It is the intent of this chapter to establish standards and
procedures that facilitate the development and availability of housing
affordable to a range of households with varying income. The purpose
of this chapter is to encourage the development and availability of
such housing by ensuring that the addition of affordable housing units
to the City's housing stock is in proportion with the overall increase
in new jobs and housing units.
(08-05; 13-03; 18-10; 21-04)
As used in this chapter, the following terms shall have the
following meanings:
"Adjusted for household size appropriate for the unit"
means a household of one person in the case of a studio unit,
two persons in the case of a one-bedroom unit, three persons in the
case of a two-bedroom unit, four persons in the case of a three-bedroom
unit, five persons in the case of a four-bedroom unit, and six persons
in the case of a six-bedroom unit.
"Administrative manual"
means the administrative manual adopted pursuant to Section
16.036.050.E for the implementation and enforcement of the provisions
of this chapter.
"Affordable housing costs"
means the total housing costs paid by a qualifying household,
which shall not exceed a specified fraction of their gross income,
adjusted for household size appropriate for the unit, as follows:
1.
Rental Units:
a.
Low income units: 30% of 60% of the Los Angeles County area
median income.
b.
Moderate income units: 30% of 110% of the Los Angeles County
area median income.
2.
For Sale Units:
a.
Claremont low income units: 30% of 80% of the Los Angeles County
area median income.
b.
Moderate income units: 35% of 110% of the Los Angeles County
area median income.
"Affordable sales price"
means the maximum price that can be charged for an Inclusionary
Unit. The Affordable sales price is equal to the lesser of:
1.
The sum of the supportable mortgage plus the benchmark down
payment, which is used solely for calculation of the affordable sales
price:
a.
The benchmark down payment is set at 10% of the affordable sales
price for Claremont low-income units.
b.
The benchmark down payment is set at 5% of the affordable sales
price for moderate income units.
2.
The purchase price prospective buyers are willing to pay in
return for purchasing a home that is subject to restrictive covenants.
"Appreciation"
means the difference in dollar amount between the net resale
price of the inclusionary unit, as defined in the administrative manual,
at the time it is sold by the initial purchaser and the fair market
value of the inclusionary unit at the time of the original sale.
"City principal"
means the difference between the fair market value of the
inclusionary unit at the time of initial sale of the unit and the
affordable purchase price actually paid by the initial purchaser for
that unit as a consequence of the requirements set forth in this chapter.
"City share of appreciation"
means a proportionate share of the appreciation of each inclusionary
unit based on the City principal to be paid to the City at the time
of resale of an inclusionary unit by the initial purchaser in accordance
with the equity share agreement. The City share of appreciation is
calculated as a percentage of the appreciation which is equal to the
ratio of the City principal to the fair market value of the inclusionary
unit at the time of initial sale.
"Claremont low income households"
means persons and families whose income does not exceed 80%
of the Los Angeles County area median income, adjusted for household
size.
"Claremont low income units"
means for sale inclusionary units restricted to occupancy
by Claremont low income households at the applicable affordable housing
cost.
"Developer"
means any person, firm, partnership, association, joint venture,
corporation, or any entity or combination of entities, which seeks
City approvals for all or part of a housing development project. The
term "developer" also means the owner or owners for any such property
for which such approvals are sought.
"Director"
means the City's Director of Community Development.
"Discretionary approval"
means any entitlement or approval, including, but not limited
to, a use permit, variance, design approval, and subdivision map.
"Equity share agreement"
means an agreement by which appreciation on the value of
an inclusionary unit from the time of the original purchase at an
affordable price to the time of resale shall be shared between the
purchaser of the inclusionary unit and the City. Such an agreement
shall be a condition of sale of the inclusionary unit.
"Fair market value"
means the fair market value of an inclusionary unit at the
time of initial purchase of that unit without regard to any restrictions
on sales price, as substantiated by an appraisal in a form and substance
and by an appraiser acceptable to the City.
