SR-400-001-03 (9)
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feEl 1 8 198J..-
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MAR 1 0 1987
Callfornla
C/ED:CPD:RAS:DKW:bz
COUNCIL MEE~IN~: 2/10/87
41t)tJ,,- tJO /-- t?~
Santa Honlca,
TO:
Mayor and Clty Councll
FROM:
Clty Staff
SUBJECT: Proposed Amendments to Program 12 of the Houslng
Element of the General Plan
INTRODUCTION
The proposed reVlSlons to Program 12 (lnclusionary Housing)
presented hereIn have been prepared In response to dIrectIon from
the CI ty Councll and Plannl.ng COmmISSl.On to reVlse the Program.
The
reVlSIons
l.nclude
changIng
the
threshold of
Program
appllcablll ty from 3 unl ts to 5 unl ts, chang lug the percentage
r2qulrement from 25-30 percent to 15 percent, and establIshIng an
In-lleu fee schedule.
The Pldnnlng COrnrnlSSl.On has recommended approval of the proposed
reVlSlons.
Thl.S
staff repor t
recommends approval of the
COmmISSl.On's recommendation wIth some changes.
BACKGROUND
Santa MonIca, together Wl.th other communltles In Callfornla, has
been charged by the State of Callfornla wIth the prOVISIon of
safe and affordable houslng for ltS cltlzenry. The CalIforn1a ~- A
MAR 1 () 1981
Leglslature has declared that "the provlslon of a decent home and
a SUl table
ll. vIng enVH."onment 1S a pr lor 1 ty of the
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order." (Health and Safety Code Section 50002.) Although
CalIfornIa has emphasIzed the Importance of decent hOUSIng for
all resldents, 1t 1S generally recogn1zed that thIS goal has not
become a realIty. In Santa MonIca, a number of hOUSIng problems
have been IdentlfIed, one of the most Important beIng a need for
more hOUSing affordable to low- and moderate-Income households.
The Cl ty of Santa MonIca has developed programs to address the
affordable hous1ng Issue. One of these IS the Incluslonary
hOUSIng program {Program l2} contaIned 1n the CIty'S 1983 HOUSIng
Element. The program reqUIres that 25-30 percent of new multI-
famIly resIdentlal developments be made avaIlable and affordable
to low and moderate Income persons.
On February 25, 1986, the CIty CouncIl, in response to concerns
raised by the PlannIng CommIssIon and other Interested persons
about the workablllty and effectiveness of Program 12, adopted a
resolutlon statIng an IntentIon to reVIew the Program. The
CounCil dIrected CIty staff to develop recommendatIons regarding
Program 12 and to perform approprIate envIronmental reVIew. The
CounCIl's actIon arose out of a process which Included the
forma tlon of a spec lal subcommIttee of the PlannIng Comrnlss lon
WhICh stud~ed the Issue.
The result of the reVIew IS recommendatIons to reVlse Program 12
and adopt an ordInance ImplementIng the reVIsed program. The key
features of the recommendatIons lnclude:
o changIng the threshold for complYlng WIth the Program from 3
unIts to 5 unIt proJects.
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o Decreaslng the lncluslonary percentage from 25% to 15%.
o Establlshlng an In-lieu fee schedule.
The recommendatlons also clarlfy various aspects of Program 12
implementation, such as the timing of in-lieu fee payments, the
Slze of incluslonary units, and so forth.
Current Status of Program 12
S1.nce the adopt~on of the HousIng Element, there have been a
total of 379 market-rate housing un1ts approved, wlth a total of
80 1nclusIonary unlts. ThlS does not lnclude the Sed Colony
hOUSIng development or any of the Community Corporation
developments. Most of these projects were submItted and approved
1n the last two years. The recent resurgence 1n res1dent1a1
development is attr1butable to improved economiC cond1t1ons,
principally lower interest rates 10 1985 and 1986. To date, 124
of the unlts have been completed or are under constructIon, while
the remalolng 255 units are pending final approval and permits.
A llSt of the proJects approved to date is attached as Attachment
3.
~lannIng CommissIon Recommendations
The Plann1.ng Comm1SSI0n conducted publ1.c hear 1.ngs on program 12
on October 18 and November l7, 1986. Seven members of the publlC
spoke to the matter at the October meeting, and twelve spoke at
the November hearing. Excerpts from the minutes of these
meetings are attached as exhIbits to this report.
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The PlannIng CommIssIon voted to approve the key staff recommen-
datIons noted above, and to make some changes to the orIgInal
staff recommendatIons. These changes, reflected In boldface and
strIkeout type In ExhIbIts A and B to the CommIssIon's resolu-
t Ion adoptIng tne amendments to Program 12, are also ldent I fled
below. Staff's recommendatIons are dIsplayed 10 ExhIbIts A and B
to the proposed CouncIl resolutIon.
Ren t Control Replacement Unl ts. The Commlss Ion voted to add a
stdtement that replacement unIts mandated by the Rent Control
Board be treated as Incluslonary unIts for purposes of complIance
WIth Program 12 If they otherWIse meet the reqUIrements for
Inclus Ionary unIts under Progr am 12. ThIS change was made In
response to a concern raIsed by a number of persons that such
unIts, by VIrtue of beIng deed-restrIcted as affordable hOUSIng,
meet the goals of Program 12, and developers of proJects WhICh
Included replacement unIts would otherWIse be reqUIred to prOVIde
affordable unIts meetIng Program 12 reqUIrements, and In
addItIon, prOVIde SUbSIdIzed replacement unIts, potentIally
affectIng economIC feaSIbIlIty of multI-famIly development.
Spec 1 f IC Plan prov IS Ion. The CommIss Ion voted to add language
statIng that areas of the CIty WhIch eIther presently or 1n the
future have a SpeCIfIC Plan WhICh establIshes alternatIve
InclusIonary hOUSIng requirements shall not be subJect to Program
12. ThIS change was made In response to suggestIons that there
may be areas of the CI ty such as the ThIrd Street Mall 1n WhICh
changes to 1ncluslonary reqUirements may be deSIrable to prOVide
an incentIve for hOUSing development.
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Local Density Bonus. The CommISSIon recommendatIons would
provIde a denSIty bonus whenever there IS an on-SIte InclusIonary
unIt WIth the denSIty bonus equal to the number of InclusIonary
unIts bUIlt on-SIte. The CommISSIon also voted to allow a
fIfteen percent denSIty bonus for proJects WhICh pay the reqUIred
In-lIeu fee payment. These changes were made to offset perceIved
economIC Impacts of the orIgInal staff recommendatIons. ThIS
speCIal local dens1.ty bonus program would reqUIre amendment of
the Land Use Element of the General Plan.
Use of In-LIeu Fee Revenues.
The CommISSIon recommended the
deletIon of a prOVISIon In the "OutlIne of Incluslonary Program
Components" statIng that up to fIfteen percent of In-lieu fee
revenues could be used for program admInIstratIon costs. Concern
was expressed that thIS percentage was too speCIfIC and was
better handled In ImplementIng gUIdelInes.
RelatIon to Adopted HOUSIng Element
Santa MonIca adopted a new HOUSIng Element In January 1983. The
adopted Element IdentIfIed the follOWIng maJor hOUSIng problems:
o SIgnIfIcant loss of affordable rental hOUSIng through
demolitIons and converSIons.
o Large Increases In rents and home prIces.
o Many eXIstIng low Income households pay more than 25 percent
of theIr Income for hOUSIng.
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o A
need
for
housIng
rehabIlItatIon
and
relIef
of
over-crowdIng.
o SIgnificant losses of families and chIldren.
o Inadequate support of local housIng needs by the private
sector and the Federal government.
~he Goal of the HOUSIng Element IS to:
Assure that Santa MonIca meets the eXistIng and proJected
hOUSIng needs of all Its reSidents and ItS regIonal respon-
sIbIlItIes for decent, affordable hOUSIng opportunItIes for
all SOCIal groups whIle maIntaInIng an economIcally sound
and healthy enVIronment.
The HOUSIng Element also contaIns a number of polICIes. PolICIes
relevant to the amendment of Program 12 include:
LA.!. PrOVIde adequate SItes for housing, IncludIng ownerShIp
hOUSIng, rental hOUSIng, factory bUIlt hOUSIng, and moblle homes.
I.A.3. Ensure that taxes and fees affectIng houSlng are no
greater than reqUIred In the publIC Interest.
I. C. MaIntaIn and Increase the supply of hOUSIng affordable to
low- and moderdte-Income persons.
I. C .1. Encourage InnovatIve MunICIpal and pr Ivate sector
programs to promote the fInanCIng and development of hOUSIng for
low- and moderate-Income persons.
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1.C.6. Encourage tne development of rental and ownership housIng
affordable to low- and moderate-~ncome persons.
1. C. 10. Ensure the con t1nued affordab1ll ty of Mun1c1pally
mandated or ass1sted hous1ng affordable to low- and moderate-
Income persons.
I. C.II. Ensure that converS1on and new resIdentlal, commerclal
and 1ndustr 1a1 pro] ects address the need for affordable hous Ing
related to such development.
The HOUSIng Element conta:lns 43 programs WhICh
goal, ob]ectlves, and polic1es of the Element.
Program 12 IS one of these programs.
1mplement the
The eXlst1ng
cons1stency w1th Adopted HOUSing Element and General Plan
The proposed Program 12 amendments would refine the eXistlng
1nclus1onary progr am 1n accordance with the C1 ty IS exper 1ence
wlth the Program over the last three years and as a result of the
economiC analYS1S WhlCh was performed to examlne effects of the
amendments on the econom1CS of hOUSing development.
The revised Program 15 conSistent with the goal of the Houslng
Element 1n tnat ~t contlnues a comm1tment to meetlng local and
reg10nal needs for affordable hOUSing by mandatlng the lncluslon
of houslng affordable to lower-lncome groups ln new multi-famlly
development. Like the eXIst1ng Program, the revIsed Program 12
would also allow satlsfact10n of thiS reqUIrement by payment of
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an ~n-l~eu fee. The reVised Program 12 addresses the goal's call
for an econom~cally sound env~ronment by adJustlng the adopted
Program to reflect economlC analysls.
The rev ~sed progr am would, together Wi th other Hous 109 Elemeo t
programs, contlnue to assure the provlslon of adequate sltes for
houslng (POliCY I .A.I. ), would set economlcally vlable In-l~eu
fees (POliCY I .A. 3), would continue the lnnovatlve concepts of
the eX1stlng Program (POliCY I.C.l), would encourage the
development of affordable rental and ownersh1p hOUSlng (POliCY
I.C.6.), would continue the ex~st~ng Program's call for long-term
controls on the affordablllty of locluslonary units (Pol~cy
I.C.IO.), and would apply to both new development and market rate
convers~ons (POllCY I.C.II.) Further, the revlsed Program would,
together wlth other City houslng programs, continue to contribute
new hous~ng un~ts and In-Ileu fees towards the Clty'S eXisting
hous~ng productlon goals.
As orlglnally recommended by staff, the Program 15 also
cons~stent wlth other Elements of the City'S General Plan. The
or~ginal recommendations would not necess~tate any changes ~n the
development pollcles of the Land Use Element, the trafflc and
parklng pollcles of the Circulat~on Element, or the pol~cles of
the No~se, SelSffilC Safety, PubllC Safety, Open Space, Scenlc
Corridors or Conservatlon Elements.
Should the Cl ty Councll wlsh to adopt the Plannlng Commlsslon' S
local denslty bonus prov~slons, amendment of the Land Use Element
would be requ~red, Slnce the Corom~sslon' s recommendations for a
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fIfteen percent densIty bonus above eXIstIng lImItatIons would
not be consIstent WIth the adopted densIty lImIts for
mUltI-famIly zones of the Land Use Element. The Land Use element
currently sets speCIfIC maXImum denSIty lImIts In each of the
mul tl-famIly zones i these Ilml ts cannot be exceeded without a
General Plan amendment. To aVOId General Plan Internal
InconSIstency, both the HOUSIng and Land Use Elements would have
to be amended SImultaneously. If the CounCIl wIshed to accept
the CommlssIon1s denSIty bonus recommendatIons, adoptIon of that
aspect of the Program would have to be delayed pendIng
preparatIon of necessary Land Use Element reVISIons and
addItIonal envIronmental reVIew.
