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HomeMy WebLinkAboutPublic Hearing to consider approval of Zoning Text Amendment (20) Huntington Beach Independent has been adiudged a newspaper of general circulation in Huntington Beach and Orange County by Decree of the Superior Court of Orange County, State of California,under date of Aug. 24, 1994,case A50479. PROOF OF PUBLICATION STATE OF CALIFORNIA ) - -- --CITY OF SS. HUNTINGTON BEACH COUNTY OF ORANGE LEG . ORDINANCE ORDINANCE NO.3829 Adopted by the City Council on MAY 4,2009 I am the Citizen of the United States and a "AN ORDINANCE OF THE resident of the County aforesaid; I am over CITY OF HUNTING AMENDING BEACH AMENDING the age of eighteen years, and not a party CHAPTER 230.OF.THE HUNTINGTON BEACH ZONING AND�SUBDIVI- . to or interested in the below entitled matter. S 10 N C O D E B Y AMENDING SECTION am a principal clerk of the HUNTINGTON 230.26 RELATING TO AF- FORDABLE HOUSING" BEACH INDEPENDENT, a newspaper of SYNOPSIS: CITY COUNCIL AP_ general circulation, printed and published in PROVED ZONING TEXT AMENDMENT NO. 08-005 the Cityof Huntington Beach, Count of WITH FINDINGS FOR AP- g y P,ROVAL AMENDING THE i Orange, State of California, and the AFFORDABLE 'HOUSING g PROVISIONS OF THE attached Notice is a true and complete ZONING lete copy ZONT 'BEACH NINGG S SUBUBDIVISION as was rinted and ublished on the 10 I N A N C E B Y p p ADOOPP TING ORDINANCE �. following date(s): C I -I THIS IS A 'CTY- NITIATED AMENDMENT FOR THE P U R P O S E O F j FACILITATIONG DEVEL- 'OPMENT OF SMALLER `RESI,pENTIAL PROJECTS. THE APPROVAL,'. OF (THIS AMENDMENT'WAS ALSO RECOMMENDED IBY STAFF AND THE . PLANNING COMMISSION. Ma 14 2009 PASSED AND ADOPTED y by the.City.Council of i the City of Huntington Beach at a,regular meet- ing held May 4, 2009 by the following roll call vote: AYES:, Carchio, Dwyer, Bohr,Coerper,Hansen NOES:Hardy ABSTAIN.None ABSENT:Green THE FULL OF TH I declare, under penalty of perjury, that the ORDI ANCEEXT IS AVAILS foregoing is true and correct. CLERK'S OFFICE.E CITY This ordinance is.effec- tive 30- days' after adoption. CITY OF Executed on May 14, 2009 HUNTINGTON BEACH2000 MAIN STREET HUNTINGTON BEACH, at Costa Mesa, California I CA 92648 714-536-5227 JOAN L.FLYNN, CITY CLERK / Published Huntington Yam// c Beach Independent May 14,2009 _ 052-645 Signat ' e City ®f Huntington Beach 3 N, 2000 Main Street • Huntington Beach, CA 92648 B ..r.rv. . OFFICE OF THE CITY CLERK e JOAN L. FLYNN CITY CLERK NOTICE OF ACTION April 28, 2009 Planning Department City of Huntington Beach 2000 Main Street Huntington Beach CA 92648 SUBJECT: ZONING TEXT AMENDMENT NO. 08-005 (Amending the Affordable Housing Provisions of the HBZSO) APPLICANT: City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648 LOCATION: Citywide DATE OF ACTION: April 20, 2009 On Monday, April 20, 2009 the City Council of the City of Huntington Beach took action on your application and approved Zoning Text Amendment No. 08-005 with Findings for Approval and approved for introduction Ordinance No. 3829. If you have any questions, please contact Mary Beth Broeren, Planning Manager at (714) 536-5550, or the Planning Department Zoning Counter at (714) 536-5561. Sincerely, tan Flynn, CIVIC City Clerk Attachments — Findings for Approval and Ordinance No. 3829 Sister Cities: Anjo, Japan • Waitakere, New Zealand (Telephone:7 9 4-536-5227) FINDINGS FOR APPROVAL -ZONING TEXT AMENDMENT NO. 08-005: 1. Zoning Text Amendment No. 08-005 amends Chapter 230 (Site Standards), Section 230.26 (Affordable Housing) to increase the size of projects that would be allowed to pay in-lieu fees; allow fractional unit requirements to be satisfied by payment of an in-lieu fee; increase the required income levels for affordable housing; decrease the required affordability term of new inclusionary units and to make other minor changes to existing provisions in a manner consistent with the goals, policies and programs specified in the General Plan, particularly the Housing Element. The proposed changes are consistent with Programs 14 and 18 of the Housing Element requiring that the City pursue the Ad Hoc Committee recommendations and adoption of a reduced fee schedule for projects with affordable units, and they are consistent with the goals and policies of the Housing Element to facilitate the development of affordable housing. 2. In the case of the general land use provision, the change proposed is compatible with the uses authorized in, and the standards prescribed for in the zoning district for which it is proposed. The amendments to Chapter 230, Section 230.96 affect the inclusionary housing requirements that new residential development projects, not subject to other requirements of redevelopment project areas and/or Specific Plan areas, would be subject to. The changes do not affect zoning of any property by altering density or development standards. Therefore, the changes do not affect the compatibility of uses allowed and established by the General Plan and Zoning designations. 3. A community need is demonstrated for the proposed zoning text amendment to facilitate development of smaller residential projects, in particular, by allowing projects with up to 30 units to pay an in-lieu fee, and of all residential projects by increasing the affordability levels and reducing the affordability term. These changes improve the financial viability of residential projects, which will ultimately improve the supply of new housing units, both market rate and affordable, in the city. 4. Its adoption will be in conformity with public convenience, general welfare and good zoning practice because the amendment to Chapter 230, Section 230.26 will encourage and facilitate residential development and provides consistency between the City's affordable housing requirements and state law. ORDINANCE NO. 3829 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING CHAPTER 230 OF THE HUNTINGTON BEACH ZONING AND SUBDIVISION CODE BY AMENDING SECTION 230.26 RELATING TO AFFORDABLE HOUSING The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. Section 230.26 of the Huntington Beach Zoning and Subdivision Code is hereby amended to read as follows: A. Purpose. I. The purpose and intent of this Chapter is to implement the goals,objectives and policies of the City's Housing Element. It is intended to encourage low-and moderate income housing, which is integrated, compatible with and complements adjacent uses, and is located in close proximity to public and commercial services. 2_ The affordable housing program is one tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors, and to meet its regional fair-share requirements for construction of affordable housing. 3. As a result of being located within a redevelopment area and/or Specific Plan area, additional restrictions or requirements may apply. B. Applicability. This section shall apply to new residential projects three(3) or more units in size. I A minimum of ten(10) percent of all new residential construction shall be affordable housing units. The whole number established by dividing the total unit count proposed by ten (10) shall be affordable housing units unless Section 23026B.4 applies. Any fractional amount may be paid with an equivalent in-lieu fee. 2_ Rental units included in the project shall be made available to low-income households as defined by Health and Safety Code Section 50079.5, or a successor statute. Rental units included in the project may be made available to moderate income households as defined by Health and Safety Code Section 50093), or a successor statute if the moderate income units are located on-site within the project. 3. For sale units included in the project shall be made available to moderate income households, as defined by the Health and Safety Code Section 50093,or a successor statute- 4- Developers of residential projects consisting of thirty or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of the 08-1779/�6028 doc Ordinance No. 3829 Section, unless the affordable housing requirement is outlined as part of a specific plan project. 5. Developers of residential projects may elect to provide the affordable units at an off-site location pursuant to subsection B unless otherwise outlined as part of a specific plan project. If affordable units are off-site, they must be under the full control of the applicant,or other approved party. 6. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of determining the required number of affordable housing units,only new units shall be counted. C. Fees in Lieu of Construction. I. Fees paid to fulfill the requirements of this Section shall be placed in the City's Affordable Housing Trust Fund, the use of which is governed by subsection E. 2. The amount of the in-lieu fees shall be calculated using the fee schedule established by resolution of the City Council. 3. One hundred (100)percent of the fees required by this Section shall be paid prior to issuance of a building permit. 4. Fees paid as a result of new residential projects shall be based upon the total number of the new residential units which are to be constructed. D. Off-Site Construction of Affordable Units. Except as may be required by the California Coastal Act and/or the Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off-site,at one or several sites, within the City of Huntington Beach. l. Off-site projects may be new construction or substantial rehabilitation,as defined by Government Code Section 33413 affordable housing production requirements, of existing non-restricted units conditioned upon being restricted to long-term affordability. "At Risk" units identified in the Housing Element or mobile homes may be used to satisfy this requirement. 2_ All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability,or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. E. Miscellaneous Provisions. 1. The conditions of approval for any project that requires affordable units shall specify the following items: (a) The density bonus being provided pursuant to Section 230.14, if any; (b) The number of affordable units; (c) The number of units at each income level as defined by the Health and Safety Code; and 08-1779/26028-doc 2 (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects of the affordable housing provisions shall be executed between the applicant and the City and recorded with the Orange County Recorder's Office, or the applicable in-lieu fee shall be paid in full, prior to issuance of the first building permit. 3. The Agreement shall specify an affordability term of not less than fifty-five (55) years for rental housing or forty-five(45) years for ownership housing. 4. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units unless otherwise approved through a phasing plan. Final approval(occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. 5. All affordable units shall be reasonably located throughout the project unless otherwise designed through a master plan, shall contain on average the same number of bedrooms as the market rate units in the project,and shall be comparable with the market rate units in terms of exterior appearance, materials and finished quality. 6. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty (50) percent of the dwelling units affordable to very low- and low-income households, with at least twenty(20) percent of the units available to very low- income households. Concurrent with establishing the annual fee schedule pursuant to subsection C, the City Council shall by resolution set forth the permitted uses of Affordable Housing Trust Funds. All units that obtain Affordable Housing Trust Funds shall maintain the affordability of the units for a minimum of fifty-five (55) years. The funds may, at the discretion of the City Council, be used for pre-development costs, land or air rights acquisition, rehabilitation, land write downs, administrative costs, gap financing, or to lower the interest rate of construction loans or permanent financing. 7. New affordable units shall be occupied in the following manner: (a) If residential rental units are being demolished and the existing tenant(s) meets the eligibility requirements, he/she shall be given the right of first refusal to occupy the affordable unit(s); or (b) If there are no qualified tenants, or if the qualified tenant(s) chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs, then qualified households or buyers will be selected_ F- Price of Affordable Units. Affordable housing cost shall be calculated in accordance with Health and Safety Code Section 50052.5 standards for ownership units and Health and Safety Code Section 50053 standards for rental units. This methodology is full described in the City's adopted housing policies. 08-1779/26028 Ordinance No. 3829 G. Reduced Fees for Affordable Housing. Projects that exceed inclusionary requirements on- site will be eligible for reduced City fees, pursuant to an Affordable Housing Fee Reduction Ordinance,upon adoption by the City Council. H. Annual Program Review and Periodic Adjustment of the Fee. Within 180 days after the last day of each fiscal year, the City Council shall review the status of the City's Affordable Housing Trust Fund, including the amount of fees collected,expenditures from the Affordable Housing Trust Fund, and the degree to which the fees collected pursuant to this Chapter are assisting the City to provide and encourage low and moderate income housing. The fee shall be updated annually using the Real Estate and Construction Report published by the Real Estate Research Council of Southern California. The fee change shall be based on the percentage difference in the New Home Prices in Orange County published in the 4`h quarter report for the then current year versus the immediately preceding year. SECTION 1_ This ordinance shall become effective 30 days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 200_ Mayor ATTEST: APPROVED AS TO FORM: City Clerk C4 City�ttom 14 REVIEW APPROVED: INITIA D ND APPROVED: !� Cit mi istrator Dir for of Planning 08-1779/26028 doc 4 'AT Council/Agency Meeting Held: Deferred/Continued to: i . roved Conditional)�Ap roved woe ied 9 C' ler s Signs re Council Meeting Date: 4/20/2009 Department ID Number: PL 09-09 CITY OF HUNTING N BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY CfIG MEMBERS SUBMITTED BY: FRED A. WILSON, CITY ADMINIST PREPARED BY: 'SCOTT HESS, DIRECTOR OF PLA SUBJECT: APPROVE ZONING TEXT AMENDMENT NO. 08-005 (AFFORDABLE HOUSING ORDINANCE REVISIONS) Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Transmitted for your consideration is Zoning Text Amendment No. 08-005 to amend the affordable housing provisions of the Huntington Beach Zoning and Subdivision Ordinance. This is a city-initiated amendment for the purpose of facilitating development of smaller residential projects. The Planning Commission and staff are recommending approval of Zoning Text Amendment No. 08-005. Funding Source: Not Applicable Recommended Action: PLANNING COMMISSION AND STAFF RECOMMENDATION: "Approve Zoning Text Amendment No. 08-005 with findings for approval (ATTACHMENT NO. 1) and adopt Ordinance No. 3829 , an Ordinance of the City of Huntington Beach amending Chapter 230 of the Huntington Beach Zoning and Subdivision Code by amending Section 230.26 relating to affordable housing (ATTACHMENT NO. 2)." REQUEST FOR ACTION MEETING DATE: 4/20/2009 DEPARTMENT ID NUMBER:PL 09-09 Planning Commission Action on March 24, 2009: THE MOTION MADE BY SPEAKER, SECONDED BY MANTINI, TO APPROVE ZONING TEXT AMENDMENT NO. 08-005, WITH MODIFICATIONS AND FINDINGS CARRIED BY THE FOLLOWING VOTE: AYES: SHIER-BURNETT, SPEAKER, DELGLEIZE, MANTINI NOES: SCANDURA, LIVENGOOD, FARLEY ABSENT: NONE ABSTAIN: NONE MOTION PASSED Alternative Action(s): The City Council may make the following alternative motion(s): 1. "Deny Zoning Text Amendment No. 08-005 with Findings for Denial." 