of Housing and Community Development, all sources of household income and assets, the relationship between household size and the size of available units, and any further criteria required by law as defined by this Chapter. The developer shall use an equitable selection method established in conformance with the terms of 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 additional point) • Dublin resident (3 points maximum, one per household member) • Seniors (1 point, one per household) 29 Attachment 3 • 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.Rev. Ord. 8-05 (March 2005); Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 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 8.68.030.A and 8.68.030.B. 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 uUse of cCredits.Affordable unit credit certificates are issued to and become the possession of the project owner, who may then use them to satisfy the requirements of this cChapter for another project in the City. If a project owner proposes to sell credit certificates, the parties shall first obtain the consent of the Community DevelopmentFinance Director, who will document the transfer by certificate number.Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 8.68.070 Incentives to Encourage On-Site Construction of Affordable Units. 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 12.5% 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. 30 Attachment 3 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.Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 8.68.080 Inclusionary Zoning In Lieu Fees Fund. 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. In Lieu Fees shall be deposited into a fund known as the “Inclusionary Zoning In Lieu Fees Fund” (“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 rReport.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.Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 8.68.090 Violations. It shall be unlawful for any person, firm, corporation, partnership or other entity that is subject to this ordinance pursuant to Sections 8.68.030.A and 8.68.030.B to violate any provision or to fail to comply with any of the requirements of this cChapter. A violation of any of the provisions of or failingure 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 cChapter, 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.Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 8.68.100 Enforcement. A. General.The City Manager shall enforce this cChapter, and its provisions shall be binding on all agents, successors, and assigns of an applicant. The City Manager may suspend or revoke any 31 Attachment 3 building permit or approval upon finding a violation of any provision of this cChapter. 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 cChapter. 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 rRents/lLegal aAction.If the City Manager determines that rents in excess of those allowed by operation of this cChapter 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.Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 8.68.110 Appeals. Decisions of the City Manager under this Chapter may be appealed as provided in Chapter 8.136.Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002) 32 Attachment 4 STAFF REPORT Planning Commission Page 1 of 4 Agenda Item 6.2 DATE:December 12, 2023 TO:Planning Commission SUBJECT:Dublin Municipal Code Amendments to the Inclusionary Zoning Regulations (Chapter 8.68)(PLPA-2023-00032)Prepared by:Jason Earl,Senior Management Analyst EXECUTIVE SUMMARY:The City Council’s Two-Year Strategic Plan includes a review of the Inclusionary Zoning Regulations. The City Council received a report on September 19, 2023, and directed Staff to prepare amendments to the Inclusionary Zoning Regulations. Staff has prepared amendments to the Inclusionary Zoning Regulations based on this direction. These amendments include lowering the applicability of the regulations to residential development projects of 10 or more units, creating separate affordability requirements for ownership and rental units, resetting the 55-year affordable resale restriction upon transfer of ownership, and applying selection criteria to resaleof ownership units. The Planning Commission is being requested to review the proposed amendments to the Inclusionary Zoning Regulations and make a recommendation to the City Council. STAFF RECOMMENDATION:Conduct the public hearing, deliberate and adopt a Resolution recommending City Councilapproval of amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations). DESCRIPTION:BackgroundThe City of Dublin Two-Year Strategic Plan includes Strategy 2: Housing Affordability, which includes the following two objectives: Objective 2b: Ensure the City’s inclusionary zoning regulations incentivize targeted housingproduction;and Objective 2c: Prepare a nexus study to evaluate the affordable housing commercial linkagefee and affordable housing in-lieu fee for for-sale and rental housing. 