The city of South Gate declares that the provision of housing in a suitable living environment for all residents is a priority of the highest order and is consistent with state, regional and national policies. The goal of the city is to achieve a balanced community with housing available for persons of all income levels. There exists within the city a shortage of housing that is affordable to households of lower and moderate incomes. Federal and state housing finance subsidy programs are not sufficient by themselves to satisfy these income housing needs. The city finds that the housing shortage for households of lower and moderate income is detrimental to the public health, safety and welfare and, further, that it is a public purpose of the city to seek assistance and cooperation from the private sector in making available an adequate supply of housing for persons of all economic segments of the community.
(Ord. 2022-05-CC § 1, 6-28-2022)
The purpose of this chapter is to enhance the public welfare and assure the compatibility between future housing development and the housing element of the city of South Gate general plan through increasing the production of housing units affordable to households of lower and moderate incomes. It is the purpose of this chapter to meet the city's general plan goals to expand the supply of housing available to lower- and moderate-income households.
(Ord. 2022-05-CC § 1, 6-28-2022)
A. 
"Affordability agreement"
means a legally binding, written agreement between an applicant and the city, in form and substance satisfactory to the city attorney, ensuring compliance with the requirements of this chapter.
B. 
"Affordable rent"
means the maximum monthly rent an owner may charge for an allocated unit in accordance with Section 50053(b) of the California Health and Safety Code, less the appropriate allowance for utilities.
C. 
"Allocated unit" or "inclusionary unit"
means a newly constructed "for-rent" or "for-sale" dwelling unit which is: (1) provided (or caused to be provided) by an applicant under the provisions of this chapter; (2) to be made available and occupied by a lower-, low- or moderate-income household, as required under the provisions of this chapter; (3) subject to occupancy and affordable rent or sales price controls for a period of not less than fifty-five years; (4) compatible with the design of other units in the residential housing development of which it is part in terms of exterior appearance, materials and quality finish; and (5) a similar unit type and bedroom mix to the overall residential development.
D. 
"Community care facility"
means a facility, place or building which is maintained and operated, subject to licensing by the California Department of Social Services, to provide nonmedical residential care, which may include home finding and other services, for children and/or adults, including: the physically handicapped; mentally impaired, mentally disordered, or incompetent; developmentally disabled; court wards and dependents; neglected or emotionally disturbed children; the addicted; the aged. "Community care facility" includes a continuing care and retirement community.
E. 
"Development standard"
means a site or construction condition, including, but not limited to, height limits, required setbacks, maximum floor area ratio, on-site open-space requirement, or required parking that applies to a residential development pursuant to any ordinance, general plan, specific plan, charter, or other local condition, law, policy, resolution, or regulation. Without limiting the foregoing, the parking requirements as set forth in Table 11.31-4 of Section 11.31.060 shall apply to any residential development subject to this chapter.
F. 
"Health care facility"
means a facility, place or building other than a hospital which is maintained and operated as a residence for patients and to provide long-term medical care. Includes nursing homes, intermediate care facilities, extended care facilities, hospice homes, and similar facilities which are licensed by the California State Department of Health Services, and defined in Health and Safety Code Section 1200, et seq. May include a lab, radiology, pharmacy, rehabilitation, and other similar services as accessory uses.
G. 
"Housing authority of the city of South Gate" or "housing authority"
means the not-for-profit public entity, responsible for ensuring adequate, decent, safe and sanitary housing for qualified people with limited income within South Gate consistent with federal, state and local laws and which is involved in administering programs designed to develop affordable housing, provide federal rental subsidy, and various other programs to benefit South Gate residents with limited income.
H. 
"Housing in-lieu fee"
means a fee paid by an applicant as an alternative to providing an allocated unit or a fraction of an allocated unit.
I. 
"Income (household), low"
means a household whose gross income does not exceed eighty percent of the area median income for the county of Los Angeles, adjusted for family size, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50079.5 of the California Health and Safety Code.
J. 
"Income (household), very low"
means a household whose gross income does not exceed fifty percent of the area median income for the county of Los Angeles, adjusted for family size, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50105 of the California Health and Safety Code.
K. 
