sr-030309-8a~~r
~;,Yof City Council Report
.Santa Monica
City Council Meeting: March 3, 2009
Agenda Item:
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Introduction for First Reading of an Ordinance Amending the Affordable
Housing Production Program and Proposed Revisions to the
Administrative Guidelines
Recommended Action
Staff recommends that City Council:
Introduce for first reading amendments to SMMC Section 9.56, the Affordable
Housing Production Program (AHPP), as set forth in Attachment A, to:
a. amend Section 9.56.030 to exempt from the requirements of the AHPP
any City-financed, 100% affordable rental housing developed by
nonprofits and deed-restricted for a period of not less than 55 years;
b. amend Section 9.56.110(a) to require that occupants of AHPP
`inclusionary' housing be selected from a City-administered list and
remove the developer option to self-select occupants, except ownership
projects of 4 or more units in the City's multifamily residential zones; and
c. amend Sections 9.56.090, 9.56.100, 9.56.110 and 9.56.160 to include
references to "moderate income" households that were inadvertently
omitted when the AHPP was previously updated.
2. Amend the AHPP Administrative Guidelines (Guidelines) as set forth in
Attachment B, to:
a. revise Section 7C of the Guidelines regarding protocols for administration
and maintenance of the City-administered housing eligibility list to be
consistent with the tenant selection procedures established in the Housing
Authority's Administrative Plan;
b. revise Section 6(B)(2) to substitute the type of index used in the resale
price formula regarding affordable ownership units;
c. revise Section 2 to incorporate the affordable housing fee adjustment
methodology adopted by Council in June 2006;
d. remove portions of Sections 2 through 7 that reiterate the AHPP
Ordinance; and
e. update the Guidelines to reflect changes in the AHPP since the last
update of the Guidelines.
Executive Summary
The proposed changes to the AHPP Ordinance and Guidelines are intended to
eliminate regulatory redundancy and conflicts between the AHPP and affordable
housing funding programs, ensure that occupants of inclusionary housing are properly
selected with regard to income eligibility and local preferences, and implement technical
changes to facilitate administration of the AHPP.
Background
SMMC Section 9.56 contains the AHPP that implements Proposition R, which
establishes that not less than 30 percent of all newly constructed multifamily housing in
the City annually must be affordable to low- and moderate-income households for at
least 55 years. The AHPP was adopted by the City Council on July 21, 1998 and has
been periodically amended to ensure that the provisions of Proposition R are met.. The
AHPP requires developers of new market-rate multifamily housing units to contribute to
affordable housing goals through payment of a fee, dedication of a portion of a projects
total units as affordable housing, construction of affordable housing offsite, or dedication
of land for affordable housing. development. Multifamily ownership housing of four of
more units developed in the City's multifamily districts is required to include affordable
units either onsite or offsite. Currently, there are approximately 800 AHPP housing
units developed by for-profit developers dispersed throughout the City.
The AHPP ordinance establishes that the City shall develop administrative guidelines
regarding the offsite development of affordable units and the tenant/purchaser selection
process, including selection priorities. The current Guidelines were adopted by the City
Council on October 5, 1999 and have been amended on December 11, 2001 regarding
the concurrent development of offsite affordable units and the associated market-rate
units. Section 1 of the Guidelines provides an introduction, Sections 2 and 3, reiterate
the AHPP ordinance, Sections 4 and 5 establish additional requirements for the offsite
unit option and the land acquisition option, respectively, Section 6 details the formula
and factors used in determining the affordable sale price of ownership units and Section
7 provides protocols regarding the tenant and purchaser selection process, including
priorities, for income-qualified households.
2
On July 23, 2008, the City Council exempted the High- Place East affordable
homeownership development from AHPP due to conflicts between the AHPP and the
requirements of the development. At the meeting, Council directed staff to analyze
whether the AHPP requirements adversely affect government-funded affordable
housing and return with findings and recommendations. This staff report addresses the
Council direction and proposes other changes to strengthen and simplify the AHPP
Discussion
Staff identified several areas where changes to the AHPP and the associated
Guidelines could. better serve the City's affordable housing goals while preserving the
long-term affordability of Santa Monica's housing stock and providing protections for the
lower-income households. The recommended changes include amendments regarding
program applicability, tenant/purchaser selection, and the enforcement of
tenant/purchaser-selection violations by property owners. Also included are minor,
technical changes to the Guidelines to modify. the resale price formula index for
affordable ownership units, include the affordable housing fee adjustment methodology
and remove language that is duplicative of the AHPP Ordinance.
Applicability to City-Funded Affordable Housing Projects
The typical City-funded, deed-restricted affordable housing developed by nonprofit
housing corporations targets 100 percent of the housing units to low-income and very
low-income households for at least 55 years. For these developments to be financially
viable, they require funding from multiple government sources that each have strict and
complex regulations regarding the time period of restrictions; income eligibility, rent
limits, and other affordability standards. The multiple funding restrictions increase the
complexity of achieving project feasibility. These 100 percent affordable housing
developments satisfy the City's zoning code definition of an "affordable housing project"
(see Section 9.04.02.030:025) and consequently qualify for various zoning incentives
such as density bonuses. Affordability restrictions result from the .Planning approval
process and are memorialized in deed restriction agreements recorded in the title of the
property. As a result, the typical City-funded development has at least three layers of
affordability requirements (two from financing programs and one from the Planning
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approval) that establish sufficient protections. Given these circumstances, the AHPP
requirements (i.e., a fourth layer) are redundant and sometimes conflict with other
requirements, complicating the feasibility of affordable housing without increasing the
supply. To .resolve this issue, staff, recommends exempting City-funded affordable
projects from the provisions of the AHPP:
Tenant/Purchaser Selection
The AHPP provides that property owners may either select occupants from their own
marketing efforts or from aCity-administered list. When selecting applicants from their
own marketing efforts for occupancy, owners are supposed to notify the City and submit
income-eligibility documents to staff for verification. However, owners routinely select
occupants without submitting documentation for City verification of eligibility, either
because they disregard it or are unaware of the requirement (e.g., new property
ownership). In these. instances, staff does not become aware that a unit has been re-
rented until the owner's annual report is submitted. This results in post-occupancy
verification of eligibility during routine monitoring, and staff has discovered irregularities.
When staff determines that an occupant is ineligible, the recourse is relocation to a
market-rate unit within the project, if available, or eviction of the tenant so the owner can
comply with the affordability restrictions.
Staff is concerned about the impact of eviction on potentially unknowing occupants.
Compliance with income-eligibility criteria is better ensured when occupants are
selected from a qualified pool that has been compiled according to the City of Santa
Monica's Housing Authority Administrative Plan: Staff recommends that the City
eligibility list become the sole process for occupancy of AHPP affordable units, except in
cases where there are no qualified applicants or the occupants would be in ownership
projects of 4 or more units in the City's multifamily residential zones. This change would
be beneficial both for those seeking housing and for property owners who often find it
easier to seek assistance from the City to achieve qualifying occupancy. Existing
inclusionary housing units would- continue to provide owners with the opportunity to
select tenants subject to verification by the City, as the proposed policy cannot be made
retroactive.
4
The proposed changes to the occupant selection process established in. Section 7C of
the Guidelines will also allow consolidation of the AHPP list with other City affordable
housing program lists, such as the Housing Authority program list, to create one master
list. This master list will preserve existing priorities and criteria for the individual
programs, yet .simplify applicant efforts to obtain affordable housing and improve
effectiveness in administering these .multiple housing programs. To accomplish this,
staff recommends streamlining Section 7C of the Guidelines to be consistent with the
tenant selection procedures established in the Housing Authority's Administrative Plan.
This Plan already contains requirements regarding establishing and maintaining a list,
including public noticing, selection priorities, income definitions and an appeal process.
Enforcement
The Housing Division and the City Attorney's Office intend to meet and coordinate more
frequently to address concerns discovered in monitoring the AHPP units and respond to
violations of affordability restrictions. Some responses to violations of the affordability
restrictions discussed to date include holding property owners liable for relocation costs
of ineligible households and requiring that non-compliant property owners be required to
select applicants for vacant affordable units from the City-administered list.
The- Guidelines currently establish- protocols for cases in which household incomes
increase beyond the eligible ceiling allowed for a particular unit. Staff intends to analyze
the approach to this situation by various .State and federal funding programs, and other
cities with inclusionary housing programs; and may return to the City Council with
further recommendations to amend the AHPP.
Resale Price Formula Index
Resale restrictions are placed on the AHPP ownership units and focus on preserving
long-term affordability for future homebuyers rather than increasing homebuyer equity to
benefit only one household. Most housing affordability formulas in California utilize the
Area Median Income (AMI) index. However, the current Guidelines use the Consumer
Price Index (CPI) in its resale formula. Staff. has determined that the AMI index
provides the best indicator of affordability and recommends this index for use iri the
5
resale price formula. The City Council considered and approved this change to the
resale price formula in July 2008 specifically for the High Place East affordable
homeownership demonstration project, and staff now recommends this change be
applied to the Guidelines uniformly.
Technical Changes
Staff recommends the following technical changes to the AHPP Ordinance:
• amend Sections 9.56.090, 9.56.100, 9.56.110 and 9.56.160 to include reference
to "moderate income" households, which was inadvertently omitted when the
AHPP was previously updated; and
Staff also recommends the following technical changes to the AHPP Guidelines:
• revise Section 66[2] to substitute the type of index used in the resale price
formula regarding affordable ownership units;
• incorporate the affordable housing fee adjustment methodology adopted by
Council on June 13, 2006 into Section 2; this methodology tracks changes in
.construction and land costs for the prior year as an index used to adjust, on an
annual basis, the affordable housing fee paid by developers;
• remove. portions of Sections 2 through 7 that reiterate the AHPP Ordinance, as
the Ordinance is attached to the Guidelines; and
• Update the Guidelines to reflect changes in the AHPP since the last update of
the Guidelines.
Commission Action
The Housing Commission discussed the proposed changes in this report at its February
19, 2009 meeting and recommended that the City Council be guided by the following
values in considering the proposed revisions to the AHPP and Guidelines:
• development of a master list that developers/owners must use for selecting
tenants/purchasers of AHPP units, with an exception that would allow for
accommodating developer/owner self-selection in certain cases;
• systematic effort to educate developers/owners about the incentives for using the
City-administered list for selecting tenants/purchasers; and
• fines for noncompliance with the AHPP and Guidelines by developers/owners
should be instituted.
Alternatives
An alternative to address the conflicts between the AHPP and the requirements of
affordable housing funding programs is to amend the AHPP to comply with other
6
funding requirements. However, the .number, complexity and evolving nature of these
funding programs creates a difficult challenge that could require continuous on-going
amendments to the AHPP. Additionally, affordable housing funding opportunities have
strict timelines that could be incompatible with the lead time necessary to complete
AHPP amendments.
Financial Impacts & Budget Actions
There are no financial or budget impacts associated with the staff recommendation in
this report.