As requIred by State law, the CIty submItted the
amendments to the State Department of HOUSIng and
that If adopted, the amendments as proposed
PlannIng CommissIon would not affect the
eXIstIng complIance WIth State law.
by
HCD
staff
proposed
CommunIty
IndIcated
and the
Development
(HCD)
for
Its
review
and
comment.
Housing
Element's
A number of Issues concernIng program ImplementatIon have been
IdentIfIed over the past three years. These Issues WIll be
addressed In an ImplementIng ordInance to be adopted by the CIty
CounCIl after the approval of the reVIsed Program 12. The
"Outline of Incluslonary Program Components" attached as Exhibit
B to the CIty CounCIl resolution for adoptIon IS Intended to
prOVIde the baSIS for an ImplementIng ordInance WhICh WIll be
prepared by the CIty Attorney.
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CEQA Status
Env~ronmental ~mpact analys~s of the proposed proJect ~s prov~ded
in the F~nal Inl.t~al Study. Th~s analYSIS Ind~cates that the
proJect w~ll not result In slgnlflcant envl.ronmental effects as
meant by the Ca11fornla Env~ronmental Quallty Act.
ANALYSIS
A number of Issues have ar ~sen ~n the con text of rev~ew of the
proposed amendment. These l.nclude the level of the proposed
~n-lIeu fees, whether there should be dIfferent fee schedules for
rental versus condOml.nlUm developments, the t~mlng of In-lIeu fee
paymen ts, the use of In-l ~eu fee revenue s, the rela t lonshIp of
the ~nclus~onary requ~rement to replacement unlts requ~red by the
Rent Control Board, and provls~on of a dens~ty bonus. Only one
of these l.ssues, the denSIty bonus, 13 part of the Hous~ng
Element ~t5elf. The others are lncluded as parts of the
Implement~ng ord~nance. Each of these ~ssues 15 dIscussed below.
Amount of Fees
The proposed amendment to the Hous~ng Element does not 5pec~fy
~n-ll.eu fees, but the Outllne of Incluslonary Program Components,
proposed to be the baSIS of an l.mplementIng ord ~nance, Includes
fees of $3.00 per square foot for the f~rst 10,000 square feet of
hous~ng proJects, and $4.00 per square foot for floor area above
10,000 square feet. These fees were Identif~ed as economl.cally
feasl.ble through an economIC analYSIS prepared by the real estate
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consultIng fIrm of Kotln Regan & Mouchly (KRM) for the C1ty.
Under an 10 ter 1m ord 1nance cur r en tly in effect, develope rs may
pay these same fees In-lleu of on-s1te prov1s1on of units.
Kot1n Regan & Mouchly (KRM) was asked to analyze the 1mpact of
~n-1Ieu fees on housIng developments 1n the CIty as follows:
1. Conduct a survey of constructIon costs, market rents,
operatIng costs and land prlces 1n three clty nelghborhoods;
"North of WIlshIre", "Ocean Park" and "P1CO Ne1ghborhood": to
determIne reasonable estImates of development costs and
developer profIts 1n the CIty.
2. Based on KRM1s experlence WIth feaslblllty analysls for
pr I vate developer s, Ident 1 fy the mln 1mum prof I t marg ln
threshold that developers would use 1n determ1n1ng the
feaslb1l1ty of a project wlth varlOUS In-lleu fee
requlrements.
3. Us 1ng the above lnformat lon, examlne the effects of var lOUS
in-lIeu fees on the f1nanCIal feasIb1l1ty of proJects 1n each
of the three areas of the CIty.
KRM flrst surveyed development costs 1n the area to determlne the
total development costs of a sample proJect 10 each of the three
nelghborhoods. Staff worked wlth KRM on th1S survey and checked
the flnd~ngs aga~nst actual costs of bu~ldln9s be~ng constructed
with C1ty asslstance or by pr1vate developers. The survey
ldenttfled a cost of $74.51 per square foot to construct houslng
units, lnclud1ng permIts, arch1tecture and eng1neerlng costs,
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hard construct~on costs, f~nanc~ng, taxes, ~nsurance and other
soft costs. Us~ng an average un~t s~ze of 1,000 square feet KRM
concluded that ~t cost approx~mately $74,500 plus land costs to
construct each un~t. KRM also surveyed rents ~n the three ne~gh-
borhoods and found market rents ~n the W~lsh~re area of $1.42 per
square foot, ~n the Ocean Park area of $1.26 per square foot, and
~n the P~co area of $1.05 per square foot. Us~ng these develop-
ment costs and revenues KRM calculated the development cost and
profIts.
KRM then had to determlne what proflt margln would be acceptable
to hOUSIng developers. KRM determIned that a developer profIt,
as measured by the Increase In proJect value at the end of fIve
years, of 15% on "Total Development Costs" or 100% on "Developer
EqUIty" would be acceptable. ThIS means that a "snapshot v~ew" of
the project In Year 5 would show that the developer would realIze
a 15% return on all of the development costs IncludIng those paId
by the lender, OR a 100% return on the developer's eqUIty
Investment.
KRM ran computer models of development proJects In each of the
three IdentIfIed neIghborhoods, USIng (1) no In-lIeu fee or
lncl us 10nary requlrernen ts, (2) a $ 3.00 per square foot In-lIeu
fee, (3) a $4.00 per square foot In-lIeu fee, and (4) a $6.00 per
square foot 1n-l1eu fee. The In-l1eu fees "per square foot" were
calculated on the bas~s of the total square feet 1n the market
rate hous1ng proJect. The results of the KRM analys1s of
development prof1t margIns for the smallest rental proJects are
summarIzed below:
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Ocean
Fee Level and Prof~t WIlshlre Park P~co
No Incluslonary Requlrement
Proflt - Equ~ty (Mln.=lOO%) 163.6% 121. 3% 104.8%
Proflt - Costs (Mln.= 15%) 22.3% 19.3% 17.6%
Proflt - Costs W/Sale (mln.=lS%) 37.6% 34.3% 32.7%
$3.00/ Square Foot
Proflt - EqUIty (Mln.=lOO%) 125.6% 90.8% 73.5%
ProfIt - Costs (MIn.= 15%) 19.6% 16.2 14.2%
Proflt - Costs W/Sale (m~n.=15%) 34.5% 30.9% 28.7%
$4.00/ Square Foot
PrOfIt - Equ~ty (MIn.=100%) 115.3% 82_4% 65.0%
Proflt - Costs (MIn.= 15%) 18.7% 15.3% 13.1%
Prof~t - Costs W/Sale (MIn.=15%) 33.5% 29.8% 27.5%
$6.00/ Square Foot
Prof~t - Equ1ty (M~n.=lOO%) 97.2% 67.6% 50.4%
Proflt - Costs (MIn.= 15%) 16.9% 13.4% 10.9%
Proflt - Costs vJ/Sale (Mln.=15%) 31. 5% 27.8% 25.0%
The KRM method of calculatlng developer proflt was based on a
theoretlcal concept of "lmputed equIty." KRM measured the value
of the proJect at the end of the f~fth year and If the proJect
value had lncreased such that tne developer could have a 15%
prof~ t over all development costs, or a 100% prof 1 t ove r the
developer's equIty amount, the proJect would be consIdered
economlcally feas Ible.
To eval ua te total pro] ect value, staff
asked KRM to add an analysls of profl"C were the developer to
actually sell the proJect at the end of the flfth year.
As the above chart shows, WIth fees of $6.00 per square foot 1n
the WIlsh1re area a development would make a 16 _ 9% proflt on
total costs, whlch meets the mln1mum feaslbIllty crIterla. Fees
of up to $4.00 per square foot allow a profIt on costs of 15.3%
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~n Ocean Park, WhlCh meets the same crlter~a_ In the PlCO area,
the profIt on costs wIth sale meets the same feas~b~l~ty
crIterIa.
In addItIon to IdentIfYIng the feaSIble fee levels, KRM and staff
made the follOWIng fIndIngs:
o There IS a WIde range In land prIces In each of the three
neIghborhoods, and even w~tnout In-lIeu fees or Incluslonary
reqUIrements rental proJects at the hIgher end of the land
prIce range In each neIghborhood dId not meet the mInImum
profIt margin threshold of 15%.
o Rental pro] ects are more fInancIally senSI t I ve to In-lIeu
Incluslonary fees than are condomInIum proJects, such that an
In-lIeu fee that was fInanCIally feaSIble for a rental
proJect would also be feaSIble for a condomInIum proJect.
o It IS not admInIstratIvely feaSIble to have In-l~eu fees that
vary from neIghborhood to neIghborhood, or from project to
proJect based on land cost.
o As recommended by the PlannIng Commlss ~on, the Chamber of
Commerce, and other In te rested par tIes It IS adv lsable to
establIsh a lower In-lIeu fee for smaller proJects than for
larger proJects.
Based on the KRM analYSIS for larger proJects, staff recommended
fees of $3.00 per square foot for proJects up to 10,000 square
feet and $4 _ 00 per each square foot over 10,000. The PlannIng
CommIssIon endorsed these fees.
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The KRM analys~s was cev~ewed extens~vely w~th ~ntecested
r:es~dents and representatl.ves of the Chamber of Commerce. The
Chamber of Commerce task force members produced numerous
development proformas ~nd~catIng that the fees were too hlgh to
make hous~ng development feas~ble unless a densIty bonus was also
pcovided to developers who pa~d the fees _ Staff has rev~ewed
these proformas at length w~th the Chamber members and notes that
tne proformas typ~cally show that development 1S not feaslble
w~thout a dens~ty bonus even ~f the C1ty requ1red no 1nclus10nary
fee payment. Th~s analys 15 lS not cons~stent WI th the Cl ty' s
current experIence wlth houslng developments.
Staff has also rev1ewed the KRM study w~th the Hous1ng Commlss1on
and Interested resldents and ne 19hbor hood organ~ za t~on member s,
who nave noted that the $3.00 and $4.00 fees are too low to fully
SUbsldlze the same number of un~ts that would be provlded In
~ncluslonary developments w1thout an 1n-lleu fee optlon. For
example, lf a S1X unl.t development had 6,000 square feet 1t would
pay a fee of $18,000 or prov Ide one un1 t on-Sl te . In order to
SUbSldlze one unl t somewhere else the C1 ty would have to pay
$40,000 $60,000. In notlng thlS several reV1ewers suggested
tha t staff lncrease the recommended level of fees so that the
fees would be equ1valent to the cost of a un1 t. However, Slnce
the dlrectlon of the Councll was to ~dentlfy a fee level that was
econom1cally feaslble the recommendatIons have not been modlfled.
The analysis prepared by KRM ~ndlcates that the proposed fees are
feaslble for both apartment and condoffi1n1um developments through-
out the City. G~ven the lncluslonary program's objectlve of
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promot1ng affordable hous1ng development, lower fees would not
appear appropr1ate Slnce revenues for affordable hous1ng develop-
ment would be reduced. Although KRM's analys1s 1nd1cates that
somewnat h1gher fees may be feas1ble 1n med1um-s1zed proJects,
h1gher fees may beg1n to affect the econom~c viab1l1ty of
res1dent1al development In smaller projects Wh1Ch are common ~n
Santa r-lon1ca.
