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O1519 / ~ e e CA:RMM:lld583C/hpc City Council Meeting 4-24-90 Santa Monica, California ORDINANCE NUMBER 1519 (CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE SECTIONS 9420, 9421, 9422, 9423, 9424, 9427, 9428, AND 9429 AND ADDING SECTION 9433 TO THE SANTA MONICA MUNICIPAL CODE RELATING TO THE INCLUSIONARY HOUSING PROGRAM THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS: SECTION 1. Santa Monica Municipal Code Section 9420 is amended to read as follows: SECTION 9420. Findings and Purpose. The city Council finds and declares: (a) The City of Santa Monica has a responsibility to address the needs of its residents and residents in the region from all social and economic groups for decent, affordable housing, while at the same time maintaining an economically sound and healthy environment. (b) The Housing Element of the General Plan of the city of Santa Monica adopted on January 25, 1983, provided for an inclusionary housing program to address - 1 - e e the need for decent and affordable housing in Program 12. (c) The city Council of the City of Santa Monica properly considered and adopted the components of an inclusionary housing program which would implement the goals of Program 12 at its meeting on March 10, 1987. (d) On June 28, 1988, the City council of the City of Santa Monica revised Program 12, adopting Ordinance Number 1448 (CCS) to implement those revisions. (e) The vast majority of new housing units being constructed in the City are not affordable to persons of low, moderate, or middle income. (f) The current inclusionary requirements placed on new housing development are inadequate to allow the city to provide sufficient numbers of new housing units to persons of low, moderate, or middle income. (g) The current per square foot in-lieu fee is inadequate to allow the City to provide the number of units which would be provided if the inclusionary requirements on new housing development - 2 - . . were met by provision of on-site housing units. (h) The city is currently conducting studies to determine the most appropriate on-site and in-lieu fee requirements for the City's inclusionary program. (i) pending completion of these studies, the city Council finds it necessary to amend the City's inclusionary program on an interim basis as set forth below. SECTION 2. Santa Monica Municipal Code section 9421 is amended to read as follows: SECTION 9421. Definitions. The following words or phrases as used in this Chapter shall have the following meanings: Dwellinq Unit. One or more rooms, designed, occupied, or intended for occupancy as separate living quarters, wi th full cooking, sleeping, and bathroom facilities for the exclusive use of a single household. Elderly Household. A household where the head of household is at least 62 years of age. - 3 - e e IiUD. The united States Department of Housing and Urban Development or its successor. Inclusionary unit. A rental dwelling unit as required by this Chapter which is affordable by a household with low or middle income. Income Eliqibility. The gross annual household income considering household size and number of dependents, income of all wage earners, elderly or disabled family members, and all other sources of household income. In-Lieu Fee. A fee paid to the City by a developer subject to this Chapter in-lieu of providing the required inclusionary units. Market Rate Unit. A dwelling unit as to which the rental rate is not restricted by this Chapter or by the Rent Control Law. Maximum Allowable Rent. A monthly housing charge which does not exceed 30% of the median income established by HOD, adjusted for income level, household size, and unit size. This charge shall represent full consideration for housing services and amenities as provided to - 4 - e e market rate units in the project, whether or not occupants of market rate units pay separate charges for such services and amenities. Housing services and common area amenities include, but are not limited to, the following: parking, use of common facilities including pools or health spas, and utilities if the project is mastermetered. Notwithstanding the foregoing, utility charge for use of natural gas and electricity, to the extent individually metered for each unit in the project, may be passed through or billed directly to the occupants of inclusionary units in the project in addition to maximum allowable rents collected for those inclusionary units. "Koderate" and "Low" Income Levels. Determined periodically by the City based on the United states Department of Housing and Urban Development (HUD) estimate of median income in the Los Angeles-Long Beach Primary Metropolitan Statistical Area. The two major income categories are: "moderate income" (61% to 100% of the area median) and "low income" (60% or less of the area median). Further adjustment shall be made by household size - 5 - e e as established by the city. The Planning Department shall make available a list of moderate and low income levels as adjusted, which list shall be updated periodically by the city and filed with the City Clerk. Off-si te Construction. Erection of low or moderate income housing units on land other than that on which the developer intends to place a project within the City of Santa Monica. project. A residential development or land subdivision proposal for which City permits and approvals are sought. SECTION 3. Santa Monica Municipal Code Section 9422 is amended to read as follows: SECTION 9422. Applicability. (a) An inclusionary requirement shall apply to all projects involving new construction of two or more residential market rate dwelling units or condominium or cooperative conversion of two dwelling units or more. (b) The construction of any multiple rental or limited equity cooperative housing which has a recorded deed restriction requiring occupancy of - 6 - e e all units in the project by and rent levels of all units affordable to low and moderate income persons or households for a period of not less than 30 years, and which is ei ther financed by