Prepared by:
Jim Kemper, Housing Administrator
Housing and Economic Development
Manager
Attachment A: Proposed Ordinance Amending the Affordable Housing Production
Program (Section 9.56 of the Municipal Code)
Attachment B: Proposed Amendments to. the Administrative .Guidelines of the
Affordable Housing Production Program
7
Approved: Forwarded to Council:
F: atty\muni\laws\barry\affordablehousingamehdord rev3-3-09
City Council Meeting 3-3-09 Santa Monica, California
ORDINANCE NUMBER (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE SECTIONS
9.56.030, 9.56.090, 9.56.100, 9.56.110,.9.56.120, AND 9.56.160 TO EXEMPT CITY-
FINANCED ONE HUNDRED PERCENT AFFORDABLE NONPROFIT HOUSING
PROJECTS FROM THE AFFORDABLE HOUSING PRODUCTION PROGRAM, TO
REQUIRE THAT OCCUPANTS OF AFFORDABLE HOUSING BE SELECTED FROM A
CITY-MAINTAINED LIST WITH SPECIFIED EXCEPTION, AND TO CLARIFY THAT
AFFORDABLE HOUSING UNITS INCLUDE VERY LOW-, LOW-, AND MODERATE-
INCOME UNITS
WHEREAS, the typical City-funded, deed-restricted affordable housing projects
developed by nonprofit housing corporations target one hundred percent of the housing
units to low-income and very low-income households for at least fifty-five years; and
WHEREAS, for these developments to be financially viable, they require funding
from multiple government sources that each have strict and complex regulations
regarding .the time period of restrictions, income eligibility, rent limits, and other
affordability standards; and
WHEREAS, multiple funding restrictions increase the complexity of achieving
project feasibility; and
1
WHEREAS, these one hundred -percent affordable housing projects meet the
Zoning Ordinance definition of an "affordable housing project" and qualify for various
zoning incentives such as density bonuses; and
WHEREAS, these affordability restrictions are deed-restricted or otherwise
restricted by an agreement approved by the City; and
WHEREAS, the typical City-funded development has at least three layers of
affordability requirements (two from financing programs and one from Zoning Ordinance
compliance); and
WHEREAS, the. additional requirements of the Affordable Housing Production
Program are unnecessary to ensure the continued affordability of these units consistent
with the policies and objectives of this program; and
WHEREAS, the Affordable Housing Production Program provides that property
owners may either select occupants from their own marketing efforts or from a City
waiting list; and
WHEREAS, owners are required to notify the City when selecting applicants from
their own marketing efforts and to submit income-eligibility documents to City staff for
verification; and
WHEREAS, owners routinely select occupants without submitting documentation
to the City for verification which can lead to unqualified tenants occupying affordable
units; and
WHEREAS, compliance with income-eligibility criteria is better ensured when the
tenants are selected from a qualified pool of qualified applicants complied by the City;
and
2
WHEREAS, certain technical modifications to the Affordable Housing Production
Program are necessary to clarify that affordable housing units include very low-, low-,
and moderate-income units,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Santa Monica Municipal Code Section 9.56.030 is hereby amended
to read as follows:
9.56.030 Applicability of chapter.
(a) The obligations established by this Chapter shall
apply to each multi-family project for which a development
application was determined complete on or after May 25,
2006 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. Notwithstanding the above, amulti-family
rental housing protect that will be developed by a nonprofit
housing provider receiving financial assistance through one
of the City's housing trust fund programs shall not be subject
to the requirements of this Chapter so long as the project is
an affordable housing project meeting the requirements of
Santa Monica Municipal Code Section 9.04.02.030.065 and
3
the project's affordability obligations will be secured by a
regulatory agreement memorandum of agreement or
recorded covenant with the City for a minimum period of 55
ey ars•
(b) Multi-family projects for which a development
application was determined complete prior to May 25, 2006
shall be subject to the provisions of Santa Monica Municipal
Code Section 9.56.010 et sea. as they existed on the date
the application for the project was determined complete.
(c) A designated landmark building or contributing
structure to an adopted Historic. District that is retained and
preserved on-site as part of amulti-family project shall not
be considered or included in assessing any of the
requirements under this Chapter.
SECTION 2. Santa Monica Municipal Code Section 9.56.090 is hereby amended
to read as follows:
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
4
and for low, -aac~ very low. and moderate-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.
SECTION 3. Santa Monica Municipal Code Section 9.56.100 is hereby amended
to read as follows:
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 acid 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 and that qualified
occupants for moderate-income units pav monthly rent that
does not exceed thirty percent of the gross monthly
5
household income for households earninq one hundred
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 and
that qualified occupants for moderate 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 earninq one percent of the median income.
SECTION 4. Santa Monica Municipal Code Section 9.56.110 is hereby amended
to read as follows:
6
9.56.110 Eligibility requirements.
(a) Only low-income very low-income, and
moderate-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-er except applicants of ownership projects of 4
or more units in the City's multi-family residential zones may
to ck}eese themselves is 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 occupied, both initially after
issuance of the certificate of occupahcy for the project and
upon subsequent vacancies in the affordable housing unit.
The guidelines may also establish priorities for income-
qualified tenants.
7
(c) The following individuals, by virtue of their
position or relationship, are ineligible to occupy an affordable
housing unit:
(1) All employees and officials of the City of
Santa Monica or its agencies, authorities, or commissions
who have, by the authority of their position, policy-making
authority or influence 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.
SECTION 5. Santa Monica Municipal Code Section 9.56.120 is hereby amended
to read as follows:
9.56.120 Relation to units required by Rent Control
Board.
Very low-income-and low-income, and moderate-
income dwelling units developed as part of a market rate
8
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.
SECTION 6. Santa Monica Municipal Code Section 9.56.160 is hereby amended
to read as follows:
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-. and moderate-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.
SECTION 7. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent .with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to that extent necessary
to effect the- provisions of this Ordinance.
SECTION 8. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The .City Council hereby declares that it would
have passed this Ordinance and each and every section, subsection, sentence, clause,
or phrase not declared invalid or unconstitutional without regard to whether any portion
of the ordinance would be subsequently declared invalid or unconstitutional
SECTION 9. The Mayor shall sign and the City Clerk shall attest to the passage
of this Ordinance. The City Clerk shall cause the same to be published once in the
10
official newspaper within 15 days after its adoption. This Ordinance shall become.
effective 30 days from its adoption.
APPROVED AS TO FORM:
M RSH ONES O'UTRIE
Ci Att r y
11
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 March 3. 2009
Prepared by
the Housing ° °~. ~'~~^'^pn~~ Division
Aa~mvfsauv~ cniudines
Affi~dzble Housing ProJUCUOn Pmgam
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 Flooc Area ............................................................. ..................4
G. Fee Refunds ............................................................................... ..................5
H. Relation to Rent Control ............................................................. ..................5
3. On-Site Affordable Unit Option ....................................................................... ............6
A. Three Ways to Satisfy the On-Site Requirement .............................. ............6
B. Calculation of Minimum Required On-Site Affordable Units ............. ............7
C. Incentives for Constructing Affordable Units on Site ......................... ..........10
D. Size and Unit Characteristics of the On-Site Affordable Units .......... ..........12
E. Income Requirements for Households Occupying On-Site Affordable Units l2
F. Rent Requirements ........................................................................... ..........13
G. Sale Price Requirements ........:.:....................................................... ..........14
H. Purchaser/Tenant Eligibility; Annual Monitoring/Reporting ............... ..........14
I. Timing of Rental or Sale of On-Site Affordable Units ......................... ..........14
J. Restrictions on Affordable Units .....................................................: ..........14
4. Off-Site Affordable Unit Option .................................................................................15
A. One-Quarter Mile Radius Maximum ............................................................15
B. Exceptions to the One-Quarter Mile Radius Maximum ...............................16
C. Evidence of Site Control ......:......................................................................17
Admtnieo-etive GuideJires
AffaNablc Housing HoOUaian Pmgr
D. Simultaneous Development of Off-Site Affordable Units .... ........................17
5. Land Acquisition Option .................................................................... ........................19
A. Eligible Land Parcels .......................................................... ........................19
B. Evidence of Site Control ..................................................... ........................22
C. Conveyance of the Site ....................................................... ........................22
D. Simultaneous Conveyance of Land or Option .................... ........................24
E. Eligible Non-Profit Affordable Housing Developer .............. ........................24
6. For-Sale Affordable Unit Requirements ............................................ ........................26
A. Establishment of the Initial Purchase Price ......................... ........................26
B. Re-Sale of an Affordable Unit to a Subsequent Purchaser . ........................28
C. Subordination ...................................................................... ........................30
D. Default and Foreclosure ..................................................... ........................30
E. Distribution of Insurance and Condemnation Proceeds ...... .......................:31
7: Tenant and Purchaser Eligibility Procedures ............:....................... ........................32
A. Priority Households ............................................................. ........................32
B. Persons Ineligible to Occupy an Affordable Unit ..............:.. ........................33
C. Establishment, Maintenance, and Update of Income-Qualified
Tenants and Purchasers List .........:...................... ........................34
Admws~n[ivc Guidelines
N6nAeble HOUSins Pmduction Pmgr
ATTACHMENTS
1-A Municipal Code Chapter 9.56
1-B AHPP Options Comparison Table
2-A Fee Adjustment Methodology
~2-B Current Base Fees for Apartment and Condominium Projects
---- --~
Formatted: Indent Left: 0",
3-A Affordable Units Table -Condominium Projects w14+ Units in Multifamily Zones ° Hanging: 0.63
------1
3-B Development Incentives Table
;?-A3333=C Calsula#ien-e#-Very Low, Low and Moderate Income Levels
2-~3-D Sal~+latiea-of Maximum Rents
~--C3=E Sample of Deed Restrictions
~4-A Sample Application for Affordable Housing Waiting List
z-4 B Referral Status Form
Admwsme~ive Guidelines
AffoNable Housing Peodu<~ion P~ug,~
1. Introduction
These Administrative Guidelines e~cplaia provide guidance on the implementation of the
City's Affordable Housing Production Program. Chapter 9.56 of the Santa Monica
Municipal Code ("AHPP") (see Attachment 1-A for a complete copy of the AHPP). Tka+s
pregram- The AHPP was originallyadopted by the City Council on July 21, 1998 (see
It has been amended on several
occasions since then. gad The AHPP gives developers of multi-family housingavarietyof
options for satisfying the City's affordable housing requirements. The precise options vary
depending on the housing type and location of the housing being produced.
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. See Attachment 9-13 for a
comparison table on the various options for complyinq_with Chapter 9.56. T"'~^^
pregr2raThe AHPP °,T,^~+^.,,+°,++^ r.^~..'.,,.,~^,-•,^.,+implements 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.
Section ~ 2 of these Guidelines describes the Fee iylethodology. Section 3
provides information about the number of affordable units required and development
incentives associated with the On-Site Option~The remaining sections ~^°~ "°expand
upon the AHPP and provide additional requirements regarding t,~,~^-^^.~~;~ ieca
nam~nsenri~z a~idzuozs
AROMable Ho~smg RaJiictiun Pmerem
/C^^+'^n O']l
~v~~~, the Off-Site Option (Section 34), and-the Land Dedication Option (Section
5) F, or-Sale Affordable Units (Section 6). the Tenant and Purchaser Eliyib~ility Arocedures
(Section 7) and P,djustments or waivers (Section 8).
