HomeMy WebLinkAboutOrdinance #4235 ORDINANCE NO. 4235
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH
AMENDING SECTION 230.26 OF THE HUNTINGTON BEACH "ZONING AND
SUBDIVISION ORDINANCE TITLED AFFORDABLE HOUSING
(ZONING TEXT AMENDMENT NO. 19-004)
WHEREAS, the Huntington Beach Planning Commission and Huntington Beach City
Council have held separate, duly noticed public hearings to consider Zoning -I-ext Amendment
No. 19-0004, which amends Chapter 230 of the Huntington Beach Zoning and Subdivision
Ordinance related to an updated, and clarified, "inclusionary housing ordinance'.
After due consideration of the findings and recommendations of the Planning
Commission and all other evidence presented, the City Council finds that the aforesaid
amendment is proper and consistent with the General Plan;
NOW, THEREFORE, the City Council of the City of 1-luntington Beach hereby ordains
as follows:
SECTION 1. Section 230.26 of the Huntington Beach "Zoning Code is amended to read
as follows:
A. Purpose.
1. The purpose of this chapter is to create an inclusionary Housing Ordinance to
enhance the public welfare and implement the goals, objectives and policies of the
Citv's General Plan, including its Housing Element. It is intended to encourage the
supply of extremely low, very low, lower, and moderate- income housing, on sites that
are integrated, compatible with and complements adjacent uses.
2. '["his Inclusionary }-lousing Ordinance is a tool the City utilizes to meet its
commitment to provide housing affordable to all economic sectors.
B. Definitions.
1. Affordable Housing Cost. The percentage of income that shall be utilized to
determine the maximum housing related costs as calculated in accordance with
California Health and Safety Code (1-IKSC) Section 50052.5 (standards for ownership
units) and 1 &SC Section 50053 (standards for rental units).
2. Affordable Housing Unit. A dwelling unit required by this Chapter to be affordable
to Extremely Low. Very Low, Lower. or Moderate Income 1-IOUSeholds. Accessory
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dwelling units (ADUs) do not satisfy the affordable housing obligation nor do they
trigger the affordable housing obligation.
3. Area Median Income. The midpoint of a County's gross income distribution
adjusted for household size as determined by the California Housing and Community
Development Department (HCD) annually.
4. Extremely Low-Income. Households whose incomes meet the standards defined
by the H&SC Section 50106. or a successor statute.
5- Lower Income. Households whose incomes meet the standards defined by the
1-I&SC Section 50079.5. or a successor statute.
6. Moderate-Income. Households whose incomes meet the standards defined by
the MSC Section 50093, or a successor statute.
7. New Residential Project- Development that includes the creation of three or
more new dwelling units, conversion of nonresidential uses to dwelling units, or the
conversion of a use from a residential rental development to a residential ownership
development.
8. Ownership Units. Dwelling units constructed as part of a New Residential
Project, or contained within a rehabilitation project, offered for individual unit sale.
including; but not limited to, single-family detached or attached homes,
condominiums, or cooperatives.
9. Phasing flan. A detailed plan provided by a developer that outlines each
segment or phase of construction including housing units and site improvements to be
developed in a New Residential Project.
10. Very Low-Income. Households whose incomes meet the standards defined by
the I-I&SC Section 50105. or a successor statute.
C. Applicability. Unless otherwise specified in the Specific Plan. this Section shall apply
to New Residential Projects of three or more units in size.
I. Affordable Housing Obligations. All New Residential Projects must be restricted.
as set for herein. to contain a minimum of 10% of Affordable Housing Units. In the
event a fractional unit is established. the Affordable Housing Unit count shall be
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rounded up, unless paragraph (C)(2) of this section applies. For projects providing
affordable units onsite, an equivalent in-lieu fee may be paid instead of rounding up.
2. Developers of residential projects may elect to fulfill the affordable housing
obligations imposed by this Section by providing Affordable Housing Units at the New
Residential Project site pursuant to subsection D below (onsite pro(Iuction) or through an
applicable alternative compliance option as provided by subsection E below (alternatives
to onsite production).
3. For purposes of determining the required number of Affordable Housing Units,
only new units shall be counted. Construction of an accessory dwelling unit does not
trigger the affordable housing obligation.
