HomeMy WebLinkAbout07 - Amendment to Title 19 SubdivisionsCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 1
November 24, 2009
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Planning Department
David Lepo, Planning Director
949 - 644 -3200, dlepo @newportbeachca.gov
Jaime Murillo, Associate Planner
949 - 644 -3209, imurilio()newportbeachca.aov
Makana Nova, Assistant Planner
(949) 644 -3249, mnova(cDnewportbeachca qov
SUBJECT: AMENDMENT TO TITLE 19, "SUBDIVISIONS ", OF THE NEWPORT
BEACH MUNICIPAL CODE, CODE AMENDMENT NO. CA2009 -003
AND ADOPTION OF IN -LIEU HOUSING FEE (PA2009 -087)
ISSUE:
Should the City Council adopt an ordinance amending Title 19 of the Newport Beach
Municipal Code?
RECOMMENDATION:
1. Introduce Ordinance No. 2009 - and conduct first reading by title only of the
proposed revisions to Title 19, "Subdivisions ", of the Newport Beach Municipal
Code (Attachment No. CC 1).
2. Adopt Resolution No. 2009 - setting the amount of the in -lieu housing fee at
$18,500 per market -rate unit and establishing an annual adjustment to the fee
(Attachment No. CC 3).
BACKGROUND:
The attached ordinance includes revisions to Title 19 of the Newport Beach Municipal
Code that were initiated to simplify procedures for review and approval of lot mergers, to
remove provisions related to required (involuntary) lot mergers, and to bring the
Municipal Code into compliance with the California Subdivision Map Act. Other revisions
Title 19 Amendment
November 24, 2009
Page 2
include a new chapter implementing Housing Program 2.2.1 of the City's Housing
Element related to inclusionary housing regulations. The new chapter will be titled,
"Chapter 19.54 (Inclusionary Housing) ", as shown in the attached ordinance
(Attachment Nos. CC 1).
Title 19 Amendments:
At its study session meeting on August 11, 2009, the City Council asked for additional
information with regard to the proposed lot line adjustment provisions as they apply to
the re- orientation of lots; and information on the reverse corner requirements of the
Zoning Code. The original staff report of August 11, 2009 is attached for the Council's
information (Attachment No. CC 4).
At its study session meeting on October 13, 2009, the Planning Department staffs
power point presentation to the City Council addressed the questions and provided
additional information requested with regard to the proposed lot line adjustment
provisions, as they apply to the re- orientation of lots. Also included in the presentation
was information on the reverse corner lot requirements of the Zoning Code, and
foreseeable impacts on vehicular access and vehicular maneuverability in and through
the alley by resident and service vehicles.
The direction received was to not allow reorientation of lots by an administrative
procedure, but that a public hearing process would be necessary to address issues and
impacts related to the reorientation of the lots. Those issues include, but are not limited
to, vehicular access, vehicular maneuverability through alleys, and new curb cuts that
may result from the request.
Inclusionary Housing Amendment
Housing Program 2.2.1 of the City's Housing Element requires an average of 15 percent
of the units in a new residential development be affordable to persons of very low -, low -,
or moderate - income, or that an equivalent in -lieu fee be paid. This program was
originally adopted to assist the City in achieving units to fulfill the "fair share"
requirement imposed by the Regional Housing Needs Assessment (RHNA) developed
by the Southern California Association of Governments. Housing Program 2.2.1 reads
as follows:
Require a proportion of affordable housing in new residential developments or levy an in -lieu fee.
The City's goal over the five -year planning period is for an average of 15 percent of all new
housing units to be affordable to very low—, low -, and moderate - income households. The City
shall either (a) require the payment of an in -lieu fee, or (b) require the preparation of an
Affordable Housing Implementation Plan (AHIP) that specifies how the development will meet the
City's affordable housing goal, depending on the following criteria for project size:
1. Projects of 50 or fewer units shall have the option of preparing an AHIP or paying the in-
lieu fee.
Title 19 Amendment
November 24, 2009
Page 3
2. Projects where more than 50 units are proposed shall be required to prepare an AHIF
Implementation of this program will occur in conjunction with City approval of any residential
discretionary permits or Tentative Tract Maps. To insure compliance with the 15 percent
affordability requirements, the City will include conditions in the approval of discretionary permits
and Tentative Tract Maps to require ongoing monitoring of those projects. (imp 2.1)
In the past, in -lieu housing fees paid to fulfill inclusionary housing program requirements
have been in an amount negotiated with each developer. In an effort to provide an
equitable in -lieu fee option to residential developers, the City has retained the services
of a consultant, Keyser Marston Associates (KMA), to analyze and provide
recommendations on the fees a residential developer should have to pay in lieu of
providing affordable housing units (Attachment No. CC 5).
Concurrent with the development of an in -lieu fee, the City must adopt an inclusionary
housing ordinance to provide a legal justification for requiring in -lieu fees and
procedures for the implementation of Housing Program 2.2.1. Although Housing
Program 2.2.1 is specific with regard to the criteria for when an in -lieu fee may be paid,
the Housing Program is relatively vague and provides no direction to staff or to
developers with regard to what an Affordable Housing Implementation Program entails,
methods for satisfying the affordability requirement, the specific criteria for the
affordable units, nor how the in -lieu fee shall be calculated. The proposed Chapter
19.54 will provide the specific requirements necessary to properly implement the
Housing Program.
PROPOSED AMENDMENTS TO TITLE 19:
Substantive, proposed revisions to Title 19 are summarized below
Procedures
The review process for tentative parcel maps, lot line adjustments, and lot mergers has
been updated to indicate that these applications will be reviewed by the Zoning
Administrator rather than the Modifications Committee. The Modifications Committee
was removed from the Zoning Code and their duties were assigned to the Zoning
Administrator in 2004.
In Section 19.04.050, the text will be revised to specify the advisory agency and appeal
authority for each subdivision application. Previously, this section only specified the
review authorities for tentative parcel maps and tentative tract maps. Review authorities
have now been identified for lot line adjustments and lot mergers as well.
The appeal process for tentative maps, lot mergers, and lot line adjustments will be
revised to provide a 10 -day appeal and decision process to be consistent with the
requirements of the Subdivision Map Act.
Title 19 Amendment
November 24, 2009
Page 4
Language
Changes are proposed to correct minor language and grammatical errors throughout
Title 19. References to sections of the Subdivision Map Act will be changed to refer to
specific Government Code sections. References to the Subdivision Code will be
changed to "Title 19 of the Municipal Code ".
Tentative Parcel Mans
The appeal process for tentative parcel maps will be revised to consolidate the outdated
"call for review" provisions into the appeal procedures. This provides consistency with
current Planning Department procedures and other discretionary application review
processes. A filing fee requirement will be added to the tentative parcel map appeal
process. Filing fees for appeals are established by City Council resolution.
The criteria for a parcel map waiver in Section 19.08.030 will be adjusted to allow for the
elimination of up to three parcels under this process. Previously, the criteria only
allowed for the elimination of one parcel under a parcel map waiver. Requirements for
consistency with the Local Coastal Plan and any applicable Specific Plan were added to
the required findings for approval of a parcel map waiver.
Condominium Conversions
In addition to general language and procedural amendments, Section 19.64.030, which
specifies the review procedures for condominium conversion applications, will be
amended to include review of nonresidential condominium conversion applications.
Lot Mergers
Under previous staff procedures, lot merger applications were processed through a
waiver of concurrent parcel map as a lot line adjustment application when no more than
one parcel was eliminated per Section 19.68.060 (D). Chapter 19.68 for merger of
contiguous lots will be amended so that lot mergers will be a process distinct from that
for lot line adjustments. The revised lot merger process allows for review of lot mergers
by the Zoning Administrator.
Procedures for required (involuntary) lot mergers will be removed from Title 19. These
regulations reflected provisions of the Subdivision Map Act that allow cities to require
that nonconforming lots be merged even if no development permit application for such
lots has been submitted.
Code provisions relating to project valuation and demolition permits that previously
triggered the lot merger process will be revised and added to new Section 19.04.035, to
Title 19 Amendment
November 24, 2009
Page 5
require an instrument of recordation to combine contiguous parcels in order to construct
a new principal or accessory structure that crosses an underlying legal lot line. With this
revision, project applicants are given the option to address this requirement through any
of the applicable subdivision applications specified in Title 19.
Lot Line Adjustments
Revised Chapter 19.76 for lot line adjustments specifies that a lot line adjustment is a
boundary adjustment between four or fewer lots or parcels with the original number of
parcels remaining unchanged after the adjustment. In order to clarify interpretations that
have arisen on recent lot line adjustment applications, Chapter 19.76 will be revised to
allow the reorientation of existing lot lines between adjacent lots so as to change the
street frontages of such lots subject to discretionary review and an accompanying
application for a zone change to establish appropriate street side setbacks on the
reoriented lot(s). Finally, lot line adjustments will be revised to consolidate existing
findings for approval and add findings regarding reorientation of parcels and legal
access to lots.
PROPOSED CHAPTER 19.54 (INCLUSIONARY HOUSING) & IN -LIEU FEE
Basic Framework of Chapter 19.54
Applicability
Chapter 19.54 will only apply to residential projects for which a parcel map or
subdivision map is proposed (for -sale units). Residential projects proposed as rentals
with no parcel map or subdivision map will not be subject to the inclusionary housing
requirements. This distinction is based on a July 2009, court decision (Palmer /Sixth
Street Properties L.P., et al., v. City of Los Angeles) in which the inclusionary housing
requirements for rental housing by the City of Los Angeles were invalidated. The court
decided that the Costa - Hawkins Rental Housing Act (State law establishing apartment
landlords' rights to set rents as they see fit) trumped the power of local authorities to
require certain rental units to be made available at certain prices.
Staffs research of market -rate rental prices in the City found that a majority of the larger
apartment complexes in the City were affordable to moderate - income households and a
few complexes were affordable to low- income households. Accordingly, the assumption
is that new residential projects proposed as rentals may be affordable to moderate -
income households. Even if the units are not affordable to moderate- income
households, rentals likely will provide more affordable options in the City than
purchasing property.
Title 19 Amendment
November 24, 2009
Page 6
Affordability Requirement
All residential subdivision projects will be required to include the construction of 15-
percent of the total number of dwelling units within a residential subdivision project as
affordable units restricted for occupancy by very low -, low- or moderate - income
households (developer's option). Affordable, for -sale units provided in compliance with
this Chapter will be required to be sold at prices affordable for moderate - income
households. If a subdivision proponent chooses to provide affordable rental units to
comply with the Chapter, the units shall be rented at a rate affordable for very-low or
low- income households. In all cases, the affordable units required by the Chapter shall
be legally restricted to occupancy by, and affordable to, households of the income levels
for which the affordable units were designated for a minimum duration of 30 years.
In order to provide flexibility to developers and reduce the burden that this Chapter may
place on new residential subdivision projects, the following alternatives to the on -site
construction requirements of the Chapter have been included:
1. Off -Site Construction- A developer may propose to construct all or some of the
affordable units required by this Chapter at a location not physically within the
residential subdivision project; however, the units must be located within the City
boundaries.
2. Off -Site Renovation- A developer may propose to renovate and convert existing
off -site units to affordable units in lieu of constructing the affordable units
required by the Chapter. The proposed units shall be subject to the following
requirements:
a. The interiors and exteriors of the units shall be substantially renovated to
improve the livability and aesthetics of the units for the duration of the
affordability period.
b. The units shall be returned to the City's housing supply as decent, safe
and sanitary housing and meet all applicable housing and building code
requirements.
c. The units shall not already be subject to affordability income restrictions
unless such restrictions are set to expire in 3 years or less. In such cases,
the affordability covenant shall provide for 30 years in addition to any
existing covenant time.
It should be noted that the conversion of market -rate units into affordable units as
provided for by this Chapter would not be eligible to fulfill the City's RHNA "fair
share" requirements. State Housing Law does include provisions that would allow
for a portion of the RHNA requirement to be fulfilled through converted units;
however, certain conditions would have to be included in this Chapter that would
Title 19 Amendment
November 24, 2009
Page 7
make this option practically infeasible to implement (i.e., minimum affordability
duration of 55 years, only units committed within first two years of the 5 -year
planning period are eligible, and specific relocation assistance requirements).
Land Dedication - A developer may propose to dedicate land to the City or a City -
designated housing developer for the provision of affordable units in lieu of
constructing some or all of the affordable units required by this Chapter. The
Chapter includes specific site suitability requirements for the proposed land to be
dedicated. In projects where the land dedication option is proposed, the City
Council shall be the final review authority.
4. In -Lieu Housing Fee- For residential subdivision projects consisting of 50 or
fewer dwelling units, the requirements of this Chapter may be satisfied by paying
a fee in lieu of providing the required number of affordable units (on -site and /or
off - site). The in -lieu fee shall be paid for each market -rate unit within the
residential subdivision project and shall be paid prior to the issuance of a Building
Permit. As explained in detail in the In -Lieu Housing Fee Calculation section of
this report, the recommended in -lieu fee per market -rate unit has been calculated
at $18,500.
The payment of an in -lieu fee alone or in combination with the provision of a
portion of the affordable units (on -site and /or off -site) may also be approved for
residential subdivision projects consisting of more than 50 units, through the
approval of an Affordable Housing Implementation Plan.
Affordable Housing Implementation Plan (AHIP)
An Affordable Housing Implementation Plan (AHIP) provides a description of the
residential subdivision and the method of satisfying the affordable housing requirement.
An AHIP shall be processed concurrently with the tentative tract map or parcel map
application and shall be reviewed and approved by the applicable review authority for
such maps. An AHIP is also a means to grant flexibility with regard to satisfying the
affordability requirement of this Chapter in a combination of ways that include one or
more of the following provisions:
• A reduced number of affordable units for projects that include very-low income
units.
• Modification to the minimum 30 year duration requirement for affordable units.
• Project phasing.
• The ability to provide a combination of affordable units on -site and off -site.
• The ability to provide a portion of the affordable units (on -site and/or off -site) in
combination with in lieu fees.
• The ability to pay an in -lieu fee for projects consisting of more than 50 units.
Title 19 Amendment
November 24, 2009
Page 8
Payment of in -lieu housing fees for residential subdivision projects consisting of 50 or
fewer units and consistent with all the provisions of the Chapter, will not require the
processing of an AHIP.
Affordable Housing Agreement
A condition of approval of an AHIP will include the recording of an Affordable Housing
Agreement. This agreement will provide the 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. With respect to rental units, rent
restrictions shall be in the form of a regulatory agreement recorded against the
applicable property. With respect to owner - occupied units, resale controls shall be in the
form of resale restrictions, deeds of trust, and /or other similar documents recorded
against the applicable property.
Affordable Housing Fund
All funds received through the payment of in -lieu housing fees will be required to be
deposited into an Affordable Housing Fund. The Fund shall be used in compliance with
the General Plan Housing Element and this Chapter to construct, rehabilitate, or
subsidize affordable housing or assist other governmental entities, private organizations
or individuals to provide or preserve affordable housing. Specific allowed uses of fund
monies are listed within the Chapter.
Financial Constraints Analvsis
The State Department of Housing and Community Development (HCD) has recently
issued a letter (Attachment No. CC 6) stating that State housing element law is neutral
relative to the enactment of mandatory inclusionary housing provisions; however, HCD
is now requiring local governments to analyze mandatory inclusionary policies as a
potential governmental constraint on housing production when adopting or updating
their housing elements.
In order to determine if the structure of the recommended Inclusionary Housing Chapter
complies with State housing element law, KMA tested the financial burden associated
with the income and affordability restrictions that may be imposed.
For -sale: Moderate Income Affordability Requirement
First, pro forma analyses were calculated to determine the primary financial burden
created by imposing affordable housing requirements on for -sale units (the difference
between the achievable market rate prices and the allowable prices for the income
restricted units). The pro forma analyses results indicate that the requirement to provide
15- percent of the units for moderate income households acts to reduce the supportable
Title 19 Amendment
November 24, 2009
Page 9
land value in the near term by 50- percent. A land value reduction in this range can be
considered an onerous burden that will act as a constraint to residential development.
Rental: Low - Income Affordability Requirement
To mitigate the financial burden, the proposed Inclusionary Housing Chapter provides
the option for developers to fulfill the affordability requirements by constructing rental
units affordable to low- income households. The financial burden associated with
imposing income and affordability restrictions on apartment development is largely
related to the decrease in supportable investment created by achievable rents;
however, the revenue reduction is offset to some degree by the fact that the property
taxes for the income restricted project will be lower than the property taxes for a market
rate project.
Pro forma analyses were then calculated to determine the financial burden created by
imposing affordable housing requirements on rental units affordable to low- income
households. The results of the comparative pro forma analyses indicate that the
proposed inclusionary requirements act to decrease the supportable land value by 10-
percent. This value decrease falls well below the typical range for an inclusionary
housing ordinance.
Conclusions
The results of the for -sale residential pro forma analyses indicate that the proposed
inclusionary housing requirements may impose an onerous burden on developers;
however, the option for developers to fulfill the requirements by providing rental units to
low- income households mitigates the detriment sufficiently to eliminate the constraint to
residential development. Therefore, it can be concluded that the proposed Inclusionary
Housing Chapter does not create an unreasonable constraint on for -sale residential
development. To crosscheck this finding, KMA surveyed over 100 jurisdictions in
California that currently impose inclusionary housing requirements and found that the
proposed Inclusionary Housing Chapter requirements fall within the norm of the
standards imposed by inclusionary housing programs being implemented throughout
the State. It was also noted that the inclusionary housing programs recently adopted in
several California locations have been projected to generate land value reductions in
the 30- percent range.
In -Lieu Housing Fee Calculation
As previously indicated, one of the ways to increase the City's inclusionary housing
requirement flexibility is by allowing the inclusionary housing obligations to be fulfilled
through the payment of an in -lieu housing fee. To establish a recommended in -lieu fee
amount, KMA translated the financial burden generated by the inclusionary
requirements into a per unit fee. Since it has been determined that the proposed
inclusionary housing requirements are supportable and do not create an unreasonable
Title 19 Amendment
November 24, 2009
Page 10
constraint on residential housing development, KMA's methodology implicitly results in a
reasonable in -lieu fee.
The KMA analysis is based on the assumption that developers will choose to fulfill the
inclusionary housing requirements with rental units affordable to low- income households
since this option would generate a substantially smaller financial burden. Thus, the in-
lieu fee analysis was based on a rental housing scenario. Based on the results of the
KMA analysis, the supportable in -lieu fee is equal to $18,500 per market rate for -sale
unit.
In -Lieu Housing Fee Adjustments
KMA has suggested an automatic annual adjustment to the in -lieu housing fee based
upon the annual percentage change in the new home prices in Orange County (from
December to December) as published in Real Estate Research Council report. This will
ensure that the fees keep pace with inflation and the future cost to construct affordable
housing. The following illustrates the annual percentage change in new homes prices in
Orange County over the last 10 years:
I4
-16.2%
mtr;,' 'lip
2003 —2004
c
+19.0%
2007 —2008
2006 —2007
- 13.6%
2002 —2003
+10.1%
2005 —2006
-1.6%
2001 —2002
+10.7%
2004 —2005
+8.7%
2000 —2001
+13.7%
Summary
Staff proposes to delete and replace Chapters 19.68 and 19.76, add Section 19.04.035
and Chapter 19.54, and amend Sections 19.04.050, 19.08.030, 19.12.010, 19.12.050,
19.12.060, and 19.64.030 pertaining to the procedures for subdivisions pursuant to the
attached draft ordinance. Please refer to the redlined and clean copies for a full
overview of the proposed changes (Attachment Nos. C01 and CC2).