"Housing development project"
means the construction of new projects (including mixed use
projects) requiring any approval from the City (including approval
of a building permit) for which an application has been submitted
to the City and which would create one or more additional dwelling
units to be offered for rent or sale by construction or alteration
of structures. All new construction projects creating one or more
additional dwelling units to be offered for rent or sale on contiguous
parcels of land by a single developer shall constitute a single housing
development project subject to the requirements of this chapter, and
any accompanying regulations, regardless of whether such projects
are constructed all at once, serially, or in phases. The term "housing
development project" shall include the conversion of rental units
to for-sale units and vice versa.
"Inclusionary housing agreement"
means a legally binding written agreement between a developer
and the City, in form and substance satisfactory to the Director and
City Attorney, setting forth those provisions necessary to ensure
that the requirements of this chapter, whether through the provision
of inclusionary units or through an alternative method, are satisfied.
"Inclusionary housing plan"
means the plan referenced in Section
16.036.050 and further described in the administrative manual, which sets forth the manner in which the requirements of this chapter will be implemented for a particular housing development project.
"Inclusionary unit"
means a dwelling unit developed pursuant to an inclusionary
housing agreement that will be offered for rent or sale to low- and
moderate-income households, at an affordable housing cost, pursuant
to this chapter.
"Low income households"
is defined in
Health and Safety Code Section 50079.5 as persons
and families whose income does not exceed the qualifying limits for
lower income families as established and amended from time to time
pursuant to Section 8 of the United States Housing Act of 1937..
"Low income units"
means rental inclusionary units restricted to occupancy by
low income households at the applicable affordable housing cost.
"Market rate units"
means dwelling units in a housing development project that
are not inclusionary units.
"Moderate income households"
means persons and families whose income does not exceed 120%
of the Los Angeles County area median income, adjusted for household
size.
"Moderate income units"
means for sale inclusionary units restricted to occupancy
by moderate income households at the applicable affordable sales price.
"Resale price"
means the agreed upon purchase price negotiated between the
initial purchaser of an inclusionary unit and the subsequent buyer
upon resale, which is used for the purpose of determining the amount
of appreciation that is shared under the terms of the equity share
agreement. The resale price shall not include any fees, escrow costs,
or closing costs incurred in connection with the resale of the inclusionary
unit. The City may, through the equity share agreement or the regulations
adopted pursuant to this chapter, require that the seller of the inclusionary
unit provide documentation, including, but not limited to, an appraisal,
demonstrating that the resale price is consistent with prevailing
market sales prices for comparable homes in the City.
"Substantial rehabilitation" or "substantially rehabilitated"
means the rehabilitation of at least one dwelling unit that
has substantial building and other code violations, and has been vacant
for at least six months, such that the unit is returned to the City's
housing supply as decent, safe, and sanitary housing, and the cost
of such work constitutes at least 25% of the after-rehabilitation
value of the dwelling unit, inclusive of the land value.
"Total housing costs"
means the total monthly or annual recurring expenses required
of a household to obtain shelter. For a rental unit, total housing
costs include the monthly rent payment and utilities. For a for-sale
unit, total housing costs include the mortgage payment (principal
and interest), utilities, home-owner's association dues, homeowner's
insurance, mortgage insurance, property taxes and assessments, and
any other related assessments.
"Unrestricted units"
has the same meaning as "market rate units."
The administrative manual provides additional definitions
for terms used in this chapter that are not defined in this section.
(08-05; 13-03; 18-10; 21-04)
This chapter shall apply to all housing development projects,
except as provided below:
A. Housing
development projects that will contain four or fewer units.
B. Housing
development projects that are exempt from this chapter by State law.
C. Any
dwelling unit or housing development project which is damaged or destroyed
by fire or natural catastrophes so long as the use of the reconstructed
building and number of dwelling units remain the same, and the cost
of such rehabilitation constitutes no more than 25% of the after-rehabilitation
square footage of the dwelling unit, inclusive of the land value.
D. Student
dormitories, student apartments owned and developed by educational
institutions, and faculty housing associated with boarding schools
below the college level.
(08-05; 13-03; 18-10; 21-04)
A. Rental
Units. A total of 5% of all newly constructed rental units shall be
low income units, and a total of 10% of all newly constructed rental
units shall be moderate income units.
B. For-Sale
Units. A total of 5% of all newly constructed for-sale units shall
be Claremont low income units, and a total of 10% of all newly constructed
for-sale units shall be moderate income units.
