HomeMy WebLinkAboutPub Hear-Code Amend 91-2 in conj w/ND 91-9-(Density Bonus REQUEST FOR CITY COUNCIL ACTIO pis--
January 21, 1992
Date
Submitted to: Honorable Mayor and City Council Members
Submitted by: Michael T. Uberuaga, City Administrator
Prepared by: Michael Adams, Director of Community Developm n
Subject: CODE AMENDMENT NO. 91-2/NEGATIVE DECLARATION NO. 91-9
Consistent with Council Policy? ( ] Yes [ ] New Policy or Exception
Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments:
STATEMENT OF ISSUE•
Transmitted for .your consideration is Code Amendment No. 91-2 which
is a request to amend Section 963 of the Huntington Beach Ordinance
Code and the Huntington Beach Local Coastal Program Implementing
Ordinances by providing a mechanism to approve density bonuses
and/or other incentives to developers of affordable housing.
RECOMMENDATION: APPROVED BY CITY COUNCIL
Planning Commission/Staff Recommendation:
Motion to: Czr L RV-
"Approve Negative Declaration No. 91-9 and Code Amendment No. 91-2
with findings by adopting Ordinance No. .3136 which would grant
density bonuses and/or other incentives to developers of affordable
housing pursuant to a Conditional Use Permit in all residential
districts" .
Planning Commission Action on August 20, 1991•
A MOTION WAS MADE BY BOURGUIGNON, SECOND BY SHOMAKER, TO APPROVE
CODE AMENDMENT NO. 91-2 IN CONJUNCTION WITH NEGATIVE DECLARATION NO.
91-9, WITH FINDINGS AND FORWARD TO CITY COUNCIL BY THE FOLLOWING
VOTE:
AYES: ALL
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
�®®
PIO 5185
Yes M4)Lbg No
e. Any increase in wind or water erosion of soils, either on or off the site? _ _ X
f. Changes in deposition or erosion of beach sands, or changes in siltation, deposition
or erosion which may modify the channel of a river or stream or the bed of the ocean
or any bay, inlet or lake? _ — X
g. Exposure of people or property to geologic hazards such as earthquakes, landslides,
mudslides, ground failure, or similar hazards? _ X
2. Air. Will the proposal result in:
a. Substantial air emissions or deterioration of ambient air quality? _ X_
b. The creation of objectionable odors? _ X
C. Alteration of air movement, moisture, or temperature, or any change in climate, either
locally or regionally? _ X
3. Water. Will the proposal result in:
a. Changes in currents, or the course of direction of water movements, in either marine or
fresh waters? _ _ X
b. Changes in absorption rates, drainage pattern.— or the rate and amount of surface runoff? X_.
C. Alterations to the course or flow of flood waters? _ _ X
d. Change in the amount of surface water in any water body? _ _ X_
e. Discharge into surface waters, or in any alteration of surface water quality, including
but not limited to temperature, dissolved oxygen or turbidity? _. _. _X...
f. Alteration of the direction or rate of flow of ground waters? _ _ X
g. Change in the quantity of ground waters, either through direct additions or withdrawals,
or through interception of an aquifer by cuts or excavations? _ _ X
h. Substantial reduction in the amount of water otherwise available for public water
supplies"? X
i . Exposure of people or property to water related hazards such as flooding or tidal waves? _ _ X
4. Plant Life. Will the proposal result in:
a. Change in the diversity of species, or number of any species of plants (including trees,
shrubs, grass, crops, and aquatic plants)? _ — X
.b. Reduction of the numbers of any mature, unique, rare or endangered species of plants? _ _X
C. Introduction of new species of plants into an area, or in a barrier to the normal
replenishment of existing species? _ _ X_
d. Reduction in acreage of an agricultural crop? _ X
Environmental Checklist —2— 0
0
�'j0 (8871d)
(' Yes Maybe No
5. Animal Life. Will the proposal result in:
a. Change in the diversity of species, or numbers of any species of animals (birds, land
animals including reptiles, fish and shellfish, benthic organisms or insects)? _ X
b. Reduction of the numbers of any unique, rare or endangered species of animals? _ X
C. Introduction of new species of animals into an area, or result in a barrier to the
migration or movement of animals? _ X
d. Deterioration to existing fish or wildlife habitat? _ _ X
6. Noise. Will the proposal result in:
a. Increases in existing noise levels? _ X
b. Exposure of people to severe noise levels? _ X
7. Light and Glare. Will the proposal produce new light or glare? _ X
8. Land Use. Will the proposal result in a substantial alteration of the present or planned
land use of an area? X _
.Discussion: The propos'�d code amendment itself will not result in an alteration of present or proposed land
use. Individual projects that result from the provisions of the Code Amendment may alter existing and
proposed lard uses by increasing density and will require environmental analysis at the time the individual
projects are proposed.
9. Natural Resources. Will the proposal result in:
a. Increase in the rate of use of any natural resources? _ _ _X
b. Substantial depletion of any nonrenewable natural resource? _ _ X
10. Risk of Upset. Will the proposal involve:
a. A risk of an explosion or the release of hazardous substances (including, but not
limited to oil , pesticides, chemicals or radiation) in the event of an accident or±
upset conditions? _ _ X
b. Possible interference with an emergency response plan or an emergency evacuation plan? __ X_
11 . Population. Will the proposal alter the location, distribution, density, or growth rate of
the human population of an area? X
Discussion: The proposed code amendment itself is .not anticipated to significantly increase the growth rate
or population distribution in the City. Individual projects that result from the provisions of the code
amendment may have an area specific impact and will require environmental analysis at the time individual
projects are proposed.
12. Housing. Will the proposal affect existing housing, or create a demand for additional housing? _ X
Discussion: The proposed Code Amendment will not affect housing conditions. Individual projects that
result from the Code Amendment may have an impact, and will require environmental analysis at the time
individual projects are proposed.
Environmental Checklist —3— (8871d)
Yes Maybe No
13. Transportation/Circulation. Will the proposal result in:
a. Generation of substantial additional vehicular movement? _ X _
b. Effects on existing parking facilities, or demand for new off—site parking? _ X
C. Substantial impact upon existing transportation systems? X
d. Alterations to present patterns of circulation or movement of people and/or goods? X
e. Alterations to waterborne, rail or air traffic? _ X
f. Increase in traffic hazards to motor vehicles, bicyclists or pedestrians? _ X
Discussion: , The proposed Code Amendment does not itself result in any impacts to the
transportation/circulation system of the City. Individual projects that result from the Code Amendment may
have an impact and will require environmental analysis at the time individual projects are proposed.
14. Public Services. Will the proposal have an effect upon, or result in a need for new or
altered governmental services in any of the following areas:
a. Fire protection? _ _X
b. Police protection? _ X
C. Schools? X
d. Parks or other recreational facilities? X
e. Maintenance of public facilities, including roads? _ X _.
f. Other governmental services? X
Discussion (a—f) : The proposed Code Amendment itself will not affect Public Services. Individual projects
that result from the Code Amendment may impact governmental services and will require environmental analysis
at the time individual projects are proposed.
15. Energy. Will the proposal result in:.
a. Use of substantial amounts of fuel or energy?. _ X
b. Substantial increase in demand upon existing source of energy, or require the
development of sources of energy? _ X
Discussion (a—b) : The proposed Code Amendment itself will not affect energy consumption. Individual
projects that result from the Code Amendment may have an impact and will require environmental analysis at
the time individual projects are proposed.
16. Utilities. Will the proposal result in a need for new systems, or substantial alterations
to the following utilities:
a. Power or. natural gas? _ X
b. Communication systems? X _
Environmental Checklist —4— ®/y i n (8871d)
Yes. Maybe No
c. Water? __ X
d. Sewer or septic tanks? X
e. Storm water drainage? _ X
f. Solid waste and disposal? X
Discussion (a—f) : The proposed Code Amendment itself will not result in a need for new or altered
utilities. Individual projects resulting from the Code Amendment may have an impact and will require
environmental analysis at the time the individual project is proposed.
17. Human Health. Will the proposal result in:
a. Creation of any health hazard or potential health hazard (excluding mental health)? _ _ X
b. Exposure of people to potential health hazards? _ X
18. Aesthetics. Will the proposal result in the obstruction of any scenic vista or view open to
the public, or will the proposal result in the creation of an aesthetically offensive site
open to public view? — X
Discussion: The proposed Code Amendment will not result in an aesthetically offensive site. Individual
projects that result from the Code Amendment may be granted relief f:•cm specific development standards and
may have an impact on the aesthetics of the site; Therefore, individual projects will require environmental
analysis at the time they are proposed.
19. Recreation. Will the proposal result in an impact upon the quality or quantity of existing
recreational opportunities? _ X _
20. Cultural Resources.
a. Will the proposal result in the alteration of or the destruction of a prehistoric or
historic archaeological site? _ — X
b. Will the proposal result in adverse physical or aesthetic effects to a prehistoric
or historic building, structure, or object? _ _ _X
C. Does the proposal have the potential to cause a physical change which would affect
unique ethnic cultural values? _ _ X
d. Will the proposal restrict existing religious or sacred uses within the potential
impact area? _ _ X
21 . Mandatory Findings of Significance.
a. Does the project have the potential to degrade the quality of the environment, sub—
stantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife
population to drop below self sustaining levels, threaten to eliminate a plant or animal
community, reduce the number or restrict the range of a rare or endangered plant or
animal or eliminate important examples of the major periods of California history or
prehistory? _ — X
Environmental Checklist —5— O O f9 V (8871d)
ram- - ��.- "�'-••-.
Yes Maybe No
b. Does the project have the potential to achieve short—term, to the disadvantage of
long—term, environmental goals? (A short—term impact on the environment is one which
occurs in a relatively brief, definitive period of time while long—term impacts will
endure well into the future.) — X
Discussion: The proposed Code Amendment itself will not have any environmental impacts. However,
individual projects resulting from the Code Amendment may have negative environmental impacts. Therefore,
individual projects resulting from the Code Amendment will require environmental analysis at the time of
proposal .
C. Does the project have impacts which are individually limited, but cumulatively consid—
erable? (A project may impact on two or more separate resources where the impact on
each resource is relatively small , but where the effect of the total of those impacts
on the environment is significant.) — _ X
d. Does the project have environmental effects which will cause substantial adverse effects
on human beings, either directly or indirectly? _ X
Discussion: The proposed Code Amendment itself will not have any environmental impacts. However,
individual projects resulting from the Code Amendment may have negative environmental impacts. Therefore,
individual projects resulting from the Code Amendment will require environmental analysis at the time of
proposal .
DETERMINATION
On the basis of this initial evaluation:
I find that the proposed project COULD NOT have a significant effect on the environment, and .a
NEGATIVE DECLARATION will be prepared.
I find that although the proposed project could have a significant effect on the environment, there
will not be a significant effect in this case because the mitigation measures described on an attached
sheet have been added to the project. A NEGATIVE DECLARATION WILL
BE PREPARED.
I find the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL
IMPACT REPORT is required.
Date Si gnat re
Revised: March,. 1990 For: City of Huntington Beach
Community Development Department
Environmental Checklist —6— 00 (8871d)
ANALYSIS•
Background
Code Amendment No.. 91-2 has been proposed to implement Section 65915
et seq. of the California Government Code which requires that all
cities adopt an ordinance to provide a mechanism of offering density
bonuses and/or other incentives to developers who propose to
construct housing affordable to lower and very low income
households . In addition to implementing State law, the proposed
ordinance will help to implement the affordable housing goals
contained within the City' s adopted Housing Element . As stated in
the Housing Element and discussed in a joint City Council/Planning
Commission Study Session last April 24, 1991, the City is targeting
to provide 1,264 housing units for Lower Income Households and 984
housing units for Very Low Income Households by the year 1994 .
The draft ordinance is proposed to be located within Article 963
(Unclassified) of the Huntington Beach Ordinance. Code thereby making
it applicable City-wide subject to approval of a conditional use
permit. The conditional use permit process, therefore, will be the
mechanism mandated by State law through which the City will review
requests for density bonuses and other incentives. The ordinance
also establishes that the final approval body for projects
requesting "other incentives" that would either waive development
fees or involve direct financial assistance from the City be the
City Council .
The provisions contained within the draft -ordinance -mirror State law
as to what type of "other incentives" are to be made available, the
definitions of the various household types that qualify for the
housing units, the target rents or .mortgage -payments for the
affordable housing units, the total number of units required to be
affordable, the period of time that the subject units must remain
affordable, and the requirement for an "Affordability Agreement"
guaranteeing the continued affordability of the units . Charts
illustrating the income levels for eligible households and the
target affordable rents are included in this report as Attachment
#6 .
In addition to the minimum requirements mandated by the State, staff
has proposed mandatory findings for approving projects that request
a density bonus and/or other incentives . The findings generally
require that the project have adequate infrastructure to serve the
proposed project and the planned land uses in the vicinity, that the
proposed project be compatible with the physical character of the
surrounding properties, and that the project be consistent with the
overall intent of the General Plan.
RCA -2- (1554Vo O
Issues •
Two issues were raised by the Planning Commission during the public
hearing process. First, is it necessary to utilize HUD/HCD median
income figures (as opposed to Chapman University figures) to
determine eligible households and affordable rents; and second, does
the City have any flexibility as to the length of time the
affordable units must be maintained as affordable? These questions
were forwarded to the City Attorney' s Office for a legal opinion
(Attachment #8) . Briefly, the State Legislation is very specific as
to how lower and very low income households are defined. Section
65915 of the Government Code specifically refers to those sections
of the Health and Safety Code that require the State Department of
Housing and Community Development to publish the HUD figures .
Discussions with HCD staff confirm this interpretation. Therefore,
the City must utilize HUD/HDC median income figures for determining
target rents/mortgages and household eligibility.
The State Density Bonus Law requires that the affordable units
provided as a condition of the granting of a density bonus be
maintained at affordable rates for 10 or 30 years, depending on
whether or not the City grants other incentives in addition to the
density bonus . The issue was raised a-s to whether or not the City
had any flexability as to the length of time affordability must be
guaranteed (i .e. requiring affordability through the life of the
project) . The answer to this question is that the 10 and 30 year
time frames are mandatory (no more and no less) unless a longer
period of time is "required by the construction or mortgage
financing assistance program, mortgage insurance program- or rental
subsidy program" . Therefore, if Federal, -State or City funds .are
used by the developer, longer periods for affordability may be .
imposed. If no outside funds a-re used, . the period of assured
affordability must be for 10 or 3.0 years depending on whether or not
other incentives are granted by the City.
The Chamber of Commerce has submitted a letter requesting several
modifications to the Ordinance (Attachment No. 7) . As a result,
staff has incorporated several of their suggested modifications into
the ordinance; however, some of the requested changes would conflict
with State Law. In those cases, the language of the ordinance has
been left in its original form.
Implementation:
Upon the adoption of this Ordinance, developers will have the option
of requesting a minimum 25% density bonus in return for providing
affordable units for a guaranteed period of time. For example, if a
parcel of property is currently zoned to permit 100 units, a
developer may build 100 units or request a 25 percent density bonus
to allow 125 units. If a developer chooses to request a density
bonus, he may also request that certain development standards or
development fees be reduced or waived. In return for the City' s
grant of the density bonus request (25 units) the developer would be
required to record an "Affordability Agreement" on the property
assuring that either 10 units would be maintained at rents
affordable to very low income households or 20 units would be
maintained at rents affordable to lower income households for the
specified number of years (10 or 30) . Other examples are included
in the State provided handout State Density Bonus Law (Attachment 5,
pp. 9) .