ENVIRONMENTAL REVIEW:
The proposed action is not defined as a project and does not require environmental
review under the California Environmental Quality Act (CEQA) because it involves
general policy and procedure making activities not associated with a project and does
not have the potential for resulting in a direct physical change in the environment or a
Title 19 Amendment
November 24, 2009
Page 11
reasonably foreseeable indirect physical change in the environment (Section 15378 of
the CEQA Guidelines).
PUBLIC NOTICE
This agenda item has been noticed in accordance with the Ralph M. Brown Act (72
hours in advance of the public meeting). The item appeared upon the agenda for this
meeting which was posted at City Hall and on the City website. In addition, an e-mail
notification of this meeting was sent to all interested parties on the City's Housing
Interest List.
ALTERNATIVES
1) The City Council may suggest changes to the proposed code amendment
and /or resolution establishing the in -lieu housing fee. Should the City
Council choose to do so, staff will return with a revised resolution and/or
ordinance incorporating these changes.
2) Deny the proposed code amendment and resolution.
Submitted by:
David Lepo
Planning Directo
Attachments:
Prepared by:
aime Murillo
Associate Planner
Makana Nova
Assistant Planner
CC 1 Draft Ordinance Amending Title 19 (clean)
CC 2 Amendments to Title 19 (redline)
CC 3 Draft Resolution setting the amount of the in -lieu fee
CC 4 Staff Report from August 11, 2009 City Council Study Session
CC 5 Keyser Marston Associates (KMA) Analysis of Inclusionary Housing Options
CC 6 State Department of Housing and Community Development Letter
Attachment No. CC 1
Draft Ordinance Amending Title 19
(clean)
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ORDINANCE NO. 2009-
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH AMENDING TITLE 19 OF THE
NEWPORT BEACH MUNICIPAL CODE PERTAINING TO
DEVELOPMENT ACROSS LOT LINES, THE AUTHORITY
OF THE ZONING ADMINISTRATOR, LOT MERGERS, LOT
LINE ADJUSTMENTS, AND ADDING CHAPTER 19.54
PERTAINING TO INCLUSIONARY HOUSING
REGULATIONS.
WHEREAS, the City of Newport Beach ( "City ") is a charter city, governed by a
charter adopted by the citizens of the City; and
WHEREAS, the City adopted Title 19 of the Municipal Code to promote the
creation of subdivisions consistent with the policies of the General Plan, the
conservation of open space, the protection of landowners, lot purchases, and
surrounding residents; and
WHEREAS, it is the City's desire to simplify the procedure for the processing of
voluntary mergers of contiguous lots and eliminate the provisions for required lot
mergers as set forth in the Subdivision Map Act; and
WHEREAS, pursuant to Section 66499.20 314 of the Government Code, a city or
local agency may, by ordinance, authorize the merger of contiguous parcels; and
WHEREAS, it is a public purpose of the City and a policy of the State to achieve
a diverse and balanced community with housing available for households of all income
levels; and
WHEREAS, economic diversity fosters social and environmental conditions that
protect and enhance the social fabric of the City and is beneficial to the health, safety
and welfare of its residents; and
WHEREAS, the lack of affordable housing has a direct impact upon the health,
safety and welfare of the residents of the City;
WHEREAS, State law pertaining to General Plans and the Housing Element of
the City General Plan require that City ordinances regulate land use development and
that the City otherwise use its authority in a manner that provides an adequate supply of
housing for all economic segments of the community; and
WHEREAS, the City is experiencing a shortage of housing affordable to very
low -, low- and moderate - income households and will not be able to fully contribute to
�5
the attainment of the State housing goals or to retain a healthy environment without
additional affordable housing; and
WHEREAS, new residential development generally does not provide housing
opportunities for very low -, low- and moderate - income households due to the high cost
of land in the City; and
WHEREAS, an increasing number of persons in very low -, low, and moderate -
income households live in overcrowded or substandard housing and devote an overly
large percentage of their income to pay for housing; and
WHEREAS, the amount of land in the City available for residential development
is limited; and
WHEREAS, the consumption of this remaining land for residential development
without providing housing affordable to persons of all income levels would be contrary to
housing, environmental and planning policies and have a substantial negative impact on
the environment and economic climate because (i) housing will have to be built
elsewhere, far from employment centers and, therefore, commutes will increase,
causing increased traffic and transit demand and consequent noise and air pollution;
and (ii) City businesses will find it more difficult to attract and retain the workers they
need; and
WHEREAS, new residential development in the City that does not provide for
affordable units aggravates the existing shortage of affordable housing by absorbing the
supply of available residential land, reducing the supply of land for affordable housing
and increasing the price of the remaining residential land; and
WHEREAS, at the same time, new residential development contributes to the
demand for goods and services in the City, increasing local service employment at
wage levels which often do not permit employees to afford housing in the City; and
WHEREAS, Federal and State funds for the construction of new affordable
housing are insufficient to fully address the problem of affordable housing within the
City; and
WHEREAS, the private housing market has failed to provide adequate housing
opportunities for very low -, low -, and moderate- income households; and
WHEREAS, the City is aware that there may be times when the inclusionary
housing requirements make market -rate housing more expensive; and
WHEREAS, in weighing all the factors, including the significant need for
affordable housing, the City Council has made the decision that the community's
interests are best served by the adoption of inclusionary housing regulations; and
11
WHEREAS, to implement the City's General Plan, to carry out the policies of the
State and Federal law and policy, and to ensure the benefits of economic diversity of
the residents of the City, it is essential that new residential development in the
remaining new growth areas of the City contain housing opportunities to households of
very low -, low- and moderate - income, and that the City provide a regulatory framework
which ensures development of an adequate supply and mix of new housing to meet the
future housing needs of all income segments of the community; and
WHEREAS, in July of 2006, the City Council adopted an update to the City's
General Plan, which includes a Housing Element that addresses issues, goals, and
policies related to ensuring an adequate supply of housing opportunities for all
residents; and
WHEREAS, with the intent of achieving the City's Regional Housing Needs
Assessment (RHNA) construction goals and to encourage the housing development
industry to respond to the housing needs of the community and demand for affordable
housing, the City updated its longstanding inclusionary housing program and
incorporated it into the 2006 Housing Element Update (Housing Program 2.2.1); and
WHEREAS, Housing Program 2.2.1 is a statement of the City's inclusionary
housing policy and requires the preparation of an Affordable Housing Implementation Plan
(or the payment of an in -lieu fee) when the construction of new units are proposed; and
WHEREAS, the City Council finds that it is necessary to adopt an inclusionary
housing ordinance to implement Housing Program 2.2.1 and to address the City's
housing shortage; and
WHEREAS, this agenda item has been noticed in accordance with the Ralph M.
Brown Act (72 hours in advance of the public meeting). The item appeared upon the
agenda for this meeting which was posted at City Hall and on the City website. In
addition, an e-mail notification of this meeting was sent to all interested parties on the
City's Housing Interest List.
NOW THEREFORE, the City Council of the City of Newport Beach, California,
hereby ordains as follows:
SECTION 1: Amendments to add, revise, or replace Chapters 19.04, 19.08, 19.12,
19.64, 19.68, and 19.76 of Title 19 of the Newport Beach Municipal Code are hereby
adopted to read as shown in Exhibit 1, which is attached hereto and incorporated by
reference into this ordinance. All other provisions of Title 19 of the Newport Beach
Municipal Code shall remain unchanged.
SECTION 2: Chapter 19.54 of the Newport Beach Municipal Code is hereby added
to Title 19 to read as shown in Exhibit 2, which is attached hereto and incorporated by
reference into this ordinance.
11
SECTION 3: If any section, subsection, sentence, clause or phrase of this
ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall
not affect the validity or constitutionality of the remaining portions of this ordinance. The
City Council hereby declares that it would have passed this ordinance, and each
section, subsection, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses and phrases be declared
unconstitutional.
SECTION 4: The proposed action is not defined as a project and does not
require environmental review under the California Environmental Quality Act (CEQA)
because it involves general policy and procedure making activities not associated with a
project and does not have the potential for resulting in a direct physical change in the
environment or a reasonably foreseeable indirect physical change in the environment
(Section 15378 of the CEQA Guidelines); and
SECTION 5: The Mayor shall sign and the City Clerk shall attest to the passage
of this Ordinance. This Ordinance shall be published once in the official newspaper of
the City, and the same shall become effective thirty (30) days after the date of its
adoption.
SECTION 6: This Ordinance was introduced at a regular meeting of the City
Council of the City of Newport Beach held on the 24th day of November, 2009, and
adopted on the 8th day of December, 2009, by the following vote, to wit:
AYES, COUNCIL MEMBERS
NOES, COUNCIL MEMBERS
ABSENT, COUNCIL MEMBERS
P193T601
Edward Selich
ATTEST:
Leilani Brown, City Clerk
APPROVED AS TO FORM,
nE OF CI VAorney NEY:
David R. Hunt, Cit
for the City of Newport Beach
09
Attachment No. CC 1
Draft Ordinance Amending Title 19
(clean),
EXHIBIT 1 Amendments to Title 19 ,Ck
EXHIBIT 1
CHANGES TO TITLE 19 AS FOLLOWS:
SECTION 1: Section 19.04.035 shall be added to read as follows:
19.04.035 Development Across Property Lines.
No person shall develop any structure including, but not limited to, a principal or
accessory structure across a lot line.
SECTION 2: Section 19.04.050 shall be amended to read as follows:
19.04.050 Advisory Agencies and Appeal Boards (66415, 66416).
Pursuant to Section 66415 of the Government Code, the Planning Commission is
hereby designated as the City's Advisory Agency for review of tentative tract maps and
the Zoning Administrator is designated as the City's Advisory Agency for review of
tentative parcel maps, lot mergers, and lot line adjustments. The duties, responsibilities,
and authority for tentative map review by the Planning Commission and Zoning
Administrator shall be as specified in Chapter 19.12. Pursuant to Government Code
Section 66416, the Appeal Board for decisions of the Planning Commission shall be the
City Council and the Appeal Board for decisions of the Zoning Administrator shall be the
Planning Commission.
SECTION 3: Section 19.08.030 shall be amended to read as follows:
19.08.030 Waiver of Parcel Map Requirement (66428).
A. Activities Eligible for Waiver. The Zoning Administrator may waive all or part of
the requirements for a tentative and final parcel map in the following cases:
1. Division of real property or interests therein created by probate, eminent
domain procedures, partition, or other civil judgments or decrees; or
2. Division of real property resulting from the conveyance of land or any
interest therein to or from the City or other public entity for public
purposes, such as school sites, public building sites, or rights -of -way or
easements for streets, sewers, utilities, drainage, and similar facilities; or
3. Mergers resulting in the net elimination of no more than three (3) parcels;
or
4. A division requiring a parcel map imposed by Section 66426 of the
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Government Code.
B. Filing Requirements. Application for a parcel map waiver shall be made on forms
provided by the Planning Department and shall include such items as may
reasonably be required to make the necessary findings. A filing fee shall be paid
as established by resolution of the City Council.
C. Required Findings. In waiving a parcel map requirement, the Zoning
Administrator shall make findings that the proposed division of land complies with
requirements as to area, improvement and design, flood water drainage control,
appropriate improved public roads and property access, sanitary disposal
facilities, water supply availability, environmental protection, and other applicable
requirements of Title 19, the Zoning Code, the General Plan, and any applicable
Coastal Plan or Specific Plan.
D. Conditions on Parcel Map Waiver. The Zoning Administrator may condition the
waiver of parcel map requirements to provide for, among other things, drainage
and other fees required for subdivisions by Title 19.
E. Instrument Filed for Record Upon Parcel Map Waiver. Upon approval of a parcel
map waiver, the applicant shall file a record of survey, certificate of compliance,
lot line adjustment, or lot merger approved by the City in writing, specifying the
names of the record owners of the fee interest and particularly describing the real
property with a site map for recordation with the County Recorder.
SECTION 4: Section 19.12.010 shall be amended to read as follows:
19.12.010 Tentative Map Review Authority.
The Planning Commission shall have the authority to approve, conditionally approve, or
deny, tentative tract maps and tentative parcel maps referred by the Zoning
Administrator to the Planning Commission for review. The Zoning Administrator shall
have the authority to approve, conditionally approve, or deny tentative parcel maps.
Appeals from actions of the above reviewing bodies shall be processed in accordance
with Sections 19.12.050 and 19.12.060, respectively.
SECTION 5: Section 19.12.050 shall be amended to read as follows:
19.12.050 Review of Tentative Tract Maps (66451.1, 66452.1 et seq., 66474.9).
A. Review by Planning Commission. Tentative tract maps shall be reviewed and
approved, conditionally approved or denied by the Planning Commission.
Decisions by the Planning Commission shall become final ten (10) days after the
action unless appealed within the time limits specified in this Section.
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B. Staff Report. After review and analysis of a tentative tract map, the Planning
Director shall forward a report, together with a recommendation of approval,
approval subject to conditions, or denial to the Planning Commission. Also, at
least three (3) days prior to any hearing or action on the tentative tract map, the
staff report shall be sent to the subdivider, to each fee owner of the subject
property if other than the subdivider, and, in the case of a proposed conversion to
a condominium, community apartment or stock cooperative project, to each
tenant of the subject property.
C. Public Hearings. Public hearings shall be noticed and held in accordance with
Sections 65090, 65091, and 66451.3 of the Government Code and City
procedures.
D. Time Limits for Action on Map.
1. Time Limits When No EIR is Required. If the City determines that no
environmental impact report (EIR) is required for review of a tentative tract
map, within fifty (50) days of the adoption of a negative declaration or
other determination that no EIR is required, the Planning Commission
shall hold a public hearing to receive testimony and thereafter shall
approve, conditionally approve, or deny the tentative tract map within said
fifty (50) day period unless a time extension is mutually agreed upon
pursuant to this Section.
2. Time Limits When EIR is Required. If an environmental impact report is
prepared for the tentative tract map, the preceding fifty (50) day time
period shall not commence until the date of certification of the EIR.
E. Extension of Time Limits.
1. Extension by Mutual Consent. The time limits specified in this Chapter for
reporting and acting on a tentative tract map may be extended by mutual
consent of the subdivider and the City.
2. Use of Outside Consultant to Meet Time Limits. At the time the subdivider
makes an application pursuant to Title 19, the Planning Director shall
determine whether or not the City is able to meet the time limits specified
in this Chapter for reporting and action on maps. If the Director determines
that such time limits cannot be met, the Director, upon request of the
subdivider and for the purpose of meeting such limits, may contract or
employ a private person or entity on a temporary basis to perform such
services as necessary to permit the City to meet such time limits, subject
to the provisions, requirements and limitations of Section 66451.1 of the
Government Code.
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F. Required Findings. In approving or denying a tentative tract map, the Planning
Commission shall make all applicable findings set forth in Section 19.12.070.
G. Approval by Inaction. If no action is taken upon a tentative tract map by the
Planning Commission within the time limits specified in this Section or within any
authorized extension thereof per this Section, the tentative tract map as filed
shall be deemed to be approved insofar as it complies with other applicable
requirements of the Government Code and the City of Newport Beach Municipal
Code. It shall be the duty of the City Clerk to affirm said approval. Any tentative
tract map deemed approved by Planning Commission inaction may in turn be
appealed to the City Council in accordance with the procedures and time limits
set forth in Subsection I of this Section.
H. Denial Action to Comply with Time Limits Prohibited. Pursuant to Section
66451.4 of the Government Code, no tentative tract map shall be denied to
comply with the time limits specified in this Section unless there are reasons for
disapproval other than the failure to timely act in accordance with the time limits
specified in this Section.
Appeals.
1. Appeal by Interested Person. Any interested person, including a City
Councilmember, may appeal any action of the Planning Commission
regarding a tentative tract map to the City Council. Any appeal filed by a
City Councilmember shall not be considered an aggrieved person based
on the fact that the City Council member filed the appeal.
2. Time Limits for Filing. Appeals shall be filed with the City Clerk within ten
(10) days after the action of the Planning Commission. Upon the filing of
an appeal, the original decision shall be stayed and the matter shall be set
for public hearing.
3. Fees. Any appeal filed by a person other than a Councilmember shall be
accompanied by a filing fee set by resolution of the City Council pursuant
to Section 66451.2 of the Government Code.
4. Hearing and Action. A public hearing shall be noticed and held prior to
action on a tentative tract map appeal. The appeal hearing shall be
noticed in accordance with Sections 65090, 65091 and 66451.3 of the
Government Code and shall be held within thirty (30) days after filing of
the appeal. Within ten (10) days following the conclusion of the hearing,
the City Council shall render its decision on the appeal.
5. Effect of Inaction. If the City Council does hot make a decision on an
appeal within the time limits specified, the tentative tract map, insofar as it
complies with the Subdivision Map Act and Title 19, shall be deemed to be
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approved or conditionally approved as last approved or conditionally
approved, and it shall be the duty of the City Clerk to certify or state that
approval.
J. Indemnification of City. Pursuant to Section 66474.9 of the Government Code, as
a condition of approval of a tentative tract map, the decision making body may
require that the owner of the fee interest or designee defend, indemnify, and hold
harmless the City and its agents, officers and employees from any claim, action
or proceeding against the City, its agents, officers, or employees to attack, set
aside, void, or annul the tentative tract map approval and any associated
approvals when such claim, action, or proceeding is brought within the time
period provided under Section 66499.37 of the Government Code. The City shall
notify the owner of the fee interest or designee of any claim, action or proceeding
and the City shall cooperate fully in the defense.
SECTION 6: Section 19.12.060 shall be amended to read as follows:
19.12.060 Review of Tentative Parcel Maps (66451.1, 66463 et seq., 66474.9).
A. Review by Zoning Administrator.
1. Authority. Tentative parcel maps shall be reviewed and approved,
conditionally approved or denied by the Zoning Administrator unless the
Zoning Administrator determines that the public interest would be better
served by review by the Planning Commission. In such a case, the
tentative parcel map shall be reviewed in the same manner as tentative
tract maps as set forth in Section 19.12.050.
2. Procedures. The provisions for tentative tract maps set forth in Section
19.12.050 Subsections (B) through (H) and (J), regarding staff reports,
public hearings, time limits, required findings, approval by inaction, and
indemnification shall apply to tentative parcel maps.
3. Finality of Decision. Decisions by the Zoning Administrator shall become
final ten (10) days after the action unless appealed within the time limits
specified in Paragraph B of this Section.
B. Appeal of Zoning Administrator Action.
1. Appeal by Interested Person. Any interested person, including a Planning
Commissioner or City Councilmember, may appeal any action of the
Zoning Administrator regarding a tentative parcel map to the Planning
Commission. In accordance with Government Code Section 66463.5, an
appeal of a denial of a tentative parcel map extension shall be heard by
the City Council.
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Time Limits for Filing. Appeals shall be filed with the Planning Director
within ten (10) days after the action of the Zoning Administrator. An appeal
of a denial of a tentative parcel map extension shall be filed with the City
Clerk and heard by City Council accordance with Government Code
Section 66463.5. The time limit for filing appeals on denials of a tentative
parcel map extension shall be 15 days after the action of the Zoning
Administrator. Upon the filing of an appeal, the original decision shall be
stayed and the matter shall be set for public hearing.
3. Fees. Any appeal filed by a person other than a Councilmember or
Planning Commissioner shall be accompanied by a fee set by resolution
of the City Council.
C. Further Appeal. Any action by the Planning Commission, when acting as the
Appeal Board, or any decision affirmed by the City Clerk due to Planning
Commission inaction within the specified time limits in Section 19.12.050 D and E
may in turn be appealed to the City Council in accordance with the procedures
and time limits set forth in Section 19.12.050.
SECTION 7: Section 19.64.030 shall be amended to read as follows:
19.64.030 General Requirements.
A. Where Permitted. If approved under the provisions of this Chapter and Title 20
(Zoning Code), residential condominium conversions may be allowed in any
district in which residential uses are permitted, including planned communities,
except within the R -1.5 District (Balboa Island). Nonresidential condominium
conversions may be allowed in any district in which such uses are permitted.
