HomeMy WebLinkAbout6.2 Density Bonus Ordinance CITY OF DUBLIN
AGENDA STATEMENT !
CITY COUNCIL MEETING DATE: October 28, 1991
SUBJECT: Public Hearing: Density Bonus Ordinance
REPORT PREPARED BY: Dennis Carrington, Senior Planner
IRobert Schubert, Contract Planner
EXHIBITS ATTACHED: Exhibit A: Draft Density Bonus Ordinance
Exhibit B: Letter dated October 16, 1991, from
the Building Industry Association
Exhibit C: Memorandum dated October 23, 1991,
from City Attorney
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
5A) Waive second reading and adopt the Density
Bonus Ordinance as reintroduced; or
5B) Waive reading and reintroduce the Density
Bonus Ordinance
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.
An undetermined amount of Staff time will be required to maintain
eligibility lists . The Dublin Housing Authority has experience in
maintaining eligibility lists .
DESCRIPTION:
On October 10, 1991, the City Council reintroduced the Density Bonus
Ordinance. At that meeting the City Council directed Staff to revise the
Density Bonus Ordinance as follows :
1 . Delete Section 8 . 16 . 030 (b) "Amenities" .
2 . Amend Section 8 . 16 . 080 (d) to make the City responsible for obtaining
and verifying information with respect to the qualifications of prospective
and current tenants and for maintaining a list of qualified applicants .
3 . Amend Section 8 . 16 . 100(e) to delete the provision of transfer of title
or interest by "gift" .
Staff has modified two sections of the ordinance in order to make them
consistent with the above changes :
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COPIES TO: Agenda/General File
ITEM N0. Density Bonus File
CITY CLERK
FILE O
1 . Section 8 . 16 .030(k) (as re-lettered) was modified to delete
language relating to the reduction of interior amenities for
restricted units.
2 . Section 8. 16 . 100(e) was modified to also delete the words
"devise or" as they were not needed when the word "gift" was deleted.
At the meeting of October 10 , 1991 , individuals representing the
building industry spoke about several issues including:
1 . The means of determining the price received by the seller of
a restricted affordable unit.
2 . The use of a transfer or severance tax to buy down the cost
of a restricted ownership unit which has appreciated beyond the
affordability of the income group to which it was assigned.
The City Council directed that Staff consider these suggestions
in preparing this staff report. Staff has prepared a brief analysis
of each issue and provided alternatives for the City Council to
consider:
1 . The means of determining the price received by the seller of
a restricted affordable unit.
Section 8 . 16.100(a) would limit the price received by the seller
of a restricted affordable unit to the purchase price plus a
percentage increase based on the percentage increase in the Consumer
Price Index; or the purchase price plus a percentage increase for a
family of four consistent with the increase in the median income for
Alameda County; or fair market value; whichever is less, as determined
by the City Manager. Members of the building community asserted that
this method would not allow the seller a fair return on investment.
As mentioned in a previous staff report, the density bonus concept has
conflicting goals, namely the provision of affordable housing for ten
or thirty years, and the provision for a return on investment in one's
home.
Alternative A: If the City Council wishes to insure the maximum
affordability of the restricted units, Staff recommends that the City
Council leave Section 8 . 16 . 100(a) in the Ordinance. Waiving a second
reading and adopting the Density Bonus Ordinance would accomplish
this.
Alternative B: If the City Council wishes to pursue an
alternative method of allowing a return on investment and still
maintain affordability of restricted units, Staff recommends that the
following language be substituted for the existing Section
8 . 16 . 100(a) : "The sales price received by the owner of a -restricted
Affordable Unit shall be limited to the fair market value as
determined by an appraisal paid for by the owner multiplied times a
factor representing the purchase price paid by the owner of the
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restricted unit divided by the market sales price of an identical unit
in the same development at the time of purchase. An example of this
calculation is shown in Attachment 3 . If the appraisal is
unacceptable to the City Manager, the City Manager may have another
appraisal performed 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 sales price. All costs
required to obtain such appraisal shall be borne by the owner.
The City Manager shall insure that the purchase price of a
restricted unit does not exceed an amount which is affordable to a
family of four belonging to the income category to which the
restricted unit was originally assigned. " Waiving reading and
reintroducing the Density Bonus Ordinance would allow this change to
be made to the ordinance.
2 . The use of a transfer or severance tax to buy down the price
of a restricted ownership unit which has appreciated beyond the
affordability of the income group to which it was assigned.