federal, state, or local housing assistance, or owned by religious or other non-profit organization shall be exempt from the requirements of this Chapter. (c) (1) The 1990 revisions to this Chapter shall apply to any project for which an application was filed with the city Planning Division on or after March 27, 1990. ( 2 ) A proj ect not subj ect to the 1990 revisions to this Chapter pursuant to subdivision (c) (1) of this section shall be subject to the provisions of this Chapter as they existed on the date of approval of the appl ication for the project, unless the applicant voluntarily requests that the amendments of this Chapter apply to the project. In the event of such a request, the provisions of this Chapter shall apply to such proj ect unless the request is barred by the provisions of Section 9424 (g) of this Chapter. - 7 - e e SECTION 4. Santa Monica Municipal Code section 9423 is amended to read as follows: SECTION 9423. project Development Requirements. (a) This Chapter requires that not less than thirty percent (30%) of the total n~~ber of new units to be constructed in any project developed by an applicant at one location, designed for permanent occupancy and containing two (2) or more units, excluding any density bonus units to which an appl icant is enti tIed under Government Code section 65915, shall be affordable by households of I ow- or mOderate-income. Not less than twenty percent (20%) of the units must be affordable to households of low-income and the balance of the affordable units must be affordable to households of moderate income. The requirements of this section may alternatively be satisfied at the developer's discretion by off-site development of required units as described in section 9423(g) or an in-lieu fee payment pursuant to the provisions of Section 9424. (b) In determining the number of inclusionary units required, any decimal - 8 - e e fraction less than 0.5 shall be rounded down to the nearest whole number, and any decimal fraction of 0.5 or more shall be rounded up to the nearest whole number. However, in determining the number of low income inclusionary units required, any decimal fraction less than O. 5 shall be rounded up to the nearest whole number. (c) At the time of filing an application with the City'S Planning Department for permission to develop mUlti-family market rate dwelling units, the developer shall specify the number, type, location, size, and construction schedule of all dwelling units proposed to be developed and shall indicate which of the dwelling units, if any, are intended to satisfy the inclusionary housing requirements of this Chapter. Cd) If located on the project site, inclusionary units shall, whenever reasonably possible, be evenly distributed throughout the project. The applicant may reduce either the size or interior amenities of the inclusionary units as long as there are not significant identifiable differences between inclusionary and market rate units visible - 9 - e e from the exterior of the units and the size and design of the units are reasonably consistent with the market rate uni ts in the proj ect, provided that all uni ts conform to the requirements of the applicable Building and Housing Codes. Inclusionary units provided shall have at least the same number of bedrooms as the average uni t in the proj ect and if the floor area of the inclusionary units is not the same as the floor area of the market rate units at the project, each of the inclusionary units shall satisfy the following minimum total floor area, depending upon the number of bedrooms provided: o Bedroom 500 Square Feet 1 Bedroom 600 Square Feet 2 Bedrooms 850 Square Feet 3 Bedrooms 1080 Square Feet 4 Bedrooms 1200 Square Peet (e) All inclusionary units in a project or a phase of a project shall be constructed concurrently with the construction of market rate units in the project or phase of that project. - 10 - e e (f) Inclusionary units developed on the project site must be rental units in rental or ownership projects. (g) Inclusionary units required pursuant to this Chapter may be provided at a location within the City other than the project site at the developer's discretion. Any such off-site inclusionary units shall be completed by the developer of the market rate housing proj ect prior to the issuance of a Certificate of Occupancy for the market rate housing unit project and shall conform to the requirements of the applicable Building and Housing Codes and the minimum size provisions cited in section 9423 (d) . The occupancy and rents of any such off-site units shall be governed by the terms of a deed restriction similar to that used for on-site inclusionary units which shall take precedence over all other covenants, liens, and encumbrances of the property on which the off-site construction is performed. SECTION 5. Santa Monica Municipal Code Section 9424 is amended to read as follows: - 11 - e e SECTION 9424. In-Lieu Fees for Inclusionary Rousinq. (a) Whenever the City requires as a condition of approval of a market rate housing development that the development include inclusionary housing units pursuant to this Chapter, the developer may elect to pay a fee to the city in lieu of providing such on-site or off-site inclusionary units in accordance with the provisions of this Section. (b) The amount of the fee pursuant to this section shall be determined as follows: $15.00 per gross square foot of floor area. In determining the required fee, the floor area of any on-si te inclusionary units shall be excluded from the floor area calculation. (c) Any fee required pursuant to this Section shall be adjusted for inflation by the percentage change in the Consumer Price Index ("CPI") between the date of adoption of this Chapter through the month in which payment is made. For purposes of this Section cpr shall mean the index for Urban Wage Earners and Clerical Workers for All Items for the Los Angeles/Long Beach/Anaheim statistical - 12 - e e area, as publ ished by the Uni ted Department of Labor, Bureau of statistics. (d) Any fee required pursuant to this