C. In
the event the calculation for the number of inclusionary units results
in a fraction of an inclusionary unit, the developer shall have the
option of either:
1. Providing a full inclusionary unit within the housing development
project at the applicable affordability level; or
2. Making an in lieu payment to the inclusionary housing fund in an
amount equal to the percentage represented by the fractional unit
multiplied by the applicable in lieu fee.
D. For purposes of calculating the number of inclusionary units required by this chapter, any additional units authorized as a density bonus under Chapter
16.033 and California
Government Code Section 65915 shall not be counted in determining the required number of inclusionary units.
E. Subject
to the exceptions listed below, while the Housing Accountability Act
(Section 65589.5 of the California
Government Code) and Section 56941.1
of the California
Government Code are in effect, and provided the
housing development project complies with applicable, objective general
plan, zoning, and subdivision standards and criteria, including design
review standards, the number of inclusionary units required for a
housing development project will be determined based on the requirements
that are or were in effect as of the latter of: (1) the date the City's
Community Development Department received a complete preliminary application
that fully complies with Section 56941.1 of the California Government
Code and any checklist or application form developed by the City;
(2) or the date the City received full payment of any applicable filing
fee for review of the preliminary application. If a housing development
project does not require any discretionary approvals, submittal of
a complete application for a building permit shall serve as the preliminary
application.
F. The
required number of inclusionary units required for a housing development
project shall be recalculated in the following circumstances:
1. Change in Number of Units. If a change in the housing development project results in a change in the total number of units, exclusive of any increase resulting from the receipt of a density bonus, incentive, concession, waiver, or similar provision under Chapter
16.033 and California
Government Code Section 65915, the number of inclusionary units required shall be recalculated based on the inclusionary housing requirements in effect as of the date of submittal of the revised housing development project.
2. Change in Square Footage. If a change in the housing development project results in the square footage of construction changing by 20% or more, exclusive of any increase resulting from the receipt of a density bonus, incentive, concession, waiver, or similar provision under Chapter
16.033 and California
Government Code Section 65915, the number of inclusionary units required shall be recalculated based on the inclusionary housing requirements in effect as of the date of submittal of the revised housing development project. For purposes of this subdivision, "square footage of construction" means the building area, as defined by the
California Building Standards Code (Title 24 of the
California Code of Regulations).
3. Failure to Timely Submit a Complete Application. If the City's Community
Development Department does not receive an application for the housing
development project within 180 days of receipt of the preliminary
application, or if the City's Community Development Department does
not receive a complete application within 90 days of notifying the
applicant that the application is incomplete, then preliminary application
shall expire and have no further force or effect, and the number of
inclusionary units required shall be recalculated based on the inclusionary
housing requirements in effect as of the date of submittal of a new
preliminary application.
G. For
housing development projects that do not comply with applicable, objective
general plan, zoning, and subdivision standards and criteria, including
design review standards, and for all housing development projects
if the Housing Accountability Act (Section 65589.5 of the California
Government Code) or Section 56941.1 of the California
Government Code
are repealed or expire, the number of inclusionary units required
for a housing development project will be determined based on the
requirements that are or were in effect as of the latter of: the date
the City's Community Development Department received a complete submittal
of a proposed inclusionary housing plan; or the date the City received
full payment of any applicable filing fee for review of the proposed
inclusionary housing plan.
(08-05; 13-03; 18-10; 21-04)
In lieu of providing the inclusionary units in the housing development project pursuant to Section
16.036.030, the requirements of this chapter may be satisfied through one or more of the alternatives set forth in this section, in accordance with procedures and standards set forth in the administrative manual.
A. In
Lieu Fee. For housing development projects proposing five or six units,
the developer may, by right, pay a fee in lieu of providing an inclusionary
unit on site. For housing development projects proposing seven units
or more units, the developer may request the City Council's discretionary
approval of a fee in lieu of providing all or some of the required
inclusionary units on-site.
Whether by right or discretionary, all in lieu fees shall be
paid as follows:
1. The amount of the fee shall be calculated using the fee schedule
established by resolution of the City Council at the time the fee
is paid.