B. Subdivision Required. All condominium conversions subject to this Chapter shall
require approval of tentative and final subdivision maps.
C. Review Responsibilities. Condominium conversions containing 5 or more
dwelling units shall be reviewed by the Planning Commission via a tentative tract
map. Condominium projects or conversions containing 4 or fewer dwelling units,
or nonresidential property, shall be reviewed by the Zoning Administrator via a
tentative parcel map.
D. Applicable Standards. Condominium conversion projects shall conform to: (1) the
applicable standards and requirements of the zoning district in which the project
is located at the time of approval per Title 20 (Zoning Code), and (2) the
applicable provisions of Title 19.
SECTION 8: Chapter 19.68 shall be deleted in its entirety and amended to read as
follows:
M
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CHAPTER 19.68
MERGER OF CONTIGUOUS LOTS
Sections:
19.68.010 Purpose and Intent
19.68.020 Exemptions
19.68.030 Lot Mergers
19.68.010 Purpose and Intent.
The provisions of this Chapter are intended to provide for the merger of parcels as
authorized by Section 66499.20 % of the Government Code. These provisions are
intended to be consistent with the state Subdivision Map Act and shall be so construed.
19.68.020 Exemptions.
A. Old Lots. Any lot of record on August 2, 1943 may be used as a development site
even when of less area or width than that required by the provisions of this code.
B. Lots in R1.5 District. On any site of less than 5,000 square feet which existed
prior to March 10, 1976, a two- family dwelling may be constructed provided that
there shall be not less than 1,000 square feet of land area for each family unit.
19.68.030 Lot Mergers.
A. Application. Mergers of contiguous lots involving four or fewer parcels under one
fee ownership may be initiated by the owner of the fee interest. An application
for a lot merger shall be filed in a manner consistent with the requirements
contained in Section 20.90.030 of Title 20 (Application Filing and Fees).
Application for merger of contiguous parcels shall be made on forms provided by
the Planning Department and shall include such items as may reasonably be
required to make the necessary findings. An application shall be accompanied by
a fee set by resolution of the City Council,
B. Required Plans and Materials. In addition to the other application materials
required by Section 20.90.030 of Title 20, an application for a lot merger shall be
accompanied by an exhibit showing the lots to be merged, the property lines of
the adjoining parcels, and structures on and adjacent to the lots to be merged.
C. Planning Department Review. An application for a lot merger shall be initially
reviewed by the Planning Department in accordance with Sections 20.90.040
and 20.90.050 of Title 20.
D. Zoning Administrator. Application for lot merger shall be approved, conditionally
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approved, or denied by the Zoning Administrator unless referred to the Planning
Commission pursuant to this Section.
E. Referral to Planning Commission. The Zoning Administrator may determine that
an application should properly be heard by the Planning Commission and may
refer the matter to the Planning Commission for hearing and original
determination on the merits. The procedure for notice and hearings held by the
Planning Commission on such applications shall be in accordance with the same
provisions as set forth in this Section.
F. Public Hearings. Lot mergers shall require a public hearing before the Zoning
Administrator. Procedures for noticing and conduct of hearings shall be in
accordance with Section 20.93.025 of Title 20.
G. Investigation. The Zoning Administrator shall cause to be made such
investigation of facts bearing upon such application as will serve to provide all
information necessary to assure that the action on each application is consistent
with the intent of this Section and sound planning practices.
H. Required Findings. All of the following findings shall be made prior to approval of
a lot merger:
Approval of the merger will not, under the circumstances of this particular
case, be detrimental to the health, safety, peace, comfort and general
welfare of persons residing or working in the neighborhood of such
proposed use or be detrimental or injurious to property and improvements
in the neighborhood or the general welfare of the City, and further that the
proposed lot merger is consistent with the legislative intent of Title 19; and
2. The lots to be merged are under common fee ownership at the time of the
merger; and
The lots as merged will be consistent or will be more closely compatible
with the applicable zoning regulations and will be consistent with other
regulations relating to the subject property including, but not limited to, the
General Plan and any applicable Coastal Plan or Specific Plan; and
4. Neither the lots as merged nor adjoining parcels will be deprived of legal
access as a result of the merger.
5. The lots as merged will be consistent with the surrounding pattern of
development and will not create an excessively large lot that is not
compatible with the surrounding development.
Conditions of Approval. The Zoning Administrator may condition a lot merger to
account for the impacts including, among other things, public improvements as
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well as the payment of drainage and other fees required for subdivisions by Title
19.
J. Rendering of Decision. After the conclusion of the hearing on any application for
a lot merger, the Zoning Administrator of Planning Commission shall render a
decision within ten (10) days unless otherwise stipulated by the applicant and the
Zoning Administrator or Planning Commission.
K. Effective Date and Appeals. Decisions on lot mergers shall not become effective
for ten (10) days after being granted. Appeals shall be made in accordance with
the provisions for appeal of tentative parcel maps, as set forth in Section
19.12.060B. Upon the filing of an appeal, the original decision shall be stayed
and the matter shall be set for public hearing.
L. Instrument Filed for Record Upon Lot Merger Approval. Upon approval of a lot
merger, the applicant shall file a document, approved by the City in writing,
specifying the names of the record owners of the fee interest and particularly
describing the real property with a site map for recordation with the County
Recorder.
M. Waiver of Concurrent Parcel Map. In accordance with Section 19.08.030, the
Zoning Administrator may approve a waiver of the parcel map requirement in
conjunction with the lot merger where no more than three parcels are eliminated.
If a merger involves the elimination of more than three parcels, tentative and final
parcel maps shall be required.
N. Expiration and Amendments. Expiration of and amendments to lot merger
approvals shall be in accordance with Chapter 20.93 of the Zoning Code.
SECTION 9: Chapter 19.76 shall be deleted in its entirety and amended to read as
follows:
CHAPTER 19.76
LOT LINE ADJUSTMENTS
Sections:
19.76.010
Purpose and Intent
19.76.020
Procedures for Lot Line Adjustments
19.76.030
Required Findings
19.76.010 Purpose and Intent.
This Chapter is intended to allow for lot line adjustments. A lot line adjustment for
purposes of Chapter 19.76 is a minor boundary adjustment involving four or fewer
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adjacent lots or parcels where the land taken from one parcel is added to an adjacent
parcel with the original number of parcels remaining unchanged after the adjustment.
19.76.020 Procedures for Lot Line Adjustments.
A. Application. An application for a lot line adjustment shall be filed in accordance
with the requirements contained in Section 20.90.030 of Title 20 (Application
Filing). The owners of the fee interest of all parcels involved shall sign the
application form.
B. Required Plans and Materials. In addition to the other application materials
required by Section 20.90.030 of Title 20, an application for a lot line adjustment
shall be accompanied by an exhibit showing the line or lines to be adjusted, the
property lines of the adjoining parcels, and structures adjacent to the line or lines
to be adjusted.
C. Planning Department Review. An application for a lot line adjustment shall be
initially reviewed by the Planning Department in accordance with Sections
20.90.040 and 20.90.050 of Title 20.
D. Zoning Administrator. Application for lot line adjustments shall be approved,
conditionally approved, or denied by the Zoning Administrator unless referred to
the Planning Commission pursuant to this Section.
E. Street Frontage Orientation. An application filed for a lot line adjustment that
proposes a change in the street frontage and /or orientation of any lot shall
require the concurrent filing of a zone change application to establish appropriate
street side setbacks deemed to be compatible with those of adjacent properties,
and shall be subject to notice and public hearing by the Planning Commission
and the City Council. In approving or conditionally approving such lot line
adjustment application and zone change, the Planning Commission and City
Council shall make required findings as set forth below.
F. Referral to Planning Commission. The Zoning Administrator may determine that
an application should properly be heard by the Planning Commission and may
refer the matter to the Planning Commission for hearing and original
determination on the merits. The procedure for notice and hearings held by the
Planning Commission on such applications shall be in accordance with the same
provisions applicable to lot line adjustments and the Zoning Administrator as set
forth in Section 19.12.050.
G. Public Hearings. Lot line adjustments shall require a public hearing. Procedures
for noticing and conduct of hearings shall be in accordance with Section
20.93.025 of Title 20.
H. Investigation. The Zoning Administrator shall cause to be made such
ifs]
30
investigation of facts bearing upon such application as will serve to provide all
information necessary to assure that the action on each application is consistent
with the intent of this Section and sound planning practices.
Required Findings. In approving, conditionally approving, or denying a lot line
adjustment, the Zoning Administrator, Planning Commission and /or the City
Council shall make the following findings.
1. Approval of the lot line adjustment will not, under the circumstances of the
particular case, be detrimental to the health, safety, peace, comfort, and
general welfare of persons residing or working in the neighborhood of
such proposed use or be detrimental or injurious to property and
improvements in the neighborhood or the general welfare of the City, and
further that the proposed lot line adjustment is consistent with the
legislative intent of Title 19.
2. The number of parcels resulting from the lot line adjustment remains the
same as before the lot line adjustment.
3. The lot line adjustment is consistent with applicable zoning regulations
except that nothing herein shall prohibit the approval of a lot line
adjustment as long as none of the resultant parcels is more
nonconforming as to lot width, depth and area than the parcels that
existed prior to the lot line adjustment.
4. Neither the lots as adjusted nor adjoining parcels will be deprived of legal
access as a result of the lot line adjustment.
5. That the final configuration of the parcels involved will not result in the loss
of direct vehicular access from an adjacent alley for any of the parcels that
are included in the lot line adjustment.
6. That the final configuration of a reoriented lot does not result in any
reduction of the street side setbacks as currently exist adjacent to a front
yard of any adjacent key, unless such reduction is accomplished through a
zone change to establish appropriate street side setbacks for the
reoriented lot. The Planning Commission and City Council in approving
the zone change application shall determine that the street side setbacks
are appropriate, and are consistent and compatible with the surrounding
pattern of development and existing adjacent setbacks.
J. Conditions of Approval. The Zoning Administrator, Planning Commission, and/or
the City Council may condition a lot line adjustment to account for the impacts
including, among other things, public improvements as well as the payment of
drainage and other fees required for subdivisions by Title 19.
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K. Rendering of Decision. After the conclusion of the hearing on any application for
a lot line adjustment, the Zoning Administrator, Planning Commission and/or the
City Council shall render a decision within ten (10) days unless otherwise
stipulated by the applicant and the Zoning Administrator, Planning Commission
and /or the City Council.
L. Effective Date and Appeals. Decisions on lot line adjustments shall not become
effective for ten (10) days after being granted. Appeals shall be made in
accordance with the provisions for appeal of tentative parcels maps, as set forth
in Section 19.12.060. Upon the filing of an appeal, the original decision shall be
stayed and the matter shall be set for public hearing. The lot line adjustment shall
only become effective when the lot line adjustment instrument specifying the
owners of the fee interest and particularly describing the real property is
approved by the City in writing and the instrument is filed for recordation with the
County Recorder.
M. Instrument Filed for Record Upon Lot Merger Approval. Upon approval of a lot
merger, the applicant shall file a document, approved by the City in writing,
specifying the names of the record owners of the fee interest and particularly
describing the real property with a site map for recordation with the County
Recorder.
N. Expiration and Amendments. Expiration of and amendments to lot line
adjustment approvals shall be in accordance with Sections 20.93.050 and
20.93.055 of Title 20.
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3a-
Attachment No. CC 1
Draft Ordinance Amending Title 19
(clean),
EXHIBIT 2 Chapter 19.54 13
Inclusionary Housing
Page 19.54 -1
Inclusionary Housing
EXHIBIT 2
CHAPTER 19.54
INCLUSIONARY HOUSING
Sections:
19.54.010
Purpose
19.54.020
Definitions
19.54.030
Applicability
19.54.040
Regulations
19.54.050
In Lieu Fees
19.54.060
Affordable Housing Implementation Plan (AHIP)
19.54.070
Alternatives to On -Site Construction
19.54.080
Affordable Housing Agreement
19.54.090
Affordable Housing Fund
19.54.100
Adjustments, Waivers
19.54.010 Purpose
The purpose of this Chapter is to:
A. Provide a balanced residential community comprised of a variety of housing
types and opportunities for all social and economic segments, including very low-
, low -, and moderate - income households;
B. Promote the City's goal to add affordable housing units to the City's housing
stock in proportion to the overall increase in new housing units;
C. Offset the demand on housing that is created by residential development and
mitigate environmental and other impacts that accompany residential
development by protecting the economic diversity of the City's housing stock,
reducing traffic, transit and related air quality impacts, promoting jobs /housing
balance and reducing the demands placed on transportation infrastructure in the
region; and
D. Ensure that the limited remaining developable land in the City's planning area is
utilized in a manner consistent with the Housing Element.
19.54.020 Definitions
For the purposes of this Chapter and this Title, the following terms shall have the
meanings indicated:
A. Affordable Housing Agreement. The agreement entered into in compliance with
Section 19.54.080 which provides legal restrictions by which the affordable units
shall be restricted to ensure that the unit remains affordable to very low -, low -, or
557
Page 19.54 -2
Inclusionary Housing
moderate - income households, as applicable. With respect to rental units, rent
restrictions shall be in the form of a regulatory agreement recorded against the
applicable property. With respect to owner- occupied units, resale controls shall
be in the form of resale restrictions, deeds of trust, and /or other similar
documents recorded against the applicable property.
B. Affordable Housing Implementation Plan (AHIP). A plan prepared in compliance
with Section 19.54.060 which provides a description of the residential subdivision
and method of satisfying the affordable housing requirement.
C. Affordable Housing Price. A sales price that is no more than 3 times the
maximum income level for very low -, low -, and moderate - income households. In
determining the maximum household income for a given affordable unit, it shall
be assumed that each bedroom is occupied by two persons, except for efficiency
units (one person).
D. Affordable Rental Price. An annual rent that does not exceed 30 percent of
maximum income level for very low -, low -, and moderate - income households, as
adjusted for household size. In determining the maximum household income for
a given affordable unit, it shall be assumed that each bedroom is occupied by
two persons, except for efficiency units (one person).
E. Affordable Unit. An ownership or rental- housing unit, including senior housing,
affordable to households with very low -, low -, and moderate - incomes as defined
in this Chapter.
F. Conversion. A change of a dwelling unit to a condominium, cooperative, or a
similar form of ownership, or to a nonresidential use.
G. Low - income. Income between 50% and 80% of the Orange County median
income, adjusted for actual household size, as determined by the California
Department of Housing and Community Development.
H. Moderate - income. Income between 80% and 120% of the Orange County
median income, adjusted for actual household size, as determined by the
California Department of Housing and Community Development.
I. Very low- income. Income 50% or less of the Orange County median income,
adjusted for actual household size, as determined by the California Department
of Housing and Community Development.
19.54.030 Applicability
Residential subdivision projects that result in a net increase in the number of units on
the property shall comply with the requirements of this Chapter, unless granted an
adjustment or waiver in compliance with Section 19.54.100 (Adjustments, Waivers). The
provisions of this Chapter shall not apply to nonresidential subdivisions, nor to
condominium projects or stock cooperatives which consist of the subdivision of air
space in an existing apartment building which, at the time of tentative map filing, is five
or more years old.
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Page 19.54 -3
Inclusionary Housing
19.54.040 Regulations
A. Affordability Requirement.
1. All residential subdivision projects shall include the construction of 15% of
the total number of dwelling units within the residential development
project as affordable units restricted for occupancy by very low -, low- or
moderate - income households. Notwithstanding the construction
requirements, alternatives to on -site construction may be provided
pursuant to Section 19.54.070 (Alternatives to On -Site Construction). A
lower percent of affordable units may be approved as part of an AHIP if
the project includes units for very low- income households.
2. The affordability requirement shall apply only to the net increase of
residential units on the property. In the event that the residential
subdivision project includes the demolition or conversion of existing
residential units, except as provided in Chapter 20.86 of the Zoning Code
(Low and Moderate Income Housing within the Coastal Zone), the
affordability requirement shall only apply to the net increase of residential
units on the property.
3. Affordable units required to be replaced under the provisions of Chapter
20.86 of the Zoning Code (Low and Moderate Income Housing within the
Coastal Zone) shall not be eligible for fullfilling the number of affordable
units required under the provisions of this Chapter.
4. The number of affordable units required for a residential subdivision
project shall be determined by the review authority prior to tentative or
parcel map approval.
5. To determine the number of units required when new affordable units are
to be provided, any decimal fraction less than 0.50 shall be rounded down
to the nearest whole number, and any fraction greater than or equal to
0.50 shall be rounded up to the next whole number. Provided, in no case
shall the affordability requirement be zero.
B. For -Sale Price. Rent, of Affordable Units. For affordable for -sale units provided in
compliance with this Chapter, the applicant shall sell the units at a housing price
affordable for moderate - income households. If the applicant chooses to provide
affordable rental units to comply with this Chapter, the applicant shall rent the
units at a rental price affordable for very low- or low - income households.
C. Duration of Affordability Requirement. Affordable units required by this Chapter
shall be legally restricted to occupancy by, and affordable to, households of the
income levels for which the affordable units were designated for a minimum
duration of 30 years, or as provided in an approved AHIP.
D. Timing. Affordable units shall be provided and offered for occupancy concurrently
with or prior to the occupancy of the market -rate units. For projects that are
phased over time, affordable units shall be provided in accordance with an
approved AHIP.
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Page 19.54 -4
Indusionary Housing
19.54.050 In Lieu Fees
A. General Requirements.
1. For residential subdivision projects of 50 or fewer dwelling units, the
requirements of this Chapter may be satisfied by paying a fee in lieu of
providing all or a portion of the affordable units, unless otherwise provided
by an approved AHIP.
2. For residential subdivision projects of 51 dwelling units or more, the
applicant may not pay a fee in lieu of constructing the required affordable
units, unless otherwise provided by an approved AHIP.
B. In -Lieu Fee Payment. When a fee is being paid in lieu of providing affordable
units, the in -lieu fee shall be paid for each market -rate unit within the residential
subdivision project.
C. Timing of Payment. Payment of the in -lieu fee shall be made prior to the
issuance of a Building Permit, unless otherwise provided by an approved AHIP.
D. Amount of Fee. The amount of the in -lieu fee shall be set by resolution of the
Council.
19.54.060 Affordable Housing Implementation Plan (AHIP)
G
n
When Required.
Residential subdivision projects of 51 dwelling units or more shall be
required to submit an AHIP.
2. Residential subdivision projects of 50 or fewer dwelling units shall have
the option of submitting an AHIP or paying an in -lieu fee.
Contents. The AHIP shall contain the following information:
A description of the residential subdivision, including the number of market
rate and affordable units proposed, and the basis for the calculation of the
number of required affordable units;
2. The method of satisfying the affordable housing requirement, including the
income level(s) and tenure of the affordable units to be provided;
3. A phasing plan, if the applicant proposes a phased project, that provides
for the timing of development of the affordable units;
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Page 19.54 -5
Inclusionary Housing
4. Information necessary to establish compliance with criteria provided in
Subsection 19.54.070.13 (Off -Site Renovation Projects) or Subsection
19.54.070.0 (Land Dedication), if applicable; and
5. Any additional information requested by the Planning Director to assist in
the evaluation of the AHIP.
C. Approval.
The review authority for the project shall approve, conditionally approve,
or deny the AHIP on the basis of the application, plans, materials, and
testimony submitted.
2. If the AHIP proposes the dedication of land in compliance with Subsection
19.54.070.0 (Land Dedication) the City Council shall be the final review
authority. In these cases, the Planning Commission shall first recommend
and the City Council shall approve, conditionally approve, or deny the
AHIP.
