The purpose of this chapter is to:
(a) 
Encourage the development and availability of housing affordable to a broad range of households with varying income levels within the city as mandated by state law, California Government Code Section 65580 et seq.
(b) 
Promote Housing Element Goal 2 to accommodate regional housing needs through a community wide variety of residential uses by size, type, tenure, affordability, and location.
(c) 
Implement the housing element by creating a mechanism to provide benefits to the community from new development in the form of affordable housing, thereby, helping to meet the housing needs of all socioeconomic segments of the community as provided in the housing element.
(d) 
Promote housing element goal to ensure the continued availability of affordable housing for very low, low, and moderate income households, seniors, and persons with disabilities, single-parent households, large families, and other special needs groups.
(e) 
Implement housing element to adopt permissible and reasonable impact fees for residential development based on impact fee nexus studies.
(f) 
Enhance the public welfare by imposing affordable housing impact fees for residential development projects whereby developers of residential development projects will help mitigate the impacts of their projects on the need for affordable housing by contributing to the supply of housing for households with very low, low, and moderate incomes.
(Ord. O-2017-11 § 3, 2017)
As used in this chapter, the following terms shall have the following meanings:
"Affordable housing agreement"
means a written agreement between the city and the developer as provided in Section 5.30.070 of this chapter.
"Affordable housing plan"
means a plan required for any residential development project which includes the provision of affordable housing units that demonstrates how the project complies with Section 5.30.070 of this chapter.
"Affordable housing unit"
means a dwelling unit that shall be offered at an affordable rent or affordable ownership cost to very low, low and moderate income households.
"Affordable ownership cost"
means the sales price of a for-sale affordable unit resulting in projected average monthly housing payments, during the first calendar year of a household's occupancy, including interest, principal, mortgage insurance, property taxes, homeowners insurance, homeowners' association dues, if any, and a reasonable allowance for utilities, property maintenance, and repairs, not exceeding the sales prices specified by Section 50052.5 of the California Health and Safety Code and California Code of Regulations Title 25, Sections 6910 through 6924.
"Affordable rent"
means the total monthly housing expenses for a rental affordable unit not exceeding the rents specified by Section 50053 of the California Health and Safety Code and California Code of Regulations Title 25, Sections 6910 through 6924. As used in this chapter, "affordable rent" shall include the total of monthly payments by the tenant for all of the following: (1) use and occupancy of the affordable unit and land and all facilities associated with the affordable unit, including, but not limited to, parking, bicycle storage, storage lockers, and use of all common areas; (2) any additional separately charged fees or service charges assessed by the owner, other than security deposits; (3) an allowance for utilities paid by the tenant as established by the Orange County housing authority, including garbage collection, sewer, water, electricity, gas, and other heating, cooking. and refrigeration fuel, but not telephone service or cable TV; and (4) any other interest, taxes, fees or charges for use of the land or affordable unit or associated facilities and assessed by a public or private entity other than the owner, and paid by the tenant.
"Building permit"
includes full structural building permits as well as partial permits such as foundation-only permits.
"City"
means the city of Placentia.
"City administrator"
means the city administrator of the city or designee.
"City council"
means the city council of the city of Placentia.
"Decision-making body"
means the city staff person or body authorized to approve or deny an application for a planning or building permit for a residential development project.
"Developer"
means the person(s) or legal entity(ies), who also may be the property owner seeking real property development permits or approvals from the city or developing a particular project in the city.
"Development permit"
shall mean the permit required or issued by the city of Placentia for the grading, site improvement, construction, or improvement of property associated with residential development projects as defined in this chapter.
"For-sale unit"
means a residential dwelling unit that may be sold individually in conformance with the Subdivision Map Act. For-sale units also include units that are converted from rental units to for-sale units. "Household" means one person living alone or two or more persons sharing residency in one dwelling unit.
"Housing impact fee fund"
means a fund for the deposit of fees established under this chapter as provided in Section 5.30.120 of this chapter.
"Low income households"
means households with incomes no greater than the maximum income for low income households, as published annually by the city for each household size, based on United States Department of Housing and Urban Development (HUD) and the California Department of Housing and Community Development (HCD) income limits for Orange County.
"Market-rate unit"
means a new dwelling unit in a residential development project that is not an affordable unit.