"Lower-income household"
is a general term which refers to households whose gross income falls under the categories of very low or low income as those terms are defined in this section.
L. 
"Moderate-income household"
means a household whose gross income does not exceed one hundred twenty percent of the area median income for the county of Los Angeles, adjusted for family size, as published and periodically updated by the State Department of Housing and Community Development pursuant to Sections 50079.5 and 50052.5 of the California Health and Safety Code.
M. 
"Residential development"
means a project containing at least one residential unit, including mixed use developments. For the purposes of this chapter, "residential development" also includes projects defined in California Government Code Section 65915(i), including a subdivision or common interest development, as defined in Section 4100 of the California Civil Code, approved by the city and consists of residential units or unimproved residential lots and either a project to substantially rehabilitate and convert an existing commercial building to residential use or the substantial rehabilitation of an existing multifamily dwelling, as defined in California Government Code Section 65863.4(d), where the result of the rehabilitation would be a net increase in available residential units.
N. 
"Review authority"
means the individual or official city body which has the responsibility and authority to review, and approve or disapprove, applications for land use entitlements.
O. 
"Single-room-occupancy unit"
is a residential unit with living space with a minimum floor area of one hundred fifty square feet and a maximum of four hundred square feet restricted to occupancy by no more than two persons. Kitchen and bathroom facilities may be wholly or partially included in each living space or may be fully shared.
(Ord. 2022-05-CC § 1, 6-28-2022)
The inclusionary requirements of this chapter apply to all residential developments within the city, including the residential component of mixed-use developments.
(Ord. 2022-05-CC § 1, 6-28-2022)
Table 1:
Rental Projects
Ownership Projects
For the 12-month period commencing on the effective date of this chapter, projects with more than 10 units
8% affordable to low-income or 6% affordable to very-low-income households
10% affordable to moderate-income households
STAFF'S RECOMMENDATION:
Subject to the approval of the city council, from the 12-month period commencing on the first anniversary of the effective date of this chapter, projects with more than 10 units
10% affordable to low-income or 8% affordable to very-low-income households
12% affordable to moderate-income households
STAFF'S RECOMMENDATION:
Subject to the approval of the city council, from and after the second anniversary of the effective date of this chapter, projects with more than 10 units
12% affordable to low-income or 10% affordable to very-low-income households
14% affordable to moderate-income households
Projects with 10 units or less
Fee only
Fee only
A. 
Residential or mixed-use development projects with ten or fewer units shall only be required to pay a housing in-lieu fee as noted in Section 11.29.100.
B. 
For projects of more than ten units, except those development projects complying with this chapter in an alternative manner consistent with Section 11.29.070, all residential or mixed-use development projects shall be subject to the inclusionary requirements set out in Table 1. For such projects of more than ten units for the time periods set out in Table 1 commencing on the first anniversary of the effective date of this chapter and thereafter, the increases in the inclusionary requirements for rental projects and ownership projects provided for therein shall be subject, however, to the prior approval of the city council before taking effect.
C. 
Fractional units that may result from the application of these requirements will be addressed as follows:
1. 
For a fractional unit requirement of less than one-half, the applicant will pay a fractional housing in-lieu fee.
2. 
For a fractional unit requirement of one-half and above, the fraction will be rounded up to the next larger integer and treated as a whole unit.
D. 
If a proposed residential development project would result in the elimination of existing deed restricted affordable housing units, the affordable units must be replaced on a one-for-one basis with equally affordable deed restricted units with a new affordability agreement recorded that results in resetting and making consistent the duration of affordability consistent with the requirements of this section.
E. 
An applicant proposing to provide on-site allocated units consistent with the inclusionary requirements of this section shall be eligible to receive one or more incentives or concessions, pursuant to Section 11.31.050 of the city's density bonus ordinance, or other benefits as negotiated with the city.
(Ord. 2022-05-CC § 1, 6-28-2022)
An applicant proposing allocated units consistent with this chapter which also applies for a density bonus consistent with Chapter 11.31 may count units affordable to lower- or moderate-income households toward both requirements. Additional units allowed by the density bonus shall not be included in the total project units when determining the proportion of required allocated units in a residential development.
