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HomeMy WebLinkAboutItem 6.1 Density Bonus Ordinance (2) CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: October 10, 1991 SUBJECT: Public Hearing: Density Bonus Ordinance REPORT PREPARED BY: Dennis Carrington, Senior Planner Robert Schubert, Contract Planner EXHIBITS ATTACHED: Exhibit A: Draft Density Bonus Ordinance RECOMMENDATION: 1) Open public hearing 2 ) Receive Staff Report and testimony from the public 3) Question Staff and the public 4 ) Close public hearing and deliberate 5) Waive second reading and adopt the Density Bonus Ordinance as re-introduced FINANCIAL STATEMENT: Costs associated with the Density Bonus Ordinance would involve Staff time to process applications for developments for which a density bonus is requested. These costs will be borne by the Applicant. DESCRIPTION: On September 23, 1991, the City Council re-introduced the Density Bonus Ordinance . At that meeting the City Council directed Staff to revise the Density Bonus Ordinance as follows : 1 . Concessions and incentives, waivers and modifications . Delete Section 8 . 16 . 050 (c) ( 3) . Delete Section 8 . 16 . 060(a) ( 3) . 2 . Recovery of the value of improvements . Add a new Section 8 . 16 . 100(b) to allow recovery of the value of substantial improvements to their property. Add a new Section 8,.,A6 . 100 (c) limiting appreciation from improvements made pursuant to Section 8 . 16 . 100 (b) only to the upper limit of affordability for the income group to which the restricted unit was assigned. Section 6 . 16 . 070 (c) was modified to add language to the third sentence which states "the original sales prices of ownership units and the original rental rates of rental units as agreed upon by the developer and the City Manager" . This language is necessary to enable the initial setting of prices and rents and provides needed information as required by the "any other information required by the City to determine the Applicant ' s compliance with the conditions" language that follows at the end of the sentence. Staff recommends that the City Council waive second reading and adopt the Density Bonus Ordinance as re-introduced. ----------------------------------------------------------------- COPIES TO: Agenda/General File ITEM NO. Density Bonus File /DBO10-10 Project Planner E CITY CLERK E .3 D o 0 M�- I ORDINANCE NO. - 91 AN ORDINANCE OF THE CITY OF DUBLIN An Ordinance Adding Chapter 8 . 16 to Title 8 of the Dublin Municipal Code, Enacting a Density Bonus Ordinance ---------------------------------- The City Council of the City of Dublin does ordain as follows : Section 1 . Chapter 8 . 16 is hereby added to Title 8 of the Dublin Municipal Code to read as follows : "CITY OF DUBLIN DENSITY BONUS ORDINANCE CHAPTER 8 . 16 OF TITLE 8 CITY OF DUBLIN MUNICIPAL CODE Article 1 General Provisions Section 8 . 16 . 010 . Title. This Ordinance shall be called the "Density Bonus Ordinance of the City of Dublin" . Section 8 . 16 . 020 . Purpose. This Ordinance is intended to establish policies which facilitate the development of senior housing, and of affordable housing to serve a variety of economic needs within the City. In order to encourage the provision for lower and very low income housing, and senior citizen housing, the City shall provide applicants who agree to meet the requirements established by this chapter, a density bonus and additional incentives if it is found necessary for affordability, or, the City shall provide other incentives of equivalent financial value. The regulations set forth in the chapter shall apply City-wide, including the extended planning area. Section 8 . 16 . 030 . Definitions . For the purposes of this Ordinance, certain words and phrases shall be interpreted as set forth in this section unless it is apparent from the context that a different meaning is intended. (a) Affordable Unit: A unit for which the rent or mortgage payment does not exceed, for lower income households, 30a of 60% of the Alameda County median income adjusted for household size, or for very low income households, 30% of 50% of the Alameda County median income median adjusted for household size. (b) Amenities : Interior amenities including, but not limited to, fireplaces, garbage disposals, dishwashers, cabinets and storage space and bathrooms in excess of one. (c) Applicant: Any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which seeks City permits and approvals for a project. (d) Approval : Adoption of a resolution by the Planning Commission and/or City Council approving a discretionary permit such as a Tentative Map, Planned Development or Use Permit for a project. (e) City: The City of Dublin or its designee or any entity with which the City contracts to administer this chapter. ( f) Density Bonus : An increase in the number of dwelling units authorized for a particular parcel of land beyond the otherwise maximum allowable residential density under the Zoning Ordinance and the Land Use Element of the General Plan as of the date of application for a project. (g) Density Bonus Unit: A dwelling unit authorized as a result of the density bonus for a project. (h) Dublin Employee: Any single person, head of household, or in the case of married couples either spouse, who has worked within the City Limits of Dublin continually for one ( 1) year immediately prior to the date of application for a restricted unit. ( i) Dublin Resident: Any person who has lived within the City Limits of Dublin continually for one ( 1) year immediately prior to the date of application for a restricted unit. Continually shall be construed to include lapses of residency of no longer than six months . ( j ) First Time Home Buyer: A person who has not held an ownership interest in a residence within the past three years . (k) Household: One person living alone or two or more persons sharing residency whose income is available to meet the family' s needs and who are related by blood, marriage or operation of law. ( 1 ) Incentive: A benefit offered by the City to facilitate construction of housing projects which include restricted units . Among others , benefits may include fee waivers, priority processing or reduction of interior amenities for restricted units . (m) Lower Income Households : A household whose gross income is as established by Health and Safety Code Section 50079 . 