RCA -3- (1554do 9 r) 0
Adoption of this Ordinance is not intended to serve as a
comprehensive affordable housing program by and of itself, but is
intended to provide a voluntary affordable housing program that will
be a part of a future comprehensive affordable housing program.
Further, the adoption of this Ordinance will bring the City into
compliance with State Law by providing a mechanism for the City to
approve density bonuses and provide other incentives to developers
in return for providing assured affordable housing.
Local Coastal Program Status
This code amendment is intended to apply City-wide, including the
Coastal Zone. Therefore, this code amendment will constitute an
amendment to the Implementation Plan of the City' s local Coastal
Program and will require approval by the California Coastal
Commission before being applied in the Coastal Zone.
Although proposed Code Amendment No. 91-2 will constitute a change
in the City' s Implementation Plan of the Local Coastal Program,
staff does not believe that there will be any impact on coastal
policies contained within the Coastal Act and/or the City' s approved
Local Coastal Program. Any project proposed in the Coastal Zone
under this .proposed ordinance will be subject to a coastal
development permit in addition to the standard conditional use
permit and environmental assessment. Therefore, any and all density
bonus proposals in the Coastal Zone will be analyzed for their
compliance with Coastal Act policies on an individual basis .
Environmental Status :
Pursuant to the environmental regul-ations in effect at this time,
the Department of Community Development- advertised- draft Negative
Declaration No. 91-9 for 30 days and circulated the document through
the State Clearinghouse for State agencies to review. One comment
was received from the State of California Department of
Transportation, District 12, regarding concern over possible
cumulative effects on traffic circulation created by increased—
density resulting through the granting of density bonuses . The
letter as well as staff ' s reply is included as a part of Draft
Negative Declaration No. 91-9 attached to this report. Staff, in
its initial study of Code Amendment No. 91-2, is recommending that a
negative declaration be issued. Prior to any action on Code
Amendment No. 91-2, it is necessary for the City Council to review
and act on Negative Declaration No. 91-9 .
RCA -4- (1554d)
0000
FUNDING SOURCE:
Not applicable.
ALTERNATIVE ACTION:
Motion to:
"Continue Code Amendment No. 91-2 to a later meeting in order that
staff may modify the ordinance as directed by the Council" .
ATTACHMENTS:
1. Findings For Approval
2. Ordinance No. 3136
3 . Negative Declaration No. 91-9
4 . Section 65915 et. seq. of California Government Code.
5 . Publication from State Housing and Community Development
Deapartment re: Density Bonuses .
6 . Charts illustrating maximum income levels and rent/mortgage
payments for target household groups and sale prices _of "for
sale" affordable units.
7 . Letter from Chamber of Commerce with attachment dated August 14,
1991
8. Legal Opinions dated July 2 and July 16, 1991 regarding terms of
Affordability Agreement.
9 . Planning Commission Staff Report dated August 20, 1991
10 . Draft Minutes of August 20, 1991 Planning Commission Meeting
MTU:MA:TR: lp
11
RCA -5- (1554d) 0000
SUGGESTED FINDINGS FOR APPROVAL - CODE AMENDMENT NO, 91-2 :
1. Code Amendment No. 91-2 to amend the Zoning code to provide a
mechanism for providing density bonuses and/or other incentives
to developers of affordable housing is consistant with the
provisions contained in the California Government Code (Section
65915 et seq. and the following policies of the Housing Element:
a . "Encourage both the private and public sectors to produce or
assist in the production of housing with particular emphasis
on housing affordable to lower income households, as well as
the needs of the handicapped, the elderly, large families and
female-headed households . " (Policy 2 . 0) This code amendment
provides increased density as well as other incentives to
developers who guarantee affordable units for lower, very
low, and elderly households .
b. "Promote and, where possible, require the continued
affordability of all units produced with participation by the
City or its authorized agents including density bonuses and
tax exempt financing. " (Policy 5 . 0) This code amendment
provides a mechanism to grant density bonuses and other
incentives to developers who agree to construct affordable
units .
2 . Code Amendment No. 91-2 to provide a mechanism for providing
density bonuses and other incentives in return for affordable
units offers opportunities for providing affordable housing to
lower, very low, and elderly households . This will help the
City to provide the number of affordable units identified within
the Regional Housing Needs Assessment (RHNA) .
3 . Code Amendment No. 91-2 will not be detrimental to policies
contained within the Coastal Act. Individual projects will
require a coastal development permit, a conditional use permit
and an environmental analysis . _ Therefore, projects _proposed in
the Coastal Zone will require a through analysis as to their
complaince with the Coastal Act.
(1631d)
0000
J� 4' CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
Tom Rogers, From Julie Osugi,
To Assistant Planner Planning Aide
Subject ENVIRONMENTAL ASSESSMENT Date March 8, 1991
FORM NO. 91-9
Applicant: City of Huntington Beach
Request: Code Amendment to the Huntington Beach Ordinance Code to implement
California Government Code Section 6591.5 et. seq. to allow density
bonuses and other incentives for the provision of affordable housing.
Location: City Wide
Background
Staff has reviewed the environmental assessment form noted above and has determined
that a negative declaration may be filed for the project. In view of this, a draft negative
declaration was prepared and was published in the Daily Pilot for a thirty (30) day public
review period commencing Tuesday, March 12, 1991 and ending Thursday, April 11, 1991.
If any comments regarding the draft negative declaration are received, you will be
notified immediately.
Recommendation
The Environmental Assessment Committee recommends that the Zoning Administrator
approve Negative Declaration No. 91-9 finding that the proposed project will not have a
significant adverse effect on the"environment.
JO:BB::ss
(8951 d-2)
I
�3
oo �Jo
LEGAL ADVERTISEMENT
DEPARTMENT OF COMMUNITY DEVELOPMENT
PLANNING DIVISION
CITY OF HUNTINGTON BEACH
Notice is hereby given by the Department of Community Development, Planning Division
of the City of Huntington Beach that the following Draft Negative Declaration request
has been prepared and will be submitted to the City Planning Commission for their
consideration. The Draft Negative Declaration will be available for public review and
comment for thirty (30) days commencing Tuesday, March 12, 1991.-
r
Draft Negative Declaration No. 91-9 in conjunction with Code Amendment 91-2 is a
request to amend the Code Amendment to the Huntington Beach Ordinance Code to
implement California Government Code Section 65915 et. seq. to allow density bonuses
and other incentives for the provision of affordable housing.
A copy of the request is on file with the Department of Community Development,
Planning Division of the City of Huntington Beach, 2000 Main Street, Huntington Beach,
California. Any person wishing to comment on the request may do so in writing within
thin, (30) days of this notice by providing written comments to the Department of
Community Development, Planning Division, P.O. Box 190, Huntington Beach, CA 92648.
(8931 d-2)
00, 00
ENVIRONMENTAL CHECKLIST FORM
CITY OF HUNTINGTON BEACH
PLANNING DIVISION
ENVIRONMENTAL ASSESSMENT NO. 91-9
1 . Name of Proponent City of Huntington Beach
Address 2000 Main Street
Huntington Beach, CA 92648
Phone Number (714) 536-5279
2. Date Checklist Submitted for Review
3. Concurrent Entitlement(s) Code Amendment No. 91-2
4. Project Location City—Wide
5. Project Description The City is proposing an amendment to the City
of Huntington Beach Ordinance Code to allow for provisions for
density bonuses subject to Conditional Use Permit approval . The
Code Amendment is intended to implement California Government Code
Section 65915 et. seq. which requires that cities have provisions
which allow for density bonuses and other incentives for the
provision of affordable housing. A copv of the Density Bonus
Ordinance has been .included as Attachment 1 .
Note: Project specific (design/locational) impacts will be reviewed
on an individual basis through the entitlement (Conditional Use
Permit) process.
ENNVIRONMENTAL IMPACTS
(Explanations of answers are included after each subsection.)
Yes Maybe No
1 . Earth. Will the proposal result in:
a. Unstable earth conditions or changes in geologic substructures? _ _ X
b. Disruptions, displacements, compaction or overcovering of the soil? _ _ X
C. Change in topography or ground surface relief features? _ _ X
d. The destruction, covering or modification of any unique geologic or physical features? 0 i_n 0- X
STATE OF CALIFORNIA—BUSINESS AND TRANSk-RTATION AGENCY PETE WILSON, Governor
DEPARTMENT OF TRANSPORTATION
DISTRICT 12 ?
2501 PULLMAN STREET
SANTA ANA, CA 92705
RECEIVED
APR 18 1991
April 10, 1991 FILE: HB/IGR
�f cmm, Development SCH #: 91031062
PM : NA
Julie Osugi
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
SUBJECT : Draft Negative Declaration 91-9 in Conjunction
With Code Amendment 91-2
Dear Ms . Osugi
Thank you for the opportunity to comment on the proposed code
amendment to Huntington Beach Ordinance Code to implement
California Code Section 65915 et . seq . , which requires that cities
have provisions , that allow for density bonuses and other
incentives for the provision of affordable housing . CALTRANS has
concluded :
A cumulative effect caused by an increase in housing density
could have a negative impact on transportation/circulation and
parking facilities . The document did not address how the
maximum densities will effect the traffic level of service and
means to mitigate the potential problem .
Once again , thank you the opportunity to review and comment on the
proposed code amendment . If you have any questions , please contact
Nathaniel H. Pickett , 714 724-2247 .
WT n Y ,
obert F . J sep
Chief
Advanced Planning Branch
cc : Jane Warren , Traffic OPS
Bill Bengtson , Permits
Ron Helgeson , HQTRS _
Terri Lovelady , OPR
0000
i
t. ..A4 _
City of Huntington Beach
2000 MAIN STREET CALIFORNIA 92648 =
DEPARTMENT OF COMMUNITY DEVELOPMENT
Building Division 536-5241
Planning Division 536-5271 = ?
April 25 , 1991
Nathaniel Pickett
Department of Transportation, District 12
2501 Pullman Street
Santa Ana , CA 92705
Subject : DRAFT NEGATIVE DECLARATION NO . 91-9 IN CONJUNCTION WITH
CODE AMENDMENT NO. 91-2 (SCH #91031062)
Dear Mr . Pickett :
Thank you for your letter dated April 10 , 1991 regarding Draft
Negative Declaration No . 91-9 . The Draft Negative Declaration is an
assessment of impacts from the proposed request to amend the
Huntington Beach Ordinance Code to allow for provisions for density
bonuses subject to Conditional Use Permit approval . The amendment
is intended to implement California Government Code Section 65915
et . seq . which requires that cities have provisions which allow for
density bonuses and other incentives for the provision of affordable
housing .
The City has received your comment and has the following response .
1 . Department of Transportation Comment : A cumulative effect
caused by an increase in housing density could have a
negative impact on transportation/ circulation and parking
facilities . The document did not address how the maximum
densities will effect the traffic level of service and
means to mitigate the potential problem.
Response : The proposed code amendment is required to
provide a method for implementing California Government
Code Section 65915 et . seq . which permits a developer of a
residential project of five ( 5) or more units to request
that the project be granted a density bonus and other
incentives for the purpose of providing affordable housing
for low and very low income households .
0000
ti 4
S 9
4 j
..Mr Pickett
..' '...Page Two
The Code Amendment only provides - a mechanism for
;..processing
density bonuses. The number. of units which wil'l':be
developed city.-wide as a result of the Code Amendment can
not be projected since it is primarily dependent :on the
individual developer ' s inclination to provide affordable
housing .
No significant impacts are anticipated since each
individual project will require Conditional Use Permit
Approval as well as Environmental Review. Any potential
environmental impacts associated with each project will be
analyzed and appropriate mitigation measures will be
required at that time .
Once again, thank you for your comments . If you have any questions ,
please feel free to contact me at (714 ) 536-5274 .
Sincerely,
Julie Osugi
Planning Aide
JO : lp
( 9523d)
0000
DENSZ'L"Y BONUS LAW AS OF MARCH 26, 1990
Government Code Sections as amended by enactment of Chapter 31 of 1990
(Section 6S913.4. was repealed)
Chapter 43. Density Bonuses and Other Incentives
6S91S.
(a) When a developer of housing proposes a housing development within
the jurisdiction of the local government, the city, county, or city and county shall
provide the developer incentives for the production of lower income housing
units within the development if the developer meets the requirements set forth
in subdivisions (b) and (c). The city county, or city and county shall adopt an
ordinance which shall specify the method of providing developer incentives.
(b) When'a developer of housing agrees or proposes to construct at ]east (1)
20 percent of the total units of a housing development for lower income
households, as defined in Section 50079.5 of the Health and Safety Code, or (2)
10 percent of the total units of a housing development for very low income
households, as defined in Section 50105 of the Health and Safety Code, or (3)
50 percent of the total dwelling units of a housing development for qualifying
residents, as defined in Section 51.2 of the Civil Code,
a city, county, or city and county shall either
(1) grant a density bonus and at least one of the concessions or incentives
identified in Subdivision (h) unless the city, county, or city and county makes a
written finding that the additional concession or incentive is not required in
order to provide for affordable housing costs as defined in Section 50052.5 of
the Health and Safety Code or for rents for the targeted units to be set as
specified in subdivision (c), or
2) provide other incentives of equivalent financial value based upon the land
cost per dwelling unit.
' 0n
Section 65915 continued
(c) A developer shall agree to and the city, county, or city and county shall
ensure continued affordability of all lower income density bonus units for 30
years or a longer,period of time if required by the construction or mortgage
financing assistance program, mortgage insurance program, or rental subsidy
program. Those units targeted for lower income households, as defined in
Section 50079.5 of the Health and Safety Code shall be. affordable at a rent that
does not exceed 30 percent of 60 percent of area median income. Those units
targeted for very low income households, as defined in Section 50105 of the
Health and Safety Code shall be affordable at a rent that does not exceed 30
percent of 50 percent of area median income. If a city, county, or city and
county does not grant at least one additional concession or incentive pursuant
to paragraph (1) of subdivision (b), the developer shall agree to and the city,
county, or city and county shall ensure continued affordability for 10 years of all
lower income housing units receiving a density bonus.
(d) A developer may submit to a city, county, or city and county a preliminary
proposal for the development of housing pursuant to this section prior to the
submittal of any formal requests for general plan amendments, zoning
amendments, or subdivision map approvals. The city, county, or city and county
shall, within 90 days of receipt of a written proposal, notify the housing
developer in writing of the procedures which it will comply with this section.
The city, county, or city and county shall establish procedures for carrying out
this section, which shall include legislative body approval of the means of
compliance with this section. The city, county, or city and county shall also
establish procedures for waiving or modifying development and zoning standards
which would otherwise inhibit the utilization of the density bonus on specific
sites. These procedures shall include, but not be limited to, such items as
minimum lot size, side yard setbacks, and placement of public works
improvements.
(e) The housing developer shall show that the waiver or modification is
necessary to make the housing units economically feasible.