Use of In-L1eu Fee Revenues
Staff proposes tnat at least Slxty percent of the fee revenues be
used for lOW-Income hous~ng (less than 80% of the County med1an
1ncome), up to twenty-fIve percent be used for m~ddle-lncome
hous1ng (from 80 to 100% of the County med1an ~ncome), and up to
f1fteen percent be used for admIn1strat1ve costs. Th1S alloca-
t~on of revenues 15 recommended to recognIze the dlversl ty of
hous1ng needs 1n the C1ty, to prOVIde fleX1bIl1ty 10 the m1X of
households In housIng projects, to reduce the potential sUbS1dy
level requ1red for hOUSIng proJects and to recogn1ze the adm1nIs-
tratIve costs assocIated WIth 1mplement1ng the program.
Staff recommends aga1nst the PlannIng Comm1ss1on I S deletIon of
the fIfteen percent allocat~on for admIn1stratIve costs. ThIS
f1gure 15 comparable to tYP1cal allocat1ons In many State and
Federal hOUSIng programs.
RelatIonshIp to Rent Control Replacement UnIts
The PlannIng Comm1ssIon and other Interested persons have
expressed concern about the relat10nshIp of the 1ncluslonary
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program to the reqUIrements of the Rent Control Board. Staff IS
recommendIng that the CouncIl accept the PlannIng CommIssIon IS
recommendatIon to allow replacement unIts to count toward Program
12 only If the unIts meet the restrIctIons of Program 12.
PrOVISIon of DenSIty Bonus
The PlannIng CommISSIon and other persons have suggested
prov IS Ion of an au toma tIC local dens 1 ty bonus for the Incl u-
slonary program, IncludIng the prOVISIon of a bonus for payment
of an In-lIeu fee. As proposed by staff, a denSIty bonus would
only be avaIlable If a developer met the applIcable reqUIrements
of the State denSIty bonus law and Included the affordable unIts
In the proJect receIVIng the denSIty bonus.
Under State law, developers may obtaIn a denSIty bonus of twenty-
fIve percent above otherWIse permIss1ble dens1 tIes If at least
twenty-fIve percent of the un1ts In the proposed development are
affordable to low and moderate Income persons, or If at least ten
percent of the unIts are affordable to low Income persons. State
law does not prOVIde a denSIty bonus for off-SIte prOVISIon of
affordable unIts, or for payment of an In-lIeu fee. These State
denSIty bonus prOVISIons prOVIde an adequate IncentIve for
affordable hOUSIng development.
PrOVISIon of a more permIssIve denSIty bonus would not appear
deSIrable due to a general communIty concern about the IntenSIty
of development WIthIn the CIty. The CIty'S econom1c analYSIS
IndIcates that an automatIc bonus IS not necessary to ensure
econom1c
VIabIlIty
of
multI-famIly
reSIdentIal
proJects.
- 17 -
.
.
Further, as noted above, the PlannIng CommISSIon recommendatIons
would reqUIre amendment of the Land Use Element, WhICh In 1984
lowe red allowable dens 1 tIes In the R2, R3 and R4 d I str lCtS In
response to wIdespread communIty concerns.
SpeCIfIC Plans
Staff recommends agaInst
SpeCIfIC plans to deVIate
Incluslonary reqUIrements
areas of the CIty In order
the Program.
InclUSIon of a prOVISIon alloWIng
from the reqUIrements of Program 12.
should be applIed unIformly to all
to achieve the fundamental goals of
ApplIcabIlIty of ReVIsed pr09ram to EXIstIng ProJects
Some developers of proJects that have entered Into deed
restrIctIon agreements and begun constructIon on proJects that
contaIn Incluslonary unIts have asked If they can be released
from these restr Ictlons on some of the unl ts after the rev Ised
Program l2 IS approved. Such a prOVISIon would create problems
where Incluslonary unIts were occupIed or where a denSIty bonus
had been granted for development of an on-Site incluslonary unit.
Staff recommends that the CIty Council speCIfy that the reqUIre-
ments of the reVIsed Program 12 apply to projects that have not
yet begun constructIon or executed deed restriction agreements.
~enure Type of Incluslonary UnIts
The proposed Program 12 reVlSloons Included a reqUIrement that
Incluslonary unIts produced on-SIte be ownerShIp units In
ownerShIp bUIldIngs, and rental units In rental bUlldlngs. Staff
- 18 -
e
.
IS recommendIng that thIS requIrement be modIfIed. It would be
very dIffIcult to desIgn adequate resale controls for an owner-
ShIP Incluslonary progrdm that provIdes low-Income homeowners
WI th suffICIent IncentIves for property maIntenance whIle still
preservIng the unI ts as affordable hOUSIng over tIme. In addI-
tIon, ownershIp lncluslonary programs are usually not recommended
as a means of provIdIng lOW-Income housIng because of the dlffl-
cuI tles Involved 1n f lnd lng el1.91.ble low-Income households with
access to down payment funds and flnanclng. It 15 also uncertaln
that there would be suffICIent demand to Justlfy the development
of such a progr am. Therefore, It 15 recommended that on-5 1 te
lncl uSlonary unl ts be rent~l un1 ts In e1 ther rental or condo-
mInIum proJects.
BUDGET/FINANCIAL IMPACT
The recommendatIons of thIS staff report are not expected to
result in budget/fInancIal Impacts dIfferent than those occurrlng
under current provlslons of law.
RECOMMENDATION
It 15 respectfully recommended that the CIty CounCIl:
1. Conduct a PublIC Hear Ing on thIS matter, affordIng Inter-
ested persons an opportunIty to provIde comments on the
recommendatlons;
2. Rev~ew the recommendat~ons of the plann~ng Commlss~on;
- 19 -
.
.
3. Adopt the attached resolutIon certlfYlng the InItIal Study
and NegatIve DeclaratIon on the amendments and adoptIng the
amendments as recommended by staff.
Prepared by:
R. Ann SIracusa, DIrector of PlannIng
D. Kenyon Webster, SenIor Planner
Ann SewIll, Housing DiViSion Manager
CommunIty and EconomlC Development Department
Attachment 1: ResolutIon certifYIng InItIal Study and NegatIve
DeclaratIon and adoptIng amendment
Attachment 2: Planning CommiSSIon ResolutIon
Attachment 3: HOUSIng proJect data
Attachment 4: Excerpts from Oct. 18 and Nov. 17, 1986 mInutes of
Planning CommISSIon
AttachmenL 5: Miscellaneous correspondence
Attachment 6: EconomiC data
prog12cc
02/05/87
- 20 -
.
Attachment 1
.
RESOLu'rr::m NO. 7385 ICeS)
(Clty Councl1 SerIes)
A RESOLUrION OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA
ADOPTING A REVISED PROGRAM 12
OF rH~ HOUSING ELEMENT OF THE GENERAL PLAN
01
~mEREAS, the Cl ty of Santa Honlca adopted Its ex lstlng
HOUSIOg Element on January 25, 1983; and
\>;HEREAS, on February 25,1986, the Clty Councl1 adopted
Resol u tlon 7172 au thor 1 Z 109 the Plann Ing CommlSS 10n to cons Ide r
amendments to Program 12 of the HousIng Element; and
.'m ERe.;:; ,
the PlannIng CommlSSlon a~polnted a specIal
suo~ommlcce2 to reVIew Program 12; and
";~CRE~S, the CIty staff prepared recommended reV1SIons ~o
Program 12 and an InltIal Study and NegatIve Declar3tlon and
C 1 c:::ul a ted these documents for pub11C rev lZw and commen t from
August 27, 1986, to September 26, 1986, 1n compllance wlth tl1e
Callfornla Envlronment~l Quallty Act and the CIty of Santa Monlca
GUldellnes for the Implementatlon of the CalIfornIa EnVIronmental
QualIty Act; and
WHEREAS, the proposed Program 12 amendment was submItted
to the State Department of HOUSIng and Community Development for
Its reVIEW, In complIance WIth ["elevant requ~rement:s of St3.te
law; anLl
- 1 -
.
.
WHEREAS, the Clty has consldered the comments of toe Stat~
Depar tmen t of Hous lng and Communl ty Development on the proposed
reV1Slons to prJgram 12; and
WHeREAS, on October 18, 1986, the Plannlng Commlsslon
conduc ted a duly not lced PubllC Hear lng on the proposed rev lsed
~
Program 12, affordlng any lnterested person an oppoctunlty to
comment on the ~atter; and
WHSREAS, o~ ~ovembec 17, 1986, the Plannlng Commlsslon
conducted a second duly notlced PubllC Hearlng on the matter; and
WHERE\3, on January 27, 1987, the Clty Councll conducted a
duly notlced PubliC Heaclng on the matter; anj
HHEREAS, the recommendatlons of the PlannIng Commlsslon,
as set forth ln ltS resolutlon adopted on November 17, 1986 hdve
been con31dered by tnz Clty Councll; and
~vHEREAS, tne pcoposed rev lsed Frog r 3m 12 lS cons 1 s ten t
wlth other portlons of the HouSing Element and other Elements of
the General plan;
NOW, THEREFORE, TH;: CITY COUNCIL OF THE. CITY OF SANTA
l1mnCA DO~S HEReBY RESOLVE A3 FOLLm~s:
SECTION 1.
The document entltl~d Flnal Inltlal Study and
Negative Declar-3tion on a Proposal for- a ReVlsed Program 12 or
che City of Santa Monlca Houslng El2menc (EIA 827, SCH 86u82706j,
attached he re to as Exh lb 1 t C anJ lncorpor a ted here ln by th 1 s
reference sat13tl~s the requlrements of the Clty'S G~ldellnes for
- 2 -
.
.
the ImplementatIon of the Callfornl3. EnvlronmentCil QualIty F<.ct
3nd the State CEQ~ GUIdelInes and tne CIty counCIl hereby
certIfIes the FInal InItIal Study and NegatIve Declaratlon.
SEcrION 2.
The document entItled RevIsed Program 12 or
the Santa Monica HOUSIng Element attached hereto as ExhIbIt A and
>I
Incorporated hereIn by thIS reference IS hereby approved and
adopted as an amend~ent to Program 12 of the HOUSIng Element of
the City of Santa MonIca.
SECTION 2. The document entItled Outline of Incluslonary
Program Components attached hereto as ExhIbit B and Incorporated
hereIn by thIS reference shall form the baSIS for an Ordl'13nCe
ImplementIng the amended Program 12.
SECrIJ~ 4.
The CIty Clerk shall certIfy to t.he adoptIon
of ~h13 Resolu~lon, 3nd thenceforth dnd thereafter toe same shall
be In full force and etfect.
APPRO~ED AS TO FORM:
~ "-. ~
Robert M. Myers, CIty Attorney
- 3 -
.
.
Adopted and
oth
1987.
i
"- ___ C~ ~
~ Mayor
I hereby certify that t~e foregoing Resolution No. 7385(CCS)
duly adopted by the CitY~il of the City of Santa Monica
was
at a meeting thereof held on March lO, 1987 by the following
Council vote:
Ayes:
Councilmembers:
Finkel, A. Katz, Zane and Mayor
Conn
Noes: Councilmembers:
Jennings, H. Katz and Reed
Abstain: Councilmembers:
None
Absent: councilmembers:
None
ATTEST:
~'7J-;~
city clerk
.
Attachment 3
HOUSING PROJECT DATA
.
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Attachment 4
PLANNING COMMISSION MINUTES
.
Total Development Costs:
Item
Permits & Fees
Construction:
Bonding
Insurance
Supervision
Profit/Over.
ArchitectjEng.
Canst. Interest
Point/Loan Fees
Taxes
Insurance
Title/Recording
Marketing/Legal
Subtotal
Land Costs
Total Cost
Notes:
KR}1 Survey
Inc.
53.56
Inc.
Inc.
Inc.
Inc.
2.50
7.37
2.01
.52
w/Taxes
Inc.
2.50
68.46
varied
varied
Attachment 6
#1
1.40
51.88
.68
.34
3.42
3.96
.67
4.22
1.98
.65
.19
.58
1. 86
71.83
23.44
95.27
.
,#2 Katz Staff
1.40 Inc. 1.40
56.74 56.82 56.00
Inc. Inc. Inc.