33 Page 2 of 4 The consulting firm Economic and Planning Systems (EPS) was selected through a competitive process to assist Staff with addressing these Strategic Plan Objectives. The subject of this Staff Report is the proposed amendments to the Inclusionary Zoning Regulations addressing the City Council Strategic Plan Objective 2b. These amendments require a review and recommendation to the City Council by the Planning Commission. Staff and EPS are also working with the City Council to address Strategic Plan Objective 2c and potential amendments to the Affordable Housing In-Lieu Fee and Commercial Linkage Fee. Please refer to Attachments 4 and 5 for additional background information regarding these efforts.The City’s current Inclusionary Zoning Regulations (DMC Chapter 8.68) was adopted by the City Council in 2002 (Ordinance No. 08-02). The Inclusionary Zoning Regulations (IZR) have been amended from time to time. These regulations help to achieve the stated purpose of contributing to the attainment of the City’s housing goals, including the production of units to satisfy the Regional Housing Needs Allocation (RHNA), by increasing the production of residential unitsaffordable to very low-, low-, and moderate-income households. This includes successfully leveraging in-lieu fees collected through this program to facilitate the production of lower income rental units, including units for special needs populations, and requiring the production of on-site units where feasible. The City’s current inclusionary requirement applies to ownership and rental residential development projects of 20 or more units, and requires 12.5% of the units in a market-rate residential project to be set aside as affordable to lower-income households. A developer may satisfy 40% of this obligation through the payment of in-lieu fees. Table 1 provides an overview of key aspects of these current regulations. The current Affordable Housing In-Lieu Fee is $241,131 per affordable unit.Table 1. Dublin Current Inclusionary Zoning Regulations Project Size Threshold Overall Inclusionary Requirement Income Targets (Ownership)Income Targets (Rental)Must Build Requirement20 Units 12.5%60% Moderate40% Low 50% Moderate20% Low30% Very Low 60% of Inclusionary Requirement Staff and EPS prepared an analysis of the development economics, best practices, and a review of inclusionary regulations in the surrounding Tri-Valley Cities, and a nexus study of the need for affordable housing generated by non-residential development to formulate recommendations to the City Council. On August 15, 2023, the City Council received an informational report on the Inclusionary Zoning and Affordable Housing In-Lieu Fee Feasibility Study and the Commercial Linkage Fee Nexus Study (Attachment 4). The City Council provided initial feedback and direction regarding updates to these programs. On September 19, 2023, the City Council received an informational report (Attachment 5) and directed Staff to prepare the following amendments to the IZR: Lower the Inclusionary Zoning Regulations applicability threshold to projects of 10+ units; and 34 Page 3 of 4 Establish separate regulations for ownership and rental developments as presented in the report.Staff has prepared amendments to the IZR. The Planning Commission is being requested to review the proposed amendments and make a recommendation to the City Council. A draft Planning Commission Resolution recommending that the City Council approve the proposed amendments to the IZR is included as Attachment 1 with the Draft Ordinance included as Attachment 2. Please refer to Attachment 3 for the proposed amendments in redline format where underlined text is proposed to be added and text with a strikethrough is proposed to be deleted.AnalysisThe following is an overview of the proposed amendments to the Inclusionary Zoning Regulations shown in Attachments 2 and 3. These amendments address the direction received from the City Council and additional amendments to facilitate implementation of these regulations.The current regulations do not differentiate the overall inclusionary requirement between projects with ownership and rental units. However, the economics of these two types of development vary dramatically. The average for-sale, single-family development requires a subsidy of $620,000 to produce an affordable unit under the City’s current inclusionary program. The current in-lieu fee of $241,131 is lower than the subsidy required to build an affordable unit and thus incentivizes the payment of in-lieu fees. However, there is room to increase this fee while continuing to incentivize payment of in-lieu fees. The average subsidy to produce an affordable rental unit under the City’s current inclusionary program is $187,000. Even without the inclusionary requirement, multifamily rental development is at the limits of feasibility, and the subsidy required for affordable rental units pushes that limit even further. Reducing the inclusionary