Questions about how a particular multifamily proiect applicant shall satisfy the affordable
housinq obligation (pay tee, build units onsite or offsite, or provide land dedications) the
8a-Slte-9ptien 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 ,
Sedicatien--9ptien current maximum rents and ; Ssales gprice calculation, or Tenant
Eligibility and Selection Procedures should be directed to staff in the Housing Division at
(310) 458-8702, ^~*~„°'^^ "^~".
2. Fee e##1~~faletty
One way to satisfy the affordable housing obligation is through payment of the Affordable
Housing P-roductio~F-Unit Base Fee (§ 9.56.070). The amount of the Affordable Housing
P--redust+e+~-Unit Base Fee ("Base Fee") is based upon the floor area of the project. The
floor area of the project, as defined in the Municipal Code § 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 Base Fee w~tl-be are deposited into a special City Trust Fund and used to
facilitate the development of housing affordable to very low income, low-income and
moderate-income households. The Fee Option is not available for ownership projects of 4
or more units in the City's multi-family residential zones.
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)).. -' Formatted: unaerfiHe
and is subject to annual adjustment based on changes in land cost and construction cost.
The methodology for making these annual adjustments was established by the Citv Council
in June X09-x2006. More specifically construction cost inflation is established based on
the_ Engineering News Record's (ENR) Construction Cost Index .because it is updated
Administm[ive Cuidalmas
Affirdablc Housing Produc,iun Pmmam
monthly and is readily available via the Internet. The methodology uses annual change in
median condominium purchase prices as a proxy measure for land cost changes. The
relative balance between land cost inflation (based on changes in median condo prices)
and construction cost inflation (based on a construction cost index) is determined based on
current development cost data for recently completed or construction-in-progress multi-
family affordable developments assisted tiv the City. T~",~~ '^^ ~^^ ~ "^ ^~'' ^+^~'
nrJ'^olly ". 1h`n ("+. !`.. ^"I M rofly nt ^h^ nc .~,..+.. A +" fl'+' r"
p°~.,..,.r ry . ,,,.y .,.,...,.,, „ ~. ., „ny~. ~~rm
S+ty. AID A detailed explanation of the annual adjustment methodology is provided in
Attachment 2-A.
There are different base fees for condominiums and apartment projects. Attachment~A
2~B contains the current Base Fee amounts for apartment and condominium projects.
F _ - - Formatted: Heading 3
Administrative Guidelines
riff tdnbk HOUSinS Raducmu Pm~rem
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ALhNabla Housing $aJOUion Pmgmm
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. Formatted: Font: (Default) Arial,
B.. Affiordable Fiousing Unit Development Cast eom
The Affordable Housing Unit Develooment Cost is set by a Resolution of the Citv Council
{See Municipal Code 9.56.070tc)) and is subject to annual adjustment based qn changes
in land cost and construction cost. The methodology for making these annual adlustments
was established by the City Council in June 2006 and is the same mathodology used in
adiustingthe Affordable Housing Unit Base Fee described in Section 3-A. The Affordable
Housing Unit Development Cost is the average cost to the Gity to develop a unit of housing
affordable to low- and moderate-income households. The Affordable Housing Productiori
Admi,us[mtive Guiddiues
AROrclablc Hausmg Prodoaiov Proy~am
Program provides that when developers of market rate multi-family housinq are providirig
affordable units on- or off-site, and the calculation of the number of affordable units
required results in a fractional unit these developers are eligible to pay a fee equal to the
cost of producing that fractional unit based on the Affordable Housing Unit Development
Gost if that fraction is less than 0.75, ',~'^~rv~'^; ~^^^,^°+'°
u^ r ,. ~ ~.,+ R^~^ c~^ See Attachment 2-A.
Example (6-unit condominium proiectl
6 X .20 = 1.2 affordable housinq units
- - Formatted: Centered
1 unit would be constructed on-site
Fee payment of 0.2 X $265.632 = $53 126.40
3. On-Site Affordable Unit Option
Another way to satisfy the affordable housing requirements of Chapter §9.56 is by
constructing affordable units on the same site as the proposed new multi-family project
(See § 9.56.050). Ownership projects or 4 or more units in multifamily zones must provide
affordable units either onsite or oftsite (See.§ 9.56,040Z_All housinq developments that
provide onsite affordable units in accordance with the AHPP are entitled to a bonus over
the maximum allowable number of units on the site (i.e. density bonus) or a development
bonus (commercial/industrial zones) and incentives in accordance with Interim Ordinance
No. 2180 extended by Interim Ordinance No. 2252. This includes all units for sale or rent
such as:
• Substantial remodel and conversion of commercial buildings to residential units
• Substantial remodel of residential buildings
• Condos and apartments.
AJmiviatrmive Guidelines
AHOOOVbIa Housing t'roduction Ragmm
- Formatted: Font: (Default) Arial
7
Attachment 3-A provides a table indicating the minimum number of affordable units
re~cuirad in an ownership project in a multifamily zone and the fractional portion of a,unit
that may be paid as a fee. Attachment 3-B provides information on density bonus and
other development incentives allpwed when providing onsite affordable units. Attachment
3-C and 3-D provide information on the most current income eligibility and rent limits.
Attachment 3-E provides an example of the Agreement Imposing Restrictions on Real
Property between the Citv and the developer reaarding a project containing affordable
housing units.
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AffoNablc Housing ProJacfian Pmgrzm
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AJmwshativc Guidalmas
Affovdoblc HousvS Production Pmgam
12
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ARO~anblc Housing Pmduction Progr
13
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AdmiNS~m~tvc Guiddires
Affonlablc Housme Pmdudinn Pmgrum
14
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Administrative Guidelines
AffoNable Huusing Pmdt¢tion Pragmm
15
x Ee-~4euelep~f'z ar~lEs-e~reile~ 1#ea##e~a~4e-mill-bite-e
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Admi,tinmlPoC Goidelires
ARO~dnblc HOUSNg PmduUion Pm~nm
16
43. Off-Site Affordable Unit Option
T#e-t#ii=rTeptisn fer+aee#itherequ}rrexnes~tse#-9r~ia~se a+s~o prevJde Eae t~itssn
a-~+..,ftt.# rarTs+te-fro+n_t~r,v-^,wse, .u!o ur~it~S§8)
###i~e~tie~a-+s se4e~ted-af4 c~,'the rte',.: in ~estlea- 4+r~es regard+ng
err~o#-#t~e -:..inm ~-fir ^f~-~:,,, ~~ ; ~,+n;~' -E,;,:t_~+~es_aac#. ~; a^~° st;ss
@#9~--IA6BK~+&~-i,..~}r~°. ~.~klrFtt~; °i........!'...id ...'.I,..,:..-., c1~}C-~-3?~}}(y~-c'tRd
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§§-4:55-2~8-{a}id-(~N- c'r l~rv~-rmmr, t'..I
~ of
This section of the Guidelines specifies certain additional requirements concerning the
location of the Off-Site Affordable Units site control and concurrent development of the
market-Tale prQjeCt_and the off~site units.
A. One-Ouarter Mile Radius Maximum
Except as provided below, the alternative site for the Off-Site Affordable Units shall be
located within aone-quarter mile radius of the parcel on which the market rate units are
proposed, and within the boundaries df the City. (SMMC § 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 Departments 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.
Admmno-ari~e cameimes
Affordable Housi,g Produc,ioo Pmgr
17
B. Exceptions to the One-Quarter Mile Radius Maximum
The maximum one-quarter mile radius requirement may be waived by majority vote bf the
City Planning Commission (whose decision shall be appealable to the City Council), based
upon substantial evidence demonstrating thatthe 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 City's zoning and planning regulations, including
maximizing affordable housing production and dispersing affordable housing throughout
the City. (SMMC § 9.56.060 (f))
The project applicant shall have the burden of demonstrating why a location forthe Off-Site
Affordable Units of more than one-quarter mile from the market rate units better
accomplishes the City's affordable housing objectives. In making its determination, the
Planning Commission shall considerthe recommendations ofthe 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.
^ More Affordable Units. The size, price or other characteristics ofthe 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.
1Jmirdsim,ive Guidclines
AffoMablc Housing Production Progrem
18
^ 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 thah five project exceptions to the one-quarter
mile radius shall be approved in any one 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 § 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
All affordable housing units in amulti-family project or a phase of amulti-family project
shall be constructed concurrently with the construction of market rate units in the multi-
family project or phase of that project. No final City construction permit sign-off or
occupancy permit shall be granted for the market rate units until either:
1) 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; or,
2) All of the following conditions have been met: i) the Off-Site Affordable
.Units have been issued a building permit; ii) all equipment and facilities
necessary to commence construction of the Off-Site Affordable Units have
.been mobilized on site and construction has commenced; and, iii) the
Admi,dsrr.~tive Guidelines
AHordablz Housing Pcoducrinn Pmgram
19
developer provides the City with an irrevocable letter of credit or similar
financial instrument deemed acceptable by the City in an amount at least
equal to the in-lieu fee that would otherwise be required to meet the
obligation for the market rate project(s), plus advance interest on that amount
equal to the most recent yield listed in the City Treasurer's Monthly Cash and
Investments Report. If the off-site affordable housing units are not issued a
final City construction permit sign-off or occupancy permit within 18 months
of a final City construction permit sign-off or occupancy permit for the market
rate units which produced the affordable housing obligation, the letter of
credit or other approved financial instrument shall contain a provision
allowing the City, in its discretion, to draw down on the letter of credit (i.e.
convert the letter of credit to cash). The City Manager shall have the
discretion to extend the 18 month period by not more than an additional 6
months.
~?t. Land Acquisition Option
- n 4h~=("i, i' ~'.J..., t'nl .J'c+~.'ntn T4hn
nr,4i.~.~.~~,on,~nn~t~hn~«nrm~~ «~nn+cs~f f"~~.F ~~v I,PO,cr.~~n
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^~ti-~.~,ty-er-aa el+gidle- -This section of the
Guidelines specifies t#aeda~res-and-re~afedadditional requirements for exercising the
Land Acquisition Option.
A. Eligible Land Parcels
Only land parcels meeting the following minimum characteristics shall be eligible underthe
Land Acquisition Option:
Adminiserneive Guideliau
AL6iNable Huusing Prudnttian Pro~am
20
1. Zoning
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-(amity 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
estate appraiser, subject to the City's 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 aone-
quartermile radius of the parcel on which the market rate units are proposed and
Admivis~ra~ive Guiddi,~s
Affu,Juble Huusi~g Production Pm~em
21
within the City limits. (SMMC § 9.56:080) The outer limits of this one-quarter mile
radius area shall be determined by the Planning and Community Development
Department. The Department'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 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 majorityvote
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 City's zoning and planning regulations, including
maximizing affordable housing production and dispersing affordable housing
throughout the City. (SMMC § 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 City's affordable housing objectives. In making its determination, the
Planning Commission shall considerthe 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:
Admvtistn[ica Cuidaluxs
AffoMabla Housing Production Pmgrem
22
^ No Available Sites. There are nomulti-family parcels within the strict boundaries df
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.