Inc. Inc. Inc.
2.23 Inc. Inc.
6.61 8.52 Inc.
3.93 Inc. 3.93
2.14 13.99 7.14
2.00 2.80 3.38
.39 Inc. 1.51
1.12 Inc. w/Tax
.28 Inc Inc.
.96 2.16 1.15
77.80 82.13 74.51
30.96 55.24 27.00 -
57.85
108.76 137.37 101. 51 -
132.36
1. "Inc." means that the cost was included in another figure.
2. Projects 1 and 2 are actual projects currently under
construction for which City staff have reviewed construction
contracts and soft costs.
3. "Katz" refers to the figures provided by Ur. Oscar Katz for a
hypothetical condominium development in Ocean Park. Since the
other projects were all apart~ents the costs ind~cated by Mr.
Katz that were only applicable to condomin~ums were not included.
4. "KRI1 Survey" refers to the construct:.on cost survey of
apart~ent builders completed by Kill1.
5. "staff" costs were the ones used in the K..~ analysis of
November 4, 1986.
. N N'NN'''-': .........
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.
EXHIBIT A
PROGRAM 12: DEVELOP AN INCLUSIONARY ZONING PROGRAM
OBJECTIVE:
PROMOTE DEVELOPMENT OF HOUSING AFFORDABLE TO LOW AND
MODERATE INCOME PERSONS.
DESCRIPTION:
The Cl ty shall adopt an lncl us lonary zonIng prog r am. The
Inclusionary requIrement shall apply to all market rate housIng
whether resultIng from new constructIon or market rate converSIon
of apartment unIts, except that proJects Involving four unIts or
less shall be exempt from the program, and converSIon proJects
approved unde~ the provISIons of ArtIcle XX of the City Charter
shall also be exempt from the program.
The Inclusionary program shall requIre that fIfteen percent
( 15 %) of all new unl ts 1n each mar ket ra te hous 1ng project be
affordable to persons wIth Incomes up to 100% of the Los Angeles-
Long Beach PrImary MetropolItan Statlstl.cal Area medIan Income.
The Ci ty shall, by ordInance, proTlIde for satisfactIon of thIS
Incluslonary reqUIrement by prOVISIon of on-SIte hOUSIng,
Off-SIte hOUSIng, or an In-Ileu fee to be pald to the City. The
developer shall have a chOIce of the method to satIsfy the
lncluslonary ~equIrement.
I n-ll.eu fees, sub] ec t to Inc r eases co recognl ze the effect
of Inflat1.on, shall be establls;-:.ed as one met~od for sat1sfYlng
the Iocluslonary program. The In-IIeu fee formula shall be
es tabllshed WI th due regard to the CI ty IS ablll ty to obta1.n the
- 1 -
.
.
benef 1 ts of State manda ted dens i ty bonuses.
The in-lieu fee
schedule must also be fair and economIcally feasible.
All
on-sIte and off-SIte
Incluslonary unIts shall be
affordable to households rangIng up to 100% of the Los Angeles-
[
Long Beach Pr l.mary Metropoll tan StatIstIcal Area med Ian income.
The CIty shall encourage the provIsIon of unIts WIth an
approprIate number of bedrooms and other features so as to best
meet the needs of senIor CItizens, large famIlIes, dIsabled
persons, and persons WIth other specIal needs.
All Incluslonary unIts shall be subject to controls to
maIntaIn affordablllty_
The relevant prOVISIons of State law, IncludIng Government
Code section 65915-65918, shall be compIled WIth in the deve1op-
ment of the lncluslonary hOUSIng ordInance.
IMPLEMENTATION:
Responsible Agency: CommunIty and EconomIC Development
Cost: No SIgnIfIcant cost.
Staffing: EXIstIng staff sufflclen~.
Funding: CIty General Fund, In-lIeu fee revenue.
Schedule: I.
Quantified Impact: Increase In new affordable hou51ng_
Estlma ted paten tl al 3dch t Ion of 5 to 25 locI us lonary urn ts per
year.
- 2 -
.
.
Exhlblt B
OOTLINE OF INCLOSIONARY PROGRAM COMPONENTS
1. ThlS outllne detalls potentlal elements of an Incluslonary
implementatIon program.
2. Definitions. The lncluslonary program should consIder the
followIng defInitlons.
a.
Dwelllns Unl t:
One or more rooms, desIgned, occupIed,
or intended for occupancy as separate Ilvlng quarters,
WIth full cooklng, sleeplng, and bathroom facllltles for
the ex~lusive use of a slngle household.
b. Hous1n<;1 Aut.hor 1 ty: HousIng Author 1 ty of the CI t..y of
Santa Monlca, a non-profIt publIC corporation.
c. Houslns Costs: The monthly rent for rental unIts.
d. HUD: The United State Department of HOUSIng and Urban
Development or lts successor.
e. Incluslonary Unlt: A rental hous2ng unu: as requ1red
by t!1lS Ord Inance, wh1ch 15 affordable by households
WIth low or mlddle income.
f. Income ElIglblllty: The gros5 annual household Income
cons lde r 1 09 household S1 ze and numbe r of depende!l. ts ,
1ncome of all wage earners, elderly or d1sabled fam1ly
members and all other sources of household 1ncome.
- 3 -
.
.
g.
In-LIeu Fee: A fee paId to the
subject to thlS ordlnance In-lieu
requIred incluslonary unIts.
City
of
by developers
providing the
h. Market Rate Unit: A dwellIng unit Which IS not supJect
to the rental regulations of thIS chapter.
1. .. MIddle" and .. Low" Income Leve Is: DetermIned per lodl-
cally by the CIty based on the U. S. Depa (trnen t of
Housing and Urban Development estImate of medIan Income
In Los AngeleS-Long Beach PrImary Metropolitan StatIS-
tIcal Area. The two major Income categorIes are
defIned as follows:
"Middle Income" - 81% to 100% of the area median.
"Low Income" - 80% or less of the area medIan.
State law also defInes "Mod2rate" Income as between 81%
and 120% of the area median.
Furtner adJustment shall be made by household SIze as
establIShed by CIty admlnlstra~lve gUIdelInes.
J. Off-Site ConstructIon: Er~ctIo~ of low or moderate
Income hOUSIng unIts on land other tha~ that on WhICh
the developer Intends to place unl~5 Within the CIty of
Santa MODIca.
k. ProJe~t: A reSIdentIal development or land subdIvIs10n
proposal for WhlCh Clty permlts and approvals are
sought.
- -1 -
e
e
3. Applicability. The incluslonary requlrement shall apply to
all mUlti-famIly resIdentIal market rate dwelling units
resulting from new construction or market rate condominlum
or cooperative converSlon of proJects of flve unIts or more.
The constructlon of any multIple dwelling restrIcted as
rental or lImIted eqUIty cooperatlve hOUSIng for persons and
famllles of low or moderate Income or for senIor citIzens,
whlch 1S financed by any federal or state hOUSIng asslstance
or owned by any relIgIOUS or other non-proflt organIzatIon
shall be exempt from these reqUIrements. The calculatIon of
the number of incluslonary unlts to be provlded In a proJect
that Includes Rent Control replacement unIts shall be
fIfteen percent of the total number of un~ts In the proJect.
ProJects approved under locluslonary standards prlor to the
effectl.ve date of these requ~remen'cs WhlCh have not begun
constructIon or executed deed res~rlctlOns may, subJe~t to
apps:opn_ate admln1-StratIV'2 and legal req\.nrements, satIsfy
the Incluslonary obllgatLon by meetIng the standards of thIS
program.
4. project Development Requirements.
a. No less tha~ fIfteen pe~cent (15%) of the total number
of unIts to be constructed pursuant 1:0 any proJect
developed by an ap?llCa~~ a~ one locatIon, whether at
thls tl~e or In t~e future, deSIgned for permanent
occupancy and contaEllng f 1 'Ie (5) or more unl ts shall
be affordable by hOUSeholds of low- or ~oderate-lncome_
- s -
.
.
The requlrements of this sectIon may also be -satisfled
by off-slte development of requlred unlts as descrlbed
in Sectlon 4F, or an In-Ileu fee paymen t pur suant to
the provislons of Sectlon 5.
b. In determlnIng the number of lncluslonary unl ts
requIred, any decimal fractlon less that 0.5 shall be
rounded down to the nearest whole number, and any
decImal fraction of 0.5 or more shall be rounded up to
the nearest whole number.
c. At the tlme the plans are submitted to the Clty'S
PlannLng DiVlSion for ~nltlal reVIew the proJect
proposal shall specIfy the number, type, locatlQn, SIze
and construction schedulIng of any dwelling units to be
developed and shall lndicate WhICh unIts are p~opcsed
for rental for the purpose of satIsfYlng the Inclusion-
ary housing reqUIrement
d.
If located on the project
shall, whenever reasonably
throughout the pro) ec t. The
the SIze and ame:ntIes of
SIte, Incluslonary unIts
pOSSIble, be dls~rlbutej
applIcant may reduce both
the Incluslonary unl ts as
long as there are not Sl~~lflcant ldentIfIable dIffer-
ences In the unl ts VISIble f rom the ex te r 10 r and the
Size and deSign of the un~ts are reasonably conSIstent
wlth the rest of the ?roJe~t, prOVIded that all unIts
conform to the requl~emenLs of the applIcable bUIldIng
and hcuslng codes. Incluslonary units prOVIded shall
- 6 -
.
.
have at least the same number of bedrooms as the
average market rate unit in the project ~nd if not the
same as the market rate unIts, shall be subJect to the
fOlloWIng mInImum SIze lImIts:
0 Bedrooms 500 Square Feet
I Bedroom 600 Square Feet
2 Bedrooms 850 Square Feet
3 Bedrooms 1080 Square Feet
4 Bedrooms 1200 Square Feet
These SIze lImIts are conSIstent WIth the standards
used In federal and state hOUSIng programs.
All Incluslonary unIts 1.0 a project and pnases of a
proJect shall be constructed concurrently WIth the
constructIon of market rate units.
e. Incluslonary unIts developed on the proJect Sl.te must
be rental unIts In rental or ownershIp proJects.
f. ReqUIred Incluslonary unlt5 may be provIded at a
locatIon WIthIn the CIty other than the proJect site.
Any such off-sIte unIts shall be completed prIor to the
Issuance of a Certlflcate of Occupancy for the market-
rate housLng unIt proJect and shall conforll to t~"1e
requlre~ents of the applIcable bUlljlng and houslng
coa~s a~d the mInlmum Slze provlslons CIted in SeCtlOn
4d. The occupancy and ren~s of any such off-slte unIts
Shall be governed by the tenr,s of a deed rest.rlctlon
- 7 -
.
.
Slm1lar to that used for on-S1 te -1nclusionary uni ts
WhICh shall take precedence over all other covenants,
lIens and encumbrances.
5. In-Lieu Fees.
a. Fees In lleu of constructIon of requIred incluslonary
un 1 ts may be pa Id to the CI ty. These In-lIeu fees
shall be used by the CIty for the purpose of developIng
affordable hOUSIng primarIly for lOW-Income households
elsewhere In the Cl ty. Up to twenty-fIve percent of
in-lIeu fee funds may be used to develop affordable
hOUSIng for moderate-Income households, and up to
fIfteen percent of in-II eu fee funds may be used for
program adml.nlstratlon costs.
b. In-lIeu fees shall be $5.50 per square foot of floor
area of the proJect for the fIrst 10,000 square feet,
and $6.50 per square foot of floor area above 10,000
square feet. Should the Santa Monlca-Malibu Unlf1ed
School DistrIct adopt a fee on reSIdentIal development
In Santa MonIca, as per~ltted by AS 2926, the amou~t of
the Cl ty' S IDCl uSJ.o:1ary fee shall be reduced by t~e
amount of the School Dlstr let fee. The floor area of
any on-5J. te Incluslonary U;ll ts shall be excluded from
the floor area calculatlon.