Section 8 .16.100(c) allows the appreciation of a for-sale
restricted unit to appreciate from improvements made pursuant to
Section 8 . 16 . 100(b) to only the upper limit of affordability for the
income group to which the restricted unit was assigned. Individuals
representing the building industry have proposed that a transfer tax
be applied to the sale of real property within the City of Dublin, the
proceeds of which would be applied to the provision of affordable
housing. This would include the buying down of the price of a
restricted ownership unit which has appreciated beyond the
affordability of the income group to which it was assigned. The City
Attorney is investigating the use of a Transfer Tax to provide
affordable housing and will make a report to the City Council.
Alternative A. Leave Section 8 . 16 . 100(c) in the ordinance as
currently shown. Waiving second reading and adopting the Density
Bonus Ordinance would accomplish this.
Alternative B. Staff recommends that the City Council leave
Section 8 . 16 . 100(c) in the ordinance with the second sentence reworded
as follows: "The determination of affordability shall be based on the
maximum monthly mortgage payment that a household of four in a given
income category can pay as determined by the methodology shown in
Attachment 3 . Waiving reading and reintroducing the Density Bonus
Ordinance would accomplish this.
Alternative C. Direct staff to investigate the .use of a transfer
tax for use in buying down the price of restricted ownership units
which have appreciated beyond the affordability of the income group to
which they have been assigned.
Staff recommends that the City Council either waive second
reading and adopt the Density Bonus Ordinance as re-introduced OR
waive reading and re-introduce the Density Bonus Ordinance.
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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
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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, 30% 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.
A.
(b) 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.
(c) 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.
(d) City: The City of Dublin or its designee or any entity with
which the City contracts to administer this chapter.
(e) 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 .
( f) Density Bonus Unit: A dwelling unit authorized as a result
of the density bonus for a project.
(g) 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.
(h) 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 .
( i) First Time Home Buyer: A person who has not held an
ownership interest in a residence within the past three years .
( j ) 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.
(k) Incentive: A benefit offered by the City to facilitate
construction of housing projects which include restricted units .
Among others , benefits may include fee waivers for restricted units
and priority processing for projects which provide restricted units .
( 1) 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 .
(m) 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.
(n) Property Owner: The owner of a restricted unit excepting a
"Project Owner" .
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(o) 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.
(p) 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 .
(q) Restricted Unit: A unit to be sold or rented to senior
citizens , or, at a price affordable to lower and very low income
households .
(r) Senior Citizen: A person at least 62 years of age.
( s) Unit Type: Dwelling units with similar floor area and
number of bedrooms .
(t) 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
18901) of Division 13 of the Health and Safety Code, including, but
not limited to, a reduction in setback and square footage requirements
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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 Yorks
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.
Section 8 . 16 . 070 . General Requirements .
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(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 fallowing
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 .
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(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 City 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. The City shall maintain a
list of qualified applicants for the duration of the program.
(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
income limits for a lower income household. Very low income
households may only sell the unit to a household which meets the
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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
the expenditure was made pursuant to a mandatory assessment levied by
the Homeowners ' Association for the development in which the Premises
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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 annua:lly by the City Council based on the
percentage increase of that iportion 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
inheritance to the purchaser-owner' s spouse or off-spring; transfers
of title to a spouse as part of a divorce or dissolution proceeding;
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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
discretion of the enforcing authority, be charged and prosecuted as an
infraction.
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(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.
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PASSED AND ADOPTED by the City Council of the City of Dublin on
this day of 1991 .
AYES :
NOES :
ABSENT:
Mayor
ATTEST:
City Clerk
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ATTACHMENT 1
City of Dublin Density Bonus Calculation
(Example for Illustrative Purposes Only)
Land Use Designation
Residential : Multifamily
and Zoning
Permitted Density: 18 du/ac.
Property Size : 4 acres
Maximum Units at
Permitted Density 72 units
Units Affordable to
Target Households ( 20% 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 ) ' 22 units
round up
Total Project Units with 72 base units
30% Density Bonus :
+ 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
ATTACHMENT 3
The maximum price of a restricted ownership unit affordable to a
low income household with femur members in Alameda County is $114 ,897 ,
and the maximum price of a jr,estricted ownership unit affordable to a
very-low income household with four members in Alameda County is
$71 ,811 , based upon the following method for determining maximum
affordable housing costs:
LOW INCOME
a. Low income definition x(80% of Alameda County's median income for
a household with four members) _ $37,450.
b. $37 ,450 is the income to be used in determining maximum
affordable price.
C. $37 ,450 - 12 X . 3 = $936, maximum monthly mortgage payment
which does not exceed 30% of gross income (property taxes, utilities
and insurance not included) .
d. $936 payment at 10. 25% fixed rate, 30 year term and 10% down
payment = $114 ,897 mortgage, using a standard mortgage payment table.