^ More Affordable Units. The size, price or other characteristics ofthe 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 any one 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:
Adminisaazive Quidelinu
AffiNable Housive Produnion Pmgam
23
1. Fee Title Transfer
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, dr 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
applicant's out-of-pocket option-related expenses, from date of project application
through conveyance of the option, is lessthan the amount of the Affordable Housing
Production Fee Option, these costs will be treated as a credit againstthe Affordable
Housing Production Fee that would otherwise be due the City under that Chapter
~wmw:~ma~z~c~iaU~
MOtdobk Housing Production Pmgam
24
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 withat 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
City's final sign-off on construction permits for the market rate units, or issuance of a
certificate of occupancy, whichever occurs first:
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 "eligible non-profit affordable housing developer." 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
Adminiserwive Guidelmcs
AffmdaAk Hoaxing Radvclion Pmgam
25
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 organization's 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.
~~. 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 aceis 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 the
median income and total housing cost as described in the AHPP (9.56.1001 and the
income-qualifying household'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 percent'.
The conventional financing shall conform to all of the following terms:
Loan Term: 30 Years
Interest Rate: Fixed
Minimum Down payment: 5%
Min./Max. Front End Debt-to-Income Ratio': 33% min./38% max.
Maximum Back End Debt-to-Income Ratio2: 41°/p
'Front Entl Ratio: ratio of total monthlyhousing costs (including marlgage principal antl interest, properytaxes, prope,tyinsumnce, homeowners association
tlues and mortgage insurance, if applicable-to total gross householtl income. Chapter 9.56 of the Municipal Cade restricts the front-entl ratio to no more
than 38%.
Back Entl Ratio: ratio of total monthlyhousingcosts (inclutling mortgage principal antl interest, propeMtaxes, propertyinsurance, homeowners association
tlues antl mortgage insurance, if applicable) plus other monthly payments on long-term householtl tlebtto gross household inc°me.
Note: The borrower must be income-qualified pursuant to Chapter 9.56 of the Municipal
Code.
Admwnmtiva Guidel6,u
AHardable Housing Pmdmtian Pm@rem
26
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 afront-end ratio of less than 33 percent or aback-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 priorto completion of the purchase transaction.
Weasiag-salEUlafions
~ nn ~,~tii ~.~~., n~e~,~---~,_ aaoi_ x o, o..° ~.~ °ot,~ld ;~ .;, r`~
$ ^~ig term debt;~gress ineeme - 18°1°°
~ P~~.:nihl., rPrv~.rvn n m ..tlhiwl m ..tL.l., hn rv soh -Rio/ `~
Admw tmtiva Guidalmas
AffoMablc Housing Production Pmgeam
27
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namN„~me~r cmaa~
AfforAabl< Housing Producfion Pro~nm
28
.l Formatted ... f411
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B. Re-Sale of an Affordable Unit to a Subsequent Purchaser
t. First Rioht 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 ("Option to Purchase"). 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 uriit 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 City's
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 desigriee (e.g., anon-profit affordable
housing developer), or by referral of a qualified fewmoderate-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
within 60 days of a purchase offer, the Option shall terminate and the owner may
sell the unit to any income qualifying party at a price as set forth below. Seller shall
not refuse an offer by an income 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 atthe time that escrow is
opened.
Ad,rvnistmtive Guidelines
AHoNable Housine PraJUC,ion Progam
29
2. Maximum Subsequent Selling Price
The resale rp ice restriction will provide that the price for resale of the affordable unit
shall be calculated using the same formula and factors set forth in Section 6A. The
monthly housind cost shall include mortaaae principal and interest, property taxes,
property insurance, homeowners' association dues and mortgage insurance, if
applicable. *~^'^'^'^~ ^P ^~'~^~:
_ - - Formatted: Indent: Left: 0.5"
Formatted: Level 1, Numbered +
Level: 1 + Numbering Style: Bullet +
Start at: 0 + Alignment: Lek +
Aligned at: 0.5" + Tab after:. 0" +
Indent at: 1"
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 S+ty~klatCity that the unit is being purchased and shall be
maintained as the purchaser's primary residence. Failure of the purchaser to
maintain eligibility for a homeowner's exemption from property tax shall be
construed as evidence that the unit is not the primary residence of the purchaser.
C. Subordination
At the request of the lewmoderate-income household's lender, the City may subordinate
the foregoing income eligibility and 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.
namwsranve cwazlmu
AHordnble Ranting Roauc~ion Pmgam
30
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 owner's 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 lender's 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 homeowners' 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.
~ s. Tenant and Purchaser Eligibility Procedures
Per Chapter 9.56, multi-family project applicants who have opted to satisfy the affordable
housing obligation through the on-site or off-site option are required to fill vacant affordable
units'^ ^'*"^~~ *'~~^ ••~aye: a) by selecting income-eligible tenants from aCity-developed
list of income-qualified households except in cases where no qualified households are
available or except ownership projects of 4 or more units in the Cm's multi-family
residential zones may to choose themselves to select income-qualified households which
shall be subject io eligibility certification by the City. , '' ° ^" ^ '' * ' ••^''^"'^, ^• "` "••
*hnm cc.h,ac olo^i'n ~I'i'...J h.. n..hn Wn ., h'nh nhnll n * r hn h'o^* +n
mc.. ~.......... .`.........~..n n~~mo rv ...... .......... n c
a ~ y...... .~ ..... ......... _.. ..~.. ... ._... .,.. __.,~...,. ...
~1'~n~l'*v nn H'i'n~*'nn by *h~ ("hr /coo Co^*'.~n 0 ?oF i 1!1/•. \~~~0 GR i. ~riPnr co
ih..1 "Thn r"i., nh^II An.,^Inn •+rJm'n'c*rM'v '.Jea l'n c fnr +h.. *^^^n*~ ^^a ^ rnhnnnr
, II
Admwstmtiva Guidelines
Affordable Housing Noductiou Roycun
31
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 Division A~~ther-ity shall establish, maintain, and
update the list of eligible tenants.
A. Priority Households
In establishing the list of households eligible to occupy affordable units, the Housing
Authority shall adhere to the following priorities:
1) FirstPriority
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
Admwstative Guideline
Affivdablz Hooting Rodvuion Pmerem
32
2) Second Priority
Persons who are either:
A) Residents of Santa Monica and/or
B) Working in Santa Monica at least 36 hours per weekfor at least 6 months
B. Persons Ineligible to Occupy an Affordable Unit
Chapter 9.56 (see § 9.56.110(c)) specifically disqualifies the following categories of
persons from occupying On-Site Affordable Units:
- 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 Division A ' shall be responsible for preparing and maintaining
an Eligibility '";g List for this program and shall follow these guidelines for
preparing, maintaining, and updating the ~"''a;~~ ;g Eliaibility List. This Eliaibility List
shall be established maintained and updated in accordance with the protocols set
forth in the Housing Authority Administrative Plan.
Admi,unrvtive Gui~clircs
Affordable Housiq RoAVC,ion Pmgrem
33
3) Referral Process
Each time affordable units become available for occupancy, the owner and the
Housing Division At~eFity shall follow these procedures:
nanw~s~ar~z c~taeit~~
Affocdablc Hoosm~ Pmduc~ion Pmerum
34
A) At least &9 90 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 (low-/mod-income, number of bedrooms, ownership or rental) of
units available.
B) Within 5-20 business days of notice by the owner, the City shall provide the
owner with a Referral List, drawn from the Eligibility List-a#-F'+aq~a~f+ed
App4sants, containing at least twe-three names for each unit available.
Additional names may be provided to the owner upon request, subject to
availability.
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 City's Eligibility List may be
referred up to a maximum of five times. After the fifth referral, candidate
names will be removed from the'W~,t,ng Eligibility List.
4) Updating the Waiting List
Admwstn~ive Goide~inec
Affi~rdal,le flousin~ Pewluc~iun Nu5
35
~A) Emergency Additions to Waiting List: At any time, even if the Wai#ing
Eligibility List is closed, cancellation of a Section 8 contract administered by
the Santa Monica Housing Authority or eviction due to governmental action
for a household residing in Santa Monica will result in the automatic addition
of that household to the Waiting Eliaibility List with the applicable priority.
SB) 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
whetherthe 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
Adm,nisma,iva Guideiurc
- AHo,dablc Rowing Producaion Pmgvm
36
be considered along with the income of the Applicant in determining eligibilityfor
any Referral List.
6) Automatic Removal from Waiting List
Applicant names will be removed immediately from the ~PEaiting Eli ibili List for:
A) Failure to appear for a scheduled prequalification interview or prior to the
interview time contact the Housing A"qty Division 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 g Elioibility 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 `"fig Elioibility 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 WaiNag Eligibility 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 ,~ Division within 10 days after the City has mailed out
notification of removal from any list.
B) Scheduling an Informal Hearing
AJmuustmtivc Guiddiras
AffuNable Housin5 Roduc[ion Pmgram
37
Upon receipt of an appeal in writing, the Housing "'>^ Division shall
designate an Informal Hearing Officer. The Housing ,4otherity Division 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 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 Ihformal Hearing inadvance, the appellant must contact the
Housing Division Atrtherity within two working days. The Housing Division
Atftherity 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 Division Autl~erity.
ii. Appellant may present written and/or oral objections to the decision; may
present any information or witnesses pertinentto 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 counsel or other designated representative at their
own expense.
iii. In addition to other rights, the Housing AaHaerity Division 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 repre-
sented by legal counsel oranother party; examine any documents to be
used by the appellant prior to the Informal Hearing; have its attorney
Anmmis,nnvz c~mern~~
AQoNll,k Housing P~oduc~iou Pmgam
38
present; and have staff persons and other witnesses familiar with the
case present.
iv. The Informal Hearing Officer may adjourn the Informal Hearing in drder to
allow the appellant time to provide additional information, documents or
witnesses before making a decision. If the appellant misses an
appointment or deadline for submission of information requested by the
Informal Hearing Officer, the action of the Housing ">^ Division
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 Aafhorafy Division within 10
days and includes a clear explanation of the reasons for the Officer's
decision.
The Housing Aa#laerity Division 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 Authe~ity Division
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 Division AeN-ierity determines it is not bound by the
Informal Hearing Officer's determination, the Housing Division Aat#erity
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.
Admws~mtive Guidelioes
AftDedable HousmS Roductiov PmSmm
39
8) Changes in Income of Residents of Affordable Units
If after moving into an affordable unit the tenant's income- eventually exceeds the
income limit for the unit, the tenant may remain in the unit as long ashis/her income
does not exceed 140% of the income limit for the unit.
However, if the. tenant'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 tenant's income exceeds
140% of the income limit forthe low income unit but remains within the Program
limit for amoderate-income unit, the tenant may remain in the unit and his/her
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 tenant's 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 amoderate-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 tenant's 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 year's notice to vacate the unit.
2) For Mixed Income Developments: If a tenant's income exceeds 140% of
the income limit for his/her unit ("original unit") 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.
Admvtistrative Guidelixn
AffoNable HoLLCing Pcaduaion Pmy~nm
40
Notwithstanding, if the tenant's income exceeds 140%the program limits for all
affordable units in the mixed income development and also exceeds the
program limits for a moderate. income affordable unit, the tenant shall be given
one year's notice to vacate the unit.
3) For Mixed Income Projects Including Market Rate Units: If the tenant's
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
maybe substituted for the original unit, the tenant may remain in the original unit
and the tenant's 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 amoderate-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% bf the income limit for the unit. However, once the tenant's
income exceeds 140% of the moderate income limit, the tenant shall be given one
year's notice to vacate the unit.
