SR-407-003
ADMINISTRATIVE GUIDELINES
for the
AFFORDABLE HOUSING PRODUCTION PROGRAM
of the
CITY OF SANTA MONICA
(Pursuant to Chapter 9.56 of the Municipal Code)
Approved by City Council October 5, 1999
Prepared by
the Housing & Redevelopment Division
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Table of Contents
1. Introduction ....................................................... 1
2. Fee Option ...................................................... 2
A. Establishment and Periodic Adjustment of Base Fee ................ 2
B. Example of Fee Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2
C. Fee Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3
D. When the Applicable Base Fee is Determined ..................... 4
E. When to Pay the Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4
F. Calculation of Floor Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4
G. Fee Refunds ............................................... 4
H. Relation to Rent Control ...................................... 5
3. On-Site Affordable Unit Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 5
A. Three Ways to Satisfy the On-Site Requirement. . . . . . . . . . . . . . . . . . .. 5
B. Calculation of Minimum Required On-Site Affordable Units ........... 6
C. Incentives for Constructing Affordable Units on Site. . . . . . . . . . . . . . . .. 9
D. Size and Unit Characteristics of the On-Site Affordable Units ........ 11
E. Income Requirements for Households Occupying
On-Site Affordable Units .................................... 11
F. Rent Requirements ......................................... 12
G. Sale Price Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13
H. PurchaserITenant Eligibility; Annual Monitoring/Reporting. . . . . . . . . .. 13
I. Timing of Rental or Sale of On-Site Affordable Units ................ 13
J. Restrictions on Affordable Units ............................... 13
4. Off-Site Affordable Unit Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
A. One-Quarter Mile Radius Maximum. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
B. Exceptions to the One-Quarter Mile Radius Maximum .............. 15
C. Evidence of Site Control ..................................... 16
D. Simultaneous Development of Off-Site Affordable Units. . . . . . . . . . . .. 16
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
5. Land Acquisition Option ........................................... 17
A. Eligible Land Parcels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 17
B. Evidence of Site Control ..................................... 20
C. Conveyance of the Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20
D. Simultaneous Conveyance of Land or Option. . . . . . . . . . . . . . . . . . . .. 22
E. Eligible Non-Profit Affordable Housing Developer. . . . . . . . . . . . . . . . .. 22
6. For-Sale Affordable Unit Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23
B. Re-Sale of an Affordable Unit to a Subsequent Purchaser . . . . . . . . . .. 25
C. Subordination ............................................. 27
D. Default and Foreclosure ..................................... 27
E. Distribution of Insurance and Condemnation Proceeds ............. 27
7. Tenant and Purchaser Eligibility Procedures ........................ 28
A. Priority Households ......................................... 29
B. Persons Ineligible to Occupy an Affordable Unit. . . . . . . . . . . . . . . . . .. 29
C. Establishment, Maintenance, and Update of
Income-Qualified Tenants and Purchasers List ................... 30
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
ATTACHMENTS
1-A Municipal Code Chapter 9.56
1-B Current Base Fees for Apartment and Condominium Projects
2-A Calculation of Very Low, Low and Moderate Income Levels
2-B Calculation of Maximum Rents
2-C Sample of Deed Restrictions
2-D Floor Area Definition from the Zoning Code
7-A Sample Application for Affordable Housing Waiting List
7 -B Referral Status Form
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
1. Introduction
These Administrative Guidelines explain the Citycs Affordable Housing Production
Program. This program was adopted by the City Council on July 21, 1998 (see Chapter
9.56 of the Santa Monica Municipal Code) and gives developers of multi-family housing
a variety of options for satisfying the Citycs affordable housing requirements.
This new program is intended to help implement Proposition R. Approved by Santa
Monica voters in November, 1990, Proposition R requires that not less than 30 percent of
all multi-family residential housing newly constructed in the City each year be permanently
affordable to, and occupied by, low- and moderate-income households.
All new multi-family housing developments of two or more units, including multi-family
housing that is part of commercial or other development, must comply with Chapter 9.56
unless specifically exempted by the terms of Chapter 9.56. The program requires that the
developer pay an affordable housing production fee, or satisfy the requirement another
way, such as by building affordable units on-site or off-site, or by dedicating land for afford-
able housing.
Section 1 ofthese Guidelines describes the Fee Option. The remaining sections describe
the On-Site Option (Section 2), the Off-Site Option (Section 3), and the Land Dedication
Option (Section 4).
Questions about the On-Site Option should be directed to the City Planning Division at
(310) 458-8341 or to the Planning Counter in Room 111 in City Hall. Questions about the
Off-Site Option, Land Dedication Option, Sales Price calculation, or Tenant Eligibility and
Selection Procedures should be directed to staff in the Housing Division at (310) 458-
8702, extension "0".
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
2. Fee Option
One way to satisfy the affordable housing obligation is through payment of the Affordable
Housing Production Fee (C 9.56.070). The amount of the Affordable Housing Production
Fee ("Fee") is based upon the floor area of the project. The floor area of the project, as
defined in the Municipal Code C 9.04.02.030.315, is multiplied by the Base Fee in order
to determine the total fee owed by each project. The proceeds from this Fee will be
deposited into a special City Trust Fund and used to facilitate the development of housing
affordable to low-income households.
A. Establishment and Periodic Adjustment of Base Fee
The Base Fee is set by a Resolution of the City Council (See Municipal Code
9.56.070(b)). The fee may be adjusted periodically by the City Council to reflect changes
in market and other conditions in the City. Also, there are different base fees for
condominiums and apartment projects. Attachment 1-A contains the current Base Fee
amounts for apartment and condominium projects.
B. Example of Fee Calculation
The following example explains how the Affordable Housing Production Fee is calculated
for a new apartment building containing 7,500 square feet of floor area on a parcel in a
multi-family residential district. The example further assumes that the Base Fee for
apartment projects is $6.00. (The actual fee is established periodically by City Council
Resolution. The currentfee may be obtained from the Planning Counter or by calling (310)
458-8341.) To calculate the Fee owed, multiply the total project floor area by the Base
Fee for apartments:
7,500 X $6.00 = $45,000
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
The total Fee in this example would be $45,000. Please note that this calculation assumes
that the project will be located in a multi-family residential district and that the parcel is not
vacant. Under other circumstances as described below, the Fee may be less.
C. Fee Reductions
In order to encourage development in areas of the City where existing residents will not
be displaced, the Affordable Housing Production Fee is reduced where there is no existing
housing, or where, if there is existing housing, that housing will not be removed by the new
development (See C 9.56.070(a)).
25% Fee Reduction for Multi-Family Projects on Vacant Parcels in Multi-family
Residential Zoning Districts
1. Chapter 9.56 defines a Vacant Parcel as, cA parcel in a multi-family
residential district that has no residential structure located on it at the time
that a multi-family project is filed with the Cityc s Planning Department. C
(See Section 9.56.020 for full text.) When the parcel to be developed with
a new multi-family project in a multi-family residential district is vacant, the
total Fee to be paid is reduced to 75% of the Fee otherwise owed. Returning
to the example in the previous section, but assuming further that the parcel
is now vacant, results in a fee that is 25% lower. In other words, the Fee is
75% times the Fee otherwise owed.
(7,500 X $6.00 = $45,000) X 75% = $33,750.00
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Affordable Housing Production Program
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50% Fee Reduction on Certain Parcels in Industrial/Commercial Districts
The applicable Fee may be reduced to 50% of the amount otherwise required when
both of the following circumstances apply:
(1) the proposed multi-family residential project is located in an Industrial or
Commercial District; and,
(2) the subject parcel
a) is not already developed with multi-family housing; or,
b) is already developed with multi-family housing, but the proposed new
multi-family project preserves the existing multi-family housing, or a
Category C Removal Permit has been obtained for the existing housing
from the City's Rent Control Board.
If the above circumstances apply, the Affordable Housing Production Fee will be
reduced to 50 percent of the fee otherwise owed. Using the above example,
(7,500 X $6.00 = $45,000) X 50% = $22,500.00
D. When the Applicable Base Fee is Determined
The Base Fee applicable to a project is the Base Fee in effect at the time that the project
application is deemed complete by the Planning Department (See
C 9.56.070(b)).
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Administrative Guidelines
Affordable Housing Production Program
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E. When to Pay the Fee
The Affordable Housing Production Fee must be paid in full prior to the Citycs granting
any occupancy permit (usually a Certificate of Occupancy) for the project (See c
9.56.07(d)).
F. Calculation of Floor Area
The floor area used to compute the Fee is the floor area of the project as defined in the
City's Zoning Code (SMMC C9.04.02.030.315); see Attachment 2D. The Case Planner
assigned to the project can assist in determining the applicable total floor area.
G. Fee Refunds
If a Certificate of Occupancy is never issued for the project and the Fee has already been
paid, or if project approvals have expired, the project applicant is eligible for a refund from
the City. If the City does not commit funds accrued in the Affordable Housing Trust Fund,
refunds may be made to project applicants who have paid the Fee, on a pro-rata basis
(See C 9.56.070(e)). In order to obtain a refund, the project applicant must send a letter
to the Case Planner in the Planning Division indicating the fee payment amount; the
payment receipt number; whether the permit has expired and, if so, the expiration date;
and, that the applicant does not intend to proceed with the project.
H. Relation to Rent Control
Paying the Fee does not exempt the project from any applicable Rent Control
requirements. However, very low income and low income dwelling units constructed on
site pursuant to replacement requirements of the Santa Monica Rent Control Board shall
count towards the affordable housing requirements of Chapter 9.56 if the affordable units
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Administrative Guidelines
Affordable Housing Production Program
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otherwise meet all other applicable requirements of Chapter 9.56 (see Section 9.56.120).
I. Use of Fees
Use of the fee revenues collected under this Program is subject to the Consolidated Rental
Housing Trust Fund Guidelines promulgated and implemented by the Housing and
Redevelopment Division. Consistent with Policy 2.7 of the April 21, 1998 Housing
Element, the funds will be used so as to encourage the distribution of affordable housing
throughout the City.
3. On-Site Affordable Unit Option
Another way to satisfy the affordable housing requirements of Chapter c9.56 is by
constructing affordable units on the same site as the proposed new multi-family project
(See C 9.56.050).
A. Three Ways to Satisfy the On-Site Requirement
Chapter 9.56 offers three different options for providing the affordable units on site (See
C 9.56.050(a)):
1) By constructing at least 20% of the total project units for low-income
households. A low-income household is defined as one earning sixty percent or
less of the area median family income. (see Attachment 2-A).
2) By constructing at least 10% of the total units for very low-income households.
A very low income household is defined as one earning fifty percent or less of the
area median family income. (see Attachment 2-A).
3) In industrial and commercial districts only, by constructing 100% of the total units
for moderate-income households. A moderate income household is defined as
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Affordable Housing Production Program
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one earning one hundred percent or less of the area median family income. (see
Attachment 2-A).
The percentage of affordable units must be calculated based upon the number of units
allowed under applicable zoning standards prior to the calculation of any allowable density
bonus.
B. Calculation of Minimum Required On-Site Affordable Units
Affordable Units
The number of On-Site Affordable Units that must be included in the proposed project to
meet the requirements for this option is calculated based upon the total number of units.
For example, a multi-family project proposed on a 7,500 square foot parcel in the R2
District is allowed 5 units by right (7,500 C 1,500 = 5). If this project meets the
requirement for 20% affordable units, the calculation for the required number of affordable
units is (20%) X (5) = 1.0. For purposes of calculating the required number of On-Site
Affordable Units, any fraction of a unit is rounded up to the next whole unit.
Tables A and B show the number of required On-Site Affordable Units for projects
satisfying the C 1 0% at 50% of area median C and C 20% at 60% of area median C
requirements, respectively for projects between 2 and 9 units, as allowed by applicable
City zoning regulations.
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Administrative Guidelines
Affordable Housing Production Program
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Table A
Projects Providing 10% of Total Units for Households Earning 50% of Area
Median Income
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2
2
2
2
3
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Administrative Guidelines
Affordable Housing Production Program
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Table B
Projects Providing 20% of Total Units for Households Earning 60% of Area
Median Income
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
1
1
1
2
2
2
2
2
3
3
3
3
3
4
4
4
4
4
5
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
C. Incentives for Constructing Affordable Units on Site
The City has established a variety of incentives to encourage the development of
affordable units on site.
Height Bonus
Height Bonuses are provided for affordable housing developments in residential
and non-residential districts. Please see SMMC C 9.04.10.14.030 (Special
Housing Development Standards).
Density Bonus
Projects satisfying either of the first two options cited above for providing affordable
housing units on site will automatically qualify for a 25% density bonus required
under State law. The density bonus is calculated based on the number of units
allowed by right on the subject parcel. Using the same example as above, the
number of units permitted by right under zoning regulations is 5 (7,500 c 1 ,500=5).
The density bonus equals 25% of the units allowed by right, or 1.25 units. For
purposes of calculating the number of allowable density bonus units, any fraction
is rounded up. For this hypothetical project, the number of density bonus units is
2 and the number of total units including the bonus units is 7. (Please note that the
calculation of density bonus units is different from the calculation of On Site
Affordable Units.)