5 as amended from time to time. (n) Project Owner: Any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which holds fee title to the land on which the project is located. \dbo10-10 -2- (o) Property Owner: The owner of a restricted unit excepting a "Project Owner" . (p) Project: A housing development at one location including all dwelling units for which permits have been applied for or approved within a twelve-month period. (q) Resale Controls : A resale restriction placed on restricted units by which the price of such units and/or the age or income of the purchaser will be restricted in order to ensure the affordability and occupancy by lower or very low income households or senior citizens . (r) Restricted Unit: A unit to be sold or rented to senior citizens, or, at a price affordable to lower and very low income households . ( s) Senior Citizen: A person at least 62 years of age. (t) Unit Type: Dwelling units with similar floor area and number of bedrooms . (u) Very Low Income Household: A household whose gross income is as established by Health and Safety Code Section 50105 as amended from time to time. Section 8 . 16 . 040 . Applicability. (a) In order to qualify for a density bonus, a project must consist of five or more dwelling units and meet one or more of the following criteria: 1 . 20% of the total units are designated for lower income households , or 2 . 10% of the total units are designated for very low income households, or 3 . 50% of the total units are designated for senior citizens . (b) Projects which meet the requirements set forth in this chapter shall qualify for a density bonus and at least one other concession or incentive unless the City adopts a written finding that the additional concession or incentive is not required in order to provide affordable housing costs as defined in Section 50052 . 5 of the Health and Safety Code, or the City shall provide other incentives of equivalent financial value based on the land cost per dwelling unit. Section 8 . 16 . 050 . Concessions and Incentives . For the purposes of this chapter, concession or incentive means any of the following: (a) A reduction in site development standards or a modification of zoning code requirements or architectural design requirements which exceed the minimum building standards approved by the State Building Standards Commission as provided in Part 2 . 5 (commencing with Section \dbo10-10 -3- 18901) of Division 13 of the Health and Safety Code, including, but not limited to, a reduction in setback and square footage requirements and in the ratio of vehicular parking spaces that would otherwise be required. (b) Approval of mixed use zoning in conjunction with the housing project if commercial, office, industrial, or other land uses will reduce the cost of the housing development and if the commercial, office, industrial, or other land uses are compatible with the housing project and the existing or planned development in the area where the proposed housing project will be located. (c) Other regulatory incentives or concessions proposed by the developer or the city which result in identifiable cost reductions may include but are not limited to: ( 1 ) Certain City fees applicable to the restricted units in a project may be waived. Fees to be waived may be established by resolution of the City Council on a project by project basis, which may be amended from time to time. ( 2 ) A project which provides restricted units may be entitled to priority processing. Upon certifying that the application is complete and eligible for priority processing, a project would be immediately assigned to planning staff . The project would be processed by City staff in advance of all non- priority items . The project will then be reviewed for environmental impacts; and, upon completion of the environmental review process, the project would be noticed and scheduled for the next available meeting of the Planning Commission and/or City Council thereafter. When more than one project qualifying for priority processing is applied for at the same time, first priority will be given to the project whose application was determined to be complete earlier. Section 8 . 16 . 060 . Waiver or Modification of Development and Zoning Standards . (a) An Applicant may request a modification of the following development and zoning standards where such waiver or modification is necessary to make the provision of restricted units economically feasible. ( 1) reduce site development standards, e.g. street widths or paving, curbs/gutters, placement of public works improvements, landscaping; ( 2 ) modify zoning code requirements, e.g. open space, minimum lot size, setbacks, parking standards; and (b) The request shall be accompanied by information sufficient to show the City the waiver or modification is necessary to make the restricted units economically feasible. \dbo10-10 -4- Section 8 . 16 . 