(Ord. 2022-05-CC § 1, 6-28-2022)
Alternatives to provision of on-site allocated units or payment of the housing in-lieu fee in accordance with Section 11.29.100 include provision of allocated units off site, directly by applicant or through an agreement with a third party, dedication or conveyance of land, conversion of market rate units to affordable, preservation of at-risk housing, use of inclusionary credits, or other innovative approaches. All alternative compliance measures must produce at least the same number and affordability of units that would have been provided on site, and are subject to review and approval by the director of community development.
A. 
Allocated Units Provided Off Site. An applicant may provide (or may cause a third party to provide) allocated units off site ("off-site units").
1. 
Allocated units provided off site must be located in the same general area of the city as the unallocated units of the development as determined by the director of community development, unless the director of community development makes a determination that locating the off-site units in a different area of the city would better serve the general plan housing goals of the city.
2. 
As part of the application submittal materials, if the applicant itself will provide the allocated units off site, the applicant shall submit evidence that the applicant owns, leases (pursuant to an executed ground lease of at least fifty-five years from the date off-site units would be produced), or has an irrevocable option to purchase, the site where the off-site allocated units are proposed to be located; alternatively, if applicant enters into an agreement with a third party to provide the allocated units off site, then the applicant shall cause such third party to submit evidence that the third party owns, or has an irrevocable option to purchase, the site where the off-site allocated units are proposed to be located.
B. 
Land Dedication or Conveyance Alternative. An applicant may offer to dedicate or convey land to the housing authority, situated on site or off site.
1. 
Land offered under this section must be within the city's boundaries and must be designated for a general plan land use which allows multifamily units.
2. 
The applicant shall provide an analysis which demonstrates that the land offered is suitable for affordable housing development in terms of size; location; general plan land use designation; availability of sewer, water and transit services; absence of toxins; absence of environmental constraints; site characteristics and surroundings. Staff will recommend to the review authority whether the dedication should be accepted.
3. 
The applicant shall also submit evidence that the applicant owns, or has an irrevocable option to purchase, the site proposed for dedication or conveyance.
4. 
Land conveyed under this section shall be used for the development of affordable housing for households of lower income.
5. 
Land shall be identified and offered for dedication or conveyance at the time of development application submittal. If the offer is accepted by the review authority, the land must be donated to the housing authority no later than the date of approval of the final subdivision map, parcel map or housing development application, and must have all the permits and approvals, other than building permits, necessary for development with the required number of affordable units.
C. 
Impaction Determination. Each site proposed to be dedicated or conveyed to the city for construction of affordable units or proposed for one or more off-site allocated units shall be evaluated as to whether the placement of such units will overly impact an area with lower income units. If the site is within one thousand feet of one or more existing or approved developments in which more than fifty percent of the units are, or will be, restricted to occupancy by households of lower incomes, impaction shall be found. The review authority may override a determination of impaction by making findings that local schools, services and adjacent uses will not be negatively impacted by the construction of allocated or affordable units at the proposed site.
D. 
Conversion of Market Rate Units to Affordable. An applicant may propose to convert existing market rate units to affordable units in an amount equal to or greater than the required on-site inclusionary housing requirement, including any needed rehabilitation to ensure compliance with building, health and safety standards.
E. 
Preservation of At-Risk Housing. An applicant may offer to purchase long-term affordability covenants on an existing deed restricted affordable housing project at imminent risk of contract termination and conversion to market rate housing.
F. 
Credit for Additional Affordable Units. If an applicant completes construction on a site of a greater number of affordable units than required by this chapter, the additional units may be credited towards meeting the requirements of this chapter for a future project. The applicant may use credits in a future project or transfer the credits in writing to another developer. Credits will only be counted toward required affordable units with the same bedroom count, the same tenure (rental or ownership), and required affordability targets. The credits must be used within ten years of issuance. Projects which have received a density bonus or which receive a government subsidy in any form, financial or other, shall not be eligible for credits.
G. 
Innovation Encouraged. Innovative alternatives to providing affordable housing not outlined in this chapter shall be evaluated by staff and considered on a case-by-case basis. Substitute programs shall be permitted providing, at the recommendation of staff and determination of the review authority that the objectives of the inclusionary housing ordinance are being met with the alternate proposal.