Any fee pursua~: to thIS
SectJ.on
shall
be
ad] us :.ed
for
~nflatlOr.
by the
percentage change In the Consumer pr Ice Index ("CPI")
between the da:.e of adoptIon of an l~cluslonary
- 8 -
.
.
ordlnance through the month 1n Wh1Ch payment is made.
For purposes of this Section, CPI shall mean the lndex
for Urban Wage Earners and Clerical Workers for the Los
Angeles/Long Beach statistlcal area I as published by
the UnIted States Department of Labor, Bureau of Labor
StatIstIcS.
c. The In-lIeu fee shall be due In full prior to the
Issuance of a CertIfIcate of Occupancy for the proJect.
Payment of thlS fee shall be secured by executIon of an
irrevocable letter of credIt In favor of the CIty or
other secur i ty acceptable to the Cl ty for the total
amount of the OblIgatIon. The letter of credIt or
other acceptable secur 1 ty shall be delIvered to the
CIty prIor to the issuance of a bUIldIng permlt for the
development.
6. Fee Waivers. The CondomInium and CooperatIve Tax descrIbed
1n SectIon 6651 of the MunICIpal Code shall be wal.ved for
requl~ed l~cluslonary unIts WhiCh are developed and low a~d
moderate income unIts developed by the CIty or Its deslgnee
uSLng 1n-112U fee funds. The Park and RecreatIon FaC1litIes
Tax descrlbed In Chapter 6C of the Munlclpal Code shall be
wal.ved for requIred 1ncl'.Jslonary un::. ts WhICh are developed
a:1.d low and mode rate l~COIT'e unl ts developed by the C1 ty or
Its designee USIng 1:1.-11e~ fee funds.
- 9 -
.
.
7. Density Bonus and Other Incent~ve~. Applicable projects may
be entitled to denslty bonuses or other incentives, pursuant
to the requ~rements of State law.
8. Pricin<] Requlrements"foc Inclus~onary Units. All incluslon-
ary unl ts shall be ren ted to households that qualIfy under
the terms of SectIon 10. RequIred Incluslonary unIts shall
be prIced so that desIgnated households pay no more than
thIrty percent (30%) of gross monthly household Income for
rent. The CIty snaIl, on an annual bas 1 s, se t allowable
rents
for
IDcluslonary unIts,
adJusted
by number
of
bedrooms. The proJect owners shall retaIn dIscretIon in the
selec tlOD of ellg Ible ren ters pr ov Ided that such renter s
meet requIrements of SectIon 9.
9. Eli9ibility Requirements. Only low- and moderate-Income
households shall be ellg Ible to occupy Inc Ius lonary unl ts.
The
C1. ty may
es;:abllsh
adWIn1.stratlve
gUIdelines
for
determInIng household Income, mInImum and maXImum occupancy
sta~dards and other elIgIbIlIty crlt2rla.
a.
Confllct of Interest.
FOlloWIng are those IndIvIduals
who, by vlrtue of thelC posltlon or relatlonshlp, are
found to be Inellg Ible to ren'C an affordable unl t as
theIr resldence:
- 10 -
.
.
(1) All employees and offiCials of the City of Santa
Monica or Its agencies, authorities or commIssions
who have, by the authOrity of their pOSItIon,
pollcy-mak~ng authorIty or Influence affectIng
City housIng programs.
(2) The immediate relatIves, employees, and anyone
gaInIng SIgnIfIcant economIC benefIt from a dIrect
bUSiness aSSOCIatIon wlth publIC employees or
offlclals.
b. In settlng priorIties amo:1.; ellglble households, the
appllcant, owner, or CIty shall generally gIve first
pr 10 r I ty to San ta Mon~ca res 1de:l. ts, second to per sons
employed In Santa MO~Ica, and thlrd to other persons.
10 _ Relation ~o Units Required by Rent Control Board _ Low and
moderate Income unl t.s developed as part. of a ~arket-rat.e
proJect, pursuant to replacement requIre~ents of the Santa
MOnli:a Rent Control Board snaIl count towards the satIs-
fact.Ion of thIS progralT' If they othenl1se meet applicable
requlrements for thIS Program l:1.clud:ng but not lImIted to
the
Income ellglblll1:y req:..L:.reoen:s of
_\...-
_.L.i.~
Program,
deed
restrIctIon reqUIrements, a~d prIcI~g reqUIrements. New
lncluslonary un1.ts req:.nred. by t:1.e Re"t. Control Board and
meet-Lng
the standards
of t.~13 prQgr3~1
........ ~, 1-
.:::. ...1-...!....L
count towards
the satIsfactIon of thIS prograw
- 11 -
.
.
11. Deed Restrictions. Prior to issuance of a building permit
for a project subject to these requirements, the applicant
shall submit for City review and approval deed restrlctions
or other legal instruments setting forth the obligations of
the appllcant under this program.
Such restr ictions shall
be effective for fifty years.
12. Availability of Government Subsidies. It is the intent of
thlS program that the requirements for inclusionary units
shall not be determined by the avallabi1ity of federal or
state houslng subsidies. Th~s is not meant to preclude the
use of such programs or Subsldles.
13. Enforcement. The provisions of thLS program shall apply to
all agents, successors and assignees of an applicant once
only for development of the site.
NO building permlt or
occupancy permit shall be lssued, nor any development
approval granted, which does not meet the requirements of
this program.
DKW:lw:klc
pl2
03/19/87
- 12 -
.
e
March 12, 1987
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Exhlblt B of Resolutlon No. 7385(CCS) was amended at
the Counc~l meetlng of March 10, 1987.
Ann Slracusa to provlde corrected Exhiblt B
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EXHIBI'r A
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PROGRAM 12: DEVELOP AN INCLUSIONARY ZONING PROGRAM
(As proposed by staff)
OBJECTIVE:
PROMOTE DEVELOPMENT OF HOUSING AFFORDABLE TO LOW AND
MODERATE INCOME PERSONS.
DESCRIPTION:
The CIty shall adopt an Incluslonary zonIng program. The
Incluslonary reqUIrement shall apply to all market rate hOUSIng
Whether resultIng from new construction or market rate converSIon
of apartment unIts, except that proJects InvolVIng four unIts or
less shall be exempt from the program, and converSIon proJects
approved under the prOVIsIons of ArtIcle XX of the CIty Charter
shall also be exempt from the program.
The InclusIonary program shall reqUIre that fIfteen percent
( 15%) of all new unIts In each mar ket rate hous Ing proJ ect be
affordable to persons Wlth Incomes up to 100% of the Los Angeles-
Long Beach PrImary MetropolItan StatIstIcal Area medIan Income.
The City shall, by ordInance, provIde for satIsfactIon of thIS
InclusIonary reqUIrement by prOVIsIon of on-SIte hOUSIng,
off-sIte hOUSIng, or an Io-lleu fee to be paId to the CIty. The
developer shall have a chOIce of the method to satisfy the
Incluslonary reqUIrement.
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In-lIeu fees, subJect to Increases to recognIze the effect
of InflatIon, shall be establIshed as one method for satIsfYIng
the lncluslonary program. The In-lIeu fee formula shall be
establIshed wIth due regard to the CIty1s abilIty to obtaIn the
benefIts of State mandated denSIty bonuses. The In-lIeu fee
schedule must also be fair and economIcally feaSIble.
All on-SIte and off-SIte lncluslonary unIts shall be
affordable to households rangIng up to 100% of the Los Angeles-
Long Beach Pr Imary MetropolI tan StatIstIcal Area medIan Income.
The CIty shall encourage the prOVIsion of unIts WIth an
approprIate number of bedrooms and other features so as to best
meet the needs of senIor CItIzens, large famIlIes, dIsabled
persons, and persons WIth other speCIal needs.
J~tX~$j~~at1 ~~jt$ pt~~~t~~ Wnf$tt~ $~aXX ~t ~~~it$~tp ~~tt$
t.n sD~f1~t $~t.~ ;S~t.)~t.yl.i~' ~f1,2l t ~,.t~X )dyl.tt.t jyl. t ~f1t~J. ~~t;r ,2lj~i $/
All locluslooary unIts shall be subJect to controls to maIntaIn
affordablllty.
The relevant prOVISIons of State law. Includ log Government
Code sectIon 65915-65918, shall be complIed WIth In the develop-
ment of the incluslonary hOUSIng ordInance.
IMPLEMENTATION:
Responsible Agency: CommunIty and EconomIC Development
Cost: No SIgnIfIcant cost.
Staffing: EXIstIng staff suffICIent.
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Fundins: Clty General Fund, In-lleu fee revenue.
Schedule: I.
Quantifled
Impact:
Increase
1n
n~w
affordable
houslng.
Estimated potentlal addltlon of 5 to 25 lnclusionary units per
year.
prog12xa
01/15/87
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Exh~b~t B
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OUTLINE OF INCLUSIONARY PROGRAM COMPONENTS
(As proposed by staff)
l. Th~s outl~ne deta~ls potentIal elements of an ~nclusIonary
ImplementatIon program.
2. Definitions. The Incluslonary program should cons~der the
follow~ng defInItions.
a. DwellIng Un~t..:.. One or more rooms, deSIgned, occupIed,
or Intended for occupancy as separate Ilv~ng quarters,
WIth full cookIng, sleep~ng, and bathroom fac~litIes for
the exclus~ve use of a SIngle household.
~j ~tt~t~X~/~Att~A~Jt/ ~ ~~~$i~~X~ ~~jt~ t$ ~~~Jttti~ ~i
t~i ~ttt ~t Jt$ ~i$j~~~~j ~tt~t~t~~ t~ pt~t~~>>t~$
~$t~~Xt$~~~ ~t t~~ ~ttij ~$ ~iitt~i t~~ ti~~jt~~~~t$ ~t
t~t$ t~~ptit t~t t~i p~tt~~$i ~t ~tt~t~~~Xi ~~jt$i ~t
~~ i~tjtt pt~yt~t~g ~tt~t~~~Xi ~~~$J~~j
c. Hous~n9 AuthorIty: HOUSIng AuthorIty of the C~ty of
Santa Mon~ca, a non-profIt publIC corporation.
d. HousIns Costs: The JI\~J1t)l.rt Jri~tt~~~~f$ ptt~ttp~.r ~;l~
j;lt~t~$tj pt~p~tti t~t~$j ~~JI\~p~~~t$ t;l$~t~;lt~j ~~~
t~;l~~JI\t;lt~JI\ t~i$j ~)I~t~ ~PpJtt~~X~j t~i ~~;lit$~tp
~J1tt$i ~~~ t~~ monthly rent for rental unIts.
e. HUD: The UnIted State Department of HOUSIng and Urban
Development or its successor.
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f. Incluslona~y UnIt: A~ ~~~~t~~tp o~ rental hOUSIng unIt
as ~equ~red by th1S ordlnance, WhlCh 1S affordable by
households wlth low or ~~~~t~t~ middle lncome.
g. Income El1g1b1l~ty: The gross annual household ~ncome
cons1derlng household SIze and number of dependents,
lncome of all wage earners, elderly or dlsabled farolly
members and all other sources of household Income.
h.
In-Lleu Fee: A fee paId
SUbJect to th~s ordlnance
requIred lncluslonary unIts.
to the City
In-lleu of
by developers
provld~ng the
1. Market Rate UnIt: A dwell1ng unit whiCh 1S not SUbject
to the rentalj $~X~ ~t t~$~X~ regulatIons of thIS
chapter_
J . 7"'1~9J~t~ti7 "MIddle", and II Lowll Income Levels: Deter-
mlned perlod~cally by the Clty based on the U. S.
Department of Hous~ng and Urban Development estImate of
med1an Income 1n Los AngeleS-Long Beach PrImary Metro-
po11tan Statlst1cal Area. The two maJor lncome cate-
gor1es are def1ned as follows:
"~f6~~t~t~ Middle Income"
medlan.