070 . General Requirements . (a) Restricted units must remain affordable or restricted to senior citizens for 30 years from the date of final occupancy clearance if both a density bonus and additional incentive are granted. If only a density bonus is granted, the restricted units shall remain affordable or restricted to senior citizens for 10 years . Affordability of restricted units shall be maintained longer if financing or subsidy programs for the project designate a longer preservation period. (b) Dublin residents will have first preference for restricted units ; second preference will be given to Dublin employees; third preference shall be given to those who need to move to Dublin to be near Dublin residents or services; and fourth preference shall be given to those who live outside Dublin. (c) Requirements for restricted units shall be established as conditions of project approval . Evidence of compliance with the conditions of this ordinance shall be in the form of an Affordable Housing Agreement between the applicant and the City Manager completed prior to issuance of any project building permits . The agreement shall indicate the household type, number, location, size and construction scheduling of all restricted units, the original sales prices of ownership units and the original rental rates of rental units as agreed upon by the developer and the City Manager, and any other information required by the City to determine the Applicant ' s compliance with the conditions . The agreement shall be recorded as a deed restriction prior to issuance of any project building permits and shall run with the land encompassed by the project for a period of 10 or 30 years, or longer, as provided in Subsection a. (d) Restricted units in a project and phases of a project shall be constructed concurrently with or prior to the construction of non- restricted units . (e) Restricted units shall be provided as follows : 1 . Such units shall be dispersed throughout the project. 2 . Such units shall include all unit types represented in the project and said unit types shall be provided in the same proportion as in the project as a whole. ( f) The applicant shall submit a project financial report (pro forma) along with the application for the project to allow the City to evaluate the financial need for the additional incentives . The City may retain a consultant to review the financial report. The cost of the consultant shall be borne by the applicant with the following exception: If the applicant is a non profit organization, the cost of the consultant may be paid by the City upon prior approval of the City Council . \dbo10-10 -5- (g) The City may contract with the Dublin Housing Authority, Alameda County Housing Authority or other similar entity to administer the rental and sales provisions of this chapter. (h) The City Council, by resolution, may establish the amount of fees to be charged to applicants and/or project owners for administration of this chapter. Section 8 . 16 . 080 . Requirements for Rental Housing Projects . (a) All restricted units shall be occupied by the ,household type specified in the agreement required under Section 8 . 16 . 070(c) . (b) Those units targeted for lower-income households shall be affordable at a rent that does not exceed 30 percent of 60 percent of the Alameda County median income adjusted for household size, or as modified by State law. (c) Those units targeted for very low-income households shall be affordable at a rent that does not exceed 30 percent of 50 percent of the Alameda County median income adjusted for household size, or as modified by State law. (d) The Project Owner shall be responsible for obtaining and verifying information with respect to the qualifications of prospective and current tenants, including, but not limited to, information relating to applications, income and eligibility in a form satisfactory to the City. The project owner shall maintain a list of qualified applicants for the duration of the program and shall allow the City Manager to inspect such information upon reasonable notice . (e) Income limits shall be adjusted at periodic intervals as new tables are published by HUD. ( f) When the eligibility of the tenants has been assured to the satisfaction of the City, the City Manager shall prepare a certification indicating that the applicant or project owner has complied with the requirements of this section. Section 8 . 16 . 090 . Requirements for Owner-Occupied Housing. (a) All purchasers of restricted units shall be senior citizens or first time home buyers . (b) Purchasers shall be required to occupy the unit unless evidence is presented to the City that the owner is unable to continuously occupy the unit due to illness or incapacity. In such cases , the City may approve rental of the unit to the same household type as the owner. (c) The owner of a restricted unit, on its sale or resale, shall sell the unit to a household in the same category. Lower income households may only sell the unit to a household which meets the \dbo10-10 -6- income limits for a lower income household. Very low income households may only sell the unit to a household which meets the income limits for a very low income household. Senior households may only sell the unit to another senior household. The sales price shall not be in excess of the maximum sales price set by the City Manager. (d) Prior to offering a restricted unit for sale, the owner shall send a written Notice of Intent to Sell to the City Manager. The City Manager will then notify the owner of the current maximum sales price . Prior to the close of the sale, the owner shall notify the City Manager of the proposed sales price, who shall review the application to assure conformance with this chapter. (e) Closing costs and title insurance shall be paid pursuant to the custom and practice in Dublin at the time of opening of escrow. No charges or fees shall be imposed by the seller on the purchaser of a restricted unit which are in addition to or more than charges imposed upon purchasers of market rate units, except for administrative fees charged by the City. ( f) The purchaser of a restricted unit shall verify on a form acceptable to the City that the unit is being purchased for the purchaser' s principal residence, or that if this unit ceases to function as his or her principal residence, it will either be sold according to the requirements of Section 8 . 