"Median income"
means the median income applicable to Orange County, as published annually by the city for each household size, based on median income data for Orange County published by the United States Department of Housing and Urban Development (HUD) and the California Department of Housing and Community Development (HCD).
"Moderate income households"
means households with incomes no greater than the maximum income for moderate income households, as published annually by the city for each household size, based on United States Department of Housing and Urban Development (HUD) and the California Department of Housing and Community Development (HCD) income limits for Orange County.
"Planning permit"
means any discretionary approval of a residential development project, including, but not limited to, a general or specific plan adoption or amendment, rezoning, tentative map, conditional use permit, variances, or design review.
"Rental unit"
means a dwelling unit that is intended to be offered for rent or lease and that cannot be sold individually in conformance with the Subdivision Map Act.
"Residential affordable housing impact fee"
means the fee paid by developers of residential development projects to help mitigate the impacts that such developments have on the demand for affordable housing in the city and to support affordable housing development and operation.
"Residential development project"
means an application for a planning permit or building permit at one location to create one or more additional dwelling units, convert nonresidential uses to dwelling units, subdivide a parcel to create one or more separately transferable parcels intended for residential development, or implement a condominium conversion, including development constructed at one time and in phases. "One location" includes all adjacent parcels of land under common ownership or control, the property lines of which are contiguous at any point, or the property lines of which are separated only by a public or private street, road, or other public or private right-of-way, or separated only by the lands owned or controlled by the developer.
"Very low income households"
means households with incomes no greater than the maximum income for very low income households, as published annually by the city for each household size, based on United States Department of Housing and Urban Development (HUD) and the California Department of Housing and Community Development (HCD) income limits for Orange County.
(Ord. O-2017-11 § 3, 2017; Ord. O-2021-02 § 2, 2021)
(a) 
Residential affordable housing impact fees are hereby established for all residential development projects. The schedule of the residential affordable housing impact fees imposed by this chapter shall be established and adjusted from time to time by resolution of the city council. The impact fees shall not exceed the cost of mitigating the impact of residential development projects on the need for affordable housing in the city.
(b) 
Payment of the impact fees shall be due in full prior to the issuance of the first building permit(s) issued for the development. The fees shall be calculated based on the fee schedule in effect at the time the first building permit is issued. If a building permit(s) is not required for a development, payment of development impact fees shall be collected in full by the city prior to the issuance of the first development permit(s) for such development. The fees shall be calculated based on the fee schedule in effect at the time the first development permit is issued. Development impact fees for new developments that include a subdivision map with multiple buildings approved as part of the development shall be allowed to pay impact fees in phases prior to the issuance of the first building permit of each phase if requested in writing by the developer. This arrangement shall require either a development agreement or a fee deferral agreement on a form approved by the director of development services or designee. Payment of said fees in phases concurrent with the issuance of the first building permit of each phase pursuant to a development agreement of fee deferral agreement must be requested by the owner or developer concurrently with the entitlement(s) being considered by the same approval body that is considering the development (e.g., city council or planning commission).
(c) 
For for-sale development projects that trigger an affordable unit requirement with a decimal fraction of less than one-half, the developer shall either build one additional affordable unit or pay an impact fee equal to the decimal fraction multiplied by the residential affordable housing impact fee for the for-sale residential project.
(d) 
The fees established in this chapter shall be automatically adjusted annually commensurate with changes in construction costs. Therefore, the fees shall be automatically adjusted annually effective every July 1 by an amount equal to the percentage change in the Construction Cost Index for Los Angeles as published by the Engineering News-Record, or its successor publication for the preceding 12 months. The annual fee adjustment shall be based on April to April Construction Cost Index for Los Angeles as published by the Engineering News-Record for the preceding 12 months, with the exception of the 2022 fee update which shall be based on February 2021 to April 2022 Construction Cost Index for Los Angeles as published by the Engineering News-Record.
(Ord. O-2017-11 § 3, 2017; Ord. O-2021-02 § 2, 2021; Ord. O-2021-08 § 2, 2021)
The requirements of this chapter do not apply to:
(a) 
Residential development projects of four or fewer new housing units, the creation of four or fewer parcels, provided that no more than four dwelling units are allowed; or accessory dwellings created pursuant to the Placentia Municipal Code.