VERY LOW INCOME
a. Very low income definition (50% of Alameda County's median income
for a household with four members) _ $23 ,400 .
b. $23 , 400 is the income to be used in determining maximum
affordable price.
C. $23 , 400 _ 12 X . 3 = $585, maximum monthly mortgage payment
which does not exceed 30% of gross income (property taxes, utilities
and insurance not included) .
d. $585 payment at 10 . 25% fixed rate, 30 year term and 10% down
payment = $71 ,811 mortgage, using a standard mortgage payment table
Where the purchase price of a restricted unit assigned to the Low
Income category is $114 ,897 in 1991 and the market sales price of an
identical unit in the same development in 1991 is $150,000 , the factor
to be used to multiply times a future market price to determine the
maximum price affordable to a household of four in the Low Income
group is 114 ,897 - 150 ,000 or .766. If the market sales price of the
restricted unit in 1996 is $193 ,500, the maximum sales price of the
restricted unit is $193 , 500 X .766 or $148 , 221 .
Example of Adjustment to Sales Price of
Ownership Restricted Unit:
Sales Price as determined
by Section 8 . 16 . 100 (a) $100, 000
Value of qualified improvements
for which written documentation
is provided as appraised
New Roof $ 8,200
Irrigation System 1, 150
Restuccoing of entire home 3, 700
Permanent spa in ground 4 , 650
$117 , 700
/hsngord2
OCT-16-91 WLa lb: j;) b1H NHLNL I Ut=L easTer(1 1 1111 IYV, JLVVVV
CA11ro
v EASTERN DIVISION
BUILDING INDUSTRY ASSOCIATION
1280 BOULEVARD WAY =211. WALNUT CREEK. CA, 94595
BUILDIN6 INDUSTRY ASSOCIATION (415) 93;_-8�84 FAX (4151 9:32-c-18',)19
Memorandum Via Fax
To: City of Dublin Mayor and Council
From: Mark Stechbart
Date: October 16 , 1991
Re: written comments on density bonus ordinance; affordable housing
concepts.
I would like to recap my remarks from the October 10 Council
hearina. Several homebuildexs have met subsequently with Dennis
Carrington and refined some concepts .
1 . The City needs to develop an income stream to subsidize
affordable housing. A severance or transfer tax would give the City
a reasonably steady income stream, keep the funds coming after
build-out (when fees upon new units would stop) and the cash flow
would have a built-in escalator based on normally increasing market
value, CPI and the like. Additionally, when economic conditions
depress new home construction and sales, resales continue.
Our proposal is for a back-end severance tax to replace the front-
end fee. The severance tax could be a small fraction of 1% of the
sales price, payable thorough escrow. The tax could be assessed
upon the entire City or to only East and West Dublin through the
annexation process.
2 . The City or its contractor (Housing Authority, etc, ) should be
solely responsible for establishing all eligibility requirements,
review applications, verify data, etc. city-wide for all projects .
Homebuilders should not establish lists project-by-project.
Presumably an applicant would have to Make multiple applications
to cover all possible sources of housing. 00
One stop applications are preferable. Privacy considerations are
safeguarded. Matching applicants with units would be more "
efficient.
3 . Staff should have the flexibility to allow changes in the
affordable floor plan mix beyond a precise percentage of the total
mix. The City's inventory of people applying for affordable housing
HEADQUARTERS WEST BAY — SOUTHERN NORTHERN
REGIONAL OFFICES: (415) 820-7623 (415) 64.90c:8 (707)
San Ramon Redwood Cit;: San Jose Rohnert Park.
Ae:_:A TFn W l l`r NAT:firr<•. C..e/<"JE a1.�I�r•.c RCS 4'.I_i�.11.1e=Q�:i♦FI�1�_i:i Nl:'11C.iUlG A�i�1i,,AT1(:P1
UIiI-t�-�1 VJr_U 10 33 D11-1 wnL11W1 VltL�ua �a �
may find their housing needs do not precisely match the
predetermined floor plan mix and an adjustment should be made.
4 . The affordability lock-in from 10 to 30 years should have a
couple of intermediate stages at 15 or 20 years with appropriate
inducements .
5. In Section 8 . 16. 070 (b) , I am assuming a "Dublin employee',
preference means people who work in Dublin for all employers, not
Just City employees .
6 . Owners of affordable units should be able to take a percentage
of equity out of their property upon resale. To prohibit buyers of
affordable housing to only recover their down payment at around a
passbook savings rate of accrued interest added to it keeps them
in a gilded cage. They will never be able to live in anything other
than affordable units .