Formatted: Font: Bold
g6. Adjustments or Waivers. -'~
- - - - - - - - _ - _- Formatted: Font: Bold
The AHPP authorizes a project applicant to request an adjustment or waiver of the AHPP
based on a showing that applvinq the requirements of this Chapter would effectuate an
unconstitutional taking of property or otherwise have an unconstitutional application to the
property.
To receive an adjustment or waiver the applicant must submit an application to the
Director of °n°^ ^° ni°^^^^^~^^`Housing and Economic Developrrment, or his/her
designee at the time the applicant files amulti-family project application The applicant
bears the burden of presenting substantial evidence to support the request and set forfh in
Admws[ntiva (jmdc~0U4
MoNabla Hoiuing Pmdu¢iou PmSVm
41
detail the factual and legal basis for the claim including all supporting technical
documentation.
In making a determination on an application to adjust or waive the requirements of this
Chapter, the Director of Housing and Economic Development __. or
City Council on appeal may assume each of the following when applicable:
(1) The applicant is subject to the affordable housing requirement of this Chapter:
(2) The applicant will benefit from the inclusionary incentives set forth in this Chapter
and the City's Municipal Code;
(3) The applicant will be obligated to provide the most economical affordable housing
units feasible in terms of construction design location and tenure.
The Director of Housing and Economic Development must make a
written decision within ninety days after a complete application is filed. The Director's
decision may be appealed to the City Council if such appeal is filed within fourteen
consecutive calendar days from the date that the decision.
If the Director of Housing and Economic Developrnent€fes or Cit
Council on appeal upon legal advice provided by or at the behest of the City Attorney
determines that applvina the requirements of this Chapter would effectuate an
unconstitutional taking of property or otherwise have an unconstitutional application to the
property the affordable housing requirements shall be adjusted or waived to reduce the
obligations under this Chapter to the extent necessary to avoid an unconstitutional result. If
an adjustment or waiver is granted any change in the use within the project shall invalidate
the adjustment or waiver If thebirector or City Council on appeal determines that no
violation of the United States or California Constitutions would occur through application of
this Chapter the requirements of this Chapter remain fully applicable
[The end]
Admwsva{va Guidelines
AfioMabla Housi~s Production Pmymm
42
1-A Municipal Code Chapter 9.56SSubiect to Amendments)
1-B AHPP Options Comparison Table
2-A t3ase-Fee Adjustment Methodology
~ 2-B Current Base Fees for Apartment and Condominium Projects Ad'usted
Annual)
3-A Affordable Units Table -Condominium Projects wl4+ Units in Multifamily Zones
3-B Development Incentives Table
~A3_C Salsi+Fati~-eE-Very Low, Low and Moderate Income Levels (Adjusted Annually)''
2-S3~D ~alcu4atien e# Maximum Rents (Adjusted Annually)
2-C3~E Sample of Deed Restrictions (Subject to Staff Revision)
~ n n n n f~ ~. ; .c. ~ r„.~
~4-A Sample Application for Affordable Housing Waiting List. endin
~4-B Referral Status Form ending)
nu~n.anve cr~aa~
AHoNOblc Housing Produmion Pmgrem
~ Formatted: ]ushfied ~ Tabs: 0 75", j
Left+ 013", Left+ 063", Left+
Not at 0 83" + 0 5 + 0.75 + 1'
(+ i.zs^
Formattetl: Tabs: 0.63", Left + Not
at 0.75"
-- --
43
ATTACHMENT 1-A
Municipal Code Chapter 9.56
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.
9.56.170 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.
9.56.070 Findings and purpose.
The Cit~IS affordable housing production program requires developers of market rate multi-family
developments to contribute to affordable housing production and thereby help the City meet its affordable
housing need. As detailed in the findings supporting the ordinance cod'rfied in this Chapter, the requirements of
this Chapter are based on a number of factors including, but not limited to, the City's long-standing
commitment to economic diversity; the serious need for affordable housing as reflected in local, state, and
federal housing regulations and policies; the demand for affordable housing created by market rate
development; the depletion of potential affordable housing sites by market-rate development; and the impact
that the lack of affordable housing production has on the health, safety, and welfare of the City's residents
including its impacts on traffic, transit and related air quality impacts, and the demands placed on the regional
transportation infrastructure. (Added by Ord. No. 7918CCS§ 7 (part), adopted 7/27/98; amended by Ord. No.
2174CCS § 1, adopted 11/08/05)
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 amulti-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-, low-, and
moderate-income households.
Admiuistmtivc Guidzlines
AHOrdvblc HOUSin~Roduttiou Raepm
Attachment 1-A: Page 7
Affordable Housing Unit. A housing unit developed by amulti-family project applicant pursuant to Section
9.56.050 or 9.56.060 of this Chapter which will be affordable to very low-, low-, or moderate-income
households.
Affordable Housing Unit Development Cost. The City's average cost to develop a unit of housing affordable
to low- and moderate 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 income for afour-
person household in the Los Angeles-Long Beach Primary Metropolitan Statistical Area. The major income
categories are: "low-income" (sixty percent or less of the area median),'Yery law-income" (fifty percent or less
of the area medianj, 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 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
Admims[m~ive Guidelinex
AHoNablc Hwsmg Reduction Pmgrvm
Attachment 1-A: Page 2
are not limited to, the following: parking, use of common facilities including pools or health spas, and utilities'rf
the project ismaster-metered. Noiwithstandingthe 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. Amulti-family residential development, including but not limited to apartments,
condominiums, townhouses or the multi-familyresideniial 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 orapprovals todevelop a multi-family
project.
Multi-family Residential District. Any district designated in the Santa Monica Zoning Ordinance as a muiti-
-family residential district.
Parcel. Parcel as defined in Santa Monica Municipal Code Section 9.04.02.030.570.
Vacant Parcel. A parcel in amulti-family residential districtthat has no residential structure located on it as
of August 20, 7998 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 9:04.10.76 et seq. (Added by Ord. No. 1918CCS § 1
(part), adopted 7/21/98; amended by Ord. No. 1926CCS § 7, adopted 10/13/98; Ord. No. 2174CCS § 2,
adopted 17/08/05; Ord. No. 2191 CCS § 7, adopted 6/13/06)
9.56.030 Applicability of chapter.
(a) The obligations established by this Chapter shall apply to each multi-family project for which a
development application was determined complete on or after May 25, 2006 involving the construction of two
or more market rate units. No building permit shall be issued for any multi-falmily project unless such
construction has been approved in accordance with the standards and procedures provided for by this
Chapter. Notwithstanding the above, amulti-family rental housing project thatwill be developed by a nonprofd
housing provider receiving financial assistance through one of the City's housing trust fund programs shall not
be subject to the requirements of this Chapter so long as the project is an affordable housing project meeting
the requirements of Santa Monica Municipal Code Section 9.04.02.030.065 and the project's affordability
obligations will be secured bya regulatory agreement, memorandum of agreement, or recorded covenant with
the City for a minimum period of 55 years. _
AAtwtistrntive Guiddu,cs
AffoNablc Haosmg Pmdvc~inn PmSm
Attachment 1-A: Page 3
(b) Multi-family projects for which a development application was determined completed prior to May 25,
2006 shall be subject to the provisions of Santa Monica Municipal Code Section 9.56.010 et seq., as they _
existed on the date the application for the project was determined complete.
(c) A designated landmark building or contributing structure to an adopted Historic District that is retained
and preserved on-site as part of a multi-family project shall not be considered or included in assessing any of
the requirements under this Chapter. (Added by Ord-. No. 1918CCS § 1 (part), adopted 7/21/98; amended by
Ord. No. 2191 CCS § 2, adopted 6/13/06; Ord. No. 2206CCS § 5, adopted 10/3/06)
9.56.040 Affordable housing obligation.
All multi-family project applicants shall comply with the requirements of this Chapter in the following
manner.
(a) Multi-family project applicants for multi-family ownership projects of four or more units inmulti-family
residential districts shall choose one of the two following options:
(1) Providing affordable housing units on-site in accordance with Section 9.56.050;
(2) Providing affordable housing units off-site in accordance with Section 9.56.060;
(b) In addition to the options established in subsections (a)(1) and (2), all other multi-family project
applicants may also choose one of the following options:
(1) Paying an affordable housing fee in accordance with Section 9.56.070;
(2) Acquiring land for affordable housing in accordance with Section 9.56.080.
Amulti-family project application will not be determined complete until the applicant has submitted a written
proposal which demonstrates the manner in which the requirements of this Chapter will be met. (Added by
Ord. No. 1918CCS § 1 (part), adopted 7/21/98; amended by Ord. No. 2191 CCS § 3, adopted 6/13/06)
9.56.050 On-site option.
The following requirements must be met to satisfy the on-site provisions of this Chapter:
(a) For ownership projects of at least four units but not more than fifteen units in multi-family residential
districts:
The multi-family project applicant agrees to construct at least: (i) tweniypercent of the total units as
ownership units for moderate-income households, or as an alternative (2) twenty percent of the total units as
rental units for low-income households if these rental units are provided by the applicant in accordance with
Civil Code Sections 1954.52(6) and 1954.53(a)(2).
Admws[nciva Guidelires
Affordable Housi~5 Roducvion Pmerem
Attachment 1-A: Page 4
(b) For ownership projects of sixteen units or more in multi-family residential districts:
The multi-family project applicant agrees to construct at least (1) twenty-five percent of the total units as
ownership units for moderate-income households, or as an alternative, (2) twenty-five percent of the total units
as rental units for low-income households if these rental units are provided by the applicant in accordance with
Civil Code Sections 1954.52(b) and 1954.53(a)(2).
(c) For all other multi-family applicants:
The multi-family project applicant agrees to construct at least (1) ten percent of the total units of the project
for very-low income households or (2) twenty percent of the total units ofthe project for law income
households or (3) one hundred percent of the total units of a project for moderate income households in an
Industrial/Commercial District.
(d) Any fractional affordable housing unit that results from the formulas of this Section that is 0.75 or more
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. Any fractional
affordable housing unit that is less than 0.75 can be satisfied by the payment of an affordable housing fee for
that fractional unit only pursuant to Section 9,56.070(a)(4) or by constructing all the mandatory on-site
affordable units with three or more bedrooms. 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 m inimum number of very
low- or low-income units required for typical sizes of multi-family projects, which list shall be updated
periodically.
(e) The multi-family project applicant may reduce either the size or interior amenities of the affordable
housing units as long as there are not signiticant 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 ai least ninety-five percent zero bedroom units, excluding the manager's
unit, in which case the affordable housing units may be zero bedroom units, (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, or (4) the multi-family project applicant has elected not to pay the
affordable housing fee pursuant to Section 9.56.070(a)(4), in which case the affordable housing units must be
at least three bedroom units. The design of the affordable housing units shall be reasonably consistent with
Adndn;nmtiva GUldalmu
AHOMabla Houci,y Pmdnction Pmgam
Attachment 1-A: Page 5
the market rate units in the project. An affordable housing unit shall have a minimum total floor area,
depending upon the number of bedrooms provided, no less than the following:
0 bedrooms: 500 square feet
1 bedroom: 600 square feet
2 bedrooms: 850 square feet
3 bedrooms: 1080 square feef
4 bedrooms: 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.
(f) All affordable housing units in amulti-family project or a phase of amulti-family project shall be
constructed concurrently with the construction of market rate units in the multi-family project or phase of that
project.