D. Appeal of review authority's decision. The decision of the review authority may
be appealed in compliance with Chapter 20.95 (Appeals).
19.54.070 Alternatives to On -Site Construction
The following alternative means of compliance with this Chapter may be considered as
part of an AHIP.
A. Off -Site Construction Projects. An applicant may propose to construct some or
all of the affordable units required by this Chapter at a location not physically
within the residential subdivision project; however, the affordable units shall be
located within the City boundaries.
B. Off -Site Renovation Projects. An applicant may propose to renovate and convert
existing off -site units to affordable units in lieu of constructing some or all of the
affordable units required by this Chapter. The proposed units shall meet the
following requirements:
The interiors and exteriors of the units shall be substantially renovated to
improve the livability and aesthetics of the units for the duration of the
affordability period.
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Page 19.54 -6
Inclusionary Housing
2. The units shall be returned to the City's housing supply as decent, safe
and sanitary housing and meet all applicable housing and building code
requirements.
3. The units shall not already be subject to affordability income restrictions
unless such restrictions are set to expire in 3 years or less. In such cases,
the affordability covenant shall provide for 30 years in addition to any
existing covenant time.
C. Land Dedication. An applicant may propose to dedicate land to the City or to a
City- designated housing developer for the provision of affordable units in lieu of
constructing some or all of the affordable units required by this Chapter. The
dedicated land shall meet the following site suitability requirements:
1. The dedicated land shall be useable for its intended purpose and have the
appropriate General Plan and zoning designation for the development of
affordable housing, be free of toxic substances and contaminated soils, be
fully improved with infrastructure and adjacent utilities necessary to serve
the project, and shall have no title restrictions that would prevent the
development of the required number of affordable units.
2. Title to the dedicated land, or lease hold for the useful life of the housing
improvements, shall be conveyed to the City or City- designated housing
developer before a Building Permit is issued for any portion of the
residential subdivision project.
3. All property taxes, special taxes, fees, or other assessments shall be
current before the title is conveyed.
4. The dedicated land shall be sufficient in size to construct the number of
affordable units that the applicant would otherwise be required to
construct.
D, Findings and Decision. The review authority may approve or conditionally
approve, an AHIP that proposes alternative means of compliance with the
requirements of this Chapter after first finding all of the following:
1. The purpose of this Chapter would be served by the implementation of the
proposed alternative;
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Page 19.54 -7
Inclusionary Housing
2. The units provided are located within the City and are consistent with the
requirements of this Chapter; and
3. It would not be feasible or practical to construct the units on -site.
19.54.080 Affordable Housing Agreement.
An affordable housing agreement shall be executed in a recordable form prior to the
issuance of a Building Permit for any portion of a residential subdivision project subject
to the requirements of this Chapter.
A. Contents. Affordable housing agreements shall include the following where
applicable:
1. A description of the residential subdivision project, how the affordable
housing requirements will be met by the applicant, and whether the
affordable units will be rented or owner - occupied;
2. The number, size, and location of each affordable unit;
3. Incentives provided by the City (if any) for density bonus;
4. Limits on income, rent and sales price of affordable units;
5. Procedures for tenant selection and the process for qualifying prospective
households for income eligibility;
6. Provisions and/or documents for resale restrictions, deeds of trust, rights
of first refusal for owner - occupied units, or restrictions for rental units;
7. Provisions for monitoring the ongoing affordability of the units;
8. Performance guarantees (e.g., a cash deposit, bond, or letter of credit) as
required by the review authority; and
9. Provisions for the enforcement and penalties for violation of the
agreement.
B. Recording of Agreement. Affordable housing agreements in a form acceptable to
the City Attorney shall be recorded against the owner- occupied affordable units
and the projects containing rental affordable units. Additional rental or resale
restrictions, deeds of trust, rights of first refusal and /or other documents shall
Page 19.54 -8
Inclusionary Housing
also be recorded against owner - occupied affordable units. In cases where the
requirements of this Chapter are satisfied through the development or renovation
of off -site units, the affordable housing agreement shall simultaneously be
recorded against the property where the off -site units are located.
19.54.090 Affordable Housing Fund
A. Fund Revenues. The fund shall receive all in -lieu fees paid under Section
20.34.050 (In -Lieu fees) and may also receive monies from other sources.
B. Purpose and Limitations. Affordable Housing Fund monies shall be used in
compliance with the General Plan Housing Element and this Chapter to
construct, rehabilitate, or subsidize affordable housing or assist other
governmental entities, private organizations or individuals to provide or preserve
affordable housing. The fund may be used for the benefit of both rental and
owner - occupied housing. Allowed uses of fund monies include:
Assistance to housing development corporations;
2. Equity participation loans;
3. Grants;
4. Pre -home ownership co- investment;
5. Predevelopment loan funds;
6. Participation leases;
7. Other public - private partnership arrangements;
8. The acquisition of property and property rights;
9. Construction of affordable housing including costs associated with
planning, administration, and design, as well as actual building or
installation;
10. Costs of rehabilitation and maintenance of existing affordable housing
when needed to preserve units that are at risk of going to a market rate or
at risk of deterioration;
11. Other costs associated with the construction or financing of affordable
housing;
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Page 19.54 -9
Inclusionary Housing
12. Reasonable administrative charges or related expenses; and
13. Reasonable consultant and legal expenses related to the establishment
and /or administration of the fund.
19.54.100 Adjustments, Waivers
The City Council may waive, wholly or partially, the requirements of this Chapter and
approve alternative methods of compliance with this Chapter if the applicant
demonstrates, and the City Council finds that either:
A. Taking. There is no reasonable relationship between the impact of a proposed
development and the requirements of this Chapter and applying the requirements
of this Chapter would take property in violation of the United States or California
Constitutions; or
B. Special circumstances. There are special circumstances unique to the residential
development that justify the granting of an adjustment or waiver; the residential
development would not be feasible without the modifications; a specific and
financial hardship would occur if the modification was not granted; and no
alternative means of compliance are available that would be effective in attaining
the purpose of this Chapter than the relief requested.
L13
EXHIBIT 1
CHANGES TO TITLE 19 AS FOLLOWS:
SECTION 1: Section 19.04.035 shall be added to read as follows:
19.04.035 Development Across Property Lines.
No person shall develop any structure including, but not limited to, a principal or
accessory structure across a lot line.
SECTION 2: Section 19.04.050 shall be amended to read as follows:
19.04.050 Advisory Agencies and Appeal Boards (66415, 66416).
Pursuant to Section 66415 of the Government Code, the Planning Commission is
hereby designated as the City's Advisory Agency for review of tentative tract maps and
the Zoning Administrator Cemm ;tee is designated as the City's Advisory
Agency for review of tentative parcel maps, lot mergers, and lot line adjustments. The
duties, responsibilities, and authority for tentative map review by the Planning
Commission and Zoning Administrator shall be as specified in Chapter 19.12. Pursuant
to Government Code Section 66416. tThe Appeal Board for decisions of the Planning
Commission shall be the City Council and the Appeal Board for decisions of the Zoning
Administrator shall be the Planning Commission.
SECTION 3: Section 19.08.030 shall be amended to read as follows:
19.08.030 Waiver of Parcel Map Requirement (66428).
A. Activities Eligible for Waiver. The Zoning Administrator Mnr f ^f;^^ C;emrn ttee
may waive all or part of the requirements for a tentative and final parcel map in
the following cases:
Division of real property or interests therein created by probate, eminent
domain procedures, partition, or other civil judgments or decrees; or
2. Division of real property resulting from the conveyance of land or any
interest therein to or from the City or other public entity for public
purposes, such as school sites, public building sites, or rights -of -way or
easements for streets, sewers, utilities, drainage, and similar facilities; or
3. V41-upAafy Mnaergers resulting in the net elimination of no more than three
(3) . eae parcels; or
4. A division requiring a parcel map imposed by Section 66426 of the
Government Code.
0
B. Filing Requirements. Application for a parcel map waiver shall be made on forms
provided by the Planning Department and shall include such items as may
reasonably be required to make the necessary findings. A filing fee shall be paid
as established by resolution of the City Council.
C. Required Findings. In waiving a parcel map requirement, the Zoning
Administrator Mod#i omrr;;ttee shall make findings that the proposed
division of land complies with requirements as to area, improvement and design,
flood water drainage control, appropriate improved public roads and property
access, sanitary disposal facilities, water supply availability, environmental
protection, and other applicable requirements of Title 19t
the Zoning Code, the General Plan: and any applicable Coastal Plan or Specific
Plan.
D. Conditions on Parcel Map Waiver. The Zoning Administrator M44AGatisns
Gon4p*tee -may condition the waiver of parcel map requirements to provide for,
among other things, payment- af-pa,niand —,drainage drainage, and other fees required for
subdivisions by Title 19.
E. Instrument Filed for Record Ge#4iwGat "Qarnpliaase -Upon Parcel Map Waiver.
Upon approval of a parcel map waiver, the applicant shall file a record of survey,
in writing, specifying the names of the record owners of the fee interest and
particulariV describing the real property with a site map
for recordation with the County Recorder.
SECTION 4: Section 19.12.010 shall be amended to read as follows:
19.12.010 Tentative Map Review Authority.
The Planning Commission shall have the authority to approve, conditionally approve, or
deny, tentative tract maps and tentative parcel maps referred by the Zoning
Administrator to the Planning Commission for review. The Zoning Administrator
Me4ifieatiG omn*tee shall have the authority to approve, conditionally approve, or
deny tentative parcel maps. Appeals from actions of the above reviewing bodies shall
be processed in accordance with Sections 19.12.050 and 19.12.060.
SECTION 5: Section 19.12.050 shall be amended to read as follows:
19.12.050 Review of Tentative Tract Maps (66451.1, 66452.1 et seq., 66474.9).
A. Review by Planning Commission. Tentative tract maps shall be reviewed and
approved, conditionally approved or denied by the Planning Commission.
Decisions by the Planning Commission shall become final ten 104 days after
the action unless appealed within the time limits specified in this Section.
K
'4r1
B. Staff Report. After review and analysis of a tentative tract map, the Planning
Director shall forward a report, together with a recommendation of approval,
approval subject to conditions, or denial to the Planning Commission. Also, at
least three i3) days prior to any hearing or action on the tentative tract map, the
staff report shall be sent to the subdivider, to each fee owner of the subject
property if other than the subdivider, and, in the case of a proposed conversion to
a condominium, community apartment or stock cooperative project, to each
tenant of the subject property.
C. Public Hearings. Public hearings shall be noticed and held in accordance with
Sections 65090, 65091, and 66451.3 of the Government Code and City
procedures.
D. Time Limits for Action on Map.
1. Time Limits When No EIR is Required. If the City determines that no
environmental impact report (EIR) is required for review of a tentative tract
map, within fifty (50) days of the adoption of a negative declaration or
other determination that no EIR is required, the Planning Commission
shall hold a public hearing to receive testimony and thereafter shall
approve, conditionally approve, or deny the tentative tract map within said
fifty (50) day period unless a time extension is mutually agreed upon
pursuant to this Section.
2. Time Limits When EIR is Required. If an environmental impact report is
prepared for the tentative tract map, the preceding fifty (50) day time
period shall not commence until the date of certification of the EIR -as
serroete.
E. Extension of Time Limits.
1. Extension by Mutual Consent. The time limits specified in this Chapter for
reporting and acting on a tentative tract map may be extended by mutual
consent of the subdivider and the City.
2. Use of Outside Consultant to Meet Time Limits. At the time the subdivider
makes an application pursuant to Title 19, the Planning Director shall
determine whether or not the City is able to meet the time limits specified
in this Chapter for reporting and action on maps. If the Director determines
that such time limits cannot be met, the Director, upon request of the
subdivider and for the purpose of meeting such limits, may contract or
employ a private person or entity on a temporary basis to perform such
services as necessary to permit the City to meet such time limits, subject
to the provisions, requirements and limitations of Section 66451.1 of the
Government Code.
%I
CE
F. Required Findings. In approving or denying a tentative tract map, the Planning
Commission shall make all applicable findings set forth in Section 19.12.070.
G. Approval by Inaction. If no action is taken upon a tentative tract map by the
Planning Commission within the time limits specified in this Section or within any
authorized extension thereof per this Section, the tentative tract map as filed
shall be deemed to be approved insofar as it complies with other applicable
requirements of the Government Code and the City of Newport Beach Municipal
Code. It shall be the duty of the City Clerk to certify -affirm said approval. Any
tentative tract map deemed approved by Planning Commission inaction may in
turn be appealed to the City Council in accordance with the procedures and time
limits set forth in Subsection I of this Section.
H. Na-- Denial Action to Comply with Time Limits Prohibited. Pursuant to Section
66451.4 of the Government Code, no tentative tract map shall be denied to
comply with the time limits specified in this Section unless there are reasons for
disapproval other than the failure to timely act in accordance with the time limits
specified in this Section.
Appeals.
1. Appeal by Interested Person. Any interested person, including a Citv
Councilmember, may appeal any action of the Planning Commission
regarding a tentative tract map to the City Council. Any appeal filed by a
City Councilmember shall not be considered an aggrieved person based
on the fact that the City Council member filed the appeal.
2.� Time Limits for Filing. Appeals shall be filed with the P!a„n me
Clerk within ten (10) days after the action of the Planning Commission.
Upon the filing of an appeal, the original decision shall be stayed and the
matter shall be set for public hearing.
CI
41
3. Fees. Any appeal filed by a person other than a Councilmember shall be
4. Hearing and Action. A public hearing shall be noticed and held prior to
action on a tentative tract map appeal. The appeal hearing shall be
noticed in accordance with Sections 65090, 65091 and 66451.3 of the
Government Code and shall be held within thirty (30) days after filing of
the appeal. Within ten (10) days following the conclusion of the hearing,
the City Council shall render its decision on the appeal.
5. Effect of Inaction. If the City Council does not make a decision on an
appeal within the time limits specified, the tentative tract map, insofar as it
complies with the Subdivision Map Act and Title 19, shall be deemed to be
approved or conditionally approved as last approved or conditionally
approved, and it shall be the duty of the City Clerk to certify or state that
approval.
J. Indemnification of City. Pursuant to Section 66474.9 of the Government Code, as
a condition of approval of a tentative tract map the decision making body may
require that the owner of the fee interest or designee defend, indemnify, and hold
harmless the City and its agents, officers and employees from any claim, action
or proceeding against the City, its agents, officers, or employees to attack, set
aside, void, or annul the tentative tract map approval and any associated
approvals when such claim, action, or proceeding is brought within the time
period provided under Section 66499.37 of the Government Codee€ —the
Subdivisie� -Act. The City shall notify the owner of the fee interest or
designee of any claim, action or proceeding and the City shall cooperate fully in
the defense.
SECTION 6: Section 19.12.060 shall be amended to read as follows:
19.12.060 Review of Tentative Parcel Maps (66451.1, 66463 et seq., 66474.9).
A. Review by Zoning AdministratorMGdif Gat ^n° Committee.
1. Authority. Tentative parcel maps shall be reviewed and approved,
conditionally approved or denied and aGtid— upep,—by the Zoning
Administrator Medifieatiens -- tee--unless the Planning Director
determines that the public interest would be better served by review by the
Planning Commission. In such a case, the tentative parcel map shall be
reviewed in the same manner as tentative tract maps as set forth in
Section 19.12.050.
2. Procedures. The provisions for tentative tract maps set forth in Section
F
50
• 1 1 • - • i • • • -•_ M Moup -••
• • • if I'MA 11 V.101411 -• SMISMISILaqw. •• • • •
•e- -
3. Finality of Decision. Decisions by the Zoning Administrator shall become
final ten (10) days after the action unless appealed within the time limits
specified in Paragraph B of this Section.
B. Appeal of Zoning Administrator Modikatio GGFRm tte Action.
1. Appeal by Interested Person. Anv interested person, includinq a Plannin
Commissioner or . .- appeal of
Council. Zoning Administrator regarding a tentative parcel map to the Planning
Commission. In accordance with Government Code Section 66463.5, an
appeal of a denial of a tentative parcel map extension shall be heard b
the City
,-;i-,bjeGt pFopeFty On the Gase
L• of t4e
L• _ _ l,aGt map to the R!
-L - -- Mh SeGtqGR 66463 11
the Gity .L.
2. Time Limits for Filing. Appeals shall be filed with the Planning Director
within ten (19)-44--days after the action of the Zoning
AdministratorMOdifiGatiORS Committee, emspt that in c ^cord° ^cc :: th
SeGtiOR n appeal of a denial of a tentative parcel
map extension shall be filed with the City Clerk and heard by City Council
accordance with Government Code Section 66463.5. of � the ;MA, The
time limit for filing appeals on denials of a tentative parcel map extension
f.9
51.
shall be 15 days after the action of the Zonino Administrator
shall be 14 —days.. Upon the filing of an appeal or a Gall for re , the
original decision shall be stayed and the matter shall be set for public
hearing.
3. Fees. Any appeal filed by a person other than a Councilmember or
Planning Commissioner shall be accompanied by a fee set by resolution
of the City Council.
C. Further Appeal. Any action by the Planning Commission when acting as the
Appeal Board an a de ^^ be ng a pea�edl or any decision deemea- affirmed by
the City Clerk due to Planning Commission inaction within the specified time
limits in Section 19.12.050 D and E may in turn be appealed to the City Council
in accordance with the procedures and time limits set forth in Section 19.12.050.
SECTION 7: Section 19.64.030 shall be amended to read as follows:
19.64.030 General Requirements.
A. Where Permitted. If approved under the provisions of this Chapter and Title 20
(Zoning Code), residential condominium conversions may be allowed in any
district in which residential uses are permitted, including planned communities,
except within the R -1.5 District (Balboa Island). Nonresidential condominium
conversions may be allowed in any district in which such uses are permitted.
B. Subdivision Required. All condominium conversions subject to this Chapter shall
require approval of tentative and final subdivision maps.
C. Review Responsibilities. Condominium conversions containing 5 or more
dwelling units shall be reviewed by the Planning Commission via a tentative tract
map. Condominium projects or conversions containing 4 or tes fewer dwelling
units, or nonresidential property, shall be reviewed by the Zoning Administrator
via a tentative parcel map.
D. Applicable Standards. Condominium conversion projects shall conform to: (1) the
applicable standards and requirements of the zoning district in which the project
is located at the time of approval per Title 20 (Zoning Code), and (2) the
applicable provisions of Title 19 this Subdiv sion Gede.
SECTION 8: Chapter 19.68 shall be deleted in its entirety and amended to read as
follows:
CHAPTER 19.68
MERGER OF CONTIGUOUS LOTS
7
sa
Sections:
19.68.010 Purpose and Intent
19.68.020 Exemptions
19.68.030 Lot Mergers
19.68.010 Purpose and Intent.
The provisions of this Chapter are intended to provide for the merger of parcels as
authorized by Section 66499.20 3/ of the Government Code. These provisions are
intended to be consistent with the state Subdivision Map Act and shall be so construed
19.68.020 Exemptions.
A. Old Lots. Any lot of record on August 2 1943 may be used as a development site
even when of less area or width than that required by the provisions of this code.
B. Lots in R1.5 District On any site of less than 5,000 square feet which existed
prior to March 10, 1976, a two - family dwelling may be constructed provided that
there shall be not less than 1,000 square feet o f land area for each family unit.
19.68.030 Lot Mergers.
A Application Mergers of contiguous lots involving four or fewer parcels under one
fee ownership may be initiated by the owner of the fee interest An application
for a lot merger shall be filed in a manner consistent with the requirements
contained in Section 20.90.030 of Title 20 (Application Filing and Fees).
Application for merger of contiguous parcels shall be made on forms provided by
the Planning Department and shall include such items as may reasonably be
required to make the necessary findings An application shall be accompanied by
a fee set by resolution of the City Council.