Priority Building and Safety Plan Check
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Projects containing On-Site Affordable Units pursuant to Chapter 9.56 shall receive
priority Building & Safety Division plan check processing, which means they will
have plan check review in advance of other pending development projects (See c
9.56.050(g)).
Fee Waivers
Condominium and Cooperative Taxes (SMMC C 6.76.010), and the Park and
Recreation Facilities Tax are waived for any On-Site (SMMC C 9.56.090) Affordable
Housing Units.
Reduced Parking Requirement
Parking requirements for On-Site Affordable Units are reduced. Please refer to
Section 9.04.10.14.040 (Regulatory Incentives for the Production of Lower Income
and Senior Housing Units) and Section 9.04.10.08.040 of the Zoning Ordinance
(Off-Street Parking Requirements).
Variance to Side Yard Setback, Front or Rear Yard Setback, and Parcel
Coverage
Per Section 9.04.10.14.040(c) of the Zoning Ordinance, projects with On-Site
Affordable Units are eligible to apply for a variance to side yard setback
requirements, front or rear yard setback requirements, and parcel coverage
requirements.
Greater Floor Area and Floor Area Discounts
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Administrative Guidelines
Affordable Housing Production Program
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Development standards in certain commercial districts include incentives such as
greater allowable floor area and floor area discounts for mixed use projects that
include housing. See Section 9.04.10.14.040 and the development standards for
the following districts: BCD, BSC, C2, C3, C3-C, C4, C6, and CM.
D. Size and Unit Characteristics of the On-Site Affordable Units
Chapter 9.56 states that, cThe multi-family project applicants may reduce either the size
or interior amenities of the affordable housing units as long as there are not significant
identifiable differences between affordable housing units and market rate units visible from
the exterior of the dwelling units...c (Section 9.56.050(b)). However, each affordable unit
must have at least two bedrooms, except when 95% of the units in the project (excluding
the Managercs units) are zero- or one-bedroom units. The design of the units must be
reasonably consistent with the market rate units. The affordable units must have the
following minimum floor areas:
No. of Bedrooms Min. Floor Area
Zero Bedroom 500 sJ.
One Bedroom 600 sJ.
Two Bedroom 850 sJ.
Three Bedroom 1,080 sJ.
Four Bedroom 1,200 sJ.
E. Income Requirements for Households Occupying On-Site Affordable Units
Chapter 9.56 requires that projects meeting the On-Site Affordable Units option must be
occupied only by "very low-" or "low-income" households. Very low-income households
are defined as households with total income equal to or less than 50% of the median family
income in the Los Angeles-Long Beach Primary Metropolitan Statistical Area (carea
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Affordable Housing Production Program
Adopted October 5, 1999
median incomeC). Low-income households are defined as households with total income
equal to or less than 60% of the area median income.
Under Chapter 9.56, in commercial and industrial districts only, projects may also satisfy
the On-Site Affordable Units option by restricting occupancy of 100 percent of the units to
"moderate income" households. A moderate-income household is defined as a
household in which total income is equal to or less than 100% of the area median income.
The area median income is determined annually by the U.S. Department of Housing and
Urban Development (HUD), based upon a four-person household. Household adjustment
factors determined by HUD are used to adjust the four-person household income for
smaller or larger household sizes. The City then converts typical household sizes to unit
bedroom sizes, using assumptions about the number of persons per bedroom. Attachment
2-A shows the current applicable income limits and household adjustment factors for
different household sizes. These income limits are adopted each year by the City Council
soon after HUD releases its annual statistics. Check with the Case Planner for the most
recent income limits.
F. Rent Requirements
In apartment developments, On-Site Affordable Units must be rentals. For condominium
developments, On-Site Affordable Units may be rentals, but may also be for sale. In any
case, maximum rents for On-Site Affordable Units are based upon the applicable income
category (i.e., 50%, 60%, or 100% of area median income). Per Chapter 9.56,
households are expected to pay up to 30% of their income in rent. This is called the
30% affordability standard. The 30% affordability standard is also used in the equation
for determining maximum rent. The formula used to calculate the maximum rent is as
follows:
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
(Median Income X Income Category X Bedroom Adjustment X Affordability Standard) C
12
Attachment 2-B shows the applicable maximum rents for on-site affordable units for
households earning 50%, 60%, and 100% of the area median income and shows all
bedroom adjustment factors.
G. Sale Price Requirements
On-Site Affordable Units included in market-rate condominium projects are subject to
maximum sale price requirements. The maximum sale prices for affordable condominiums
are described in Section 6 of these Guidelines.
H. PurchaserlTenant Eligibility; Annual MonitoringlReporting
Only very low-, low-, or moderate-income households may occupy affordable housing units
intended to satisfy the On-Site Affordable Units option pursuant to Chapter 9.56. Certain
procedures must be followed in selecting tenants and buyers of the affordable units. Also,
rent and tenant income levels in each affordable unit are monitored annually by the City.
Procedures for income-qualifying and selecting tenants/buyers are described in Section
7 of these Guidelines. Annual monitoring and reporting requirements are described in
Section 8.
I. Timing of Rental or Sale of On-Site Affordable Units
On-Site Affordable Units constructed simultaneously with market rate units must be offered
for sale or rent prior to or at the same time as the market rate units.
J. Restrictions on Affordable Units
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
If you choose to develop affordable units on-site, the affordable units will be subject to a
minimum 55-year deed restriction (See c 9.56.130). A sample deed restriction is provided
in Attachment 2-C. The units will also be subject to rent limits, income limits for the
tenants, price limitations if they are ownership units, and annual monitoring and tenant
income recertification by the City.
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Administrative Guidelines
Affordable Housing Production Program
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4. Off-Site Affordable Unit Option
The third option for meeting the requirements of Ordinance 1918, is to provide the units
on a different site from the market-rate units. (SMMC C 9.56.060)
If this option is selected, all of the requirements in Section 3 of these Guidelines regarding
calculation of the minimum number of units required, unit sizes and characteristics,
household income limits, maximum unit costs, household selection and eligibility, and
project applicant reporting requirements, also apply to Off-Site Affordable Units. (SMMC
C C 9.56.060 (a) and (d))
This section of the Guidelines specifies certain additional requirements concerning the
location of the Off-Site Affordable Units.
A. One-Quarter Mile Radius Maximum
Except as provided below, the alternative site for the Off-Site Affordable Units shall be
located within a one-quarter mile radius of the parcel on which the market rate units are
proposed, and within the boundaries of the City. (SMMC c 9.56.060 (c)) The outer limit
of this one-quarter mile radius area shall be determined by the Planning and Community
Development Department. The Departmentcs method for so doing shall be similar to the
method used for determining the area within which written notice of a pending
development permit is given. Specifically, on a map of City parcels, the project applicant
shall submit as part of the project application a set of one-quarter mile radii from the
corners of the parcel on which the market rate units will be constructed. Any multi-family
parcel or commercial parcel on which multi-family housing is a permitted use, located, in
whole or in any part, within these intersecting one-quarter mile radii is an eligible parcel
for development of Off-Site Affordable Units.
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Administrative Guidelines
Affordable Housing Production Program
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B. Exceptions to the One-Quarter Mile Radius Maximum
The maximum one-quarter mile radius requirement may be waived by majority vote of the
City Planning Commission (whose decision shall be appealable to the City Council), based
upon substantial evidence demonstrating that the location of Off-Site Affordable Units
more than one-quarter mile from the site of the market rate units, but still within the City
limits, better accomplishes the goals of the Citycs zoning and planning regulations,
including maximizing affordable housing production and dispersing affordable housing
throughout the City. (SMMC c 9.56.060 (f))
The project applicant shall have the burden of demonstrating why a location for the Off-
Site Affordable Units of more than one-quarter mile from the market rate units better
accomplishes the Citycs affordable housing objectives. In making its determination, the
Planning Commission shall consider the recommendations of the Planning Director and
the Housing and Redevelopment Manager on the petition. An application for an exception
to the one-quarter mile radius shall be submitted as part of the planning application for any
other discretionary approvals on the project that are within the purview of the Planning
Commission.
By way of example, but not by limitation, factors that may justify the special exception
include:
. No Available Sites. There are no multi-family or suitably zoned non-residential
parcels within the strict boundaries of the one-quarter mile radius that can
accommodate the required number of Affordable Off-Site Units.
. Dispersal of Affordable Units. The alternative location makes it possible to locate
Off-Site Affordable Units throughout the City.
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Administrative Guidelines
Affordable Housing Production Program
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. More Affordable Units. The size, price or other characteristics of the alternative site
results in a project that yields more affordable units than the project would yield if
it were located within the strict limits of the one-quarter mile radius.
. Deeper Level of Affordability. The size, price or other characteristics of the
alternative location makes it possible to offer the Off-Site Affordable Units to
households at a lower household income level than would be possible within the
strict limits of the one-quarter mile radius.
In no event, however, shall the Off-Site Affordable Units be located outside a radius of one
mile from the market rate units. No more than five project exceptions to the one-quarter
mile radius shall be approved in anyone City fiscal year.
C. Evidence of Site Control
In order to exercise the Off-Site Affordable Unit Option, the applicant must provide
evidence that the site is owned in fee or that an option to purchase, subject to City project
approval, has been secured. (SMMC C 9.56.060 (b)) Evidence of such site control (e.g.,
copies of purchase or option agreements) shall be provided to the City as part of the
project application package.
D. Simultaneous Development of Off-Site Affordable Units
Construction of the Off-Site Affordable Units shall precede or commence at the same time
as construction of the market rate units. No final City construction permit sign-off or
occupancy permit shall be granted for the market rate units until a final construction permit
sign-off or occupancy permit has been granted for the Off-Site Affordable Units. Off-Site
Affordable Units shall be offered for rent or sale, as applicable, prior to or concurrently with
rental or sale of the market rate units.
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5. Land Acquisition Option
The fourth option for meeting the requirements of Chapter 9.56, involves providing land
to the City, or a non-profit developer of affordable housing, that would be used to develop
housing affordable to low-income households. (SMMC C 9.56.080) The market rate
project applicant may dedicate land, sell land at below market rate, or option land on
behalf of the City, or an eligible non-profit affordable housing developer. This section of
the Guidelines specifies the procedures and related requirements for exercising the Land
Acquisition Option.
A. Eligible Land Parcels
Only land parcels meeting the following minimum characteristics shall be eligible under the
Land Acquisition Option:
1. ZoninQ
Land parcels eligible for conveyance to the City, or an eligible non-profit affordable
housing developer, shall be located in a City multi-family housing, commercial or
industrial district in which multi-family housing is a permitted use.
2. Minimum Land Value
For sites dedicated to the City, or an eligible non-profit affordable housing
developer, the fair market value of the parcel(s) shall be at least equal to the
amount of the Affordable Housing Production Fee that would otherwise apply were
the market rate project applicant to elect that option under Chapter 9.56 instead of
the Land Acquisition Option. The fair market value of the parcels proposed under
this Option shall be supported by an estimate of value prepared by a qualified real
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estate appraiser, subject to the Citycs reasonable review of the appraisal. For
situations involving option payments, rather than conveyance of land in fee, see
below. For below market rate sales, or option transfers, see below.
3. Site Characteristics
The parcel shall satisfy the following minimum criteria:
- 6,000 square feet
- Can be developed with at least 4 dwelling units
- Free of characteristics that would make it difficult or impossible to develop
(i.e., irregular shape, excessive sloping, soil or other contamination, adjacent
to incompatible land use)
A Phase I environmental evaluation report shall be required before any parcel can
be considered for conveyance.
4. One-Quarter Mile Radius Maximum
Except as provided below, the land parcel(s) proposed to be conveyed to the City,
or an eligible non-profit affordable housing developer, shall be located within a one-
quarter mile radius of the parcel on which the market rate units are proposed and
within the City limits. (SMMC C 9.56.080) The outer limits of this one-quarter mile
radius area shall be determined by the Planning and Community Development
Department. The Departmentc s method for so doing shall be similar to the method
used for determining the area within which written notice of a pending development
permit is given. Specifically, on a map of City parcels, the project applicant shall
draw a set of one-quarter mile radii from the corners of the parcel on which the
market rate units will be constructed. Any multi-family parcels located, in whole or
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
in any part, within these intersecting one-quarter mile radii is an eligible parcel for
the Land Acquisition option.
5. Exceptions to the One-Quarter Mile Radius Maximum
The maximum one-quarter mile radius requirement may be waived by majority vote
of the City Planning Commission (whose decision shall be appealable to the City
Council), based upon substantial evidence demonstrating that the location of land
more than one-quarter mile from the site of the market rate units better
accomplishes the goals of the Citycs zoning and planning regulations, including
maximizing affordable housing production and dispersing affordable housing
throughout the City. (SMMC c 9.56.080)
The project applicant shall have the burden of demonstrating why a proposed site more
than one-quarter mile from the market rate units (but still within the City limits) better
accomplishes the Citycs affordable housing objectives. In making its determination, the
Planning Commission shall consider the recommendations of the Planning Director and
the Housing and Redevelopment Manager. An application for an exception to the one-
quarter mile radius shall be processed simultaneously with any other discretionary
approvals on the project that are within the purview of the Planning Commission.