(g) On-site affordable housing units must be rental units in rental projects. In ownership projects, these
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-qual'rfied households.
(h) 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 unitthroughout the prior year, and such other information as may be required by
City staff.
(i) Amulti-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.
Q) 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 § t (part), adopted 7/21/98; amended by Ord. No: 2191CCS § 4, adopted 6/13/06)
9.56.060 Off-site option.
The following requirements must be met to satisfy the off-site option of this Chapter:
Administmtivc Guidelines
AfioMVbla Housing Pmduttiov Pcogmm
Attachment t-A: Page 6
(a) The multi-family project applicant for ownership projects of four or more units inmulti-family residential
districts shall agree to constructtwenty-five percent more affordable housing units than number of affordable
housing units required by Section 9.56.050(a) and (b).
(b) For all other multi-family project applicants, the applicant shall agree to construct the same number of
affordable housing units as specified in-Section 9.56.050(c):
(c) The multi-family project applicant shall identify an alternate site suitable for residential housing which
the project 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 Cilys housing objectives
and projects.
(d) The off-site units shall be located within aone-quarter mile radius of the market rate units.
(e) The off-site units shall satisfy the requirements of subsections (d) through Q) of Section 9.56.050.
(f) 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.
(g) 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, hosed 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.
(h) The Housing Division of the Resource Management Department shall prepare administrative
guidelines to. implement this Section. (Added by Ord. No. 1918CCS § 1 (part), adopted 7/21/98; amended by
Ord. No. 2191 CCS § 5, adopted 6/13/06)
9.56.070 Affordable housing fee. -
Amulti-family project applicant eligible to meet the affordable housing obligations established by this
Chapter by paying an affordable housing fee shall pay thetee in accordance with the following requirements:
(a) An affordable housing tee 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;
Administrmivc Guidclivcs
AfroMOblc Housing Production Pmgctm
Attachment 1-A: Page 7
(2) Multi-family projects in Multi-family Residential Districts on vacant parcels:
Affordable housing unit base fee x floor area of multi-family project xseventy-five percent;
(3) Multi-family projects in lndustriaVCommercial Districts on parcels that are either not alreadydeveloped
with multi-family housing or are already developed with multi-family housing, but the multi-family project
preserves the existing m ulii-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 fifty percent..
(4) Multi-family projects with fractional affordable housing units of less than 0.75 based on the formula
established in Section 9.56.050(d):
City's affordable housing unit development cost x fractional percentage.
(b) For purposes of this Section, the affordable housing unit base fee shall be established by resolution of
the City Council. Commencing on July 1, 2006 and on July 1st of each fiscal year thereafter, the affordable
housing unit base fee shall be adjusted based on changes in construction costs and land costs. No later than
July 1, 2010; and approximately everyfive year period thereafter, theCitywill conduct a comprehensive study
of these fees and the results of the comprehensive studyshall bereported to 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 affordable housing fee is paid to the City.
(c) For purposes of this Section, the City's affordable housing unit development cost shall be established
by resolution of the City Council. Commencing on July 1, 2007 and on July 1st of each fiscal year thereafter,
the City's affordable housing unit development cost shall be adjusted based on changes in construction costs
and land costs. No later than July 1, 2010 and approximately every five year period thereafter, the City will
conduct a comprehensive study of these fees and the results of the comprehensive study shall be reported td
the City Council. The affordable housing fee that the multi-family project applicant must pay shall be based on
the affordable housing unit development cost resolution in effect at the time df payment to the City.
(d) 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 far affordable housing. -
(e) The affordable housing fee shall be paid in full to the City prior to the City granting any approval forthe
occupancy of the project, but no earlier than the time of building permit issuance.
Aumim.,~a,m~ c~~aoi~zs
AffaNabla Ho¢cins ProJUC,ian Program
Attachment 1-A: Page 8
(f) The Cityshall 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
years afterthe 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.
(g) 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 § 1 (part), adopted
7/27/98; amended. by Ord. 1926CCS § 2, adopted 10/13/98; Ord. No. 2174CCS § 3, adopted 71/8/05; Ord.
No. 2191 CCS § 6, adopted 6/13/06)
9.56.080 Land acquisition.
Amulti-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 anon-profit housing provider, (b) selling of land
to the City or anon-profit housingprovider at below market value, or (c) optioning of land on behalf of the City
or anon-profit housing provider. Each of these options must be for a value at IeasYequivalent tothe affordable
housing obligation otherwise required pursuant to this Section. The m ulti-tamily project applicant must identify
the land ai 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 df 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 dispering affordable housing throughou*. 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 means
set forth in this Chapter. (Added by Ord. No. 1918CCS § 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 Sonia Monica
Municipal Code shall be waived for required affordable housing units and for low, very low and moderate
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 § 1 (part), adopted 7/21/98)
AdmiNsxvd[iVL GuiAzlNes
Afto~Aable Housine Ralaction Ro~ram
Attachment 1-A: Page 9
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, 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 and that and that qualified occupants for moderate-income units pay monthly rent that does not
exceed thirty percent of the gross monthly household income for households earning one hundred 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, 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 and that qualified occupants for moderate-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 one hundred percent of the median income. (Added by Ord. No. 1918CCS § 1 (part),
adopted 7/21/98)
9.56.110 Eligibility requirements.
(a) Only low-income, very low-income and moderate income households shall be eligible to occupy or own
and occupy affordable housing units. The City shall develop alist otincome-qualified households. Multi-family
project applicants shall be required to select households from the City-developed list of income-qualified
households, except applicants of ownership projects of 4 or more units in the City's multi-family residential
zones may 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 occupied, both initially after issuance of the certificate of occupancyforthe
project and upon subsequent vacancies in the affordable housing unit. The guidelines may also establish
priorities for income-qualified tenants.
AJmie,ixtmtiva Cuidalinu
Affordable Hnusi~e H,xlucrio~ Pmgmm
Aftachmeni 1-A: Page 10
(c) The following individuals, by virtue of their position or relationship, are ineligible to occupy an
affordable housing unit:
(1) All employees and officials of the City of Santa Monica or its agencies, authorities, or commissions
who have, bythe authority of their position, policy-making authorityor influence overthe 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 § 1 (part), adopted 7/21/98)
9.56.120 Relation to units required by Reni Control Board.
Very low-income, low-income and moderate-income dwelling units developed as part of a market rate
project, pursuant to replacement requirements of the Sonia Monica Rent Control Board, shall count towards
the satisfaction of this Chapter if they otherwise meet applicable requirements for this Chapter including, but
notlimited 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. 1918CGS § t (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 oroff-site, the multi-family project applicantshall 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 § 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 § 1 (part), adopted
7/21/98)
9.56.150 Annual report.
The Housing Division of the Resource Management Department shall submit a reportio the City Council on
an annual basis which shall contain information concerning the implementation of this Chapter. This report
shall also detail the 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 turther assess whether the provisions of
nami~i=~art~z eniadi~,
A(rnNabla Housing Production Pmyrum
Attachment 1-A: Page 11
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 § 1
(part), adopted 7/21/98)
9.56.160 Principles and guidelines.
(a) In addition to the administrative guidelines specificallyrequired 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 thatthe required affordable housing units are
provided and are occupied by very low-income, low-income and moderate-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 § 1 (partj,
adapted 7/21/98) '
9.56.170 Adjustments or waivers.
(a) Amulti-family project applicant may request that the requirements of this Chapter be adjusted or
waived based on a showing that applying the requirements of this Chapter would effectuate an
unconstitutional taking of property or otherwise have an unconstitutional application to the property.
(b) To receive an adjustment or waiver, the applicant must submit an application to the Director of
Resource Management, or his/her designee, at the time the applicant files amulti-family project application.
The applicant shall bear the burden of presenting substantial evidence to support the request and set forth in
detail the factual and legal basis for iheclaim, including all supporting technical documentation.
(c) In making a determination on an application to adjust or waive the requirements of this Chapter, the
Director of Resource Management, or City Council on appeal, may assume each of the following when
applicable:
(1) The applicant is subject to the affordable housing requirement of this Chapter;
(2) The applicant will benefit from the inclusionary incentives set forth in this Chapter and the City's
Municipal Code;
(8) The applicant will be obligated to provide the most economical affordable housing units feasible in -
terms of construction, design, location and tenure.
A~mw~t,ativc GuiAelmes
AffoNaM1le Housing &oduttiov Pmgam
Attachment 1-A: Page 12
(d). The Director of Resource Management shall render a written decision within ninety days after a
complete application is filed. The Director's decision may be appealed to the City Council if such appeal is filed
within fourteen consecutive calendar days from the date that the decision is made in the manner provided in
Part 9.04.20.24, Sections 9.04.20.24.070 through 9.04.20.24.040 of this Code.
(e) If the Director of Resource Management, or City Council on appeal, upon legal advice provided by or
at the behest of the City Attorney, determines that applying the requirements of this Chapter would effectuate
an unconstitutional taking of property or otherwise have an unconstitutional application to the property, the
affordable housing requirements shall be adjusted or waived to reduce the obligations under this Chapter to
the extent necessary to avoid an unconstitutional result. If an adjustment or waiver is granted, any change in
the use within the project shall invalidate the adjustment or waiver. If the Director, or City Council on appeal,
determines that no violation of the United States or California Constitutions would occurthrough application of
this Chapter, the requirements of this Chapter remain fully applicable. (Added by Ord. No. 2174CCS § 4,
adopted 11/8/05; amended by Ord. No. 2207CCS § 70, adopted 10/3/06)
Administra~ive Guidolues
Affordable Housing Prnduc~ion PNgr~
Attachment 1-A: Page 13
ATTACHMENT 1-B
AHPP Options Comparison Table
• 10% of units for Very I
Income
• 20% of units for Low
Income
• 100% of units for
,Moderate Income (for
• Same as on-site option
$25.31/sf for apartments
$29.56/sf for condominiums
SMMC 9.58.080
• 20% of units are
affordable for 4-15 unit
projects
• 25% of units are
affordable for 16+ unit
projects
• 25% more than the
required number of on-
Not Applicable
Not Applicable
Admivis~m~ive Guideliuu
AffoNable flnuing Pmdudion Pmgam
Attachment 1-B
ATTACHMENT 2-A
Fee Adjustment Methodoloav
Table 1 -Affordable Housing Unit Base Fee
AHordable Housing Unit Base Fee Annual lnflazicn Adjustment Calwlations far FY 2008-09
Land Cost Irr#adan
Median Annual Pdce Calculation
ZIP Cede - Change During 2006 #COndos BOltl Weighs Weighted AVg
90401 -2.2% 18 3.]% -0.1%
90402 445% 31 71% 32%
90403 1.0% t60 36 ]°k 04%
80404 1.4% 92 21.1% 0.3%
90405 114% 13] 31.4% 38%
436 ].4%
Source: Los Angeles Times, Real Estate Section, p. K1q January ID, 2008 (bacetl on DataCUick Information Systems)
CorzsLUCtMn ConlrrflaHOn
Engineering News Records COnstmction Cast lntlex-LOS Angeles
March 200] Intlex Value 8,8]3.09
March 20081ntlex Value 9,188.89
Percentage Change IDOJ-2000 3.]%
Source Engineering News Recortl (available at btlpJM+uw.encconsW coon.mmfreatures(mnecofsubslconstlntlexHinasp)
DetlvaHen ofLantl Cost and Constmcdon Ces[Calculaflorz Weights
Hartl COnnmction
Mon Recall CC6M Family Rental Projects Land Cos[ Cast Sum
Berkeley Place-3031 Santa Monica BNtl. $ 3,808,109 $ 10,5]9,820 $ 14,185,]29
The Tahilt Apts-2411 CeMinela S 1920851 S 9929.1]8 $ 11850029
$ 5,528,980 $ 20,508,]98 5 28,035,]58
21.2% ]8.8% 10000%
Source: Reusing DiNSim, Cdy of Santa Monica
Irzllafbn Fac[ar Dedvaflon
Inflation Value Weigh LNtl. Avg.