requirement and in-lieu fees would help improve the financial feasibility of such projects. Therefore, the proposed amendments create separate regulations for ownership and rental developments. Separately, the City Council will consider amending the in-lieu fees for rental and ownership units.The proposed allocation of affordable ownership units remains unchanged. However, the allocation of affordable rental units is proposed to focus on low-income households. The subsidy required to achieve units affordable to very low-income households is significant and typically achieved through development of affordable housing by non-profit housing developers who can leverage the City’s Affordable Housing Fund and state and federal subsidies to construct these units. The rent for units affordable to moderate-income households is essentially equal to market rate rent and, thus, does not provide much benefit in the current market. Table 2 summarizes these proposed regulations.Table 2. Ownership and Rental Policy RecommendationsProject Size Threshold OverallAffordability Requirement Very Low Low Moderate Ownership 10 Units 12.5%0%40%60%Rental 10 Units 10%0%100%0% 35 Page 4 of 4 The IZR (Section 8.68.020.E) requires resale controls to ensure that affordable ownership units remain affordable for a total of 55 years. Staff proposes to amend the regulations to reset the 55-year period with each transfer of ownership of future for sale units created through the inclusionary program.The implementation procedures for the IZR include selection criteria that provide for the use of preference points by the developer upon the initial sale of units (Section 8.68.050.D). Staff is proposing to amend this section to require the use of preference points with the resale of ownership units.The proposed amendments to the Inclusionary Zoning Regulations align the economics of developing affordable housing and the efforts of the City Council to prioritize the collection of fees that can be leveraged to facilitate the production of lower income units to satisfy the City’s RHNA while providing on-site units. ENVIRONMENTAL DETERMINATION:The California Environmental Quality Act (CEQA), together with 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 proposed Zoning Ordinance Amendments 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. NOTICING REQUIREMENTS/PUBLIC OUTREACH:In accordance with State law, a public notice was published in the East Bay Times and posted at several locations throughout the City. The public notice was provided to all people who have expressed an interest in being notified of meetings. The Staff Report for this public hearing was also made available on the City’s website. ATTACHMENTS:1) Resolution Recommending City Council Approval of Amendments to Dublin Municipal CodeChapter 8.68 (Inclusionary Zoning Regulations)2) Exhibit A to Attachment 1 – Ordinance Approving Amendments to the Dublin Municipal CodeChapter 8.68 (Inclusionary Zoning Regulations)3) Redlined Version of Amendment to Inclusionary Zoning Regulations4) City Council Staff Report dated August 15, 2023 5) City Council Staff Report dated September 19, 2023 36 Attachment 5 STAFF REPORT CITY COUNCIL Page 1 of 5 Agenda Item 6.1 DATE:January 9, 2024 TO:Honorable Mayor and City Councilmembers FROM:Linda Smith, City Manager SUBJECT:Amendment to the Dublin Municipal Code Inclusionary Zoning Regulations (Chapter 8.68), Adopting a Methodology for Determining Affordable Housing In-Lieu Fees and Adopting Non-Residential Development Affordable Housing Impact Fees (PLPA-2023-00032)Prepared by:Jason Earl,Senior Management Analyst EXECUTIVE SUMMARY:The City Council’s Two-Year Strategic Plan includes a review of the Inclusionary Zoning Regulations (Dublin Municipal Code Chapter 8.68), Affordable Housing In-Lieu Fee, and Non-Residential Development Affordable Housing Impact Fee (aka “Commercial Linkage Fee”). Staff and the City’s consultant, Economic and Planning Systems, prepared an Affordable Housing In-Lieu Fee Feasibility Study and a Commercial Linkage Fee Nexus Study to address the Strategic Plan objectives. The City Council received informational reports on August 15, 2023, and September 19, 2023, and directed Staff to prepare amendments to the Inclusionary Zoning Regulations, Affordable Housing In-Lieu Fee, and Non-Residential Development Affordable Housing Impact Fee programs to ensure they align with the economics of developing affordable housing and the City Council’s priorities. Staff has prepared the updates to these programs. The City Council will hold a Public Hearing to consider adopting the amendments to these programs. STAFF RECOMMENDATION:Conduct the public hearing, deliberate, and take the following actions: 1) waive the reading and INTRODUCE the Ordinance Approving Amendments to Dublin Municipal Code Chapter 8.68(Inclusionary Zoning Regulations); 2) Adopt the Resolution Establishing the Methodology for Determining the Affordable Housing In-Lieu Fee for Future