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Home My WebLink AboutSS4 - Inclusionary Housing Ordinance Overview - PowerPointincluwvndry nvuwn� `+ overview City Council Chambers Consh 14 �� 2021 , and 'ITY COUNCIL STUDY SESSIC :Z•]TTI I-: I "r&T- •[ar-;1410 4--qwrk 44 ala l NAL` 1 G � `+ City Council Chambers September 14 �� 2021 , Background • June 22 and July 13, 2021 Study Sessions o Brief overview of inclusionary housing o Consensus to study program in more detail 0 15% minimum accepted for discussion • Draft Housing Element Policy Action 1K o Interim policy within 6 months of HE adoption o Base inclusionary requirement of 15% o Study and adopt ordinance within 36 months Our Goal: for Today 1. Provide a refresher on inclusionary housing 2. Share the basic structure of an inclusionary housing ordinance 3. Pose questions to Council for feedback 4. Outline a possible inclusionary ordinance 5. Get feedback on whether to move forward with an ordinance or wait What is "inclusionary" housing? C9<I FOIFL A local ordinance that requires apre-determined share of new housing projects be affordable to persons of low-, very -low- lower and/or moderate incomes Inclusionary Housing Programs help to provide affordable housing in higher - cost markets Basic Ordinance Structs v1 Applicability o What projects are affected ✓ Set Aside Requirements o Minimum percentage of affordable units ✓ Income Targeting o Determines the mix of affordability (i.e., very low, low or moderate income) ✓ Alternatives and Incentives o Outlines alternative means of compliance and incentives to provide affordable units on-site Southern California Examples Irvine All units 15% (20%) Y 5% very low / 5% low / 5% Moderate Huntington 3+ units 10% Y Rental units: low income / For Sale: moderate Beach income San 6+ units c 15 /o Y Rental: 7.5% very low / 7.5% low Clemente For Sale: 3% very low / 4% low / 8% moderate Carlsbad 7+ units 15% Y Units not to exceed 80% of MFI for County Encinitas 7+ units 10-15% Y Rental: 15% if low, 10% very low Owner: 15% if low, 10% very low Y Rental: 20% very low, low or moderate Pasadena All units 20% Owner: 5% very low, 5% very low or low, 10% very low, low or moderate Solana 5+ units c 15/ Y Rental: 15% very low and/or low Beach Owner: 15% Beverly 10+ 10% Y 10% very low, low or moderate Hills Encinitas Applicability of Affordable Income Distribution In -Lieu Option Other Notes 7 or mor( 10-15 15% if low-income 10% if very -low-income Yes Currently studying to update Example: Beverly H Componen Applicability 10 or more units of Affordable 10% 10% very -low-, low-, or moderate - Income Distribution . incomes In -Lieu Option Yes Other Notes Recently adopted December 2019 Our Previous Ordind, Applicability All for -sale projects of Affordable 15% 15% very -low, low-, or moderate - Income Distribution . incomes In -Lieu Option Yes Other Notes Repealed in 2013 Preview of Question 1. When should the requirements apply? 2. What is the minimum % of units to set aside as affordable? 3. How should the minimum % be distributed across income levels? 4. What alternatives and incentives do we want to offer? Question 1 When should the requirements apply? • Can establish aproject-size threshold for when inclusionary applies • For Example: o All residential projects regardless of size o All residential projects with more than # units Question 2 What is the minimum % of units to set aside as affordable? • Some jurisdictions have between 10% and 20% ■ Anaheim is going to focus on a fee • Higher = more affordable units, but may impact financial feasibility • lower = less affordable units, but may be easier to develop HCD takes neutral stance Question 3 How should the minimum % be distributed across income levels? • Can encourage development of units for certain income level(s) • For Example: 0 10% requirement when units are affordable to very -low-income households 0 15% requirement when units are affordable to low- or moderate -income households Question 4 What alternatives and incentives do we want to offer? • Can choose when alternatives are allowed • Can consider alternative compliance options: ✓ In -lieu affordable housing fees ✓ Off-site construction or conversions ✓ land dedication elsewhere ✓ Others? • Can offer incentives for on-site construction State Density Bonus Law ✓ Allowed regardless of local ordinance ✓ Incentive to develop affordable housing on- site with project ✓ Legislative updates in 2021 now allow up to 50% (previously 35%) ✓ Not applicable when in -lieu fee option taken 6 7 8 9 10 11 12 13 14 15 22.5 25 27.5 30 32.5 35 38.75 42.5 46.25 50 11 21.5 11 6 12 23 12 7 13 24.5 13 8 14 26 14 9 15 27.5 15 10 16 29 16 11 17 30.5 17 12 18 13 18 32 19 14 19 33.5 20 15 20 35 21 16 21 38.75 22 17 22 42.5 23 18 23 46.25 24 19 24 50 Important Consideration Minimum % of affordable units (i.e., inclusionary amount) is crucial High (>_20%) • More units • Less feasible • Constraint Low (< 20%) • Less units • More feasible • Not a constraint • Bigger buffer necessary Possible Paths Forward 1. Would the City Council like to focus on developing an ordinance? • Residential projects with 7 or more units • Minimum inclusion of 10 % for very/low/moderate income units • Allow alternatives: ■ off-site construction of affordable units ■ conversion of existing units ■ dedication of land ■ in -lieu fees (currently being studied) 2. Or would the City Council prefer to wait for: • HCD comments • In -lieu fee analysis � fl-1FoR� Inclusionary Ordinance Overview and Considerations CITY COUNCIL STUDY SESSION MATOIT"d Am— b Thank you. IV. Questions? i Seimone Jurjis Community Development Director =�Jim Campbell .. Deputy Community Development Director Imo._ ._ '• - -; -'. f k Ben Zdeba Senior Planner GPUpdate@newportbeachca.gov t Possible Ordinance Summary o Residential projects with 7 or more units o Minimum inclusion: ■ 10% when very -low-income units ■ 15% when low- and moderate -income units o Allow alternatives: ■ off-site construction of affordable units ■ conversion of existing units ■ dedication of land ■ in -lieu fees (currently being studied) o No added local incentives for on-site construction Possible Ordinance 1. When should the requirements apply? All residential projects with 7 or more units 2. What is the minimum % of units to set aside as affordable? 10% to 15% depending on affordability 16 F_M Note: If minimum is set too low (e.g... 5%), then the RHNA buffer is likely to be quickly depleted resulting in the need to rezone Possible Ordinance (cont. °' F_M 3. How should the minimum % be distributed across income levels? 10% if affordable to very -low-income households 15% if affordable to low- or moderate -income households 4. What alternatives and incentives do we want to offer? Off-site construction Preservation/conversion of existing units Dedication of land In -lieu affordable housing fees (currently being studied) No incentives beyond State density bonus/funding 10 20 11 21.5 12 23 13 24.5 14 26 15 27.5 16 29 17 30.5 18 32 19 33.5 20 35 21 38.75 22 42.5 23 46.25 24 50 5 20 6 22.5 7 25 8 27.5 9 30 10 32.5 11 35 12 38.75 13 42.5 14 46.25 15 50 10 5 25 20 11 6 26 21 12 7 27 22 13 8 28 23 14 9 29 24 15 10 30 25 16 11 31 26 17 12 32 27 18 13 33 28 19 14 34 29 20 15 35 30 21 16 36 31 22 17 37 32 23 18 38 33 24 19 39 34 MORAY _ a:: f77 - • 4 r- _ _ - - - - - -� ,.r,• - u' akuo HOW Uw*q -�, 1. Ll Y WNW- md R — w O