(b) 
Replacement construction that results in a net increase of four or fewer new housing units.
(c) 
Residential developments that already have more deed-restricted units that are affordable to very low, low and moderate income households than this chapter requires, for the period required under this chapter.
(d) 
Residential development projects which fall within one or more of the following categories:
(1) 
Any structure proposed to repair or replace a building that was damaged or destroyed by fire or other calamity, so long as the square footage and use of the building remains the same, and construction of the replacement building begins within one year of the damage's occurrence.
(2) 
Residential development projects to the extent they have received a vested right to proceed without payment of affordable housing impact fees pursuant to state law, including those that are the subject of development agreements currently in effect with the city, if such development agreements were approved prior to the effective date of the ordinance codified in this chapter and where such agreements expressly preclude the city from requiring payment of the affordable housing impact fee.
(3) 
Residential development projects for which applications have been deemed complete prior to the effective date of the ordinance codified in this chapter.
(4) 
Other uses that may be specified by resolution of the city council.
(Ord. O-2017-11 § 3, 2017)
(a) 
Notwithstanding any contrary provisions of this chapter, the city may determine that alternatives to the requirements in Section 5.30.030 of this chapter as proposed by the developer in the affordable housing plan required by Section 5.30.070 of this chapter, provided that the city council makes the findings in Section 5.30.070(D), (E), or (F) as appropriate.
(b) 
For-Sale Residential Projects. As an alternative to construction of affordable housing units on-site or payment of a residential affordable housing impact fee, if approved by the city council, developers of for-sale residential development projects may propose to mitigate affordable housing impacts of such housing through alternative means, including, but not limited to:
(1) 
Provision of affordable units off site.
(2) 
Purchase of existing units for conversion to affordable units.
(3) 
Dedication of land to the city suitable for construction of affordable units.
(4) 
Acquisition and rehabilitation of affordable units.
(5) 
Increase in the total number of affordable housing bedrooms.
(6) 
Provision of greater level of affordability.
(7) 
Construction of second dwelling units.
(8) 
Providing rental affordable units rather than for-sale affordable units.
(c) 
Rental Residential Development Projects. As an alternative to payment of residential affordable housing impact fee, developers of rental residential development projects may propose to help mitigate the affordable housing impacts of such developments through an alternative mitigation program, including, but not limited to:
(1) 
Construction of affordable housing units on site or through an alternative mitigation program, such as the provision of off-site affordable units, donation of land for the construction of affordable units, or purchase of existing units for conversion to affordable units.
(2) 
For rental residential developments proposing this alternative, eleven percent of the total development shall be restricted to occupancy by very low income households, or 20% of the total development shall be restricted to occupancy by low and moderate income households.
(3) 
If a developer proposes to provide affordable rental units, then, to ensure compliance with the Costa-Hawkins Rental Housing Act (Chapter 2.7 of Title 5 of Part 4 of Division 3 of the Civil Code), the city may only approve such a proposal if, as required by Civil Code Sections 1954.52(b) and 1954.53(a)(2), the developer agrees in a contract with the city to limit rents in accordance with Section 12.260.070 of this chapter in consideration for a direct financial contribution from the city or a form of assistance specified in the State's Density Bonus Law (Chapter 4.3, commencing with Section 65915, of Division 1 of Title 7 of the Government Code). The developer may request that the city waive the residential affordable housing impact fee as a direct financial contribution to the rental residential development project.
(d) 
Any affordable rental or for-sale units proposed as an alternative shall be subject to the requirements described in Section 5.30.080 of this chapter.
(Ord. O-2017-11 § 3, 2017)
(a) 
General. Approval of an affordable housing plan and execution, recordation and implementation of an affordable housing agreement shall be conditions of any approval of a residential development project, which includes the provision of affordable housing units as provided in Section 5.30.030 or 5.30.060. No affordable housing plan is required if the developer proposes only to pay the residential affordable housing impact fee.