(f) For the purposes of this chapter, "density bonus" means a density increase
of at least 25 percent over the otherwise maximum allowable residential density
under the applicable zoning ordinance and land use element of the general plan
as of the date of application by the developer to the city, county, or city and
county. The density bonus shall not be included when determining the number
of housing units which is equal to 10 or 20 percent of the total. The density
bonus shall apply to housing developments consisting of five or more dwelling
units.
0000
-t h
Section 65915 continued
(g) "Housing development" as used in this section means one or more groups
of projects for residential units constructed in the planned development of a city,
county, or city and county. For purposes of calculating a density bonus, the
residential units do not have to be based upon individual subdivision maps or
parcels. The density bonus shall be permitted in geographic areas of the
housing development other than the areas where the units for the lower income
households are located.
(h) For purposes of this chapter, concession or incentive means any of the-
following:
(1) A reduction in site development standards or a modification of zoning
code requirements or architectural design requirements which exceed the
minimum building standards approved by the State Building Standards
Commission as provided in Part 2.5 (commencing with Section 18901) of
Division 13 of the Health and Safety Code, including, but not limited to, a
reduction in setback and square footage requirements and in the ratio of
vehicular parking spaces that would otherwise be required.
(2) Approval of mixed use zoning in conjunction with the housing project if
commercial, office, industrial, or other land uses will reduce the cost of the
housing development and if the commercial, office, industrial, or other land uses
are compatible with the housing project and the existing or planned development
in the area where the proposed housing project will be located.
(3) Other regulatory incentives or concessions proposed by the developer or
the city, county, or city and county which result in identifiable cost reductions.
This subdivision does not limit or require the provision of direct financial
incentives for the housing development, including the provision of publicly owned
land, by the city, county, or city and county or the waiver of fees or dedication
requirements.
(i) If a developer agrees to construct both 20 percent of the total units for
lower-income households and 10 percent of the total units for very low income
households the developer is entitled to only one density bonus and at least one
additional concession or incentive identified in Section 65913.41 under this
section although the city, city and county, or county may, at its discretion, grant
more than one density bonus.
1 The contents referred to in Section 65913.4 were transferred to Section 65915(g) by"
Chapter 31, Statutes of 1990. This reference is presumed to.be an oversight.
'3 0000
65917.
In enacting this chapter it is the intent of the Legislature that the density bonus
or other incentives offered by the city, county, or city and county pursuant to
this chapter shall contribute significantly to the economic feasibility of lower
income housing in proposed housing developments. In the absence of an
agreement by a developer in accordance with Section 65913.5 or 65915, a
locality shall not offer a density bonus or any other incentive that would
undermine the intent of this chapter.
b:dbcode.w
0,9190
r4
�c�1NG ,� George Deukmejian, Governor
�O 46, John Geoghegan, Secretary of
• '; 0 Business, Transportation and Housing
n S of
.��n �� Maureen Higgins, Director
q State Department of Housing
G �O and Community Development
err}' DEQ Division of Housing
Policy Development
1800 Third Street, Room 430
P. O. Box 952053
Sacramento, CA 94252-2053
(916) 445-4728
March 1990
STATE DENSITY BONUS LAW
Government Code Sections 65913.4,65915 and 65917, relating to density bonus requirements,
were amended in 1989 by Chapter 841 These amendments were effective from January 1 to
March 26, 1990. Chapter 31 of the Statutes of 1990 repealed Section 65913.4, and amended
Section 65915; this action was effective March 26, 1990. Government Code Section 65915
provides that a local government shall grant a density bonus of at least 25 percent, and an .
additional incentive, or financially equivalent incentive(s), to a developer of a housing
development agreeing to construct at least:
a) 20% of the units for lower-income households; or
b) 10% of the units for very low-income households; or
c) 50% of the units for senior citizens.
This paper provides guidance to local governments in implementing requirements of the law,
and to parties interested in exercise of the law.
5
y "0000
GENERAL POLICY ISSUES
1. Must all jurisdictions comply with State density bonci-v law?
Yes. The law applies to any charter city, general law city, county, or city and county
(Sections 65915(a) and 65918).
2. Does State density bonus law apply to all housing developments?
Yes, with the exception of housing developments of fewer than 5 units (excluding
any density bonus units). As noted earlier, standards for condominium conversion
projects, however, differ, and are not specifically discussed here. The law applies
to both single-family and multifamily units, and both rental and ownership units.
The standards are, however, better suited for providing the target units as
multifamily rental units than as single-family ownership units. - "Housing
development" is defined as one or more groups of projects for residential units.
Calculation of the density bonus may be based upon more than one parcel or
subdivision map (Section 6597-5(g)).
3. Is a locality required to approve a housing development or condominium conversion
proposal which qualifies for a density bonus?
No. State law does not require project approval just because a project complies
with density bonus requirements. With regard to condominiums, the law explicitly
states that jurisdictions are not required to approve proposals to convert apartments
to condominiums (Government Code Section 65915.5). However, a housing
development which seeks and qualifies for a density bonus cannot be approved
without granting it, or an alternative incentive of equivalent financial value.
Furthermore, a locality may not discriminate against a project because of the
intended occupancy by low-income households or the method of financing
(Government Code Section 65008).
Rejection of any proposed housing development project complying with the general
plan, zoning, and development policies in effect at the time the application is found
complete must be based on both of the following written findings, supported by
substantial evidence on record:
0000
- the project would have a specific, adverse impact upon the public health
or safety, and
- there is no feasible method to satisfactorily mitigate or avoid the adverse
impact identified (Government Code Section 65589.5).
4.: Is any agency of the State authorized to enforce local implementation of density bonus
law?
No. Enforcement of the provisions of the density bonus statute is subject to judicial
enforcement, pursuant to any litigation initiated by an applicant or interested party.
However, the amended statutes require adoption of an implementing ordinance.
As analysis of such government regulation is included within local housing elements
reviewed by the Department_ of Housing and Community Development, density
bonus implementation efforts may be subject to review and comment" by the
department (see item 5 below).
5. How does State density bonus law apply to housing elements?
Each locality is required to analyze governmental constraints upon housing
development, including land use controls, and to establish a five-year program
schedule of actions implementing policies and objectives of the housing element
(Government Code Sections 65583 (a)(4) and (c)). Program actions include
administration of land use and development controls, and provision of regulatory
concessions and incentives. Each program is to include actions assisting in the
development of adequate housing to meet the needs of low- and moderate-income
households.
A density bonus program could be a program component for mitigating constraints
to development of housing for low-income households, and to facilitate meeting a
locality's share of the regional housing need. Implementation of a density bonus
program pursuant to the statutory requirements will contribute to compliance with
housing element law as well as density bonus law.
0000
EY PLEMENTATION ISSUES
L Wh t procedures are required to implement the State density bonus law?
Every jurisdiction must adopt an implementing ordinance, including a procedure for
evaluating preliminary applications. The ordinance must specify which of the
following three types of developer incentives will be provided; one of the. types
must include procedures for modifying development and zoning standards:
1) Modify development standards
Reduce site development standards, e.g. street widths or paving,
curbs/gutters, location of public works improvements, landscaping.
Modify zoning codes requirements, e.g. open space, minimum lot size,
setbacks, parking standards.
Reduce or eliminate any design requirements exceeding state building
code standards, e.g. restrictions on roofing materials.
Each jurisdiction should stipulate what information is to be provided by the
developer to justify a request to modify development or zoning standards, and
the review and approval process to be used. Standardized application forms
should be developed for this purpose.
If a jurisdiction finds some types of potential modifications more appropriate
than others, it may be useful to specify this, perhaps prioritizing the order
in which particular concessions or incentives should be considered by the
developer. For example, if modifications to setbacks or lot coverage could
more readily be accommodated than modifications to parking standards in
certain areas, this could be indicated. Use of the density bonus in designated
areas of the jurisdiction could.be influenced by offering particularly attractive
incentives in those areas. Government Code Section 65008 permits
government to extend preferential treatment to residential developments
intended for occupancy by low- and moderate- income households. However,
as this statute also prohibits standards which would discriminate against such
households (in particular geographic areas, for example), any differential
incentives should be carefully considered.
3 O000
2) Permit mixed-use zoning within housing development
Alow non-residential uses along with residential if mixed use can reduce
housing cost over housing-only on a site, e.g., uses which might qualify for off-
site parking and/or parking in-lieu fees.
3) Allow other re ulg ato_[y incentives
Allow other measures which can be shown to result in cost reductions, e.g.,
additional density bonus, expedited processing, use of redevelopment funds
or powers, or other public financing (there is however, no requirement to
offer direct financial assistance).
Procedure for evaluating preliminary density bonus applications within 90 days of
application (Section 65915(d)):
Specifying and making available the required information in advance should facilitate
expeditious review. Before drafting an ordinance, it is important to plan how the
program will be administered, as there are a number of long-term considerations
involved. One of the most important issues is how the terms of affordability of the
reserved units will be determined and enforced.
The ordinance should identify those provisions which will be included in a binding
agreement with the project developer. The ordinance could also specify the type(s)
of instruments which will be used to secure these provisions. Such instruments`
might include Development Agreements (pursuant to Government Code Section
65865), or other types of contractual agreements recorded as deed restrictions
running with the property. Minimum provisions to be secured with a developer
for reserved units include:
• number of units by number of bedrooms
• standards for maximum qualifying household incomes
• standards for maximum rents or sales prices
party/process responsible for certifying tenant incomes
• how vacancies will be marketed and filled
• restrictions and enforcement mechanisms binding on property upon sale or
transfer
0000
Other issues which should be .considered in drafting an ordinance are discussed
throughout this paper. Other issues might include public agency interests regarding
screening factors (e.g. possible.asset limitations, first-time homebuyer priority), lease
approval, an inspection option, maintenance provisions, leasing options for local
housing authority, or. first right of refusal for purchase. The ordinance also could
include any provisions relative to geographic areas within which density bonus units
may be transferred, minimum unit sizes, unit distribution, or any development timing
restrictions. The construction of the ordinance could also be affected by
considerations relative to other statutory requirements such as state and federal laws
governing housing for seniors.
2. What type of environmental assessment is appropriate?
Environmental assessment of broad statutory requirements, such as those of State
density bonus law, is appropriate for use of the "tiering" concept set forth in the
California Environmental Quality Act (CEQA). The objective is to permit the
general or comprehensive environmental effects of a policy, plan, or ordinance be
followed by narrower, site specific assessment, thereby avoiding repetitive analysis.
(Pub. Res. Code Sections 21068.5, 21093, subd.(a); CEQA Guidelines, Section
15152)
As the amended statutes require adoption of an implementing ordinance, a
"Program EIR," pursuant to Section 15168 of the CEQA Guidelines, would be an
appropriate type of comprehensive EIR on the general effects and potential
mitigation of density increases. EIRs prepared on Redevelopment Plans, Specific
Plans, Community Plans, or the General Plan could also include analysis of the
effects of implementation of State density bonus law. Site-specific implementation
can then follow with use of a Project EIR, Subsequent EIR, or Negative
Declaration, in which the prior Program EIR is incorporated by reference, with
analysis concentrated on any environmental effects not previously examined.
It could be useful for subsequent project-specific environmental assessment if the
Program EIR included threshold figures for assessing potential significance of certain
environmental effects relative to incremental increases in project densities. A
frequent concern relates to the potential for traffic congestion from increased
project density. The Program EIR might identify maximum increased densities in
particular areas which would be accommodated by any traffic and circulation
mitigation measures proposed for the Program EIR. For example, a potential
density bonus project area may have street and traffic signal improvements operating
at a lower standard than an adopted Level of Service (LOS) standard, indicating
that a certain amount or redistribution from additional traffic generation could
5 0000
potentially be accommodated without requiring additional mitigation.
In the case of a particular project application, if a Project EI'R is not otherwise
necessary and the only environmental assessment consideration is the density bonus,
another relevant factor is whether provisions of the density bonus ordinance are
mandatory or permissive. If the ordinance mandates a specific standard course of
action for complying density bonus applications, then the actual granting of the
density bonus and additional incentive could be a ministerial act (not subject to
discretionary approval by the jurisdiction's legislative body). Ministerial acts are
exempt from CEQA (CEQA Guidelines, Section 15300.1). However, if the
ordinance involves exercise of discretionary authority in determining which
implementation measures are to be taken with regard to complying density bonus
applications, such applications would not be exempt from CEQA. Furthermore,
categorical exemptions may be invalid where cumulative effects have potential for
significant environmental impacts, pursuant to a recent court decision (East
Peninsula Education Council v. Palos Verdes Peninsula Unified School District (1989]).
3. How long must units for the target households be reserved?
Generally, the units must be reserved for at least 30 years. If the jurisdiction grants
both a density bonus and an additional incentive, or an incentive of equivalent
financial value in the form of a direct financial contribution, affordability of the units
for the target group households must be maintained for a minimum of 30 years
(affordability may not be an issue if the density bonus was granted for senior units
without income limits). Examples of "direct financial contributions" include
subsidizing infrastructure, land cost, or construction costs. If only a density bonus
is granted, without an additional incentive, affordability to the target households is
required for a minimum of 10 years. The preservation period could be longer,
however, if government financing with a longer designated preservation period is
used for the project (Sections 65915(c) and 65916).
4. How is a density bonus calculated?
The base density is the "otherwise maximum allowable residential density under
the applicable zoning ordinance and land use element of the general plan" (Section
65915(f)). A project may qualify for a minimum increase of 25% over the maximum
allowable density as of the date of application. The density bonus units are not
included when determining the number of required target units relative to the total
project units.
j
POO
The statute specifies "at least" 10 percent (very low income), 20 percent (lower
income), 50 percent (seniors), as well as "at least" a 25 percent_ bonus.
Therefore, any resulting fraction of a unit should be counted as a whole unit for
both the numbers of target units and density bonus units, i.e. 20 percent of 72 base
units: .20 x 72= 14;4, or 15 units.
While a zoning ordinance is required by law to be consistent with the general plan,
including the land use element, zoning ordinances typically are more site specific
than land use elements. Consequently, the maximum net density permitted under
a zoning ordinance is generally most applicable, although this may vary depending
on the type of project application and local practice. For applications involving an
infill project on a single parcel, it would be appropriate to base the density
calculations on the maximum density permitted by the zoning ordinance for that
particular site. The following example illustrates this type of project.
Exhibit II.
PROJECT APPLICATION EXAMPLE A: Infill Property
Land Use
Designation Residential: Multifamily
Permitted Density 18 duac
Property Size 4 acres
Maximum Units at
Permitted Density 72 units
Units Affordable to
Target Households
(20% for lower-income HH's)
[72 x .20 = 14.4]; round up 15 units
Density Bonus Units (@25%) 18 units
t:
Total: Project Units
with 25% Density Bonus: 72 base units
+ 18 density bonus units
90 total units
(75 units @ market rate,
15 units w/restricted rents)
0000
5. Can density bonus units be located separate frorn the target units?
The density bonus also can be applied to groups of residential projects. Section
65915 (g) provides that "the density bonus shall be permitted in geographic areas
of the housing development other than the areas where the units for the lower-
income households are located," and specifies the density bonus need not be based
on individual subdivision maps or parcels. This option poses several .issues which
warrant careful consideration by the jurisdiction.