IILow Income" - 80% or less of the area medlan.
81% to 100% of the area
State law also defines "Moderate" Income as between 81%
and 120% of the area median_
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Further adJustment shall he made by household SIze as
establIshed by City admInIStratIve gUIdelInes.
k. Off-SIte ConstructIon: ErectIon of low or moderate
Income hOUSIng unIts on land other than that on WhICh
the developer Intends to place unIts WIthIn the CIty of
Santa MonIca.
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ProJect:
proposal
sought.
A reSIdentIal development or land subdIVISIon
for WhICh CIty permIts and approvalS are
~j 1~~~~~/~~nti~~~j ~t~~X t~~tttttJ~n~ ~i ~~tt~ t~~ ~tti~
~t jntl~$j~~~ti ~njt~ ~tXX ~~ t~~tt~JJ~~ t~ j~$~t~ t~~t
t~~ ~~tt t$ ~tt~t~~~X~ ~i X~~ ~t ~~~~t~t~ j~t~~~ ~~~~ti
~~~%~~~J~% ~y~t tt~ij
3. Applicability. The loclusIonary reqUIrement shall apply to
all mUltI-famIly reSIdentIal market rate dwellIng unIts
reSUltIng from new constructIon or market rate condomInIum
or cooperatIve converSIon of proJects of fIve unIts or more.
The constructIon of any multIple dwellIng t~t~~~~~
re5tr~cted as rental or limited equity cooperative hOUSIng
for persons and famIlIes of low or moderate Income or for
senIor CItIzens, WhIch IS fInanced by any federal or state
hOUSIng aSSIstance or owned by any relIgIOUS or other
non-profIt organIzatIon shall be exempt from these
reqUIrements. The calculation of the number of inclusionary
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un~ts to be provided 1n a proJect that includes Rent Control
replacement un~ts shall be fifteen percent of the total
number of units in the project_
Projects approved under ~nclusionary standards prior to the
effective date of these requirements which have not begun
construct10n or executed deed restrictions may, subject to
appropriate administrative and legal requirements, satisfy
the ~nclusionary obligation by meeting the standards of this
program.
4. Project Development Requirements.
a. No less that flfteen percent (15%) of the total number
of un 1. ts to be cons tr uc ted pursuant to any proj eet
developed by an applIcant at one location, whether at
thIS tIme or In the future, deslgned for permanent
occupancy and contaInIng fIve (5) or more unIts shall
be affordable by households of low- or moderate-Income.
The reqUIrements of thIS section may also be satIsfIed
by off-site development of reqUIred unIts dS descrIbed
In SectIon 4F, or an in-lIeu fee payment pursuant to
the prOVISIons of SectIon 5j ~t ft ~~~~t~~tt~~ ~t t~~%~
Jrl.etJiJ6l2I%.
b. In determInIng the number of lncl uSlonary un 1 ts
reqUIred, any deCImal fractIon less that 0.5 shall be
rounded down to the nearest whole number, and any
deCImal fractIon of 0.5 or more shall be rounded up to
the nearest whole number.
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c. At the t~me the plans are subm~tted to the C~ty's
Plann~ng D~Vis~on for in~tial reView the proJect
proposal shall specify the number, type, location, Size
and construction scheduling of any dwelling units to be
developed and shall indicate WhiCh units are proposed
for rental ~t ~~~it~~jp for the purpose of satisfYing
the inclusionary housing requirement.
d. If located on the proJect: Site, lnclusionary units
shall, whenever reasonably possible, be distributed
throughout the proJect. Tne applicant may reduce both
the Size and amen 1 t~es of the inclus ~onary unl ts as
long as there are not Significant ~dent~f~able dlffer-
ences in the un~ ts vls~ble from the exter ~or and the
Size and design of the units are reasonably consistent
w~th the rest of the proJect, prov~ded that all un~ts
conform to the requirements of the appllcable bu~ldlng
and housing codes. Inclusionary unl ts prov~ded shall
have at least the same number of bedrooms as the
average market rate unit in the project and if not the
same as the market rate units, shall be subJect to the
following min~mum Size l~rnlts:
0 Bedrooms 500 Square Feet
1 Bedroom 600 Square Feet
2 Bedrooms ~~~ 850 Square Feet
3 Bedrooms JJ.~fJ 1080 Square Feet
4 Bedrooms X~fJfJ 1200 Square Feet
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These size limits are consistent with the standards
used in federal and state housing programs.
All 10cluslonary unl ts 10 a proJect and phases of a
proJect shall be constructed concurrently wIth the
constructIon of market rate unlts.
e. x~t~~$t~~~tt ~~jt~ ~~1~J~P~~ ~~ t~~ pt~i~tt ~jt~ t~JJJ
~~ ~t t~t ~~~i tt~~t~ tlP~ ~~ t~~ pt~Jittf$ ~~t~it t~ti
~~~~t~~ ~~tt$j Inclusionary units developed on the
proJect site must be rental units in rental or
ownership projects.
f. Requlred lncluslonary units may be provlded at a
loea tIon WI thIn the CI ty other than the pro] eet s 1. te.
Any such off-sIte unIts shall be completed prIor to the
issuance of a CertIfIcate of Occupancy for the market-
rate housIng unIt proJect and shall conform to the
requlrements of the appllcable bUlldlng and housIng
codes and the mlnImum SIze proVISIons cIted 10 Sectlon
4d. The occupancy and rents of any such off-site unIts
shall be governed by the terms of a deed restriction
slm.ilar to that used for on-site inclusionary units
wbich shall take precedence over all other covenants,
liens and encumbrances.
5. In-Lieu Fees.
a.
Fees 10 lIeu of constructlon of
unIts may be pald to the CIty.
reqUIred Incluslonary
These In-lleu fees
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shall be used by the C1ty for the purpose of develop1ng
affordable hous1ng pr1mar1ly for lOW-1ncome households
elsewhere 1n the C1ty. Up to twenty-f1ve percent of
1n-lIeu fee funds may be used to develop affordable
hous1ng for moderate-1ncome households, and up to
flfteen percent of 1n-l1eu fee funds may be used for
program adm1n1strat1on costs.
b. In-l1eu fees shall be $3.00 per square foot of floor
area of the project for the f1rst of 10,000 square
feet, and $ 4.00 per square foot of floor ar ea above
10,000 square feet. The floor area of any on-s1te
Inclus10nary un1ts shall be excluded from the floor
area calculation. Any fee pursuant to th1S Section
shall be adJusted for InflatIon by the percentage
change In the Consumer Pr1ce Index ("CPI") between the
date of adoptIon of an 1nclus1onary ord1nance through
the month in Wh1Ch payment 1S made. For purposes of
th1S Section, CPI shall mean the 1ndex for Urban Wage
Ear ner sand Cle r lcal War ker s for the Los Ange les/Long
Beach stat1stlcal area, as published by the Un1ted
States Department of Labor, Bureau of Labor StatistiCS.
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c. The In-lieu fee shall be due 1n full pr lor to the
Issuance of a Certificate of Occupancy for the proJect.
Payment of this fee shall be secured by execution of an
irrevocable letter of cred1t In favor of the Cl ty or
other secur I ty acceptable to the City for the total
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amount of the obI ~ga t~on. The letter of cred~ t or
other acceptable secur ~ ty shall be del~vered to the
C~ty pr~or to the ~ssuance of a bu~ldIng perm~t for the
development.
6. Fee Waivers. The Condoffilnlurn and Cooperatlve Tax descrlbed
ln Sectlon 6651 of the Munic lpal Code shall be wa~ved for
requ~red lncluslonary un~ts WhiCh are developed and low and
moderate lncome unIts developed by the CIty or its deslgnee
USing In-lleu fee funds. The Park and Recreatlon FaCllltles
Tax descrlbed in Chapter 6C of the Munlc~pal Code shall be
walved for requlred lncluslonary unIts wh~ch are developed
and low and moderate income unlts developed by the City or
Its desIgnee USIng In-l~eu fee funds.
7. Density ~onus and Other Incentives. Appllcable projects may
be entItled to denslty bonuses or other ~ncent~ves, pursuant
to the requ~rements of State law.
8. Pricing Requirements_for Inclusionary Units. All lnc1uslon-
ary unlts shall be rented ~t ~~,~ to households that qual~fy
under the terms of Sectlon 10. Requlred Incluslonary unIts
shall be prlced so that desIgnated households pay no more
than thlrty percent (30%) of gross monthly household lncome
for rent .i~ t~~'I-~' }1yi.i'l-$ ?'Jt tYftt'l-tft:i:lf l>~tt~yi'l- 1/J$1>1 tit.
fdtti$~ Jrl~}'1'1-!l,t jJ1trDJrli ttit iit)}d,S,iJ1l!1 t~~'I- ,in. ~)'7J1~t$;f.ip }dn..i'l-~.
The C~ty shall, on an annual basIs, set allowable rents ayi~
t~ttt.ing t!l~t~i$ for lncluslonary unlts, adJusted by number
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of bedrooms. ~~~~tt~~ j~tX~~t~~~tl ~~tt~ ~~t~~ ~t~ ~~~~tf
$~tp ~~jt$ ~~~XX ~~ ~~X~ ~t ~ ptj~~ ~~~~X t~ ~t X~$$ t~~~ ~
rttt'i t~J.t'/1J./J.tj.~(J. ~)1.,itYl /J.$$}6.Jti~$ 2)lJ~ 1>1. 54t56$$ tt.~1it'1iJ.l
~~'/1.s~~~X~ j~t~~~ t$ $P~~t t~t ptj~ttp~X ft~~ t~t~t~$t
Pi1tIri~~t$j i1 t1itttt l~~t .x~i1~ t~t,ni i11f9I ;i,r t~:t.~t~t.t t~t~
~'1itt~ I~t.x~tt$ __t~~t t~,r~jtj~__j t'1i~ t,rt~ti$t t~t~
t~~P~~~~t ~t tn~ t~t~~x_ $'1i~XX ~~ ~9Ii~$t~9I ~~,r~~xxt ~i t'1i~
rttt"J j r/lt j1S~ It ttrj4~ tt~~)6.,!~t 'tJiJ.t.tt. tt tFi.e 'tJ-ti ~~~tt" tt
~~t~~~i1ttJ ~~~,r p~t~~~t ~~ltXX ~~ ~~~~X t56 561 X~$$ t~/J.~ t~~
P~tt~~t fX~$j ~t t~~ $~X~$ ptjt~J ~56 t'1i/J.t~~ 56'1 t~~ t.'1i/J.XX ~~
j_P~$~9I j1S~ :t.'1i~ p~tt'1i~$~ 561. /J.,r t~tl~.st56~~tt ~~tt ~'1ijt'1i t.s j~
~9I~ttt56~ t56 ~t ~~/~ t'1i~~ ~~/J.t~~~ j~P~.s~9I ~p56,r p~t~'1i/J.$~/~ 561
~/J.tx~t t~t~ )6.~tt~j The proJect owners shall retaIn
dIscret10n In the selectIon of ellg1ble renters rpt )5~t~.t.s
prov ided that such renter s 561 'pS~;litt. meet requlremen ts of
SectIon 9.
9. Eligibility Requirements. Only low- and moderate-Income
households shall be e1lg Ible to occupy locI us lonary unl ts.
The CI ty may establIsh admin 1str atl ve gUIdel1nes for
determIn1ng household Income, minimum and maXImum occupancy
standards and other elIgIbIlIty crIter1a.
a. Conflict of Interest. Followlng are those lndlv1duals
who, by v1rtue of thelr pOSItIon or re1atIonshlp, are
found to be lnellglble to p~.tt~~%~ ~.t rent an
affordable unit as thelr reSIdence:
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(1) All employees and offIcIals of the Clty of Santa
Mon1ca o~ 1ts agencies, authoritIes or comm1ssions
who have, by the authority of the~r pos~tlon,
pollcy-maklng authorlty or Influence affectlng
Clty housIng programs.