B. Required Plans and Materials. In addition to the other application materials
required by Section 20 9D 030 of Title 20 an application for a lot merger shall be
accompanied by an exhibit
showing the lots to be merged the property lines of the adjoining parcels and
structures on and adiacent to the lots to be merged.
C. Planning Department Review. An application for a lot merger shall be initially
reviewed by the Planning Department in accordance with Sections 20.90.040
and 20.90.050 of Title 20.
D. Zoning Administrator. Application for lot merger shall be approved conditionally
approved or denied by the Zoning Administrator unless referred to the Planning
Commission pursuant to this Section.
0
5
E. Referral to Planning Commission The Planning Director may determine that an
application should properly be heard by the Planning Commission and may refer
the matter to the Planning Commission for hearing and original determination on
the merits The procedure for notice and hearings held by the Planning
Commission on such applications shall be in accordance with the same
provisions as set forth in this Section
F Public Hearings Lot mergers shall require a public hearing before the Zoning
Administrator. Procedures for noticing and conduct of hearings shall be in
accordance with Section 20.93.025 of Title 20.
G. Investigation. The Zoning Administrator shall cause to be made such
investigation of facts bearing upon such application as will serve to provide all
information necessary to assure that the action on each application is consistent
with the intent of this Section and sound planning practices
H. Required Findings All of the following findings shall be made prior to approval of
a lot merger:
1. Approval of the merger will not, under the circumstances of this particular
case, be detrimental to the health, safety, peace, comfort and general
welfare of persons residing or working in the neighborhood of such
proposed use or be detrimental or injurious to property and improvements
in the neighborhood or the general welfare of the City, and further that the
proposed lot merger is consistent with the legislative intent of Title 19 and
2. The lots to be merged are under common fee ownership at the time of the
merger: and
3. The lots as merged will be consistent or will be more closely compatible
with the applicable zoning regulations and will be consistent with other
regulations relating to the subiect property including but not limited to the
General Plan and any applicable Coastal Plan or Specific Plan and
4. Neither the lots as merged nor adjoining parcels will be deprived of legal
access as a result of the merger.
5 The lots as merged will be consistent with the surrounding pattern of
development and will not create an excessively large lot that is not
compatible with the surrounding development.
I. Conditions of Approval. The Zoning Administrator may condition a lot merger to
account for the impacts including among other things public improvements as
well as the payment of drainage and other fees required for subdivisions by Title
19.
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J. Rendering of Decision. After the conclusion of the hearing on anv application for
a lot merger, the Zoning Administrator shall render a decision within ten (10)
days unless otherwise stipulated by the applicant and the Zoning Administrator.
K. Effective Date and Appeals Decisions on lot mergers shall not become effective
the provisions for appeal of tentative Darcel maps, as set torth in Section
19.12.060B. Upon the filing of an appeal the original decision shall be staved
and the matter shall be set for public hearing
L. Instrument Filed for Record Upon Lot Merger Approval. Upon approval of a lot
merger, the applicant shall file a document approved by the City in writing
specifying the names of the record owners of the fee interest and particularly
describing the real property with a site map for recordation with the County
Recorder.
M. Waiver of Concurrent Parcel Map. In accordance with Section 19.08.030 the
Zoning Administrator may approve a waiver of the parcel map requirement in
coniunction with the lot merger where no more than three parcels are eliminated.
If a merger involves the elimination of more than three parcels tentative and final
parcel maps shall be required.
N Expiration and Amendments Expiration of and amendments to lot merger
approvals shall be in accordance with Chapter 20.93 of the Zoning Code.
SECTION 9: Chapter 19.76 shall be deleted in its entirety and amended to read as
follows:
CHAPTER 19.76
LOT LINE ADJUSTMENTS
Sections:
19.76.010 Purpose and Intent
19.76.020 Procedures for Lot Line Adjustments
19.76.030 Required Findings
19.76.010 Purpose and Intent.
This Chapter is intended to allow for lot line adjustments. A lot line adiustment for
purposes of Chapter 19.76 is a minor boundary adjustment involving four or fewer
adjacent lots or parcels where the land taken from one parcel is added to an adjacent
parcel with the original number of parcels remaining unchanged after the adjustment.
10
55
19.76.020 Procedures for Lot Line Adiustments.
A. Application. An application for a lot line adjustment shall be filed in accordance
with the requirements contained in Section 20.90.030 of Title 20 (Application
Filing). The owners of the fee interest of all parcels involved shall sign the
application form.
B. Required Plans and Materials. In addition to the other application materials
required by Section 20.90.030 of Title 20 an application for a lot line adjustment
shall be accompanied by an exhibit
ena+aeeF- showing the line or lines to be adjusted the property lines of the
ad oininp parcels and structures adjacent to the line or lines to be adjusted.
C. Planning Department Review. An application for a lot line adjustment shall be
initially reviewed by the Planning Department in accordance with Sections
20.90.040 and 20.90.050 of Title 20.
D. Zoning Administrator. Application for lot line adiustments shall be approved,
conditionally approved or denied by the Zoning Administrator unless referred to
the Planning Commission pursuant to this Section.
E. Street Frontage Orientation. An application filed for a lot line adjustment that
proposes a change in the street frontage and /or orientation of any lot shall
require the concurrent filing of a zone change application to establish appropriate
street side setbacks deemed to be compatible with those of adjacent properties
and the City Council. In approving or conditionally approving such lot line
adjustment application and zone change the Planning Commission and City
Council shall make required findings as set forth below.
F. Referral to Planning Commission. The Planning Director may determine that an
application should properly be heard by the Planning Commission and may refer
the matter to the Planning Commission for hearing and original determination on
the merits. The procedure for notice and hearings held by the Planning
Commission on such applications shall be in accordance with the same
provisions applicable to lot line adjustments and the Zoning Administrator as set
forth in Section 19.12.050.
G. Public Hearings. Lot line adjustments shall require a public hearing. Procedures
for noticing and conduct of hearings shall be in accordance with Section
20.93.025 of Title 20.
H. Investigation. The Zoning Administrator shall cause to be made such
investigation of facts bearing upon such application as will serve to provide all
information necessary to assure that the action on each application is consistent
with the intent of this Section and sound planning practices.
11
a
I, Required Findings. In approving conditionally approving or denying a lot line
1. Approval of the lot line adiustment will not under the circumstances of the
particular case, be detrimental to the health, safety, peace, comfort, and
general welfare of persons residing or working in the neighborhood of
such proposed use or be detrimental or incurious to property and
improvements in the neighborhood or the general welfare of the City, and
2. The number of parcels resulting from the lot line adiustment remains the
same as before the lot line adjustment.
3. The lot line adjustment is consistent with applicable zoning regulations
except that nothing herein shall prohibit the approval of a lot line
ad'ustment as long as none of the resultant parcels is more
nonconforming as to lot width depth and area than the parcels that
existed prior to the lot line adjustment.
1 -4. Neither the lots as adjusted nor adioining parcels will be deprived of legal
access as a result of the lot line adjustment.
2L.5. That the final configuration of the parcels involved will not result in
the loss of direct vehicular access from an adjacent alley for any of the
parcels that are included in the lot line adiustment.
M. That the final configuration of a reoriented lot does not result in any
reduction of the street side setbacks as currently exist adjacent to a front
yard of any adiacent key, unless such reduction is accomplished through a
zone change to establish appropriate street side setbacks for the
reoriented lot. The Planning Commission and City Council in approving
the zone change application shall determine that the street side setbacks
are appropriate, and are consistent and compatible with the surrounding
pattern of development and existing adjacent setbacks.
J. Conditions of Approval. The Zoning Administrator may condition a lot line
adjustment to account for the impacts including, among other things public
improvements as well as the payment of drainage and other fees required for
subdivisions by Title 19.
K. Renderinq of Decision. After the conclusion of the hearing on any application for
a lot line adiustment, the Zoning Administrator shall render a decision within ten
(10) days unless otherwise stipulated by the applicant and the Zoning
12
51
Administrator.
L. Effective Date and Appeals. Decisions on lot line adjustments shall not become
effective for ten (10) days after being granted. Appeals shall be made in
accordance with the provisions for appeal of tentative parcels maps, as set forth
in Section 19.12.060. Upon the filing of an appeal the original decision shall be
staved and the matter shall be set for public hearing. The lot line adjustment shall
only become effective when the lot line adjustment instrument specifying the
owners of the fee interest and particularly describing the real property is
approved by the City in writing and the instrument is filed for recordation with the
County Recorder.
M. Instrument Filed for Record Upon Lot Merger Approval. Upon approval of a lot
merger, the applicant shall file a document approved by the City in writing
specifying the names of the record owners of the fee interest and particularly
describing the real property with a site map for recordation with the County
Recorder.
N. Expiration and Amendments. Expiration of and amendments to lot line
adiustment approvals shall be in accordance with Sections 20.93.050 20.93.055
of Title 20.
13
i
Attachment No. CC 3
Draft Resolution setting the amount of the
in -lieu fee
5`1
RESOLUTION NO, 2009-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH SETTING THE AMOUNT OF THE
AFFORDABLE HOUSING IN -LIEU FEE PURSUANT TO
SECTION 19.54.050(D) OF THE NEWPORT BEACH
MUNICIPAL CODE
WHEREAS, in July of 2006, the City Council adopted an update to the City of
Newport Beach's ( "City ") General Plan, which includes a Housing Element that
addresses issues, goals, and policies related to ensuring an adequate supply of housing
opportunities for all residents; and
WHEREAS, with the intent of achieving the City's Regional Housing Needs
Assessment construction goals and encouraging the housing development industry to
respond to the housing needs of the community and the demand for affordable housing,
the 2006 Housing Element Update (Housing Program 2.2.1) incorporates the City's
longstanding inclusionary housing policy; and
WHEREAS, Housing Program 2.2.1 is a statement of the City's inclusionary
housing policy and requires the preparation of an Affordable Housing Implementation
Plan, or the payment of an in -lieu fee, when the construction of new units is proposed; and
WHEREAS, Chapter 19.54 of the Newport Beach Municipal Code implements
Housing Program 2.2.1 and establishes an affordable housing requirement requiring 15-
percent of the total number of dwelling units within residential subdivisions be affordable
to very low -, low- or moderate- income households; and
WHEREAS, to increase the flexibility in the means of fulfilling inclusionary
housing requirements, Chapter 19.54 provides the option of paying a fee in lieu of
providing the affordable units within residential subdivision projects; and
WHEREAS, the City has retained Keyser Marston Associates (KMA) to prepare
selected analyses of the financial burden associated with income and affordability
restrictions that may be imposed under the requirements of Chapter 19.54; and
WHEREAS, such financial analyses indicated the inclusionary housing
requirements can be fulfilled without creating an unreasonable constraint on residential
development; and
WHEREAS, the KMA in -lieu fee analysis is based on the assumption that the
City will provide developers with the option to fulfill the inclusionary requirements with
either ownership or rental units; and
CO 1
WHEREAS, the analysis further indicates that the provision of affordable rental
units generates a substantially smaller financial burden than the provision of affordable
ownership units, and, accordingly, the in -lieu fee analysis is based on a rental housing
scenario; and
WHEREAS, KMA projected the financial burden imposed on a typical new
residential subdivision by the inclusionary requirements into an equivalent per unit in-
lieu fee; and
WHEREAS, the results of the in -lieu fee analysis indicate that the financial
burden required to provide low- income rental units pursuant to the provisions of Chapter
19.54 equates to a supportable in -lieu fee of $18,500 per market rate ownership unit.;
and
WHEREAS, the City Council has reviewed the financial analyses and
methodology used to establish the in -lieu housing fee, and determines the in -lieu fee to
be appropriate; and
WHEREAS, the proposed action is not defined as a project under the California
Environmental Quality Act (CEQA) because it involves general policy and procedure
making activities not associated with a project or a physical change in the environment
(Section 15378 of the CEQA Guidelines).
NOW THEREFORE, the City Council of the City of Newport Beach, California,
hereby resolves as follows:
SECTION 1: The in -lieu housing fee pursuant to Section 19.54.050 (D) of the
Newport Beach Municipal Code is set at Eighteen Thousand Five Hundred Dollars
($18,500).
SECTION 2: The in -lieu housing fee shall be increased automatically, based
upon the annual percentage change in the new home prices in Orange County (from
December to December) as published in Real Estate Research Council report in order
to ensure that the fees keep pace with inflation and the cost to construct affordable
housing.
SECTION 3: This Resolution passed and approved at a regular meeting of the
City Council of the City of Newport Beach held on the 24th day of November, 2009, by
the following vote, to wit:
AYES, COUNCIL MEMBERS
NOES, COUNCIL MEMBERS
ABSENT, COUNCIL MEMBE
Attachment No. CC 4
Staff Report from August 11, 2009 City
Council Study Session
M
Title 19 - Subdivisions
CITY OF NEWPORT BEACH
CITY COUNCIL STUDY SESSION STAFF REPORT
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Planning Department
David Lepo, Planning Director
949 - 6443226, dleooCdcity newoort- beach.ca.us
Makana Nova, Assistant Planner
(949) 6443249, mnoyay§ciiv ne Dort -beach ca us
SUBJECT: AMENDMENT TO TITLE 19, "SUBDIVISIONS ", OF THE NEWPORT BEACH MUNICIPAL CODE (PA2009 -087)
Provide guidance to staff on the proposed revisions to Title 19, 'Subdivisions", of the Newport Beach Municipal Code.
BACKGROUND:
Page 1 of 7
Agenda Item No. SS5
August 11, 2009
Revisions to Title 19 of the Newport Beach Municipal Code were initiated primarily to include procedures for review and approval of lot mergers, to remove
provisions related for involuntary lot mergers, and to bring the Code into compliance with the California Subdivision Map Act.
Substantive, proposed revisions to Title 19 are summarized below.
Procedures
The review process for tentative parcel maps, lot line adjustments, and lot mergers has been updated to indicate that these applications will be reviewed by
the Zoning Administrator rather than the Modifications Committee. The Modifications Committee was removed from the Zoning Code and their duties were
assigned to the Zoning Administrator in 2004.
In Section 19.04.050, the text was revised to specify the advisory agency and appeal authority for each subdivision applications. Previously, this section only
specified the review authorities for tentative parcel maps and tentative tract maps. Review authorities have now been identified for lot line adjustments and lot
mergers as well.
The appeal process for tentative maps, lot mergers, and lot line adjustments has been revised to provide a 10-day appeal and decision process to be
consistent with the requirements of the Subdivision Map Act.
Language
Changes are proposed to correct minor language and grammatical errors throughout Title 19. References to sections of the Subdivision Map Act have been
changed to refer to specific Government Code sections. References to the Subdivision Code have been changed to 'Title 19 of the Municipal Code ".
Tentative Parcel Maps
The appeal process for tentative parcel maps has been revised to consolidate the outdated "call for review' provisions into the appeal procedures. This
provides consistency with current Planning Department procedures and other discretionary application review processes. A fee requirement was added to the
tentative parcel map appeal process. Fees for appeals are established by City Council resolution.
The aitena for a parcel map waiver in Section 19.08.030 has been adjusted to allow for the elimination of up to three parcels under this process. Previously,
the cntena only allowed for the elimination of one parcel under a parcel map waiver. Requirements for consistency with the Local Coastal Plan and any
applicable Speck Plan were added to the required findings for approval of a parcel map waiver.
Lot Mergers
Chapter 19.68 for merger of contiguous lots has been rewritten so that lot mergers are a process distinct from that for lot line adjustments. The revised lot
merger process allows for review of lot mergers by the Zoning Administrator.
Procedures for required (involuntary) lot mergers have been removed from Title 19. These refiected provisions of the Subdivision Map Act that at one time
allowed cities to require that nonconforming lots be merged even if no development permit application for such lots had been submitted. Language in the
current code that allows development on nonconforming lots has been removed and will be included in the revised zoning code. This change will make the
exceptions for nonconforming lots more readily accessible to property owners and to the development community.
Code provisions relating to project valuation and demolition permits that previously triggered the lot merger process are revised and added to new Section
19.04.035, to require an instrument of recordation to combine configuous parcels in order to construct a new principal or accessory structure that crosses an
underlying legal lot line. With this revision, project applicants are given the option to address this requirement through any of the applicable subdivision
applications specified in Title 19.
Lot Line Adjustments
Revised Chapter 19.76 for lot line adjustments specifies that a lot line adjustment is a boundary adjustment between four or fewer lots or parcels with the
original number of parcels remaining unchanged after the adjustment, consistent with this requirement. In order to clarify interpretations that have arisen on
recent lot line adjustment applications, Chapter 19.76 is proposed to be revised to allow the reorientation of existing lot lines between adjacent lots so as to
change the street frontages of such lots, provided the reorientation would not increase the non- conformity of any resultant lot as to width, depth, or area.
Finally, lot line adjustments have been revised to consolidate and simplify the required findings for lot line adjustments and specify the types of conditions
which may be imposed on lot line adjustment approvals.
(4v
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Title 19 - Subdivisions
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Summary
Staff proposes to delete and replace Chapters 19.68 and 19.76, add Section 19.04.035, and amend Sections 19.04.050, 19.08.030, 19.12.010, 19.12.050,
19.12.060, and 19.64.030 pertaining to the procedures for subdivisions pursuant to the attached draft ordinance. Please refer to the redlined and clean copies
for a full overview of the proposed changes (Attachments 1 and 2).
Submitted by:
David Lepo
Planning Director
Prepared by:
Makana Nova
Assistant Planner
Attachments:
1. Draft Ordinance Amending Title 19 (redline)
2. Draft Ordinance Amending Title 19 (clean)
ORDINANCE NO. 2009-
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AMENDING TITLE 19 OF THE NEWPORT
BEACH MUNICIPAL CODE PERTAINING TO DEVELOPMENT ACROSS LOT LINES, THE AUTHORITY OF THE ZONING
ADMINISTRATOR, LOT MERGERS AND LOT LINE ADJUSTMENTS
WHEREAS, the City adopted Title 19 of the Municipal Cade to provide provisions for the orderly and controlled growth within the City with adequate traffic
circulation, utilities, and other services; and
WHEREAS, it is the City's desire to simplify the procedure for the processing of voluntary lot mergers of contiguous lots under one fee ownership initiated by
the owner of the fee interest and eliminate the provisions for required lot mergers; and
WHEREAS, City staff found it necessary to amend Title 19 of the Municipal Code to update the language of Title 19 of the Municipal Code to change
references to the Zoning Administrator from the Modification Committee, clarify language related to lot line adjustments, and provide for an updated review
process separate from lot line adjustments by which the owner of the fee interest initiated lot mergers can be reviewed and acted upon; and
WHEREAS, pursuant to Section 66499.20 314 of the Government Code, a city or local agency may, by ordinance, authorize the merger of contiguous parcels
under common ownership without reverting to acreage, provided the ordinance requires the recordation of an instmment evidencing the merger; and
WHEREAS, the proposed action is not defined as a project and does not require environmental review under the California Environmental Quality Act (CEQA)
because it involves general policy and procedure making activities not associated with a project and does not have the potential for resuting in 9 direct
physical change in the environment or a reasonably foreseeable indirect physical change in the environment (Section 15378 of the CEQA Guidelines); and
WHEREAS, after providing notice in accordance with law, the City Council conducted a public hearing on , in the City Hall Council
Chambers, 3300 Newport Boulevard, Newport Beach, California, and considered evidence, both written and oral, that was presented to, and considered by,
the City Council at this meeting.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1: Section 19.04.035 of Chapter 19.04 of Title 19 shall be added to read as follows:
19.04.035 Development Across Property Lines.
No person shall develop any structure including, but not limited lo, a principal or accessory structure across lot lines.