1). Options for Fulfilling Affordable Housing Obligations: On-Site Production
1. Affordable Ownership Housing Units
a. Pursuant to section 230.26(17), New Residential Project Owners or Developers
shall place an affordability covenant on Ownership Units that is set at the
iModerate-Income I-louschold affordability level.
b. The Affordable Housing Units shall be built concurrenHy with the market rate
units as provided with an approved Phasing Plan.
c. The bedroom mix for the affordable units shall be proportional to the bedroom
mix of the market rate units. The affordable units may be no more than 20%
smaller in square footage than the average square footage of the market rate
units.
d. All exterior and interior improvements, finishes, appliance packages, etc., for
the affordable units shall be comparable to the base level market rate units.
2. Affordable Rental l-iousing Units within an Ownership 1-fousing Project
a. The affordability covenant placed on Rental Units is set at the Low-Income
level, but the developer may choose to fulfill the affordable housing
requirement with units at the Very-Low or Extremely-Low Income level.
b. A Market Rate Developer may create a separate affordable housing parcel
within the New Residential Development site and enter into an agreement with
an Affordable 1-10usin6 Developer to construct, own, and operate the affordable
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housing units. The Affordable Housing Developer is required to enter into an
Affordable Flousing Agreement with the City. subject to the following:
i. The Affordable Housing Developer shall have recent relevant
experience and be approved by the Community Development Director
or their designee.
ii. The Affordable Housing Developer and/or 1%9arket Rate Developer may
not request any financial assistance from the City.
c. The bedroom mix is not required to match the unit mix provided in the market
rate ownership housing project. At least 40% of the affordable units shall
include at least two bedrooms.
d. The affordable units shall be built concurrently with the market rate project.
The Affordable Housing Units may be constructed in phases if the market rate
project is developed in phases, with an approved Phasing Plan.
3. Affordable Rental Housing Units
a. Pursuant to section 230.26(P), New Residential Project owners or developers
shall place an affordability covenant on Rental Units at the Low-Income
Household affordability level, but the developer may choose to fulfill the
affordable housing requirement with units at the Verv-l..ow or Extremely-Low
Income Household affordability level.
b. The affordable units shall be built concurrent]\ with the market rate project.
The Affordable 1-lousing Units may be constructed in phases if the market rate
project is developed in phases, with an approved Phasing Plan.
c. The bedroom mix for the affordable units shall be proportional to the bedroom
mix of the market rate units. The affordable units may be no more than 20%
smaller in square footage than the average square footage of the market rate
units.
d. The minimum construction standards for interior improvements of the
affordable units shall be the same as those imposed by the Low-Income
Housing Tax Credit (LIFITC).
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E. Options for Fulfilling Affordable Housing Obligations: Alternatives to On-Site
Production
I. Off-Site Production of Affordable Housing Units
a. Except as may be required by the California Coastal Act or Government
Code Section 65590 or a successor statute, developers may provide the
required Affordable Housing Units off-site, at one or several sites. within the
Citv of l-luntiwon Beach.
b. Pursuant to Section 230.26(F), New Residential Project owners or developers
shall place an affordability covenant on the off-site units that is set at 15% of
the total number of units included in the New Residential Project that
Generated the affordable housing obligation. The affordability covenant
placed on the off-site Affordable Housing Units shall be at the Low-Income
Household affordability level, but the developer may choose to fulfill the
affordable housing requirement with units at the Very-Law or Extremely-Low
Income Household affordability level. The affordability covenant shall
specify the off-site Affordable Housing Units shall be rental units.
c. The provision of the off-site Affordable Housing Units shall not create an over
concentration of Affordable Housing Unites in any specific area.
d. The design, building quality, and maintenance standards shall be the
requirements imposed by the LII ITC minimum construction standards.
c. The bedroom mix for the affordable units is not required to match the mix
provided in the market rate project that is subject to the affordable housing
obligations. At mininuurl, 40% of the affordable units shall include at least
two bedrooms.
f. Pursuant to Section 230.26(F), a market rate developer may enter into an
agreement with an affordable housing developer to construct, own and operate
the off-site affordable housing project. The affordable housing developer is
required to enter into an Affordable Housing Agreement with the Cite, subject
to the following:
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ORDINANCE NO. 4235
i. The Alfordable Housing Developer shall have recent relevant
experience and be approved by the Community Development Director
or their designee.
ii. The Affordable Housing Developer and/or Market Rate Developer may
not request any financial assistance from the City.
iii. All off-site affordable units shall be constructed prior to or concurrently
with the market rate project that generated the affordable housing
obligation. Ifthe market rate project is developed in phases, with an
approved Phasing Plan, the affordable units may be developed along
with the first phase of the market rate project. Final approval
(occupancy) of the first market rate residential unit shall be contingent
upon the completion and public availability, or evidence of the
applicant's reasonable progress towards attainment of completion, of
the affordable units.