Section 65915(g) defines a housing development as "one or more groups of projects
for residential units constructed in the planned development of the jurisdiction.
Each jurisdiction can determine whether such project groups must. be contiguous,
e.g. whether infill projects could be combined with new development. Other issues
to be clarified by the jurisdiction in cases of more than one project include the
foII owl 11g:
- whether the projects must be developed simultaneously,
- whether target units could be segregated in one building, and
- the geographic area(s) in which density bonus transfers will be permitted.
A jurisdiction might, for example, limit density transfers within geographic
boundaries defined by specific plans, community plans, or master plans for large
properties including more than one land use designation. Such plans often include
several parcels, although they may encompass property of a single property owner.
This situation may most commonly be encountered for major new development-
areas, such as when agricultural property is proposed for urban development in the
general plan, and requires rezoning. Example B illustrates use of a density transfer
with a master site plan for new development including both single-family and
multifamily uses.
8 oono
Exhibit E[f.
PROJECT APPLICATION EXAMPLE B: Master Planned Project for Prezoning
Density bonus is calculated. on entire Master Plan, with units to be preserved for target
households to be constructed on multifamily portion of Master Plan; sites to be specified.
In this case, the density bonus is calculated on the entire plan, but is allocated to only the
multifamily portion of the master plan. The increased density could be concentrated on
one or more sites, or dispersed throughout the multifamily use area.
I. Calculation of mandatory 25 percent density bonus only:
Land Use
Designation Residential: Single (SF) & Multifamily (MF)
Permitted Density SF: 5 du/ac MF: 18 du/ac
Property Size 120 acres: 90 ac SF, 30 ac MF
Maximum Units at
Permitted Density 450 SF units + 540 MF units = 990 total units
Units Affordable to 10% of units for Very Low-Income Households
Target Households [.10 x 990 units] = 99 target units
Density Bonus Units
(@2S%) 990 x .25 = 247.5, rounded to 248 additional units
Total Project Units
with 2S% Density 990 base units
Bonus + 248 density bonus units
1,238 total units (1,139 @ market-rate, 99 w/ restricted rents)
H. With additional incentive consisting of another 15% density bonus:
Additional Density
Bonus Units @ 15% [990 x .15] = 148.5
Total Project Units 990 base units
(25% + 15%= total + 247.5 density bonus units @ 25%
density bonus of 40%) 148.5 density bonus units (@ 15%
1,386 total units
(450 SF market-rate; 936 MF, with 99 rent-restricted & 837 @ market-rate)
0000
6. How are elderly persons and families defined?
One of the alternatives to qualify for a density bonus is provision of "50 percent of
the total dwelling units for qualifying residents" (Section 65915). Pursuant to Section
51.3 of the Civil Code, qualifying residents are senior citizens, and qualifying projects
must be developed for, and put to use as, housing for senior citizens. Senior
citizens are defined as persons at least 62 years of age or 55 years of age. If the
55 year age threshold is used, the density bonus project (including the density bonus
units) must consist of at least 150 units if within an SMSA, or at ]east 35 units if
located elsewhere. Mobilehomes are excluded from this definition. Initially, at least
one person in each dwelling unit must be at least 62 or at least 55, respectively.
(Section 51.3 (1) and (2)(c)(3) of. the Civil Code)
Recent federal law (Fair Housing Amendments Act of 1988, Pub. L. 100-430)
prohibits discrimination against persons or families with minor children except in
"housing for older persons." This affects the percentage of units occupied by senior
citizens for a project to qualify for such an exception pursuant to this federal statute.
Permissible age discrimination in housing in California is a combination of the most
restrictive provisions of State and federal law. Unless HUD issues a determination
that a particular housing program is specifically designed and operated to assist
"elderly persons," at least 80 percent of the units must be occupied by at least one
person 55 years of age or older, and the housing must provide facilities and services
for older persons to qualify for the exception.
7. If an existing local density bonus program provides bonuses or equivalent incentives less
than, or different from, those required in the State density bonus law, must the local `
program be amended to conform with the State law?
Yes, to the extent they undermine the intent of the law (Section 65917). The State
density bonus law establishes minimum standards for local programs. Since the law
sets a minimum density increase, and also provides for an additional incentive, which
could be an additional density increase, a jurisdiction can permit density increases
considerably higher than 25% if it chooses. The objective of the law is to enable
significant contribution to the economic feasibility of lower-income housing in
proposed developments.
Jurisdictions are not to "offer a density bonus or any other incentive that would
undermine the intent, of this" law (Section 65917). Any program which permits .
qualification for other types of residential density bonuses, including bonuses for
moderate-income units, must be offered in addition to the density bonus for
lower/very low-income units, to conform with State law. In other words, such other"
types of density bonuses are not to be offered in lieu of the State density bonus law.
If a local program offers density bonuses for reasons other than the provision of
lower- and very low-income housing, e.g., by offering density bonuses for moderate-
income housing or child care centers, the jurisdiction should carefully consider
whether the effect of such a program could be to "undermine the intent" of the
State density bonus law. If such a local program, seeking developer commitments
other than lower-income housing, would discourage use of the State density bonus
law, it could be considered as "undermining" it, and could therefore be invalid.
Local programs which offer lesser incentives, e.g. smaller density bonuses, for
providing the same proportion of target units as required by State law would not
comply with the State density bonus law. Conversely, programs offering the same
incentives as those of State law for smaller proportions of target units would also
not comply. Local programs which define a density bonus in terms of a specific
number of units per acre conform to the State standard only if they provide at least
the required 25 percent density bonus in all cases.
8. Flow are the maximum allowable rents or sales prices calculated?
The maximum rents to comply with the law, as interpreted by the Department of
Housing and Community Development, are as follows:
Income Category Maximum Monthly Rent
Lower Income [.60 x area median income x .30] _ 12
Very Low Income [.50 x area median income x .30] _ 12
The effect of this formula is that rental income for the target units will be the same,
regardless of the number of bedrooms per unit. This factor might be considered
in structuring the standard requirements and incentives offered. If a jurisdiction has
a need for two- and three-bedroom units, developers may not incur greater costs
for larger units unless larger units (or similar size as market-rate units) are required,
or unless the incentives are greater than those offered for constructing studio or
one-bedroom target units.
The State densi bonus law does not rescribe maximum sales prices for for-sale
units. However, lower- or very low-income households, as de ine in Health and
Safety Code Sections 50079.5 and 50105 respectively, must be able to afford the
units (see Question 9).The sales price amounts will depend on whether the sales
are to be coordinated with any mortgage subsidy program.
"Area median income" is the area median family income published by HCD based
on information from HUD. These figures are available from the Department of
Housing and Community Development - see Question 9 below. Jurisdictions in
1 � 0100
non-metropolitan counties should note that the area median family income in these
counties is the higher of HUD's estimate of the county's median family income, and
the statewide non-metropolitan median family income.
9. How is eligibility for lower- and very low-income units determined? How can a locality
obtain the area median income, and the lower- and very low-income eligibility limits?
All localities must use the income limits published by the Department of Housing
and Community Development (HCD) in administering the State density bonus law.
This applies to both for-rent and for-sale housing. Pursuant to Health and Safety
Code Sections 50079.5 and 50105, HCD publishes lower-' and very low-income limits
in the California Code of Regulations (Title 25, Section 6932). The income limits
are published by county, and there are different limits for each household size.
Section 6914 of the Title 25 regulations defines what constitutes income.
The lower- and very low-income limits published by HCD are based on the limits
established by HUD approximately annually. The income figures published by
HCD in 1990 are included in the appendix to this report. Subsequent updates of
these may be obtained from HCD. Any questions about the income limits and
other applicable provisions of Title 25 should be directed to HCD at:
Department of Housing and Community Development
Housing Policy Development Division
P.O. Box 952053
Sacramento, CA 94252-2053
Attention: Don Crow (916) 323-3175
10. Must the need for an incentive(s) in addition to a density bonus be established by the
developer with each application?
No. State density bonus law is based on the premise that " local governments must
offer the private sector incentives for the development of affordable housing . . ."
(Chapter 842, Statutes of 1989, Section 1.). A key feature of the 1989 amendments
requires provision of at least one additional incentive in addition to a minimum
density bonus. Section 65917 places the burden on the jurisdiction for these
incentives to "contribute significantly" (emphasis added) to the economic feasibility
of lower-income housing in proposed developments." This means the incentives
cannot be token in nature; they must directly affect the financial feasibility of
including the target units in proposed projects. As noted below, the need for the
additional incentive must be demonstrated only in certain cases; and in all cases
where the jurisdiction denies an additional incentive, it must make a written finding,
that the additional incentive is unnecessary for affordability of the target units.
12— 0000
' There are three types of cases which warrant evaluation of the extent of the need
for an additional incentive:
a) If a jurisdiction is to find the incentive unnecessary, it must establish that
the project with the proposed target units would be feasible without the
incentive.
b) If the application involves a modification of zoning or development
standards, Section 65915 (e) places the burden on the developer to prove
the waiver or modification is necessary to "make the housing units
economically feasible."
c) A jurisdiction may offer an "other" type of incentive which involves direct
financial assistance requiring project feasibility analysis.
II. How can the feasihilit�, of a proposed project with or without an additional incentive he
evaluated?
Choice of a method for determining the need for an additional incentive is at the
discretion of local government, but adequate information to effectively analyze
project rents or sales prices would be needed. An appropriate method might relate
to the relative scale and complexity of the project, the type of target groups and
requirements of any other subsidy programs involved, and/or the extent of
administrative review desired. A jurisdiction could rely on a third party, or assess
the cost information itself.
Such a third party could be a potential project lender. A developer might provide
a statement from a lender that the project would not be financed by that institution
as proposed (with the density bonus only) because of a lack of economic feasibility.
If this method were used, the jurisdiction might subsequently require a "Letter of
Intent" from the same lender on the proposed project with a density bonus and the
requested modification to confirm financing availability. A weakness of this
approach is that if a lender were aware of more favorable options, they may reject
the more restrictive option, regardless of feasibility.
Alternatively, a jurisdiction can request the information to make the determination
itself. This option may be appropriate for jurisdictions which already evaluate
project applications for potential subsidies, such as redevelopment or _housing
rehabilitation programs. A "Sources and Uses of Funds Statement" might be
requested, identifying the projected financial "gap" of the project with the required
target rents or sales prices. The developer would then establish how much of the
gap would be covered by the 25% density bonus, leaving a remainder figure to bey
� � 0000
covered by an additional incentive.
If some form of direct financial contribution or participation by the jurisdiction is
being considered as the additional incentive, a complete project pro forma may be
requested. This would be comparable to what the developer must submit to a
conventional lender or another government lender; it is used to project cash flow
and financial return to the developer over the projected ownership period. Key
components of a pro forma are described below.
If the project is being financed separately, two key indicators which will be
considered by potential lenders are the loan-to-value ratio and the debt- coverage ratio.
Typically, a maximum conventional real estate loan will not exceed 80% of the fair
market value of the property (loan-to-value ratio). The debt- coverage ratio is the
project's net income divided by the total debt service (principal and interest).
Typical debt-coverage ratios expected by lenders generally range from 1.2 - 1..4,
where the net income exceeds the debt service cost by 20% to 40%.' These may
be lower in subsidy programs.
An important variable for multifamily development is the project cost per unit Or
per square foot, and how this figure is affected by the type of additional incentive
requested. The project cost per unit is information used by, and should be available
from, area lenders to compare against the area norms for similar projects. The
primary components affecting rental project feasibility and the size of any financing
gap are the capital costs and the operating expenses. As capital costs .are generally
the more influential, and can usually be projected more accurately than operating
expenses, it will be important to closely evaluate potential impacts on a project's
capital costs.
1 Innovative Techniques to Finance Housing Development, The National Development
Council, New York, N.Y., 1988.
�y 0000
Exhibit N.
PROJECT PRO FORMA INFORMATION
Capital Costs: all outlays or sacrificed resources used in the process of acquiring
or constructing long-term assets, i.e., land, _buildings, equipment
Equity Investment: developer-provided outlays, or the amount of down payment and any
other resources provided by the developer or owner
Debt Service: mortgage payment of principal and interest, based on the loan
amount, interest rate, and term of the mortgage financing the capital
costs
Discount Rate: minimum anticipated rate of return on investment; usually the
prevailing borrowing rate
' Revenues: proposed rents or sales prices on market-rate units
proposed rents or sales prices on target units
any additional tenant contributions, e.g., utility payments
miscellaneous income, e.g., laundry revenues
Vacancy Allowance: a contingency amount to be subtracted from tl:c projected gross
revenues; should be based on local vacancy factors, generally higher
in .first year(s) of operation
* Operating Expenses: - property management fees
- insurance
- property taxes
- maintenance & landscaping
- reserve for structural repairs
Net Income or
Net Operating Income: excess of revenues over operating expenses
Pre-Tax Cash Flow: net operating income less debt service
After-Tax Cash Flow: net operating income adjusted for the tax rate, deductions from sale
proceeds, for annual depreciation expenses, amortization of fees,
and amortization of principal
Return
on Investment: the ratio of the financial return or income stream to the investment
cost; can be measured by capitalization rate, "Cash-on-Cash" rate of
return, "Cash Flow Rate After-tax," or "Internal Rate of Return"
basis
* Assumptions regarding projected annual rate of increase should be identified.
►5 0000
12. .mow are incentives of equivalent financial value to be determined?
Section 65915(b) provides that a jurisdiction may offer other incentives of equivalent
financial value in lieu of granting a density bonus (if target units are reserved for
only 10 years), or a density bonus and additional incentive. Incentives of equivalent
finaricial value are to be based on the land cost per dwelling unit. There is no easy
way to determine this; it is likely to involve staff time and effort in arriving at a
negotiated agreement.
The value of the density bonus might be determined by the difference in the value
of the land with and without the density bonus. One or more independent
appraisals could be used for negotiations to derive the land value. Identification of
any increased value of the land only, as distinguished from the land including the
value of the additional improvements attributable to the 25% unit increase, might
be specifically requested, as this affects the type of appraisal method involved.
Similarly, the value of both a density bonus and an additional incentive could be
determined by the difference in the value of the land with or without both
incentives.
The equivalent financial incentive is also subject to the declared intent of the
Legislature that ana, incentives must "contribute significantly to the economic
feasibility of lower-income housing."
13. What factors most affect the Potential use of the State density bonus lax, by developers?
A process which minimizes discretionary decisions is especially desirable.
Applications for projects qualifying for the density bonus will be affected by the
perceived effectiveness of the local program. The effectiveness of the density bonus
and additional incentives will be dependent on the degree to which these measures
assist developers by:
- overcoming local constraints to development,
- offering significant benefits not otherwise available, or
- offering greater returns than would otherwise be possible.
A key appeal to non-profit developers will relate to the extent to which they can
increase the number of affordable units they could otherwise develop, and allows
them to provide units for very low-income households.
The program's effectiveness will be affected by the degree to which local
implementation procedures and options are responsive to local development
0000
conditions. FaciLtating such a match entails careful evaluation of potential effects
relative to local zoning and site development regulations, processing times, and local
market conditions. Local market conditions include the relationship of prices or
rents to local household incomes, and the general capacity of projects to meet the
target sales prices of rents. As these factors vary over time, particularly relative to
local supply and demand, periodic review of effectiveness of the incentives also is
warranted.