(2) The Immediate relatIves, employees, and anyone
gaInIng SIgnIficant economIC beneflt from a direct
buslness associatIon with publlC employees or
offlClals.
b. In settIng pr lor 1 tIes among ellg Ible households, the
applIcant, owner, or CIty shall generally gIve flrst
pr lor 1 ty to San ta Monica resIdents, second to per sons
employed In Santa MonIca, and th~rd to other persons.
10 _ RelatIon to Units ReqUIred by Rent Control Board. Low and
moderate income unIts developed as part of a market-rate
proJect, pursuant to replacement reqUIrements of the Santa
MonIca Rent Control Board shall ~~t count towards the satis-
fact10n of thIS program if they otherwise meet applicable
requirements for this Program including but not limited to
the income eligibility requirements of the program, deed
restriction requirements, and pricing requirements. New
Incluslonary unIts requlred by the Rent Control Board and
meetlng the standards of thIS program shall count towards
the satIsfactIon of thIS program.
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11. Deed Restrictions. PrIor to Issuance of a bUlldlng permIt
for a proJect subJect to these requlrements, the appllcant
shall submIt for C~ty reVIew and approval deed restrIctlons
or other legal Instruments settlng forth the oblIgatIons of
the appll.cant under thls program.
Such restr lctIons shall
be effectIve for fIfty years.
12. Availability of Government Subsidies.
It IS the Intent of
thls progr am that the requIr eIDen ts for lncl uSlonary unl. ts
shall not be determIned by the avallablllty of federal or
state hOUSIng Subs1d1es. ThIS 1S not meant to preclude the
use of such programs or SubSIdIes.
13. Enforcement. The provIslons of thIS program shall apply to
all agents, successors and aSSIgnees of an applIcant once
only for development of the 51 te.
No bUIld lng perml t or
occupancy perffilt shall be Issued, nor any development
approval granted, WhICh does not meet the requlrements of
thlS program.
DKW:lw:klc
prog12s
02/05/87
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Attachment 2
PLANNING COMMISSION RESOLUTION
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Attachmen.
RESOLurrON NO.
(Plannlng Commlsslon Serles)
A RESOLUTION OF THE PLANNING COMMISSION
OF THE CIry OF SANTA MONICA
ADOPTING A REVISED PROGRAM 12
OF THE HOUSING ELLMENT OF THE GENERAL PLAN
WHEREAS, the Clty of Santa Honlc:a adopted ItS eXlstlng
Houslng Element on January 25, 1983; and
~mEREAS, on February 25,1985, the CIty CouncIl adoptsd
ResolutIon 7172 authorIz1D9 the PlannIng Commlsslon to consujer
3mendments to Program 12 of tne HousIOg Element; and
~HEREA3, the Planoln3 Com~ls51on apPoInted a specIal
SUbCOffiffiILtee to reVIew Progr3m 12; and
~HEREAS, cae CILY staff prepared recomillended reV1Slons to
Program 12 and an In1 tIal Study and Negatlve De:::larar.lon and
CIrculated these documents foe pJbllC reVlew a:1o comment from
August 27, 1986, to Sept2il1ber 26, 1985, In complIance WIth the
Call for nla Env ironmen tal QU2i.ll ty Act and the CI ty of S,m ta ~1onIca
GUldellnes for the ImplementatIon of the Cal~fornla Envlronmental
QU3l1ty Act~ and
~-mEREAS, the proposed progr am 12 amendment was subrnl t t2d
to the State Departillent of HOUSIng and Communlty Development for
1 ts rev 12W, In compllanCG W~ th relevant requI r emen ts of Sta t8
law; and
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mIEREAS,
the plannlng Com~ISSlon has considered the
co~ments of the State Deoartffient of Houslng and Community
DevelopMent on the proposed reViSions to Program 12; and
WHEREAS, o~ October 18, 1986, the PlannIng Commlssion
conducted a duly noticed PublIC Hear ing on the proposed revlsed
progr am 12, afford lng any inter ested per son an oppor tuni ty to
comment on the matter; and
WHEREAS, on November 17, 1986, the PlannIng CommissIon
conducted a s~cond duly notIced PubliC Hearing on the matter; and
~mE~EAS, the proposed reVIsed program 12 lS conslstent
WIth other portlons of the HouSlng Element and other Elements of
the General Plan;
~Ch~, '..i.'HERBFORE, THE PLANNING COH1USS ION OF THE CITY OF
SANrA MONICA DOES dEREBY RESOLVE A3 FOLLOW3:
SECI'I01'J 1.
Tne document en ti tied Rev lsed Frog r am 12 of
the Santa Monica HousIng Element att3cned hereto as ExhIbit A and
Incorporated herein by thlS reference is hereby approved and
adopted as the PlannIng Commisslon's recoM~enjed amend~ent to
.I~
Program 12 of the HousIng Element of the CIty of Santa MonIca.
SECTION 2. The do~ument ~ntltled Outline of I~cluslDnary
Program Components attached hereto as Exhlblt B and ln~orporat2d
hereIn by
thiS
reference
18
recommended
by
the PlannIng
CommISSIon to form the basls for an ordlnance Implementlng the
a~end2d Progra~ 12.
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SECfION 3.
~he documenc entItled FInal InItlal Study and
~~egatl.ve Declara.t~on on a Proposal for a Rev~s2d Program 12 of
the C~ty of Santa ~onlca Houslng Element (EIA 827, SCH 85082706),
attached hereto as Exhlblt C and IncorporJ.ted here~n - by thlS
reference satlsfles the reqUIrements of the C~tyls GUldel~nes for
the ImplemeD t3 t~on of the CalIforn13 Env I ronmen tal Quail 'cy Act
and tne State CEQA GUldellnes and t~e Plannln] Commlsslon
recommends that the Clty CouncIl certIfy the Final In~tlal Study
and Negatlve Declaratlon.
SEC~ION 4. The Secretary of the Pl~~~lng Commlsslon shall
cer tlfy to the adoptlon of thlS Resolutlon, and thenC2for ch 3.l1d
tnereaft~r the same shall be In full force and effect.
l.\P?ROVED AS 1'0 FORil:
~--tt-.~
Robert M. Myers, Clty At~orney
.I..
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ADOPTED AND APPROVED thlS 17th day of ~ovembe~ 1986.
'CYL~r~A~
E~leen Hecnt, Chairwoman
Plann~n~ CommlSSl0n
I hereby certIfy that the foregoIng resolutIon No.
was
duly adopted by tne Plann~ng Commlsslon of the Cl ty ot Santa
~tonIC3. at 3. meetlng ther20f held on November 17, 1986, "Jy the
followIng Commlsslon vote:
Ayes: Burns, Farlvar, Israel, LatImer, Perlman
Noes: Hecht, Nelson
Abs2nt.:
AbstaIn:
ATTEST:
~.
Ol. C~
R. Arln SIracusa, Secretary
DIrector of PlannIng
DK~.y : b Z
prog12e
01/03/87
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ExhIbIt A
.
PROGRAM 12: DEVELOP AN INCLUSIONARY ZONING PROGRAM
(As proposed by Plannlng Commlsslon)
OBJECTIVE:
PROMOTE DEVELOPMENT OF HOUSING AFFORDABLE TO LOW AND
MODERATE INCOME PERSONS.
DESCRIPTION:
The CIty shall adopt an locluslonary zonIng program. The
Incluslonary reqUIrement shall apply to all market rate hOUSIng
whether resultIng from new constructlon or market rate converSIon
of apartment unIts, except that proJects InvolVIng four unIts or
less shall be exempt from tha program, and converSion proJects
approved under the prOVISIons of ArtIcle XX of the Clty Charter
shall also be exempt from the program.
The Incluslonary program shall requlre that fIfteen percent
(15%) of all new unIts in each market rate hOUSIng proJect be
affordable to persons WIth Incomes up to 100% of the Los Angeles-
Long Beach Pr lmary Metropoll tan Sta tl stIcal Area med Ian income.
The City shall, by ordInance, provIde for satIsfactIon of thls
Incluslonary
reqUIrement
by provls Ion
of
on-SIte
hOUSIng,
off-SIte houslng, or an In-lIeu fee to be paId to the CIty. The
developer shall have a chOIce of the method to satlsfy the
Incluslonary reqUIrement.
In-lIeu fees, subJect to Increases to recognIze the effect
of InflatIon, shall be establIshed as one method for satIsfYIng
the lncluslonary program.
The In-l leu fee formula shall be
establIshed wlth due regard to the CIty'S abilIty to obtaIn the
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benef I ts of State manda tea dens.1 ty bonuses. The In-l.leu fee
schedule must also be falr and economIcally feaslble.
All on-slte and off-slte lncluslonary units shall be
affordable to households ranglng up to 100% of the Los Angeles-
Long Beach Prlmary Metropoll tan Sta tlstlcal Area medIan Income.
The Clty shall encourage the provIslon of unlts wIth an
approprlate number of bedrooms and other features so as to best
meet the needs of senIor cltizens, large famllles, dlsabled
persons, and persons wlth other speclal needs.
Incluslonary unlts produced on-slte shall be ownerShIp unIts
In ownershlp bUlldlngs, and rental unl ts In rental bUIldIngs.
All Lncluslonary units shall be subJect to controls to maIntaln
affordabll1ty.
The relevant prov lS10ns of State law, IncludIng Government
Code sectlon 65915-65918, shall be compIled wIth In the develop-
ment of the Incluslonary houslng ordInance.
A local density bonus of up to fifteen percent above
otherwise applicable density limitations shall be provided
equivalent to one market-rate unit for every inclusionary unit
provided on-site, or where a fee L5 paid in-lieu of on-site
development of an inclusionary unit.
Areas of the City WhlCh either presently or in the future
have a Specific Plan wbich establishes alternative lnclusionary
housing requirements shall not be subject to Program 12.
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Rent Control Board-mandated replacement units shall be
treated as ~nclusionary units for the purposes of this Program if
they otherwise meet applicable requirements for this Program
including any implementing ord~nances-
IMPLEMENTATION:
Responsible Agency: Comrnunlty and EconomlC Development
Cost: No slgnlflcant cost.
Staffing: EXistlng staff sufflclent.
Fundlnq: City General Fund, in-lIeu fee revenue.
Schedule: I.
Quantified Impact: Increase In new
EstImated potential add 1 tion of 5 to 25
year.
affordable houslng.
Incl USlonary unl ts per
prog12x
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ExhIbIt B
.
OUTLINE OF INCLUSIONARY PROGRAM COMPONENTS
(As proposed by plann~ng CommIssIon)
1. ThlS outlIne detalls potentl.al elements of an lncluslonary
~m?lementat~on program.
2. Definitions. The Incluslonary program should consIder the
followIng defInItIons.
a. Dwelllng UnIt: One or mor e rooms, desIgned, occupIed,
or Intended for occupancy as separate lIvIng quarters,
WIth full cooklng, sleepIng, and bathroom faCIlitIes for
the exclusIve use of a SIngle household.
b. ElIgIble Purchaser: A household WhICh IS qualIfIed by
the Clty or Its deslgnee, accordIng to procedures
establIshed by the CIty, as meetIng the reqUIrements of
thIS chapter for the purchase of affordable unI ts; or
an entIty provIding affordable hOUSIng.
c. HOUSIng AuthorIty: HOUSIng AuthorIty of the City of
Santa MonIca, a non-prOfIt publIC corporatlon.
d. HOUSIng Costs: The monthly mor tgage IS pr Inclpal and
Interest, property taxes, homeowners Insurance, and
condomInIum fees, where applIcable, for ownership
unlts; and the monthly rent for rental unIts.
e. HUD: The Unlted State Department of Houslng and Urban
Development or Its successor.
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f. Incluslonary UnIt: An ownerShIp or rental housIng unIt
as requned by th1S Ord1nance, WhlCh 1S affordable by
households wlth low or moderate Income.
g. Income El19lbl1lty: The gross annual household Income
consIderlng household SIze and number of dependents,
Income of all wage earners, elderly or dIsabled famIly
members and all other sources of household Income.
h.
