City of Lompoc, CA INCLUSIONARY HOUSING

The per-unit housing in-lieu fee shall be equal to the maximum amount of financial assistance available to a single applicant under the Homebuyer Assistance Program, as established by a resolution of the City Council, plus a 10% administrative fee. The maximum amount of financial assistance available to a single applicant under the Homebuyer Assistance Program shall be the sum of (a), (b), and (c), below, and shall be calculated in accordance with the formulas and assumptions stated in the Lompoc Affordable Housing Trust Fund Program Implementation Plan, as may be amended by resolution of the City Council. The per-unit housing in-lieu fee shall be the sum of (a), (b), (c), and (d), below.

(a)

The difference between the average sale price of a market-rate three-bedroom home in the City of Lompoc and the maximum affordable purchase price for a four-person moderate-income household in the City of Lompoc;

(b)

An allowance for inflation to cover potential increases in home prices over the 12 months following the calculation of the in-lieu fee;

(c)

A closing cost grant, in an amount approved by City Council resolution, which shall not exceed the actual market rate for closing costs at the time the grant amount is adopted. Closing costs include, but are not limited to, loan origination and/or processing fees, appraisal, credit reports, prepaid hazard insurance and property taxes, and title and escrow fees; and

(d)

An administrative fee equal to 10% of the sum of (a), (b), and (c). This administrative fee will be used to pay for the salaries and benefits of staff working directly with the Homebuyer Assistance Program, office supplies, program marketing, consulting costs, legal fees, audit charges, environmental fees, maintenance costs associated with properties received through default actions (including in-lieu of foreclosures), loan servicing costs, title, escrow and covenant monitoring costs.

The maximum amount of financial assistance available to a single applicant under the Homebuyer Assistance Program and the amount of the per-unit housing in-lieu fee shall be re-calculated and adopted annually in or around June of each year and shall be effective on July 1 of each year.

If the City terminates or temporarily suspends the Homebuyer Assistance Program, then the housing in-lieu fee shall, nonetheless, continue to be calculated and annually updated as described in subsections (i) and (ii) based on the formulas and assumptions in the last-adopted version of the Lompoc Affordable Housing Trust Fund Program Implementation Plan.

Total housing in-lieu fee. The total housing in-lieu fee shall be calculated by multiplying the required number of inclusionary units by the per-unit housing in-lieu fee.

Timing of payment. The housing in-lieu fee shall be paid in one of the following ways:

In one lump sum at any time between approval of the project and issuance of the first Building Permit for a residential unit in the development, in which case the total housing in-lieu fee shall be based on the current in-lieu fee at the time of payment; or

On a pro rata basis, where the developer pays the in-lieu fee for one inclusionary unit for every 10 Building Permits issued for residential units for developments outside of the Old Town Redevelopment Project, Amendment No. 2 Area, or for every six Building Permits issued for residential units for developments in the Old Town Redevelopment Project, Amendment No. 2 Area. The project conditions of approval shall specify the payment schedule of in-lieu fees based on the prorated computation (e.g., for developments outside of the Old Town Redevelopment Project, Amendment No. 2 Area, the first in-lieu fee payment would be due prior to issuance of the Building Permit for the first unit, the second in-lieu fee payment would be due prior to issuance of the Building Permit for the eleventh unit, etc.; and for a development in the Old Town Redevelopment Project, Amendment No. 2 Area, the first in-lieu fee payment would be due prior to issuance of the Building Permit for the first unit, the second in lieu fee payment would be due prior to issuance of the Building Permit for the seventh unit, etc.). Each in-lieu fee payment shall be based on the current in-lieu fee at the time of payment; or

The developer may lock in the per-unit in-lieu fee at the amount of the fee at the time of first payment by paying 25% of the total in-lieu fee at any time between approval of the project and issuance of the first Building Permit for a residential unit in the development and then paying the remainder of the in-lieu fees as follows: After making the first payment, the developer shall then be required to pay the in-lieu fee for one inclusionary unit for every 10 Building Permits issued for residential units for developments outside of the Old Town Redevelopment Project, Amendment No. 2 Area, or for every six Building Permits issued for residential units for developments in the Old Town Redevelopment Project, Amendment No. 2 Area, unless such amount has already been paid as provided in the following paragraph.

For three years following the first payment on the anniversary of the first payment. and regardless of the number of Building Permits that have been issued, the developer shall make additional fee payments, as necessary, such that on the first anniversary the developer shall have paid at least 50% of the total in-lieu fee, on the second anniversary the developer shall have paid at least 75% of the total in-lieu fee, and on the third anniversary the developer shall have paid 100% of the total in-lieu fee. If the developer fails to maintain a payment balance in accordance with the previous sentence, then the amount of the in-lieu fee shall no longer be locked in and developer shall thereafter make payments in accordance with Subsection A.1.c.ii.

Payment non-refundable. The payment of in-lieu fees is non-refundable.