Procedures. should incorporate flexibility to accommodate individual project
circumstances. Rigid requirements as to required target unit sizes or amenities for
all projects, for example, should be avoided, as they may not be sufficiently sensitive
to market demand and variability, and could eliminate important variables relative
to project feasibility.
It is important that incentives be regarded by developers as sufficiently compelling
to motivate incorporating target units in projects. Attempts to do so will depend
on the perceived value of, and ease of obtaining, the incentive in addition to the
25% density bonus. It may be beneficial to consult with local developers, including
nonprofit providers, in drafting the incentive package, and to also work with
community groups to promote its use. The benefits of the incentive must outweigh
the long-term (30-year) use and income restrictions on the target units. Projects will
need reasonably high densities for the efficient inclusion of lower-income units. In
many markets, provision of very low-income units will only be feasible with the
additional incentive of a direct financial subsidy or subsidies from other sources.
14. 11"hat are other potential benefits (in addition to obtaining the target units)for promoting
use of density bonuses?
The density bonus program also offers potential for incorporation into other local
development objectives. For communities with strong retail and office development
markets, inclusion of target units within mixed-use projects may be most feasible..
Promotion of this could be part of local economic development efforts appealing
to employers concerned with affordable housing for their employees close to work.
Density bonuses can also be used to attract or accommodate higher density
development to address the following local concerns in addition to affordability:
• feasibility of mass transit modes
shortages of large tracts of land for new development
• lifestyle demands for greater convenience, e.g., shorter commutes, less
maintenance
• high land, labor, and infrastructure costs
1?
0000
I5. How can the State density bonus law be used to complement other local housing
Programs?
Perhaps one of the Most effective uses of the State density bonus law is in conjunction
other affordable housing program efforts. The density bonus and additional incentive opi
might be incorporated and promoted for use in the following programs for lower-incc
housing. It may be possible to give density bonus projects priority or beneficial treatm-
in these programs.
• local housing trust funds
• local redevelopment Low and Moderate Income Set-aside Funds
• bond financing
Community Development Block Grant funds for pro-rated infrastructure subsidie
exemptions for lower-income housing in a growth management program
• private development of publicly-owned sites
in conjunction with other State or federal funds
• inclusionary standards applicable to all new development, e.g., if local inclusiona
standards are identical to those of the State density bonus law.
f
�� 00,0
MAXIMUM GROSS INCOME PER HOUSEHOLD
PER HUD/HCD REQUIREMENTS
TYPE OF HOUSEHOLD
Household Very Low Income Lower Income Moderate Income O.C. Median Income*
Size (Up to 50% of (Up to 80% of (Up to 120% of (OCMI)
OCMI) OCMI) OCMI)
1 $18,250/Yr. $29,200/Yr. $43,800/Yr. $36,500
2 $20,900/Yr. $33,440/Yr. $50,160/Yr. $4.1 ,800
3 $23,500/Yr. $37,600/Yr. $56,400/Yr. $47,000
4 $26,100/Yr. $41 ,760/Yr. $62,640/Yr. $52,200
5 $28,200/Yr. $45, 120/Yr. $67,680/Yr. $56,400
6 $30,300/Yr. $48,480/Yr. $72,720/Yr. $60,600
*1991.
Last updated 7/24/91
(1260D)
V
O
TARGET RENTS/MORTGAGE PAYMENTS
TYPE OF HOUSEHOLD
Household Very Low Income Lower Income Moderate Income
Size Target Rent/Mortgage* Target Rent/Mortgage" Target Rent/Mortgage***
1 $5,475/year or $6,570/year or $7,300 to $10,950/year or
$ 456/month $ 548/month $ 608 to $ 913/month
2 $6,270/year or $7,524/year or $8,360 to $12,540/year or
$ 523/month $627/month $ 697 to $1 ,045/month
3 $7,050/year or $8,460/year or $9,400 to $14,100/year or
$ 588/month $ . 765/month $ 783 to $ 1 ,175/month
4 $7,830/year or $9,396/year or $10,440 to $15,660/year or
$ 653/month $ 783/month $ 870 to $ 1 ,305/month
5 $8,460/year or $10,152/year or $11 ,280 to $16,920/year or
$ 705/month $ 846/month $ 940 to $ 1 ,410/month
6 $9,090/year or $10,908/year or $12, 120 to $18,180/year or
$ 758/month $ 909/month $ 1 ,010 to $ 1 ,515/month
* = 30% of 50% of Orange County Median Income (1991 )
** = 30% of 60% of Orange County Median Income (1991 )
*** = 25% of Gross Family Income (1991 )
Last updated 7/24/91
(1260D)
O
O
SALE PRICES OF AFFORDABLE UNITS
(LOWER INCOME)
Maximum
Household Maximum Interest Sales
Size Income Level Rate * Price**
1 $ 29,200 9.0% $ 74,849/$78,076.
2 $ 33,440 9.0% $ 85,717/$89,413
3 $ 37,600 9.0% $ 96,380/$100,537
4 $ 41,760 9.0% $ 107,044/$111,660
* No assumption is made as to loan type; however, adjustable rate loans are approximately 8% as of July 1, 1991.
** Includes a 1.0% downpayment; "/" denotes 30 year vs. 40 year loan amortization.
Methodology: 30% of 60% of Orange County Median Income.
® 0025Y/3
SALE PRICES OF AFFORDABLE UNITS
(VERY LOW INCOME)
Maximum
Household Maximum Interest Sales
Size Income Level Rate * Price**
1 $ 18,250 9.0% $ 62,374/$65,064
2 $ 20,900 9.0% $ 71,431/$74,511
3 $ 23,500 9.0% $ 80,317/$83,780
4 $ 26,100 9.0% $ 89,203/$93,050
* No assumption is made as to loan type; however, adjustable rate loans are approximately 8% as of July 1, 1991.
** Includes a 10% downpayment; "/" denotes 30 year vs. 40 year loan amortization.
Methodology: 30% of 50% of Orange County Median Income.
0025Y/4
O
SALE PRICES OF AFFORDABLE UNITS
(MODERATE INCOME)
ECEIVED
Maximum .J U L 2
Household Maximum Interest Sales 3 1S 91
Size Income Level Rate * Price** Dept. of Co;Mm peve!oh
, ment
1 $ 43,800 9.0% $ 124,748/$130,127
2 $ 50,160 9.0% $ 142,862/$149,022
3 $ 56,400 9.0% $ 160,634/$167,561
4 $ 62,640 9.0% $ 178,407/$186,100
* No assumption is made as to loan type; however, adjustable rate loans are approximately 8% as of July 1, 1991.
** Includes a 10% downpayment; "/" denotes 30 year vs. 40 year loan amortization.
Methodology: Gross Income x 25% = 12. months = $ available for a monthly mortgage payment.
Determine a corresponding loan amount and multiply by I10% (10% downpayment) to yield an
affordable sales price.
0025Y/1
k
CD
7�un`f1'ir �n f3eacl�C
C�iairr�e�j'�Conrn,rerce .
August 1 4 , 1991
Kirk Kirkland , Chairman
and Members of the Planning Commission
Community Development Department
City of Huntington Beach
2000 Main St .
Huntington Beach , CA 92648
Subject : Density Bonus Ordinance ( Code Amendment Fo . 91 -2 )
Dear Commissioner Kirkland :
The Huntington Beach Chamber of Commerce would like to commend
the city for formulating the Density Bonus provision of state
law into city regulations . This is one of several steps needed
to be taken in order to provide affordable housing in Huntington
Beach .
Our Chamber Is Community Development Committee has reviewed the
proposed ordinance and has several recommend at ions . In addition
to the comments we have noted on the attached "draft " ordinance ,
we offer the following general comments .
The ordinance as it is presented does not follow the usual format.
of the existing zoning ordinance .
When a density bonus is granted it should apply to all. pertinent
land use designations on the property : i . e . zoning , general
plat, and specific plan designations .
In the Staff Report it is suggested that targeting specific
areas for higher density developments should be done . T n U r e
was concern that designating such areas could result in higher
land costs unless it is understood that such designation would
not result in increased land value .
In regard to the Affordability Agreement we would like to forward
the observation offered earlier by the Association of REALTORS
that resale controls have proved difficult to implement in the
past .
+ #
2213 Main Street Suite 32 ac, e n
Huntington Beach.CA 92648
714/536-8888 0000
(FAX) 714/960-7654
7-1-
Tillotson - 08/14/91 - p . . 2
In order for the ordinance to accomplish the goal of increasing
the number of affordable units in the city , fast tracking and
priority processing of projects with affordable elements should
be part of the city ' s policy . In addition there should be a
means whereby a project could recieve preliminary approval so
that, developers would not spend considerable time and money
only to find out the project is unacceptable .
We would like to meet with a committee consisting of the Planning
Commission and city staff on an informal basis' ( similar to the
meetings held to review the SRO Ordinance ) to discuss our recom-
mendations .
Sincerely ,
Haydee V . Tillotson
President
HVT : mmd
enclosure : Draft Ordinance with comments
cc : Mike Uberuaga , City Administrator
Ray Silver , Assistant City Administrator
Mike Adams , Director of Community Development
Howard Zelefsky , Planning Director
0000
ORDINANCE NO .
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
AMENDING THE HUNTINGTON BEACH ORDINANCE CODE
BY ADDING SECTION 9637 TO ARTICLE 963 RELATING
TO INCENTIVES FOR DEVELOPERS OF AFFORDABLE HOUSING
WHEREAS , the California Government Code §65915 et seq .
requires that if a developer of a residential project zoned
and general planned for five ( 5) or more units on a specific
site requests a density bonus and/or other incentives for the
purpose of providing affordable housing for qualifying
residents , very low and lower income households , the City must
grant the request ; and
A procedure for implementing and monitoring a density
bonus program is necessary;
NOW, THEREFORE, the City Council of the City of Huntington
Beach does hereby ordain as follows :
SECTION 1 . The Huntington Beach Ordinance Code is
hereby amended by adding Section 9637 . to Article ' 963 to read
as follows :
Section 9637
DENSITY BONUS AND OTHER INCENTIVES FOR THE PROVISION
OF AFFORDABLE HOUSING FOR QUALIFYING RESIDENTS ,
LOWER INCOME AND VERY LOW INCOME HOUSEHOLDS
For the purpose of providing affordable housing , a
0000
-1- .
developer of a residential property which is zoned and .-general
planned to allow five (5) or more dwelling units may request a
density bonus and/or other incentive through a conditional use
permit subject to the provisions contained in this section .
Dens,ity bonus requests pursuant to the provisions contained
within this article shall not be denied unless the project is
denied in -its entirety .
9637 . 1 Definitions
( a ) "Density Bonus " for the purposes of this article ,
means an increase in the proposed number of units of
twenty-=rive (25) percent or greater over the number
permitted pursuant to the�c-u-r_rent zoning designation_�.�
general plan and specific plan
on the property . ,
(b) "Other Incentives" are J-�actions
taken by the City designed to ens ur —that thy.__
development will be produced a �af ordable rice�h
Y
include, but are not limited to the following :
1 . A reduction in site development standards or
architectural design requirements which exceed
the minimum building standards contained within
the Uniform Building Code as adopted by the City
including , but not limited to , a reduction in
? ` �`set_ack and open space requirements(��j
parking , lot coverage , square footage
*see state law for additional wording
0000
_2_
2 . Approval of mixed use zoning in conjunction with
s= the housing project if commercial , office,
industrial , or other land uses. will reduce the
cost of the housing development and if the
commercial , office, industrial , or other land
uses are compatible with the housing project and
the existing or planned development in the area
where the proposed housing project will be
located .
3 . A reduction in development and/or processing
fees . d or dedication requirements:
4 . Other regulatory incentives or concessions
proposed by the developer or the City which
result in identifiable cost reductions .
5 . Financial assistance by the City, . i . e . , housing .
set-aside funds .
6 . Utilize federal programs . i . e . bond financing
7 . Other incentives mutually agreeable to city and developer.. l
(c) Moderate income household
A household shall be classified as "moderate income" if
annual income is at or below one hundred twenty ( 120)
percent of Orange County median income as defined by the
1•y�
?!; State of California Department of Housing and Community
Development ther re ionall acre to t for determinin
median income. i.e. Chapman College figures (HUD figures would
be used only when necessar . 0
-3- -
(d) Lower income household
�Y
A household shall be classified as " lower income" if
annual income is at or below eighty (80 ) percent of Orange
County median income as defined by the State of California
Department of Housing and Community Development . (see item c)
(e) very low income household
A household shall be classified as "very low income" if
the annual income is at or below fifty ( 50) percent of
Orange County median income as defined by the State of
California Department of Housing and Community D_e_ v_eloprre-n-t_,_
(see item c)
"Senior
� ---------�-`
( f) 0ua1if Yin q resident
' \senior
A person shall be classified as a
P qualify4ng esi.dent" if
he or she is 62 years of age or older . (Section 51 . 2 of
the California Civil Code . )
9637 , 2 Target rents/mortgage payments
( a) For the pu-r es o gois -f—this—article;—units designated
(80% - 120% OC median incomei�
for mod a-te neomeYhou-sehold--s-h-a1-l--be affordable at
a rent or mortgage payment that does not exceed
twenty-five 25 percent of the gross family income .
e .would recommend 30% to be con'st-s-tent with other standards.
7_ (b) o-r- he urpose of this ar,�icle, units designated for
fi 50$ - 80% OC median income)
low be affordable at a rent
-4-
0000
or mortgage p•aymen-t tbat does not exceed thirty (30)
eighty (80)
percent o - ercent of the Orange County
median income as defined by the State of California
Department of Housing and Community Development .
or other regionally accepted method for determining
income. i . e. Chapman College figures
(c) For e purpose of this mar+_ r1�� th_o��—� �its
C(less than 5. 0%W median income)�
designated for very law—income-households shall be
affordable at a rent or mortgage payment that does
not exceed thirty (30) percent of fifty ( 50) percent
of Orange County median income as defined by the
State of California Department of Housing and
Community Development< (see item b)
9637 . 3 Affordability Reguirements
( a) Percentage of Affordable Units Required
To qualify for a density bonus and/or other incentives ,
the developer of a residential project must agree to one
of the following :
1 . Provide at least twenty ( 20) percent of the
total units of the housing development for lower
income households ; or
2 . Provide at least ten ( 10) percent of the total
units of the housing development for very low
income households ; or
-5-
3 . Provide at least fifty
y (50) percent of the total
units of the housing development for qualifying
(senior) residents .
Units granted th��ou
h�deYrsit�tI st. be included when determining
the number of housing units required to be affordable .
Remaining units maybe rented , sold , or leased at "market "
rates .
o recommend deleting this paragraph. It is not in state law. >
If a developer is granted a density bonus in excess of
twenty-five (25) percent , those additional units above the
twenty-five (25) percen may- e required to be maintained
affordable for "moderate income" households-..--- --
V--r==-- ----------- ---_ -
under what circumstances would this be required? __
Pursuant to this article the City, in addition to granting
a density bonus , shall -' either
1) grant a density bonus and at least one of the
concessions or incentives identified in section
9637 . 1(b) unless the City makes a written finding
that the additional concession or incentive is not
required in order -for rents or mortgage payments to
meet the target rates ; or
2) provide other incentives of equal value to a
density bonus as provided in Section 65915 , et seq .