By way of example, but not by limitation, factors that may justify the special exception
include:
. No Available Sites. There are no multi-family parcels within the strict boundaries
of the one-quarter mile radius that are suitable for multi-family development.
. Dispersal of Affordable Units. The alternative location makes it possible to locate
affordable housing throughout the City.
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
. More Affordable Units. The size, price or other characteristics of the alternative site
could result in an affordable housing project that yields more affordable units than
would otherwise be required under the On-Site Affordable Units option or the Off-
Site Affordable Units option in Ordinance 1918.
. Deeper Level of Affordability. The size, price or other characteristics of the
alternative location makes it possible to offer affordable units to households at a
lower household income level than would be possible within the strict limits of the
one-quarter mile radius.
In no event, however, shall the Land Acquisition Option apply to a site located outside a
radius of one mile from the market rate units. No more than five project exceptions to the
one-quarter mile radius maximum shall be approved in anyone City fiscal year.
B. Evidence of Site Control
In order to exercise the Land Acquisition Option, the market rate multi-family project
applicant shall provide evidence, subject to reasonable City approval, that the site to be
conveyed to the City, or an eligible non-profit affordable housing developer, is owned in
fee by the applicant, or that an option to purchase has been secured. Evidence of such
site control, including a current title report, and a copy of the option or lease agreement,
if applicable, shall be included as part of the application for the market rate project.
C. Conveyance of the Site
An eligible site, or option to purchase an eligible site, shall be conveyed to the City, or an
eligible non-profit affordable housing developer, as follows:
1. Fee Title Transfer
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
The site shall be sold or dedicated to the City or to a qualified non-profit housing
developer free of any encumbrances, contractual, physical or financial, that would
prevent it from being developed in a timely way by the City, or a qualified non-profit
housing developer, for affordable multi-family housing.
If the site is dedicated to the City, or to an eligible non-profit affordable housing
developer at no cost, the City shall provide reasonable cooperation as may be
requested to help the applicant secure any state or federal tax credit for which such
a dedication may be eligible.
If the site is sold to the City, or to an eligible non-profit affordable housing
developer at below market rate, the difference between the fair market value and
the below market sale price must be at least equal to the amount of the Affordable
Housing Production Fee other wise due, if that option had been selected by the
project applicant.
2. Option to Purchase
If the market rate project applicant secures an option for another site to fulfill the
Land Acquisition Option, the option must have a minimum term of six months and
clearly state that the option may be transferred to a third party, such as the City or
a qualified non-profit housing developer, under the same terms and conditions,
including the agreed upon purchase price. A copy of the option agreement and a
current title report shall be included with the application for the market rate project.
Any costs incurred by applicant to maintain the option from the date of project
application through successful transfer of the option to the City or to a qualified
non-profit developer shall be the responsibility of the applicant. If the sum of the
applicantc s out-of-pocket option-related expenses, from date of project application
through conveyance of the option, is less than the amount of the Affordable
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Housing Production Fee Option, these costs will be treated as a credit against the
Affordable Housing Production Fee that would otherwise be due the City under that
Chapter 9.56 option. The applicant shall pay any difference to the City as a
reduced Affordable Housing Production Fee. The applicant shall provide the City
a full accounting of all option payments and out-of-pocket option-related costs
eligible for offset against the Affordable Housing Production Fee amount, which
accounting shall be subject to reasonable City review and approval.
The land offered for option must have the following minimum site characteristics:
- 6,000 square feet
- Can be developed with at least 4 dwelling units
- Free of characteristics that would make it difficult or impossible to develop
(i.e., irregular shape, excessive sloping, soil or other contamination, adjacent
to incompatible land use)
A Phase I environmental evaluation report shall be required before any parcel can
be considered for option.
The City shall exercise reasonable discretion in considering the option. The land
option must be consistent with all City funding requirements, including the
Consolidated Rental Housing Trust Fund Guidelines.
D. Simultaneous Conveyance of Land or Option
Conveyance of land or an option to purchase land to the City or an eligible non-profit
affordable housing developer, pursuant to Chapter 9.56, shall be completed prior to the
Citycs final sign-off on construction permits for the market rate units, or issuance of a
certificate of occupancy, whichever occurs first.
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
E. Eligible Non-Profit Affordable Housing Developer
Dedication of land, below market rate sale of land or transfer of an option to purchase may
be made either to the City or an C eligible non-profit affordable housing developer. C For
purposes of the Land Acquisition Option of Chapter 9.56, an eligible not-profit affordable
housing developer is a private, non-profit corporation with: (1) a current exemption under
Section 501 (c)(3) of the U.S. Internal Revenue Code; (2) a certificate of good standing
from the Secretary of State in which the organization is incorporated; (3) has the
development of housing affordable to low-income households as one of its principle
missions; and (4) has been approved by the City Housing and Redevelopment Manager,
based on reasonable review of the organizationcs record of performance developing
multi-family housing affordable to low-income households. The non-profit affordable
housing developer intended as the recipient of land pursuant the Land Acquisition Option
must be identified as part of the project application.
6. For-Sale Affordable Unit Requirements
In the event that the affordable units required under either the On-Site Affordable Unit
Option or the Off-Site Affordable Unit Option are intended to be for-sale units, rather than
rentals, the following rules shall apply.
A. Establishment of the Initial Purchase Price
The developer shall establish the sales price for the affordable unit based upon an
income-qualifying household C s ability to obtain conventional bank financing and to service
debt at a front-end ratio of no less than a 33 percent and no greater than a 38 percent1.
The conventional financing shall conform to all of the following terms:
Loan Term: 30 Years
Interest Rate: Fixed
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Minimum Down payment:
Min./Max. Front End Debt-to-Income Rati01:
Maximum Back End Debt-to-Income Rati02:
5%
33% min./38% max.
41%
1 Front End Ratio: ratio of total monthly housing costs (including mortgage principal and interest, property taxes, property insurance, homeownersn
association dues and mortgage insurance, if applicable n to total gross household income. Chapter 9.56 of the Municipal Code restricts the front-end ratio
to no m ore than 38%.
2 Back End Ratio: ratio of total monthly housing costs (including mortgage principal and interest, property taxes, property insurance, homeownersn
association dues and mortgage insurance, if applicable) plus other monthly payments on long-term household debt to gross household income.
Note: The borrower must be income-qualified pursuant to Chapter 9.56 of the Municipal
Code.
The lending criteria used by the private lender must be reasonable and customary and
shall be subject to review and approval by the City Housing Division prior to completion
of the purchase transaction. Moreover, any purchase price for an affordable unit
underwritten with a front-end ratio of less than 33 percent or a back-end ratio of more than
41 percent (the maximum generally required by the secondary mortgage market) will also
require review and reasonable approval by the City prior to completion of the purchase
transaction.
Examples of Purchase Prices
By way of example, but not by limitation, Table C shows a range of purchase prices for
very low- and low-income households assuming a certain set of market conditions and
assuming a minimum front-end ratio of 33 percent and a maximum back-end ratio of 41
percent. These examples are provided for illustrative purposes only. Except for the
required loan terms specified above, the assumptions concerning applicable interest rate,
borrower debt and credit, and monthly mortgage costs in relation to other housing costs
will vary depending upon individual circumstances.
The following assumptions were used in the examples presented in Table C:
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
. I nterest Rate = 7 percent
. Loan Term = 30 years
. Down Payment = 5 percent of purchase price
. Very low-income gross household income = 50 percent x area median income
. Low-income gross household income = 60 percent x area median income
. Area Median Income (4-Person Hshld.) = $51,300
. Household size to number of bedrooms per unit conversion per City affordable
housing calculations
. Monthly housing costs = 33% x gross household income3
. Other monthly long-term debt/gross income = 10%4
. Monthly mortgage payment/total monthly housing cost = 61 %5
3
The factor of 33% is based upon current Fannie Mae lending criteria for secondary market mortgages. Am inim urn front-end, debt-to-incom e ratio of 33%
must be used by the private lender in evaluating the borrower for an affordable unit under this Program. However, a higher ratio up to 38% may be used
if justified by the lender.
4
The factor of 10% is based upon typical debt for low- and very low-income households as determined by HR&A. This factor is included for illustrative
purposes only. The actual debt circumstances of each buyer will vary.
5
The factor of 61 % is based upon typical ratios of mortgage debt to total monthly housing costs for low- and very low-income households as determ ined
by HR&A. This factor is included for illustrative purposes only. The actual ratio of mortgage payments to total housing costs will depend upon actual taxes,
insurance, interest rate, and HOA fees.
Table C
Examples of Maximum Purchase Prices Affordable to
Very Low- and Low-Income Households in Santa Monica,
Assuming, Among Other Things, a 33 Percent Front-End Ratio
and 41 Percent Back-End Ratio
3
Maximum Very Low-Income Maximum Low-Income
Purchase Price Purchase Price
Based on Based on Based on Based on
Front-End Ratio Back-End Ratio Front-End Ratio Back-End Ratio
$54,462 $65,355 $67,665 $81 ,199
$64,674 $77,609 $80,353 $96,423
$73,865 $88,638 $91,771 $110,126
$83,396 $100,075 $103,613 $124,335
Number of
Bedrooms
Per Unit
2
4
Source: HR&A, Inc.; City of Santa Monica Housing and Redevelopment Division
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
B. Re-Sale of an Affordable Unit to a Subsequent Purchaser
1. First RiQht of Refusal to the City
Throughout the 55-year period of the Agreement Imposing Restrictions on Real
Property, the City shall have the first opportunity to purchase affordable for-sale
units created pursuant to the On-Site Affordable Unit Option or the Off-Site
Affordable Unit Option (COption to PurchaseC). Owners wishing to sell their units
shall notify the City in writing at least 60 days before the unit is offered for sale to
another qualifying party. The seller shall ensure that the unit is clean, in good
repair and is available to be shown to prospective buyers. Any Option-related time
periods in favor of the City shall be tolled until these conditions are met to the
Citycs reasonable satisfaction.
The City shall have 60 days to notify the seller of its intent to exercise the Option
to Purchase, either by City purchase, by its designee (e.g., a non-profit affordable
housing developer), or by referral of a qualified low-income buyer. (See below for
the method for calculating the subsequent purchase price.) The City or other
qualified buyer shall close escrow within 90 days from the date that the City notifies
seller of its intent to exercises the Option to Purchase. If the City elects to assign
its Option to Purchase, the opening of escrow may be deferred for up to 30
additional days to enable the City to effectuate the assignment.
In the event that the City does not exercise the Option to Purchase, or an offer to
purchase by the City or a qualified buyer is not accepted by the seller, or once
accepted, if an escrow account contemplating a sale shall not have been opened
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
within 60 days of a purchase offer, the Option shall terminate and the owner may
sell the unit to any qualifying party at a price as set forth below. Seller shall not
refuse an offer by a qualified buyer, subject to the price restrictions set forth below.
Closing costs shall be divided between seller and buyer as is customary for like real
estate transactions in Santa Monica at the time that escrow is opened.
2. Maximum Subsequent SellinQ Price
The resale restriction will provide that the price for resale of the affordable unit shall
be the lower of either:
the appraised market value of the property as established by neutral
appraiser;
the initial sales price, plus an amount equal to the percentage increase in
the Consumer Price Index for All Urban Consumers, plus the value of any
documented, permanent capital improvements to the property approved by
the City, minus the amount determined by the City as needed to correct any
deferred maintenance costs or building code violations.
3. Continuous Use as a Primary Residence
Each purchaser of an affordable unit shall certify, prior to the close of escrow, in a
form acceptable to the City, that the unit is being purchased and shall be
maintained as the purchasercs primary residence. Failure of the purchaser to
maintain eligibility for a homeownerCs exemption from property tax shall be
construed as evidence that the unit is not the primary residence of the purchaser.
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
C. Subordination
At the request of the low-income householdcs lender, the City shall subordinate the
foregoing resale price restrictions to a first Deed of Trust at the time of purchase, provided
that the Deed of Trust does not exceed the purchase price of the unit.
D. Default and Foreclosure
A Request for Notice of Default shall be recorded along with the Agreement Imposing
Restrictions on Real Property. The Agreement will provide that any Notice of Default will
constitute an ownerCs Notice of Intent to Sell, and that the City may exercise its Option
to Purchase. In the event that the City does not exercise its Option and the unit is
foreclosed upon, proceeds of the foreclosure sale shall be used first to satisfy the
lendercs lien(s), and any surplus proceeds, up to the amount that the owner would have
received had there been no foreclosure, shall be paid to the owner. The remaining
balance of any surplus shall be paid to the City for deposit into the Citywide Affordable
Housing Trust Fund.
E. Distribution of Insurance and Condemnation Proceeds
In the event that the unit is destroyed and insurance proceeds are distributed to the low-
income household owner instead of being used to rebuild, or in the event of liquidation of
the homeownersC association and distribution of the assets of the association to the
members, including the owner, any surplus remaining after payment of encumbrances
shall be distributed as set forth above with respect to default and foreclosure.