SECTION 2: Section 19.04.050 of Chapter 19.04 of Title 19 shall be amended to read as follows:
19.04.050 Advisory Agencies and Appeal Boards (66415, 66416).
Pursuant to Government Code section 66415, the Planning Commission is hereby designated as the City's Advisory Agency for review of tentative tract maps
and the Zoning Administrator is designated as the City's Advisory Agency for review of tentative parcel maps, lot mergers, and lot line adjustments. The
duties, responsibilifies, and authority for tentative map review by the Planning Commission and Zoning Administrator shall be as specified in Chapter 19.12.
Pursuant to Government Code Section 66416, the Appeal Board for decisions of the Planning Commission shall be the City Council and the Appeal Board for
decisions of the Zoning Administrator shall be the Planning Commission.
SECTION 3: Section 19.08.030 of Chapter 19.08 of Title 19 shall be amended to read as follows:
19.08.030 Waiver of Parcel Map Requirement (66428).
A. Activities Eligible for Waiver. The Zoning Administrator may waive all or part of the requirements for a tentative and final parcel map in the following
cases:
1. Division of real property or interests therein created by probate, eminent domain procedures, partition, or other civil judgments or decrees; or
2. Division of real property resulting from the conveyance of land or any interest therein to or from the City or other public entity for public purposes,
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such as school sites, public building sites, or rights -of -way or easements for streets, sewers, utilities, drainage, and similar facilities; or
3. Mergers resulting in the net elimination of no more than three (3) parcels; or
4. A division requiring a parcel map imposed by Section 66426 of the Government Code.
e. Filing Requirements. Application for a parcel map waiver shall be made on forms provided by the Planning Department and shall include such items as
may reasonably be required to make the necessary findings. A filing fee shall be paid as established by resolution of the City Council.
C. Required Findings. In waiving a parcel map requirement, the Zoning Administrator shall make findings that the proposed division of land complies with
requirements as to area, improvement and design, flood water drainage control, appropriate improved public roads, sanitary disposal facilities, water
supply availability, environmental protection, and other applicable requirements of Title 19, the Zoning Code, the General Plan, and any applicable
Coastal Plan or Specific Plan.
D. Conditions on Parcel Map Waiver. The Zoning Administrator may condition the waiver of parcel map requirements to provide for, among other things,
payment of parkland, drainage, and other fees required for subdivisions by Title 19.
E. Instrument Filed for Record Upon Parcel Map Waiver. Upon approval of a parcel map waiver, the applicant shall file a document, approved by the City
in writing, specifying the names of the record owners of the fee interest and particularly describing the real property with a site map for recordation with
the County Recorder.
SECTION 4: Section 19. 12.010 of Chapter 19.12 of Title 19 shall be amended to read as follows:
19.12.010 Tentative Map Review Authority.
The Planning Commission shall have the authority to approve, conditionally approve, or deny, tentative tract maps and tentative parcel maps referred to the
Planning Commission for review by the Zoning Administrator. The Zoning Administrator shall have the authority to approve, conditionally approve, or deny
tentative parcel maps. Appeals from actions of the above reviewing bodies shall be processed in accordance with Sections 19.12.050 and 19.12.060.
SECTION 5: Section 19.12.050 of Chapter 19.12 of Tile 19 shall be amended to read as follows:
19.12.050 Review of Tentative Tract Maps (66451.1, 66452.1 at seq., 66474.9).
A. Review by Planning Commission. Tentative tract maps shall be reviewed and approved, conditionally approved or denied by the Planning Commission.
Decisions by the Planning Commission shall become final ten (10) days after the action unless appealed within the time limits specified in this Section.
B. Staff Report. After review and analysis of a tentative tract map, the Planning Director shall forward a report, together with a recommendation of
approval, approval subject to conditions, or denial to the Planning Commission. Also, at least three (3) days prior to any hearing or action on the
tentative tract map, the staff report shall be sent to the subdivider, to each fee owner of the subject property if other than the subdivider, and, in the
case of a proposed conversion to a condominium, community apartment or stock cooperative project, to each tenant of the subject property.
C. Public Hearings. Public hearings shall be noticed and held in accordance with Sections 65090, 65091, and 66451.3 of the Government Code and City
procedures.
D. Time Limits for Action on Map.
1. Time Limits When No EIR is Required. If the City determines that no environmental impact report (EIR) is required for review of a tentative tract
map, within fly (50) days of the adoption of a negative declaration or other determination that no EIR is required, the Planning Commission shall
hold a public hearing to receive testimony and thereafter shall approve, conditionally approve, or deny the tentative tract map within said fifty (50)
day period unless a time extension is mutually agreed upon pursuant to this Section.
2. Time Limits When EIR is Required. If an environmental impact report is prepared for the tentative tract map, the preceding fifty (50) day time
period shall not commence until the date of certification of the EIR as complete.
E. Extension of Time Limits.
1. Extension by Mutual Consent. The time limits specified in this Chapter for reporting and acting on a tentative tract map may be extended by
mutual consent of the subdivider and the City.
2. Use of Outside Consultant to Meet Time Limits. At the time the subdivider makes an application pursuant to Title 19, the Planning Director shall
determine whether or not the City is able to meet the time limits specified in this Chapter for reporting and action on maps. If the Director
determines that such time limits cannot be met, the Director, upon request of the subdivider and for the purpose of meeting such limits, may
contract or employ a private person or entity on a temporary basis to perform such services as necessary to permit the City to meet such time
limits, subject to the provisions, requirements and limitations of Section 66451.1 of the Government Cade.
F. Required Findings. In approving or denying a tentative tract map, the Planning Commission shall make all applicable findings set forth in Section
19.12.070.
G. Approval by Inaction. If no action is taken upon a tentative tract map by the Planning Commission within the time limits specified in this Section or
within any authorized extension thereof per this Section, the tentative tract map as filed shall be deemed to be approved insofar as it complies with
other applicable requirements of the Government Code and the City of Newport Beach Municipal Code. It shall be the duty of the City Clerk to certify
said approval. Any tentative tract map deemed approved by Planning Commission inaction may in turn be appealed to the City Council in accordance
with the procedures and time limits set forth in Subsection I of this Section.
H. No Denial to Comply with Time Limits. Pursuant to Section 66451.4 of the Government Code, no tentative tract map shall be denied to comply with the
time limits specified in this Section unless there are reasons for disapproval other than the failure to timely act in accordance with the time limits
specified in this Section.
Appeals
1. Appeal by Interested Person. Any interested person, including a City Councilmember, may appeal any action of the Planning Commission
regarding a tentative tract map to the City Council. Any appeal filed by a City Councilmember in accordance with this section shall be
considered a call for review and the City Councilmember shall not be considered an aggrieved person based on the fact that the City Council
member filed the appeal.
2. Time Limits for Filing. Appeals shall be fled with the Planning Director within ten It 0) days after the action of the Planning Commission. Upon
I
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Title 19 - Subdivisions
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the filing of an appeal, the original decision shall be stayed and the matter shall beset for public hearing.
3. Fees. Any appeal filed by a person other than a Councilmember shall be accompanied by a fee set by resolution of the City Council pursuant to
Section 66451.2 of the Government Code.
4. Hearing and Action. A public hearing shall be noticed and held prior to action on a tentative tract map appeal. The appeal hearing shall be
noticed in accordance with Sections 65090, 65091 and 66451.3 of the Government Code and shall be held within thirty (30) days after filing of
the appeal. Within ten (10) days following the conclusion of the hearing, the City Council shall render its decision on the appeal.
5. Effect of Inaction. If the City Council does not make a decision on an appeal within the time limits specified, the tentative tract map, insofar as it
complies with the Subdivision Map Act and Title 19, shall be deemed to be approved or conditionally approved as last approved or conditionally
approved, and it shall be the duty of the City Clerk to certify or stale that approval.
Indemnification of City. Pursuant to Section 66474.9 of the Government Code, as a condition of approval of a tentative tract map, the decision making
body may require that the owner of the fee interest or designee defend, indemnify, and hold harmless the City and its agents, officers and employees
from any claim, action or proceeding against the City, its agents, officers, or employees to attack, set aside, void, or annul the tentative tract map
approval and any associated approvals when such claim, action, or proceeding is brought within the time period provided under Section 66499.37 of
the Government Code. The City shall notify the owner of the fee interest or designee of any claim, action or proceeding and the City shall cooperate
fully in the defense.
SECTION 6: Section 19.12.060 of Chapter 19.12 of Title 19 shall be amended to read as follows:
19.12.060 Review of Tentative Parcel Maps (66451.1, 66463 of seq., 66474.9).
A. Review by Zoning Administrator.
1. Authority. Tentative parcel maps shall be reviewed and approved, conditionally approved or denied by the Zoning Administrator unless the
Planning Director determines that the public interest would be better served by review by the Planning Commission. In such a case, the tentative
parcel map shall be reviewed in the same manner as tentative tract maps as set forth in Section 19.12.050.
2. Procedures. The provisions for tentative tract maps set form in Section 19.12.050 Subsections (B) though (H) and (J), regarding staff reports,
public hearings, time limits, required findings, approval by inaction, and indemnification shall apply to tentative parcel maps.
3. Finality of Decision. Decisions by the Zoning Administrator shall become final ten (10) days after the action unless appealed within the time limits
specified in Paragraph B of this Section.
B. Appeal of Zoning Administrator Action.
1. Appeal by Interested Person. Any interested person, including a Planning Commissioner or City Councilmember, may appeal any action of the
Zoning Administrator regarding a tentative parcel map to the Planning Commission, except that, in accordance with Government Code section
66463.5, an appeal of a denial of a tentative parcel map extension shall be heard by the City Council.
2. Time Limits for Filing. Appeals shall be filed with the Planning Director within ten (10) days after the action of the Zoning Administrator except
that in accordance with Government Code Section 66463.5, an appeal of a denial of a tentative parcel map extension shall be heard by City
Council the time limit for fling appeals on denials of a tentative parcel map extension shall be 15 days after the action of the Zoning
Administrator. Upon the filing of an appeal, the original decision shall be stayed and the matter shall be set for public hearing.
3. Fees. Any appeal filed by a person other than a Councilmember or Planning Commissioner shall be accompanied by a fee set by resolution of
the City Council,
C. Further Appeal. Any action by the Planning Commission, when acting as the Appeal Board, or any decision deemed affirmed due to Planning
Commission inaction within the specified time limits may in turn be appealed to the City Council in accordance with the procedures and time limits set
forth in Section 19.12.050.
SECTION 7: Section 19.64.030 of Chapter 19.64 of Title 19 shall be amended to read as follows:
19.64.030 General Requirements.
A. Where Permitted. If approved under the provisions of this Chapter and Title 20 (Zoning Code), residential condominium conversions may be allowed in
any district in which residential uses are permitted, including planned communities, except within the R -1.5 District (Balboa Island). Nonresidential
condominium conversions may be allowed in any district in which such uses are permitted.
B. Subdivision Required. All condominium conversions subject to this Chapter shall require approval of tentative and final subdivision maps.
C. Review Responsibilities. Condominium conversions containing 5 or more units shall be reviewed by the Planning Commission via a tentative tract map.
Condominium projects or conversions containing 4 or less units shall be reviewed by the Zoning Administrator via a tentative parcel map.
D. Applicable Standards. Condominium conversion projects shall conform to: (1) the applicable standards and requirements of the zoning district in which
the project is located at the time of approval per Title 20 (Zoning Code), and (2) the applicable provisions of Title 19.
SECTION 8: Chapter 19.68 of Title 19 shall be deleted in its entirety and amended to read as follows:
CHAPTER 19.66
MERGER OF CONTIGUOUS LOTS
Sections:
19.68.010 Purpose and Intent
19.68.020 Lot Mergers
19.68.010 Purpose and Intent.
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The provisions of this Chapter are intended to provide for the merger of parcels as authorized by Section 66499.20 % of the Government Code. These
provisions are intended to be consistent with the state Subdivision Map Act and shall be so construed.
19.66.020 Lot Mergers.
A. Application. Mergers of contiguous lots under one fee ownership may be initiated by the owner of the fee interest. An application for a lot merger shall
be filed in a manner consistent with the requirements contained in Section 20.90.030 of Title 20 (Application Filing and Fees). Application for merger of
contiguous parcels shall be made on forms provided by the Planning Department and shall include such items as may reasonably be required to make
the necessary findings. An application shall be accompanied by a fee set by resolution of the City Council.
B. Required Plans and Materials. In addition to the other application materials required by Section 20.90.030 of Title 20, an application for a lot merger
shall be accompanied by an exhibit showing the lots to be merged, the property lines of the adjoining parcels, and structures on and adjacent to the
lots to be merged.
C. Planning Department Review, An application for a lot merger shall be Initially reviewed by the Planning Department in accordance with Sections
20.90.040 and 20.90.050 of Title 20.
D. Zoning Administrator. Application for lot merger shall be approved, conditionally approved, or denied by the Zoning Administrator unless referred to the
Planning Commission pursuant to this Section.
E. Referral to Planning Commission. The Planning Director may determine that an application should properly be heard by the Planning Commission and
may refer the matter to the Planning Commission for hearing and original determination on the merits. The procedure for notice and hearings held by
the Planning Commission on such applications shall be in accordance with the same provisions as set forth in this Section,
F. Public Hearings. Lot mergers shall require a public hearing before the Zoning Administrator. Procedures for noticing and conduct of hearings shall be
in accordance with Section 20.93.025 of Title 20.
G. Investigation. The Zoning Administrator shall cause to be made such investigation of facts bearing upon such application as will serve to provide all
information necessary to assure that the action on each application is consistent with the intent of this Section and sound planning practices.
H. Required Findings. All of the following findings shall be made prior to approval of a lot merger.
1. Approval of the merger will not be detrimental to the health, safety, peace, comfort and general welfare of persons residing or working in the
neighborhood of such proposed use or be detrimental or injurious to property and improvements in the neighborhood or the general welfare of
the City. and further that the proposed lot merger is consistent with the legislative intent of Title 19; and
2. The lots to be merged are under common fee ownership at the time of the merger; and
3. The lots as merged will be consistent or will be more closely compatible with the applicable zoning regulations and will be consistent with other
regulations relating to the subject property including, but not limited to, the General Plan and any applicable Coastal Plan or Specific Plan; and
4. Neither the lots as merged nor adjoining parcels will be deprived of legal access as a result of the merger.
5. The lots as merged will be consistent with the surrounding pattern of development and will not create an excessively large lot that is not in
conformance with the surrounding development.
I. Conditions of Approval. The Zoning Administrator may condition a lot merger to account for the impacts of the lot merger including, among other
things, public improvements as well as the payment of parkland, drainage, and other fees required for subdivisions by Title 19.
J. Rendering of Decision. After the conclusion of the hearing on any application for a lot merger, the Zoning Administrator shall render a decision within
ten (10) days unless otherwise stipulated by the applicant and the Zoning Administrator.
K. Effective Date and Appeals. Decisions on lot mergers shall not become effective for ten (10) days after being granted. Appeals shall be made in
accordance with the provisions for appeal of tentative parcels maps, as set forth in Section 19.12.060. Upon the filing of an appeal, the original decision
shall be stayed and the matter shall be set for public hearing.
L. Instrument Filed for Record Upon Parcel Map Waiver. Upon approval of a lot merger, the applicant shall file a document, approved by the City in
writing, specifying the names of the record owners of the fee interest and particularly describing the real property with a site map for recordation with
the County Recorder.
M. Waiver of Concurrent Parcel Map. In accordance with Section 19.08.030, the Zoning Administrator may approve a waiver of the parcel map
requirement in cases where no more than three parcels are eliminated. If a merger involves the elimination of more than three parcels, tentative and
final parcel maps shall be required.
N. Expiration and Amendments. Expiration of and amendments to lot merger approvals shall be in accordance with Chapter 20.93 of the Zoning Code.
SECTION 9: Chapter 18.76 of Title 19 shall be deleted in its entirety and amended to read as follows:
CHAPTER 19.76
LOT UNE ADJUSTMENTS
Sections:
19.76.010 Purpose and Intent
19.76.020 Procedures for Lot Line Adjustments
19.76.030 Required Findings
19.76.010 Purpose and Intent.
This Chapter is intended to allow for lot line adjustments. A lot line adjustment for purposes of Chapter 19.76 is a minor boundary adjustment between four or
fewer adjacent lots or parcels where the land taken from one parcel is added to an adjacent parcel with the original number of parcels remaining unchanged
http: / /newportbeach. granicus. com /MetaViewer.php ?view_id =26 &clip _ id= 1020 &meta_id... 11/17/2009 �o
Title 19 - Subdivisions
after the adjustment.
19.76.020 Procedures for Lot Line Adjustments.
Page 6 of 7
A. Application. An application for a lot line adjustment shall be filed in accordance with the requirements contained in Section 20.90.030 of Title 20. The
owners of the fee interest of all parcels involved shall sign the application form.
B. Required Plans and Materials. In addition to the other application materials required by Section 20.90.030 of Title 20, on application for a lot line
adjustment shall be accompanied by an exhibit showing the line to be adjusted, the property lines of the adjoining parcels, and structures adjacent to
the line to be adjusted.
C. Planning Department Review. An application for a lot line adjustment shall be initially reviewed by the Planning Department in accordance with
Sections 20.90.040 and 20.90.050 or Title 20.
O. Zoning Administrator. Application for lot line adjustments shall be approved, conditionally approved, or denied by the Zoning Administrator unless
referred to the Planning Commission pursuant to this Section.
E. Referral to Planning Commission. The Planning Director may determine that an application should property be heard by the Planning Commission and
may refer the matter to the Planning Commission for hearing and original determination on the merits. The procedure for notice and hearings held by
the Planning Commission on such applications shall be in accordance with the same provisions applicable to lot line adjustments and the Zoning
Administrator as set forth in this Section.
F. Public Hearings. Lot line adjustments shall require a public hearing. Procedures for noticing and conduct of hearings shall be in accordance with
Section 20.93.025 of Title 20.
G. Investigation. The Zoning Administrator shall cause to be made such investigation of facts bearing upon such application as will serve to provide all
information necessary to assure that the action on each application is consistent with the intent of this Section and sound planning practices.
H. Required Findings. In approving, conditionally approving, or denying a lot line adjustment, the Zoning Administrator shall make all applicable findings
set forth in Section 19.76.030.
I. Rendering of Decision. After the conclusion of the hearing on any application for a lot line adjustment, the Zoning Administrator shall render a decision
within ten (10) days unless otherwise stipulated by the applicant and the Zoning Administrator.
J. Effective Date and Appeals. Decisions on lot line adjustments shall not become effective for ten (10) days after being granted. Appeals shall be made
in accordance with the provisions for appeal of tentative parcels maps, as set forth in Section 19.12.060. Upon the fling of an appeal, the original
decision shall be stayed and the matter shall be set for public hearing. The lot line adjustment shall only become effective when the lot line adjustment
instrument specifying the owners of the fee interest and particularly describing the real property is approved by the City in writing and the instrument is
filed for recordation with the County Recorder.
K. Expiration and Amendments. Expiration of and amendments to lot line adjustment approvals shall be in accordance with Sections 20.93.D5D 20.93.055
of Title 20.
19.79.930 Required Findings.
In approving a lot line adjustment the following specific findings shall be made'
A. That the establishment, maintenance, or operation of the use of the property or building will not, under the circumstances of the particular case, be
detrimental to the health, safety, peace, comfort, and general welfare of persons residing or working in the neighborhood of such proposed use or
be detrimental or injurious to property and improvements in the neighborhood or the general welfare of the City, and further that the proposed lot
line adjustment is consistent with the legislative intent of Title 19.