Off-site construction. Off-site affordable housing units may be proposed within the City limits to satisfy the inclusionary requirement for the development. Off-site housing units may include any combination of new units, new units created in existing structures, or acquisition and conversion of existing market-rate units to units that are affordable to target income groups. Off-site units shall meet the same requirements as if they were inclusionary (on-site) units (e.g., number, unit type and size, etc.).

Conveyance of land.

Criteria for conveyance of land. The dedication of land may be proposed to satisfy the housing mitigation requirement, if it can be determined by the City that all the following criteria have been met:

Marketable title to the site is transferred to the City, or an affordable housing developer or non-profit approved by the City, no later than the approval of a final map or issuance of first Building Permit, in compliance with an agreement between the market-rate project developer and the City, and such agreement is in the best interest of the City.

The site has General Plan and zoning designations that authorize residential uses.

Infrastructure to serve the dedicated site, including, but not limited to, streets and public utilities, must be available at the property line, or will be made available prior to issuance of certification of occupancy.

(iv)

Environmental review of the proposed site has been completed to allow full disclosure for the conveyance of the proposed site, including, but not limited to, an analysis of the site for the presence of hazardous materials; cultural and historical resources; and geological hazards and that such resources or hazards are or will be mitigated to the satisfaction of the City prior to acceptance of the site by the City.

(v)

The value of the site upon the date of conveyance is equal to or greater than the applicable housing fee for the market-rate development. Fair market value shall be determined preliminarily at the time and market-rate development is submitted to the City for review. Final determination of fair market value shall be made by a licensed California appraiser prior to Building Permit issuance and shall be net of any real estate commission for the conveyance of the land.

(vi)

If the value of the site upon the date of conveyance exceeds the amount of the applicable housing in-lieu fee in compliance with Subsection A.1 of this section, the developer shall be assigned housing migration credit for the difference in the value of the site conveyance and the applicable housing in-lieu fee, consistent with these requirements for conveyance of land.

Disposition of land by the City. The City shall not be required to construct inclusionary units on the site dedicated to the City, but may sell, transfer, lease, or otherwise dispose of the dedicated site in order to facilitate the construction of those units and only when a clearly demonstrable greater housing benefit would be achieved as determined by Council. Any funds collected as a result of sale, transfer, lease, or other disposition of sites dedicated to the City shall be deposited in the Affordable Housing Trust Fund and the funds and interests accrued shall remain in the fund and shall be used in compliance with Section 17.324.060 (Affordable Housing Trust Fund).

Conveyance of development-ready lots within the project site. The builder or developer may dedicate development-ready lots within the project site in compliance with Section 17.324.030 (Inclusionary Requirements). All conveyance lots shall be part of an approved final subdivision map and have completed utility connections and roadway improvements at the time of conveyance so as to be development ready. Such conveyance shall be subject to the criteria in Subsection A.3.a.

Combination. The review authority may approve any combination of on-site construction, off-site construction, housing in-lieu fees, and land dedication that is at least equal to the inclusionary requirement if it makes the finding in Subsection B.

Findings. The review authority may approve, conditionally approve or deny any alternative proposed by an applicant as part of a project application. Any approval or conditional approval shall be based on a finding that the proposed alternative is consistent with the City's General Plan and shall be based on a consideration of market conditions, development proformas, land economics and other substantial evidence.

(Ord. 1670(19) § 11; Ord. 1685(21) § 4; Ord. 1698(22) §§ 3—5; Ord. 1703(23) § 1)

§ 17.324.050 Rental Regulatory Agreement.

A rental regulatory agreement with the City, shall be required for rent inclusionary housing units and shall be consistent with all applicable State laws.

(Ord. 1670(19) § 11)

§ 17.324.060 Affordable Housing Trust Fund.

All housing in-lieu fees collected in compliance with this Chapter shall be deposited into an affordable housing fund (Lompoc Affordable Housing Trust Fund).

Separate accounts within the housing fund may be created from time to time to avoid commingling as required by law or as deemed appropriate to further the purposes of the housing fund.

The housing fund shall be administered by the City Manager (or designee) who shall have the authority to govern the housing fund consistent with this Chapter, and to prescribe procedures for said purpose, subject to approval by the Council.

Expenditures from the housing fund shall be controlled, authorized and paid in compliance with general City budgetary policies. Execution of contracts related to the use or administration of housing fund moneys shall comply with standard Council policy.

Monies deposited in the housing fund, along with any interest earnings on monies, shall be used to provide affordable housing in compliance with the Lompoc Affordable Housing Trust Fund Program Implementation Plan, as adopted and revised by City Council resolution.

(Ord. 1670(19) § 11; Ord. 1698(22) § 6)

§ 17.324.070 Design Standards.

Applicability. All inclusionary units required by this Chapter shall comply with the design standards described in this Section.

Design Quality.

Affordable units constructed as part of a larger project, shall be comparable in exterior appearance and overall quality of construction to market rate units.