2. "Continue Zoning Text Amendment No. 08-005 and direct staff accordingly." Analysis: A. PROJECT PROPOSAL: Applicant: City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648 Location: Citywide Zoning Text Amendment No. 08-005 represents a request to amend Section 230.26 (Affordable Housing) of the Huntington Beach Zoning and Subdivision Ordinance (ZSO) pursuant to Chapter 247 (Amendments). Zoning Text Amendment No. 08-005 would implement the following significant changes (a legislative draft is provided in Attachment No. 3; the section references below refer to the attachment): • Allow fractional unit requirements to be satisfied by payment of an in-lieu fee, rather than rounding up to another whole unit (Section B.1); ® Change the required income level of affordable rental units from very low or low income to low income. Allow for moderate income if the units are included within the project (Section B.2); • Change the required income level of affordable for-sale units from very low, low or median income to only moderate income (Section B.3); • Increase the size of a project that may pay an in-lieu fee to satisfy its affordable housing obligation from nine units to 30 units (Section B.4); • Modify the requirements for off-site rehabilitation of units (Section D.1); GARCAs\2009\PL09-09(ZTA-Affordable Housing).doc -2- 4/1/2009 1:34 PM REQUEST FOR ACTION MEETING DATE: 4/20/2009 DEPARTMENT ID NUMBER:PL 09-09 • Decrease the affordability term from 60 years to 55 years for rental housing and 45 years for for-sale housing (Section E.3); • Delete the requirement for an Agreement if in-lieu fees are being paid (Section EA), • Establish a "Reduced Fees for Affordable Housing" section that would allow projects that exceed inclusionary requirements on-site to be eligible for reduced City fees. If this new section is approved, the City would subsequently develop and adopt the reduced fee schedule (Section G); and • Clarify the methodology for annual fee updates and add an annual reporting requirement (Section H). The amended ordinance was initiated by the City Council to facilitate the development of smaller residential projects by reducing the costs associated with complying with the City's affordable housing ordinance. B. BACKGROUND The City's affordable housing ordinance was adopted in 2004, codifying a decade-old policy requirement that projects with three or more units provide the equivalent of 10 percent of their units as affordable housing either on-site or off-site. The ordinance has a provision that projects with three to nine units be allowed to satisfy their affordable housing requirement via payment of an in-lieu fee. In 2007 the City of Huntington Beach adopted the affordable housing in-lieu fee; an annual adjustment was approved in 2008. In its deliberations on affordable housing issues, the City Council formed an Ad Hoc Affordable Housing Committee and directed the Committee to evaluate the possibility of increasing the size of a project that would be eligible to pay an in-lieu fee. The City Council Ad Hoc Committee on Affordable Housing met in April and July of 2008. At the July meeting, the Committee directed staff to prepare a revised ordinance and process the zoning text amendment. In October 2008, the Planning Commission held a Study Session on the proposed ordinance changes. In response to a letter from the Chamber of Commerce, the item was continued. On December 16, 2008, the City Council Ad Hoc Committee met and reviewed the Chamber's letter in conjunction with staff recommendations on the various items and provided direction to staff. On January 27, 2009 the Planning Commission was scheduled to have a Study Session on Zoning Text Amendment No. 08-005. However, in response to other aspects of the City's affordable housing program, the City Council held a meeting on February 3, 2009 on the topic of affordable housing and directed staff to continue the Planning Commission item. The February City Council meeting did not result in any changes to the proposed ordinance amendments that had previously been agreed to by the City Council Ad Hoc Committee and scheduled for the Planning Commission. Therefore, the item was re-scheduled for Planning Commission and acted on by the Planning Commission on March 24cn GARCAs\2009\PL09-09 (ZTA-Affordable Housing).doc -3- 4/1/2009 1:34 PM REQUEST FOR ACTION MEETING DATE: 4/2012009 DEPARTMENT ID NUMBER:PB_ 09-09 C. PLANNING COMMISSION MEETING AND RECOMMENDATION: The Planning Commission held two Study Sessions on the proposed ordinance changes on October 14, 2008 and March 10, 2009. A public hearing was scheduled with the Planning Commission on November 12, 2008. At that meeting, the Chamber of Commerce submitted a late communication requesting additional changes to the ordinance. The Planning Commission continued the item to provide an opportunity for the City Council Ad Hoc Committee to review and consider the Chamber's recommendations. The Planning Commission continued public hearing was held on March 24, 2009. There were four public speakers. The speaker representing Huntington Beach Tomorrow indicated that they were not in support of easing the income restrictions and that only projects with 20 or fewer units should be allowed to pay an in-lieu fee. The two speakers representing the Chamber of Commerce presented an opposite view: that all projects should be allowed to pay an in-lieu fee. In addition, the Chamber representatives thought that the in-lieu fee should be calculated differently and based on rental projects only. The final speaker representing Colette's Children's Home, spoke to the growing need of very low income families and seniors. The Planning Commission discussed the various components of the proposed amendments and took straw votes to increase the affordable income level of units (similar to what the existing ordinance requires) and as to whether all projects could pay an in-lieu fee. None of the straw motions passed. The Planning Commission did agree that an annual reporting requirement on how the in-lieu fees are spent should be added to the ordinance. Staff concurs and the attached ordinance reflects the Planning Commission's suggestion. The Planning Commission approved the Zoning Text Amendment with a 4-3 vote. D. STAFF ANALYSIS AND RECOMMENDATION: City staff was directed to process this Zoning Text Amendment for the initial reason of evaluating allowing projects with more than nine units the option of paying an in-lieu fee to satisfy their affordable housing obligations. As a result of the City Council Ad Hoc Committee discussions, as well as previous input from the City's consultant, the Zoning Text Amendment includes other recommended changes. The analysis examines the various components of the ZTA. Project Size Section B.4 of the existing ordinance allows projects with three to nine units to pay a fee in- lieu of providing an affordable unit either on-site or off-site. Over the years, the development community has expressed that this threshold is too low and that relief should be given to larger projects. The Ad Hoc Committee discussed a range of possibilities, including allowing all projects regardless of the number of units to pay an in-lieu fee. City staff and its consultant evaluated the size of projects that have been proposed or approved in the last several years and concluded that a project size of 30 units would satisfactorily capture the GARCAs�2009\PL09-09(ZTA-Affordable Housing).doc -4- 4/1/2009 1:34 PM REQUEST FOR ACTION MEETING DATE: 4/20/2009 DEPARTMENT ID NUMBER:PL 09-09 range of smaller projects built in the city. Specifically, projects have either been over 200 units or less than 30 units. Staff does not support the concept that all projects be allowed to pay an in-lieu fee. First, staff believes that the development community is better positioned to provide affordable units in general, and second, larger projects can better absorb the cost of providing these units. The Ad Hoc Committee's recommendation is to change the project limit from nine units to 30 units. The resolution to adopt the fee for projects with 10 to 30 units is provided in a separate Request for Action on the agenda. Affordability Levels The existing ordinance states that affordable rental units will be provided at either very low or low income levels and that affordable for-sale units will be provided at very low, low or median income levels (Sections B.2 and B.3). Based on the City's experience in implementing the inclusionary requirement and input from the development community, staff is recommending that the income levels be relaxed such that the requirements would only be low income for rental units and moderate income for for-sale units. In response to the Chamber's November 2008 letter, the Ad Hoc Committee agreed to also allow rental units in a project at the moderate income level if they are located on-site within the project. The principal reason for the change for rental units is based on practice. Due to the high cost of developing in the city, the only time that very low income units have been built/required is where there has been significant subsidy, either from state tax credits, redevelopment agency funds or as a Habitat for Humanity project. In other words, a typical development project is not in the position to financially accommodate the deep subsidy that is required to provide units at a very low income level. While the Economic Development Department will continue to look for opportunities to facilitate projects with a very low income component, staff believes that it is misleading to imply in the ordinance that the City might require a development to provide very low income units. The desire to allow moderate income rental units within a project provides further financial relief to developers and also recognizes that finding off-site locations to satisfy housing requirements can be difficult. With regard to the for-sale units, prior to adoption of the affordable housing ordinance in 2004, the City required for-sale units at a moderate income level. In 2004, the City decided to lower the income level to median levels. This had the effect of making it more costly for the development community,but improved the affordability for the home buyer. Staff is now recommending a switch back to the moderate income levels. This will provide relief to the development community,but will still provide affordable units that can count toward the City's Regional Housing Needs Assessment (RHNA) requirement. Affordability Term The proposed Zoning Text Amendment would decrease the affordability term of new inclusionary units from 60 years to 55 years for rental housing and 45 years for for-sale housing (Sections E.3, EA and E.7). Prior to the adoption of the ordinance in 2004, the City required an affordability term of 30 years for inclusionary units. In 2004, the City chose to GARCAs\2009\PL09-09 (ZTA-Affordable Housing).doc -5- 4/1/2009 1:34 PM REQUEST FOR ACTION MEETING DATE: 4/20/2009 DEPARTMENT ID NUMBER:PL 09-09 require the 60 year term in order to ensure a continued supply of affordable units. The development community has consistently voiced opposition to the 60 year requirement, citing difficulty in getting financing and the cost implications this requirement has on the viability of a project. Staff and the Ad Hoc Committee recommend that the length of affordability be reduced slightly to terms that are consistent with Redevelopment Law. Fractional Units Section B.1. of the City's ordinance is recommended to be changed to allow the payment of an in-lieu fee for fractional unit requirements. This provision would be triggered for projects with more than 30 units, which are not eligible to pay an in-lieu fee for their inclusionary housing requirement. As an example, under the existing ordinance a project with 42 units would have an inclusionary housing requirement of 4.2 (10 percent) affordable units; because the City rounds up, their unit requirement would actually be 5. The proposed text amendment would reduce the requirement for units by allowing the developer to pay an in- lieu fee for the fractional unit requirement (0.2 in the example). Thus, the developer would be required to only provide four affordable units and pay the in-lieu fee for 0.2. This proposed change was agreed to by the Ad Hoc Committee and is in response to the Chamber's November 2008 letter. Consistency/Clarifying/Streamlining changes A number of the proposed amendments are recommended by the City's housing consultant, Keyser Marston Associates (KMA), to make the City's ordinance more consistent with state law and/or redevelopment law requirements and definitions. These types of changes are made to Sections B.2, B.3, E.1.(c) and F. The ordinance would refer to the Health and Safety Code Sections as they define affordable households and affordable housing cost. Section D.1 is amended to make the definition of substantial rehabilitation consistent with that of the state Government Code. Staff recommends these changes because they are supported by the state definitions and maximize the opportunities for the City and Redevelopment Agency to be able to count units for RHNA and Agency purposes. In addition, staff and KMA are recommending that the ordinance include language clarifying how annual fee updates are calculated; changes related to this item are made in a new Section H, which also includes the reporting provision recommended by the Planning Commission. This reporting requirement is consistent with that required of other fees, e.g. traffic impact fees. New language is also recommended in the Purpose section (Section A.3), to clarify that projects located within a redevelopment and/or Specific Plan area may be subject to other restrictions or requirements (e.g., 15% requirement). Finally, in response to the Chamber's November 2008 letter, the Ad Hoc Committee agreed to the deletion of requiring an agreement to be recorded if in-lieu fees are paid (original Section EA). The City does not require such an agreement for other similar fees. This change would streamline project implementation and achieve better consistency with other City practices. G:\RCAs\2009\PL09-09(ZTA-Affordable Housing).doc -6- 4/6/2009 1:32 PM REQUEST FOR ACTION MEETING DATE: 4/20/2009 DEPARTMENT ID NUMBER:PL 09-09 Reduced Fees Provision Pursuant to the discussion and program in the City's updated Housing Element, staff is recommending that the City establish a "Reduced Fees for Affordable Housing" section that would allow projects that exceed inclusionary requirements on-site to be eligible for reduced City fees. If this new section is approved, the City would subsequently develop and adopt the reduced fee schedule (Section G). The City's Housing Element targets this for completion by the end of 2009. Staff recommends that the City Council approve Zoning Text Amendment No. 08-005 with findings for approval. The proposed changes strike a balance between providing financial relief to developers of small projects, in particular, while still fulfilling the City's goals for affordable housing. Strategic Plan Goal: The affordable housing ordinance changes are consistent with Strategic Plan Goal L-1, "Establish the vision and create a land use plan for reuse of critical parcels so that the next phase of the community investment and improvement can begin." The changes to the affordable housing requirements make redevelopment of parcels suitable for housing more feasible and will help to stimulate investment in the city. Environmental Status: The proposed project is categorically exempt pursuant to the City Council Resolution No. 4501, Class 20, which supplements the California Environmental Quality Act. Attachment(s): City Cleek's • . • - N,umberNo. i - • • 1. Suggested Findings for Approval 2. Ordinance No. 3829 , An Ordinance of the City of Huntington Beach Amending Chapter 230 of the Huntington Beach Zoning and Subdivision Code by amending Section 230.26 Relating to Affordable Housing 3. Legislative Draft 4. Planning Commission Staff Report dated March 24, 2009 5. Power Point Presentation G:\RCAs\2009\PL09-09(ZTA-Affordable Housing).doc -7- 4/6/2009 1:33 PM ORDINANCE NO. 3829 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING CHAPTER 230 OF THE HUNTINGTON BEACH ZONING AND SUBDIVISION CODE BY AMENDING SECTION 230.26 RELATING TO AFFORDABLE HOUSING The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. Section 230.26 of the Huntington Beach Zoning and Subdivision Code is hereby amended to read as follows: A. Purpose. 1. The purpose and intent of this Chapter is to implement the goals, objectives and policies of the City's Housing Element. It is intended to encourage low-and moderate income housing, which is integrated, compatible with and complements adjacent uses, and is located in close proximity to public and commercial services. 2. The affordable housing program is one tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors, and to meet its regional fair-share requirements for construction of affordable housing. 3. As a result of being located within a redevelopment area and/or Specific Plan area, additional restrictions or requirements may apply. B. Applicability. This section shall apply to new residential projects three (3) or more units in size. 1. A minimum of ten(10)percent of all new residential construction shall be affordable housing units. The whole number established by dividing the total unit count proposed by ten(10) shall be affordable housing units unless Section 230.26B.4 applies. Any fractional amount may be paid with an equivalent in-lieu fee. 2. Rental units included in the project shall be made available to low-income households as defined by Health and Safety Code Section 50079.5, or a successor statute. Rental units included in the project may be made available to moderate income households as defined by Health and Safety Code Section 50093, or a successor statute if the moderate income units are located on-site within the proj ect. 3. For sale units included in the project shall be made available to moderate income households, as defined by the Health and Safety Code Section 50093, or a successor statute. 4. Developers of residential projects consisting of thirty or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of the 08-1779/26028.doe I Ordinance No. 3829 Section, unless the affordable housing requirement is outlined as part of a specific plan project. 5. Developers of residential projects may elect to provide the affordable units at an off-site location pursuant to subsection B unless otherwise outlined as part of a specific plan project. If affordable units are off-site, they must be under the full control of the applicant, or other approved party. 6. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of determining the required number of affordable housing units, only new units shall be counted. C. Fees in Lieu of Construction. 1. Fees paid to fulfill the requirements of this Section shall be placed in the City's Affordable Housing Trust Fund, the use of which is governed by subsection E. 2. The amount of the in-lieu fees shall be calculated using the fee schedule established by resolution of the City Council. 3. One hundred (100) percent of the fees required by this Section shall be paid prior to issuance of a building permit. 4. Fees paid as a result of new residential projects shall be based upon the total number of the new residential units which are to be constructed. D. Off-Site Construction of Affordable Units. Except as may be required by the California Coastal Act and/or the Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off-site, at one or several sites, within the City of Huntington Beach. 1. Off-site projects may be new construction or substantial rehabilitation, as defined by Government Code Section 33413 affordable housing production requirements, of existing non-restricted units conditioned upon being restricted to long-term affordability. "At Risk" units identified in the Housing Element or mobile homes may be used to satisfy this requirement. 2. All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. E. Miscellaneous Provisions. 1. The conditions of approval for any project that requires affordable units shall specify the following items: (a) The density bonus being provided pursuant to Section 230.14, if any; (b) The number of affordable units; (c) The number of units at each income level as defined by the Health and Safety Code; and 08-1779/26028.aoc 2 (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects of the affordable housing provisions shall be executed between the applicant and the City and recorded with the Orange County Recorder's Office, or the applicable in-lieu fee shall be paid in full, prior to issuance of the first building permit. 3. The Agreement shall specify an affordability term of not less than fifty-five (55) years for rental housing or forty-five (45) years for ownership housing. 4. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units unless otherwise approved through a phasing plan. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. 