16 . 090 or rented to an eligible household according to the requirements of Section 8 . 16 . 080 . Section 8 . 16 . 100 . Control of resale. In order to maintain the availability of restricted units which may be constructed pursuant to the requirements of this Chapter, the City shall impose the following resale conditions on approval of any project for which restricted units are required under this Chapter: (a) The price received by the seller of a restricted Affordable Unit shall be limited to the purchase price plus a percentage increase based on the percentage increase in that portion of the San Francisco/Oakland/San Jose Consumer Price Index as published monthly by the U. S . Department of Labor relating to those costs related to housing and housing expenses; or the purchase price originally paid by the seller plus a percentage increase for a family of four consistent with the increase in the median income for Alameda County, as adjusted for household size, since the date of purchase; or the fair market value; whichever is less , as determined by the City Manager (refer to Attachment 2 for a sample calculation)-. (b) The sales price of a restricted unit may be increased beyond the amount permitted in Section 8 . 16 . 100(a) by the value of any substantial structural or permanent fixed improvements which cannot be removed without substantial damage to the premises or substantial or total loss of value of said improvements . No such adjustment shall be made except for improvements made or installed by the selling Owner. No improvements shall be deemed substantial unless the actual initial cost for each improvement to the Owner exceeds $1, 000, except where \dbo10-10 -7- the expenditure was made pursuant to a mandatory assessment levied by the Homeowners ' Association for the development in which the Premises is located, whether levied for improvements or maintenance to the Premises, the common area, or related purposes . The minimum expenditure amount necessary to be deemed substantial shall be adjusted by resolution annually by the City Council based on the percentage increase of that portion of the San Francisco/Oakland/San Jose Consumer Price Index as published monthly by the U. S . Department of Labor relating to those costs related to housing and housing expenses . Substantial structural or permanent fixed improvements would include, but not be limited to, a new roof, new siding for the house, recarpeting the entire house to upgrade the carpeting, a room addition, resurfacing the exterior of the house, repainting the exterior of the house, installation of an irrigation system and installation of a permanent pool or spa in the ground. Such an improvement would not include landscaping, interior repairs, new appliances, interior painting or carpeting one room of the house. No adjustments shall be made for the value of any improvements unless the Owner shall present to the City valid written documentation of the cost of said improvements . The value of such improvements by which the sale price shall be adjusted shall be determined as follows : The value of any substantial structural or permanent fixed improvements shall be the appraised market value of the improvement when considered as an addition or fixture to the premises ( i .e. , the amount by which said improvement enhances the market value of the premises ) at the time of sale. Said value shall be determined by means of an appraisal obtained by the City Manager and paid for by the owner. If the owner objects to the value as determined by the City Manager, the owner may request the City to obtain an appraisal of the property by another qualified real estate appraiser mutually agreed upon by the City and the owner, which appraisal will be considered by the City in determining the value of the improvements . All costs required to obtain such appraisal shall be borne by the owner. (c) A for-sale restricted unit may appreciate from improvements made pursuant to Section 8 . 16 . 100(b) only to the upper limit of affordability for the income group to which the restricted unit was assigned. The determination of affordability shall be based on the maximum monthly mortgage payment that a household in a given income category can pay, less 100%, based on -the median income for the household and the payment of no more than 30% of gross income for mortgage payments . Any appreciation above that point will not be added to the sales price of the restricted unit. (d) The City Manager shall be responsible for monitoring the resale of restricted units . (e) The following transfers of title or any interest therein are not subject to the provisions of this section: transfers by gift, \dbo10-10 -8- devise or inheritance to the purchaser-owner' s spouse or off-spring; transfers of title to a spouse as part of a divorce or dissolution proceeding; acquisition of title or interest therein in conjunction with marriage; provided, however, that the Affordable Housing Agreement required by Section 8 . 