2. Existing Units Acquisition and Rehabilitation Projects
The City Council has the discretion. but not the requirement, to approve a
developer's request to acquire, rehabilitate, and place affordability covenants on
existing off-site units. The request shall meet either of the following threshold
requirements in order to Fulfill a project's affordable housing obligation:
a. 'I'he project(s) shall be identified as at-risk in the City's Housing Element: or
b. The project is a motel that can be adaptively reused as residential units.
Additional requirements for acquisition and rehabilitation projects:
a. The developer or owner shall place an affordable housing covenant on the
Affordable Housing Units that are equal to at least 20% of the units in the
New Residential Project that trigged the affordable housing obligation.
b. The rents charged for the rehabilitated units shall be set at the lesser of the
H&SC 50053 rents or at least 10% discount from the achievable market
rents for the units. subject to annual monitoring and reporting.
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c. If there are more units in the acquisition and rehabilitation project than are
required to fulfill the affordable housing requirement. those units may be
rented at market rate.
3. Land Dedication.
The City Council has the discretion, but not the requirement, to allow a developer
to dedicate property in lieu of constructing Affordable Housing Units. The following
requirements arc applicable to any property proposed to be dedicated:
a. The property shall be located within the City of l-luntington Beach.
b. The developer shall convey the property to the City at no cost.
c. The property proposed to be dedicated shall yield a minimum of 20% of the
total units constructed within the market rate project:
i. The site's existing General Plan and zoning standards shall allow for a
residential use at a density sufficient to allow for the requisite number of
affordable units to be developed without a density bonus request.
ii. The site shall be suitable in terms of size. configuration, and physical
characteristics to allow for the requisite number of affordable units to be
developed on a cost efficient basis.
iii. The bedroom mix for the affordable units shall be proportional to the
bedroom mix of the market rate units. The affordable units may be no
more than 20% smaller in square footage than the average square footage
of the market rate units.
d. The developer shall provide evidence of the following when the land dedication
proposal is submitted:
i. A title report showing the developer/owner has lien-free, fee simple
title. Any encumbrances or easements that adversely impact the
property's title shall be disclosed and will be factored into the estimated
value of the interests proposed to be conveyed to the City.
ii. An appraisal dated within 30 days of the application by a Member
Appraisal Institute (MAI) appraiser.
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iii. A Phase I Environmental Site Assessment and a Phase Il
Environmental Site Assessment if the Phase I report indicates that
hazardous materials were potentially previously used on the site.
iv. The property shall not contain any hazardous materials at the time the
land dedication proposal is submitted. If hazardous materials .were
previoush remediated, a site closure letter from the appropriate
regulatory agency showing evidence that the site was remediated to
residential standards is required.
e. The property shall not have been improved with any residential use for at least
five years prior to the submission of a land dedication proposal.
1'. Payment in full of all taxes and/or assessments shall have been made when the
proposal is submitted. and again prior to conveyance of the property to the City.
g. The construction of affordable units on the property shall not create an over
concentration of logy income housing in any specific area.
h. The property shall be fully served by the necessary infrastructure prior to
conveyance to the City.
i. To assist the City in evaluating land dedication proposals. the developer shall
submit a conceptual site plan and narrative description of a project that could be
developed on the property.
4. Pee Payment in Lieu of Construction
a. Developers of the following New Residential Project types may pay an in-lieu
lee to fulfill Affordable (lousing Obligations:
i. Ownership residential projects proposing any number of units.
ii. Rental residential projects proposing 100 units or fewer.
b. The amount of the in-lieu fees shall be calculated using the fee schedule
established by Resolution of the City Council.
c. A project may be permitted to pay in-lieu fees if it does not meet the eligibility
standards of this section if the City Council determines, at its discretion, that the
requirement to provide affordable housing units would impose an extreme
hardship on the developer.