5. All affordable units shall be reasonably located throughout the project unless otherwise designed through a master plan, shall contain on average the same number of bedrooms as the market rate units in the project, and shall be comparable with the market rate units in terms of exterior appearance, materials and finished quality. 6. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty (50) percent of the dwelling units affordable to very low-and low-income households, with at least twenty (20) percent of the units available to very low- income households. Concurrent with establishing the annual fee schedule pursuant to subsection C, the City Council shall by resolution set forth the permitted uses of Affordable Housing Trust Funds. All units that obtain Affordable Housing Trust Funds shall maintain the affordability of the units for a minimum of fifty-five (55) years. The funds may, at the discretion of the City Council, be used for pre-development costs, land or air rights acquisition, rehabilitation, land write downs, administrative costs, gap financing, or to lower the interest rate of construction loans or permanent financing. 7. New affordable units shall be occupied in the following manner: (a) If residential rental units are being demolished and the existing tenant(s) meets the eligibility requirements, he/she shall be given the right of first refusal to occupy the affordable unit(s); or (b) If there are no qualified tenants, or if the qualified tenant(s) chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs, then qualified households or buyers will be selected. F. Price of Affordable Units. Affordable housing cost shall be calculated in accordance with Health and Safety Code Section 50052.5 standards for ownership units and Health and Safety Code Section 50053 standards for rental units. This methodology is full described in the City's adopted housing policies. 08-1779/26028 3 Ordinance No. 3829 G. Reduced Fees for Affordable Housing. Projects that exceed inclusionary requirements on- site will be eligible for reduced City fees,pursuant to an Affordable Housing Fee Reduction Ordinance, upon adoption by the City Council. H. Annual Program Review and Periodic Adjustment of the Fee. Within 180 days after the last day of each fiscal year, the City Council shall review the status of the City's Affordable Housing Trust Fund, including the amount of fees collected, expenditures from the Affordable Housing Trust Fund, and the degree to which the fees collected pursuant to this Chapter are assisting the City to provide and encourage low and moderate income housing. The fee shall be updated annually using the Real Estate and Construction Report published by the Real Estate Research Council of Southern California. The fee change shall be based on the percentage difference in the New Home Prices in Orange County published in the 41n quarter report for the then current year versus the immediately preceding year. SECTION 1. This ordinance shall become effective 30 days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 4th day of May , 200 9 . 9L& /S e-� Mayor ATTEST: APPROVED AS TO FORM: City Clerk City ttorney REVIEW APPROVED: INITIA D 4LND APPROVED: � 44�� Cit mi istrator 'Dii-r4Yfor of Planning 08-1779/26028.doc 4 Ord. No. 3829 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a regular meeting thereof held on April 20,2009,and was again read to said City Council at a regular meeting thereof held on May 4, 2009, and was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council. AYES: Carchio, Dwyer, Bohr, Coerper, Hansen NOES: Hardy ABSENT: Green ABSTAIN: None I,Joan L.Flynn,CITY CLERK of the City of Huntington Beach and ex-officio Clerk of the City Council,do hereby certify that a synopsis of this ordinance has been published in the Huntington Beach Fountain Valley Independent on May 14,2009. In accordance with the City Charter of said City Q"iq Joan L. Flynn,City Clerk Ci Clerk and ex-officio erk Senior Deputy City Clerk of the City Council of the City of Huntington Beach, California ATTACHMENT # 1 ATTACHMENT NO. 1 SUGGESTED FINDINGS FOR APPROVAL ZONING TEXT AMENDMENT NO. 08-005 SUGGESTED FINDINGS FOR APPROVAL - ZONING TEXT AMENDMENT NO. 08-005: 1. Zoning Text Amendment No. 08-005 amends Chapter 230 (Site Standards), Section 230.26 (Affordable Housing) to increase the size of projects that would be allowed to pay in-lieu fees; allow fractional unit requirements to be satisfied by payment of an in-lieu fee; increase the required income levels for affordable housing; decrease the required affordability term of new inclusionary units and to make other minor changes to existing provisions in a manner consistent with the goals, policies and programs specified in the General Plan, particularly the Housing Element. The proposed changes are consistent with Programs 14 and 18 of the Housing Element requiring that the City pursue the Ad Hoc Committee recommendations and adoption of a reduced fee schedule for projects with affordable units, and they are consistent with the goals and policies of the Housing Element to facilitate the development of affordable housing. 2. In the case of the general land use provision, the change proposed is compatible with the uses authorized in, and the standards prescribed for in the zoning district for which it is proposed. The amendments to Chapter 230, Section 230.96 affect the inclusionary housing requirements that new residential development projects, not subject to other requirements of redevelopment project areas and/or Specific Plan areas, would be subject to. The changes do not affect zoning of any property by altering density or development standards. Therefore, the changes do not affect the compatibility of uses allowed and established by the General Plan and Zoning designations. 3. A community need is demonstrated for the proposed zoning text amendment to facilitate development of smaller residential projects, in particular, by allowing projects with up to 30 units to pay an in-lieu fee, and of all residential projects by increasing the affordability levels and reducing the affordability term. These changes improve the financial viability of residential projects, which will ultimately improve the supply of new housing units,both market rate and affordable, in the city. 4. Its adoption will be in conformity with public convenience, general welfare and good zoning practice because the amendment to Chapter 230, Section 230.26 will encourage and facilitate residential development and provides consistency between the City's affordable housing requirements and state law. ATTACHMENT #2 ATTACHMENT #3 Ordinance No. 3829 LEGISLATIVE DRAFT AMENDING SECTION 230.26 OF HBZSO CHAPTER 230 230.26 Affordable Housing A. PM OS 1. The purpose and intent of this Chapter is to implement the goals, objectives and policies of the City's Housing Element. It is intended to encourage very levy, low-and immoderate income housing, which is integrated, compatible with and complements adjacent uses, and is located in close proximity to public and commercial services. 2. The affordable housing program is one tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors, and to meet its regional fair-share requirements for construction of affordable housing. 3. As a result of being located within a redevelopment area and/or Specific Plan area, additional restrictions or requirements may apply. B. Applicability. This section shall apply to new residential projects three (3) or more units in size. 1. A minimum of ten (10) percent of all new residential construction shall be affordable housing units. The whole number established by dividing the total unit count proposed by ten (10) shall be affordable housing units unless Section 230.2613.4 applies. Any fractional amount maybe paid with an equivalent in-lieu fee 2. Rental units included in the project shall be made available to ver�low e low-income households based o the Orange 0--f ,AA—lian in,.em adjtrstedferaapprepnate flaninily size, as „ lis a b the Uflited States Depai4 ent f Housingd Ufban Developmentestablish d as defined by the State E) Ga ifef '^ r nt to Health and Safety Code Section TRTi�PI �ulllvl 50093 50079.5, or a successor statute. Rental units included in the project ma be made available to moderate income households as defined by Health and Safety Code Section 5 0093 or a successor statute if the moderate income units are located on-site within the project 3. For sale units included in the project shall be made available to vefy low, low E)f faedi moderate income level households bused on the Of a-nge- County N4edian ineoffle, adjusted f ate f fflily ^, as 1e r,...,,r,-; p�tt3lis� by the United,a States D i4 t f H d T r b Development J ...�.... .x.w i.yr u. iivii va Housing uuu v1vu1 established defined by the State f Galifomia, pufstiant to Health and Safety Code Section 50093, or a successor statute. 4. Developers of residential projects consisting of ethiay or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of the Section, unless the affordable housing requirement is 08-1779/26033 1 outlined as part of a specific plan project. 5. Developers of residential projects may elect to provide the affordable units at an off-site location pursuant to subsection B unless otherwise outlined as part of a specific plan project. If affordable units are off-site, they must be under the full control of the applicant, or other approved party. 6. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of determining the required number of affordable housing units, only new units shall be counted. C. Fees in Lieu of Construction. 1. Fees paid to fulfill the requirements of this Section shall be placed in the City's Affordable Housing Trust Fund, the use of which is governed by subsection E. 2. The amount of the in-lieu fees shall be calculated using the fee schedule established aniitially by resolution of the City Council. 3. One hundred (100)percent of the fees required by this Section shall be paid prior to issuance of a building permit. 4. Fees paid as a result of new residential projects shall be based upon the total number and size of the new residential units which are to be constructed. D. Off-Site Construction of Affordable Units. Except as may be required by the California Coastal Act and/or the Cal—�rifefnia Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off- site, at one or several sites, within the City of Huntington Beach. 1. Off-site projects may be new construction or n ajef physi-- substantial rehabilitation, as defined by Government Code Section 33413 affordable housing production requirements eqi al to f.Reffe-than ^N-e *h4d the v f the exist; g p rt ludin.land value-,of existing non- restricted VA1J llll 1111 1� restricted units conditioned upon being restricted to long-term affordability. "At Risk" units identified in the Housing Element or mobile homes may be used to satisfy this requirement. 2. All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. E. Miscellaneous Provisions. 1. The conditions of approval for any project that requires affordable units shall specify the following items: 08-1779/26033 2 (a) The density bonus being provided pursuant to Section 230.14, if any; (b) The number of affordable units; (c) The number of units at each income level as County Media ineemedefined by the California Health and Safety Code; and (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects of the affordable housing provisions shall be executed between the applicant and the City and recorded with the Orange County Recorder's Office, or the applicable in-lieu fee shall be paid in full prior to issuance of the first building permit. 3. The Agreement shall specify an affordability term of not less than six-t3` (6%5 -five (551 years—for rental housing or forty-five (45) years for ownership housing. AiavLuuLiett Fee. -54. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units unless otherwise approved through a phasing plan. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. 65. All affordable units shall be reasonably dispersed-located throughout the project unless otherwise designed through a master plan, shall contain on average the same number of bedrooms as the market rate units in the project, and shall be comparable with the market rate units in terms of exterior appearance, materials and finished quality. 7b. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty (50) percent of the dwelling units affordable to very low- and low-income households, with at least twenty (20) percent of the units available to very low-income households. Concurrent with establishing the annual fee schedule pursuant to subsection C, the City Council shall by resolution set forth the permitted uses of Affordable Housing Trust Funds. All units that obtain Affordable Housing Trust Funds shall maintain the affordability of the units for a minimum of suety (60)fiftv-five (551 years. The funds may, at the discretion of the City Council, be used for pre-development costs, land or air rights acquisition, rehabilitation, land write downs, administrative costs, gap financing, or to lower the interest rate of construction loans or permanent financing. S7. New affordable units shall be occupied in the following manner: 08-1779/26033 3 (a) If residential rental units are being demolished and the existing tenant(s)meets the eligibility requirements, he/she shall be given the right of first refusal to occupy the affordable unit(s); or (b) If there are no qualified tenants, or if the qualified tenant(s) chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs, then qualified households or buyers will be selected. F. Price of Affordable Units. Aff-efdable units shall be sold or-fented at pr4ees, (Al1Vl llUlJ1{/to ver- low, 111Vn��i.a ble Housing A gfee,..,o +Affordable housing cost shall be calculated in L U accordance with Health and Safety Code Section 50052.5 standards for ownership units and Health and Safety Code Section 50053 standards for rental units. This methodology is fully described in the City's adopted housing policies. G. Reduced Fees for Affordable Housing. Projects that exceed inclusionary requirements on-site will be eligible for reduced City fees. pursuant to an Affordable Housing Fee Reduction Ordinance, upon adoption by the City Council. H. Annual Program Review and Periodic Adjustment of the Fee. Within 180 days after the last day of each fiscal year, the City Council shall review the status of the City's Affordable Housing Trust Fund, including the amount of fees collected. expenditures from the Affordable Housing Trust Fund, and the degree to which the fees collected pursuant to this Chapter are assisting the City to provide and encourage low and moderate income housing. The fee shall be updated annually using the Real Estate and Construction Report published by the Real Estate Research Council of Southern California. The fee change shall be based on the percentage difference in the New Home Prices in Orange County published in the 4... quarter report for the then current year versus the immediately preceding year. 08-1779/26033 4 ATTAC H M E N T #4L] City of Huntington Breach Planning.Department STAFF REPORT HUNTINGTON BEACH - TO: Planning Commission FROM: Scott Hess, AICP, Director of Planning BY: Mary Beth Broeren, AICP, Planning Manag6 DATE: March 24, 2009 SUBJECT: ZONING TEXT AMENDMENT NO. 08-005 (AFFORDABLE HOUSING ORDINANCE REVISIONS—Continued from November 12, 2008) APPLICANT: City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648 LOCATION: Citywide STATEMENT OF ISSUE: o Zoning Text Amendment No. 08-005 request: - Amend Chapter 230 (Site Standards), Section 230.26 (Affordable Housing) of the Huntington Beach Zoning and Subdivision Ordinance to increase the size of projects that would be allowed to pay in-lieu fees; allow fractional unit requirements to be satisfied by payment of an in-lieu fee; increase the required income levels for affordable housing; decrease the required affordability term of new inclusionary units and make other minor changes to existing provisions. Staffs Recommendation: Approve Zoning Text Amendment No. 08-005 based upon the following: - The amendment will encourage and facilitate residential development, both market rate and affordable units, and provides consistency between the City's affordable housing requirements and state law. - The proposed changes strike a balance in providing financial relief to developers of small projects, in particular, while still fulfilling the City's goals for affordable housing. RECOMMENDATION: Motion to: "Approve Zoning Text Amendment No. 08-005 with findings for approval (Attachment No. 1) and forward Draft Ordinance (Attachment No. 2) to the City Council for adoption." ALTERNATIVE ACTIONN: The Planning Commission may take alternative actions such as: A. "Continue Zoning Text Amendment No. 08-005 with findings for denial." B. "Deny Zoning Text Amendment No. 08-005 and direct staff accordingly." #B-1 PROJECT PROPOSAL: Zoning Text Amendment No. 08-005 represents a request to amend Section 230.26 (Affordable Housing) of the Huntington Beach Zoning and Subdivision Ordinance (ZSO) pursuant to Chapter 247 (Amendments). Zoning Text Amendment No. 08-005 would implement the following significant changes (a legislative draft is provided in Attachment No. 3; the section references below refer to the attachment): ■ Allow fractional unit requirements to be satisfied by payment of an in-lieu fee, rather than rounding up to another whole unit (Section B.1); ■ Change the required income level of affordable rental units from very low or low income to low income. Allow for moderate income if the units are included within the project (Section B.2); ■ Change the required income level of affordable for-sale units from very low, low or median income to only moderate income (Section B.3); ■ Increase the size of a project that may pay an in-lieu fee to satisfy its affordable housing obligation from nine units to 30 units (Section B.4); ■ Clarify the methodology for annual fee updates (Section C.3); ■ Modify the requirements for off-site rehabilitation of units (Section D.1); ■ Decrease the affordability term from 60 years to 55 years for rental housing and 45 years for for- sale housing (Section E.3); ■ Delete the requirement for an Agreement if in-lieu fees are being paid(Section EA); and ■ Establish a"Reduced Fees for Affordable Housing" section that would allow projects that exceed inclusionary requirements on-site to be eligible for