7 . The back-end transfer tax creates an affordable housing fund
that would allow the market, the buyer and the City to address
affordability with a minimum of management.
The City maintains the eligibility list. The transfer tax creates
a fund. The City can go out and build units directly, with a non-
profit or as part of the PD/PUD process with a private builder. The
density bonus can have a role.
The City Affordable Housing Fund can also issue grants to a family
seeking shelter, secured by normal contractual or title
restrictions , and that family can then rent or buy a market based
(but now subsidized) unit. The grant, silent second, etc. expires
at a set time or upon the sale of the unit. The Fund recovers its
loan plus accrued equity share and that revolves. The selling
family, once the recipient of affordable housing funds, retains
their share of equity based on their market rate sale and moves on
to other shelter.
In many cases, this scenario works best. There are no arguments
over the home improvements or the value of volunteer labor. Equity
is shared and people can move out of the loop, Market based units
can be used, based on subsidies from the Fund: Pride' of ownership
is created because equity is created.
MEY'ERS, NAVE, T{IBACIC & WEST
MICHAEL R.NAVE A PROFESSIONAL LAW CORPORATION PENINSULA OFFICE
STEVEN R.MEYERS 1220 HOWARD AVE.,SUITE 250
NATALIE E.WEST GATEWAY PLAZA
777 DAVIS STREET,SUITE 300 TELEPHONE:CA 91010.130
ELIZABETH H.SILVER TELEPHONE:(415)9/A•T1�0
MICHAEL S.RIBACK SAN LEANDRO,CALIFORNIA 94577 FACSIMILE:(415)332•0686
MOLLY T.TAMI TELEPHONE:(510)351.4300
MICHAEL F.RODRIOUEZ FACSIMILE:(510)351-4481 MARIN OFFICE
KATHLEEN FALIBION
FREDERICK 5,ETHERIDGE MEMORANDUM N CA,202 ARANT SUITE E
OVATO,DA 93045
WENDY A.ROBERTS
TELEPHONE:(415)892•8818
DAVID W.SKINNER
REPLY TO:
OF COUNSEL
ANDREA J.SALTZMAN San Leandro
T0; Dennis Carrington DATES October 23 , 1991
Senior Planner
FROXI Elizabeth H. Silver
city Attorney
REt proposed Density Bonus and Incslusionary Houas►ing
ordinanoes
in your discussions with representatives of the Building
Industry Association (BIA) regarding the proposed density bonus
ordinance and the proposed inclusionary housing ordinance "in lieu"
fee, there have been suggestions that the City should impose a tax
on the sale of all property in the city in order to assist in
constructing low and moderate income housing, rather than relying
exclusively on the requirements of the inclusionaxy housing
ordinance and the "in lieu" fee proposed for funds to construct low
and moderate income housing. The proposed tax has been referred
to by the BIA as a "severance tax" or transfer tax. "
I am not familiar with the term "severance tax" and can find
no reference to such a tax, and will, thus, assume that a transfer
tax is meant. I have summarized below the current state of the law
with respect to the city' s ability to impose "transfer taxes" .
�enera,i Taxes
A general law city may impose a "general" tax without voter
approval.
A general tax is a levy, the funds of which are placed in the
general fund to be utilized for general governmental purposes.
(City and rr,,,ni-y of San Franca sco y. Farre-1 (1982) 32 cal. 3d 47 ,
53 , 184 cal.Rptr. 713 , 718. )
As such, a "general" tax is .
distinguished from a a ,special"" fund;for which the funds are ear-
marked or placed special
HIBEX9
T0: Dennis Carrington
FROM: Elizabeth H. Silver
RE: Taxi
DATE; ootobar 23, 1991
PAGE: 2
Although Proposition 62 , enacted in 1986, attempted to require
a majority vote of approval of all general taxers, the Court of
Appeal in Vo of W�d�ake v. L4aan (1991) 230 Cal.App.3d 1058 , 282
Aa1.Rptr. 27, held that these provisions of Proposition 62 were
invalid. In Woadlake, the city had adopted a utility tax on
electrical power, gas, telephone and cable television
as required
without submitting the tax to the voters for app
by Government Code section 53723 and 53724 , which were enacted as
part of Proposition 62 . The Court held that these provisions
conflict with the constitutional restrictions against allowing a
referendum on a tax measure. The California Supreme Court recently
refused to review the 1Vaodlake case and that case is now final.
spe i $1 TaXea
A special tax, that is, a tax which is ,collected
ear-
marked for a special purpose, rather than being deposited
general fund. " (C d County of San Franci
sco v Farrel, sIU=
32 Cal. 3d at 53) , requires approval of two-thirds of the voters.
Proposition 62 also imposed a requirement that all special
taxers be approved by a two-thirds vote of the voters.