Residential Units Subject to the City of Dublin Inclusionary Zoning Regulations; and 3) Adopt the Resolution Approving the Non-Residential Development Affordable Housing Impact Fees. FINANCIAL IMPACT:The Affordable Housing In-Lieu Fee is proposed to be amended to align with the economics of developing affordable housing. This will generate additional funding for the Affordable Housing 37 Page 2 of 5 Fund. The proposed amendments to the Non-Residential Affordable Housing Impact Fee program will combine the Research & Development and Office uses into a single fee and ensure that the impact fee program does not overburden the economic development priorities set by the City Council. DESCRIPTION:BackgroundThe City of Dublin Two-Year Strategic Plan includes Strategy 2: Housing Affordability, which includes the following two objectives: Objective 2b: Ensure the City’s inclusionary zoning regulations incentivize targeted housingproduction;and Objective 2c: Prepare a nexus study to evaluate the affordable housing commercial linkagefee and affordable housing in-lieu fee for for-sale and rental housing.The consulting firm Economic and Planning Systems (EPS) was selected through a competitive process to assist Staff with addressing these Strategic Plan Objectives. Staff and EPS prepared an analysis of the development economics, reviewed industry best practices, reviewed inclusionary regulations in the surrounding Tri-Valley cities, and evaluated thenexus between non-residential development and the need it generates for affordable housing to formulate recommendations to the City Council. This culminated in the Affordable Housing In-Lieu Fee Feasibility Study and the Commercial Linkage Fee Nexus Study which are included as Attachments 3 and 5. On August 15, 2023, the City Council received an informational report on these efforts (Attachment 7). The City Council provided initial feedback and direction regarding updates to these programs. On September 19, 2023, the City Council received another informational report (Attachment 8) and directed Staff to prepare the following updates to the Inclusionary Zoning Regulations, Affordable Housing In-Lieu Fee, and Non-Residential Development Affordable Housing Impact Fee which is also referred to as a “Commercial Linkage Fee”. Lower the Inclusionary Zoning Regulations applicability threshold to projects of 10+ units; and Assess in-lieu fees on a per-square-foot basis for each market-rate unit; and Establish separate regulations for ownership and rental developments; and Retain the existing Commercial Linkage Fee amount with an annual inflationary index; and Combine the Research & Development and Office use categories and set the fee at $1.39 per square foot, which is the average of the current fee for those two use categories. Staff has prepared the amendments to these programs for consideration by the City Council. The Ordinance adopting amendments to the Inclusionary Zoning Regulations is included as Attachment 1, the Resolution approving the methodology for determining the Affordable Housing In-Lieu Fee is included as Attachment 2, and the Resolution approving the Non-Residential Development Affordable Housing Impact Fee is included as Attachment 4. 38 Page 3 of 5 AnalysisThe following is an overview of the proposed amendments to the Inclusionary Zoning Regulations, Affordable Housing In-Lieu Fee, and the Non-residential Development Affordable Housing Impact Fee. The proposed amendments align the economics of developing affordable housing and the efforts of the City Council to prioritize the collection of fees that can be leveraged to facilitate the production of lower income units to satisfy the City’s Regional Housing Need Allocation (RHNA)while providing on-site units. Inclusionary Zoning RequirementsThe proposed amendments to the Inclusionary Zoning Regulations (IZR) in the Dublin Municipal Code (Chapter 8.68) create separate regulations for ownership and rental developments. The threshold for projects subject to the IZR would be reduced from 20 units to 10 units. The proposed allocation of affordable ownership units remains unchanged. However, the allocation of affordable rental units is proposed to focus on low-income households. Table 1 summarizes these proposed regulations.Table 1. Ownership and Rental Policy RecommendationsProject Size Threshold OverallAffordability Requirement Very Low Low Moderate Ownership 10 Units 12.5%0%40%60%Rental 10 Units 10%0%100%0%The IZR (Section 8.68.020.E) requires resale controls to ensure that affordable ownership units remain affordable for a total of 55 years. Staff proposes to amend the regulations to reset the 55-year period with each transfer of ownership of future for sale units created through the inclusionary program.The implementation procedures for the IZR include selection criteria that provide for the use of preference points by the developer upon the initial sale of units (Section 8.68.050.D). Staff is proposing to amend this section to require