reduced City fees. If this new section is approved, the City would subsequently develop and adopt the reduced fee schedule (Section G). The amended ordinance was initiated by the City Council to facilitate the development of smaller residential projects by reducing the costs associated with complying with the City's affordable housing ordinance. Backerouud: The City's affordable housing ordinance was adopted in 2004, codifying a decade-old policy requirement that projects with three or more units provide the equivalent of 10 percent of their units as affordable housing either on-site or off-site. The ordinance has a provision that projects with three to nine units be allowed to satisfy their affordable housing requirement via payment of an in-lieu fee. In 2007 the City of Huntington Beach adopted the affordable housing in-lieu fee; an annual adjustment was approved in 2008. In its deliberations on affordable housing issues, the City Council formed an Ad Hoc Affordable Housing Committee and directed the Committee to evaluate the possibility of increasing the size of a project that would be eligible to pay an in-lieu fee. The Committee has met numerous times in the last several years and most recently in December 2008. The Planning Commission has held two Study Sessions on the proposed ordinance changes. A public hearing was scheduled with the Planning Commission on November 12, 2008. At that meeting, the Chamber of Commerce submitted a late communication requesting additional changes to the ordinance. The Planning Commission continued the item to provide an opportunity for the City Council Ad Hoc Committee to review and consider the Chamber's recommendations. PC Staff Report -3/24/09 2 (09sr24 ZTA 08-005) On December 16, 2008, the City Council Ad Hoc Committee met and reviewed the Chamber's letter (Attachment No. 5) in conjunction with staff recommendations on the various items. In addition to the City Council members, the Committee meeting was attended by representatives of the Building Industry Association, the Huntington Beach Chamber of Commerce, the Orange County Board of Realtors and Huntington Beach Tomorrow. The Committee's decisions on the various items are reflected in the attached legislative draft. The Committee agreed to make changes to Sections B.1, B.2, EA and F in response to the Chamber's suggestions. ISSUES: Subject Property And Surrounding Land Use, Zoning And General Plan Designations: Zoning Text Amendment(ZTA) No. 08-005 is applicable to new residential development projects citywide that are subject to the City's inclusionary housing requirement. General Plan Conformance: The proposed Zoning Text Amendment No. 08-005 is consistent with the goals, policies, and programs of the City's General Plan as follows: HousinZ Element Goal 4: Remove Governmental Constraints Policv 4.1: Offer financial and/or regulatory incentives, including density bonuses, where feasible to offset or reduce the costs of developing affordable housing. Program 14: Inclusionary Housing Ordinance — Continue to utilize the Inclusionary Housing Ordinance as a tool to integrate affordable housing within market rate developments, or alternatively, to generate fees in support of affordable housing in off-site locations. Implement the Affordable Housing Ad Hoc Committee's recommendation regarding use of in-lieu fees. Program 18: Development Fee Assistance — Conduct a fee study and Adopt an Affordable Housing Fee Reduction Ordinance by the end of 2009 as an incentive for projects to provided increased percentages of affordable units. The amended ordinance will facilitate the development of smaller residential projects by reducing the costs associated with complying with the City's affordable housing ordinance. The amended ordinance also fulfills Program 14 by carrying out the Ad Hoc Committee's recommendations and provides a first step in fulfilling Program 18 to establish a fee reduction ordinance. Zoning Compliance: Not applicable. Urban Design Guidelines Conformance: Not applicable. PC Staff Report -3/24/09 3 (09sr24 ZTA 08-005) Environmental Status: The proposed ZTA No. 08-005 is categorically exempt pursuant to City Council Resolution No. 4501, Class 20, which supplements the California Environmental Quality Act. Coastal Status: The proposed amendment will be combined with other minor amendments that will be forwarded to the California Coastal Commission as a minor Local Coastal Program Amendment for certification. Redevelopment Status: Not applicable. Design Review Board: Not applicable. Subdivision Committee: Not applicable. Other Departments Concerns and Requirements: The proposed ordinance changes were prepared with assistance and input from the Economic Development Department and the City Attorney's Office. Public Notirtcation: Legal notice was published in the Huntington Beach/Fountain Valley Independent on March 12, 2009, and notices were sent to individuals/organizations requesting notification (Planning Department's Notification Matrix), as well as other interested parties. As of March 16, 2009 no communication supporting or opposing the request has been received. Application Processing Dates: DATE OF COMPLETE APPLICATION: MANDATORY PROCESSING DATE(S): July 29, 2008 Legislative Action—Not Applicable ANALYSIS: City staff was directed to process this Zoning Text Amendment for the initial reason of evaluating allowing projects with more than nine units the option of paying an in-lieu fee to satisfy their affordable housing obligations. As a result of the City Council Ad Hoc Committee discussions, as well as previous input from the City's consultant, the Zoning Text Amendment includes other recommended changes. The analysis examines the various components of the ZTA. Project Size Section BA of the existing ordinance allows projects with three to nine units to pay a fee in-lieu of providing an affordable unit either on-site or off-site. Over the years, the development community has expressed that this threshold is too low and that relief should be given to larger projects. The Ad Hoc Committee discussed a range of possibilities, including allowing all projects regardless of the number of units to pay an in-lieu fee. City staff and its consultant evaluated the size of projects that have been proposed or approved in the last several years and concluded that a project size of 30 units would satisfactorily capture the range of smaller projects built in the city. Specifically,projects have either been PC Staff Report -3/24/09 4 (09sr24 ZTA 08-005) over 200 units or less than 30 units. Staff does not support the concept that all projects be allowed to pay an in-lieu fee. First, staff believes that the development community is better positioned to provide affordable units in general; and second, larger projects can better absorb the cost of providing these units. The Ad Hoc Committee's recommendation is to change the project limit from nine units to 30 units. At the October 14, 2008 and March 10, 2009 Planning Commission Study Sessions, the Commission inquired as to the requirements of other cities, which vary widely as shown in the examples below. The far right column shows examples of cities that have restrictions on what projects can pay an in-lieu fee. See Attachment No. 4 for a more detailed listing of other cities' programs. Inclusionary Negotiated Inclusionary by formula In-lieu Fee Restrictions Case by Case Brea Carlsbad (7+units requires 15%) Davis (30 units or less may ask) Fullerton(only in redevelopment) Coronado (20% or in-lieu) Livermore (only if 9 or less units) Newport Beach Irvine(15% or in-lieu) San Jose(no in-lieu fees accepted) Orange(only in redevelopment) Laguna Beach(15%or in-lieu) Santa Clara(no in-lieu fees accepted) San Clemente (6+units requires 4%) West Hollywood(20 units or less) Affordability Levels The existing ordinance states that affordable rental units will be provided at either very low or low income levels and that affordable for-sale units will be provided at very low, low or median income levels (Sections B.2 and B.3). Based on the City's experience in implementing the inclusionary requirement and input from the development community, staff is recommending that the income levels be relaxed such that the requirements would only be low income for rental units and moderate income for for-sale units. In response to the Chamber's November 2008 letter, the Ad Hoc Committee agreed to also allow rental units in a project at the moderate income level if they are located on-site within the project. The principal reason for the change for rental units is based on practice. Due to the high cost of developing in the city, the only time that very low income units have been built/required is where there has been significant subsidy, either from state tax credits, redevelopment agency funds or as a Habitat for Humanity project. In other words, a typical development project is not in the position to financially accommodate the deep subsidy that is required to provide units at a very low income level. While the Economic Development Department will continue to look for opportunities to facilitate projects with a very low income component, staff believes that it is misleading to imply in the ordinance that the City might require a development to provide very low income units. The desire to allow moderate income rental units within a project provides further financial relief to developers and also recognizes that finding off-site locations to satisfy housing requirements can be difficult. With regard to the for-sale units, prior to adoption of the affordable housing ordinance in 2004, the City required for-sale units at a moderate income level. In 2004, the City decided to lower the income level to median levels. This had the effect of making it more costly for the development community but improved the affordability for the home buyer. Staff is now recommending a switch back to the moderate income levels. This will provide relief to the development community but will still provide affordable units that can count toward the City's Regional Housing Needs Assessment (RHNA) requirement. PC Staff Report -3/24/09 5 (09sr24 ZTA 08-005) At the Study Session, the Planning Commission inquired as to what the various income levels were and associated typical salaries. The table below provides data for the County of Orange as a whole. County of Orange Income Level Maximum Example Occupations & Mean Annual Wage Qualifying (2008 1"Qtr.) Incomes by Household Size 4 Persons Very Low Retail Salesperson$26,629 (50%of Median) $46,500 School Bus Driver$35,986 Teacher's Assistant$31,390 Low Firefighter$58,889 (80% of Median) $74,400 Kindergarten Teacher$54,360 Librarian$66,522 Dental Hygienist$78,756 Median $84,100 Police Officer$75,499 Registered Nurse$75,772 Moderate Computer Software Engineer$91,882 (120% of Median) $100,900 Optometrist$85,688 Public Relations Manager$99,770 Source of Wage Data is the California Employment Development Department Affordability Term The proposed Zoning Text Amendment would decrease the affordability term of new inclusionary units from 60 years to 55 years for rental housing and 45 years for for-sale housing (Sections E.3, EA and E.7). Prior to the adoption of the ordinance in 2004, the City required an affordability term of 30 years for inclusionary units. In 2004, the City chose to require the 60 year term in order to ensure a continued supply of affordable units. The development community has consistently voiced opposition to the 60 year requirement, citing difficulty in getting financing and the cost implications this requirement has on the viability of a project. Staff and the Ad Hoc Committee recommend that the length of affordability be reduced slightly to terms that are consistent with Redevelopment Law. Fractional Units Section B.1. of the City's ordinance is recommended to be changed to allow the payment of an in-lieu fee for fractional unit requirements. This provision would be triggered for projects with more than 30 units, which are not eligible to pay an in-lieu fee for their inclusionary housing requirement. As an example, under the existing ordinance a project with 42 units would have an inclusionary housing requirement of 4.2 (10 percent) affordable units; because the City rounds up their unit requirement would actually by 5. The proposed text amendment would reduce the requirement for units by allowing the developer to pay an in-lieu fee for the fractional unit requirement (0.2 in the example). Thus, the developer would be required to only provide four affordable units and pay the in-lieu fee for 0.2. This proposed change was agreed to by the Ad Hoc Committee and is in response to the Chamber's November 2008 letter. PC Staff Report -3/24/09 6 (09sr24 ZTA 08-005) ConsistencylClarifying/Streamlining changes A number of the proposed amendments are recommended by the City's housing consultant, Keyser Marston Associates (KMA) to make the City's ordinance more consistent with state law and/or redevelopment law requirements and definitions. These types of changes are made to Sections C.2, C.3, E.L(c) and F, where the ordinance would refer to the Health and Safety Code Sections as they define affordable households and affordable housing cost; and Section D.I to make the definition of substantial rehabilitation consistent with that of the state Government Code. Staff recommends these changes because they are supported by the state definitions and maximize the opportunities for the City and Redevelopment Agency to be able to count units for RHNA and Agency purposes. In addition, staff and KMA are recommending that the ordinance include language clarifying how annual fee updates are calculated; changes related to this item are made in a new Section C.3. New language is also recommended in the Purpose section(Section A.3), to clarify that projects located within a redevelopment and/or Specific Plan area may be subject to other restrictions or requirements (e.g., 15%requirement). Finally, in response to the Chamber's November 2008 letter, the Ad Hoc Committee agreed to the deletion of requiring an agreement to be recorded if in-lieu fees are paid(original Section EA). The City does not require such an agreement for other similar fees. This change would streamline project implementation and achieve better consistency with other City practices. Reduced Fees Provision Pursuant to the discussion and program in the City's updated Housing Element, staff is recommending that the City establish a"Reduced Fees for Affordable Housing" section that would allow projects that exceed inclusionary requirements on-site to be eligible for reduced City fees. If this new section is approved, the City would subsequently develop and adopt the reduced fee schedule (Section G). The City's Housing Element targets this for completion by the end of 2009. Staff recommends that the Planning Commission approve Zoning Text Amendment No. 08-005 with findings for approval and forward the item to City Council for adoption of the ordinance. The proposed changes strike a balance in providing financial relief to developers of small projects, in particular, while still fulfilling the City's goals for affordable housing. ATTACHMENTS: 2. Draft Ordinance for ZTA No. 08-005 3. Legislative Draft for ZTA No. 08-005 4. Summary of other cities' inclusionary programs. 5. Chamber of Commerce letter, dated November 12, 2008 6. Chamber of Commerce letter, dated February 13, 2009 SH:MBB PC Staff Report -3/24/09 7 (09sr24 ZTA 08-005) ORDINANCE NO. AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING CHAPTER 230 OF THE HUNTINGTON BEACH MUNICIPAL CODE BY AMENDING SECTION 230.26 RELATING TO AFFORDABLE HOUSING The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. Section 230.26 of the Huntington Beach Municipal Code is hereby amended to read as follows: A. Purpose. 1. The purpose and intent of this Chapter is to implement the goals, objectives and policies of the City's Housing Element. It is intended to encourage low-and moderate income housing, which is integrated, compatible with and complements adjacent uses, and is located in close proximity to public and commercial services. 2. The affordable housing program is one tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors, and to meet its regional fair-share requirements for construction of affordable housing. 3. As a result of being located within a redevelopment area and/or Specific Plan area, additional restrictions or requirements may apply. B. Applicability. This section shall apply to new residential projects three (3) or more units in size. 1. A minimum of ten (10) percent of all new residential construction shall be affordable housing units. The whole number established by dividing the total unit count proposed by ten (10) shall be affordable housing units unless Section 230.2613.4 applies. Any fractional amount may be paid with an equivalent in-lieu fee. 2. Rental units included in the project shall be made available to low-income households as defined by Health and Safety Code Section 50079.5, or a successor statute. Rental units included in the project may be made available to moderate income households as defined by Health and Safety Code Section 50093, or a successor statute if the moderate income units are located on-site within the project. 3. For sale units included in the project shall be made available to moderate income households, as defined by the Health and Safety Code Section 50093, or a successor statute. 4. Developers of residential projects consisting of thirty or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of the Section, unless the affordable housing requirement is outlined as part of a specific 08-1779/26028 1 ATTACHMENT ! O ' plan project. 5. Developers of residential projects may elect to provide the affordable units at an off-site location pursuant to subsection B unless otherwise outlined as part of a specific plan project. If affordable units are off-site, they must be under the full control of the applicant, or other approved party. 6. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of determining the required number of affordable housing units, only new units shall be counted. C. Fees in Lieu of Construction. 1. Fees paid to fulfill the requirements of this Section shall be placed in the City's Affordable Housing Trust Fund, the use of which is governed by subsection E. 2. The amount of the in-lieu fees shall be calculated using the fee schedule established by resolution of the City Council. 