The size and interior features of affordable units may vary from market rate units; however, they shall have the same number of bedrooms and bathrooms.

Affordable units shall be dispersed throughout the project and not concentrated in a single location, to the maximum extent feasible.

(Ord. 1670(19) § 11)

§ 17.324.080 Eligibility, Continued Affordability.

Eligibility for Below Market Rate Units (Owner-Occupied and Rental Units).

No household shall be permitted to occupy or purchase an affordable housing unit required by this Chapter, unless the City or City-authorized entity has approved the household's eligibility. If the City maintains a list of eligible households, households selected to occupy such units shall be first selected from that list in compliance with any applicable rules, agreements, or restrictions.

Any household which occupies or purchases an affordable housing unit required by this Chapter shall occupy that unit as its principal residence and shall not lease or sublease to a different party, unless allowed in special circumstances as documented in the deed restriction.

Continued Affordability Requirements (Owner-Occupied and Rental Units). Prior to the issuance of certificated of occupancy for the inclusionary units, any deeds, restrictions, or agreements applicable to the units shall be deemed acceptable by the Director and City Attorney and recorded against parcels or units having such affordable units. Such units shall be legally restricted to occupancy by households of the target income levels for which the units were designated for a minimum of 55 years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. At a minimum, agreements provided in compliance with this Section shall provide:

A standard to provide the City or its qualified designee the continuing right-of-first-refusal to purchase or lease any or all of the designated dwelling units at the appraised value of the units or the value based on the target income levels, whichever is less, subject to the resale restriction;

A covenant stating that the developer or successor-in-interest shall not assign, lease, rent, sell, sublet, or other otherwise transfer any interests for the designated units without the written approval of the City;

That in any action taken to enforce compliance with the deed restrictions, the City Attorney shall, if compliance is ordered by a court of competent jurisdiction, take all action that may be allowed by law to recover all of the City's costs of action including legal services; and

That compliance with the agreement will be monitored and enforced in compliance with the measures included in the agreement.

Initial and Continued Affordability: Owner-Occupied Units. In addition to the minimum requirements set forth in Subsection B, the developer shall agree to the following measures to assure the initial and on-going affordability of required inclusionary units:

Initial sales price. The initial sales price of a for-sale inclusionary housing unit shall be based on the developer's estimate of homeowner's associate dues, if any, the City's assumptions for interest rates and other factors, and the methodology or formula for calculating sales prices contained in the Council resolution. The City shall provide the developer with an estimate of the initial sales price for the inclusionary units at an earlier date if so requested by the developer in writing. After the Building Permit is issued, the initial sales price may be adjusted by the City due to changes in market factors upon written request by the developer no less than 90 days prior to marketing of the inclusionary units.

Resale restrictions. Documents to assure continued affordability shall be recorded against the property in compliance with the provisions of Subsections A and B, and the following concerning resale restrictions:

Terms and conditions concerning the resale of the units shall be specified as necessary to ensure their continuing affordability. Such requirements may include, but are to limited to:

Limits on resale price, based on an appropriate calculation method.

Provision offering units for resale to the City.

Monitoring requirements for resale of units, including required notice of intent to sell in a timely manner before the unit is intended to be marketed.

The City reserves the right to modify or waive recorded resale restrictions at the time of resale, as warranted, based on residential real estate market conditions or economic hardship on the part of the inclusionary homeowner. An inclusionary homeowner may request a modification or waiver of resale restrictions by completing a modification/waiver request form provided by the City.

Initial and Continued Affordability: Rental Units.

Initial rents for below market rate units. The initial rent of inclusionary units shall be set by the City at least 30 days prior to the marketing of the inclusionary unit, so that the eligible households will pay an affordable rent in compliance with the established affordability level. The initial rent shall be based on the City's assumptions of utility costs and the methodology or formula for calculating rents contained in the Council resolution.

Rent regulatory agreement. A rent regulatory agreement acceptable to the City shall be recorded against the residential development prior to issuance of certificate of occupancy. Such an agreement shall reflect the limitations on rents required by this Chapter, the provisions of Subsection D.1, and the minimum requirements outlined below:

Nondiscrimination. When selecting tenants, the owners of inclusionary units shall follow all fair-housing laws, rules, regulations, and guidelines. The owner shall apply the same rental terms and conditions to tenants of inclusionary units as are applied to all other tenants, except as required to comply with this Chapter (for example, rent levels and income requirements) or with other applicable government subsidy programs.

Move-in costs. Total deposits, including security deposits, required of households occupying an inclusionary unit shall be limited as mandated by State law applicable at the time of leasing or renting.

Reporting requirements.

The owners shall submit an annual report summarizing the occupancy of each inclusionary unit for the year, demonstrating the continuing income-eligibility of the tenant, and the rent charged for each inclusionary unit. The City may require additional information to confirm household income and rents charged for the unit if it determines necessary.