the use of preference points with the resale of ownership units.The draft Ordinance approving the amendments to the Inclusionary Zoning Regulations is included as Attachment 1. Please refer to Attachment 6 for the proposed amendments in redline format where underlined text is proposed to be added and text with a strikethrough is proposed to be deleted.Affordable Housing In-Lieu FeeThe proposed Affordable Housing In-Lieu Fee would be assessed on a per-square-foot basis for each market-rate unit produced. The proposed fee is based on the Affordable Housing In-Lieu Fee Feasibility Study and rounded to the nearest dollar. This fee is reflective of the cost to produce affordable ownership and rental units. The proposed fee would be set at $9/square foot and adjusted annually based on an inflationary index. The proposed fee is equivalent to approximately 39 Page 4 of 5 $400,000 per affordable ownership unit and $237,000 per rental unit. The Resolution to approvethe proposed Affordable Housing In-Lieu Fee is included as Attachment 2. Non-Residential Development Affordable Housing Impact FeeThe DMC (Chapter 7.86) established the authority for the City to impose a Non-Residential Development Affordable Housing Impact Fee, also known as a “Commercial Linkage Fee”. This fee is based on a nexus between non-residential development and the need it generates for affordable housing. The fee was first adopted by the City Council in 2005 (Resolution 70-05) and is adjusted annually based on an inflationary index. The amount was set to ensure that it does not overburden the economic development priorities set by the City Council. New non-residential development is assessed this fee on a per-square-foot basis at the time a building permit is issued. On September 19, 2023, the City Council directed Staff to retain the existing fee structure with aninflationary index but combine Research & Development and Office uses into a single category and set the fee at $1.39 per square foot. Additionally, the names of the land use categories have been updated to be consistent with the Nexus Study and current industry terminology. The remainder of the program is unchanged. The Resolution adopting the Non-Residential Development Affordable Housing Impact Fee is included as Attachment 4. ENVIRONMENTAL DETERMINATION:The California Environmental Quality Act (CEQA), together with 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 proposed Zoning Ordinance Amendments 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. PLANNING COMMISSION REVIEW:On December 12, 2023, the Planning Commission held a public hearing to consider the proposed amendments to the Inclusionary Zoning Regulations and make a recommendation to the City Council. Following the public hearing, the Planning Commission unanimously adopted Resolution No. 23-12 (Attachment 9), recommending the City Council approve the proposed amendments. The Planning Commission further recommended periodic review of the Inclusionary Zoning Regulations. STRATEGIC PLAN INITIATIVE:Strategy 2: Housing AffordabilityObjective 2b: Ensure the City’s inclusionary zoning regulations incentivize targeted housing production.Objective 2c: Prepare a nexus study to evaluate the affordable housing commercial linkage fee and affordable housing in-lieu fee for for-sale and rental housing. NOTICING REQUIREMENTS/PUBLIC OUTREACH: 40 Page 5 of 5 In accordance with State law, a public notice was published in the East Bay Times ten days prior to the hearing and again five days prior to the hearing, posted at several locations throughout the City, and sent to interested parties notifying the community of the City Council’s consideration of the proposed amendments to the Inclusionary Zoning Regulations, Affordable Housing In-Lieu Fee, and the Non-Residential Development Affordable Housing Impact Fee. The City Council Agenda was posted. ATTACHMENTS:1) Ordinance Approving Amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations)2) Resolution Establishing the Methodology for Determining the Affordable Housing In-Lieu Feefor Future Residential Units Subject to the City of Dublin Inclusionary Zoning Regulations3) Exhibit A to the Resolution - Inclusionary Housing Feasibility Report dated December 7, 20234) Resolution Approving the Non-Residential Development Affordable Housing Impact Fees5) Exhibit A to the Resolution - Commercial Linkage Fee Nexus Study dated October 27, 20236) Redlined Version of Amendment to Inclusionary Zoning Regulations7) City Council Staff Report dated August 15, 2023 8) City Council Staff Report dated September 19, 20239) Planning Commission Resolution 23-12 Recommending City Council Approval of Amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) 41 Attachment 6 STAFF REPORT CITY COUNCIL Page 1 of 3 Agenda Item 3.1 DATE:March 19,2024 TO:Honorable Mayor and City Councilmembers FROM:Linda Smith, City Manager SUBJECT:Inclusionary Zoning and Affordable Housing In-Lieu Fee Study SessionPrepared by:Jason Earl,Senior