(Ord. 2022-05-CC § 1, 6-28-2022)
The following residential developments are exempt from the inclusionary requirements (Section 11.29.050) of this chapter:
A. 
The construction of a dwelling unit to replace a previously existing dwelling unit situated on the same lot if the previous dwelling was demolished or destroyed within five years of the date the building permit application for the replacement unit is submitted to the community development department.
B. 
The construction of homeless shelters, community care facilities, health care facilities, single-room-occupancy units and units which, under agreement with the city or a city agency, are only available for occupancy by lower or moderate income households at affordable rents or affordable sales prices for a period of not less than fifty-five years.
C. 
The construction of accessory dwelling units.
(Ord. 2022-05-CC § 1, 6-28-2022)
A. 
Determination of a Taking of Property Without Just Compensation. In accordance with the procedures provided by this section, an applicant may request a determination as to whether the requirements of this chapter, taken together with density bonuses and any concessions or other incentives available under Chapter 11.31, would constitute a taking of property without just compensation under the California or Federal Constitutions.
1. 
If an inclusionary housing plan is subject to the approval of the director of community development, the applicant may request the director to make a takings determination within fifteen days of the decision by the director to approve or disapprove the affordability agreement. The developer may appeal the director's takings determination to the planning commission within ten working days after the date of the decision in compliance with Chapter 11.50.
2. 
If an inclusionary housing plan is subject to the approval of the city council, the developer may request the city council to make a takings determination at the time it acts to approve or disapprove the affordability agreement.
B. 
Presumption of Facts. In making the taking recommendation or determination, the director or city council, as appropriate, shall presume each of the following facts:
1. 
Application of the inclusionary housing plan to the project; and
2. 
Application and utilization of all density bonuses and incentives available under state and local law; and
3. 
Utilization of the most cost-efficient product type for the inclusionary units that would meet the standards of this chapter; and
4. 
The reasonable availability of external funding.
C. 
Modifications to Reduce Obligations. If it is determined that the application of the provisions of this chapter would be a taking, the inclusionary housing plan 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 that no taking would occur though application of this chapter to the residential project, the requirements of this chapter shall remain applicable.
(Ord. 2022-05-CC § 1, 6-28-2022)
A. 
Residential development projects shall be assessed a housing in-lieu fee as an alternative to provision of on-site allocated units in accordance with Section 11.29.050.
B. 
The city council, by resolution, shall establish the amounts and calculation of the housing in-lieu fee. The fee for a for-rent unit shall be paid no later than prior to the final inspection for each unit in a residential project; payment for a for-sale unit shall be no later than the close of escrow or one year following the final inspection, whichever is sooner. The fee for rental and for-sale units shall be adjusted annually in July based on the annual percentage change in corresponding month in the Bureau of Labor Statistics Long Angeles/Long Beach/Anaheim Consumer Price Index—All Urban Consumers (CPI-U).
C. 
Except as otherwise provided in this chapter, all housing in-lieu fees paid under this chapter shall be paid to the city and shall be used by the city's housing authority only for the development of housing situated within the city limits that is affordable to households of lower and moderate incomes, including, but not limited to, the acquisition of property, costs of construction, including costs associated with planning, administration and design, as well as actual building or installation costs, and program administration. Housing assisted with housing in-lieu fees shall be subject to a minimum fifty-five-year affordability agreement with the housing authority encumbering the site where the assisted housing is situated.
(Ord. 2022-05-CC § 1, 6-28-2022)
A. 
All inclusionary units shall be:
1. 
Reasonably dispersed throughout the residential project;
2. 
Proportional, in number of bedrooms, and location, to the market rate units;
3. 
Comparable to the market rate units included in the residential project in terms of size, design, materials, finished quality, and appearance; and
4. 
Permitted the same access to project amenities and recreational facilities as are market rate units.
B. 
Timing of Construction. All inclusionary units in a project shall be constructed concurrent with or before the construction of the market rate units. If the city approves a phased project, a proportional share of the required inclusionary units shall be provided within each phase of the residential project.
C. 
Accessory dwelling units shall not be counted towards meeting a project's inclusionary requirements.
D. 
Units for Sale.
1. 