7. Tenant and Purchaser Eligibility Procedures
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Per Chapter 9.56, multi-family project applicants who have opted to satisfy the affordable
housing obligation through the on-site option are required to fill vacant affordable units in
either of two ways: a) by selecting income-eligible tenants from a City-developed list of
income-qualified households, if such a list is available, or b) by themselves selecting
income-qualified households which shall in turn be subject to eligibility certification by the
City (see Section 9.56.11 O(a)). Chapter 9.56 further states that, cThe City shall develop
administrative guidelines for the tenants and purchaser selection process detailed in this
Section, which shall establish, at a minimum, the timing by which affordable housing units
in a project must be leased or sold and occupied, both initially after issuance of the
certificate of occupancy for the project and upon subsequent vacancies in the affordable
housing unit. The guidelines may also establish priorities for income qualified tenants. C
(C 9.56.110(b))
As of July, 1999, the City has developed a list of income-qualified tenants for this Program.
Projects approved under Ordinance 1615 are required to select tenants using this list.
Projects approved under Ordinance 1918 are encouraged to select tenants from this list,
though they may use their own selection lists subject to City eligibility certification.
This section establishes priorities for eligibility to occupy On-Site Affordable Units,
describes categories of persons ineligible to occupy On-Site Affordable Units, and outlines
the procedures whereby the City Housing Authority shall establish, maintain, and update
the list of eligible tenants.
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
A. Priority Households
In establishing the list of households eligible to occupy affordable units, the Housing
Authority shall adhere to the following priorities:
1) First Priority
Persons who have been permanently displaced or face permanent
displacement from their housing units in Santa Monica as a result of any of
the following:
A) Ellis Act, owner-occupancy, or removal permit eviction
B) Earthquake, fire, flood, or other natural disaster
C) Cancellation of Section 8 contract by property owner
D) Governmental Action, such as Code enforcement
2) Second Priority
Persons who are either:
A) Residents of Santa Monica and/or
B) Working in Santa Monica at least 36 hours per week for at least 6 months
B. Persons Ineligible to Occupy an Affordable Unit
Chapter 9.56 (see C 9.56.110(c)) specifically disqualifies the following categories of
persons from occupying On-Site Affordable Units:
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
All employees and officials of the City or its agencies, authorities, or commissions
who have, by virtue of their position, policy-making authority or influence over the
implementation of the Affordable Housing Production Program, as well as the
immediate relatives of employees of such City employees and officials.
The immediate relatives of the applicant or owner, including spouse, child, parent,
grandparent, 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. Establishment, Maintenance, and Update of Income-Qualified Tenants and
Purchasers List
The Housing Authority shall be responsible for preparing and maintaining a Waiting
List for this program and shall follow these guidelines for preparing, maintaining,
and updating the Waiting List.
1) Public Noticing Procedures
To create the Waiting List, the Housing Authority shall publish notices in
newspapers circulated widely in Santa Monica, including newspapers that reach
minority communities. At least one notice shall be published in a Spanish-
language newspaper of general circulation. Examples of appropriate
newspapers include the Our Times section of the L.A. Times; La Opinion; The
Sentinel; and, The ArQonaut. The notices should briefly explain what affordable
housing is, state the applicable income requirements, indicate where
applications are available, state when the application period opens and closes,
indicate priorities for eligible occupants, and provide a telephone number for
questions.
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Applications may require name, address, telephone number, number of persons
occupying the household, date of birth, information relevant to program
priorities, and applicantcs signature. An example of such an application is
provided in Attachment 7-A.
2) List of Prequalified Applicants
From the Waiting List, the Housing Authority shall create a List of Prequalified
Applicants. C Prequalified C means that the information provided on the
application, including income, age, residency, place of employment (if
applicable), priority status, and any other relevant information has been verified.
The length of the List of Prequalified Applicants shall depend upon the number
of affordable units becoming available in the near future and shall include at
least two prequalified households for each unit anticipated.
3) Referral Process
Each time affordable units become available for occupancy, the owner and the
Housing Authority shall follow these procedures:
A) At least 60 days prior to issuance of a Certificate of Occupancy by the City
for newly developed units, or within 5 business days of notice of tenant
vacation in existing developments, owners shall notify the City of the number
and type (Iow-/mod-income, number of bedrooms, ownership or rental) of
units available.
B) Within 5 business days of notice by the owner, the City shall provide the
owner with a Referral List, drawn from the List of Prequalified Applicants,
containing at least two names for each unit available. Additional names may
be provided to the owner upon request, subject to availability.
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
C) Owners shall directly contact the persons on the Referral List provided by
the City. Owners shall give applicants at least 5 business days to submit a
completed application. Owners who are not able to fill vacant units from the
Referral List provided may request additional names from the City.
Additional names will be provided within 5 business days, subject to
availability.
D) Owners shall conduct all screening and selection of applicants. All
applicable State Fair Housing laws must be observed.
E) Candidates on the Citycs List of Prequalified Applicants may be referred up
to a maximum of five times. After the fifth referral, candidate names will be
removed from the Waiting List.
4) Updating the Waiting List
A) Annual Update: The Waiting List shall be updated annually. Letters shall
be sent to all persons on the waiting list requesting verification of all
information, including name, address, place of residency, place of
employment (if applicable), and continued interest in staying on the list.
Waiting List applicants shall be given six weeks to respond. At the end of
the six week period, the names of Applicants who have failed to respond
shall to taken off the Waiting List. The Waiting List shall also be updated to
incorporate any changes in status (place of residency, eligibility for priority
status, etc.) for each applicant.
B) EmerQency Additions to WaitinQ List: At any time, even if the Waiting List
is closed, cancellation of a Section 8 contract administered by the Santa
Monica Housing Authority or eviction due to governmental action for a
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
household residing in Santa Monica will result in the automatic addition of
that household to the Waiting List with the applicable priority.
C) The City will provide a Referral Status Form to the owner for each
household on the Referral List. The owner shall complete the Referral
Status Form indicating whether a unit was offered to the household and
whether the unit was accepted or refused. A sample Referral Status Form
is provided in Attachment 7.B. If a unit was not offered because of a poor
credit history or for any other reason, the owner will note this as well. The
City will incorporate this information into the Waiting List.
D) Applicants will be referred only for those units for which they qualify. For
example, moderate income households will only be referred for vacancies
in moderate income units. Applicants must report any changes to address,
household size, Santa Monica residency, employment in Santa Monica,
and/or, for households on the List of Prequalified Applicants, income to the
Housing Authority within 10 days.
5) Persons Dependent Upon Income from Other Sources
Applicants must report income from all sources. Any Applicant receiving
support, including tuition payments, rent payments, and/or, substantial gifts,
and/or any Applicant who appears as a dependent upon the tax return of
another individual must so disclose. In these cases, the income of the other will
be considered along with the income of the Applicant in determining eligibility
for any Referral List.
6) Automatic Removal from Waiting List
Applicant names will be removed immediately from the Waiting List for:
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
A) Failure to appear for a scheduled prequalification interview or prior to the
interview time contact the Housing Authority to arrange an alternate time or
date, or;
B) More than two refusals of offered units, or;
C) Fraudulent statements on Application, Prequalification Interview, Referral
Interview, or Informal Hearing, or;
D) Failure to disclose dependent status or receipt of substantial support, or;
E) Acceptance of an affordable unit stemming from a Referral.
Applicants whose names are removed from the Waiting List will also have their
names removed from the List of Prequalified Applicants, and from any Referral
Lists upon which their names appear. Applicants whose names are removed
from the Waiting List shall be notified by mail at the address which they have
supplied to the City. The reason for removal will be specified as part of the
notification.
7) Appeal Process
A) Right to Appeal
The decision by the City to remove a name from the Waiting List, the List of
Prequalified Applicants or from a Referral List may be appealed. All appeals
must be in writing and must be postmarked or received by the Housing
Authority within 10 days after the City has mailed out notification of removal
from any list.
B) Scheduling an Informal Hearing
Upon receipt of an appeal in writing, the Housing Authority shall designate
an Informal Hearing Officer. The Housing Authority may use the Dispute
Resolution Service to conduct Informal Hearings. The Informal Hearing
Officer will schedule an Informal Hearing to take place within 10 days of
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
receipt of the appeal. Once the Informal Hearing date is set, the appellant
may reschedule only upon showing "good cause," which is defined as an
unavoidable conflict seriously affecting the health, safety or welfare of the
appellant or his/her family.
C) Failure of Appellant to Appear for Informal Hearing
If the appellant does not appear at a scheduled Informal Hearing and has
not rescheduled the Informal Hearing in advance, the appellant must contact
the Housing Authority within two working days. The Housing Authority shall
reschedule the Informal Hearing only if the appellant's absence was caused
by medical emergency or incarceration. In this event, the Informal Hearing
may be rescheduled only once.
D) Conduct of the Informal Hearing
I. Informal Hearings are conducted by a Hearing Officer who is appointed
by the Housing Authority.
II. Appellant may present written and/or oral objections to the decision; may
present any information or witnesses pertinent to the issue of the
Informal Hearing; may request that staff be available or present at the
Informal Hearing to answer questions pertinent to the case; and may be
represented by legal counselor other designated representative at their
own expense.
III. In addition to other rights, the Housing Authority has a right to present
evidence and any information pertinent to the issue of the Informal
Hearing; be notified in writing if the appellant intends to be represented
by legal counselor another party; examine any documents to be used by
the appellant prior to the Informal Hearing; have its attorney present; and
have staff persons and other witnesses familiar with the case present.
IV. The Informal Hearing Officer may adjourn the Informal Hearing in order
to allow the appellant time to provide additional information, documents
or witnesses before making a decision. If the appellant misses an
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
appointment or deadline for submission of information requested by the
Informal Hearing Officer, the action of the Housing Authority takes effect
and another Informal Hearing is not granted.
E) Informal Hearing Officer Decision
The Informal Hearing Officer determines whether the decision to remove
the appellant's name from any list was correct based on the information
presented at the Informal Hearing. A notice of the Informal Hearing
Findings is provided in writing to the Housing Authority within 10 days
and includes a clear explanation of the reasons for the Officer's decision.
The Housing Authority is not bound by Informal Hearing decisions where
such decision concerns matters other than the matter directly under
appeal, is contrary to HUD regulations or requirements, is contrary to
federal, State or local laws, or exceeds the authority of the person
conducting the Informal Hearing.
F) Notification of Decision
I. If the Informal Hearing decision is valid, the Housing Authority sends a
notice to the appellant within 14 days of receipt of the decision stating a
summary of the decision and reasons for the decision.
II. If the Housing Authority determines it is not bound by the Informal
Hearing Officer's determination, the Housing Authority sends a letter to
the participant within 14 days of receipt of the decision describing the
reasons for not complying with the Informal Hearing Officer's decision.
8) Changes in Income of Residents of Affordable Units
If after moving into an affordable unit the tenantcs income eventually exceeds the
income limit for the unit, the tenant may remain in the unit as long as his/her income
does not exceed 140% of the income limit for the unit.
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Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
However, if the tenante s income exceeds 140% of the income limit for the unit, the
following shall apply, depending upon the income mix of the development:
1) For Developments that are All Low-Income: If a tenante s income exceeds
140% of the income limit for the low income unit but remains within the Program
limit for a moderate-income unit, the tenant may remain in the unit and his/her
name name shall be moved automatically to the top of the Waiting List for the
next available moderate-income unit of the same size or larger in the City. As
long as the tenantes income does not exceed the program limits for a moderate
income unit, the tenant may remain in the low income until the next moderate
income affordable unit of an appropriate size becomes available. Once the
tenant is offered tenancy in a moderate-income unit, if the tenant does not
accept the offer, then the tenant must move out of the low income unit with 90
days of the offer of the moderate-income unit.
Notwithstanding, if the tenantes income exceeds the program limits for a
moderate income unit at any time during his/her tenancy in the low-income unit,
the tenant shall be given one yeares notice to vacate the unit.
2) For Mixed Income Developments: If a tenantes income exceeds 140% of
the income limit for his/her unit (eoriginal unite) but does not exceed the
income limits of other units in the development, the tenant may remain in the
original unit as long as a) the income limit for the original unit is re-designated
for an appropriate higher income category applicable to another unit in the
development, and b) the next vacant higher income unit in the development is
re-designated for the same lower income category applicable to the original unit.
Notwithstanding, if the tenantes income exceeds 140% the program limits for
all affordable units in the mixed income development and also exceeds the
40
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
program limits for a moderate income affordable unit, the tenant shall be given
one yeares notice to vacate the unit.
3) For Mixed Income Projects Including Market Rate Units: If the tenantes
income exceeds the program limits for the original unit by 140%, and if there are
no units designated for a higher income category within the development which
may be substituted for the original unit, the tenant may remain in the original unit
and the tenantes rent may be raised to market rate. However, the next vacant
market rate unit in the development must be re-designated for the same income
limit formerly applicable to the original unit.
Tenants Residing in Moderate Income Units
If the income of a tenant residing in a moderate-income unit exceeds the income
limit for the unit, the tenant may remain in the unit as long as his/her income does
not exceed 140% of the income limit for the unit. However, once the tenantes
income exceeds 140% of the moderate income limit, the tenant shall be given one
yeares notice to vacate the unit.