3. Fees shall be updated annually using the Real Estate and Construction Report published by the Real Estate Research Council of Southern California. The fee change shall be based on the percentage difference in the New Home Prices in Orange County published in the 4ch quarter report for the then current year versus the immediately preceding year. 4. One hundred (100)percent of the fees required by this Section shall be paid prior to issuance of a building permit. 5. Fees paid as a result of new residential projects shall be based upon the total number of the new residential units which are to be constructed. D. Off-Site Construction of Affordable Units. Except as may be required by the California Coastal Act and/or the Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off-site, at one or several sites, within the City of Huntington Beach. 1. Off-site projects may be new construction or substantial rehabilitation, as defined by Government Code Section 33413 affordable housing production requirements, of existing non-restricted units conditioned upon being restricted to long-term affordability. "At Risk" units identified in the Housing Element or mobile homes may be used to satisfy this requirement. 2. All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. E. Miscellaneous Provisions. 1. The conditions of approval for any project that requires affordable units shall specify the following items: 08-1779/26028 2 (a) The density bonus being provided pursuant to Section 230.14, if any; (b) The number of affordable units; (c) The number of units at each income level as defined by the Health and Safety Code; and (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects of the affordable housing provisions shall be executed between the applicant and the City and recorded with the Orange County Recorder's Office, or the applicable in-lieu fee shall be paid in full, prior to issuance of the first building permit. 3. The Agreement shall specify an affordability term of not less than fifty-five (55) years for rental housing or forty-five (45) years for ownership housing. 4. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units unless otherwise approved through a phasing plan. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. 5. All affordable units shall be reasonably dispersed throughout the project unless otherwise designed through a master plan, shall contain on average the same number of bedrooms as the market rate units in the project, and shall be comparable with the market rate units in terms of exterior appearance, materials and finished quality. 6. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty (50) percent of the dwelling units affordable to very low- and low-income households, with at least twenty (20) percent of the units available to very low- income households. Concurrent with establishing the annual fee schedule pursuant to subsection C, the City Council shall by resolution set forth the permitted uses of Affordable Housing Trust Funds. All units that obtain Affordable Housing Trust Funds shall maintain the affordability of the units for a minimum of fifty-five (55) years. The funds may, at the discretion of the City Council, be used for pre-development costs, land or air rights acquisition, rehabilitation, land write downs, administrative costs, gap financing, or to lower the interest rate of construction loans or permanent financing. 7. New affordable units shall be occupied in the following manner: (a) If residential rental units are being demolished and the existing tenant(s) meets the eligibility requirements,he/she shall be given the right of first refusal to occupy the affordable unit(s); or (b) If there are no qualified tenants, or if the qualified tenant(s) chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs, then qualified households or buyers will be selected. F. Price of Affordable Units. Affordable housing cost shall be calculated in accordance with Health and Safety Code Section 50052.5 standards for ownership units and Health and 08-1779/26028 3 Safety Code Section 50053 standards for rental units. This methodology is full described in the City's adopted housing policies. G. Reduced Fees for Affordable Housing. Projects that exceed inclusionary requirements on- site will be eligible for reduced City fees, pursuant to an Affordable Housing Fee Reduction Ordinance, upon adoption by the City Council. SECTION 1. This ordinance shall become effective 30 days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 200 Mayor ATTEST: tP PD AS TO FORM: City Clerk City Attorney C REVIEWED AND APPROVED: INITIATED AND APPROVED: City Administrator Director of Planning 08-1779/26028 4 LEGISLATIVE DRAFT AMENDING SECTION 230.26 OF HBMC CHAPTER 230 230.26 Affordable Dousing A. Purpose. 1. The purpose and intent of this Chapter is to implement the goals, objectives and policies of the City's Housing Element. It is intended to encourage very lew, low-and medianmoderate income housing, which is integrated, compatible with and complements adjacent uses, and is located in close proximity to public and commercial services. 2. The affordable housing program is one tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors, and to meet its regional fair-share requirements for construction of affordable housing. 3. As a result of being located within a redevelopment area and/or Specific Plan area additional restrictions or requirements may apply B. Applicability. This section shall apply to new residential projects three (3) or more units in size. 1. A minimum of ten (10) percent of all new residential construction shall be affordable housing units. The whole number established by dividing the total unit count proposed by ten(10) shall be affordable housing units unless Section 230 26B 4 applies Anv fractional amount may be paid with an equivalent in-lieu fee. 2. Rental units included in the project shall be made available to veer low-income households based or the Orange County aroma i.,,.,,me adjusted fa f appr-epda family fra e� ., ,bl' h 7 by the United States DepaFtment ef Housing and UFbafl Development or-establish t YY� published as defined by the State =Cali ami^, pufsuant to Health and Safety Code Section 50093 50079.5, or a successor statute. Rental units included in the proiect may be made available to moderate income households as defined by Health and Safety Code Section 50093 or a successor statute if the moderate income units are located on-site within the proiect 3. For sale units included in the project shall be made available to ver-5,low, lee E)F ed ., moderate income Ievel households based on the r,,.,nge size,County Median Ifteeme, adjusted fef appropriate family as published by the United States Deplaftment of Hatising and Uf-ban Deveiepment OF establisheQ defined by the v�aw St * v f G life ", pursuant to Health and Safety u Code Section 50093, or a successor statute. 4. Developers of residential projects consisting of ninethlrty or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of the Section,unless the affordable housing requirement is 08-1779/26033 1 outlined as part of a specific plan project. 5. Developers of residential projects may elect to provide the affordable units at an off-site location pursuant to subsection B unless otherwise outlined as part of a specific plan project. If affordable units are off-site, they must be under the full control of the applicant, or other approved party. 6. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of determining the required number of affordable housing units, only new units shall be counted. C. Fees in Lieu of Construction. I. Fees paid to fulfill the requirements of this Section shall be placed in the City's Affordable Housing Trust Fund, the use of which is governed by subsection E. 2. The amount of the in-lieu fees shall be calculated using the fee schedule established afwua41y by resolution of the City Council. 3. Fees shall be updated annually using the Real Estate and Construction Report published by the Real Estate Research Council of Southern California. The fee change shall be based on the percentage difference in the New Home Prices in Orange County published in the 4 quarter report for the then current year versus the immediately preceding year. -34. One hundred (100) percent of the fees required by this Section shall be paid prior to issuance of a building permit. 4-5. Fees paid as a result of new residential projects shall be based upon the total number and size of the new residential units which are to be constructed. D. Off-Site Construction of Affordable Units. Except as may be required by the California Coastal Act and/or the r'^'�;a Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off- site, at one or several sites, within the City of Huntington Beach. 1. Off-site projects may be new construction or majef rr.ysi-^'--substantial rehabilitation, as defined by Government Code Section 33413 affordable housing production requirements, equal to more than thifa the valtie of ex the ti o e o elu g land i .., „�a« ,of existing non- restricted units conditioned upon being restricted to long-term affordability. "At Risk" units identified in the Housing Element or mobile homes may be used to satisfy this requirement. 2. All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. 08-1779/26033 2 rTACHM NT E. Miscellaneous Provisions. 1. The conditions of approval for any project that requires affordable units shall specify the following items: (a) The density bonus being provided pursuant to Section 230.14, if any; (b) The number of affordable units; (c) The number of units at each income level as Felated to Orange County>\,�edia., !nee defined by the California Health and Safety VVU11L�' 1Y1 Code; and (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects of the affordable housing provisions shall be executed between the applicant and the City and recorded with the Orange County Recorder's Office, or the applicable in-lieu fee shall be paid in full prior to issuance of the first building permit. 3. The Agreement shall specify an affordability term of not less than sixty (6 Aft-five(551 years—for rental housing or forty-five (451 years for ownership housing. ejeet r-equifing an in lieu fee, the appheantshall exeeute ,7 Feeof an Agreement, subject te appfoyal by the Planni-g Dif-etoF, to pay an AFC ,l.,b eHo Housing T 1 1 i�iVl , 54. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units unless otherwise approved through a phasing plan. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. 65. All affordable units shall be reasonably dispersed throughout the project unless otherwise designed through a master plan, shall contain on average the same number of bedrooms as the market rate units in the project, and shall be comparable with the market rate units in terms of exterior appearance,materials and finished quality. -76. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty(50) percent of the dwelling units affordable to very low- and low-income households, with at least twenty(20) percent of the units available to very low-income households. Concurrent with establishing the annual fee schedule pursuant to subsection C, the City Council shall by resolution set forth the permitted uses of Affordable Housing Trust Funds. All units that obtain Affordable Housing Trust Funds shall maintain the affordability of the units for a minimum of sixty (69)a -five (551 years. The funds may, at the discretion of the City Council,be used for pre-development costs, land or air rights acquisition, 08-1779/26033 3 rehabilitation, land write downs, administrative costs, gap financing, or to lower the interest rate of construction loans or permanent financing. 87. New affordable units shall be occupied in the following manner: (a) If residential rental units are being demolished and the existing tenant(s) meets the eligibility requirements, he/she shall be given the right of first refusal to occupy the affordable unit(s); or (b) If there are no qualified tenants, or if the qualified tenant(s) chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs, then qualified households or buyers will be selected. F. Price of Affordable Units. A f:;rdable units shall be sold o ented at aff-ofdable to very low, le", or-median ineeme households pursuant to terms of th Aff-efdable Housing ^gf +.Affordable housing cost shall be calculated in iiviuuv accordance with Health and Safety Code Section 50052.5 standards for ownership units and Health and Safety Code Section 50053 standards for rental units This methodology is fully described in the Citv's adopted housing policies. G. Reduced Fees for Affordable Housing Projects that exceed inclusionary requirements on-site will be eligible for reduced Cjty fees pursuant to an Affordable Housing Fee Reduction Ordinance, upon adoption by the City Council 08-1779/26033 4 rI Affordable Housing In-Lieu Fees in California City: Affordable housing in-lieu fees Details: 1 Berkeley Inclusionary Ordinance. Inclusionary Ordinance on all housing. Developer cannot do in-lieu fees unless requirement includes a fraction of a unit, in that case, they can pay an in-lieu fee. (I.e. if it turns out a developer is required to set aside 4.5 units for affordable housing, the developer must set aside 4 units and pay an in-lieu fee for the .5 unit.) 2 Brea Yes/No Formula For a 231-houses project, the city required 10% allocated for affordable housing. Developer only wanted to provide 7 units; paid in lieu for the 16 other units. No formula. 3 Calistoga Yes 5 or more units shall set aside funds and make available a minimum of 20% of the units within the project for households of low and moderate income. Commercial & Industrial projects with new and additions to gross floor area shall contribute an in-lieu fee to the Calistoga Housing Trust Fund. 4 Carlsbad Yes. 7 or more units shall set aside 15% of units for affordable housing for very low and low income. In lieu fee allowed. 5 Coronado Yes. 20% of units must be set aside for affordable housing, or pay an in-lieu fee. 6 Cotati Yes. 5 units or more shall set aside 15% of units of low and moderate income household. 7 Danville Yes In-lieu fees available, but always push developers to build. M 8 Davis Yes 5 units or more must set aside 25-35 % for - I affordable housing for very low, low (rental units) and moderate (sale units): Projects with 30 units or less can ask for consideration of in-lieu. �r City: Affordable housing in-lieu fees Details: 10 Encinitas Yes 10 units or more can request affordable unit consideration but restricts project to rental only. 12 Fullerton No Redevelopment negotiates affordability with use of set-aside funds. 13 Irvine Yes 15% affordable units required for inclusionary housing. In-lieu fee allowed. 14 Larkspur No For projects of 10 or more units, 15% must be set aside for inclusionary housing at cost or rents affordable to low income households. 15 Livermore Yes. For initial construction, 10 % of units are to be put aside for affordable housing if the development consists of 10 or more units (or a fee for 9 or less units), which the council requests. Developers can submit alternate proposal to staff for consideration. 16 Menlo Park Yes. Same as Below Market Rate For projects 5 or more units, one BMR unit is (BMR) Housing Program. required. Projects with 10-19 units are required to provide 1 BMR unit plus 1 additional BMR unit or pay an in-lieu fee. Development projects with 20 or more units shall provide up to 15% at BMR for affordable housing. City asks the developer to assist with relocation, but there is not formal city policy or provisions reaardina that. 17 Monterey Yes Formula used for affordability requirements: 3-4 Units in lieu fee permitted; 5 Units 20% of inclusionary units-1 at very low income; 6 Units and above 20 % inclusionary plus payment of in lieu fee for any fractional difference. 13 Newport Beach Yes. Negotiable Basis 19 Oakland No inclusionary ordinance Developments are required to provide affordable housing when the project is located within a _ redevelopment project area. 20 Orange No Only if in redevelopment .s City: Affordable housing in-lieu fees Details: 21 Oceanside Yes 22 Pasadena Yes. Inclusionary housing ordinance established: Any development with ten or more units must set aside 10% for low (80% of median) and 5% for moderate (120% of median) income. In-lieu fees based on affordability gap and location of proposed development. 23 Pleasanton Yes The city has an in-lieu fee ordinance that applies to all residential projects. 24 Roseville No. The city is divided into "plan areas" with its own specific plans. Each specific plan is required to have a certain number of affordable housing units. The requirement is then allotted to various parcels, which are required to provide the affordable housing. 25 San Clemente Yes Based on Vacancy Rate. Less than 6 units, no requirements. More than 6 units, 4% must be set-aside for individuals earning less than 50% of median income. (i.e. For a 100-unit apt. complex, 4 units must be sold or rented permanently to person in very low income category. If 4 units are not provided, an in-lieu fee must be paid, based on 1% of construction of every unit converted.) See supplementary documents for details 26 San Jose No Require affordable housing component only if project is located in a redevelopment area; otherwise, up to applicant to provide affordable housing (Incentives offered). 15% of units required to be set aside for affordable housing. No in-lieu fees accepted. 27 Santa Clara No in-lieu fees For proposed building with greater than 10 units, at least 10% must be set aside for affordable housing. The city partially subsidizes building of City: Affordable housing in-lieu fees Details: affordable housing units using 30% of Redevelopment Agency (RDA) money. As of now, has not done one for condo conversion, but same requirements would apply. 28 Santa Cruz Yes Most affordable housing based on area meeting income; rather complicated. Based on low, very low, and average incomes. Requires 1 out of 5 units affordable. 29 Tustin No. City prefers not to accept in-lieu Affordable housing provision met either on- or off- fees. Otherwise, would place an site. obligation on the city. 30 West Hollywood Yes For developments of 20 or less units. 