B. The number of resultant parcels created by the lot line adjuust Went remains unchanged.
C. The lot line adiustment is consistent w'th applicable zonino reaula0ons except the
adiuslmenl as long as none of the resultant parcels is more nonconforming as to lot wx
SECTION 10. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of
any court of competent jurisdiction. such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that
it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared Invalid or unconstitutional without
regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 11. The Mayor shall sign and the City Clerk shall attest to the passage to this Ordinance. The City Clerk shall cause the same to be published once
in the official newspaper, and it shall become effective thirty (30) days after its adoption.
SECTION 12. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on, 2009, and adopted on , 2009 by
the following vote, to wit:
AYES, COUNCIL
NOES, COUNCIL
ABSENT, COUNCIL MEMBERS,_..._ ._..__
MAYOR
Edward Selich
ATTEST:
Loilani Brown,
bttp://newportbeach.granicus.com/MetaViewer.php?view id=26,kchpid= 102Mmeta—id... 11/17/2009
Attachment No. CC 5
Keyser Marston Associates (KMA)
Analysis of Inclusionary Housing Options
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ADVISOR5 IN PUBLIC /PRIVATE REAL ESTATE DEVELOPMENT
MEMORANDUM
To: Sharon Wood, Assistant City Manager
City of Newport Beach
From: Kathleen Head
Date: September 17, 2009
Subject: Analysis of Inclusionary Housing Options
At your request, Keyser Marston Associates, Inc. (KMA) prepared selected financial
analyses pertaining to the City of Newport Beach (City) Inclusionary Housing Program.
These analyses can be described as follows:
The inclusionary housing requirements are proposed to be imposed on new
ownership residential development. Market rate rental projects are not proposed
to be subject to the Inclusionary Housing Program requirements.
2. The proposed Program will allow the income and affordability requirements to be
fulfilled in any of the following ways:
a. On -site development of units within the proposed market rate ownership
residential development; or
b. Development of income restricted rental units; or
C. Payment of a fee to the City in lieu of developing any income restricted
housing units.
3. KMA tested the financial impacts associated with income and affordability
restrictions that may be imposed under the Inclusionary Housing Program.
Based on that analysis, KMA identified an Inclusionary Housing Program
structure that does not create an onerous burden on residential development.
The recommended structure is intended to comply with the State of California
(State) Housing Element requirement that the program should not create an
unreasonable constraint on residential development.
500SOUTH GRAND AVENUE. SIATE 1480 LOS ANCELES,CALIFORNIA900'71 n PHONE:2136228095 m FAX:2136225204
W W W KM, ERMARiTON.COM
0905025_2.doc; NB:KHH: NYM:9bd
1609t001/012
VNA
To: Sharon Wood, City of Newport Beach September 17, 2009
Subject: Analysis of Inclusionary Housing Options Page 2
BACKGROUND STATEMENT
The City has applied an inclusionary housing requirement on a case -by -case basis for
new residential development for more than 20 years. This requirement is currently being
formalized into an ordinance that will impose specific restrictions on future new
ownership residential development. As part of the process, the City engaged Economic
& Planning Systems, Inc. to prepare an "Inclusionary Housing In -Lieu Fee Study" (EPS
Study). This study was completed in October 2008.
KMA was recently engaged by the City to test the financial impacts associated with the
proposed requirements. The ultimate objective of the KMA analysis is to create
Inclusionary Housing Program terms that fulfill the City's affordable housing objectives
without eliminating the developer's economically beneficial use of the property.
KMA tested the following baseline inclusionary housing obligations:
Threshold requirement: 15% of the units in market rate ownership residential
development are subject to income and affordability restrictions.
Household Income Restrictions:
a. If ownership units are provided to fulfill the obligation, the restricted units
must be allocated to moderate income households.
b. If rental units are provided to fulfill the obligation, the restricted units must
be rented to low income households.
KMA prepared pro forma analyses of prototypical product types to estimate the financial
impact created by imposing the identified inclusionary housing requirements. The
analyses compare baseline market rate project pro formas to pro formas for projects that
meet the inclusionary standards. These comparisons are used to quantify the financial
impacts created by the requirements being tested.
KMA also reviewed the characteristics of inclusionary housing ordinances currently in
place throughout California. The purpose of this survey is to provide further assistance
in determining whether the requirements being considered by the City fall within the
range of other existing ordinances.
PRO FORMA ANALYSIS ORGANIZATION
A summary of the analysis is presented in Table 1. The supporting pro forma analyses
are organized as follows:
0905025_2. doc; N B: KH H: N Y M: gb d
16091.0011012
'r\
To: Sharon Wood, City of Newport Beach
Subject: Ana
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E,
ysis of Inclusionary Housing Options
Affordable Housing Cost Calculations
Ownership: Baseline Market Rate Project
Ownership: Moderate Income Inclusionary
Rental: Baseline Market Rate Project
Rental: Low Income Inclusionary
ANALYSIS ASSUMPTIONS
Ownership Assumptions
September 17, 2009
Page 3
KMA reviewed ownership residential projects that have recently been submitted to the
City's Planning Department to identify the product type to use as the baseline market
rate project scenario. Based on the available information, KMA created a prototype
project with the following characteristics:
The development site is set at two acres.
The prototype project includes 32 units, which represents a density of 16 -units
per acre.
3. The average unit size is set at approximately 2,100 square feet.
The pro forma analyses are based on the following assumptions:
1. The construction costs, excluding land acquisition costs, are estimated at $1.2
million per unit.
2. The average sales price for the market rate units is projected at $1.8 million per
unit.
3. Based on the affordable housing cost calculation methodology defined in the
City's Housing Element, the 2009 affordable purchase price for a three - bedroom
unit is approximately $360,000 (See Appendix A -Table 1).
4. The threshold developer profit is set at 15% of the project's construction costs.
Rental Assumptions
The rental prototype being tested in the KMA financial analysis is based on a survey of
apartment complexes in Newport Beach. The key components of the prototype project
are:
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To: Sharon Wood, City of Newport Beach September 17, 2009
Subject: Analysis of Inclusionary Housing Options Page 4
1. The development site is set at two acres.
2. The prototype project includes 36 units, a density of 18 -units per acre.
3. The project includes the following unit mix:
a. 40% one- bedroom units;
b. 40% two- bedroom units; and
C. 20% three - bedroom units.
The following assumptions are used in the rental scenarios
1. The construction cost estimates are based on the assumptions applied in the
EPS Study. The construction costs, excluding land acquisition, are estimated at
$154,000 per unit.
2. Projected Market Rents
a. One - bedroom unit: $2,100 per month;
b. Two - bedroom unit: $2,700 per month; and
C. Three - bedroom unit: $3,000 per month.
3. Affordable Rent Inclusionary Housing Units
a. The affordable rents are based on the calculation methodology identified
in the City's Housing Element.
b. The 2009 low income rents are:
i. One - bedroom unit: $1,441 per month;
ii. Two- bedroom unit: $1,802 per month; and
iii. Three - bedroom unit: $2,065 per month.
4. The threshold stabilized return on total investment for the rental housing projects
is set at 6.6 %. This return rate is approximately equal to the rate applied in the
EPS Study.
0905025_2. d0C, NB: KHH: N YM: gbd
18091.0011012 n
1
To: Sharon Wood, City of Newport Beach September 17, 2009
Subject: Analysis of Inclusionary Housing Options Page 5
FINANCIAL CONSTRAINTS ANALYSIS
Ownership: Moderate Income Inclusionary
The primary financial impact created by imposing affordable housing requirements on
ownership units is the difference between the achievable market rate prices and the
allowable prices for the income restricted units. However, there are also some minor
differences in cost categories that are driven by the revenues generated by an
ownership project. The pro forma analyses in Appendices B and C illustrate the
estimated impact created by providing the inclusionary units within a market rate project.
The pro forma analyses results indicate that the requirement to set aside 15% of the
units for moderate income households acts to reduce the supportable land value in the
near term by 50% (Appendix C — Table 3). A land value reduction in this range can be
considered an onerous burden that will act as a constraint to residential development.
Rental: Low Income Inclusionary
To mitigate the financial burden, the proposed Inclusionary Housing Program provides
the option for developers to fulfill the requirements by constructing affordable rental
units. This section of the analysis evaluates the financial impact associated with
providing the required inclusionary units in rental projects.
The financial impact associated with imposing income and affordability restrictions on
apartment development is largely related to the decrease in supportable investment
created by the reduction in the achievable rents. However, the revenue reduction is
offset to some degree by the fact that the property taxes for the income restricted project
will be lower than the property taxes for a market rate project. The pro forma analyses in
Appendices D and E illustrate the impact created by providing low income rental units.
The results of the comparative pro forma analysis indicate that the proposed inclusionary
requirements act to decrease the supportable land value by 10% (Appendix E) This
value decrease falls well within the typical range for an inclusionary housing ordinance.
0905025 2.doc;NB:KHH:NYM:gbd
16091.0011012
To: Sharon Wood, City of Newport Beach September 17, 2009
Subject: Analysis of Inclusionary Housing Options Page 6
Development Constraints Conclusions
The results of the ownership residential analysis indicate that the identified inclusionary
housing requirements impose an onerous burden on developers. However, the option
for developers to fulfill the requirements by providing affordable rental units mitigates the
detriment sufficiently to eliminate the constraint to residential development. Thus, it can
be concluded that the inclusionary housing requirements do not create an unreasonable
constraint on ownership residential development.
ORDINANCE COMPARISON
The financial analyses undertaken by KMA indicate that the inclusionary housing
requirements can be fulfilled without creating an unreasonable constraint on residential
development. To crosscheck this finding, KMA surveyed over 100 jurisdictions in
California that currently impose inclusionary housing requirements. The results of this
survey indicate that the identified requirements fall within the norm of the standards
imposed by inclusionary housing programs being implemented throughout the state.
The courts have held that affordable housing is a "public benefit ", and that locally
imposed inclusionary housing ordinances are a legitimate means of providing this public
benefit. The courts have further found that the requirements cannot deprive an owner of
all economically beneficial use" of the property. However, to date, no definition of all
economically beneficial use has been provided. For reference purposes, it should be
noted that inclusionary housing programs recently adopted in several California locations
have been projected to generate land value reductions in the 30% range.
As discussed previously in this analysis, the inclusionary housing obligations being
tested are projected to create a financial detriment that is significantly less than a 30%
decrease to the supportable land value. As such, it can be concluded that the proposed
inclusionary housing requirements do not create an unreasonable constraint on
residential development.
SUPPORTABLE IN -LIEU FEE
To increase the Program's flexibility, the inclusionary housing obligations can be fulfilled
through the payment of an in -lieu fee. To establish a recommended in -lieu fee amount,
KMA translated the financial impact generated by the inclusionary requirements into a
per unit fee. Since it has been determined that the identified inclusionary housing
requirements are supportable, this methodology implicitly results in a reasonable in -lieu
fee.
0905025_2.doc; NB: KHH: NYM:gbd
16091.0011012 0.
To: Sharon Wood, City of Newport Beach September 17, 2009
Subject: Analysis of Inclusionary Housing Options Page 7
The KMA analysis is based on the assumption that the City will provide developers with
the option to fulfill the inclusionary requirements with either ownership or rental units.
The analysis further indicates that the provision of affordable rental units generates a
substantially smaller financial impact than the provision of affordable ownership units.
Thus, the in -lieu fee analysis is based on a rental housing scenario.
The following methodology was used to establish the recommended in -lieu fee amount:
As shown on Appendix E — Table 3, the financial impact is estimated at $591,000
for the 36 -unit prototype apartment project being evaluated.
2. The inclusionary housing obligation is applicable to market rate ownership
housing development. As such, the in -lieu fee analysis is based on the
inclusionary requirement for the 32 -unit prototype ownership that was tested
previously in this analysis:
a. The 32 -unit ownership project generates a requirement for five income
restricted units.
b. When the $591,000 gap is divided by the five affordable units, the
supportable in -lieu fee equals approximately $118,200 per affordable unit.
3. The affordability gap can also be divided by the total number of market rate
ownership units to arrive at a supportable in -lieu fee per market rate unit. Based
on the results of the KMA analysis, the supportable in -lieu fee is equal to $18,500
per market rate ownership unit ($591,000 / 32 units).
CONCLUSIONS
Based on the results of the financial analysis, KMA reached the following conclusions:
The Inclusionary Housing Program structure evaluated by KMA does not deprive
an owner of "all economically beneficial use" of the property, nor does it create
an unreasonable constraint on residential development as defined by State
Housing Element requirements.
The inclusionary option selected by developers will vary depending on the actual
scope of development being proposed. However, the financial analysis
demonstrates that there is a strong financial incentive for developers to select the
in -lieu fee option. Nonetheless, it is possible that some developers may find it
preferable to fulfill the inclusionary housing requirements by constructing
affordable rental units.
0905025_2.doc; Ne:KHH: NYM:gbd
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• r
TABLE 1
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. 1OWNERSHIP - SITE 87.120 SF
Affordable Housing None 5 Units - 15% Moderate
Requirements Income
Housing Cost N.A. Housing Element
Standards
-and Cost' $167 /SF $167ISF
supportable Land Value $841SF
Y. (Decrease)1lncrease in Land Value -50%
RENTAL - SITE 87.120 SF
OWNERSHIP:
MARKET RATE
[MODERATE INCOME
SCENARIO
INCLUS I ONARY
Number of Units 32
32
Density (Units /Acre) 16.0
16.0
Affordable Housing None 5 Units - 15% Moderate
Requirements Income
Housing Cost N.A. Housing Element
Standards
-and Cost' $167 /SF $167ISF
supportable Land Value $841SF
Y. (Decrease)1lncrease in Land Value -50%
RENTAL - SITE 87.120 SF
MARKET RATE
RENTAL: LOW INCOME
SCENARIO
I N CLUS IONARY
Number of Units
36
36
Density (Units /Acre)
18.0
18.0
Affordable Housing
None
5 Low Income Units 3
Affordable Housing Cost
N.A.
Housing Element
Standards
Land Cost 2
$68 /SF
$68 /SF
Supportable Land Value
$61 !SF
% (Decrease) /Increase in Land Value
-10%
III. 1 Supportable In -Lieu Fee/ Market Rate Unit' $18,500 /Unit
' The land cost is based on the residual land value supported by the market rate scenario.
2 The land cost is set at $69/ SF based on the EPS Inclusionary Housing Study, 10/712008.
3 Based on the number of inclusionary units required by the ownership residential project.
a The in -lieu fee is based on the affordability gap associated with fulfilling the obligation with rental units. See
APPENDIX E.
Prepared by: Keyser Marston Associates, Inc.
File name: NB Ind 9_17_D9.x1s; Summary
%V
APPENDIX A
AFFORDABLE HOUSING COST CALCULATIONS
Prepared by: Keyser Marston Associates, loc.
File name: NB Incl_9_17 09.xis: Alford Cost
$a
APPENDIX A - TABLE 1
AFFORDABLE HOUSING COST CALCULATIONS
OWNERSHIP UNITS
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Income Assumptions
Income Level
Number of Bedrooms
Benchmark Household Size
Household Income for Calculation Purposes '
II. Affordable Housing Price Calculation
Household Income
Multiplier 2
Total Affordable Housing Price
Moderate
Three- Bedrooms
Six Person
$119,850
$119,650
3.0
$359,600
Based on the 2009 area median income published by the California Housing & Community Development
Department. The household size is set at the number of bedrooms in the unit multiplied times two.
2 Based on the methodology defined in the City's Housing Element.
Prepared by: Keyser Marston Associates, Inc.
File name: NS Incl_9_17_09.xis; Affcul Cost
APPENDIX A - TABLE 2
AFFORDABLE HOUSING COST CALCULATIONS
RENTAL UNITS
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Income Level
Low
II. One - Bedroom Units
Benchmark Household Size
Two Person
Household Income for Calculation Purposes '
$59,500
% of Income Allotted to Housing Costs
30%
Annual Income Available for Housing Costs
$17,850
Monthly Income Available for Housing Costs
$1,488
Less: Utilities Allowance
47
Total Affordable Rent
$1,441
III. Two - Bedroom Units
Benchmark Household Size
Four Person
Household Income for Calculation Purposes
$74,400
% of Income Allotted to Housing Costs
30%
Annual Income Available for Housing Costs
$22,320
Monthly Income Available for Housing Costs
$1,860
Less: Utilities Allowance
58
Total Affordable Rent
$1,802
IV. Three - Bedroom Units
Benchmark Household Size
Six Person
Household Income for Calculation Purposes '
$86,300
%of Income Allotted to Housing Costs
30%
Annual Income Available for Housing Costs
$25,890
Monthly Income Available for Housing Costs
$2,158
Less: Utilities Allowance
93
Total Affordable Rent
$2,065
Based on the 2009 household incomes published by the California Housing & Community Development
.Department. The household size is set at the number of bedrooms in the unit multiplied times two.
Prepared by. Keyser Marston Associates, tnc.
File name: NB Inc 9_t 7_09.xis; Afford Cost
APPENDIX B
OWNERSHIP: BASELINE - MARKET RATE PROJECT: 32 UNITS (16 UNITSIACRE)
Prepared by: Keyser Marston Associates, Inc.
File name: N3 Inc1 9_17_09Als; Own Base
M
APPENDIX B - TABLE 1
ESTIMATED CONSTRUCTION COSTS
OWNERSHIP: BASELINE - MARKET RATE PROJECT: 32 UNITS (16 UNITS /ACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Direct Costs
Site Work Costs
87,120 Sf Land Area
$40.00
/Sf Land Area
$3,485,000
Building Costs'
67,952 /Sf GBA
$285
/Sf GBA
19,366,000
Total Direct Costs
$22,851,000
II. Indirect Costs
General Indirect Costs 2
13% Direct Costs
$2,971,000
Permits & Fees
32 Units
$20,000
/Unit
640,000
Insurance
32 Units
$15,000
lunit
480,000
Developer Fee
3% Sales Revenues
1,769,000
Total Indirect Costs
$5,860,000
III. Financing /Closing Costs
Interest During Construction /Absorption 3 $5,885,000
Loan Origination Fees " $35,380,000 Loan Amount 2.5 Points 885,000
Closing & Sales; & Warranties s 3,106,000
Total Financing/Closing Costs $9,878,000
IV. ITotal Construction Costs 32 Units $1,206,000 /Unit $38,589,000
Average unit size equal to 2,124 square feet. GBA includes a 0% allowance for non - livable area.
2
Includes architecture, engineering & consulting; taxes, legal & accounting; marketing; and soft cost contingency.
3 Construction and absorption period interest set at a 10.2% blended return on debt and equity. Carrying costs are based on an 18
month development period. Absorption rate is set at 4 units /month.
4 Based on a 60% loan to value ratio.
5 Based on 5% of sales revenues plus $5,000 1unit for warranties costs.
Prepared by: Keyser Marston Associates, Inc.
File name: NB Inc1_9_17_09.xis; Own Base
M,
APPENDIX B - TABLE 2
PROJECTED SALES REVENUES
OWNERSHIP: BASELINE - MARKET RATE PROJECT: 32 UNITS (16 UNITS /ACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH. CALIFORNIA
MARKET RATE SCENARIO'
I. ITotal Sales Revenues 32 Units @ $1,842,700 /Unit $58,966,000
1 Sales price at $868 1sf of net livable area.
Prepared by: Keyser Marston Associates, Inc.
File name: NB Incl_9_17_e9.xls; Own—Base
$r�
APPENDIX B - TABLE 3
RESIDUAL LAND VALUE ANALYSIS
OWNERSHIP: BASELINE - MARKET RATE PROJECT: 32 UNITS (16 UNITS /ACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Total Sales Revenues
II. Proiect Costs
Total Construction Costs
Threshold Developer Profit
Total Project Costs
See APPENDIX B - TABLE 2
See APPENDIX B - TABLE 1
15% of Total Construction Costs
$38,589,000
5,788,000
$58,966,000
$44,377,000
III. I Residual Land Value 87,120 Sf Land Area $167 /Sf Land Area $14,589,000
Prepared by: Keyser Marston Associates, lnc.