[The end]
C:\work\W PD\export\12991.wpd
41
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
ATTACHMENTS
1-A Municipal Code Chapter 9.56
1-B Current Base Fees for Apartment and Condominium Projects
2-A Calculation of Very Low, Low and Moderate Income Levels
2-B Calculation of Maximum Rents
2-C Sample of Deed Restrictions
2-D Floor Area Definition from the Zoning Code
7-A Sample Application for Affordable Housing Waiting List
7-B Referral Status Form
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
1-A Municipal Code Chapter 9.56
Attachment I-A
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Chapter 9.56 AFFORDABLE HOUSING PRODUCTION
PROGRAM
9.56.010 Findings and purpose.
9.56.020 Definitions.
9.56.030 Applicability of chapter.
9.56.040 Affordable housing obligation.
9.56.050 On-site option.
9.56.060 Off-site option.
9.56.070 Affordable housing fee.
9.56.080 Land acquisition.
9.56.090 Fee waivers.
9.56.100 Pricing requirements for affordable housing units.
9.56.110 Eligibility requirements.
9.56.120 Relation to units required by Rent Control Board.
9.56.130 Deed restrictions.
9.56.140 Enforcement.
9.56.150 Annual report.
9.56.160 Principles and guidelines.
9.56.010 Findings and purpose.
(a) Santa Monica is a coastal city in a prime location, being
bordered by the City of Los Angeles to the north, east and south.
The combination of a scenic oceanside location, excellent
climate, and the ready availability of urban facilities, services
and entertainment make Santa Monica an extremely desirable
place to live.
(b) The land area of the City is very small -- approximately
eight square miles. Santa Monica is already a fully built-out city,
with only sixty-two vacant residential parcels. It also has a
population of approximately ninety thousand. Santa Monica's
population density, eleven thousand two hundred persons per
square mile, is the second highest among neighboring and
nearby jurisdictions, and is the densest among coastal
communities in Los Angeles County.
(c) The vast majority of new market rate multi-family
development in the City is not affordable to lower-income
households. Moreover, market conditions, including the high
cost of residential land, construction costs, and the availability
and cost of financing, make the development of affordable
housing in the City extremely difficult.
(d) In addition, the consumption patterns of the
upper-income households who occupy these new market rate
multi-family housing units create a need for affordable housing
in the City. More specifically, households create demand for
goods and services in the private sector, such as retail goods
and medical services, and jobs in the public sector, such as
teachers and municipal services. The higher the household's
income, the more demand is created. New market rate
multi-family housing in Santa Monica accommodates upper-
income households almost exclusively because of the high rent
or purchase price required to occupy it. Supplying goods and
services sufficient to meet the demand created by upper-income
Attachment I-A
households in new market rate multi-family housing requires
workers across the pay scale spectrum, including lower-wage
employees.
(e) The City has prepared an analysis of this relationship
between new market rate apartment and condominium
development in the City and the need for affordable housing
created by this new development. This study focuses on the
relationship between the demand for goods and services created
by households who occupy new market rate multi-family
development in the City, the number of low-wage workers in
public agencies and businesses needed to satisfy this demand,
and the costs of producing the affordable housing needed by
these workers. This study demonstrates the range per square foot
which could be imposed on new market rate multi-family
development to help finance the development of affordable
housing needed to meet the demand created by market rate
development.
(f) In addition, because the City is built-out, land available
for residential development in the City is limited. Further, land
which could be used for development of housing for low income
households is being depleted by development of high cost
housing. Thus, continued new residential development which
does not include or contribute toward the cost of housing for
lower income households will only serve to further exacerbate the
current affordable housing shortage.
(g) Requiring developers to assist in the production of
affordable housing is also consistent with the City's long-standing
commitment to achieve and maintain a suitable living
environment including decent housing for persons at all economic
levels. This municipal commitment conforms with State and
Federal policies and is a principal goal of the City's recently
adopted 1998-2003 Housing Element Update.
(h) The City has historically effectuated this commitment
through extraordinary efforts manifest in various City laws,
policies and programs. For instance, the City's voters have
adopted initiative measures which strive to maintain and promote
affordable housing in the City. The Rent Control Charter
Amendment, adopted in 1979, has as its primary purpose the
protection of affordable housing and has historically been the
City's most important legislative tool for maintaining the supply
of affordable housing. Similarly, Proposition R, adopted by the
voters in 1990, mandates that thirty percent of all new
multi-family housing units constructed in the City each year be
affordable.
(i) The City's zoning laws and policies also include
substantial incentives for the production of affordable housing,
including height and density bonuses and reduced parking
requirements. In addition, the City operates a number of
programs
which facilitate the production of affordable housing. These
include loans to private, for-profit developers and owners and
funding to non-profit agencies to acquire or construct affordable
housing units.
(j) Despite the City's prime location and high real estate
values, the City has historically been highly successful in
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
maintaining its economic diversity. According to the 1998-2003
Update, twenty-three percent of the City's households are very
low income, 16.1 percent are low income, 20.7 percent are
moderate income, and 40.1 percent are upper income.
Moreover,
fifty-three percent of households residing in rent-controlled
apartments are very low- and low-income. This diversity is an
essential element of the City's character. It sets the City apart
from all other similarly situated coastal cities in California.
(k) However, notwithstanding the City's ongoing
commitment and efforts, changes in State and Federal law and
market conditions are making it increasingly difficult for the City
to ensure a continued supply of affordable housing. In 1986, the
State enacted the Ellis Act which enables a property owner to
cease operating property as residential rental property. More
recently, in 1995, the State enacted the Costa-Hawkins Rental
Housing Act which phases out limits on the rents which a
property owner may charge when re-renting voluntarily vacated
units. Except in limited circumstances, it eliminates the City's
ability to control the rent a property owner can impose when a
unit is initially rented. Although the full impacts of
Costa-Hawkins will not be felt until 1999 and the years
thereafter. studies prepared by the Santa Monica Rent Control
Board tracking the rent levels of units decontrolled as a result of
Costa-Hawkins demonstrates that these units are already losing
their affordability. Thus, this law is having and will continue to
have a significant impact on the City"s supply of affordable
housing. Moreover, there is an extremely low vacancy rate for
the existing rental housing stock. In addition, reductions in State
and federal funding for affordable housing, changes in these
programs, and the potential expiration of controls on rents in
federally-assisted projects all hinder the City's ability to provide
or promote affordable housing. In short, changes in State and
federal law seriously threaten the City's existing affordable
housing stock. The decline in the affordability of this housing
stock is further exacerbated by the production of luxury market
rate housing. Given current economic conditions and the general
desirability of the City; the new housing costs will only continue
to increase, thereby further exacerbating the growing shortage
of housing affordable to very low- and low-income households
in the City.
(I) California's Housing Element law requires each city and
county to develop local housing programs designed to address
its "fair share" of existing and future housing needs for all
income groups. The City's 1998-2003 Housing Element Update
establishes the City's fair share at 3,219 housing units of which
1,369 (43%) should be affordable to very low- and low-income
households.
(m) The Housing Element Update catalogues a dozen
funding sources that the City utilizes to assist in the
development of affordable housing. These substantial resources
are projected to assist in the development of 403 new units
affordable to low- and moderate- income households. However,
this represents only twenty-one (21 %) of the estimated need for
new affordable housing in the City as established by the City's
fair share. Consequently, the total housing needs of the City
exceed the City's available resources and the City's ability to
Attachment I-A
meet these needs. The vast majority of housing units have been
and will continue to be produced by the private housing industry.
(n) This Affordable Housing Production Program will benefit
the City as a whole. Each development which contributes to
affordable housing through the provisions of this Chapter
augments the City's housing mix, helps to increase the supply of
housing for all economic segments of the community, addresses
the affordable housing need generated by the development, and
thereby supports a balanced community which is beneficial to the
public health, safety and welfare of the City. (Added by Ord. No.
1918CCS Sec. 1 (part), adopted 7/21/98)
9.56.020 Definitions.
The following words or phrases as used in this Chapter shall
have the following meanings:
Affordable Housing Fee. A fee paid to the City by a multi-family
project applicant pursuant to Section 9.56.070 of this
Chapter to assist the City in the production of housing affordable
to very low- and low-income households.
Affordable Housing Unit. A housing unit developed by a
multi-family project applicant pursuant to Sections 9.56.050 or
9.56.060 of this Chapter which will be affordable to very low- or
low-income households.
Dwelling Unit. One or more rooms, designed, occupied or
intended for occupancy as separate living quarters, with full
cooking, sleeping and bathroom facilities for the exclusive use of
a single household. Dwelling unit shall also include single-room
occupancy units as defined in Santa Monica Municipal Code
Section 9.04.02.030.790.
Floor Area. Floor area as defined in Santa Monica Municipal
Code Section 9.04.02.030.315.
HUD. The United States Department of Housing and Urban
Development or its successor.
Income Eligibility. 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.
Industrial/Commercial District. Any district designated in the
Santa Monica Zoning Ordinance as a commercial or industrial
district.
"Low," "Very Low," and "Moderate" Income Levels. Income
levels determined periodically by the City based on the United
States Department of Housing and Urban Development (HUD)
estimate of median family income in the Los Angeles-Long Beach
Primary Metropolitan Statistical Area. The major income cate-
gories are: "low-income" (sixty percent or less of the area
median), "very low-income" (fifty percent or less of the area
median), and "moderate-income" (one hundred percent or less of
the area median). Adjustment shall be made by household size
as established by the City.
Market Rate Unit. A dwelling unit as to which the rental rate or
sales price is not restricted by this Chapter.
Maximum Affordable Rent. A monthly housing charge which
does not exceed one-twelfth of thirty percent of the maximum
very low-, low-, and moderate-income levels as defined in this
Chapter and adopted each year by the City. This charge shall
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
represent full consideration for housing services and amenities
as provided to market rate dwelling units in the project, whether
or not occupants of market rate dwelling 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 master-metered.
Notwithstanding the foregoing, utility charges, to the extent
individually metered for each unit in the project, may be passed
through or billed directly to the occupants of affordable housing
units in the project in addition to maximum allowable rents
collected for those affordable housing units.
Multi-family Project. A multi-family residential development,
including but not limited to apartments, condominiums, town-
houses or the multi-family residential component of a mixed use
project, for which City permits and approvals are sought.
Multi-family Project Applicant. Any person, firm, partnership,
association, joint venture, corporation, or any entity or
combination of entities which seeks City development permits or
approvals to develop a multi-family project.
Multi-family Residential District. Any district designated in the
Santa Monica Zoning Ordinance as a multi-family residential
district.
Parcel. Parcel as defined in Santa Monica Municipal Code
Section 9.04.02.030.570.
Vacant Parcel. A parcel in a multi-family residential district
that has no residential structure located on it as of August 20,
1998 or which had a residential structure located on it on that
date which was subsequently demolished pursuant to a
demolition order of the City. No demolition of structures shall be
permitted except in accordance with Santa Monica Municipal
Code Section 9.04.10.16 et seq. (Added by Ord. No. 1918CCS
Sec. 1 (part), adopted 7/21/98; amended by Ord. No. 1926CCS
Sec. 1, adopted 10/13/98)
9.56.030 Applicability of chapter.
(1) The obligations established by this Chapter shall
apply to each multi-family project for which a development
application was deemed complete on or after March 1, 1998
involving the construction of two or more market rate units. No
building permit shall be issued for any multi-family project
unless such construction has been approved in accordance with
the standards and procedures provided for by this Chapter.
(2) Multi-family projects for which a development
application was deemed complete prior to March 1, 1998 shall
be subject to the provisions of Santa Monica Municipal Code
Section 9.28 et seq. as they existed on the date the application
for the project was deemed complete. (Added by Ord. No.
1918CCS Sec. 1 (part), adopted 7/21/98)
9.56.040 Affordable housing obligation.
All multi-family project applicants subject to the provisions of
this Chapter pursuant to Section 9.56.030 shall choose one of
the following options to meet the requirements of this Chapter:
Attachment I-A
(a) Providing affordable housing units on-site in accordance
with Section 9.56.050;
(b) Providing affordable housing units off-site in accordance
with Section 9.56.060;
(c) Paying an affordable housing fee in accordance with
Section 9.56.070;
(d) Acquiring land for affordable housing in accordance with
Section 9.56.080.
A multi-family project application will not be deemed complete
until the applicant has submitted plans and proposals which
demonstrate the manner in which the requirements of this
Chapter will be met. (Added by Ord. No. 1918CCS Sec. 1 (part),
adopted 7/21/98)
9.56.050 On-site option.
A multi-family project applicant may meet the affordable
housing obligations established by this Chapter by providing
affordable housing units on-site in accordance with the following
requirements:
(a) The multi-family project applicant agrees to construct at
least: (1) twenty percent of the total units of a project for
low-income households, or (2) ten percent of the total units of a
project for very-low income households, or (3) one hundred
percent of the total units of a project for moderate-income
households in an Industrial/Commercial District. Any fractional
affordable housing unit that result from the formulas of this
subsection shall be treated as a whole affordable housing unit
(i.e.: any resulting fraction shall be rounded up to the next larger
integer) and that unit shall also be built pursuant to the provisions
of this section. The Planning and Community Development
Department shall make available a list of very low-, low-, and
moderate-income levels adjusted for household size, the
corresponding maximum affordable rents adjusted by number of
bedrooms, and the minimum number of very low- or low-income
units required for typical sizes of multi-family projects, which list
shall be updated periodically.