31 County of Marin Yes. 10 units or more must provide 15% affordable units for very low, low and moderate income households. In lieu fee shall be calculated as the difference between the ability of a moderate income family to pay for housing and the estimated cost of a market rate unit of appropriate size.. 32 County of Monterey Yes Case-by-case basis. Option of in-lieu fees determined while the project is going through the planning phase, usually in a subdivision process. 33 County of Placer Yes. Obligated to provide in-lieu fee option, but prioritize options and discourage in-lieu fees. No �. formula, up to decision makers and permit process. 34 County of Santa Cruz If considered a subdivision, then in- lieu fees are allowed. M Z �a. : ' November 12, 2008 HUNTINGTON BEACH`: CHAMBER�f COMMERCE x Mr. Tom Livengood, Planning Commission Chair City of Huntington Beach * * * * 2000 Nain Street Huntington Beach, CA 92648 Dear Mr. Livengood: Thank you for the opportunity to have the Chamber represented on the City's Affordable Housing In-lieu Fee Committee. Over the past two and a half years the Committee had discussed and agreed upon many proposed changes to the City's Zoning Code provisions addressing affordable housing. We believe that the Committee's recommendations are significant steps in the right direction, however there are still a couple of items which should be addressed and other items clarified, in an effort to assist the building community in accepting their role in the implementation of the City's obligation for affordable housing. Proposed Additional Amendments B-1. "A minimum of ten (10) percent of all new residential construction shall be affordable housing units." consider adding: The whole number established bar dividing the total unit count proposed by ten (10). Any fractional amount could be paid with an equivalent in-lieu fee. B.2. "Rental units included in the project shall be made available to low income households." consider adding: low and moderate households. This request is consistent with the Council's recent action on the Ripcud project, in the Edinger Corridor. BA. Consider adding that projects proposing greater than 30 units have the opportunity to propose unique solutions including on-site and off-site units or.the payment of increased fees, subject to the approval of an Affordable Housing Agreement by City Council. • creating a strong focal economy • Promoting the community • Providing networking opportunities • Representing r sAqit • PoiitiraI action � LJ a g ,A�, - C.2. Consider eliminating the fee schedule and establish a fixed per unit fee of $15,000 established by resolution of the City Council. CA. Consider allowing projects to pay fees prior to final approval (occupancy) of the first market rate residential unit. This delay in payment will greatly assist the builder and still provide the fees in a timely manner. E_1.c Consider deleting this provision. the number of affordable units at various income levels should be part of the Affordable Housing Agreement and not part of the conditions on the project entitlement. EA. Consider deleting: There should not be a need for an Agreement only a condition of approval on the entitlement. E.6. Consider deleting this provision. The units and type of unit within a project that are proposed to be set-aside to meet the City's affordable housing obligation, should be the decision of the developer and subject to approval of the Affordable Housing Agreement. It should be permissible for the least desirable and/or smallest units within a project to be offered to meet the affordable obligation. F. Please clarify the "Health and Safety Code Section 50052.5" affordable housing cost standards for ownership and rental units. Thank you again for the opportunity to participate in achieving a workable solution to the community wide concern and obligation of affordable .housing. Sinc rely, J c iddeil,` resident un rngton Beach Chamber of Commerce 1 a City of Huntington Boa,.,: HUNTINGTON BEACHA February 12, 2009 CHAMBERO OM _; FEB 13 2009 ® Mary Beth Broeren, Planning Manager * * Huntington Beach Planning Department 2000 Main Street Huntington Beach, CA 92648 e Dear IV�S. r eren: Thank you for the opportunity to have the Chamber represented on the City's Affordable Housing In-lieu Fee Committee. Over the past two and a half years the Committee has discussed and agreed upon many proposed changes to the City's Zoning Code provisions addressing affordable housing. We believe that the Committee's recommendations are significant steps in the right direction. The Committee met on December 16th to review additional concerns expressed in our letter dated November 12, 2008. After considerable discussion there remains one fundamental issue, that being the basis upon which the affordable housing in-lieu fee is determined. The Chamber believes that the in-lieu Affordable Housing fee should only be based upon the gap between a market rate residential rental unit and a low- income (51%-80% of the county median) rental unit. That affordability gap was determined to be $105,000, in a Keyser Marston report dated January 23, 2006. Adjusting the number to 2009 and adding a City administration cost, the gap to produce an affordable unit could increase to approximately $150,000 per affordable rental unit; subject to verification by the City's consultant. Funding the affordability gap for rental housing will directly address the City's housing needs. Our proposed approach will establish a reasonable fee and add to the City's affordable housing stock. The staff recommended fee is based on blending the affordability gap for both rental and for sale housing unit. This approach will nearly double the fee which will be added as an expense to new residential projects and result in an overall increase in the cost of each housing unit produced in the City. The City's desire to provide a greater variety of affordable housing for both ownership and rental units is an admirable goal. However, as recently demonstrated providing affordable for sale housing can create a great deal of misunderstanding and frustrated homeowners. The City should focus their efforts on providing affordable housing through the creation, rehabilitation and subsidy of rental units. 19891 Beach Blvd.,Suite 140 • Creating a strong local economy Huntington Beach,CA 92648 • Promoting the community (714)536-8888 • Providing networking opportunities (714)960-7654 Fax • Representing the interests of businesses WIh rjov,,rYtr;gmA www.hbchamber.com • Political action Assuming that the City Council concurs pursuing primarily affordable rental housing, the proposed in-lieu fee should be based on the affordable gap of providing new affordable rental units. The Chamber requests that the proposed affordable housing in-lieu fee be revised to reflect a $15,000 per unit fee (subject to annual review and adjustment) for all projects. In addition the graduated fee schedule already adopted by Council, for the projects of 3-9 units, should remain. Thank you again for the opportunity to participate in achieving a workable solution to the community wide concern and obligation of affordable housing. Sin rely, Jo e iddell, President H ntington Beach Chamber of Commerce "5MER _a .w - ATTACHMENT #5 Request Affordable Housing Ordinance Revisions �) oAmend Section 230.26 of the ZSO oIncrease the size of a project that may pay in-lieu fees from nine to 30 units; allow for Zoning Text Amendment No. 08-005 fractional unit payment for projects with more than 30 units ' oChange required income level of rental and April 20, 2009 for-sale units to low and moderate income, respectively; allow moderate rental if on-site o Decrease the affordability term for rental and for-sale units to 55 and 45 years,respectively oAdditional clarifying provisions and new section on reduced fees IBackground I Analysis o City Council approved affordable \' o Increase project size: housing ordinance October 2004; however, City has been requiring /) •Allow projects w/ 3-30 units to pay affordable housing by policy since the an in-lieu fee early 1990s .Projects in recent past have either o City Council created an Ad Hoc been below 30 or above 200 Committee to further evaluate affordable housing issues •30 unit cap will benefit the o Committee includes reps from BIA, majority of small developers HBT, Chamber of Commerce, as well as City Council 1\ Analysis Analysis o Allow for fractional unit payment: o Change affordability levels: . Projects w/ >30 units could pay in-lieu •Rental units from very low and low fee for their fractional requirement income to]ust low income; moderate . Example: level rental allowed if on-site w/in Existing Code: 42 affordable units unit project required project to provide 5 affor . For-sale units from median to moderate (10%=4.2, rounded up=5) .Changes are consistent with current Proposal: 42 units project required to practice in terms of rental units and provide 4 affordable units and pay in-lieu would be consistent with the City's fee for 0.2 units. policy for for-sale units prior to the adoption of the ordinance in 2004. 1 \l Analysis Planning Commission Action o Change affordability term o Planning Commission approved the . Decrease from 60 years; still consistent / ZTA on March 24, 2009: j with redevelopment law •Added a requirement for annual o Miscellaneous changes / report on status of Housing Trust • Definition consistency—income and Fund (funded by affordable rehabilitation of units housing in-lieu fees) • Method for annual fee update and reporting requirement o New Reduced Fees section . Establish provision for projects that exceed inclusionary requirements on-site to be eligible for reduced City fees. Recommendation o Staff recommends the City Council: •Approve Zoning Text Amendment No. 08-005 with findings and adopt i' the Ordinance 2 RCA ROUTING SHEET IAPR 2009 I t INITIATING DEPARTMENT: PLANNING SUBJECT: Zoning Text Amendment No. 08-005 Affordable Housing Ordinance Revisions) COUNCIL MEETING DATE: Aril 20, 2009 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached Not Applicable ❑ Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable E Attached ❑ Contract/Agreement (w/exhibits if applicable) Not Applicable (Signed in full by the City Attorney) Attached ❑ Subleases, Third Party Agreements, etc. Not Applicable (Approved as to form by City Attorney) Certificates of Insurance (Approved b the CityAttorne Attached ❑ y y) Not Appiicable hed ❑ Fiscal Impact Statement (Unbudget, over $5,000) Not Attac Applicable Bonds (If applicable) Attached ElNot Applicable Attached Staff Report (If applicable) Not Applicable ❑ Commission, Board or Committee Re ort If applicable Attached p ( pp ) Not Applicable ❑ s/Conditions for Approval and/or Denial Attached Findin g pp Not Applicable ❑ EXPLAHATIOH FOR MIS NG ATTACHNEHTS REVIEWED RETURNED FORWARDED, Administrative Staff Assistant City Administrator Initial City Administrator initial FCity Clerk ) VV EXPLANATION FOR RETURN OF ITEM! (BlqlaW Spaoos RCA Author: SH:MBB Ordinance No. 3829 (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects of the afford le housing provisions shall be executed between the applicant and the Cit/ne an recorded with the Orange County Recorder's Office, or the a in-lieu fe shall be paid in full,prior to issuance of the first building perm 3. The Agreement shall specify an affordability tt le than fifty-five (55) years for rental housing or forty-five (45)yearer p housing. 4. All affordable on-site units in a project shall bcted concurrently with or prior to the construction of the primary projectless otherwise approved through a phasing plan. Final approval (occup the first market rate residential unit shall be contingent upon the co and public availability, or evidence of the applicant's reasonable progress attainment of completion, of the affordable units. 5. All affordable units shall be reasonabl d' perse throughout the project unless otherwise designed through a master plan, s alrrcontain on average the same number of bedrooms as the market rat units in the project, and shall be comparable with the market rate uni in terms of exterior appearance, materials and finished quality. 6. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty (50)percent of the dwlling units affordable to very low- and low-income households, with at least twenty(20)percent of the units available to very low- income households. Concurrent with establishing the annual fee schedule pursuant to subsection C./the City Council shall by resolution set forth the permitted uses of Affor able Housing Trust Funds. All units that obtain Affordable Housing st Funds shall maintain the affordability of the units for a ,Irminimum of fifty-fi e (55)years. The funds may, at the discretion of the City Council, be used f r pre-development costs, land or air rights acquisition, rehabilitation, land write downs, administrative costs, gap financing, or to lower the interest rate,of construction loans or permanent financing. 7. New affordable units shall be occupied in the following manner: (a) If residential rental units are being demolished and the existing tenant(s) meets the eligibility requirements,he/she shall be given the right of first refusal to occupy the affordable unit(s); or (b) If there are no qualified tenants, or if the qualified tenant(s) chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs,then qualified households or buyers will be selected. F. Price o Affordable Units. Affordable housing cost shall be calculated in accordance with Health4nd Safety Code Section 50052.5 standards for ownership units and Health and Safety Code Section 50053 standards for rental units. This methodology is full described in the City's adopted housing policies. //// 08-1779/26028.doc 3 � L ,, _; } ,� (a) The density bonus being provided pursuant to Section 230.14, if any; (b) The number of affordable units; (c) The number of units at each income level as related to 'range County N edi n Treefaedefined b the California Health and S etyy �.vuii��r Code; and (d) A list of any other incentives offered by the City. 2. An Affordable Housing Agreement outlining all aspects o/ndthe ble housing provisions shall be executed between the applicaty and recorded with the Orange County Recorder's Office , able in-lieu fee shall be paid in full prior to issuance /fnot fst building permit. 3. The Agreement shall specify an affordability ter less than si�y ("fifty-five (55) years—for rental housin or fo45 ears for ownership housing. 54. All affordable on-site units in a pr/eprimary all be constructed concurrently with or prior to the construction o project units unless otherwise approved through a ph ing plan. Final approval (occupancy) of the first market rate residenti unit shall be contingent upon the completion and public availa V ity, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. 65. All affordable units shafl be reasonabl disperse hroughout the project unless otherwise desigfied through a mas an, shall contain on average the same number of bedrooms as the market rate units in the project, and shall be comparabVwith the market rate units in terms of exterior appearance /mateials and finished quality. -6. Affordable g Trust Funds shall be used for projects which have a minimum of (50) percent of the dwelling units affordable to very low- and to -income households, with at least twenty(20)percent of the units avai ble to very low-income households. Concurrent with establish' g the annual fee schedule pursuant to subsection C, the City Counci shall by resolution set forth the permitted uses of Affordable Housi g Trust Funds. All units that obtain Affordable Housing Trust Fun shall maintain the affordability of the units for a minimum of sib fifty-five (551 years. The funds may, at the discretion of the City C uncil, be used for pre-development costs, land or air rights acquisition, r habilitation, land write downs, administrative costs, gap financing, or to ower the interest rate of construction loans or permanent financing. 87. New affordable units shall be occupied in the following*manner 1`y 08-1779/26033 3 ` A ENN NOTICE OF PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH NOTICE IS HEREBY GIVEN that on Monday, April 20, 2009, at 6:00 p.m., in the City Council Chambers, 2000 Main Street, Huntington Beach, the City Council will hold a public hearing on the following planning and zoning items: ❑ 1. ZONING TEXT AMENDMENT NO. 08-006 (AFFORDABLE HOUSING ORDINANCE REVISIONS)Applicant: City of Huntington Beach Request: To amend Chapter 230 of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) to modify the provisions for affordable housing. The proposed amendment would increase the size of projects that would be allowed to pay in- lieu fees; increase the required income levels for affordable housing; decrease the required affordability term and make other minor changes to existing provisions. Location: Citywide Project Planner: Mary Beth Broeren NOTICE IS HEREBY GIVEN that Item #1 is categorically exempt from the provisions of the California Environmental Quality Act. NOTICE IS HEREBY GIVEN that Item #1 will require a Local Coastal Program Amendment certified by the California Coastal Commission. ON FILE: A copy of the proposed request is on file in the Planning Department, 2000 Main Street, Huntington Beach, California 92648, for inspection by the public. A copy of the staff report will be available to interested parties at the City Clerk's Office on Thursday, April 16, 2009. ALL INTERESTED PERSONS are invited to attend said hearing and express opinions or submit evidence for or against the application as outlined above. If you challenge the City Council's action in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City at, or prior to, the public hearing. If there are any further questions please call the Planning Department at 536-5271 and refer to the above items. Direct your written communications to the City Clerk. Joan L. Flynn, City Clerk City of Huntington Beach 2000 Main Street, 2nd Floor Huntington Beach, California 92648 (714) 536-5227 G:\LEGALS\CITY COUNCIL\2009\090420 (ZTA 08-005 Affordable Housing).doc gn naa,�AWVv-.va- a-� Ii�- O as aI lan a ;�"`� � fts% . ItLING LABW�°AjaAe'AA/UNu► ��eu eee tvc ial' a a "'S ; AwN6 is', President Roger Kutoshita Kerry Smith li-B. Chamber of Conunerce 500 N. State College Blvd.Ste. 100 Harbinger[-Tomes 19891 Beach Blvd.,Ste. 140 Orange,CA 92868 2728 17,1'St. Huntington Beach,CA 92648 Huntington Beach,A 92648 Dave Stefanides Alex Wong Dave MacLeod Orange County Assoc.of Realtors Red Oak Investments 19671 Beach Blvd.,Ste. 101 25552 La Paz Road 2101 Business Center Dr.,Ste. 230 Huntington Beach,CA 92648 Laguna Hills,CA 92653 Irvine,CA 92612 Bijan Sassounian Lindsay Parton Michael C.Adams Associates 21190 Beach Blvd. DJM Capital Partners,Inc. PO Box 382 Huntington Beach,CA 92648 922 Laguna Street Huntington Beach,CA 92648-0382 Santa Barbara,CA 93101 Duf Sfreddo Dick and Kevin Kelter Jeff Bergsma 5622 Research Dr.,Ste.A 18281 Gothard,Ste.203. Team Design/Construction Huntington Beach,CA 92649 Huntington Beach,CA 92648 221 Main St.,Ste. S Huntington Beach,CA 92648 President Keith Dawson Gil Aousizerat Huntington Beach Tomorrow 15581 Placid Cit. 17912 Gothard St. PO Box 865 Huntington Beach,CA 92647 Huntington Beach,CA 92647 Huntington Beach,CA 92648 Julie Vandermost Ed Bonnani Hearthside Homes BIA-OC 5622 Research Dr.,Ste. A Ed Mountford 17744 Sky Park Circle,#170 Huntington Beach,CA 92649 6 Executive Circle,Suite 2.50 Irvine CA 92614-4441 Irvine,CA 92614 Richard Spicer [Michael Gagnet Joe Gergen SCAG Makar Properties,LLC 211-13 Main St. 818 West 7th, 12th Floor PO Box 7080 Huntington Beach,CA 92648 Los Angeles,CA 90017 Newport Beach,CA 92660 Sarah Phan Duc Nguyen,AIA John&Kathy Zehnder 2500 S.Fairview St.,#P 11770 E.Warner Ave.