Time Limit for Inclusionary Restrictions. A unit for sale shall be restricted to the target income level group at the applicable affordable housing cost for a minimum of fifty-five years.
2. 
Certification of Purchasers. The applicant and all subsequent owners of an inclusionary unit offered for sale shall certify, in form and content acceptable to the city, the income of the purchaser.
3. 
Resale Price Control. In order to maintain the availability of inclusionary units required by this chapter, the resale price of an owner-occupied inclusionary unit shall be limited to the lesser of the fair market value of the unit as established by a licensed real estate agent based upon three comparable properties or the restricted resale price. For these purposes, the restricted resale price shall be the greater of either the applicable affordable housing cost or an amount equal to the sum of: a) the purchase price, b) an amount equal to ten percent of any increase in the applicable affordable housing cost since the previous sale of the unit, c) the adjusted amount of any capital improvements for which a building permit has been issued by the city and a certification of occupancy or similar final certification has been filed, or other improvements which add assessed value to the unit, d) any applicable transaction fee charged by a real estate professional, and e) if the occupant has allowed the unit to deteriorate due to deferred maintenance, the restricted retail price shall be discounted in an amount equal to the costs necessary to bring the unit into conformity with the city municipal code.
4. 
Inheritance of Inclusionary Units. Upon the death of an owner of an owner-occupied inclusionary unit, title in the property may transfer to the surviving joint tenant without respect to the income-eligibility of the household. Upon the death of a sole owner or of all owners of an inclusionary unit and the inheritance of the property by one or more nonincome eligible children or stepchildren of the deceased, the property shall be sold to an income eligible household within one year of the time when the deceased's estate is settled. Inheritance of an inclusionary unit by any other nonincome eligible person or persons shall require the sale of the property to an income eligible person as soon as is feasible, but not more than one hundred eighty days after the deceased's estate is settled.
5. 
Forfeiture. If an inclusionary unit for sale is sold for an amount in excess of the resale price controls required by this section, the buyer and the seller shall be jointly and severally liable to the city for the entire purchase price of the unit. Recovered funds shall be deposited into the affordable housing trust funds. Notwithstanding the foregoing, upon written request for time to cure any violation given to the city by the buyer and seller, it shall be within the discretion of the city manager to allow the buyer and seller one hundred eighty days to cure any violation of the resale price controls.
E. 
Rental Units.
1. 
Time Limit for Inclusionary Restrictions. A rental unit shall remain restricted to the target income level group at the applicable affordable housing cost for fifty-five years.
2. 
Certification of Renters. The owner of any rental inclusionary units shall certify to the director, on a form provided by the city, the income of the tenant at the time of the initial rental and annually thereafter.
3. 
Forfeiture. Any lessor who leases an inclusionary unit in violation of this chapter shall be required to forfeit to the city all money so obtained. Recovered funds shall be deposited into the affordable housing trust fund.
4. 
The director may require the execution and recording of whatever documents are necessary or helpful to ensure enforcement of this section, including but not limited to: promissory notes, deeds of trust, resale restrictions, rights of first refusal, options to purchase, and/or other documents, which shall be recorded against all inclusionary units.
F. 
General Prohibitions.
1. 
No person shall sell or rent an inclusionary unit at a price or rent in excess of the applicable affordable housing cost placed on the unit in accordance with this chapter.
2. 
No person shall sell or rent an inclusionary unit to a person or persons that do not meet the income restrictions placed on the unit in accordance with this chapter.
3. 
No person shall 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 that person is not eligible.
G. 
Principal Residency Requirement.
1. 
The owner or lessee of an inclusionary unit shall reside in the unit as such person's principal residence for at least ten out of every twelve consecutive months unless actively serving in the United States military. Notwithstanding this requirement, an owner or lessee may live elsewhere for a period up to six months every five years on account of hardships, including, but not limited to, medical reasons, the need to assist family member in crisis or medical need, and relocation for employment purposes, subject to verification by the director of community development.
2. 
No owner or lessee of an inclusionary unit shall lease or sublease, as applicable, an inclusionary unit without the prior permission of the director.