Management Analyst EXECUTIVE SUMMARY:On January 9, 2024, the City Council held a public hearing to consider amendments to the Inclusionary Zoning Regulations and Affordable Housing In-Lieu Fee. At the conclusion of thatpublic hearing the City Council directed Staff to return at a future meeting with additional information and analysis regarding increasing the inclusionary zoning requirement to 15%;increasing the in-lieu fee; differentiating the affordable housing requirements for different ownership product types; the impact of interest rate fluctuations; and a projection of in-lieu fee revenue. The City Council will hold a Study Session and receive a presentation with this information. No formal action will be taken by the City Council at this Study Session. STAFF RECOMMENDATION:Receive a presentation and provide feedback and direction regarding amendments to the Inclusionary Zoning Regulations and Affordable Housing In-Lieu Fee program. FINANCIAL IMPACT:None. DESCRIPTION:BackgroundThe City’s Two-Year Strategic Plan includes Strategy 2: Housing Affordability, which incorporates the following two Objectives: 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 fee and affordable housing in-lieu fee for for-sale and rental housing. 42 Page 2 of 3 Staff and the City’s consultant, Economic and Planning Systems (EPS), prepared an Affordable Housing In-Lieu Fee Feasibility Study and a Commercial Linkage Fee Nexus Study. As directed by the City Council, these studies analyzed and assessed the targeted housing production and fees, and provided a housing market analysis to ensure that Dublin remains competitive for both housing and commercial development, while ensuring the availability of affordable housing.The City Council received an informational report on these efforts on August 15, 2023, and provided feedback and direction regarding updates to these programs. On September 19, 2023, the City Council received another informational report and directed Staff to prepare updates to the Inclusionary Zoning Regulations, Affordable Housing In-Lieu Fee, and Non-Residential Development Affordable Housing Impact Fee which is also referred to as a “Commercial Linkage Fee”.The City Council's direction included amendments which prioritize the collection of fees that can be leveraged to facilitate the production of lower income units to satisfy the City’s Regional Housing Needs Allocation (RHNA) while providing on-site units where feasible. Staff prepared amendments to these programs that align with the priorities set by the City Council.On December 12, 2023, the Planning Commission held a public hearing and unanimously recommended approval of the proposed amendments to the Inclusionary Zoning Regulations and Affordable Housing In-Lieu Fee. On January 9, 2024, the City Council held a public hearing to consider the proposed amendments to the Inclusionary Zoning Regulations, Affordable Housing In-Lieu Fee, and Non-Residential Development Affordable Housing Impact Fee (Attachment 1). At the conclusion of the public hearing the City Council directed Staff to return at a future meeting with additional information and analysis regarding the Inclusionary Zoning Regulations and Affordable Housing In-Lieu Fee.At this Study Session, the City Council will receive a presentation by Staff and EPS addressing the following information as requested by the City Council: Evaluate increasing the inclusionary zoning requirement to 15%. Evaluate further increasing the proposed Affordable Housing In-Lieu Fee. Present options to differentiate the affordable housing requirements and in-lieu fee for the different ownership product types (i.e., condominiums, townhomes, and single-family homes). Demonstrate how interest rate fluctuations impact the inclusionary zoning and in-lieu fee recommendations. Provide a projection of the Affordable Housing In-Lieu Fee revenue. 43 Page 3 of 3 STRATEGIC PLAN INITIATIVE:Strategy 2: Housing AffordabilityObjective 2B: Ensure the City’s inclusionary zoning regulations incentivize targeted housing production.Objective 2C: Prepare a nexus study to evaluate the affordable housing commercial linkage fee and affordable housing in-lieu fee for for-sale and rental housing. ENVIRONMENTAL REVIEW:The City Council is holding a Study Session on the Inclusionary Zoning Regulations and Affordable Housing In-Lieu Fee, and no formal action will be taken at this time. The Study Session is not subject to the requirements of the California Environmental Quality Act (CEQA) as it does not have the potential to result in a direct physical change in the environment or a reasonably foreseeable indirect change in the environment and, thus, does not meet the definition of a project under CEQA Guidelines Section 15378. NOTICING REQUIREMENTS/PUBLIC OUTREACH:A public notice is not required for the City Council to hold a Study Session. The City Council Agenda was posted. ATTACHMENTS:1) City Council Staff Report dated January 9, 2024 (without attachments) 44