2. One-half of the in-lieu fee required by this subsection shall be
paid (or a letter of credit posted) prior to issuance of a building
permit for all or any part of the housing development project. The
remainder of the fee shall be paid before a certificate of occupancy
is issued for any unit in the housing development project.
3. The fees collected shall be deposited in the inclusionary housing
fund.
4. No certificate of occupancy shall be issued for any unit in a housing
development project (market rate or inclusionary) unless any and all
fees required under this section have been paid in full to the City.
B. Land
Dedication. In lieu of providing inclusionary units, a developer may
request City Council approval to dedicate land to the City that the
Director determines is suitable for the construction or substantial
rehabilitation of inclusionary units. To accept a land dedication
in lieu of on-site inclusionary units, the City Council must determine
the fair market value of the dedicated land is equivalent to or greater
than the amount of in lieu fees that would have been needed to satisfy
the housing development project's inclusionary housing obligation.
C. City
Council Approval. To approve a discretionary in lieu fee, the City
Council must make all of the findings set forth below. It is the developer's
burden to provide any and all information needed to make these findings.
Even if the City Council can make these findings, it still has discretion
to deny a request for an in lieu fee and can, instead, require the
housing development project meet the requirements of this chapter
by providing on-site inclusionary units and/or dedicating land unless
doing so would legally constitute a taking of property without just
compensation under the California or Federal Constitutions.
1. The housing development project complies with all requirements in
the administrative manual.
2. Providing the inclusionary units on-site and/or through land dedication
would result in an unreasonable and unavoidable economic hardship.
In evaluating this finding, the City Council should evaluate whether
there are feasible financial, design, and/or development methodologies
that would mitigate or avoid the unreasonable economic hardship of
providing inclusionary units on-site and/or through land dedication.
3. The developer has explored and exhausted all options to reduce the
cost of development and sources of funding to subsidize on-site inclusionary
units, such as participating in such programs like: (a) low income
housing tax credits; (b) below market rate financing from governmental
affordable housing programs; (c) tax-exempt bond financing; and (d)
any other available government programs.
(08-05; 13-03; 18-10; 21-04)
A. In
accordance with the standards and procedures set forth herein and
in the administrative manual, developer shall:
1. Submit an inclusionary housing plan for approval by the Director,
setting forth in detail the manner in which the provisions of this
chapter will be implemented for the proposed housing development project.
If land dedication or off-site units are proposed, the inclusionary
housing plan shall include information necessary to evaluate the site,
location, suitability for inclusionary housing, potential development
constraints, and the number of inclusionary units assigned pursuant
to the administrative manual.
2. Execute and cause to be recorded an inclusionary housing agreement,
unless developer is complying with this chapter solely through in
lieu fees pursuant to Section 16.036.040.A.
3. If the housing development project consists of for-sale units, as
a condition of the sale of each inclusionary unit, require that the
purchaser to enter into an equity sharing agreement with the City
and execute a second deed of trust in favor of the City securing the
equity sharing agreement against the inclusionary unit. The equity
sharing agreement and second deed of trust shall be in a form and
include terms that are in accordance with the requirements of the
administrative manual, as they may be amended from time to time.
B. No
discretionary or ministerial approval shall be issued for all or any
portion of a housing development project subject to this chapter until
the developer has submitted an inclusionary housing plan.
C. No
building permit shall be issued for all or any portion of a housing
development project subject to this chapter until the Director has
approved the inclusionary housing plan, and the inclusionary housing
agreement, if required, is recorded.
D. No
certificate of occupancy shall be issued for all or any portion of
a housing development project subject to this chapter unless the housing
development project is in full compliance with the approved inclusionary
housing plan.
E. The
Community Development Department of the City shall establish, and
may amend from time to time, regulations for the implementation of
this chapter, which shall be known as the administrative manual. The
administrative manual provides more detailed descriptions of the requirements
imposed by this chapter. Each developer of a housing development project
that is subject to this chapter will be provided with a copy of the
administrative manual when an inclusionary housing agreement is executed.
The administrative manual is modified from time to time. Pertinent
modifications to the administrative manual will be applied prospectively
to existing project.