(Ord. 2022-05-CC § 1, 6-28-2022)
An applicant may request the city provide regulatory, procedural or financial incentives, including but not limited to a density bonus or modified development standards, in exchange for providing on-site inclusionary units as required by this chapter. The request for incentives shall be included as part of the project application materials, and shall be subject to review and approval by the director of community development.
(Ord. 2022-05-CC § 1, 6-28-2022)
A. 
The applicant shall comply with the following requirements at the times and in compliance with the standards and procedures in the city's regulations for the implementation of this chapter:
1. 
Inclusionary Housing Plan. An applicant shall submit an inclusionary housing plan, in a form specified by the director of community development, detailing how the provisions of this chapter will be implemented for the proposed project. If the inclusionary housing plan includes alternatives to on-site units, then the inclusionary housing plan shall be subject to the review and approval of the city council. All other inclusionary housing plans shall be subject to the approval of the director of community development, subject to appeal to the planning commission. Any such appeal shall be filed within ten working days of the director's decision.
2. 
Affordability Agreement. An applicant shall execute and cause to be recorded an affordability agreement. The affordability agreement shall be a legally binding agreement between the applicant and the city, in a form and substance satisfactory to the director and the city attorney, and containing those provisions necessary to ensure that the requirements of this chapter are satisfied, whether through the provision of inclusionary units or through an approved alternative method. Once the residential development including allocated units has received its final discretionary approval, the applicant shall file an application, including payment of any processing and monitoring fees, with the community development department for approval and finalization of the affordability agreement.
B. 
An applicant for a project providing allocated units consistent with this chapter and affordable units consistent with the provisions of the density bonus and other developer incentives chapter of this code shall enter into a single affordability agreement with the city.
C. 
Discretionary Approvals. No discretionary approval shall be issued for a project subject to this chapter until the applicant has submitted an inclusionary housing plan.
D. 
Issuance of Building Permit. No building permit shall be issued for a project subject to this chapter unless the director of community development has approved the inclusionary housing plan, and any required affordability agreement has been recorded encumbering the project site.
E. 
Issuance of Certificate of Occupancy. A certificate of occupancy shall not be issued for a project subject to this chapter unless the approved inclusionary housing plan has been fully implemented.
(Ord. 2022-05-CC § 1, 6-28-2022)
A. 
The city council, by resolution, may from time to time adopt procedures, policies, rules and requirements, including the adoption of processing and administrative fees, to implement, administer, and/or enforce the provisions of this chapter.
B. 
The director of community development or designee is authorized to determine the number of dwelling units contained within a particular residential development, if a determination is needed to resolve a disagreement. When a question arises regarding the meaning, or requires an interpretation of any provision of this chapter to any specific circumstances or situation, the director of community development is authorized to render a decision thereon in writing.
C. 
The housing authority shall keep on file and available for public review a copy of the current income schedules and utility allowances.
(Ord. 2022-05-CC § 1, 6-28-2022)
At least once each calendar year, the community development department shall prepare a report on the effectiveness of the inclusionary housing ordinance, which shall include the following:
A. 
By income category, the total number of on-site inclusionary units issued building permits during the time period covered by the report.
B. 
By income category, the total number of off-site inclusionary units issued building permits during the time period covered by the report.
C. 
The amount of acreage by land use category dedicated to the housing authority as an alternative to fulfill an inclusionary requirement during the time period covered by the report.
D. 
By income category, the total number of inclusionary units converted from market rate during the time period covered by the report.
E. 
By income category, the total number of affordable units preserved as an alternative to fulfill an inclusionary requirement during the time period covered by the report.
F. 
By income category, the total number of additional inclusionary units issued building permits during the time period covered by the report, as well as those issued building permits in the preceding nine years.
G. 
The amount of any housing in-lieu fees collected.
H. 
Any recommendations with regard to changes or revisions to the adopted program to improve its effectiveness and/or administration.
(Ord. 2022-05-CC § 1, 6-28-2022)
Housing in-lieu fees collected by the city pursuant to this chapter shall be deposited into an affordable housing trust fund maintained by the city for use in the site acquisition, development, rehabilitation, or preservation of affordable housing, either directly by the city or in partnership with the housing authority or third-party affordable housing developers.
(Ord. 2022-05-CC § 1, 6-28-2022)