{ of the California Government Code . The value of the
yk 6 ncentives shall be based on the land cost per
dwelling�uni�. �hese additional incentives should be
su iciethe cost of the land down to make
the units affordable. 00
-6-
(b) Affordability Agreement
Affordability shall be guaranteed through an
"Affordability Agreement" executed between the developer
and the City . Said agreement shall be recorded on the
subject property with the Orange County Recorder ' s Office
as provided in S�ect,-Don—,6-5-9-145,— eq . of the California
urrent wit
Government Code , h-e—issuance of building permits
and shall become effective upon occupancy or final
inspection of the first affordable unit . The subject
agreement shall be legally binding and enforceable on the
property owner (s) and any subsequent property owner( s) for
the duration of the agreement . The agreement shall
include , but is not limited to , the following items :
1 . The number of and duration of the affordability
for the affordable units . Units required to be
affordable as a result of the granting of a
density bonus and other incentives shall remain
affordable for thirty (30) years . If the City
does not grant at least one concession or
incentive pursuant to this article in addition
to the density bonus , or provides other
incentives in lieu of the density bonus , those
units required to be affordable shall remain so
for ten ( 10) years ;
0000
-7-
2 . The method in which the developer and' the City
are to monitor the affordability of the subject
affordable units and. the eligibility of the
tenants or owners of those units over the period
of the agreement ;
3 . The method in which vacancies will be marketed
and filled; and units resold;
4 . A description of the location and unit type
(bedrooms , floor area , etc . ) of the affordable
units within—the project . Afforda-h-le
-- i
in
i &affle
5 . Standards for maximum qualifying household
incomes and standards for maximum rents or sales
prices .
9637 . 4 Procedure
add state law section 65915 (d) to this section
(a) In addition to submitting all documentation required
to apply for a conditional use permit , a developer
requesting a density bonus or other incentive
pursuant to this section shall include the following -
in the written narrative supporting the application: 0
-8-
1 . A general description of the proposed project ,
general plan designation, applicable zoning ,
maximum possible density permitted under the
current zoning and general plan designation and
such other information as is necessary and
sufficient . The property must be zoned and
general planned to allow a minimum of five ( 5)
units to qualify for a density bonus ;
2 . A calculation of the density bonus allowed
pursuant to California Government Code Section
65915 . 5 (b) , which is an increase in units of at
least 25 percent over the number of units
permitted under the existing_ zonincdesigna _i_ons._;,
general plan and spe_cif; c plan" %
3 . In the case that the developer requests the City
to modify development standards as an other
incentive, a statement providing a detailed
explanation as to how the requested incentive
will enable the developer to provide housing at
the target rents or mortgage payments .
Modification of development standards will be
granted only to the- extent necessary to achieve
the housing affordability goals set forth herein .
4 . A statement detailing the number of density
0000
-9-
bonus units being proposed over and above the
r number of units normally
y permitted by the
applicable zoning and general plan designations .
(b) All subsequent City review of and action on the
applicant ' s proposal for a density bonus and/or
consideration of any requested other incentives shall
occur in a manner concurrent with the processing of
the conditional use permit and any other required
entitlements , if. any . If the developer proposes that
the project not be subject to impact fees or other
fees regularly imposed on a development of the same
type , final approval will. be by the City Council .
(c) The Planning Commission/City Council shall review the
subject Affordability Agreement concurrently with the
development proposal . No project shall be deemed
approved until the Affordability Agreement has been
approved by the appropriate reviewing body .
(d) The Planning Commission/City Council may place
reasonable conditions on the granting of the density
bonus and any. other incentives as proposed by the
applicant . However , such conditions must not have
the effect , individually or cumulatively, of
r impairing the objective of California Government Code
§65915 et seq . , and this article, of providing
'v".
affordable housing for qualifying residents , lower or
very low income households in residential projects G Q 0
-10-
>; 3 . The .granting of the proposed other incentives)
'r 1
will not be detrimental to the general health,
welfare, and safety of persons working or
residing in . the vicinity .
4 . The granting of the proposed other incentive( s)
will not be injurious to property or
improvements in the vicinity .
5 . The granting of the proposed other incentive ( s)
will not impose an undue financial hardship on
the City .
6 . If the other incentive is a modification of
development standards , the granting of the other
incentive is necessary to achieve the target
affordable rents/mortgage payments for the
affordable units .
SECTION 2 . This ordinance shall take effect thirty days
after its passage .
PASSED AND ADOPTED by the City Council of the City of
0000
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r
Huntington Beach at a regular meeting thereof held on the
day of , 1991 .
Mayor
ATTEST : APPROVED AS TO FORM:
City Clerk City Attorney -►�-< �
REVIEWED AND APPROVED : INITIATED AND APPROVED :
City Administrator Director of Community
Development
0000
-14-
3 . The proposed project which includes a density
bonus is compatible with the physical character
of the surrounding area .
4 . The proposed project which includes a density
bonus is consistent with the overall intent of
the General Plan .
(b) Other Incentives
A request for an additional incentive shall not be
denied by the Planning Commission or City Council
unless a finding is made that the incentive is not
necessary to the establishment of affordable units .
In , granting any other incentives as defined in this
article , the Planning Commission/City Council shall
be required to make the following findings :
1 . The granting of the proposed other incentive( s)
will not have an adverse impact on the physical
character of the surrounding area .
2 . The granting of the proposed other incentive( s)
is consistent with the overall intent of the
Y General Plan .
r�
4oO' U
-12-
We recommend deletion of this section. Additional fees
reduce affordibility.
What are these?
(e) A filing , processing and monitoring fee as
established by resolution of the City Council , shall
be paid by the applicant to the City prior to
issuance of a certificate of occupancy for the first
unit . This fee shall be in addition to any other
fees required for the processing of the conditional
use permit , environmental analysis , and/or any other
entitlements required .
9673 . 5 Required Findings For Approval
( a) Density Bonus
In granting a conditional use permit for a density
bonus , the Planning Commission/City Council shall
make the following findings :
Will this require an EIR? If yes , then priority should be
be .given to processing the EIR.
1 . The proposed project , which includes a density
bonus , can be adequately serviced by the City
and County water , sewer , and storm drain
systems , without significantly impacting the
overall service or system.
2 . The proposed project , which includes a density
} bonus , will _not have a significant adv.er.se. ;
impact on traffic vo.lumes ana ' road capacities ,
school enrollments, ' or recreational resources .
0000
-11-
I
� ' CITY OF HUNTINGTON BEmq#t
INTER-DEPARTMENT COMMUNICATION 1{ n
HUNTINGTON BEACH - - l�
;Dept. 0,Ce;
DevelO_ment
To MIKE ADAMS, Director From GAIL HUTTON
Community Development City Attorney
Subject Density Bonus Ordinance Date July 2 , 1991
QUESTION PRESENTED:
In the course of preparing the Density Bonus Ordinance for my
review, you inquired whether state law permits the City to
utilize standards other than those established by the Federal
Department of Housing and Urban Development ( and adopted by the
California Department of Housing and Community Development) for
defining " low" and "very low" income . Further, you asked if the
City is bound by the state requirements concerning the length of
time which target units must remain affordable if a density
bonus is granted .
ANSWER:
The City must comply with the thirty year use restrictions of
state law and must employ the definitions of " low" and "very
low" income households found in the California Health and Safety
Code .
ANALYSIS :
The density bonus statute, Government Code §§65915 , et seq . , is
basically a grant of authority to the City, without which the
City could not permit a project which exceeded the maximum
allowable density. That grant of authority is conditioned upon
.the fulfillment of certain requirements , including the
affordable portion of the project being restricted for a minimum
of thirty years .
Government Code §65915 (c) reads, in part , that : "a developer
shall agree to and the city. . . shall ensure continued
affordability of all, lower income density bonus units for 30
years . . . " (emphasis added) . Concerning the househo].3s eligible
for the affordable units , subsections (a) and (b) of that . same
law state that "the city. . . shall provide the developer
incentives for the production of lower income housing units" and
"shall adopt an ordinance" which enables the City to do so if
the units are for " lower and low income" households as defined .
in California Health and Safety Code §§50105 and 50079 . 5 . These
two Health and Safety Code sections utilize the H.C.D.
definitions which, in turn, adopt the H.U.D. standards .
,n S
a m �
0000
Page 2
Density Bonus Ordinance
The use of the word "shall" signals that these requirements
cannot be waived at the City' s discretion. Government Code §14
controls the interpretation of the words "shall" and ".may" when
used in the statutes . "Shall" is tantamount to a command and
the action in question becomes mandatory (Cannizzo v . Guarantee_
Insurance Co . [19661 245 Cal .App . 2d 70) .
While Government Code §65915 leaves local entities with some
regulatory authority, these areas are specifically set forth in
the statute and are those areas of traditional local interest,
such as design standards and land use controls (see e . g . ,
Government Code §65915(h) ( 1) ) . Had the Legislature wished to
permit local governmental agencies the latitude to change the
other standards specifically enumerated in Section 65915 , it
would have said so . Instead, the Legislature used statutory
language which makes mandatory the use of state standards
concerning income levels and the life of affordability
restrictions .
More than the statutory language alone supports the contention
that the City of Huntington Beach is bound by the H .C.D. low
income- standards and the thirty year use restriction found in
the density bonus statutes . A local ordinance which deals with
matters of statewide concern is void if it conflicts with state
law which is intended by the Legislature to fully cover the
subject matter throughout the state (Younger v . Berkeley City
Council [19751 119 Cal .App . 3d 825) . The same is true if the
subject matter has been partially covered by state law and the
state statute is written in terms which indicate that paramount
state concern will not tolerate further or additional local
action (People v . Mueller [19701 8 Cal .App . 3d 949) .
The legislative history makes clear that the Legislature
considered affordable housing to be an issue of statewide
concern (see 69 Ops . Ca1 .Atty.Gen. 225 and text quoted
therein) . The text of the Government Code itself evinces the
legislative intent to heavily control local regulations of
housing which has an affordability component . Government Code
§95917 prohibits a city from taking any action which would
undermine the intent of the state density bonus law and
Government Code §37364 " reaffirms" that affordable housing is a
"concern of vital statewide importance . "
This same conclusion was reached by the California Attorney
General in addressing the question of whether compliance with
the thirty year restriction is required when a city uses federal
0000
Page 3
Density Bonus Ordinance
community development block grant funds to provide affordable
housing . The argument that a city may furnish a financial
incentive to a developer for the construction of affordable.
housing through the use of an agreement which does not address
the length of time for which units would remain "affordable, "
was rejected . The Attorney General reasoned that the
legislative intent was to impose upon all density bonus plans a
requirement that the units remain affordable for a thirty year
period .
CONCLUSION:
As to both issues , state law appears to be rather intransient .
Conversations between my deputy, Sarah Lazarus , and the staff of
the State Department of Housing and Community Development in
Sacramento reveal that the state ' s position on this issue is
that state law completely pre-empts the City' s ability to
regulate in this area . It would appear that , at least
concerning the two areas about which you inquire, the City must
abide by the state standards which demand affordability for
thirty years and require the use of H.U. D. /H. C.D. formulas .
Aim /-/U%ToN !�
GAIL HUTTON, City) Attorney
by JOSEPH BARRON, Acting City Attorney
JCB : SL : k
�000
F• CITY OF HUNTINGTON BEACH _
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
To MIKE ADAMS, Director From GAIL HUTTON
Community Development City Attorney
Subject . Your Inquiry re. Density Date July 16 , 1991
Bonus Opinion RLS 90-483
QUESTION:
May the City grant a density bonus upon the condition that the
target units remain affordable for a period longer than that set
forth in state law?
ANSWER: No .
ANALYSIS :
The attached opinion responded to your request for legal
services number 90-483 , in which you inqu .red whether the state
density bonus law, codified as California Government Code
Section 65915 , et seq . confined a local government to the state
requirement that affordable units remain affordable for either
ten or thirty years . The analysis set forth in that opinion
applies with equal force to the question now presented .
The state density bonus law prohibits cities from offering any
incentive or establishing any standard, formula , or criterion,
which could undermine the intent of the legislature in this area
(California Government Code Section 65917) . Because the state
statutes establish the minimum standards for the grant of a
density bonus , some have been led to erroneously believe that a
locality may make any additions , to the state standards so long
as the addition merely enlarges the specific formulas and
numbers in the state law; this is not the case .
If a local government were to increase the state mandated
thirty-year term of affordability, a developer might well be
discouraged from creating any affordable units at all ,
theorizing that the target units would never be available at
"market rate" because they would have to remain "affordable" for
a period longer .than the useful life of the building . Since an
increase in the term of affordability might tend to discourage
and overburden potential developers of affordable housing, the
change could "undermine the intent of the legislature" and thus
run counter to Government Code Section 65917 and the intent of
the entire state density bonus structure .
GAIL HUTTON
0000
GH: SL : k
huntington beach department of community development
STAFF
REPORT
TO: Planning Commission
FROM: Community Development
DATE: August 6, 1991
SUBJECT: CODE AMENDMENT NO. 91-2 IN CONJUNCTION WITH NEGATIVE
DECLARATION NO. 91-9
APPLICANT: City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
REOUEST: To amend the Huntington Beach Ordinance Code and .Local
Coastal Program Implementing Ordinance by adding
Section 963.7 to Article 963 (Unclassified Uses)
installing a mechanism to provide density bonuses
and/or other incentives to developers of affordable
housing .
LOCATION: City-Wide
ZONE: All Residential Zoning Districts
GENERAL
PLAN: All Residential Land Use Designations
1 . 0 SUGGESTED ACTION:
Motion to :
"Approve Negative Declaration No . 91-9 and Code Amendment No . 91-2
with findings and forward to City Council for adoption. "
2 . 0 GENERAL INFORMATION:
Pursuant to the California Government Code, Section 65915 et seq . ,
all cities are required to adopt an ordinance installing a mechanism
to provide density bonuses and/or other incentives to developers who
agree to guarantee that a specific number of those units will be
reserved for lower and very low income and senior citizen households
at% below market affordable rates for a specific number of years .
Draft Code Amendment No . 91-2 is intended to implement this section
of State law.
0000
swam sm
A-FM-23C
C'V✓' 1��/�+
3 . 0 COASTAL STATUS :
This code amendment is intended to apply City-wide, including the
Coastal Zone . Therefore, this code amendment will constitute an
amendment to the Implementation Plan of the City' s local Coastal
Program and will require approval by the California Coastal
Commission.
Although proposed Code Amendment No . 91-2 will constitute a change
in the City' s Implementation Plan of the Local Coastal Program,
staff does not believe that there will be any impact on coastal
policies contained within the Coastal Act and/or the City' s approved
Local Coastal Program. Any project proposed in the Coastal Zone
under this proposed ordinance will be subject to a coastal
development permit in addition to the standard conditional use
permit and environmental assessment . Therefore, any and all density
bonus 'proposals in the Coastal Zone will be analyzed for their
compliance with Coastal Act policies on an individual basis .