(b) The multi-family project applicant may reduce either the
size or interior amenities of the affordable housing units as long
as there are not significant identifiable differences between
affordable housing units and market rate units visible from the
exterior of the dwelling units, provided that all dwelling units
conform to the requirements of the applicable Building and
Housing Codes. However, each affordable housing unit provided
shall have at least two bedrooms unless (1) the proposed project
comprises at least ninety-five percent one bedroom units,
excluding the manager's unit, in which case the affordable
housing units may be one bedroom, (2) the proposed project
comprises at least ninety-five percent zero bedroom units,
excluding the manager's unit, in which case the affordable
housing units may be zero bedroom units, or (3) the proposed
project comprises zero and one bedroom units, excluding the
manager's unit, in which case the affordable housing units must
be at least one bedroom units. The design of the affordable
housing units shall be reasonably consistent with the market rate
units in the project. An affordable housing unit shall have a
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
minimum total floor area, depending upon the number of
bedrooms provided, no less than the following:
o bedrooms
1 bedroom
2 bedrooms
3 bedrooms
4 bedrooms
500 square feet
600 square feet
850 square feet
1080 square feet
1200 square feet
Affordable housing units in multi-family projects of one hundred
units or more must be evenly disbursed throughout the
multi-family project to prevent undue concentrations of
affordable housing units.
(c) All affordable housing units in a multi-family project or
a phase of a multi-family project shall be constructed
concurrently with the construction of market rate units in the
multi-family project or phase of that project.
(d) On-site affordable housing units must be rental units in
rental projects. In ownership projects, affordable housing units
may be either rental units or ownership units. Affordable housing
ownership units shall comply with requirements concerning
sales price, monthly payment, and limited equity and resale
restrictions as established by resolution of the City Council to
ensure that subsequent purchasers are also income-qualified
households.
(e) Each multi-family project applicant, or his/her
successor, shall submit an annual report to the City identifying
which units are affordable units, the monthly rent (or total
housing cost if an ownership unit), vacancy information for each
affordable unit for the prior year, verification of income of the
household occupying each affordable unit throughout the prior
year, and such other information as may be required by City
staff.
(f) A multi-family project applicant who meets the
requirements of this Section shall be entitled to the density
bonus
development standards established in Santa Monica Municipal
Code Section 9.04.10.14.040.
(g) All residential developments providing affordable
housing on-site pursuant to the provisions of this Section shall
receive priority building department plan check processing by
which housing developments shall have plan check review in
advance of other pending developments to the extent authorized
by law. (Added by Ord. No. 1918CCS Sec. 1 (part), adopted
7/21/98)
9.56.060 Off-site option.
A multi-family project applicant may meet the affordable
housing obligations established by this Chapter by providing
affordable housing units off-site in accordance with the following
requirements:
(a) The multi-family project applicant shall agree to con-
struct the same number of affordable housing units as specified
in Section 9.56.050.
(b) The multi-family project applicant shall identify an
alternate site suitable for residential housing which the project
Attachment I-A
applicant either owns or has site control over (e.g., purchase
agreement, option to purchase, lease) subject to City review to
ensure that the proposed development is consistent with the
City's housing objectives and projects.
(c) The off-site units shall be located within a one-quarter
mile radius of the market rate units.
(d) The off-site units shall satisfy the requirements of
subsections (b) through (f) of Section 9.56.050.
(e) The off-site units shall not count towards the satisfaction
of any affordable housing obligation that development of the
alternative site with market rate units would otherwise be subject
to pursuant to this Chapter.
(f) Exceptions to the location of the off-site units specified in
this Section may be granted by the Planning Commission on a
case-by-case basis upon a showing by the multi-family project
applicant, based upon substantial evidence, that the location of
off-site units in a location different from that specified in this
Section better accomplishes the goals of this Chapter, including
maximizing affordable housing production and dispersing
affordable housing throughout the City.
(g) The Housing Division of the Resource Management
Department shall prepare administrative guidelines to implement
this Section. (Added by Ord. No. 1918CCS Sec. 1 (part), adopted
7/21/98)
9.56.070 Affordable housing fee.
A multi-family project applicant may meet the affordable
housing obligations established by this Chapter by paying an
affordable housing fee in accordance with the following
requirements:
(a) An affordable housing fee may be paid in accordance
with the following formulas:
(1) Multi-family Projects in Multi-family Residential
Districts:
affordable housing unit base fee x floor area of
multi-family project;
(2) Multi-family Projects in Multi-family Residential
Districts on Vacant Parcels:
affordable housing unit base fee x floor area of
multi-family project x 75%;
(3) Multi-family Projects in Industrial/Commercial
Districts on Parcels that are either not already developed with
multi-family housing or are already developed with multi-family
housing, but the multi-family project preserves the existing
multi-family housing or a Category C Removal Permit has been
obtained for the existing multi-family housing:
affordable housing unit base fee x floor area of
project devoted to residential uses x 50%.
(b) For purposes of this Section, the affordable housing unit
base fee may be established at least every two years by
resolution of the City Council. The amount of the affordable
housing fee that the multi-family project applicant must pay shall
be based on the affordable housing unit base fee resolution in
effect at the time that the application for the multi-family project
is
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
deemed complete or based on Resolution No. 9295 (CCS),
whichever resolution is adopted later in time.
(c) The amount of the affordable housing unit base fee may
vary by product type (apartment or condominium) and shall
reflect, among other factors, the relationship between new
market rate multi-family development and the need for
affordable housing and the impact that the fee will have on the
financial return of multi-family project applicants.
(d) The fee shall be paid in full to the City prior to the City
granting any approval for the occupancy of the project.
(e) The City shall deposit any payment made pursuant to
this Section in a Reserve Account separate from the General
Fund to be used only for development of very low- and
low-income housing, administrative costs related to the
production of this housing, and monitoring and evaluation of this
Affordable Housing Production Program. Any monies collected
and interest accrued pursuant to this Chapter shall be
committed within five (5) years after the payment of such fees
or the approval of the multi-family project, whichever occurs
later. Funds that have not been appropriated within this five-year
period shall be refunded on a pro rata share to those
multi-family project applicants who have paid fees during the
period. Expenditures and commitments of funds shall be
reported to the City Council annually as part of the City budget
process.
(f) An affordable housing fee payment pursuant to this
Section shall not be considered provision of affordable housing
units for purposes of determining whether the multi-family
project qualifies for a density bonus pursuant to Government
Code Section 65915. (Added by Ord. No. 1918CCS Sec. 1
(part), adopted 7/21/98; amended by Ord. 1926CCS Sec. 2,
adopted 10/13/98)
9.56.080 Land acquisition.
A multi-family project applicant may meet the affordable
housing obligations established by this Chapter by making an
irrevocable offer: (a) dedicating land to the City or a non-profit
housing provider, (b) selling of land to the City or a non-profit
housing provider at below market value, or (c) optioning of land
on behalf of the City or a non-profit housing provider. Each of
these options must be for a value at least equivalent to the
affordable housing obligation otherwise required pursuant to this
Section. The multi-family project applicant must identify the land
at the time that the development application is filed with the City.
Any land offered pursuant to this Section must be located within
one-quarter mile radius of the market rate units unless the
multi-family project applicant demonstrates that locating the
land outside of this radius better accomplishes the goals of this
Chapter, including maximizing affordable housing production
and dispersing affordable housing throughout the City. The City
may approve, conditionally approve or reject such offers subject
to administrative guidelines to be prepared by the Housing
Division of the Resource Management Department. If the City
rejects such offer, the multi-family project applicant shall be
required to meet the affordable housing obligation by other
Attachment I-A
means set forth in this Chapter. (Added by Ord. No. 1918CCS
Sec. 1 (part), adopted 7/21/98)
9.56.090 Fee waivers.
The Condominium and Cooperative Tax described in Section
6.76.010 of the Santa Monica Municipal Code and the Park and
Recreation Facilities Tax established in Chapter 6.80 of Article 6
of the Santa Monica Municipal Code shall be waived for required
affordable housing units and for low and very low income dwelling
units developed by the City or its designee using affordable
housing fees. However, any multifamily project applicant who
elects to pay an affordable housing fee shall not be eligible for
any fee waiver under this Section. (Added by Ord. No. 1918CCS
Sec. 1 (part), adopted 7/21/98)
9.56.100 Pricing requirements for affordable housing units.
The City Council shall, by resolution, on an annual basis, set
maximum affordable rents and maximum affordable purchase
prices for affordable housing units, adjusted by the number of
bedrooms. Such maximum affordable rents shall be set at rates
such that qualified occupants for low-income units pay monthly
rent that does not exceed thirty percent of the gross monthly
household income for households earning sixty percent of the
median income and that qualified occupants for very low income
units pay monthly rent that does not exceed thirty percent of the
gross monthly household income for households earning fifty
percent of the median income. Such maximum affordable
purchase price shall be set at rates such that qualified occupants
for low income units pay total monthly housing costs (mortgage
payment, property taxes, homeowners' insurance, property
mortgage insurance, homeowners' association fees) that do not
exceed thirty-eight percent of the gross monthly household
income for households earning sixty percent of the median
income and that qualified occupants for very low-income units
pay total monthly housing costs (mortgage payment. property
taxes, homeowners' insurance, property mortgage insurance,
homeowners' association fees) that do not exceed thirty-eight
percent of the gross monthly household income for households
earning fifty percent of the median income. (Added by Ord. No.
1918CCS Sec. 1 (part), adopted 7/21/98)
9.56.110 Eligibility requirements.
(a) Only low-income and very low-income households shall
be eligible to occupy or own and occupy affordable housing units.
The City shall develop a list of income-qualified households.
Multi-family project applicants shall be required either to select
households from the City-developed list of income-qualified
households or to themselves select income-qualified households
which shall be subject to eligibility certification by the City.
(b) The City shall develop administrative guidelines for the
tenant and purchaser selection process detailed in this Section,
which shall establish, at a minimum, the timing by which
affordable housing units in a project must be leased or sold and
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
occupied, both initially after issuance of the certificate of
occupancy for the project and upon subsequent vacancies in the
affordable housing unit. The guidelines may also establish
priorities for income-qualified tenants.
(c) The following individuals, by virtue of their position or
relationship, are ineligible to occupy an affordable housing unit:
(1) All em ployees 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 over the implementation of this Chapter and the
immediate relatives and employees of such City employees and
officials;
(2) The immediate relatives of the applicant or owner,
including 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.
(Added by Ord. No. 1918CCS Sec. 1 (part), adopted 7/21/98)
9.56.120 Relation to units required by Rent Control Board.
Very low-income and low-income dwelling 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 applicable requirements for this Chapter including, but not
limited to, the income eligibility requirements, 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.
(Added by Ord. No. 1918CCS Sec. 1 (part), adopted 7/21/98)
9.56.130 Deed restrictions.
Prior to issuance of a building permit for a project meeting the
requirements of this Chapter by providing affordable units
on-site or off-site, the multi-family project applicant shall submit
deed restrictions or other legal instruments setting forth the
obligation of the applicant under this Chapter for City review and
approval. Such restrictions shall be effective for at least fifty-five
years. (Added by Ord. No. 1918CCS Sec. 1 (part), adopted
7/21/98)
9.56.140 Enforcement.
No building permit or occupancy permit shall be issued, nor
any development approval granted, for a project which is not
exempt and does not meet the requirement of this Chapter. All
affordable housing units shall be rented or owned in accordance
with this Chapter. (Added by Ord. No. 1918CCS Sec. 1 (part),
adopted 7/21/98)
9.56.150 Annual report.
The Housing Division of the Resource Management
Department shall submit a report to the City Council on an
annual basis which shall contain information concerning the
implementation of this Chapter. This report shall also detail the
Attachment I-A
projects that have received planning approval during the previous
year and the manner in which the provisions of this Chapter were
satisfied. This report shall further assess whether the provisions
of Proposition R have been met and whether changes to this
Chapter or its implementation procedures are warranted. In the
event the provisions of Proposition R have not been met, the City
Council shall take such action as is necessary to ensure that the
provisions will be met in the future. This action may include, but
not be limited to, amending the provisions of this Chapter or its
implementation. (Added by Ord. No. 1918CCS Sec. 1 (part),
adopted 7/21/98)
9.56.160 Principles and guidelines.
(a) In addition to the administrative guidelines specifically
required by other provisions of this Chapter, the City Manager or
his or her designee shall be the designated authority to develop
and implement rules and regulations pertaining to this Chapter,
to enter into recorded agreements with multi-family project
applicants, and to take other appropriate steps necessary to
assure that the required affordable housing units are provided
and are occupied by very low- and low-income households.