#216 614 20th St_ Santa Ana,CA 92704 Fountain Valley,CA 92708 Huntington Beach,CA 92648 Dick Harlow John Laing Homes Dave Oddo 1742 Main Street 815 Main St. Huntington Beach,CA 92648 3121 Michelson Dr.,Ste.200 Huntington Beach,CA 92648 Irvine,CA 92612-7672 Shea Homes Schubert Flint Public Affairs Larry Brose Ron Metzler Attn:Marice H.White Robert Mayer Corp. 603 S.Valencia Ave. 2020 Main Street,Suite 1160 660 Newport Center Dr.,Stc. 1050 Brea,CA 92823 Irvine,CA 92614 _ �j Newport Beach,CA 92660 4V:\Broeren\IlousingUn-Lieu ding Labels . r t 9g6(rc�i r ftdW et jklim as d a �}�a �i � am% vii �"'Wfag8§fl N e X tasy Neel - 9_ F -do aalq d a10nWft le4� ( ft Use AVer/ -Lieu Fee NC` e Po U @ Ian 1 3y� eeza`ii(ft P 1� p0965 �AILING Lt(B i 4 ( . I��n � Bill Holman Karen tackle Teryll Hopper 21190 Beach Boulevard 18652 Florida St. #300 Orange County Assoc. of Realtors Huntington Beach,CA 92648 Huntington Beach,CA 92648 25552 La Paz Road Laguna Hills,CA 92653 Councilmember Jill Hardy Bob Hall Paul Emery Administration Administration Administration 411,Floor 41b Floor 41b Floor Stanley Smalewitz Jennifer McGrath Kellee Fatzal Economic Development City Attorney's Office Economic Development 51h Floor 41h Floor 51h Floor Scott Hess Councilmember Don Hansen Mayor Keith Bohr Planning Administration Administration 3,d Floor 4"Floor 4t'Floor G.1T3roe n�H� U4i-Li u\M iling Labels i r queWes fatue a peer ( ®sempfV d do �A liW10MIJ ' ( I aaan as 60 1 charuak%arwole li fer le QO 4�6` , ,d Ase3j CITY COUNCIL/REDEVELOPMENT AGENCY PUBLIC GEARING REQUEST FORM MEETING DATE: 4A . 2,D� U� SUBJECT: 00 DEPARTMENT: `✓`, CONTACT NAME: PHONES N/A YES NO ( ) ( ( ) Is the notice attached? ( ) ( ) Do the heading and closing of the notice reflect a hearing before the City Council and/or Redevelopment Agency? ( ) -f� ( ) Are the date, day and time of the public hearing correct? ( ) ( ) If an appeal, is the appellant's name included in the notice? ( ) ( ) If Coastal Development Permit, does the notice include appeal language? ( ) ( ) ) Is there an Environmental Status to be approved by Council? ( ) ( ) Is a map attached for publication? ( ) ( ) .* Is a larger ad required? Size ( ) ( ) ) Is the verification statement attached indicating the source and accuracy of the mailing list? t, - ( ) ( ) Are the applicant's name and address part of the mailing labels? ( ) ( ) Are the appellant's name and address part of the mailing labels? ( ) ( ) If Coastal Development Permit, is the Coastal Commission part of the mailing labels? ( ) ( ) If Coastal Development Permit, are the resident labels attached? ( ) ( ) is Summary Report 33433 attached? (Redevelopment Agency items only) What is the minimum number of days from publication to hearing date? to r What is the minimum number of times to be published? f q J ,d)- I What is the specified number of days between publications? p Y FOR ADMINISTRATION AND CITY CLERIC USE ONLY Approved for public hearing Date noticed to newspaper � 0 1 Date published ;0 ✓ Date notices mgiled RCA Process Training Manual 10-05-06 -24- F CITY OF HUNTINGTON BEACH f3 Inter Office Communication Planning Department TO: Joan Flynn, City Clerk FROM: Mary Beth Broeren, Planning Manager DATE: September 15, 2008 SUBJECT: AFFORDABLE HOUSING ORDINANCE AND IN-LIEU FEE; ADVANCE NOTIFICATION TO BUILDING INDUSTRY ASSOCIATION AND OTHERS Attached please find the information packet that has been sent to the Building Industry Association and others (mailing list is attached) regarding proposed changes to the City's affordable housing ordinance and associated in-lieu fee. The tentative hearing schedule for this item is presented on page 2 of the attached memorandum. Hopefully,this will address some of the concerns raised in early August; please let me know if you do any additional noticing, beyond the standard public hearing notice. If you have any questions, please contact me at ext 5550. Thank you. Attachments Cc: Scott Hess, Planning Manager G:\Broeren\Housing\In-Lieu Fee Analysis\City Clerk Memo.DOC FiBO�� 1aa City ® f Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF PLANNING Phone 536-5271 Fax 374-1540 September 12, 2008 To: Interested Persons Subject: Affordable Housing Ordinance Changes and Tentative Public Meeting Schedule (Zoning Text Amendment No. 2008-005) Background In 2004 the City of Huntington Beach adopted an affordable housing ordinance that codified the requirement that projects with three or more units provide the equivalent of 10 percent of their units as affordable housing either on-site or off-site. The ordinance has a provision that projects with three to nine units be allowed to satisfy their affordable housing requirement via payment of an in-lieu fee. In 2007 the City of Huntington Beach adopted the affordable housing in-lieu fee; an annual adjustment was approved in 2008. In its deliberations on affordable housing issues in the city, the City Council formed an Ad Hoc Affordable Housing Committee and directed the Committee to evaluate the possibility of increasing the size of a project that would be eligible to pay an in-lieu fee. The Committee has met on several occasions, most recently in July 2008. Proposed Affordable Housing Ordinance Changes In response to input from Committee representatives, which include representatives from the Huntington Beach Chamber of Commerce and the Building Industry Association and members of the City Council, as well as input from the City's housing consultant, Keyser Marston Associates, the proposed ordinance changes would accomplish the following significant items (a complete legislative draft is attached): • Change the required income level of affordable rental units from very low or low income to only low income (Section B.2); ■ Change the required income level of affordable for-sale units from very low, low or median income to only moderate income (Section B.3); • Increase the size of a project that may pay an in-lieu fee to satisfy its affordable housing obligation from nine units to 30 units (Section B.4); ■ Clarify the methodology for annual fee updates (Section C.3); • Modify the requirements for off-site rehabilitation of units (Section D.1); • Decrease the affordability term from 60 years to 55 years for rental housing and 45 years for for-sale housing (Section E.3); and • Establish a "Reduced Fees for Affordable Housing" section that would allow projects that exceed inclusionary requirements on-site to be eligible for reduced City fees. If this new section is approved, the City would subsequently develop and adopt the reduced fee schedule (Section G). Page 1 of 2 Pursuant to the recommended change to Section B.4 to allow projects with 30 units or less to pay an in-lieu fee, a revised fee schedule would also be presented to the City Council for adoption at the tentative December meeting date shown below. This fee schedule is the one that was reviewed at the July 2008 Ad Hoc Committee meeting. The Keyser Marston Associates memorandum regarding this fee schedule is attached, as is the existing fee schedule for projects with three to nine units. In addition, the two previous City Council reports regarding the in-lieu fee methodology are referenced below and available on the City's website or at the City Clerk's office. http://surfcity-hb.org/Government/Agendas/may0707.cfm Item D-1 http://surfcity-hb.org/Government/Agendas/octl507.cfm Item D-3 Tentative Public Meeting Schedule The proposed ordinance changes (attached legislative draft) are being provided at this time to allow adequate time for review prior to the public meetings, which are tentatively scheduled as follows: October 14, 2008 — Planning Commission Study Session: presentation by staff, discussion, public comments; no action will be taken November 12, 2008 — Planning Commission Public Hearing:recommendation to City Council December 15, 2008 - City Council Public Hearing: ordinance and revised fee schedule agendized for approval. A meeting notice will be sent to you closer to individual meeting dates as a reminder. You may attend any and all meeting(s). You may also provide written comments that would then be attached to staff reports. Written comments should be sent to: Mary Beth Broeren, Planning Department, 2000 Main Street, Huntington Beach, CA 92648. Should you have any questions regarding this information, please contact Mary Beth Broeren, Planning Manager, at 536-5550. Attachment: Legislative Draft for Affordable Housing Ordinance Changes Keyser Marston Associates Memorandum, dated June 23, 2008 Existing In-Lieu Fee Schedule, 2008 '�� Page 2 of 2 LEGISLATIVE DRAFT AMENDING SECTION 230.26 OF HBMC CHAPTER 230 230.26 Affordable Housing (3687-12/04) A. Purpose. 1. The purpose and intent of this Chapter is to implement the goals, objectives and policies of the City's Housing Element. It is intended to encourage very low, low-and mediaanoderate income housing, which is integrated, compatible with and complements adjacent uses, and is located in close proximity to public and commercial services. (3687-12/04) 2. The affordable housing program is one tool the City utilizes to meet its commitment to provide housing affordable to all economic sectors, and to meet its regional fair-share requirements for construction of affordable housing. (3687-12/04) B. Applicability. This section shall apply to new residential projects three (3) or more units in size. (3687-12104) 1. A minimum of ten(10)percent of all new residential construction shall be affordable housing units. (3687-12/04) 2. Rental units included in the project shall be made available to'Very levy er low-income households based on the n,.ange recant.,Median r,,eeme, adjusted fof appropriate fiHnily size,as published by the UWted States as defined by the StatepufsuantHealth and Safety Code Section 50093-5007 .5, or a successor statute. (3687-12/04) 3. For sale units included in the project shall be made available to very low, low of medi moderate income level households based on the n,..,,, e size,County Median ineeme, adjusted f6r-appropfiate family as publisheby the United States DepaAment of Housing and Urban DevelepmefA of eked defined by the State e f Califefaia, p nt to Health and Safety Code Section 50093,or a successor statute. (3687-12/04) 4. Developers of residential projects consisting of ftiii:e1h&or fewer units may elect to pay a fee in lieu of providing the units on-site to fulfill the requirement of the Section, unless the affordable housing requirement is outlined as part of a specific plan project. (3687-12/04) 5. Developers of residential projects may elect to provide,the affordable units at an off-site location pursuant to subsection B unless otherwise outlined as part of a specific plan project. If affordable units are off-site,they must be under the full control of the applicant, or other approved party. (3687- 12/04) 6. New residential projects shall include construction of an entirely new project or new units added to an existing project. For purposes of 08-1779/26033 1 determining the required number of affordable housing units, only new units shall be counted. (3687-12/04) C. Fees in Lieu of Construction. 1. Fees paid to fulfill the requirements of this Section shall be placed in the City's Affordable Housing Trust Fund, the use of which is governed by subsection E. (3687-12/04) 2. The amount of the in-lieu fees shall be calculated using the fee schedule established ap.-malty by resolution of the City Council. (3687-12/04) 3. Fees shall be undated annually using the Real Estate and Construction Report published by the Real Estate Research Council of Southern_ California. The fee change shall be based on the percentage difference in the New Home Prices in Orange County published in the 4 auarter report for the then current year versus the immediately preceding year 3-4. One hundred (100) percent of the fees required by this Section shall be paid prior to issuance of a building permit. (3687-12/04) 4-5. Fees paid as a result of new residential projects shall be based upon the total number and size of the new residential units which are to be constructed. (3687-12/04) D. Off-Site Construction of Affordable Units. Except as may be required by the California Coastal Act and/or the Calife Lia Government Code Section 65590 or a successor statute, developers may provide the required affordable housing off- site, at one or several sites, within the City of Huntington Beach. (3687-12/04) 1. Off-site projects may be new construction or majef physi substantial rehabilitation, as defined by Government Code Section 33413 affordable housing production requirements. �' *�mere that E)„_ *r,:..a *'Re_-,al nth t• etit o elu land value-,of existing non- restricted units conditioned upon being restricted to long-term affordability. "At Risk" units identified in the Housing Element or mobile homes may be used to satisfy this requirement. (3687-12/04) 2. All affordable off-site housing shall be constructed or rehabilitated prior to or concurrently with the primary project. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. (3687-12/04) E. Miscellaneous Provisions. 1. The conditions of approval for any project that requires affordable units shall specify the following items: (3687-12/04) 08-1779/26033 2 112- (a) The density bonus being provided pursuant to Section 230.14, if any; (3687-12/04) (b) The number of affordable units; (3687-12/04) (c) The number of units at each income level as felated to Orange Geunty Meth., Inc Inco defined by the California Health and Safety - Code; and (3687-12/04) (d) A list of any other incentives offered by the City. (3687-12/04) 2. An Affordable Housing Agreement outlining all aspects of the affordable housing provisions shall be executed between the applicant and the City and recorded with the Orange County Recorder's Office prior to issuance of the first building permit. (3687-12104) 3. The Agreement shall specify an affordability term of not less than sib (60)fifty-five(55) years—for rental housing or forty-five(451 years for ownership housing. (3687-12104) 4. In a project requiring an in-lieu fee, the applicant shall execute and record an Agreement, subject to approval by the Planning Director, to pay an Affordable Housing In-Lieu Fee. (3687-12/04) 5. All affordable on-site units in a project shall be constructed concurrently with or prior to the construction of the primary project units unless otherwise approved through a phasing plan. Final approval (occupancy) of the first market rate residential unit shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion, of the affordable units. (3687-12/04) 6. All affordable units shall be reasonably dispersed throughout the project unless otherwise designed through a master plan, shall contain on average the same number of bedrooms as the market rate units in the project, and shall be comparable with the market rate units in terms of exterior appearance, materials and finished quality. (3687-12/04) 7. Affordable Housing Trust Funds shall be used for projects which have a minimum of fifty(50) percent of the dwelling units affordable to very low- and low-income households, with at least twenty(20) percent of the units available to very low-income households. Concurrent with establishing the annual fee schedule pursuant to subsection C, the City Council shall by resolution set forth the permitted uses of Affordable Housing Trust Funds. All units that obtain Affordable Housing Trust Funds shall maintain the affordability of the units for a minimum of sib (69}fiftv-five(55� years. The funds may, at the discretion of the City Council, be used for pre-development costs, land or air rights acquisition, rehabilitation, land write downs, administrative costs, gap financing, or to lower the interest rate of construction loans or permanent financing. (3687- 12/04) 08-1779/26033 3 8. New affordable units shall be occupied in the following manner: (3687- 12/04) (a) If residential rental units are being demolished and the existing tenant(s) meets the eligibility requirements, he/she shall be given the right of first refusal to occupy the affordable unit(s); or (3687- 12/04) (b) If there are no qualified tenants, or if the qualified tenant(s)chooses not to exercise the right of first refusal, or if no demolition of residential rental units occurs, then qualified households or buyers will be selected. (3687-12/04) F. Price of Affordable Units. Aff-ardable units shall be soldrated at � aff-efdable to vefy low, low of Fftedian ineeme households pufstiant to terms of the n ff r,a.ble Housing n,...e,,. ent Affordable housing cost shall be calculated in accordance with Health and Safety Code Section 50052.5 standards for ownership units and Health and Safety Code Section 50053 standards for rental units. (3687- 12/04) G. Reduced Fees for Affordable Housing. Projects that exceed inclusionary requirements on-site will be eligible for reduced City fees, pursuant to an Affordable Housing Fee Reduction Ordinance, upon adoption by the City Council. 