4 . 0 ENVIRONMENTAL STATUS :
Pursuant to the environmental regulations in effect at this time,
the Department of Community Development advertised draft Negative
Declaration No . 91-9 for 30 days and circulated the document through
the State Clearinghouse for State agencies to review. One comment
was received from the State of California Department of
Transportation, District 12, regarding concern over possible
cumulative effects on traffic circulation created by increased
density resulting through the granting of density bonuses . The
letter as well as staff ' s reply is included as a part of Draft
Negative Declaration No . 91-9 attached to this report . Staff , in
its initial study of Code Amendment No . 91-2 , is recommending that a
negative declaration be issued . Prior to any action on Code
Amendment No . 91-2 , it is necessary for the Planning Commission to
review and act on Negative Declaration No . 91-9 .
5 . 0 REDEVELOPMENT/SPECIFIC PLAN STATUS :
This code amendment is intended to apply City-wide, including
Redevelopment Project and Specific Plan areas .
6 . 0 SUBDIVISION COMMITTEE: Not applicable.
7 . 0 ISSUES AND ANALYSIS:
Background
Code Amendment No . 91-2 has been proposed to implement Section 65915
et seq . of the California Government Code which requires that all
cities adopt an ordinance to provide a mechanism of offering density
bonuses and/or other incentives to developers who propose to
construct housing affordable to lower and very low income
households . In addition to implementing State law, the proposed
ordinance will help to implement the affordable housing goals
contained within the City' s adopted Housing Element . As stated in
Staff Report - 8/20/91 -2- (0357d)
0000
the Housing Element and discussed in a joint City Council/Planning
commission Study Session last April 24 , 1991, the City is required
to provide 1, 264 housing units for Lower Income Households and 984
housing units for Very Low Income Households by the year 1994 .
Structure
The draft ordinance is proposed to be located within Article 963
(Unclassified) of the Huntington Beach Ordinance Code thereby making
it applicable City-wide subject to approval of a conditional use
permit . The conditional use permit process, therefore, will be the
mechanism mandated by State law through which the City will review
requests for density bonuses and other incentives . The ordinance
also establishes that the final approval body for projects
requesting "other incentives" that would either waive development
fees or involve direct financial assistance from the City be the
City Council .
The provisions contained within the draft ordinance mirror State law
as to what type of "other incentives" are to be made available, the
definitions of the various household types that qualify for the
housing units , the target rents or mortgage payments for the
affordable housing units , the total number of units required to be
affordable, the period of time that the subject units must remain
affordable, and the requirement for an "Affordability Agreement"
guaranteeing the continued affordability of the units . In addition
to the minimum requirements mandated by the State, staff has
proposed mandatory findings for approving projects that request a
density bonus and/or other incentives . The findings generally
require that the project have adequate infrastructure to serve the
proposed project and the planned land uses in the vicinity, that the
proposed project is compatible with the physical character of the
surrounding properties, and that the project is consistent with the
overall intent of the General Plan.
Discussion
This ordinance was presented to the Planning Commission during the
May 7, 1991 Study Session. At that meeting, two (2) issues were
raised that required additional staff research. First , is it
necessary to utilize HUD/HCD median income figures (as opposed to
Chapman College figures) and second, does the City have any
flexibility as to the length of time the affordable units must be
maintained as affordable? These questions were forwarded to the
City Attorney' s Office for a legal opinion (attached) . Briefly, the
State Legislation is very specific as to how lower and very low
income households are defined . Section 65915 of the Government Code
specifically refers to those sections of the Health and Safety Code
that require the State Department of Housing and Community
Development to publish the HUD figures . Discussions with HCD staff
confirm this interpretation. Therefore, the City must utilize
HUD/HDC median income figures for determining target rents/mortgages
and household eligibility. As to the second issue, length of time
that affordability must be guaranteed, Section 6591(c) of the
Government Code states that the 10 and 30 year time frames are
Staff Report - 8/20/91 -3- 0 6 fy7d)
mandatory (no more and no less) unless a longer period of time is
"required by the construction .or mortgage financing assistance
program, mortgage insurance program or rental subsidy program" .
Therefore, if Federal , State or City funds are used by the
developer, longer periods for affordability may be imposed. If no
outside funds are used, the period of assured affordability must be
for 10 or 30 years depending on whether or not other incentives are
granted by the City.
Implementation
Approval of this ordinance is not intended to serve as a
comprehensive affordable housing program, but is intended to lay the
foundation for an overall affordable housing program of which
density bonuses and other incentives will be a part . In addition,
the adoption of this ordinance will bring the City into compliance
with State law by providing a mechanism for a developer to request a
density bonus and other incentives .
8 . 0 RECOMMENDATION:
Motion to :
"Approve Negative Declaration No . 91-9 and Code Amendment No . 91-2
with findings and forward to City Council for adoption. "
FINDINGS FOR APPROVAL - CODE AMENDMENT NO, 91-2 :
1 . Code Amendment No . 91-2 to amend the Zoning code to provide a
mechanism for providing density bonuses and/or other incentives
to developers of affordable housing is consistant with the
provisions contained in the California Government Code (Section
65915 et . seq. and the following policies of the Housing Element :
a . "Encourage both the private and public sectors to produce or
assist in the production of housing with particular emphasis
on housing affordable to lower income households , as well as
the needs of the handicapped, the elderly, large families and
female-headed households . " (Policy 2 . 0) This code amendment
provides increased density as well as other incentives to
developers who guarantee affordable units for lower, very
low, and elderly households .
b. "Promote and, where possible, require the continued
affordability of all units produced with participation by the
City or its authorized agents including density bonuses and
tax exempt financing . " (Policy 5 . 0) This code amendment
provides a mechanism to grant density bonuses and other
incentives to developers who agree to construct affordable
units .
Staff Report - 8/20/91 -4- d 40307d)
2 . Code Amendment No . 91-2 to provide a mechanism for providing
density bonuses and other incentives in return for affordable
units offers opportunities for providing affordable housing to
lower , very low, and elderly households . This will help the
City to provide the number of affordable units identified within
the Regional Housing Needs Assessment (RHNA) .
3 . Code Amendment No . 91-2 will not be detrimental to policies
contained within the Coastal Act . Individual projects will
require a coastal development permit, a conditional use permit
and an environmental analysis . Therefore, projects proposed in
.the Coastal Zone will require a thourough analysis as to their
complaince with the Coastal Act .
9 . 0 ALTERNATIVE ACTION:
The Planning Commission may deny Negative Declaration No . 91-9 and
Code Amendment No . 91-2 with findings .
ATTACHMENTS :
I -ram-Density Ineentive G-r-di na—e
B .. Publieatien €Eerg State-we-using and Ge unity ne.,el e A
Q-A Density Beauses
d Lhv_ r_ts illustrating f a d i Ali[ i }G6ie -1 eiel$ and
—i Eit,'ie
pymantc for target household groups and. sidle
sale" a€€e r,d a ;3e eei W;
5 . heb`er freni „L__b_ -f- GeRv:nercee raid a taehmee4-7- dated
August 14 , !W--1
6 . Legal-e p i n i e•n s--dated duly 2 , 19 9! a d d J u l y !6,—_9 T-
HS:TR: kjl
Staff Report - 8/20/91 -5- 0000 (0357d)
DRAF
B-6 CODE AMENDMENT N tTION WITH NEGATIVE DECLARATION
NO. 91-9 (CONTINUED FROM THE AUGUST 6, 1991 PLANNING COMMISSION
MEETING) .
APPLICANT: City of Huntington Beach
LOCATION: City-wide
Pursuant to the California Government Code, Section 65915 et seq. , all
cities are required to adopt an ordinance installing a mechanism to
provide density bonuses and/or other incentives to developers who
agree to guarantee that a specific number of those units will be
reserved for lower and very low income and senior citizen households
at below market affordable rates for a specific number of years .
Draft Code Amendment No. 91-2 is intended to implement this section of
State law.
STAFF RECOMMENDATION:
Staff recommends that the Planning Commission approve Neg.ative
Declaration No. 91-9 and Code Amendment No. 91-2 with findings and
forward to City Council for adoption.
THE PUBLIC HEARING WAS OPENED.
THERE WERE NO PERSONS PRESENT TO SPEAK FOR OR AGAINST THE REQUEST AND
THE PUBLICHEARI•NG WAS .CLOSED.
The Commission discussed delaying action on this item until they had
met with City Council to discuss this at a joint Study Session. They
stated their concern of coming to a concensus on housing with the
Council before they made any decisions . Counsel explained that they
were confusing Density Bonuses with the pending Affordable Housing
strategy. Counsel stated that Density Bonus is only one mechanism to
achieve Affordable Housing, and this request only allows what is State
mandated.
A MOTION WAS MADE BY BOURGUIGNON, SECOND BY SHOMAKER, TO APPROVE CODE
AMENDMENT NO. 91-2 IN CONJUNCTION WITH NEGATIVE DECLARATION NO. 91-9,
WITH FINDINGS AND FORWARD TO CITY COUNCIL, BY THE FOLLOWING VOTE:
AYES: Richardson, Newman, Shomaker, Kirkland, Dettloff,
Bourguignon, Leipzing
NOES: None
ABSENT: None
ABSTAIN: None
MOTION PASSED
0000
PC Minutes - 8/20/91 -6- - (0779d)
OR
IT
FINDINGS FOR APPROVAL Kf NO. 91-2 :
1. Code Amendment No. 91-2 to amend the Zoning Code to provide a
mechanism for providing density bonuses and/or other incentives
to developers of affordable housing is consistant with the
provisions contained in the California Government Code (Section
65915 et. seq. and the following policies of the Housing Element:
a . "Encourage both the private and public sectors to produce or
assist in the production of housing with particular emphasis
on housing affordable to lower income households, as well as
the needs of the handicapped, the elderly, large families and
female-headed households. " (Policy 2 .0) This code amendment
provides increased density as well as other incentives to
developers who guarantee affordable units for lower, very
low, and elderly households .
b. "Promote and, where possible, require the continued
affordability of all units produced with participation by the
City or its authorized agents including density bonuses and
tax exempt financing. " (Policy 5.0) This code amendment
provides a mechanism to grant density bonuses and other
incentives to developers who agree to construct affordable
units .
2 . Code Amendment No. 91-2 to provide a mechanism for providing
density bonuses and other incentives in return for affordable
units offers opportunities for -providing affordable housing to
lower, very low, and elderly households . This will help the
City to provide the number of affordable units identified within
the .Regional Housing Needs Assessment (RHNA) .
3 . Code Amendment No. 91-2 will not be detrimental to policies
contained within the Coastal Act. Individual projects will
require a coastal development permit, a conditional use permit
and an environmental analysis. Therefore, projects proposed in
the Coastal Zone will require a thourough analysis as to their
complaince with the Coastal Act.
0000
PC Minutes - 8/20/91 -7- (0779d)
STATE OF CALIFORNIA
County of Orange 1 ' PUBLICNOTICEa I
NOTICE OF
I am a Citizen of the United States and a PUBLICgHEARING.
COD AMENDMENT
resident of the County aforesaid; I am over the t"O 9,•2 1N
CONJUNCTION WIT,H:`
age of eighteen years, and not a party to or �ECLGaRaT oN
interested in the below entitled matter. I am a -
;NO.9.1.9;' "
principal clerk of the HUNTINGTON BEACH (Density Bonus
r�Jr1CD� ir1G T a r /Otherincentives -
:ikenc. I DEN a, newspaper of general Ordlnanco)
NOTICE IS .HEREBY
circulation, printed and pubtshed in the City of GIVEN that the Huntington
Huntington Beach, County of Orange, State of Beahch�llPtanrnP -
Huntington
son wi�Bolda ublic hear-
Iing inthe Council Chamber.
Caiifomia.and that attached Notice is a true and t at they Huntington, Beach
.Civic Centdr;.1,000 Main.
complete co as was printed and published in %"Street Hgritington;;Beach;i
P PY P ,c6lifomra;'on the date and
at the time indicated below:
the Huntington Beach and Fountain Valley 1'_;
to recerv..gr),consider.the
issues of said newspaper to wit the isme(s) of• statements-b all persons
• i who wish to be heard rela-
tive toAhe application'de-
scribed below.
DATE(f_IME:_.-Tuesday,
%-January 21-,1992,7:00`PM
January9 1992 -=APPLICATION NUMBER:
. Code'Ariiendment No. 91-
2/Negative'Declaration No.
91-9.-
,APPLICANT: City of.Hun-
�tin�gton,Beachzr•. •.
LOCATION City-wide ,
`ZONE`All residential 6-n-
ing district`s`
REQUEST: To amend the
Huntington- Beach-.O.rdi-
nance.Code and Local
Coastal--Program Irnple-
meriting- Ordnances by
adding Section-9637 to Ar
ticle+9634(Unclassified) in=
stalling,-"a mechanism to
provyde ;density .bonuses_
and/or--other'incentives;•to
(developers of, affordable
housing-.. "
:ENVIRONMENTAL STA=
TUS Covered by Negative
Declaration No.91=9'which
will also:be considered by
the Ciy o&uncil.xl
I declare under penalty of perjury, that the CO4AST6ndmenTUS This
• I_code amendment willresu lt.
in_'an .amendment.to•the
foregoing is true and correct. City s ,Certified Local
Coastal�Pvrpgram.
ON FILES A'copy of the
January 9, 199 2 propose equest is on file
Executed on , j in,the Community Develop-
'merit Department,,-2000.
at Costa Mesa, Cafiifomic& PMain, Street, ;'Huntington•
Beach,jr,�California 92648
for Inspection,by the pub rh„r� A _
iic A copy of the staft re pUBLICANO-,T-M fS,x ;
port`will fie available to.1h .� T_� I
terested'parties,at City Halt ther quesponsplease;callry
S) nature Poi, the Main City Library ThomaslA.'Roge- Assistant
9 (7111 Talbert Avenue) on Planner?ati536 52711
January 17;1992. X Conrile' Brockway,l
ALL INTERESTED PER City Clerk »UP I
SONS are invited.to,attend ,; *Published 'Huntington i
I said hearing and-express ,
y pinions or submit evi beach/FbuntamValleyr In
l: tlence for :or:against the dependdentr`January 9;
rap'phcatron as outlined =1992
above. If-there are any fur 012.043
PROOF OF PUBLICATION
NOTICE OF PUBLIC HEARING
CODE AMENDMENT NO. 91-2 IN CONJUNCTION WITH
NEGATIVE DECLARATION NO. 91-9L
(Density Bonus/Other Incentives Ordinance)
NOTICE IS HEREBY GIVEN that the Huntington Beach City Council will
hold a public hearing in the Council Chamber at the Huntington Beach
Civic Center, 2000 Main Street, Huntington Beach, California, on the
date and at the time indicated below to receive and consider the
statements of all persons who wish to be heard relative to the
application described below.
DATE/TIME: Tuesday, January 21, 1992, 7: 00 PM
APPLICATION NUMBER: Code Amendment No. 91-2/Negative Declaration
No . 91-9
APPLICANT: City of Huntington Beach
LOCATION: City-wide
ZONE: All residential zoning districts .
REQUEST: To amend the Huntington Beach Ordinance Code and Local
Coastal Program Implementing Ordinances by adding
Section 9637 to Article 963 (Unclassified) installing
a mechanism to provide density bonuses and/or other
incentives to developers of affordable housing .