(b) Within one year from the passage of this Chapter,
administrative rules and regulations pertaining to this Chapter
shall be brought before the City Council for adoption. (Added by
Ord. No. 1918CCS Sec. 1 (part), adopted 7/21/98)
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
1-B Current Base Fees for Apartment and Condominium Projects
Attachment I-B
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
f: \atty\mu n i\1 aw\barry\affh se. res
City Council Meeting 7-21-98
Santa Monica, California
RESOLUTION NUMBER 9295 (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
ESTABLISHING AFFORDABLE HOUSING UNIT BASE FEES
FOR NEW MARKET RATE APARTMENT AND
CONDOMINIUM DEVELOPMENT
WHEREAS, the City Council of Santa Monica adopted Ordinance Number 1918
(CCS) on July 21, 1998 -- the Cityes Affordable Housing Production Program; and
WHEREAS, the Affordable Housing Production Program requires developers of
market-rate multifamily housing to assist in the production of affordable housing through
the payment of an affordable housing development fee, development of on-site affordable
units or through other specified options; and
WHEREAS, Santa Monica Municipal Code Section 9.56.070(b) of the Affordable
Housing Production Program provides for the establishment of an affordable housing unit
base fee by Resolution of the City Council; and
WHEREAS, Santa Monica Municipal Code Section 9.56.070(c) provides that the
affordable housing unit base fee shall reflect, among other factors, the relationship
between new market rate multi-family development and the need for affordable housing
and the impact that the fee will have on the financial return of multifamily project
applicants; and
WHEREAS, Hamilton, Rabinovitz &Alschuler, Inc. (eHR&Ae) on behalf of the City
has prepared an analysis ofthe relationship between new market rate apartment and condominium
Attachment I-B
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
development in the City and the need for affordable housing created by this new development
(DNexus StudyD). The Nexus Study focuses on the relationship between the demand for goods and
services created by households who occupy new market rate multi-family development in the City,
the number o flow-wage workers in public agencies and businesses needed to satisfY this demand, and
the costs of producing the affordable housing needed by these workers. The Nexus Study
demonstrates the fee range per square foot which could be imposed on new market rate multi- family
development to help fmance the development of affordable housing needed to meet the demand
created by market rate development. The Nexus Study concludes that the average fee which can
reasonably be charged to developers of new market rate apartments is $6.14 per square foot of floor
area and the average fee which can reasonably be charged to developers of new market rate
condominiums is $7.13 per square foot of floor area; and
WHEREAS, Santa Monica Municipal Code Section 9.04.02.030.315 establishes the defmition
of floor area; and
WHEREAS, HR&A also prepared an analysis of the impact that the fee will have on the
fmancial return of multifamily project applicants for purposes of assessing at what amount the fee
would become a Dgovernmental constraintD within the meaning of State Housing Element Law
(DConstraint Analysis D); and
WHEREAS, HR&A concluded that a fee of$6.14 per square foot offloor area imposed on
new market rate apartments and a fee of$7.13 per square foot offloor area imposed on new market
rate condominiums would not constitute a governmental constraint; and,
WHEREAS, the City Council has reviewed the Nexus Study and the Constraint Analysis, and
conducted a duly noticed public hearing, prior to adopting this Resolution;
Attachment I-B
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANT A MONICA DOES
RESOLVE AS FOLLOWS:
SECTI ON 1. The affordable housing unit base fee for new market rate apartments established
pursuant to Section 9.56.070 is $6.14 per square foot of floor area.
SECTION 2. The affordable housing unit base fee for new market rate condominiums
established pursuant to Section 9.56.070 is $7.13 per square foot of floor area.
SECTION 3. The City Clerk shall certifY to the adoption of this Resolution, and the same
shall be in full force and effect sixty (60) days from the date of adoption of this Resolution.
APPROVED AS TO FORM:
MARSHA JONES MOUTRIE
City Attorney
Attachment I-B
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Attachment 2-A
2-A Calculation of Very Low, Low and Moderate Income Levels
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
1999 MAXIMUM ALLOWABLE INCOME LEVELS
For On Site Affordable Housing
MAXIMUM INCOME LEVELS
BY HOUSEHOLD SIZE AND INCOME CATEGORY
INCOME CALCULATION: (Median Income X Income Category
X Hhld Adjustment Factor)
Median Income 1999: I $51,300 4 - PERSON HOUSEHOLD"
I-person
2-person
3-person
4-person
5-person
6-person
7-person
8-person
0.7000 l
0.8000 I
0.9000 I
1. 0000 I
1.0800 I
1.1600 I
1.2400 I
1.3200 J
MAXIMUM INCOME LEVELS
I-Person $17,955 $21,546 $35,910
2-Person $20,520 $24,624 $41,040
3-Person $23,085 $27,702 $46,170
4-Person $25,650 $30,780 $51,300
5-Person $27,702 $33,242 $55,404
6-Person $29,754 $35,705 $59,508
7-Person $31,806 $38,167 $63,612
8-Person $33,858 $40,630 $67,716
Attachment 2-A
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
2-B Calculation of Maximum Rents
Attachment 2-B
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
1999 MAXIMUM RENTS
For On Site Affordable Housing
MAXIMUM RENTS BY
INCOME CATEGORY AND UNIT SIZE
MONTHLY RENT CALCULATION:
(Median Income X Income Category X Bedroom Adjustment Factor X Affordability Standard)/12
Median Income 1999:
$51,300
"4 - PERSON HOUSEHOLD"
Affordability Standard: 30%
Bedroom Adjustments:
o Bdr
1 Bdr
2 Bdr
3 Bdr
4 Bdr
0.700
0.800
0.950
1.085
1.225
MAXIMUM MONTHLY RENTS
Unit Size
O-BDRM $449 $539 $898
1-BDRM $513 $616 $1,026
2-BDRM $609 $731 $1,218
3-BDRM $696 $835 $1,392
4-BDRM $786 $1,571
Attachment 2-B
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
2-C Sample of Deed Restrictions
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Recording Requested By:
City of Santa Monica
When Recorded Mail To:
City of Santa Monica
1685 Main Street, Room 212
Santa Monica, CA 90401
Attention: Housing Division
Space Above This Line For Recorders Use
No Recording Fee Required
Government Code Section 27383
AGREEMENT IMPOSING RESTRICTIONS
ON REAL PROPERTY
THIS AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY, entered into
this [_] day of [month, 19--], by and between the CITY OF SANTA MONICA, a Municipal
Corporation (hereinafter the "City"), and [name of applicant], (hereinafter the "Developer"), is made
with reference to the following:
R E C I TAL S:
A. Developer is the owner of certain real property located at [address] in the City of Santa
Monica, in the County of Los Angeles, California (hereinafter referred to as the "Subject Property").
The subject property is more particularly described in Exhibit "A" which is attached hereto and
incorporated herein by this reference.
B. Developer wishes to construct [project description include # stories, building square
footage, form of ownership apt./condo etc.] (hereinafter referred to as the "Project"). The City has
approved [type of application/ project # AA, DR, V AR etc] for the proposed development Project.
The City issued this approval subject to conditions which are imposed for the benefit ofthe City, the
public and surrounding landowners and without which no permit would be issued. The developer
wishes to meet a requirement to provide [#] affordable units in the Project.
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows:
1. CONTRACT WITH CITY.
Developer hereby acknowledges that in issuing the [type of permit AA, V AR etc.] Permit
for the Project, the City is reducing or modifying development standards otherwise applicable to the
Project such as unit density, parking standards, and other property development standards. In
exchange for such forms of assistance from the City, which are offmancial benefit to the Developer,
Developer has entered into this contract with the City and agreed to the other conditions ofthe [type
of permit see above] Permit, including the requirement included in this Agreement to provide and
maintain [#] affordable units on site for occupancy by qualified low and moderate income households.
The parties agree and acknowledge that this is a contract providing forms of assistance to the
Developer within the meaning of Civil Code Section 1954.52 (b).
2. DEVELOPER TO PROVIDE rTotal # deed restricted unitsl AFFORDABLE UNITS.
(a) Developer shall provide and maintain [#] affordable housing units on the Subject
Property of which [# of low affordable units; remove if no low units] shall be affordable to
households which earn not more than sixty percent (60%) ofthe then current annual median income
adjusted for household size, for the Los Angeles County Area, as defmed by the United States
Department of Housing and Urban Development ("HUD"), and [# of moderate affordable units;
remove if no mod units] shall be affordable to households which earn not more than one hundred
percent (100%) ofthe then current annual median income adjusted for household size, for the Los
Angeles County Area, as defmed by the United States Department of Housing and Urban
Development ("HUD"). The affordable units at the subject property shall be rented to and affordable
to low or moderate income households as follows:
Number of Units
[number low units]
[ number mod units]
% of Median Income
0; 60%
0; 100%
(b) Developer may satisfY Section 2(a) by providing the Affordable Units to households
which participate in a subsidy program under Section 8 of the Housing Act of 1937, as amended, or
any other comparable subsidy program.
(c) The Affordable Units shall be rental units and the maximum rent shall be calculated
pursuant to the formula set forth in Section 3 of this Agreement.
(d) The City shall issue a Certificate of Occupancy for the Project ("Certificate") expressly
contingent upon compliance with the terms ofthis Agreement. A valid Certificate shall be required
at all times to continue to use or occupy the Project. A breach of this Agreement shall be grounds
for revoking the Certificate. The City shall provide reasonable notice and an opportunity to cure any
breach of this Agreement prior to revoking the Certificate.
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
3. TERMS FOR THE RENTAL OF THE AFFORDABLE UNITS.
[specify unit #Ds rented to low; remove if none] shall be rented to low income households
and [specify unit #Ds rented to mod; remove if none] shall be rented to moderate income
households pursuant to Section 2 of this Agreement, at the maximum rental rates established as
follows:
( a) If the househo ld is receiving assistance under the Section 8 Existing Assistance Pro gram
or similar subsidy program, the maximum allowable rent shall be that which is established by the
Section 8 subsidy program.
(b) Ifthe househo ld is not receiving federal rental assistance as defmed above, the maximum
allowable rent for the unit shall be calculated as follows:
Low Income Household: Median income x 60% x Bedroom Adjustment Factor x 30% =
Maximum Allowable Rent (Annual).
Moderate Income Household: Median Income x 100% x Bedroom Adjustment Factor x 30%
= Maximum Allowable Rent (Annual).
The Maximum Allowable Rent figures must be divided by twelve to determine the maximum
allowable monthly rent.
"Median Income" is defined as the median income for a four person household in the Los
Angeles County Area as established periodically by HUD. The formula for the calculation of rents
as of the date ofthis Agreement is as follows:
Median Income (1) x Income Range (2) x Bedroom Adjustment (3) x 30%
1. Median Income - As periodically published by HUD, currently $51,300 (for a family
of four).
2. Income Ranges
Low 60% or less of median income
Moderate 100% or less of median income
3. Bedroom Adjustment Factors
o Bedroom
1 Bedroom
2 Bedroom
.7
.8
.95
3 Bedrooms
4 Bedrooms
1.085
1.225
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Affordable Rents - 1997 [Housing Div. updates figures once a year; usually April?]
O-BR
1-BR
2-BR
3-BR
Low (60%)
$539
$616
$731
$835
Moderate
(100% )
$898
$1,026
$1,218
$1,392
In the event the standards for establishing the monthly rental rate of the Affordable Units set forth
in Section 3 above cease to exist, the parties shall substitute a similar standard established by HUD
or its successor governmental agency. If the parties are unable to agree upon a substitute standard,
the parties shall refer the choice ofthe substitute standard to binding arbitration in accordance with
the rules of the American Arbitration Association.
4. INCOMES, OCCUPANCY AND ELIGIBILITY STANDARDS.
Developer shall only rent the Affordable Units to persons whose income, adjusted for
household size, meets the following income guidelines for the low or moderate income households
as required by Section 2:
Low: Median Income x 60% x Household Adjustment Factor
Moderate: Median Income x 100% x Household Adjustment Factor
The Household Adjustment Factors are as follows:
1 person 0.7
2 persons 0.8
3 persons 0.9
4 persons 1.0
5 persons 1.08
6 persons 1.16
7 persons 1.24
8 persons 1.32
Ifthe affordable rents are below the Section 8 Program "Fair Market Rents" Developer shall
make the Affordable Units available for occupancy to Section 8 Housing Assistance Program
Certificate Holders by listing the Affordable Units with the local Housing Authority. In no case shall
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
the Developer discriminate against Section 8 Program Certificate Holders for occupancy in the
property.
Developer shall not rent the Affordable Units to a member of his or her family. For the
purposes of this Agreement, the term "family" shall include the Developer and his or her 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. For the purposes of this Section,
the term "Developer" shall include all parties bound by this Agreement.
In addition, if Developer is a corporation, Developer shall not rent the Affordable Units to any
officer, shareholder or employee of such corporation. If Developer is a partnership, Developer shall
not rent the Affordable Units to any partner or employee of such partnership.
In addition, Developer shall not rent the Affordable Units to any member ofthe Santa Monica
City Council, or City Boards or Commissions, or City employees who presently exercise any function
or responsibility in connection with the Property, or shall have or acquire any personal, fmancial, or
economic interest, direct or indirect. For the purposes ofthis Agreement direct or indirect interest
includes any interest held by the spouse, parent, child, brother, sister, father-in-law, mother-in-law,
brother-in-law, sister-in-law, daughter-in-law, or son-in-law of the potential tenant.
