HomeMy WebLinkAbout2010-9 - Incorporating a New Inclusionary Housing Chapter (Chapter 19.54) Into Title 19 of the Newport Beach Municipal CodeORDINANCE NO. 2010-9
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH INCORPORATING A NEW
INCLUSIONARY HOUSING CHAPTER (CHAPTER 19.54)
INTO TITLE 19 OF THE NEWPORT BEACH MUNICIPAL
CODE.
WHEREAS, the City of Newport Beach ( "City ") is a charter city, governed by a
charter adopted by the citizens of the City; 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
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
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, notice of this hearing was made by posting the Council Agenda on
the City's official notice bulletin board and posting the agenda and report on the City's
Website. Notice of the time and place of the hearing, including the address where the
information could be reviewed, was also posted on the City's official notice bulletin
board, and mailed to the Building Industry Association of Southern California, Orange
County Chapter per their written request not less than 14 days prior to the hearing. 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: Chapter 19.54 of the Newport Beach Municipal Code is hereby added
to Title 19 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: 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 3: 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 4: 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 5: This Ordinance was introduced at a regular meeting of the City
Council of the City of Newport Beach held on the 27th day of April, 2010, and adopted
on the 11 th day of May, 2010, by the following vote, to wit:
AYES, COUNCIL MEMBERS selich, Rosansky, Webb, Gardner
NOES, COUNCIL MEMBERS Daigle, Mayor curry
ABSENT, COUNCIL MEMBERS Henn
Mayor
ATTEST:
X L
City Clerk
APPROVED AS TO FORM,
FICE OF CIT ATTORNEY:
Leonie Mulvihill, Acting City Attorney
for the City of Newport Beach
Page 19.54 -1
Inclusionary Housing
EXHIBIT 1
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
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
Page 19.54 -2
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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.
Page 19.54 -3
Inclusionary Housing
19.54.040 Regulations
A. Affordability Requirement.
1. Residential subdivision projects subject to this Chapter shall include the
construction of 15% of the net increase 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 Section
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.
Page 19.54 -4
Inclusionary Housing
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.
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)
A. When Required.
1. 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.
B. Contents. The AHIP shall contain the following information:
1. 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;
Page 19.54 -5
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4. Information necessary to establish compliance with criteria provided in
Subsection 19.54.070.B (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.
1. 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 in the City 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:
1. 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.
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. Renovations shall include energy conserving retrofits that will contribute to
reduced housing costs for future occupants of the units.
Page 19.54 -6
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4. 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;
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 applicant that chooses any option for satisfying the affordability requirements of the
Chapter, with the exception of the payment of in -lieu fees, shall enter into an affordable
housing agreement with the City. The 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.
Page 19.54 -7
Inclusionary Housing
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
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:
1. Assistance to housing development corporations;
Page 19.54 -8
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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;
13. Reasonable administrative charges or related expenses; and
14. 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
Page 19.54 -9
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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.
STATE OF CALIFORNIA }
COUNTY OF ORANGE } as.
CITY OF NEWPORT BEACH }
I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby
certify that the whole number of members of the City Council is seven; that the foregoing ordinance,
being Ordinance No. 2010 -9 was duly and regularly introduced on the 27th day of April, 2010, and
adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held
on the 11th day of May, 2010, and that the same was so passed and adopted by the following vote, to
wit:
Ayes: Selich, Rosansky, Webb, Gardner
Noes: Daigle, Mayor Curry
Absent: Henn
Abstain: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
official seal of said City this 12th day of May, 2010.
(Seal)
City Clerk
City of Newport Beach, California
CERTIFICATE OF PUBLICATION
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, LEILANI I. BROWN, City Clerk of the City of Newport Beach, California, do hereby certify
that Ordinance No. 2010 -9 has been duly and regularly published according to law and the order of
the City Council of said City and that same was so published in The Daily Pilot, a daily newspaper of
general circulation on the following dates:
2010.
Introduced Ordinance: May 1, 2010
Adopted Ordinance: May 15, 2010
In witness whereof, I have hereunto subscribed my name this � sr day of 9
/—I
City Clerk
City of Newport Beach, California
City Clerk
City of Newport Beach, California