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d. One hundred percent of the Ices required by this section shall be paid prior to
issuance of a building permit. However, fir phased projects the developer may
pay a pro rata share of the in-lieu fee concurrently with the issuance of building
permits for each development phase, as approved by a Phasing Plan.
e. Fees paid to fulfill the requirements of this section shall be placed in the City's
Affordable Housing Trust Fund, the use of which is governed by subsection F
of this section.
f. Fees paid as a result of new residential projects shall be based upon the total
number of the new residential units which are to be constructed prior to the
grant of any density bonus.
F. Nliseellaneous Provisions.
I. An Affordable Housing Agreement placing a covenant that rums with the land and
outlining all aspects of the Affordable Housing Obligations, including but not limited
to the affordability term for the restricted units. shall be executed between the applicant
and the City and recorded with the Orange County Recorder's Office.
2. The Affordable Housing Agreement shall specify an affordability term of not less
than 55 years for rental units or 45 years for ownership units.
3. In general, the Affordable Housine Trust Funds shall be used for projects which
have a minimum of 50% of the dwelling units affordable to very low- and low-income
households, with at least 20% of the units available to very low-income households.
Concurrent with establishing the annual fee schedule pursuant to subsection E of this
section, the City Council shall by resolution set forth additional permitted uses of
Affordable Housing Trust Funds. To obtain Affordable Housing Trust Funds, the
recipient shall enter into an affordable housing agreement as set forth above, and shall
maintain the affordability of the units for a nninimum of 55 years. The funds may, at
the discretion of the City Council, be used far pre-development costs, land or air rights
acquisition, rehabilitation, land write downs, administrative costs, gap financing, or to
lower the interest rate of construction loans or permanent financing.
4. New affordable units shall be occupied in the following manner:
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a. Any existing residents shall be allowed to occupy their units until six months
before the start of construction activities with proper notice.
b. The developer shall provide relocation benefits to the occupants of the
affordable units that are displaced.
c. If residential rental units are being demolished and the existing tenant(s) meets
the eligibility requirements, he/she shall be given the right of first refusal to
occupy a comparable unit available in the new housing development affordable to
the household at an affordable rent (e.g. Extremely-Low Income, Very-Low
Income, Low-Income, ivioderate Income, lk4arket Rate).
d. If there are no qualified tenants, or if the qualified tenant(s) chooses not to
exercise the right of first refusal. or if no demolition of residential rental units
occurs. then qualified households or buyers will be selected.
G. Annual Program Review and Periodic .Adjustment of the Fee. Within ISO days
after the last day of each fiscal year, the City Council shall review the status of the City's
Affordable Housing Trust Fund, including the amount of fees collected, expenditures from
the Affordable (lousing Trust Fund; and the degree to which the fees collected pursuant to
this chapter are assisting the City to provide and encourage low- and moderate-income
housing. The fee shall be updated annually using the Real Estate and Construction Report
published by the Real Estate Research Council of Southern California. The fee chance shall
be based on the percentage difference in the new home prices in Orange County published
in the fourth quarter report for the then current year versus the immediately preceding year.
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ORDINANCE NO. 4235
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at
a regular meeting thereof held on the 52!hLday of QGfobar' , 2021.
Mayor
ATTEST: APPROVED AS ORM:
City Clerk City Attorney
nLANrDROVED: INITIATED AND APPROVED:
�= UMW
City Manager Director of Community Development
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Ord. No. 4235
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
1, ROBIN ESTANISLAU. the duly elected, qualified City Clerk ofthe
City of Huntington Beach, and ex-ollicio Clerk ofthe City Council of said City. do
hereby certify that the whole number of members ofthe City Council ofthe City of
Huntington Beach is seven: that the foregoing ordinance was read to said City Council at
a Regular meeting thereof held on September 21, 2021, and was again read to said City
Council at a Regular meeting thereof held on October 5, 2021, and was passed and
adopted by the affirmative vote of at least a majority of all the members of said City
Council.
AYES: Bolton, Delgleize, Carr. Moser. Kalmick
NOES: Peterson
ABSENT: Posey
ABSTAIN: None
1.Robin Estanislau.CITY CLERK of the City of Huntington
Beach and cc-olricio Clerk of the City Council.do hereby
cenity that a synopsis of this ordinance has been published in 9�
the Huntington reach Wave on October IJ,202 1.
In accordance with the City Charter of said City.
Robin Estanislau. Citv Clerk City Clerk and ex-officio Clerk
Deputy Ciuv Clerk ofthe City Council ofthe City
of 1-luntineton Beach. California