Developer agrees to make reasonable efforts to rent vacant Affordable Units within sixty days.
5. TENANT SELECTION.
Developer shall select households from a City-administered list of income-qualified
households. However, if such list is not available, the following requirements shall apply to tenant
selection.
Developer shall give preference in leasing the affordable units to persons evicted pursuant to
the Ellis Act, Government Code Section 7060, persons residing in Santa Monica, and persons
working in Santa Monica, unless preempted by HUD grant program requirements.
Developer shall certifY the income ofthe prospective tenants prior to selection for occupancy
in order to ensure that the occupancy requirements specified in Section 3 ofthis Agreement are met.
The income certification shall be completed in accordance with the following:
( a) Developer shall require an income declaration from all household members eighteen (18)
years of age and older.
(b) For the purposes of this Agreement, "income" shall include employment income, social
security, disability, pensions, supplementary benefits, support payments, income from sale of real
property, and income from assets over $5,000 (not including automobiles or furnishings). Developer
shall obtain verification for all income, which may include pay stubs, income tax returns, savings
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
account statements, fmancial statements, stock certificates, etc. in order to verifY the gross annual
household income.
(c) Developer shall compute gross annual household income by totaling all income, and
adjusting as follows:
(1) Deduct $480 for each dependent, defmed herein as a household member under
18 years of age;
(2) Deduct $400 for any family with a head of household over 62 years old;
(3) Deduct medical expenses in excess ofthree percent (3%) of annual income for
any elderly family; and
(4) For households whose total assets exceed $5,000, the Developer must calculate
the annual asset income by multiplying the value ofthe total assets by ten percent (10%). Developer
shall then add the result to the other household income to obtain the adjustment gross annual income.
(d) Developer shall select a household for the Affordable Units upon completion of income
verification process and may require other information prior to selection, including documentation
of ability and history of timely payment of rent, and ability and history of maintaining property.
( e) Developer may accept a tenant with a current and valid Section 8 Housing Assistance
Payments Program Certificate as eligible, without completing the above verifications.
6. CITY APPROVAL OF DOCUMENTS.
(a) Developer shall rent the Affordable Units pursuant to the terms and conditions ofa lease
or rental agreement approved by the City. At least thirty days prior to the expected completion date,
Developer shall submit to the City Housing Division for review a copy ofthe lease agreement to be
used and a brief marketing plan and description ofthe tenant selection process to be used. Said lease
or rental agreement shall contain a provision prohibiting subleasing ofthe Affordable Units or revising
the composition ofthe household without Developer's permission. Developer shall not approve any
change that renders the Units in noncompliance with the income guidelines for such household as set
out in Section 1. The addition to the household of a minor child or children shall not be deemed a
change in the household requiring Developer's prior approval pursuant to this Section.
7. ATTORNEYS' FEES AND COSTS.
In the event of any controversy, claim or dispute between the parties hereto, arising out of
or relating to this Agreement or breach thereof, the prevailing party shall be entitled to recover from
the losing party reasonable expenses, attorneys' fees and costs.
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
8. APPOINTMENT OF OTHER AGENCIES.
The City may designate, appoint or contract with any other public agency to perform City's
obligations under this Agreement.
9. SEVERABILITY.
In the event any limitation, condition, restriction, covenant or provision contained in this
Agreement is held to be invalid, void or unenforceable by any court of competent
jurisdiction, the remaining portions ofthis Agreement shall, nevertheless, be and remain in full force
and effect.
10. NOTICES.
All notices required under this Agreement shall be sent by certified mail, return receipt
requested, to the following addresses:
TO THE CITY OF SANTA MONICA: City of Santa Monica
Planning and Community Development Department
1685 Main Street, Room 212
Santa Monica, California 90401
Attention: Director, Planning and Community
Development Department
TO THE DEVELOPER: [enter developer name/address]
Any party may change the address to which notices are to be sent by notifYing the other
parties of the new address, in the manner set forth above.
11. HOLD HARMLESS.
As between the City and the Developer, the Developer is deemed to assume responsibility and
liability for, and the Developer shall indemnifY and hold harmless the City and its City Council, boards
and commissions, officers, agents, servants or employees from and against any and all claims, loss,
damage, charge or expense, whether direct or indirect, to which the City or its City Council, boards
and commissions, officers, agents, servants or employees may be put or subjected, by reason of any
damage, loss or injury of any kind or nature whatever to persons or property caused by or resulting
from or in connection with any negligent act or action, or any neglect, omission or failure to act when
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
under a duty to act, on the part of the Developer or any of Developer's officers, agents, servants,
employees or subcontractors in his or their performance hereunder.
12. BURDEN TO RUN WITH PROPERTY.
The covenants and conditions herein contained shall apply to and bind the heirs, successors
and assigns of all the parties hereto and shall run with and burden the Subject Property for the benefit
ofthe City, the public and surrounding landowners, until terminated in accordance with the provisions
hereof. Developer shall expressly make the conditions and covenants contained in this Agreement
a part of any deed or other instrument conveying any interest in the property.
13. SALE OR CONVERSION OF PROPERTY.
In the event of sale or conversion of the subject property, any Conditions, Covenants and
Restrictions (CC & R's) for the property, shall incorporate by reference all obligations and duties of
the parties created by this Agreement. Reporting obligations set forth in Section 20 below, shall be
set forth in the CC & R's if any, for the project.
14. PROHIBITION AGAINST DISCRIMINATION.
Developer agrees not to discriminate against any actual or potential occupant ofthe subject
property on the basis of sex, race, color, religion, ancestry, national origin, sexual orientation, age,
pregnancy, marital status, handicap, HIV, family composition, or the potential or actual occupancy
of minor children. Developer further agrees to take affIrmative action to ensure that no such person
is discriminated against for any of the aforementioned reasons.
15. STANDING TO ENFORCE AGREEMENT.
Violation of this Agreement may be enjoined, abated or remedied by appropriate legal
proceedings by the parties hereto, or their respective successors, heirs, and assigns. The general
public shall be deemed a third party beneficiary of this Agreement having standing to enforce the
terms of this Agreement in a court of competent jurisdiction.
16. INTEGRATED AGREEMENT.
This Agreement constitutes the entire agreement between the parties and no modification
hereof shall be binding unless reduced to writing and signed by the parties hereto.
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
17. APPLICABLE LAW.
All questions pertaining to the validity and interpretation of this Agreement shall be
determined in accordance with the laws of California applicable to contracts made to and to be
performed within the State.
18. DURATION OF AGREEMENT.
This Agreement shall terminate and become null and void fifty-five (55) years from the date
of recordation hereof. This Agreement, and any Section, subsection, or covenant contained herein,
may be terminated or amended only upon the written consent of all parties hereto.
19. RECORDING OF AGREEMENT.
The parties hereto shall cause this Agreement to be recorded in the Official Records of the
County of Los Angeles.
20. YEARLY REPORT.
Developer shall issue a written report to City on an annual basis commencing one year from
the date of recordation of this Agreement and continuing thereafter throughout the term of the
Agreement. The report shall state the rent level then being charged for the Affordable Units, whether
the occupants are assisted by a program under Section 8 ofthe Housing Act of1937, the number of
occupants in the household, and whether there have been any changes in the composition of the
household and whether any vacancies have occurred during the reporting year.
21. AUTHORITY TO EXECUTE.
The undersigned declare they have full authority to execute this Agreement on behalf of
Developer, and bind Developer to all the terms and conditions contained herein.
[Note: document text needs to be part of signature page; set hard page breaks when necessary]
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as ofthe
day and year fIrst above written.
ATTEST:
CITY OF SANTA MONICA
A Municipal Corporation
BY
MARIA STEWART
City Clerk
BY
JOHN JALILI
City Manager
APPROVED AS TO FORM:
MARSHA JONES MOUTRIE
City Attorney
DEVELOPER:
By
[name, and title trustee, owner ete]
C:\work\ WPD\export\12991.wpd
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
EXHIBIT A
Lot -----------, Block ---------, Tract ------------ in the City of Santa Monica, County of Los Angeles,
State of California, as per map recorded in Book xx Page xxx, in the Office ofthe County Recorder
of said County.
(Insert Complete Legal Description)
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On [
, 19..], before me,
the
undersigned, a Notary Public in and for said State, personally appeared [project applicant],
personally known to me - OR - proven to me on the basis of satisfactory evidence to be the person
whose name is subscribed to the within instrument and acknowledged to me that he/she executed the
same in his/her authorized capacity as [name of company title] of the subject property.
WITNESS my hand and official seal.
Notary Public in and for said State
Description ofInstrument
Title: AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY
Property location: r address 1, Santa Monica, California.
Number of Pages: r#l, plus Exhibit A
Document Date:
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
, [19--], before me, the undersigned, a Notary Public in and for said
On
State, personally appeared JOHN JALILI, known to me to be the CITY MANAGER of the CITY
OF SANTA MONICA, a Municipal Corporation, that executed the within instrument on behalf of
the CITY OF SANTA MONICA, and acknowledged to me that the CITY OF SANTA MONICA
executed the same.
WITNESS my hand and official seal.
Notary Public in and for said State
Description ofInstrument
Title: AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY
Property location: r address 1, Santa Monica, California.
Number of Pages: r#l, plus Exhibit A
Document Date:
Attachment 2-C
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
2-D Floor Area Definition from the Zoning Code
Attachment 2-D
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Santa Monica Municipal Code
9.04.02.030.315
Floor area.
The total gross horizontal areas of all floors of a building, including usable basements
and all areas measured from the interior face of exterior walls, or a wall separating two
buildings excluding:
(a) Stairways and stairwells;
(b) Elevators, elevator equipment rooms and elevator shafts;
(c) Ramps to a subterranean or semi-subterranean parking structure or ramps
between floors of a parking structure provided the ramp does not accommodate parking;
(d) Unenclosed decks, balconies and platforms not used for commercial or
restaurant activity;
(e) Courtyards, arcades, atria, paseos, walkways and corridors open to the outdoors
whether or not covered by a roof provided they are not used for commercial or restaurant
activity;
(f) The volume above interior courtyards, atria, paseos, walkways and corridors
whether covered or not;
(g) Subterranean and semi-subterranean parking structures used exclusively for
parking and loading and unloading;
(h) At-grade parking not covered by a building, structure or roof;
(i) Loading docks open or covered by a roof or canopy, but otherwise unenclosed
and used exclusively for loading and unloading;
U) Mechanical equipment rooms, electrical rooms, telephone rooms, and similar
space, if located below grade.
Floor area shall include those areas occupied by the following:
(a) Restrooms, lounges, lobbies, kitchens, storage areas, and interior hallways and
corridors;
(b) The floor area of interior courtyards, atria, paseos, walkways and corridors
covered by a roof or skylight;
(c) Covered at-grade parking;
(d) Above grade parking.
Floor area devoted to covered at-grade parking shall be counted at two-thirds of the
actual area if all of the following conditions are met:
(a) The floor devoted to parking does not exceed ten feet in height;
(b) There is at least one level of subterranean or semi-subterranean parking
provided on the parcel;
(c) The at-grade and above grade parking levels are screened from view;
(d) There is no parking on the ground floor within forty feet of the front property line;
(e) The design of the parking levels is compatible with the design of the building as
determined by the Architectural Review Board. (Added by Ord. No. 1826CCS Sec. 1 (part),
adopted 11/7/95)
Attachment 2-D
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Attachment 7-A
7-A Sample Application for Affordable Housing Waiting List
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
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In order to qualifY, your household income must be less than:
1 Person Household - $35,910 2 Person Household - $41,040
3 Person Household - $46,170 4 Person Household - $51,300
5 Person Household - $55,404 6 Person Household - $59,508
Santa Monica Housing & Redevelopment Division
Return this application to:
I:'
APPUCA nON MUST BE POSTMARKED BY JULY 2. 1009
~..................................................................... :.:
]
I certifY under penalty of perjury under the laws of the State of California that the information provided
is true and correct. I understand that any misrepresentation (s) of the information contained in this
application may result in disqualification from the Inc1usionary Housing program.
Signature
Attachment 7-A
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
7 -B Prequalified Applicant Referral Status Form
On fdatel , the City referred [Name], [Address], [Telephone] to you for consideration
for tenancy at the following address:
[Address]
Please indicate the results of this referral and return this form to the Housing Authority by
[date]:
The prospective tenant was not offered a unit because:
All available units were filled.
Household income exceeded maximum allowable income.
The prospective tenant did not respond within _ days (minimum 5 days).
The prospective tenant was not creditworthy and thus was declined.
The prospective tenant received unfavorable referrals and thus was declined.
_ Other (Please give reason)
The prospective tenant was offered a unit and declined on
fdatel
The prospective tenant was offered a unit and accepted on
fdatel
Signed
Title
Organization
Date
Attachment 7-B
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999
Please return this form to: Housing Authority....
Attachment 7-B
Administrative Guidelines
Affordable Housing Production Program
Adopted October 5, 1999