Code section 53722 . )Proposition 13 two-third
(cal hiCon tit•, requirement s ticle XIIIA, section
required by
4) , and, thus is constitutional.
While a '1special tax" requires two-thirds voter approval., a
charge that is ear-marked for a special purpose does not require
any voter approval as long as the charge "does not exceed the
reasonable cost of providing the service or regulatory activity for
which the fee is charged" (Gov. Code g 50076) or is 'reasonably
commensurate with the cost of the regulatory activity. fGQu tntvoQf
at whose instance the activity is conducted ( -
TrjjLtt�4 (1980) 108 Cal.App. 3d 656, 663 , 166 Cal.Rptr. 674) . Thus,
the in lieu fee proposed for construction of low and moderate .
income housing would not be a special tax but a fee.
Real Procarty Trans er Taxes
The City of Dublin is a general law city. The Documentary
Transfer Tax Act (Revenue & Taxation Code SS 11901 9-t M• )
provides authority for a general law city to enact a documentary
transfer tax, The Act provides that a county may adopt an
TU' Dennis Carrington
YRgM= Elizabeth H. Silver
R$s T&X*N
DATE: ootober 23, 1991 ;
PAGE: 3
ordinance imposing a tax of the sales price on any at the rate of $0.55 for each
transfer of
fractional part thereof
Rev. & Tax. Cade � 11911 (x) • ) A city within a county
property. ( impose a documentary
which has enacted such an ordinance may also imp tax, and a
transfer tax in the amount on amount aof the county tax if the Code
credit is allowed again' with the Act. (Rev. & Tax.
ordinance is in conformity The county A llectis all taxes imposed
SS 11911 (b) and (c) , 11931• )
pursuant to the Act and shall allocate them ordinance a conforms to the
and one-half to the city, if th (2)• ) The City of Dublin has
Act (Rev. & Tax. Code §
enacted a documentary transfer tax pursua nt to the Act andrica�
receives one-half or 27 .5 cents for each$ 500 of the sales p
(Dublin Municipal Code, P ter
This documentary transfer tax anthat the City beyorescnd ot be
statutory amount, but it is Possible
this transfer tax and enact a different type of transfer tax at a
higher rate or enact an additional with the County for collectionnaf
the City would have to contract
the tax.
neral law or charter, should be able to
A city, whether ge
to tar Transfer Act. (," @ Gov. Code
enact a transfer tax under n to independent power of Gov.taxation
without relying on the Doc 1955) 162 Cal.App.3d 440, 2
37100. 5; °„i-ntt y• Dplan4 ( which provides
Cal.Rptr. 486; tie;lac Rev. & Tax. Code 1193y transfer taxes
for the division of and credits for documentary : "All money
under the Act and which provides in s i isiO located
a city which
which relates to transfers of real property r property not in conformity with
imposes a tax on transfers of real p ain't the county tax and the
11 not be this Part amours a collected by edited against
entire the county shall be allocated entirely
n
• to the county.")
It is not clear, however, whether Proposition 3twogthirds
the power of a city to enact a transfer tax or requires f the California
voter approval aosf snactedtby.PrapositionT 13 provides'
Constitution,
i
TO: Dennis Carrington
FROM= Elizabeth H. silver
Rat TaRe•
DATE: October 23, 1991
PAGE: 4
oiCitiesi, counties and special districts, by a two-thirds
vote of the qualified electors of such district, may
impose spacial taxes on such� ransaation taxp4 ss�l valorem
�s--
taxes on real property
or1 the ae►1� �� real prQCOrtY within such city, vounty or ;
special district. (Emphasis added. )
(1990) 223 Cal.App. 3d 261, 272 Ca1.Rptr.
Yn Appeal held that Axticle XIIIA,
t.
714 , the Firs District Court of
lied to apeeigl taxes. Thus, it held the City of
a
S 4 only pp property transfer tax without a
Oakland could increase its real (romp Oakland' s tax was applied to
two-thirds vote because the levy from tax.
the general fund and was not a special
In summary, a general law city, such as Dublin, should be
to impose a new transfer tax without a two-thirds, or any, vote
only if the City does noearamarked for funds for low and
special purpose,noaetwoe
housing. If funds are
thirds vote would be required.
Very truly yours,
MBE'YERS, NAVE, RI�DACK & WEST
Elizabeth 2i. silver
cc: City Manager
Planning Director
114\M6"\t axes.*he