(08-05; 13-03; 18-10; 21-04)
A. Inclusionary
units shall be reasonably dispersed throughout the housing development
project; shall be proportional, in number of bedrooms, to the unrestricted
units. If the housing development project offers a variety of unit
plans with respect to design, materials, and optional interior amenities,
the inclusionary units shall be identical to the housing development
project's base-plan in terms of design, appearance, materials, finished
quality, and interior amenities. If multiple floor plans with the
same number of bedrooms are proposed, the inclusionary units may be
the units with the smaller floor plans. The inclusionary units may
have non-garage parking or garages smaller than the unrestricted units
so long as the inclusionary unit otherwise conforms with the standards
set forth herein and in the administrative manual.
B. All
inclusionary units in a housing development project shall be constructed
concurrently with or prior to the construction of the unrestricted
units. In the event the City approves a phased project, the inclusionary
units required by this chapter shall be constructed and occupied in
proportion to the number of units in each phase of the housing development
project.
C. Inclusionary
units shall be rented or sold to low and moderate income households
at the ratios established pursuant to the administrative manual, and
shall be provided at the applicable affordable housing cost. An inclusionary
unit that is for rent shall remain reserved for the target income
level group at the applicable affordable housing cost in perpetuity,
as secured by recorded covenants.
D. The
number of bedrooms in inclusionary units must be the same as the number
of bedrooms in the unrestricted units, except that if the unrestricted
units provide more than four bedrooms, the inclusionary units need
not provide more than four bedrooms.
E. The
equity share agreement for any inclusionary units that are for-sale
shall be in a form approved by the Director and City Attorney in conformance
with this chapter and the administrative manual prepared in accordance
herewith. The equity share agreement shall include the following terms:
1. Upon resale of an inclusionary unit between the date of the initial
sale and the 10 year anniversary of the initial sale, the seller must
repay to the City an amount equal to the sum of: (a) the City principal
from the inclusionary unit; plus (b) 100% of the City share of appreciation.
2. Upon resale of an inclusionary unit between the date of the 10 year
anniversary of the initial sale and the 15 year anniversary of the
initial sale, the seller must repay to the City an amount equal to
the sum of: (a) the City principal from the inclusionary unit; plus
(b) 80% of the City share of appreciation.
3. Upon resale of an inclusionary unit between the date of the 15 year
anniversary of the initial sale and the 20 year anniversary of the
initial sale, the seller must repay to the City an amount equal to
the sum of: (a) the City principal from the inclusionary unit; plus
(b) 60% of the City share of appreciation.
4. Upon resale of an inclusionary unit between the date of the 20 year
anniversary of the initial sale and the 25 year anniversary of the
initial sale, the seller must repay to the City an amount equal to
the sum of: (a) the City principal from the inclusionary unit; plus
(b) 40% of the City share of appreciation.
5. Upon resale of an inclusionary unit between the date of the 25 year
anniversary of the initial sale and the 30 year anniversary of the
initial sale, the seller must repay to the City an amount equal to
the sum of: (a) the City principal from the inclusionary unit; plus
(b) 20% of the City share of appreciation.
6. Upon resale of an inclusionary unit after the 30 year anniversary
of the initial sale, the seller must repay to the City an amount equal
to the City principal.
(08-05; 13-03; 18-10; 21-04)
A. The
provisions of this chapter shall apply to all developers and their
agents, successors and assigns proposing, building, selling, renting,
and/or occupying a housing development project. All inclusionary units
shall be rented or sold in accordance with this chapter and the administrative
manual. It shall be a misdemeanor to violate any provision of this
chapter. Without limiting the generality of the foregoing, it shall
also be a misdemeanor for any person to sell or rent to another person
an inclusionary unit under this chapter at a price exceeding the maximum
allowed under this chapter or to rent or sell an inclusionary unit
to a household not qualified under this chapter, provided that such
restriction shall not prohibit a household that purchased an inclusionary
unit in accordance with this chapter and the administrative manual
from selling its unit in accordance with the terms of the equity share
agreement. It shall further be a misdemeanor for any person to provide
false or materially incomplete information to the City or to a seller
or lessor of an inclusionary unit to obtain occupancy of housing for
which he or she is not eligible.
B. Any
individual who sells or rents an inclusionary unit in violation of
the provisions of this chapter shall be required to forfeit all monetary
amounts so obtained. Recovered funds shall be deposited into the inclusionary
housing fund.