ENVIRONMENTAL STATUS: Covered by Negative Declaration No. 91-9
which will also be considered by the City
Council.
COASTAL STATUS: This code amendment will result in an
amendment to the City' s Certified Local
Coastal Program.
ON FILE: A copy of the proposed request is on file in the
Community Development 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 City Hall on January 15, 1992 or
the Main City Library (7111 Talbert Avenue) on
January 17, 1992 .
ALL INTERESTED PERSONS are invited to attend said hearing and
express opinions or submit evidence for or against the application
as outlined above. If there are any further questions please call
Thomas Rogers, Assistant Planner at 536-5271 .
Connie Brockway
City Clerk
(1263d)
PUBLIC HEARING NOTIFICATION CHECKLIST
MAILING LABELS
(1010D) 8/20/90
H.B. Chamber of Commerce Huntington Beach Co. City of Westminster
2213 Main St. #32 2110 Main St. 8200 Westminster Blvd.
Huntington Beach, CA 92648 Hunt. Bch., CA 92648-2499 Westminster, CA 92683
Attn: Kim Barone Attn: William D. Holman Attn: Planning Dir.
H.B./F.V. Board of Realtors >1982
<BeacCAS'492648
ety City of Seal Beach
8101 Slater Ave. useum 211 Eight St.
Huntington Beach, CA 92647 Seal Beach, CA 90740
Attn: Board President Attn: Planning Dir.
Amigos De Bolsa Chica >Huntin
iources Bd. CA Coastal Commission
15545 Computer Lane Dept. Theresa Henry
Huntington Beach, CA 92649 245 W. Broadway, Ste 380
Attn: President c 92648 Long Bch, CA 90802
son
Friends of the HB Wetlands Council on Aging Caltrans District 12
21902 Kiowa Lane 1706 Orange Ave. 2501 Pullman St.
Huntington Beach, CA 92646 Huntington Beach, CA 92648 Santa Ana, CA 92705
Attn: Charles Grant Attn: Robert Joseph
Coastal Conservancy Golden St. Mob. Hm. Owners Leag.
P.O. Box 66494 11021 Magnolia Blvd.
Los Angeles, CA 90066 Garden Grove, CA 92642
Attn: Ruth Galanter Attn: Edna Littlebury
Huntington Beach Tomorrow County of Orange/EMA
411 6th St. Michael M. Ruane, Dir..
Huntington Beach, CA 92648 P.O. Box 4048
Attn: President Santa Ana, CA 92702-4048
BIA—OC County of Orange/EMA
2001 E. 4th St. #224 Thomas Mathews, Dir, Planning
Santa Ana, CA 92705 P. 0. Box 4048
Attn: Julie Vandermost Santa Ana, CA 92702-4048
SCAG County of Orange/EMA
818 West 7th, 12th Floor Bob Fisher, Dir.
Los Angeles, CA 90017 P.O. Box 4048
Attn: Richard Spicer Santa Ana, CA 92702-4048
E.T.I. Corrall 100 City of Costa Mesa
Mary Bell P.O. Box 1200
20292 Eastwood Cir. Costa Mesa, CA 92628-1200
Huntington Beach, CA 92W Attn: Planning Dir.
Chairman, Environmental Board City of Fountain Valley
Comm. Dev. Dept. 10200 Slater Ave.
2000 Main St. Fountain Valley, CA 92708
Huntington Beach, CA 92648 Attn: Planning Dir.
ORDINANCE NO. 3130
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
AMENDING THE HUNTINGTON BEACH ORDINANCE CODE
BY ADDING SECTION 9637 TO ARTICLE 963 RELATING
TO INCENTIVES FOR DEVELOPERS OF AFFORDABLE HOUSING
WHEREAS, the California Government Code §65915 et seq.
requires that if a developer of a residential project zoned
and general planned for five (5) or more units on a specific
site requests a density bonus and/or other incentives for the
purpose of providing affordable housing for qualifying
residents, very low and lower income households; the City must
grant the request; and
A procedure for implementing and monitoring a density
bonus program is necessary;
NOW, THEREFORE, the City Council of the City of Huntington
Beach does hereby ordain as follows :
SECTION 1. The Huntington Beach Ordinance Code is
hereby amended by adding Section 9637 to Article 963 to read
as follows :
Section 9637
DENSITY BONUS AND OTHER INCENTIVES FOR THE PROVISION
OF AFFORDABLE HOUSING FOR QUALIFYING RESIDENTS.
LOWER INCOME AND VERY LOW INCOME HOUSEHOLDS
For the purpose of providing affordable housing, a
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developer of a residential property which is zoned and general
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planned to allow five (5) or more dwelling units may request a
density bonus and/or other incentive through a conditional use
permit subject to the provisions contained in this section.
Density bonus requests pursuant to the provisions contained
within this article shall not be denied unless the project is
denied in its entirety.
9637. 1 Definitions
(a) "Density Bonus" for the purposes of this article,
means an. increase in the proposed number of units of
twenty-five (25) percent or greater over the number
7 permitted pursuant to the current zoning and general
plan designation on the property.
(b) "Other Incentives" are policies, programs or actions
taken by the City designed to ensure that the
development will be produced at a lower cost. They
include, but are not limited to the following:
1. A reduction in site development standards or
architectural design requirements which exceed
the minimum building standards contained within
the Uniform Building Code as adopted by the City
a including, but not limited to, a reduction in
setback, lot coverage, floor area . ratio, parking.
and open space requirements .
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2. Approval of mixed use zoning in conjunction with
the housing project if commercial, office,
industrial, or other land uses will reduce the
cost of the housing development and if the
commercial, office, industrial, or other land
uses are compatible with the housing project and
the existing or planned development in the area
where the proposed housing project will be
located.
3..._ ____A__reduction in development and/or processing
fees.
4 . Other regulatory incentives or concessions
proposed by the developer or the City which
result in identifiable cost reductions .
5 . Financial assistance by the City, i .e. , housing
set-aside funds .
6 . Other incentives mutually agreeable to the City
and developers consistent with all City, State
and Federal laws, rules, standards, regulations
and policies .
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(c) Moderate- income household
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A household shall be classified as "moderate income" if
annual income is at or below one hundred twenty (120)
percent of Orange County median income as defined by the
State of California Department of Housing and Community
Development.
(d) Lower income household
A -household shall be classified as "lower income" if
annual income is_ .at or below eig.hty _ (80) percent of Orange
County median income as defined by the State of California
Department of Housing and Community Development.
(e) very low income household
A household shall be classified as "very low income" if
the annual income is at or below fifty (50) percent of
Orange County median income as defined by the State of
California Department of Housing and Community Development.
(f) Qualifying Senior Resident
A person shall be classified as. a "qualifying senior
resident" if he or she is 62 years of age or older.
(Section 51.2 of the California Civil Code. )
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9637 .2 Target rents/mortgage payments
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(a) For the purposes of this article, units designated
for moderate income household shall be affordable at
a rent or mortgage payment that does not exceed
twenty-five (25) percent of the gross family income.
(b) For the purpose of this article, units designated for
lower income households shall be affordable at a rent
or mortgage payment that does not exceed thirty (30)
percent of sixty (60) percent of the Orange County
median..--income as defined by the State of California
Department of Housing and Community Development .
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(c) For the purpose of this article, those, units
designated for very low income households shall be
affordable at a rent or mortgage payment that does
not exceed thirty (30) percent of fifty (50) percent
of Orange County median income as defined by the
State of California Department of Housing and
Community Development.
9637.3 Affordability Requirements
(a) Percentage of Affordable Units Required
To qualify for a density bonus and/or other incentives,
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the developer of a residential project must agree to one
of the following:
1. Provide at least twenty (20) percent of the
total units of the housing development for lower
income households; or
2. Provide at least ten (10) percent of the total
units of the housing development for very low.
income households; or
3 . __.._.Provide at least fifty_(_50_)_ percent of the total
units of the housing development for qualifying
i (senior) residents.
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The density bonus shall not be included when determining
the number of housing units required to be affordable.
Remaining units maybe rented, sold, or leased at "market"
rates.
If a developer is granted a density bonus in excess of
twenty-five (25) percent, those additional units above the
twenty-five (25) percent may be required to be maintained
affordable for "moderate income" households .
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Pursuant to this article the City shall :
1) grant a density bonus and at least one of
the concessions or incentives identified in section
9637. 1(b) unless the City makes a written finding
that the additional concession or incentive is not
required in order for rents or mortgage payments to
meet the target rates; or
2) provide other incentives of equal value to
a density bonus as provided in Section 65915, et seq.
of the California Government Code. The value of the
other incentives shall be based on the land cost per
dwelling unit.
(b) Duration of Affordability
Units required to be affordable as a result of the
granting of a density bonus and other incentives shall
remain affordable for thirty (30) years . If the City does
not grant at least one concession or incentive pursuant to
this article in addition to the-density bonus, or provides
other incentives in lieu of the density bonus, those units
required to be affordable shall remain so for ten (10)
years;
(c) Affordable Unit Distribution and Product Mix
Affordable units shall be located throughout the project
and shall include a mixture of unit types in the same
ratio as provided throughout the project;
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(d) Affordability Agreement
Affordability shall be guaranteed through an
"Affordability Agreement" executed between the developer
and the City. Said agreement shall be recorded on the
subject property with the Orange County Recorder' s Office
as provided in Section 65915, et seq. of the California
Government Code, prior to the issuance of building permits
and shall become effective prior to final inspection of
the first unit. The subject agreement shall be legally
binding and enforceable on the property .owner(s) and any
subsequent property owner(s) for the duration of the
! agreement. The agreement shall include, but is not
limited to, the following items :
1. The number of and duration of the affordability
for the affordable units.
2 . The method in which the developerand the City
are to monitor the affordability of the subject
affordable units and the eligibility of the
tenants or owners of those units over the period
of the agreement;
3 . The method in which vacancies will be marketed
and filled;
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4 . A description of the location and unit type
(bedrooms, floor area, etc. ) of the affordable
units within the project; and
5. Standards for maximum qualifying household
incomes and standards for maximum rents or sales
prices .
9637.4 Procedure
(a) In addition_-to submitting_all documentation required
to apply for a conditional use permit, a developer
requesting a density bonus or other incentive
pursuant to this section shall includee the following
in the written narrative supporting the application:
1. A general description of the proposed project,
general plan designation, applicable zoning,
maximum possible density permitted under the
current zoning and general plan designation and
such other information as is necessary and
sufficient. The property must be zoned and
general planned to allow a minimum of five (5)
units to qualify for a density bonus;
2 . A calculation of the density bonus allowed
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pursuant to California Government Code Section
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65915. 5(b) , which is an increase in units of at
least 25 percent over the number of units
permitted under the existing zoning and general
plan designation;
3 . In the case . that the developer requests the City
to modify development. standards as an other
incentive, a statement providing a detailed
explanation as to how the requested incentive
will enable the developer to provide housing at
the._t.arget rents or mortgage_ payments .
Modification of development standards will be
granted only to the extent necessary to achieve
the housing affordability goals set forth herein.
4 . A statement detailing the number of density
bonus units being proposed over and above the
number of units normally permitted by the
applicable zoning and-general plan designations .
(b) All subsequent City review of and action on the
applicant ' s proposal for a density bonus and/or
consideration of any requested other incentives shall
occur in a manner concurrent with the processing of
the conditional. use. permit and any other required
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entitlements, if any. If the developer proposes that
the project not be subject to impact fees or other
fees regularly imposed on a development of the same
type, final approval will be by the City Council .
(c) The Planning Commission/City Council shall review the
subject Affordability Agreement concurrently with the
development proposal. No project shall be deemed
approved until the Affordability Agreement has been
approved by the appropriate reviewing body.
(d)_ __ .The .Pl_ann ng Commission/City.._Council may place
reasonable conditions on the granting of the density
bonus and any other incentives as proposed by the
applicant.. However, such conditions must not have
the effect, individually or cumulatively, of
impairing the objective of California Government Code
§65915 et seq. , and this article, of providing
affordable housing for qualifying residents, lower or
very low income households in residential projects .
(e) A monitoring fee as established by resolution of the
City Council, shall be paid by the applicant to the
City prior to issuance of a certificate of occupancy
for the first unit. This fee shall be in addition to
any other fees required for the processing of the
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conditional use permit, environmental analysis,
and/or any other entitlements required.
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9673 . 5 Required Findings For Approval
(a) Density Bonus
In granting a conditional use permit for a density
bonus, the Planning Commission/City Council shall
make all of the following findings :
1. The proposed project, which includes a density
bonus, can be adequately serviced by the City
_ _. ...___ and .CQunty water, sewer_,._. and. storm\'drain
systems, without significantly impacting the
overall service or system.
2 . The proposed project, which includes a density
bonus, will not have a significant adverse
impact on traffic volumes and road capacities,
school enrollments, or recreational resources .
3 . The proposed project which includes a density
bonus is compatible with the physical character
of the surrounding area.
4 . The proposed project which includes a density
bonus is consistent with the overall intent of
j the General Plan.
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(b) Other Incentives
A request for an additional incentive shall not be
denied by the Planning Commission or City Council
unless a finding is made that the incentive is not
necessary to the establishment of affordable units .
In granting any other incentives as defined in this
article, the Planning Commission/City Council shall
be required to make all of the following findings :
._The granting of the proposed other incentive(s)
will not have an adverse impact on the physical
character of the surrounding area .
2 . The granting of the proposed other incentive(s)
is consistent with the overall intent of the
General Plan.
3 . The granting of the proposed other incentive(s)
will not be detrimental to the general health,
welfare, and safety of persons working or
residing in the vicinity.
4 . The granting of the proposed other incentive(s)
will not be injurious to property or
improvements in the vicinity.
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5 . The granting of the proposed other incentive(s)
will not impose an undue financial hardship on
the City.
6. If the other incentive is a modification of
development standards, the granting of the other
incentive is necessary to achieve the target
affordable rents/mortgage payments for the
affordable units.
SECTION 2-._. _This -ordinance shall take effect thirty days
after its passage.
PASSED AND ADOPTED by the City Council of 'Nhe City of
Huntington Beach at a regular meeting thereof held on the 3rd
day of February 1992.
ATTEST: APPROVED AS TO FORM:
40w;.' A 4 t tz 1
City Clerk 4V City Attorney
REVIEWED AND APPROVED: INITIATED AND PPROVED:
City Administrator Director of Community
Development
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Ord. No. 3130
STATE OF CALIFORNIA )
COUNTY OF ORANGE ss:
CITY OF HUNTINGTON BEACH ;
I, CONNIE BROCKWAY, the duly elected, qualified City
Clerk of the City of Huntington Beach and ex-officio Clerk of the
City Council of the 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 therof held on the 21st day of January
19 92 , and was again read to said City Council at a regular
meeting therof held on the 3rd day of February 19 92 , and
was passed and adopted by the affirmative vote of at least a majority of
all the members of said City Council .
AYES: Councilmembers:
Robitaille, Moulton-Patterson, Winchell, Silva, Green, MacAllister, Kelly
NOES: Councilmembers:
None
ABSENT: Councilmembers:
None
City Clerk and ex-offici Jerk
of the City Council of the City
of Huntington Beach, California