(b) 
Affordable Housing Plan. No application for approval of a residential development project which includes the provision of affordable housing units may be deemed complete until an affordable housing plan containing all the elements identified below is submitted to the community development department. The affordable housing plan shall include:
(1) 
The number, location, number of bedrooms and size of the proposed market rate and affordable housing units and the basis for calculating the number of affordable housing units;
(2) 
The city may approve an increase in the number of units per acre in a residential development if the increase is consistent with state density bonus law per Section 65915 of the State Government Code. If the applicant is proposing to apply for a density bonus, the affordable housing plan must include an analysis of the density bonus request;
(3) 
A site plan depicting the proposed location of the initial affordable housing units;
(4) 
A floor plan depicting the proposed location of the initial affordable housing units within a residential development;
(5) 
The income levels to which each affordable housing unit will be made affordable;
(6) 
The mechanisms that will be used to assure that the units remain affordable for the desired term, such as resale and rental restrictions, deeds of trust, and city's option to purchase and other documents;
(7) 
For a phased residential development proposing any change to the phasing requirements specified in Section 5.30.080(B), a phasing plan that provides for the timely development of affordable housing units in each proposed phase of development;
(8) 
The conceptual plan for initial sales or rental by developer of the affordable housing units;
(9) 
Any proposed alternative as provided in Section 5.30.060 along with information necessary to support the findings required in Section 5.30.070(E) for approval of such alternatives;
(10) 
The city administrator may request additional information as reasonably needed to assist with evaluation of the affordable housing plan under the standards of this chapter.
(c) 
The affordable housing plan shall be processed concurrently with all other permits required for the residential development project. Before approving the affordable housing plan, the city council shall find that the affordable housing plan conforms to this chapter. A condition shall be attached to the first approval of any residential development project to require recordation of an affordable housing agreement, as described in this subsection, prior to the approval of any final or building permit for the residential development project.
(d) 
Findings—All Alternatives. The city council may or conditionally approve an alternative contained in an affordable housing plan if the city council determines, based on substantial evidence, that the proposed alternative supports adopted housing element policies and goals and assists the city in meeting state housing requirements.
(e) 
Findings—Alternative Proposing On-Site Affordable Units. The city council may approve or conditionally approve an affordable housing plan that proposes on-site construction of affordable units if the city council determines, based on substantial evidence, that:
(1) 
The proposed affordable units comply with the standards in Section 5.30.080, including, without limitation, compliance with Section 5.30.080(B) requiring that the affordable units be made available for occupancy concurrently with the market-rate units; and
(2) 
The affordable units will help mitigate the impact of the project on the need for affordable housing.
(f) 
Findings—Alternative Proposing Off-Site Affordable Units. If a developer proposes off-site affordable housing units or any other alternative in the affordable housing plan, the city administrator may approve, conditionally approve or reject any alternative proposed by a developer subject to final approval by the city council in its discretion. Any approval or conditional approval shall be based on a finding that:
(1) 
Financing or a viable financing plan, which may include public funding sources, is in place for the proposed affordable housing units;
(2) 
The proposed location is suitable for the proposed affordable housing, is consistent with the housing element, general plan, and zoning ordinance, and will not tend to cause residential segregation; and
(3) 
The net cost of the alternative is at least equal to the net cost to provide affordable housing units;
(4) 
The alternative does not detract from the city's program to meet its housing goals and obligations under California Housing Law (Government Code Section 65580 et seq.).
(g) 
Affordable Housing Agreement. To ensure compliance with the approved affordable housing plan, an affordable housing agreement acceptable to the city administrator or designee shall be recorded against the residential development project prior to approval of any final, or issuance of any building permit, whichever occurs first. The affordable housing agreement shall specify the number, type, location, size, phasing, and terms of affordability of all affordable units, provisions for income certification and screening of potential purchasers or renters of units, and resale control mechanisms, including the financing of ongoing administrative and monitoring costs, consistent with the approved affordable housing plan, and subject to final approval by the city council.
(h) 
The city administrator may adopt affordable housing guidelines consistent with this chapter and the housing element for the purpose of carrying out the administration of this chapter and may update those guidelines periodically as required.
(Ord. O-2017-11 § 3, 2017)
(a) 
All affordable units provided pursuant to Sections 5.30.030 and 5.30.060 shall be comparable to the overall quality of construction to market-rate units in the same housing development as follows:
(1) 
The exterior appearance of the affordable units shall be compatible with that of market-rate units.
(2) 
Interior finishes and amenities may not differ from those provided in the base model market rate units.
(3) 
The number of bedrooms in the affordable units shall be comparable to the average number of bedrooms in the market-rate units, and the affordable units shall be reasonably dispersed within the residential development, with unit locations comparable to those of the market-rate units, subject to review and approval by the community development director.