C. The
City may institute any appropriate legal actions or proceedings necessary
to ensure compliance with this chapter, including but not limited
to: (1) actions to revoke, deny or suspend any permit, including a
building permit, certificate of occupancy, or discretionary approval;
(2) civil actions for injunctive relief or damages; (3) actions to
recover from any violator of this chapter civil fines, restitution
to prevent unjust enrichment, and/or enforcement costs; and (4) any
other action, civil or criminal, authorized by law or by any regulatory
document, restriction, or agreement under this chapter.
D. In
any action to enforce this chapter or an inclusionary housing agreement
recorded hereunder, the City shall be entitled to recover its reasonable
attorney's fees and costs.
E. Failure
of any official or agency to fulfill the requirements of this chapter
shall not excuse any person, owner, developer or household from the
requirements of this chapter.
F. The
remedies provided for herein shall be cumulative and not exclusive
and shall not preclude the City from any other remedy or relief to
which it would otherwise be entitled under law or equity.
(08-05; 13-03; 18-10; 21-04)
A. Inclusionary
Housing Fund. There is hereby established a separate fund of the City,
to be known as the inclusionary housing fund. All monies collected
pursuant to this chapter, including Sections 16.036.040.A, 16.036.060.E,
and/or 16.036.070.B, shall be deposited in the inclusionary housing
fund. Additional monies from other sources may be deposited in the
inclusionary housing fund. The monies deposited in the inclusionary
housing fund shall be subject to the following conditions:
1. Monies deposited into the inclusionary housing fund must be used
to increase and improve the supply of housing affordable to moderate,
low, and very low income households in the City. Monies may also be
used to cover reasonable administrative or related expenses associated
with the administration of this chapter.
2. The inclusionary housing fund shall be administered by the Director
of Community Development, or his or her designee, who may develop
procedures to implement the purposes of the inclusionary housing fund
consistent with the requirements of this chapter and any adopted budget
of the City.
3. Monies deposited in accordance with this section shall be used in
accordance with the City's Housing Element, or subsequent plan adopted
by the City Council to construct, rehabilitate, or subsidize affordable
housing or assist other government entities, private organizations,
or individuals to do so. Permissible uses include, but are not limited
to, assistance to housing development corporations, equity participation
loans, grants to renters and homeowners, pre-home ownership co-investment,
pre-development loan funds, participation leases, or other public-private
partnership arrangements. The inclusionary housing fund may be used
for the benefit of both rental and owner-occupied housing.
B. Administrative
Fees. The City Council may by resolution establish reasonable fees
and deposits for the administration of this chapter.
C. Appeal. Within 10 calendar days after the date of any Director decision, an appeal may be filed pursuant to Chapter
16.321 of this title.
D. Taking
Determination.
1. Commencing upon the approval or disapproval of the inclusionary housing plan by the Director pursuant to this chapter and the administrative manual, and within 10 days thereafter, a developer may request a determination that the requirements of this chapter, taken together with the inclusionary incentives, as applied to the housing development project, would legally constitute a taking of property of the housing development project without just compensation under the California or Federal Constitutions. The developer has the burden of providing economic information and other evidence necessary to establish that application of the provisions of this chapter to the housing development project would constitute a taking of the property of the proposed housing development project without just compensation. The Director shall make the determination, which may be appealed in the manner and within the time set forth in subsection
C of this section, except that the City Council shall serve as the appeal body.
2. In making the taking recommendation or determination, the decision
maker shall consider each of the following:
a. Application of the inclusionary housing requirement to the housing
development project;
b. Application of the inclusionary incentives;
c. Utilization of the most cost-efficient product type for the inclusionary
units; and
d. External funding where reasonably likely to occur.
3. If it is determined that the application of the provisions of this
chapter would be a taking, the inclusionary housing plan and the inclusionary
housing agreement shall be modified to reduce the obligations in the
inclusionary housing component to the extent and only to the extent
necessary to avoid a taking. If it is determined no taking would occur
through application of this chapter to the housing development project,
the requirements of this chapter remain applicable.
(08-05; 13-03; 18-10; 21-04)