Lantl Value Inflation ].4% 21 2% 1.6%
COnelNeflOn COSt Inflation 3J% ]8.8% ?9° _
6.5%
Atl/usletl Fees
FY 200]-08 Faes Inflazicn Factor Updazed Fees $ Change
Contlos $29.56 45% $30.88 $1.33
Apartments $25.31 4.5% $28.45 $1.14
Adnuvstmrive Guideliuu
A[foNablc Housing Pmdouinn Pmgmm
Farmatted_ Font: (Default) Arial_._ _ ~
Attachment 2-A: Page 1
ATTACHMENT 2-A
Fee Adjustment Methodology
Table 2 -Affordable Housing Unit Development Cost
AROrdable Housing Oevalapmen(Cos[ Cumulative Inflation Adustmertt Calculations for FY 2908-09
Land COSt ingatian
Median Annual Price Calculaion
21P Coda Change Oaring 200] # Condos 9Wd Weights Weighed Avg.
00401 -22% 16 3]% -0.1%
90402 44.5% 31 ].i% 3.2%
90403 19% 160 36J% a4%
90404 1.4% B2 21.1% 0.3%
90405 114% 13] 31.4% 3.8%
436 ].d%
Source: tas Angeles Times, Real Estate Sedion, p. K10, January 20, 2008 (based on DataDUick InicrmaHbn Systems]
Consvuctiorz Cos[ Irrtlarlon
Engineering News Record's Construction Cost Intlez-Los Angeles
March 200] Intlez Value 8,8]3.09
March 20081ntlex Value 8,188.89
Percentage Change200]-2008 3.]%
Source: Engineering News Record (availahle at http:/Fw.nv.enrconstudion.comffeaNre9coneco/subs/constlntlexHisl.asp)
DerivaUOn o{Lantl COStand COnaVUCGnn Cart Calculation Weights
Hard Constuction
Most Recent CCSM Farrily Rental Projects Lantl Cost Cos[ Sum
BeMeley Place-3031 Santa Monica BNtl. $ 3,fi06,109 S 10,5]9,620 $ 14,185,]29
The Tahiti Apts: 2411 Centinela $ 1.920.851 S 9.929.1]8 $ 11.850029
$ 5$26,860 $ 20,508)98 $ 26,035,]58
212% ]8.8°b 100.0%
Source: Housing DiVisicn, City of Santa Mcnia
/ngalion Factor Cerlvatlon
Inflaion Value Weigh Wtd. AVg.
Land Value Inflation ].4% Z1.2% t.6%
Conslmdion Cod lnflatim 3]% ]8.8% 2.9%
QS%
Atljurtetl Untt COS[
FY 200]418 COSWnit inflation Factor ppda[ed COStNnit $CHange
AROrtlableHmsing Development COt $265,632 4.5% $2]],585 $11953
Aden;wtvtivc Guidalmzs
Affordable Housivg Pmducrioo Pmgmm
Formatted Font: (Default) Arlal
C____________- _~__-_.__-__- _J
Attachment 2-A: Page 2
ATTACHMENT 2-B
Current Base Fees for Apartment and Condominium Projects
FEE FOR APARTMENT PROJECTS
$26.45 [adopted 7-23-08]. Effective October 1, 2008.
FEE FOR CONDOMINIUM PROJECTS
$30.89 [adopted 7-23-08]. Effective October 1, 2008.
TIMING OF FEE PAYMENT
Base Fee is due prior to completion of project, but not before building permit issuance, and
the amount of fee due is based on fee amount in effect at time of payment.
AJmwnr~~iva Guidelines
AfioNVblc Housing Pmduninn Pmgsam
Attachment 2-B
ATTACHMENT 3-A
Affordable Housing Table for 4+ Ownership Units
in Multi-Family Zones
Number of units Number of FRAGT10fVS`**
in project before
density bonus affotdable units
to be provided" Fraction eligible
foe fee payment Fractional cost of
developing a unit
2 On-site or off-site units are not mandatory.
3 May pay in-lieu fee.
4 1.00 0.00 $0.00
+ 5 1.00 O.DO $0.00
Z \ 4
O N 7 1 00 O.dO $ 06 252
80
4
k 8 1.00 0.60 $159,379.20
U
f/1 9 2.00 0.00 $0.00
ti ~ 14 2.00 0.00 $O.OD
f? ~ 11 2.00 0.20 $53,126.40
~ ~, 12 2.00 0.40 $106,252.80
13 2.00 0.60 $159,379.20
14 3.00 0.00 $0.00
15 3.00 0.00 $0.00 -
16+ # units x 25°la fraction < 0.75 fraction x unit develo ment cost
2 On-site or off-site units required are not mandatory
3 May pay in-lieu fee.
4 1.00 0.00 $0.00
* 5 1.00 0.25 $66,4D8.00
O \ 6 1.00 0.50 $132,816.00
F`- N 7 2.00 0.00 $O.DO
40 k S 2.00 0.00 $O.DO
W F 9 2.00 0.25 $66,408.00
2 10 2.00 0.50 $132,816.00
y ,
b 11 3.00 0.00 $0.00
t
t, `, 12 3.00 0.00 $0.00
~ 13 3.00 D.25 $66,408.00
14 3.00 0.50 $132,816.00
15 4.00 0.00 $0.00
etc. etc. raction < 0.75 fraction x unit develo ment cast
'Ownershin units must be available far very low. low. or nmderate income households
"Rental units must be available for very low or low income hmisehalAs
*'For fractions of 035 or mare -round up to next whole number
"`Farfractimrs less than 0.75 -there are 2 options:
7) Pay the fractional cost of developing the writ }based on affonlahle housing unit development cos4)
2} CmrstmM all mandatory affordable units with 3+ bedrooms
Admwnrmive Guidelines
Affordable Housing Pmduc~ion Pmgam
Attachment 3-A
ATTACHMENT 3-B
Development Incentives
Density Bonus Table for Housing Developments in All Zones
Minimum % of project that must be affordable to be eligible for bonus
OF UNITS THAT DENSITY BONUS" ADDITIONAL BONUS°
ARE AFFORDABLE VERY LOW INCOME LOW INCOME MODERATE INCOME LAND DONATION
FOR RESIDENTIAL ZONES
B%
6% a a•.
22 5%
7% 25.0%
8% 27.5%
9%
10%
11% 30.0%
32.5%
35.0%
a e•.
21.5!
a'.
60%
a•.
16D%
12% 350% 23.0% 707 170%
13% 350% 24.5% 8.0% 180%
14% 350% 26.0% 9.0% 190%
15 % 35.0% 27:5% 10.0% 2D.0°!o
16% 35.0% 29 0°!0 11.0 % 21.0 %
17% 35.0% 30.5% 120% 220%
18 % 35 0% 32.0% 13 0% 23 0%
19% 35.0% 33.5% 14.0% 24.0%
20% 35.0% 350% 15.0% 25.0%
21 % 35.0% 35 0% 16 0% 26.0
22% 35.0% 35.0% 170% 270%
23% 35 0% 35.0% 18 0% 28 0
24% 35.0% 35.0% 19.0% 29.0
25% 35.0% 35 0% 20.0% 30.0
26% 35.0% 35.0% 21 D% 31.0%
27°l0 35 0 % 35.0% 22.0% 32 0 %
28% 350% 350% 23.0% 33.0%
29% 35.0% 35.0% 24.0%~ 34.0%
30% 35.0% 3S0% 25D% 350%
31 % 35 0 % 35.0 % 26.0% 35 0%
32% 350% 350% 27.0% 350% -
- 33 % 35.0°fo. 35 0 % 28.0% 35.0%
34% 35.0% 350% 29D% 350%
35 % 35.0 % 35.0% 30 0% 35 0
36 % 35.0% 35.0 % 31.0 % 35.0°!0
37% 35.0% 350% 32.0% 35.0°!0
38 % 35.0 % 35.0% 33.0 % 35.0 %
39% 350% 35.0% 340% 350%
40% 35 0 % 35.0 % 35.0% 35.0°!0
FOR COMMERCIAL AND INDUSTRIAL ZO NES
C5, CP, and M1
zones FAR bonus of 35°/0 over maximum allowable Floor area
- for each zone
BSC, BCD, C2, C3,
C4, C3C, C6, CM,
LMSD zones FAR bonus of tliscounting residenSal floor area alreatly exists in development
standards for each zone in addition to provisions in SMMC 9.04.10.14 0309(b)(1)
'Developer shall only choose only ONE densiy bom s <ateaorv anA may request a lesser density bonus.
"Boons tar land Aonation can be in addition m density honus for providing units. CamhineA total cannot exceeA 35°0.
AJnuvixw~ivc GUidAmra
Ad'oodable Flousi2 Produetiov Promam
Attachment 3-B: Page 1
ATTACHMENT 3-B
Development Incentives
Affordable Housing Incentives and Concessions
Note That:
Requests for incentives/concessions on the Menu shall not require the filing of an
application for Variance, GPA, Zone Change, or any other discretionary approval.
Requests for density bonuses without incentives, with by-right incentives, and/or one or
more incentives included in the Menu of Incentives/Concessions shall be reviewed by the
Director of Planning or designee.
Requests shall be granted unless:
o The incentive/concession is not required to provide for affordable housing costs per
Section 50052.5 of Health and Safety Code, or for rents for the affordable units.
o There is~aspecific adverse impact upon public health and safety, on the physical
environment or on any real propertythat includes historic sites, andforwhich there is no
feasible method to mitigate or avoid the specific adverse impact without rendering the
development unaffordable to Moderate, Low, or Very Low Income households.
PARKING STANDARDS
When requested, the following parking standards must be granted to an entire housing development
that has obtained a density bonus and are inclusive of guest and disabled access parking:
0 to 1 bedroom units: 1 onsite space/units
2 to 3 bedroom units: 2 onsite spaces/unit
4 or more bedroom units: 2.5 onsite spaces/unit
Fractional numbers shall be rounded up to the neat whole number.
DEVELOPMENT STANDARDS
Incentives and Concessions
A developer that obtains a density bonus may be granted up to 3 concessions/incentives based on
the percentage of units in a project that are affordable.
Number of % of units that are restricted affordable before densit bonus)
Incentives/
Concessions Very Low Income Low Income Moderate Income
1 5% 10%, 10%
2 10% 20% 20%
3 15% 30% 30%
Administrative Goiddires
Affordable Housing Raduc,ion Pmg.am
Attachment 3-B: Page 2
ATTACHMENT 3-B
Development Incentives
Affordable Housing Incentives and Concessions (cont.)