(4) 
The affordable units shall have the same amenities as the market rate units, including the same access to and enjoyment of common open space, parking, storage, and other facilities in the residential development, provided at an affordable rent as defined in Section 5.30.010 or at affordable ownership cost as defined in Section 5.30.010.
(b) 
Affordable units provided pursuant to Sections 5.30.030 and 5.30.060 shall be made available for occupancy concurrently with the market-rate units. For the purposes of this subsection, "concurrently" means that the city may not issue building permits for more than fifty percent of the market-rate units until it has issued building permits for all of the affordable units, and the city may not approve any final inspections or certificates of occupancy for more than 50% of the market-rate units until it has issued final inspections or certificates of occupancy for all of the affordable units. However, the city council may modify the timing requirements for construction and occupancy of market-rate units to accommodate phasing schedules, model variations, or other factors, if the city council determines this will provide greater public benefit.
(c) 
All affordable units provided pursuant to Sections 5.30.030 and 5.30.060 shall be subject to a resale restriction, deed of trust, and/or regulatory agreement recorded against the property for execution by the city administrator, in a form approved by the city attorney, to ensure the continued affordability of the affordable units.
(1) 
Affordable housing units produced under this chapter shall be legally restricted to occupancy by households of the income levels for which the units were designated for a period of not less than 55 years for rental units and 45 years for owner-occupied units.
(2) 
To the extent permitted by state and federal law, preferences will be given to those households where at least one member in the household lives or works in Placentia or works for a school district serving the residents living in the city, except for those deemed ineligible due to conflict of interest noted below.
(3) 
Conflict of Interest. The following individuals are ineligible to purchase or rent certain affordable housing units: (i) elected or appointed city officials (including their spouse and dependents) who participated in the approval process for a project that included the affordable housing units; (ii) the project applicant and its officers and employees (and their spouse and dependents); and (iii) the project owner and its officers and employees (and their spouse and dependents). However, employees of the project applicant and project owner may purchase or rent affordable housing units if the units were designed and intended to be occupied by employees of the applicant or owner, with approval of the city council. Officials, employees, or consultants of the city and members of city boards and commissions shall comply with all applicable laws, regulations, and policies relating to conflicts of interest as to their eligibility to develop, construct, sell, rent, lease, occupy, or purchase an affordable unit.
(4) 
Any household that occupies an affordable unit must occupy that unit as its principal residence, unless otherwise approved in writing for rental to a third party for a limited period of time due to household hardship, as determined by the city.
(5) 
No household may begin occupancy of an affordable unit until the household has been determined to be eligible to occupy that unit by the community development director or designee. The city administrator or designee may from time to time adopt guidelines for determining household income and affordable housing cost, determining buyer eligibility, monitoring, and relevant administrative provisions.
(Ord. O-2017-11 § 3, 2017)
(a) 
Sale to Eligible Households. Owner-occupied units will be offered to eligible households at a sales price set so that the eligible household will pay an affordable ownership cost. The developer shall certify each prospective purchaser's income to the city or city's designee and obtain approval of the household prior to close of escrow. The developer must obtain and review documents that demonstrate the prospective owner's total income and assets and submit such information on a form approved by the city.
(b) 
Initial Sales Price. The initial sales price of the affordable housing unit shall be set by the city so that the eligible household will pay an affordable ownership cost. The city shall respond to a written request by developer and provide developer with a good-faith estimate of the initial sales price during pre-development.
(c) 
Deed Restrictions. Deed restrictions provided by the city, recorded against title to the affordable housing unit, and secured by a deed of trust shall be required as condition of sale for all owner-occupied affordable housing units and will include, but are not limited to, the city's or its designee's option to purchase, resale restrictions, occupancy requirements, payment of penalty for any default, and procedures and policies regarding changes in title. Deed restrictions must be approved by the city attorney prior to close of escrow.
(d) 
Administration. The developer or subsequent seller shall pay all administrative costs associated with the sale of the for sale affordable housing units, including for buyer review and qualification, and the review and processing of documents associated with the transaction.