Section shall be paid in full before a Certificate of Occupancy is issued for any unit in the housing project. (e) Any fee required by this section shall be secured by execution of an irrevocable letter of credit in favor of the City or other security acceptable to the ci ty for the total amount of the obligation. The letter of credit or other acceptable security shall be delivered to the City prior to the issuance of a building permit for the housing development. The letter of credit or other security shall be released and returned to the developer immediately upon payment of the in-lieu fee. (f) Any payment made pursuant to this Section shall be deposited in a Reserve Account separate from the General Fund to be used only for development of low and moderate income housing. Up to twenty-five percent (25%) of in-lieu fee funds may be used to develop affordable housing for moderate income households, states Labor - 13 - e e and up to fifteen (15%) funds may be administration costs. (g) This Section shall not apply to any housing development for which an agreement has been executed between the city and developer to provide for an on-site inclusionary unit and the inclusionary unit has been occupied. (h) This section shall not apply to any housing development in which a density bonus has been given pursuant to Government Code Section 65915. of in-lieu fee for program used SECTION 6. Santa Monica Municipal Code Section 9427 is amended to read as follows: SECTION 9427. pricing Requirements for Inclusionary Units. The City shall, on an annual basis, set maximum allowable rents for inclusionary units, adjusted by the number of bedrooms. Such maximum allowable rents shall be set at rates such that qualified occupants for low income units pay no more than thirty percent (30%) of the gross monthly household income for households earning 60% of the median income. Qualified occupants for moderate income units shall pay no more - 14 - e e than 30% of the gross household income for households earning the median income. The owner of each inclusionary unit shall retain discretion in the selection of eligible renters for that unit, provided that such renters meet the requirements of section 9428. SECTION 7. Santa Monica Municipal Code section 9428 is amended to read as follows: SECTION 9428. Eligibility Requirements. (a) Only low- and moderate-income households shall be eligible to occupy inclusionary units. The City may establish administrative guidelines for determining household income, minimum and maximum occupancy standards and other compatible eligibility criteria. The City council may, by resolution, approve a tenant certification process with which a proj ect appl icant subj ect to this Chapter shall be required to comply. (b) The following individuals, by virtue of their position or relationship, are ineligible to occupy an affordable unit: - 15 - e e (1) All employees and officials of the City of Santa Monica or its agencies, authorities, or commissions who have, by the authority of their position, policy-making authority or influence affecting city housing programs. (2) The immediate relatives, employees, or other persons gaining significant economic benefit from a direct business association with public employees or officials. (3) The immediate relatives of the appl icant or owner, incl uding spouse, children, parents, grandparents, brother, sister, father-in-law, mother- in-law, son-in-law, daughter-in-law, aunt, uncle, niece, nephew, sister-in-law, and brother-in-law. (c) In setting priorities among eligible households, first priority shall be given to Santa Monica residents, second priority to persons employed in Santa Monica, and third priority to other persons. SECTION 8. Santa Monica Municipal Code section 9429 is amended to read as follows: - 16 - . e SECTION 9429. Relation to units Required by Rent control Board. Low- and moderate-income units developed as part of a market rate project, pursuant to replacement requirements of the Santa Monica Rent control Board, shall count towards the satisfaction of this Chapter if they otherwise meet appl icable requirements for this Chapter including, but not limited to, the income eligibility requirements of the Chapter, deed restriction requirements, and pricing requirements. New inclusionary units required by the Rent Control Board which meet the standards of this Chapter shall count towards the satisfaction of this Chapter. SECTION 9. Section 9433 is added to the santa Monica Municipal Code to read as follows: SECTION 9433. Relation to units or Fees Required Pursuant to Future Ordinances Implementinq proqram 10 of the city's Bousinq Element. Low- or moderate- income uni ts constructed to meet the requirements of this Chapter, or in-lieu fees paid to meet the requirements of this Chapter, shall be credited toward - 17 - . e requirements for on-site replacement units or fees required pursuant to any ordinance implementing Program 10 of the City's Housing Element. SECTION 10. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. SECTION 11. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The city Council hereby declares that it would have passed this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. ~ - 18 - . . e e SECTION 12. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The city Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective after 30 days from its adoption. APPROVED AS TO FORM: ~ """'"'. ROBERT M. MYERS city Attorney ~ - 19 - '". r . e Adopted and approved this 1st day of May, 1990. V"J 2~ I hereby certify that the foregoing Ordinance No. 1519 (CCS) was duly and regularly introduced at a meeting of the City council on the l7th day of April 1990; that the said Ordinance was thereafter duly adopted at a meeting of the city Council on the 1st day of May 1990 by the following council vote: Ayes: councilmembers: Abdo, Finkel, Genser, Mayor Zane Noes: Councilmembers: Jennings, Katz, Reed Abstain: Councilmemhers: None Absent: Councilmembers: None - '-.... ~ ATTEST: '- , ~;/' ~~~ - ----- - ->-~ / r'/?UMPJ:-. b. -: ~ ~~'-:-' ~ City Cle