08-1779/26033 4 l . y KEYSER MARSTON ASSOCIATES ADVISORS IN PUBLIC/PRIVATE REAL ESTATE DEVELOPMENT- MEMORANDUM REAL ESTATE To: Mary Beth Broeren, Principal Planner RF DU V E1.u1'Mf N 1 AErl1Rt)Aw"ousm-. City of Huntington Beach EC0190MIi_DEVELOPMENT ,_;>;1 1,,41, From: Kathleen Head A.TERRY KEYSER TIM0TNYC.KELLY" KATE EAILLE FUNK Date: June 23, 2008 DENuf M.KFRN R01tURT I.WtThiklRt REM L KAWALIARA Subject: Inclusionary Housing In-Lieu Fee Analysis: 10+ Unit Projects AI.VIN t.14.it I.IS.a At your request, Keyser Marston Associates, Inc. (KMA) prepared the following analysis KAtH1ttN 14 1IEAll pertaining to the City of Huntington Beach (City) Inclusionary Housing Ordinance LAMES A.RARC PAUL:C:ANi 0WIN (Ordinance). The analysis supplements work KMA has previously performed related to c(U0011Y n.SO.0-1400 the in-lieu fee option for projects with nine or fewer units. The purpose of the following KmN E,ENGstRom p p 1 p p g I11LIt L.ikk MEY memorandum is to assist the City in establishing an in-lieu fee payment schedule to be I,i, ; ; applied to larger projects. GMAW M,TmmoLE PAUL C MARRA INCLUSIONARY HOUSING ORDINANCE REQUIREMENTS The City's primary objective pirki4 r-ohjjectiue in implementing the Ordinance is to attract sufficient housing to fulfill the affordable housing production requirements imposed on the Huntington Beach Redevelopment Agency(Agency) by California Health and Safety Code Section 33413, and to eliminate the unmet need for affordable housing identified in the Regional Housing Needs Assessment(RHNA). The Ordinance requirements that must be considered in establishing an in-lieu fee schedule are: 1. All for-sale and rental new construction housing projects with three or more units must make at least 10% of the units available to the following households:' a. For-sale units must be made available to very-low, low or median income households.2 ' New residential projects are defined as an entirely new project or new units added to an existing project. Only new units are used to calculate the required number of affordable housing units. 500SOUTH GRAND AVEN UE.SU ITE 1480 > LOS ANGELES,CA U roRN[A 90071 m PHONE:2136228095 > FAX:2 13 622 5204 WWWW.KEYSERMARSTON.COM 0806029;ti0B:KHH/012 14066.005/012 a. � To: Mary Beth Broeren, City of Huntington Beach June 23, 2008 Subject: Inclusionary Housing In-Lieu Fee Analysis: 10+ Units Page 2 b. Rental units must be made available to very-low or low income households. 2. The income and affordability covenants must remain in place for at least 60 years. 3. The affordable units must be: a. Dispersed throughout the project; b. Proportional in number, bedroom size and location to the market rate units; C. Comparable with the market rate units in terms of the base design, appearance, materials and finish quality; and d. Constructed and occupied concurrently with, or prior to, the construction and occupancy of market rate units. The Huntington Beach City Council (City Council) has approved an in-lieu fee schedule for three to nine unit projects. At this time, the City Council would like to evaluate the pros and cons associated with allowing larger projects to pay a fee in lieu of providing affordable housing on site within market rate residential projects. ASSUMPTIONS The foundation of the in-lieu fee payment amount is the financial impact associated with fulfilling the affordable housing requirements within market rate projects. That financial impact is equal to the difference between the market rate prices and the affordable price for the required income restricted units. This difference is known as the"affordability gap". The in-lieu fee schedule established for three to nine unit projects is based on a hybrid of the affordability gaps associated with ownership and rental units. In addition, the schedule takes into account the fact that the inclusionary requirement has a greater impact on smaller projects than it does for typically sized projects. To that end, the in- lieu fee is charged on a sliding scale basis based on the following assumptions: 1. In 2008, the"Base Fee"for typically sized projects is set at$26,181 per market rate unit in a residential project. 2 The median is defined as the Orange County median income(Median). 0806029;HTB:KHH:gbd 14066.0051012 aa To: Mary Beth Broeren, City of Huntington Beach June 23, 2008 Subject: Inclusionary Housing In-Lieu Fee Analysis: 10+ Units Page 3 2. Currently, the in-lieu fee for three-unit projects is set at$8,130 per market rate unit; this equates to 26% of the Base Fee amount. The fee per unit steps up with each increase in the number of units. The current in-lieu fee for nine-unit projects is$14,240 per market rate unit, or 46% of the Base Fee amount. 3. The in-lieu fee schedule is updated annually based on the changes in the median price for new homes in Orange County as published in the Real Estate Research Council report for December of the preceding year. ANALYSIS A fundamental goal of the proposed modifications to the Ordinance is to eliminate the requirement for luxury home ownership projects to include affordable housing units within the project. This goal was established for the fallowing reasons: 1. It will ultimately be possible for the City to use in-lieu fee revenues to attract a greater number of affordable housing units than will be produced if the units are provided on site within luxury projects. 2. Only a small number of households receive the benefits of purchasing the inclusionary units in luxury projects. There is a perception that those households receive an unfair advantage over the households that are purchasing homes in the lower priced housing projects in Huntington Beach. Within the context of this reasoning, it is the KMA assumption that the City would like to create an in-lieu fee structure for larger projects that achieves the following: 1. The in-lieu fee revenues should be sufficient to produce an equal or greater number of affordable units than would be provided within the market rate projects. 2. The in-lieu fee schedule should not create an incentive for developers to choose to develop smaller, higher priced product types to avoid fulfilling the affordable housing requirements imposed by the Ordinance. 3. The in-lieu fees revenues will be treated as follows: a. The in-lieu fees will be deposited into a dedicated affordable housing account. b. The account will only be used to provide funding assistance for construction or retention of affordable housing, and for reasonable administration costs. 0806029;HTB:KHH:gbd 14066.0051012 0.3 To: Mary Beth Broeren, City of Huntington Beach June 23, 2008 Subject: Inclusionary Housing In-Lieu Fee Analysis: 10+ Units Page 4 To assist in creating a recommended in-lieu fee schedule for larger projects,IKMA considered the following factors: 1. The City's Planning Department staff provided KMA with information pertaining to residential development applications that have been filed within the past two years. That information demonstrated a clear breakpoint in project sizes. Based on the available information, KMA set the maximum project size.for in-lieu fee payment at 30 units. 2. The current in-lieu fee payment amount for three to nine unit projects tops out at 46% of the Base Fee amount. There would be a definite incentive for developers to choose to construct no more than nine units if the in-lieu fee amount increased dramatically for projects with 10+ units. To avoid this, KMA created a fee schedule that gradually increases the in-lieu fee amount up to the maximum level for a 30-unit project. 3. The Agency is currently contributing between $200,000 and $300,000 per unit in assistance to developers that are acquiring and substantially rehabilitating apartment buildings in the community. It can be assumed that the assistance costs for new construction will be at least as much as the assistance being provided to existing projects. On the basis of the identified factors, KMA created a recommended schedule that gradually increases the in-lieu fee amount for projects with between 10 and 30 units. The in-lieu fee amount for 25-to 30-unit projects is equal to the Base Fee amount derived from KMA's analysis of the small project in-lieu fee. RECOMMENDED IN-LIEU FEE SCHEDULE As discussed previously in this analysis, 30 units is currently the effective breakpoint between small and large residential projects being developed in Huntington Beach. As such, it makes analytical sense to provide developers with the option to select the in-lieu fee payment option for projects with up to 30 units. Based on the assumptions and analysis presented in this memorandum, KMA recommends that the in-lieu fee schedule for 2008 be set as follows: 0806029;HTB:KHH:gbd 14066.005/012 a.y To: Mary Beth Broeren, City of Huntington Beach June 23, 2008 Subject: Inclusionary Housing In-Lieu Fee Analysis: 10+ Units Page 5 In-Lieu Fee J Inclusionary In-Lieu Fee/ Project Market Rate Total In- Requirement Affordable Size Unit Lieu Fee (Units) Unit 10 $17,224 $172,244 1.0 $172,244 11 17,224 189,469 1.1 172,244 12 17,224 206,693 1.2 172,244 13 17,224 223,918 1.3 172,244 14 17,224 241,142 1.4 172,244 15 17,224 258,367 1.5 172,244 16 20,210 323,358 1.6 202,099 17 20,210 343,568 1.7 202,099 18 20,210 363,778 1.8 202,099 19 20,210 383,987 1.9 202,099 20 20,210 404,197 2.0 202,099 21 23,195 487,101 2.1 231,953 22 23,195 510,296 2.2 231,953 23 23,195 533,492 2.3 231,953 24 23,195 556,687 2.4 231,953 25 23,195 579,882 2.5 231,953 26 26,181 680,698 2.6 261,807 27 26,181 706,879 2.7 261,807 28 26,181 733,060 2.8 261,807 29 26,181 759,240 2.9 261,807 30 26,181 785,421 3.0 261,807 The recommended in-lieu fee schedule achieves the primary affordable housing goals outlined in this analysis. The trade-off is that increasing the opportunities for developers to pay a fee in lieu of producing affordable housing units shifts the burden for producing the units to the City and the Agency. If the City Council chooses to modify the Ordinance to allow projects with up to 30 units to pay an in-lieu fee to satisfy their affordable housing obligations, KMA recommends that the following additional modifications be made at the same time: 1. The in-lieu fee schedule should be adjusted annually using the same methodology as has been approved for three to nine unit projects. 2. The Ordinance should clearly state that the City Council may allow an in-lieu fee to be paid for projects with more than 30 units at their sole discretion. Because, the in-lieu fee option would only be granted under extraordinary circumstances, it -is advisable to establish the in-lieu fee amount on a case-by-case basis. However, it would be useful to have a methodology in place that defines the calculation methodology to be applied in setting the in-lieu fee amount for these projects. 0806029;HT&KHH_gbd 14066.005/012 �, 5 RESOLUTION NO. 2008-43 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ADJUSTING THE AFFORDABLE HOUSING IN-LIEU FEE AS AUTHORIZED BY ZONING& SUBDIVISION ORDINANCE 3687 SECTION 230.26 WHEREAS, on November 1, 2004 the Council adopted Ordinance No. 3687 adding Zoning& Subdivision Ordinance Section 230.26, relating to the goals and objectives of the City's Housing Element, which is intended to encourage very-low, low and median housing; Pursuant to Section 230.26(B), a minimum of ten(10) percent of all residential construction projects of three (3) or more units must provide affordable housing units; Pursuant to Section 230.26(b)(4),developers of residential projects consisting of nine or fewer units may elect to pay a fee in lieu of providing the required affordable units on site to fulfill the City's requirement of the Inclusionary Housing Ordinance, unless the affordable housing requirement is outlined as part of a Specific Plan Project; On October 15, 2007, the City Council adopted Resolution No. 2007-71 establishing a per project in-lieu fee and requiring the fee to be adjusted by the Cost of Living Index every January beginning 2008. NOW,THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: 1. The fees adopted pursuant to Resolution No. 2007-71 are herby adjusted by the Cost of Living Index such that the proposed per project in-lieu fee shall be as follows: FeelUnit Total Fee 2007 2008 Update Sliding Scale In-lieu Fee 3 Unit Projects $9,430 $8,140 $24,420 4 Unit Projects $10,600 $9,150 $36,600 5 Unit Projects $11,780 $10,170 $50,850 6 Unit Projects $12,960 $11,180 $67,080 7 Unit Projects $14,140 $12,200 $85,400 8 Unit Projects $15,330 $13,230 $105,840 9 Unit Projects $16,500 $14,240 $128,160 1 D1 . 5 08-1594/24103 Huntington Beach Independent has been adjudged a newspaper of general circulation in Huntington Beach and Orange County by Decree of the Superior NOTICE OfPUBUCHEARING Court of Orange County, State of California,under date of Aug. 24, 1994,case BE FORE.THE CITYCOUNtIL A50479. ,OF THE CITY,OF � HUNTINGTON BEACH , NOTICE IS HEREBY, PROOF OP I GIVEN that on Monday, April 20, 2009,' at 6:06 PUBLICATION C'hamin the City Council Chambers, 2000 Main ' Street,. Huntington Beach,.the City, Council will hold a public hearing_ on the following plan- ningS I and zoning items: STATE OF CALIFORNIA ) ❑ 1'. ZONING TEXT AMENDMENT .NO. 08 005 (AFFORDABLE COUNTY �Tw ) SS. HOUSING ORDINANCE COVl�lT 1 OF ORANGE ) REVISIONS) Appintin ton City of Huntington � Beach Request:. To amend Chapter 230 of ! the Huntington Beach Zoning and Subdivision am the Citizen of the United States and a Ordinance (HBZSO) Ao modify the pfovisions II resident of the County aforesaid; I am over for.affordable housing.-I the age of eighteen years and not a party The p r pose d amendment-would in- , crease `the size of to or interested in the below entitled matter. projects.that would,.beallow 9 am a principal clerk of the HUNTINGTON fees; increase. the in-lieu. income`levels,for BEACH INDEPENDENT, a newspaper of affordable housmg;.'de- crease the required af- j general circulation, printed and published in fordability term and I the City of Huntington Beach, County of make other minor changes,to-existing,pro- visions. Location: City Orange, State of California, and the wide Project. Planner: Mary Beth Broeren attached Notice is a true and complete copy NOTICE IS HEREBY GIVEN' that, Item # is as was printed and published on the categorically ..exe�pt from the provisions of following date(s): the California Environ- mental Quality Act. NOTICE .IS HEREBY GIVEN that Item #1 will require•a Local;Coastal Program Amendmen certified by.the Califor- nia Coastal Commission. ON FILE: A copy of the. proposed request is on file in'the Planning De- 1 partment, 2000 Main April 9, 2009 jStreet, Huntington Beach, California 92648, for inspection by .the public. A'copy of the staff report will,be avail- able to interested par- ties at the City Clerk Office on Thursday,April 16,2009. ALL INTERESTED PER- ,SONS are invited to at- tend said hearing and I declare, under penalty of perjury, that the express opinions or'sub- mit evidence for .or foregoing is true and correct. against the application as outlined above.If you.l challenge the City Coun- fcil's action in court,you 1 may be limited to raising only those issues you or Executed on A ril 14 2009 someone else raised at p > ;the public hearing de- scribed I at Costa Mesa, California ir in notice, Ispondence delivered Jo I the City at, or prior to, I the public hearing. ,If there are. any,further questions please call the Planning Department at i 536'5271 and refer to I Signat !the, above items. Direct your written communi- cations to'the City Clerk, Joan L..Flypn,City Clerk City.:of Huntington Beach, 2000 Main Street, 2nd Floor Huntington Beach, California 92648 (714)536-5227 Published Huntington 'beach Independent April 9,20019 042-539 , Huntington Beach Independent has been adjudged a newspaper of general circulation in Huntington Beach and Orange County by Decree of the Superior -- Court of Orange County,State of California,under date of Aug. 24, 1994,case NOTICE OF;PUBUC HEARING A50479. BEFORE THE CITY COUNCIL " OTHE CITY O F I BE N � NOTICE HEREBY GIVEN),-that on Monday, PLT�I�ICATI®T� April in e.Cit C nc 01 p.m., m the,City CounciP 1 Chambers,' 2000 -Main. Street, ,Huntingtont Beach, the City Council p T g,� �7 will hold a public hearingi STATE ®E CALIFORNIA )I� ) on,the following plan-I nmgandZONING, T ❑ 1.„ZONING.'TEXTI AMENDMENT N0:.08-! y,� ) SS. 005 .(AFFORDABLEI COUNTY�� ®d ORANGE l�E ) HOUSING ORDINANCE i REVISIONS) Applicant: City of- Huntington Beach Request: To amend Chapter 230 of the Huntington .Beach I am the Citizen of the United States and a Zoning and Subdivision, ;Ordinance (HBZSO) to resident of the County aforesaid; I am over modify the. provisions for',affordable housing. the age of eighteen years, and not a party T h p r o_p o se'd amendment would in- to or interested in the below entitled matter. crease the Size of projects that,would be am a principal clerk of the HUNTINGTON allowed to' pay in-lieu .fees; increase. the"re- BEACH INDEPENDENT, a newspaper of quired`income levels,for affordable ;housing; de- general circulation, printed and published in crease the required af- fordability term and the City of Huntington Beach, County of make other, minor changes to existing pro- I . Orange, State of California, and the visions. Lecatianc city, wide prefect Planner:.' attached Notice is a true and complete copy Mary.BethBroeren NOTICE IS,-HEREBY as was printed and published on the GIVEN that Item #1 'is categorically'.exempt. following date(s): from the 'provisions of the California Environs mental Quality Act'. NOTICE IS HEREBY GIVEN that Item 41 will require a,Local Coastal Program',Amendment certified by the Calif' nia Coastal Commission. ON FILE: A copy of.'the' proposed request is on file in.the.Planning De April 9, 2009 St�tCetnt,' ,2000: Main Beach, California 92648, for..ins pection by the public: A copy...,of the staff report will be avail- able to interested par- ties at the ,City Clerk. Office on Thursday,,April, 16,2009. ALL INTERESTED PER- SONS are invited to at- declare under penalty ofperjury, that the tend'Said hearing and P Y � express opinions,or Sub-„ foregoing is true and correct. mil evidence tor" or against the;,application as outlined above.If you`' challenge the City Coun- cil's action in court, you may be limited to raising Executed on A ril 14 2009 only those issues you or p , � Someone else raised at the public-hearing de- at Costa Mesa, California scribed inthis notice,or in written. corre- spondence delivered to the,City at,'or prior,to, the public hearing.- If- Zo"I" C there are .any further f7j ✓ questions please call the Planning Department at Signature 536-5271 and refer, to the above items. Direct your, written communi- cations to the City Clerk. Joan L.Flynn,City Clerk City of Huntington Beach 2000 Main Street,', '2nd Floor Huntington Beach;, California 92648 (714)536-5227 ' Published Huntington �Beach Independent April ,9,2009: '042-539