(Ord. O-2017-11 § 3, 2017)
(a) 
Non-Discrimination. When selecting tenants, the owners of affordable housing units shall comply with all fair-housing laws, rules, regulations, and guidelines. The owner shall apply the same rental terms and conditions to tenants of affordable housing units as are applied to all other tenants, except as required to comply with this chapter or with other applicable government programs.
(b) 
Annual Report. The owner shall submit an annual report summarizing the occupancy of each affordable housing unit for the year and demonstrating the income-eligibility of the tenant. The city administrator may require additional information to confirm household income and rental price of the unit if he or she deems necessary. The city council may establish and charge the owner or operator of the rental residential development an annual fee to cover the costs of this monitoring. The fee will be added to the master fee schedule by city council resolution.
(c) 
Periodic Audit. The city shall have the right to periodically audit the information supplied to the city for the annual report if deemed necessary to ensure compliance with this chapter. In addition, owners of affordable housing units shall cooperate with any audits conducted by the city, state agencies, federal agencies, or their designees.
(d) 
Change in Income. If, after moving into an affordable rental housing unit, a tenant's household income exceeds the limit for that unit, the tenant household may remain in the unit as long as his or her household income does not exceed 120% of the income limit, but the tenant's rent shall be increased to 30% of monthly income upon expiration of the tenant's lease. Once the tenant's income exceeds 120% of the income limit, the tenant shall be given one year's notice to vacate the unit, or the next available market rate unit in the residential development shall be offered as an affordable housing unit. The owners of the residential development are responsible for notifying the city of such changes in income and documenting the process by which the existing tenant will be removed or the next available unit shall be offered as an affordable housing unit.
(Ord. O-2017-11 § 3, 2017)
(a) 
As part of an application for the first approval of a residential development project, a developer may request that the requirements of this chapter be waived or modified by the city council, based upon a showing that applying the requirements of this chapter would result in an unconstitutional taking of property or would result in any other unconstitutional result, or because there is no reasonable relationship between the impact of the development and the need for affordable housing. Concurrently:
(1) 
Any request for a waiver or modification shall be submitted with the project application. The developer shall set forth in detail the factual and legal basis for the claim, including all supporting technical documentation.
(2) 
Any request for a waiver or modification based on this section shall be reviewed and considered at the same time as the project application. The city council may from time to time establish by resolution a processing fee for review of any request for a waiver or modification.
(b) 
The waiver or modification may be approved only to the extent necessary to avoid an unconstitutional result, based upon legal advice provided by or at the behest of the city attorney, after adoption of written findings, based on legal analysis and the evidence. If a waiver or modification is granted, any change in the project shall invalidate the waiver or modification, and a new application shall be required for a waiver or modification pursuant to this section.
(Ord. O-2017-11 § 3, 2017)
(a) 
There is hereby established in the city of Placentia a separate "housing impact fee fund," pursuant to Section 66006 of the California Government Code. All affordable housing impact fees or other funds collected under this chapter shall be deposited into the city's housing impact fee fund.
(b) 
The monies in the housing impact fee fund and all earnings from investment of the monies in the fund shall be expended exclusively to provide housing affordable to extremely low income, very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the city's housing element and the purposes for which the fees were collected, and for administration and compliance monitoring of the affordable housing program.
(c) 
The city council may, from time to time, adopt guidelines for expenditure of monies in the housing impact fee fund.
(Ord. O-2017-11 § 3, 2017)
(a) 
Payment of the residential affordable housing impact fee is the obligation of the developer for a residential development project. The city may institute any appropriate legal actions or proceedings necessary to ensure compliance herewith, including, but not limited to, actions to revoke, deny, or suspend any permit or development approval.
(b) 
The city attorney shall be authorized to enforce the provisions of this chapter and all affordable housing agreements, regulatory agreements, and all other covenants or restrictions placed on affordable units, by civil action and any other proceeding or method permitted by law.
(c) 
Failure of any official or agency to fulfill the requirements of this chapter shall not excuse any developer or owner from the requirements of this chapter. No permit, license, map, or other approval or entitlement for a residential development shall be issued, including, without limitation, a final inspection or certificate of occupancy, until all applicable requirements of this chapter have been satisfied.
(d) 
The remedies provided for in this section shall be cumulative and not exclusive and shall not preclude the city from any other remedy or relief to which it otherwise would be entitled under law or equity.
(Ord. O-2017-11 § 3, 2017)