File name: NB Incl_9_17 09.x15; Own Base
1, �'
APPENDIX C
OWNERSHIP: IMODERATE INCOME INCLUSIONARY: 32 UNITS (16 UNITSIACRE)
Prepared by Keyser Marston Associates, Inc.
Filename: NB lncl_9_17_09.:Is: Own Inc
o '
Mm
APPENDIX C - TABLE 1
ESTIMATED CONSTRUCTION COSTS
OWNERSHIP: [MODERATE INCOME INCLUSIONARY: 32 UNITS (16 UNITS /ACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH. CALIFORNIA
I. Direct Costs
Site Work Costs
87,120
Sf Land Area
$40.00
/Sf Land Area
$3,485,000
Building Costs '
67,952
/Sf GBA
$285
/Sf GBA
19,366,000
Total Direct Costs
$22,851,000
ll. Indirect Costs
General Indirect Costs 2
13%
Direct Costs
$2,971,000
Permits & Fees
32
Units
$20,000
/Unit
640,000
Insurance
32
Units
$15,000
/Unit
480,000
Developer Fee 3
1,769,000
Total Indirect Costs
$5,860,000
III. Financing /Closing Costs
Interest During Construction /Absorption 4 $6,073,000
Loan Origination Fees s $35,380,000 Loan Amount 2.5 Points 885,000
Closing & Sales: & Warranties e 2,738,000
Total FinancingtClosing Costs $9,696,000
IV. ITotal Construction Costs 32 Units $1,200,000 /Unit $38,407,000
Average unit size equal to 2,124 square feet. GBA includes a 0% allowance for non - livable area.
2
Includes architecture, engineering & consulting; taxes, legal & accounting; marketing; and soft cost contingency.
s See APPENDIX B - TABLE 2 - The Developer Fee is set equal to the amount calculated in the market rate scenario.
4 Construction and absorption period interest set at a 10.2% blended return on debt and equity. Carrying costs are based on an 18
month development period. Absorption rate is set at 4 units /month.
s Based on a 60% loan to value ratio.
c Based on 5% of sales revenues plus $5,000 /unit for warranties costs.
Prepared by: Keyser Marston Associates, Inc.
File name: NB Ind_9_17 09.xis; Own Inc
as
APPENDIX C - TABLE 2
PROJECTED SALES REVENUES
OWNERSHIP: [MODERATE INCOME INCLUSIONARY: 32 UNITS (16 UNITSIACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Market Rate Units' 27 Units @ $1,842,700 /Unit $49,752,900
II. Moderate Income Units - 3 Bd z 5 Units @ $359,600 /Unit 1,796,000
III. I Total Sales Revenues $51,550,900
1 Sales price at $868 /sf of net livable area for Three - Bedrooms and $0 /sf of net livable area for Five - Bedrooms.
2 See APPENDIX A - TABLE 1 for the affordable housing cost calculations.
Prepared by: Keyser Marston Associates, Inc.
File rants: NB Ind _9_17_09.xIS; Own Inc
OA-1
APPENDIX C - TABLE 3
LAND VALUE IMPACT ANALYSIS
OWNERSHIP: IMODERATE INCOME INCLUSIONARY: 32 UNITS (16 UNITS /ACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Total Sales Revenues
H. Proiect Costs
Total Construction Costs
Land Cost'
Threshold Profit 2
Total Project Costs
III. Affordability Gap
IV, Effective Land Value
Land Cost
Affordability Gap
Effective Land Value
% Land Value Decrease
V. Supportable In -Lieu Fee
Total Fee
Fee/ Affordable Unit
Fee/ Market Rate Unit
See APPENDIX C - TABLE 2
See APPENDIX C - TABLE 1
See APPENDIX B - TABLE 3
See APPENDIX B - TABLE 3
87.120 Sf Land Area $84 /Sf Land Area
38,407,000
14,589,000
5,788,000
$14,589,000
(7,233,000)
$51,550,900
$58,784,000
($7,233,000)
$7,356,000
-50%
$7,233,000
$1,446,600 /Unit
$267,900 /Unit
1 Land Cost is based on the Residual Land Value generated by the market rate scenario in APPENDIX B.
2 Threshold Profit is based on the amount of profit generated by the market rate scenario in APPENDIX B.
Prepared by: Keyser Mahlon Associates, Inc.
File name: NB Incl 9_17 09.x15; Own Inc
APPENDIX D
RENTAL: BASELINE - MARKET RATE PROJECT: 36 APARTMENT UNITS (18 UNITS/ACRE)
Prepared by: Keyser Marston Associates, Inc.
File name: NB Incl 9 17 09,xls; Apt_Base
APPENDIX D - TABLE 1
ESTIMATED CONSTRUCTION COSTS
RENTAL: BASELINE - MARKET RATE PROJECT: 36 APARTMENT UNITS (18 UNITSIACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
II. Direct Costs 1
One - Bedroom
14 Units
$88,450 /Unit
$1,238,000
Two - Bedrooms
14 Units
$128,100 /Unit
1,793,000
Three - Bedrooms
8 Units
$152,500 /Unit
1,220,000
Total Direct Costs
$4,251,000
III. Indirect & Financing Costs
30% Direct Costs
$1,275,000
V. ITotal Construction Costs 36 Units $153,500 /Unit $5,526,000
Direct Costs are based on Economic & Planning Systems' Construction Costs from "Inclusionary Housing In -Lieu Fee Study ", dated
October 7, 2008.
Prepared by: Keyser Marston Associates, Inc.
Filename: NB Ind_ 9_ 17_09.cIs, Apt_Base DI
6
APPENDIX D - TABLE 2
STABILIZED NET OPERATING INCOME
RENTAL: BASELINE - MARKET RATE PROJECT: 36 APARTMENT UNITS (18 UNITSIACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Rent Income 1
One - Bedroom
14
Units@
$2,100
/Month
$352,800
Two - Bedrooms
14
Units @
$2,700
/Month
453,600
Three - Bedrooms
B
Units @
$3,000
/Month
288,000
Gross Income
$1,094,400
Vacancy & Collection Allowance
5%
Gross Income
(54,700)
Effective Gross Income
$1,039,700
II. Operating Expenses
General Operating Expenses
36
Units @
$4,200
/Unit
$151,200
Properly Taxes 2
36
Units @
$3,680
/Unit
132,500
Total Operating Expenses
36
Units @
($7,880)
/Unit
($283,700)
III. I Net Operating Income $756,000
1 Market rent = $2.83/sf for One- Bedroom; $2.53/sf for Two-Bedrooms: and $2.44 /sf for Three - Bedrooms.
2 Based on the project value at a 6.0% capitalization rate and a 1.05% tax rate.
Prepared by: Keyser Marston Associates, Inc. -
File name; NB Incl_9_17_99.xls; Apt_Base
APPENDIX D - TABLE 3
RESIDUAL LAND VALUE ANALYSIS
STABILIZED NET OPERATING INCOME
RENTAL: BASELINE - MARKET RATE PROJECT: 36 APARTMENT UNITS (18 UNITSIACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
I. Warranted Private Investment
Net Operating Income
Threshold Return on Total Investment 1
Total Warranted Investment
II. Total Construction Cost
See APPENDIX D - TABLE 2
See APPENDIX D - TABLE 1
$756,000
6.6%
$11,455,000
$5,526,000
111. 1 Residual Land Value 87,120 Sf Land Area $68 /Sf Land Area $5,929,000
t Threshold Return on Total Investment is based on a 6.0% capitalization rate and 20% profit as a percentage of construction costs.
Prepared by: Keyser Marston Associates, Inc.
File name: NB Incl_9_17_09.x1s; Apt_Base
APPENDIX E
RENTAL: LOW INCOME INCLUSIONARY : 36 APARTMENT UNITS (18 UNITS /ACRE)
Prepared by: Keyser Marston Associates, Inc.
File name: NB Incl_9_17_09.z1s; Apl_Low
00
APPENDIX E - TABLE 1
ESTIMATED CONSTRUCTION COSTS
RENTAL: LOW INCOME INCLUSIONARY : 36 APARTMENT UNITS (18 UNITS /ACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Direct Costs'
One- Bedroom
14 Units
$88,450 /Unit
$1,238,000
Two - Bedrooms
14 Units
$128,100 !Unit
1,793,000
Three- Bedrooms
8 Units
$152,500 /Unit
1,220,000
Total Direct Costs
$4,251,000
II. Indirect & Financing Costs
30% Direct Costs
$1,275,000
III. ITotal Construction Costs 36 Units $153,500 !Unit $5,526,000
Construction Costs are based on Economic & Planning Systems' "Inclusionary Housing In -Lieu Fee Study ", dated October 7, 2008.
Prepared by: Kayser Marston Associates, Inc.
File name: NB Incl_9 17_09.xis; Apt_Low
APPENDIX E - TABLE 2
STABILIZED NET OPERATING INCOME
RENTAL: LOW INCOME INCLUSIONARY : 36 APARTMENT UNITS (18 UNITSIACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Rent Income
Market Rent'
One- Bedroom
Two-Bedrooms
Three - Bedrooms
Low Income'
One - Bedroom
Two-Bedrooms
Three - Bedrooms
Gross Income
Vacancy & Collection Allowance
Effective Gross Income
II. _Operating Expenses
General Operating Expenses
Property Taxes 3
Total Operating Expenses
12
Units @
$2,100
/Month
$302,400
12
Units @
$2,700
/Month
388,800
7
Units @
$3,000
/Month
252,000
2
Units @
$1,441
/Month
$34,600
2
Units @
$1,802
/Month
43,200
1
Unit @
$2,065
/Month
24,800
$1,045,800
5%
Gross Income
(52,300)
$993,500
36 Units @ $4,200 /Unit $151,200
36 Units @ $3,480 /Unit 125,300
36 Units @ ($7,680) IUnit ($276,500)
III. I Not Operating Income $717,000
1 Market rent = $2.83 1sf for One - Bedroom; $2.53/sf for Two - Bedrooms; and $2.441sf for Three - Bedrooms.
2 See APPENDIX A - TABLE 2 for the affordable housing cost calculations.
3 Based on the project value at a 6.0% capitalization rate and a 1.1 % tax rate.
Prepared by: Kayser Marston Associates, Inc.
File name: NB Incl_9_17_09.x1s: Apt Low
Em
APPENDIX E - TABLE 3
LAND VALUE IMPACT ANALYSIS
RENTAL: LOW INCOME INCLUSIONARY : 36 APARTMENT UNITS (18 UNITS /ACRE)
AFFORDABLE HOUSING CASE STUDIES
INCLUSIONARY HOUSING ANALYSIS
NEWPORT BEACH, CALIFORNIA
I. Warranted Private Investment
Net Operating Income
Threshold Return on Total Investment I
Total Warranted Investment
II. Total Construction Cost
III. Residual Land Value
See APPENDIX E - TABLE 2
See APPENDIX E - TABLE 1
$717,000
6.60%
$10,864,000
$5,526,000
$5,338,000
IV. Effective Land Value
Land Cost From Mkt Scenario See APPENDIX D - TABLE 3 $5,929,000
Supportable Land Value 87,120 Sf Land Area $fit ISf Land Area $5,338,000
Decrease in Land Value $591,000
% Land Value Decrease 10%
V. Supportable In -Lieu Fee
Total Fee $591,000
Feet Affordable Unit $118,200 /Unit
Fee/ Market Rate Unit in the Market Rate Ownership Project I $18,500 /Unit
1 Threshold Return on Total Investment is based on a 6.0% capitalization rate and 20% profit as a percentage of construction costs.
s The Market Rate Ownership Project includes 32 units.
Prepared by: Keyser Marston Associates, Inc.
He name: NB Incl 9_17 09.xls; Apt_LOw
1
Attachment No. CC 6
State Department of Housing and
Community Development Letter
jIz`
STATFOF_GAI IFORNIA_RI MNFSS TRANSPORSATION ANn H01 SING AGFNPY ARNOLO CPHWAR]FNFGbFR f;nvrrnnr
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
OFFICE OF THE DIRECTOR
1800 Third Street, Room. 450
Sacramento, CA 95811 �!I,'V ��
(916) 445 -0775
Fax (916) 3245107
w nco.ca any
August 26, 2009
Mr. Stephen D. Madison
Executive Vice President
Building Industry Association
of Central California
1401 F Street, Suite 200
Modesto, CA 95354
Dear Mr. Madison:
Thank you for your recent inquiry regarding inclusionary ordinances. The Department is
pleased to provide information on the requirements of State law and its policy. For your
information, neither State law nor Department policy requires the adoption of any local
inclusionary ordinance in order to secure approval of a jurisdiction's housing element.
State law does require incentives for voluntary inclusionary development (State density
bonus law), pronounces housing element law neutral relative to enactment of mandatory
local inclusionary provisions, and circumscribes the responsibilities of local governments
which do enact inclusionary policies. The relevant sections of the Government Code are
described below.
Government Code Section 65915 -17, State density bonus law, requires local governments
to make incentives available to residential developers that voluntarily propose to reserve
specified portions of a proposed development for occupancy by low- or moderate - income
households, and indicates that local governments are not to undermine implementation of
this provision. Every local government is required to adopt an ordinance establishing how
it will implement State density bonus law, including setting forth the incentives the local
government will provide.
State housing element law requires jurisdictions to plan for their existing and projected
housing needs, identify adequate sites to accommodate their share of the regional housing
need, and, among other things, analyze local policies, regulations or requirements that
have the potential to constrain the development, maintenance or improvement of housing
for all income level. The law also requires program to "assist in the development of
adequate housing to meet the needs of low- and moderate- income households ".
Many local governments adopt mandatory inclusionary programs as one component of a
comprehensive affordable housing strategy and have demonstrated success in increasing
the supply of housing affordable to low- and moderate - income households. However,
some inclusionary programs may have the potential to negatively impact the overall
development of housing. As a result, local governments must analyze mandatory
inclusionary policies as potential governmental constraints on housing production when
adopting or updating their housing elements, in the same way that other land -use
regulations must be evaluated as potential constraints.
1 p1�_
Mr. Stephen D. Madison
Page 2
For example, local governments must analyze whether inclusionary programs result in
cost shifting where the cost of subsidizing the affordable units is underwritten by the
purchasers of market -rate units in the form of higher prices. Such increases can be a
barrier to some potential homebuyers who already struggle to qualify for a mortgage, and
earn too much to qualify for government assistance. Local governments must also
analyze their inclusionary policies to evaluate whether sufficient regulatory and financial
incentives are offered to facilitate compliance with the requirements.
In addition, it is important to note that the adoption of mandatory inclusionary zoning
programs do not address housing element adequate sites requirements to accommodate
the regional housing need for lower- income households. Inclusionary programs are not a
substitute for designating sufficient sites with appropriate zoning, densities and
development standards as required by Government Code Section 65583(c)(1).
Finally, Government Code Section 65589.8 specifies that nothing in housing element law
shall be construed to expand or contract the authority of a local government to adopt an
ordinance, charter amendment, or policy requiring that any housing development contain a
fixed percentage of affordable housing units. It further states that a local government
which adopts such a requirement shall permit a developer to satisfy all or a portion of that
requirement by constructing rental housing at affordable monthly rents, as determined by
the local government.
California has been for many years in the midst of a severe housing crisis; there are
simply not enough homes for the number of residents who need them. Continued
undersupply of housing threatens the State's economic recovery, its environment, and the
quality of life for all residents. Effectively addressing this crisis demands the involvement
and cooperation of all levels of government and the private sector. Both the public and
private sector must reexamine existing policies, programs and develop new strategies to
ensure they operate most effectively and provide an adequate housing supply for all
Californians. The Department is committed to working with its public and private sector
partners in this effort for the benefit of California's growing population.
If you need additional information, please call me at (916) 445 -4775 or Cathy Creswell,
Deputy Director, Division of Housing Policy Development, at (916) 323 -3177.
Sincerely,
Lynn L. Jacobs
Director
\03
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item Nos. 7 and 23
November 24, 2009
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, City Manager
9491644 -3002 or dkiff@newportbeachca.gov
SUBJECT: AGENDA ITEM NO. 7 — AMENDMENT OF MUNICIPAL CODE TITLE 19
(SUBDIVISIONS) AND ADOPTION OF INCLUSIONARY HOUSING IN-
LIEU FEE; AND
AGENDA ITEM NO. 23 — COST RECOVERY ORDINANCE (CHAPTER
3.36), FEE RESOLUTION AND MASTER FEE SCHEDULE.
For Item #7:
1. Introduce Ordinance No. 2009 -_, including Exhibit 1 but deleting Recitals 7
through 24 and Exhibit 2; and
2. Continue Resolution No. 2009--to January 12, 2010.
For Item #23
1. Continue the item to December 8, 2009.
DISCUSSION:
Aspects of these items may have required additional notice to affected stakeholders
beyond what was provided. In the interest of allowing stakeholders such notice, I
respectfully ask that the above recommended actions be approved tonight.
Submitted by:
Dave iff
City Manager
Authorized to publish Advernecments of all koxh including public notices by
Free of the Superior Court of Change County, California. Number A -6214,
September 29. 1%1, and A -24831 June 11. 1%3.
RECEIVED
PROOF OF PUBLICATION 2V IJC _q M S qq
pFFiC� OF
STATE OF CALIFORNIA) crCRl (ARK
SS. My =f BEN�i
COUNTY OF ORANGE )
I am a Citizen of the United States and a
resident of the County aforesaid; I am
over the age of eighteen years, and not a
party to or interested in the below entitled
matter. I am a principal clerk of the
NEWPORT BEACH - COSTA MESA
DAILY PILOT, a newspaper of general
circulation, printed and published in the
City of Costa Mesa, County of Orange,
State of California, and that attached
Notice is a true and complete copy as
was printed and published on the
following dates:
November 28, 2009
declare, under penalty of perjury, that
the foregoing is true and correct.
Executed on December 2, 2009 at
Costa Mesa, California.
Sign e
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Authorized to Publish Advertisements of all kinds including public mluccs by
Decree of the Superior Court of Orange County. California. Number A -PEC E I`/E D
September 29, 1%1, and A -24831 June 11, 1%3,
I{.1'
PROOF OF PUBLICATION 29
STATE OF CALIFORNIA) CI
) ss.
COUNTY OF ORANGE )
I am a Citizen of the United States and a
resident of the County aforesaid; I am
over the age of eighteen years, and not a
party to or interested in the below entitled
matter. I am a principal clerk of the
NEWPORT BEACH - COSTA MESA
DAILY PILOT, a newspaper of general
circulation, printed and published in the
City of Costa Mesa, County of Orange,
State of California, and that attached
Notice is a true and complete copy as
was printed and published on the
following dates:
December 12, 2009
I declare, under penalty of perjury, that
the foregoing is true and correct.
Executed on December 16, 2009 at
Costa Mesa, California.
Signature
18 AM 0 12
0 FICE OF
E QTY CLERK
r,�'11?ORT BEN,
CITY OF
NEWPORT
BEACH
PUBLIC NOTICE
ORDINANCE
SUMMARY
NOTICE i5 ""y DIVEN 0W a Drs
6. 20119. m. City Ca
of M CRr of Nwppl
I r, owvw rus0.
ORDINANCE NO.
200E-30
AN ORDINANCE OF
THE CtrY COUNCIL
OF THE CITY OF
NEWPORT BEACH,
CALIFORNIA,
AMENDING TITLE If
OF THE NEWPORT
BEACH MUNICIPAL
CODE PERTAINING
TO DEVELOPMENT
ACROSS LOT LINES,
THE AUTHORITY
OF THE ZONING
ADMINISTRATOR, LOT
MERGERS, LOT LINE
ADJUSTMENTS.
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