16 . 070(c) shall continue to run with the land following such transfers . Section 8 . 16 . 110 . Application Procedure. (a) An applicant may submit to the Planning Department a preliminary proposal for the development of housing pursuant to this chapter prior to the submittal of any formal project application. The City shall, within 90 days of receipt of a preliminary proposal, provide the applicant in writing, comments and preliminary evaluation of the project . The preliminary proposal is not an application for purposes of the Permit Streamlining Act deadlines, and any comments or preliminary evaluations do not bind future City actions . (b) Formal application shall be according to the review process stated in the City of Dublin Municipal Code or zoning Ordinance ( for the particular application being filed) and shall provide the following additional information: 1 . A written statement specifying the desired density increase, incentive requested and the number, type, location, size and construction scheduling of all dwelling units . 2 . A project financial report (pro forma) , if required pursuant to Section 8 . 16 . 070 ( f) . 3 . Any other information requested by the Planning Director to implement this Chapter. Section 8 . 16 . 120 . Conflict of Interest. Following are those persons who, by virtue of their position or relationship, are found to be ineligible to purchase or rent a restricted unit as their residence: (a) All employees and officials of the City of Dublin who have, by the authority of their position, policy making authority or influence affecting City housing programs . (b) The Applicant or Project Owner. Section 8 . 16 . 130 . Violations . (a) It shall be unlawful for any person, firm, corporation, partnership or other entity to violate any provision or to fail to comply with any of the requirements of this Chapter. A violation of any of the provisions or failing 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 \dbo10-10 -9- discretion of the enforcing authority, be charged and prosecuted as an infraction. (b) Any person convicted of an infraction under the provisions of this Code, unless provision is otherwise herein made, shall be punishable as provided by the Government Code of the State of California . Section 8 . 16 . 140 . Enforcement. (a) The provisions of this Chapter shall apply to ,all agents, successors and assigns of an applicant. No building permit or occupancy permit shall be issued, nor any development approval be granted which does not meet the requirements of this Chapter. The City Manager may suspend or revoke any building permit or approval upon finding a violation of any provision of this chapter. (b) The City Manager is designated to be the enforcing authority. (c) In the event it is determined that rents in excess of those allowed by operation of this Chapter have been charged to a tenant residing in a restricted rental unit, the City may take the appropriate legal action to recover, and the project owner shall be obligated to pay to the tenant or to the City in the event the tenant cannot be located, any excess rents charged. Section 8 . 16 . 150 . Appeals . Any person aggrieved by any action or determination of the City Manager under this ordinance may appeal such action or determination to the City Council in the manner provided in Section 1 . 04 . 050 of the Municipal Code. " Section 2 . 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 3 . Effective date and posting of Ordinance. This Ordinance shall take effect and be in force thirty ( 30) days from and after the date of its passage. The City Clerk of the City of Dublin shall cause this Ordinance to be posted in at least three ( 3) public places in the City of Dublin in accordance with Section 36933 of the Government Code of the State of California. \dbo10-10 -10- PASSED AND ADOPTED by the City Council of the City of Dublin on this day of 1991 . AYES : NOES : ABSENT: Mayor ATTEST: City Clerk \dbo10-10 -11- ATTACHMENT 1 City of Dublin Density Bonus Calculation (Example for Illustrative Purposes Only) Land Use Designation and Zoning Residential : Multifamily Permitted Density: 18 du/ac Property Size : 4 acres Maximum Units at Permitted Density 72 units Units Affordable to Target Households (20o for lower-income HH' s ) ( 72 x . 20 = 14 . 4 ) ; round up 15 units (restricted units ) Density Bonus Units (at 30% ) ( 72 x . 3 = 21 . 6 ) ; round up 22 units Total Project Units with 30% Density Bonus : 72 base units + 22 density bonus units 94 total units ( 79 units at market rate, 15 restricted units with restricted rents/sales prices) /hsngord2 ATTACHMENT 2 City of Dublin Resale Price Calculation for Density Bonus Units (Example for Illustrative Purposes Only) I . The example assumes : A. Original Sales Price of Density Bonus Unit = $175, 000 B. Period Owned = 5 years C . Percentage increase in the Bay Area Consumer Price Index over five year period = 15% D. Percentage increase in the Alameda County Median Income over five year period = 6% E . Fair Market Value of the unit = $200, 000 II . Purchase Price plus a Percentage Increase based upon the Percentage Increase in the San Francisco/Oakland/San Jose Consumer Price Index = $175,000 x . 15 = $26 ,250 + $175, 000 = $201,250 III . Purchase Price plus a Percentage Increase consistent with the Percentage Increase in the Median Income for a family of four for Alameda County, as adjusted for household size = $175, 000 x . 06 = $10, 500 + $175, 000 = $185,500 IV. Fair Market Value = $200, 000 V. Allowable Sales Price (whichever amount is less) _ $185,500 /hsngord2