In-LIeu Fee: A fee paId to the
subJect to thIS ordInance In-lleu
requIred InclusIonary unIts.
Clty
of
by developers
provIdIng the
1. Market Rate UnIt: A dwellIng unlt WhICh is not subJect
to the rental, sale or resale regulatIons of thIS
chapter.
J .
"Moderate",
and
"Low"
Income
Levels: Determ1ned
perIodlcally by the CIty based on the U. S. Department
of HOUSIng and Urban Development estImate of medIan
Income In Los Angeles-Long Beach prImary Metropolltan
StatIstIcal Area. The two maJor Income categorIes are
defIned as follows:
"Moderate Income" - 81% to 100% of the area medlan.
"Low Income" - 80% or less of the area medlan.
Further adJustment shall be made by household Slze as
establIshed by CIty admInIstratIve gUIdelInes.
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k. Off-SIte ConstructIon: Erectlon of low or moderate
lncome housIng unlts on land other than that on WhlCh
the developer Intends to place unIts wIthIn the Clty of
Santa MonIca.
1.
ProJect:
proposal
sough t.
A resldentlal development or land subdlvlSlon
for WhICh CIty permlts and approvals are
m. Resale Controls: Legal restrlctlons by WhICh the prIce
of lncluslonary unIts wlll be controlled to Insure that
the unIt IS affordable by low or moderate lncome County
households over tIme.
3. Applicability. The Inclusionary requIrement shall apply to
all multl-famlly resIdentIal market rate dwellIng unIts
resultIng from new constructIon or market rate condomlnlum
or cooperatIve conversIon of proJects of fIve unIts or more.
The constructIon of any multIple dwelllng Intended as rental
housIng for persons and farnllles of low or moderate Income
or for senlor CItIzens, WhlCh is fInanced by any federal or
state housIng aSSIstance or owned by any relIgIOUS or other
non-prof~t organIzatIon shall be exempt from these
requlrements.
4. Project Development Requirements.
a. No less that fIfteen percent (15%) of the total number
of unIts to be constructed pursuant to any proJect
developed by an applIcant at one locatIon, whether at
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.
thlS tIme or In the future, desIgned for permanent
occupancy and contalnlng f~ve (5) or more unIts shall
be affordable by households of low- or moderate-Income.
The reqUIrements of thIS sectIon may also be satIsfIed
by off-s1te development of requIred unIts as descrlbed
In SectIon 4F, or an In-lIeu fee payment pur suant to
the provls10ns of SectIon 5, or a cornblnatlon of these
methods.
b. In determInlng the number of Incluslonary unl ts
requlred, any decImal fractIon less that 0.5 shall be
rounded down to the nearest whole number, and any
declmal fractlon of 0.5 or more shall be rounded up to
the nearest whole number.
c. At the tIme the plans are submItted to the Cl ty IS
PlannIng DIV1SIon for InItlal reVIew the proJect
proposal shall specIfy the number, type, locatlon, SIze
and constructIon schedulIng of any dwellIng unlts to be
developed and shall Indlcate WhICh unlts are proposed
for rental or ownershlp for the purpose of satlsfylng
the Incluslonary houslng requlrement.
d. If located on the proJect Sl te, Incluslonary unIts
shall, whenever reasonably possIble, be dIstrIbuted
throughout the proJect. The applIcant may reduce both
the SIze and amenltles of the Incluslonary units as
long as there are not slgnlflcant Identlflable dlffer-
ences In the unl. ts V1S Ibl e from the ex ter lor and the
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SIze and desIgn of the unIts are reasonably consIstent
WIth the rest of the proJect, provIded that all un~ts
conform to the requ~rements of the appl~cable bUIldIng
and housl.ng codes. Inclusl.onary unlts provlded shall
have at least the same number of bedrooms as the
average market rate unIt ln the proJect and ~f not the
same as the market rate unlts, shall be subJect to the
followIng m~nlmum Slze Ilmlts:
0 Bedrooms 500 Square Feet
1 Bedroom 600 Square Feet
2 Bedrooms 900 Square Feet
3 Bedrooms 1,100 Square Feet
4 Bedrooms 1,300 Square Feet
All Incluslonary unI ts In a proJect and phases of a
proJect shall be constructed concurrently wIth the
constructIon of market rate unlts.
e. Incluslonary unIts developed on the proJect sIte shall
be of the same tenure type as the proJect's market rate
hOUSIng unIts.
f. Requlred Incluslonary unIts may be provlded at a
loca tlon WI thIn the Ci ty other than the pro] ec t Sl te.
Any such off-SIte unIts shall be completed prIor to the
Issuance of a Certlflcate of Occupancy for the market-
rate hOUSIng unIt proJect and shall conform to the
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requlrements of the appllcable bUIldIng and housIng
codes and the mInImum Slze prOVISIons cIted In Sectlon
4d.
5. In-Lieu Fees.
a. Fees In lIeu of constructlon of requIred lnclus~onary
un 1 ts may be paId to the CI ty. These In-lIeu fees
shall be used by the CIty for the purpose of developIng
affordable housIng prlmarlly for lOW-lncome households
elsewhere In the Clty. Up to twenty-flve percent of
In-l leu fee funds may be used to develop affordable
housIng for moderate-Income households, /J.ft~ ~p t~
f-j.tt~~1i p~.tt~yi.t I>t jrifX;i.~'/J f-~~ .f'/J1il21~ ~/J.;/ 'P~ ,1d~~lii tl>;
Ptr/J~t~~ ~~~j~t~tt~tjl>~ t~~t~.
b. In-lIeu fees shall be $ 3.00 per square foot of floor
area of the proJect for the fIrst of 10,000 square
feet, and $4.00 per square foot of floor area above
10,000 square fee t. The floor area of anyon-51 te
lncluslonary unl ts shall be excluded from the floor
area calculatIon. Any fee pursuant to thlS SectIon
shall be adJusted for InflatIon by the percentage
change In the Consumer Prlce Index ("CPI") between the
date of adoptIon of an Incluslonary ordlnance through
the month In WhICh payment lS made. For purposes of
thlS Section, CPI shall mean the Index for Urban Wage
Earners and Cler lcal Workers for the Los AngeleS/Long
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Beach statIstIcal area, as publIshed by the UnIted
States Department of Labor, Bureau of Labor StatlstlCS.
C. The In-lleu fee shall be due In full pr lor to the
~ssuance of a CertIfIcate of Occupancy for the proJect.
Payment of thIS fee shall be secured by executIon of an
I r revocable letter of credIt In favor of the Cl ty or
other secur I ty acceptable to the Cl ty for the total
amount of the oblIgatIon. The letter of credIt or
other acceptable secur 1 ty shall be delIvered to the
CIty prIor to the Issuance of a bUlldlng permIt for the
development.
6. Fee Waivers. The Condoffilnlum and Cooperdtlve Tax descrIbed
In Sectlon 6651 of the HunIclpal Code shall be waIved for
requlred Incluslonary unIts Whlch are developed and low and
moderate Income unIts developed by the CIty or Its deSIgnee
uSlng In-l~eu fee funds. The Park and Recreation Facllltles
Tax descrlbed In Chapter 6C of the Munlclpal Code shall be
wa~ ved for requlr ed Incl usionary unIts WhICh are developed
and low and moderate Income unIts developed by the CIty or
Its deSIgnee uSIng In-lIeu fee funds.
7. Density Bonus and Other Incentives. Applicable proJects may
be entItled to densIty bonuses or other Incentlves, pursuant
to the requIrements of State law.
A local density bonus of up to fifteen percent above
otherwise applicable density limitations shall be prOVIded
equivalent to one market-rate unit for every lnclusionary
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unit provided on-site, or where a fee is paid in-lieu of
on-site development of an inclusionary unit.
8. Pricing Requirements for Inclusionary units. All Incluslon-
ary unIts shall be rented or sold to households that qualIfy
under the terms of Sectlon 10. ReqUIred ~ncluslonary unlts
shall be prIced so that designated households pay no more
than thIrty percent (30%) of gross monthly household 1ncome
for rent In rental unl ts or thIrty-fIve percent (35%) of
gross monthly Income for hOUSIng cost In ownerShIp unl ts.
The City shall, on an annual basIs, set allowable rents and
carrYIng charges for Incluslonary unIts, adJusted by number
of bedrooms. Requlred Incluslonary unIts WhICh are owner-
ShIP unlts shall be sold at a prIce equal to or less than a
CIty calculat10n WhIch assumes 30% of gross monthly
household Income IS spent for prIncIpal and Interest
payments, a thirty year loan term, and an l.nterest rate
WhICh reflects mar ke t cond 1 tlons. The lnte rest rate
component of the formula shall be adJusted annually by the
CIty, or on a more frequent bas I s If the CIty deems It
necessary. Down payment shall be equal to or less than ten
percent (10%) of the sales prIce. No charge or fee shall be
lrnposed on the purchase of an Inc!usIonary unIt WhlCh IS In
addItlon to or more than charges lmposed upon purchasers of
market rate unl ts. The proJect owners shall retaIn
dlscretlon In the selectIon of elIgIble renters or buyers
provIded that such renters or buyers meet reqUIrements of
Sectlon 9.
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9. Eligibility Requirements. Only low- and moderate-lncome
households shall be ellglble to occupy Incluslonary unlts.
The CIty may establIsh admlnlstratlve gUidelInes for
determlnlng household Income, mInImum and maXImum occupancy
standards and other elIgIbIlIty crlterla.
a. ConflIct of Interest. FollowIng are those IndIvlduals
who, by VIrtue of theIr pOSItIon or relatIonshIp, are
found to be Inellg Ible to purchase or rent an afford-
able unIt as theIr resIdence:
(1) All employees and off~clals of the CIty of Santa
MonIca or Its agenci~s, authoritIes or commlSSlons
who have, by the authorlty of theIr posltlon,
pollcy-maklng authorIty or Influence affectIng
CIty housIng programs.
(2) The ImmedIate relatives, employees, and anyone
gaIning sIgnifIcant econOffilC benefIt from a dlrect
bUSIness aSSoclatlon WIth publlc employees or
offICIals.
b. In settIng pr lor 1 tIes among el ig Ible households, the
applIcant, owner, or CI ty shall gener ally gIve fIr st
pr lor 1 ty to Santa MonIca resIdents, second to persons
employed In Santa MonIca, and thIrd to other persons.
10. Relation to Units Required by Rent Control Board. Low and
moderate Income unIts developed as part of a market-rate
project, pursuant to replacement reqUIrements of the Santa
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MonIca Rent Contro! Board shal! ~~t count towards the
satlsfactlon of
thIS program
if they otherwise meet
appl1cable requirements for this program. New lnc!USlonary
unl ts requlred by the Rent Control Board and meetlng the
standards
of
thIS
program
shall
count
towards
the
satIsfactIon of thIS program.
11. Deed Restrictions. pr lor to Issuance of a bUIld lng perml t
for a proJect subJect to these requIrements, the applIcant
shall submIt for CIty reVIew and approval deed restrIctlons
or other legal Instruments settIng forth the obllgatlons of
the applIcant under thlS program.
Such restrlctlons shall
be effectIve for fIfty years.
12. Availability of Government Subsidies.
It lS the Intent of
thlS program that the reqUirements for lncluslonary unIts
shall not be determIned by the avaIlablllty of federal or
state houslng Subsldles. ThlS IS not meant to preclude the
use of such programs or SubSldles.
13. Enforcement. The prOVIsIons of thIS program shall apply to
all agents, successors and asslgnees of an applIcant once
only for development of the SI te.
No bUlldlng perInI t or
occupancy perInIt shall be Issued, nor any development
approval granted, WhICh does not meet the reqUIrements of
thIS program.
DKW:lw:klc
progl2pc
01/15/87
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