The following are the incentives/concessions that a developer may request, depending on the zone.
The developer may also request additional waivers and modifications not in this list.
T e of Zone Menu of Incentives/Concessions that ma be re nested
up to 15% deviation from one side yard
Side Yard Setback setback re uirement
Residential Zones Parcel Covera e u to 10% deviation
up to 15% deviation as long as rear yard
Front or Rear Setback setback is at least 5 feet
Number of stories Eliminate restriction
Residential floor area to be discounted by 50%
Commercial or Floor Area when determining Development Review permit
Industrial Zones threshold
Private O en S ace Eliminate restriction
Additional Waivers and Modifications
Developer that seeks a density bonus may also request the waiver or modification of development
standards but shall show that:
1) The modification is necessary to make the housing units economically feasible.
2) The development standards, even with the concessions or incentives, would have the effect
of precluding construction of the density bonus units.
A Public Hearing shall be held by the Planning Commission to review these waivers and
modifications following the procedures for Design Compatibility Permits in SMMC 9.04.20.15.030.
The Planning Commission's decision maybe appealed to the City Council.
APPLICATION TO REQUEST INCENTIVES
Applicant must submit the following:
1) Site Plan showing total number of units, number and location of affordable housing units,
and number and location of density bonus units.
2) Level of affordability for affordable housing units and proposals for ensuring affordability.
3) Description of any requested modifications or incentives. For all waivers and modifications
not on the Menu of Incentives/Concessions, applicant must demonstrate that the request will
result in identifiable, financially sufficient, and actual cost reductions. The cost of reviewing
anyfinancial data submitted bythe developer, including the hiring of a consultant bythe City,
shall be borne by the developer.
Administa~ive Guidelines
ARO~dabla Housing Pmduc~ion Pmgmm
Attachment 3-B: Page 3
ATTACHMENT 3-C
Very Low, Low and Moderate Income Levels
2008 MAXIMUM INCOME
MAXIMUM ALLOWABLE INCOME
Household Very Low Moderate
Size (50%) Low (60%) Low (80%) (100%)
1 $26,550 $31,860 $42,450 $53,100
2 $30,300 $36,360 $48,500 $60,600
3 $34,100 $40,920 $54,600 $68,200
4 $37,900 $45,480 $60,650 $75,800
5 $40,950 $49,140 $65,500 $81,900
6 $43,950 $52,740 $70,350 $87,900
7 $47,000 $56,400 $75,200 $94,000
8 $50.050 $60,060 $80,050 $100,100
Admiuistntive G11iJC~lIW4
AtfoNaLle Housing PeWu<tio~ Rugam
Attachment 3-C
ATTACHMENT 3-D
Maximum Rents
2008 MAXIMUM ALLOWABLE RENT~MONTHLY)"
_ -_
Unit T e
Very Low
(50%)
Low 60%) Low 80%
Moderate
(100%)
0-Bdrm $663 $796 $1;061 $1,327
1-Bdrm $758 $910 $1,213 $1,516
2-Bdrm $900 . $1,080 $1,440 $1,800
3-Bdrm $1,028 $1,234 $.1,645 $2,056
4-Bdrm $1,161 $1,393 $1,857 $2,321
Rents: Median Income for 4- erson household x Betlroom Ad'ustment x Affordabilit 30 % / 72.
Bdrm Adjustments
0-Bdrm ~ 0.7
1-Bdrm 0.8
2-Bdrm 0.95
3-Bdrm 1.085
4-Bdrm 1.225
Admwstn[ivc Guidelivee
AffuNubl<HOUSmS r~oduaion Pmgr~m
Attachment 3-D
ATTACHMENT 3-E
Sample of Deed Restrictions
Recording Requested Bv:
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 RENTS & OCCUPANCY OF REAL PROPERTY
THIS AGREEMENT IMPOSING RESTRICTIONS ON RENTS & OCCUPANCY OF
REAL PROPERTY, entered into this [] day of [month, 20--], by and between the
CITY OF SANTA MONICA, a Municipal Corporation (hereinafter the "City"), and [name of
applicant], a [California Limited Liability Company] (hereinafter the "Developer"), is made
with reference to the following:
RECITALS:
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, VAR etc] for
the proposed development Project. The City issued this approval subject to conditions
which are imposed for the benefit of the 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.
Adminismn~ive Guiddixs
AKoNable Homing Prod~etion Pmgnm
Attachment 3-E: Page 1
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as
follows:
1. CONTRACT W ITH CITY. [Select as applicable]
Developer hereby acknowledges that in issuing the [type of permit AA, VAR etc.]
Permit for the Project, the City is reducing or modifying development standards otherwise
applicable to the Project such as increasing unit density, reducing parking standards, and
other property development standards. In exchange for such forms of assistance from the
City, which are of financial benefit to the Developer, Developer has entered into this
contract with the City and agreed to the other conditions of the [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 households which meet income
requirements specified in Section 2 of this Agreement. 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).
[OR if rio density bonus or incentives, use the following paragraph]
In exchange for the development approvals from the City authorized by [Type of
permit AA, VAR, TM, etc.], which are of financial benefit to the Developer, Developer
entered into this contract with the City and agreed to the other conditions of [type of permit
-see above] including the requirement included in the Agreement to provide and maintain
X# (#) affordable unit of housing on site for occupancy by qualified households which meet
the income requirements specified in Section 3 of this Agreement. The parties agree and
acknowledge that this is a contract providing forms of assistance to the Developer with the
meaning Civil Code Section 1954.52(b).
2. DEVELOPER TO PROVIDE (Total # deed restricted unitsl AFFORDABLE
UNITS.
(a) Developer shall provide and maintain [#] affordable housing units on the
Subject Property that shall be affordable to households which earn not more than [fifty
percent (50%)] of the then current annual median income adjusted for household size, for
the Los Angeles County Area, as defined bythe United States Department of Housing and
Urban Development ("HUD") [if very-low units, or sixty percent (60%) if low affordable
units, or eighty percent (SO%), or one hundred percent (100%) if moderate affordable
units as appropriate]. Three (3) [insert correct number] of the affordable units shall
contain at least two bedrooms and one [insert correct number] of the affordable units
shall contain at least three bedrooms. The affordable units at the subject property shall be
rented to and affordable to [very-low, low or moderate (select correct rate)] income
households as follows:
Administre,ive Guidalmu
Affi,dable Hoosin5 &oducnon Pmgam
Attachment 3-E: Page 2
(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 of this 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.
3. TERMS FOR THE RENTAL OF THE AFFORDABLE UNITS.
[specify unit #=s] units shall be rented to [very low, low or moderate
(select appropriate level). ] income households which meet income requirements
specified in Sections 2 and 4 of this Agreement, not to exceed the maximum allowable
rental rates established as follows:
(a) If the household is receiving assistance under the .Section 8 Existing
Assistance Program or similar subsidy program, the maximum allowable rent shall be that
which is established by the Section 8 subsidy program.
(b) If the household is not receiving federal rental assistance as defined above,
the maximum allowable rent for the unit shall be calculated as follows:
Median income x 50%x Bedroom Adjustment Factor x 30%=Maximum Allowable
Rent (Annual). [ if Very-Low Income, otherwise delete ]
Median income x 60%x Bedroom Adjustment Factor x 30%=Maximum Allowable
Rent (Annual). [if Low Income, otherwise delete ]
Median Income x [ 80%or 100%(select appropriate rate)] x Bedroom Adjustment
Factor x 30% =Maximum Allowable Rent (Annual). [if Moderate Income otherwise
delete]
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 of this Agreement is as follows:
Median Income (1) x Income Range (2) x Bedroom Adjustment (3) x 30%
Median Income - As periodically published by HUD, currently $75,800 (for a
family of four).
2. Income Ranges
Aamwscmeva Goiaalmu
AfforAable F{ousing PeoduRinn Pm~mm
Attachment 3-E: Page 3
Very-Low is 50% or less of median income [delete if inapplicable]
Low is 60% or less of median income [delete if inapplicable]
Moderate is 80%, or 100% or less of median income [delete inapplicable ]
3. Bedroom Adjustment Factors
0 Bedroom .7 3 Bedrooms 1.085
1 Bedroom .8 4 Bedrooms 1.225
2 Bedroom .95
Affordable Rents 2008 [Housing Div. updates figures once a year]
0-BR 1-BR 2-BR 3-BR
Very-Low (50%) $663 $758 $900 $1,028
Low (60%) $796 $910 $1,080 $1,234
Moderate (100%) $1,327 $1,516 $1-,800 $2,056
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 of the
substitute standard to binding arbitration in accordance with the rules of the American
Arbitration Association.
4. INCOMES. OCCUPANCY AND ELIGIBILITY STANDARDS.
Except as required by section 2, Developer shall only rent the Affordable Units to
persons whose income, adjusted for household size, does not exceed the following income
guidelines:
Median Income x 50% x Household Adjustment Factor [for Very-Low, delete if
inapplicable]
Median Income x 60% x Household Adjustment Factor [for Low, delete if
inapplicable]
Median Income x 80% or 100% x Household Adjustment Factor [for Moderate,
delete inapplicable rate]
AdmiNSmoive Guidclincs
Affo,Anbla Housing Protlwnon Pmtvm
Attachment 3-E: Page 4
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
If the 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 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 of the
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, financial, or economic interest, direct or indirect. For the
purposes of this 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 aCity-administered list of income-qualified
households, or self select households subject to the following requirements.
Admwnm,ive Goideliwx
AffoNable Housing Pmduction Prayam
Attachment 3-E: Page 5
Developer shall give preference in leasing the affordable units to persons evicted
pursuant to the EIIis Act, Government Code Section 7060, persons residing in Santa
Monica, and persons working in Santa Monica, unless preempted by HUD grant program
requirements or other government requirements that pertain to tenant selection.
Developer shall certify the income of the prospective tenants subject to City
certification, prior to selection for occupancy in order to ensure that the occupancy
requirements specified in Section 4 of this 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 account statements, financial statements, stock
certificates, etc. in order to verify the gross annual household income.
(c) Developer shall compute gross annual household income bytotaling all income,
and adjusting as follows:
(1) Deduct $480 for each dependent, defined 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 of three 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 of the 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..
The Conditions, Covenants and Restrictions (C,C & R's) for the Subject Property
shall include reference to all applicable obligations and duties of the parties created bythis
Agreement. The City Attorney of the City of Santa Monica shall approve as to form the C,C
& R's prior to recordation of the final subdivision or parcel map for the Subject Property.
Adminisva,ive Guidelivo~
AfioNable Housig Productiov ProSmm
Attachment 3-E: Page 6
Developer shall rent the Affordable Units pursuant to the terms and conditions of a
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 of
the lease agreement to be used and a brief marketing plan and description of the tenant
selection process to be used. In addition to any other provision required by the City to
ensure compliance with Chapter 9.56 and the Administrative Guidelines for Chapter 9.56,
said lease or rental agreement shall contain a provision prohibiting subleasing of the
Affordable Units or revising the composition of the 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.
8. APPOINTMENT OF OTHER AGENCIES.
The City may designate, appoint or contract with any other public agencytoperform
City's obligations under this Agreement.
9. SEVERABILITY.
In the event any limitation, condition, restriction, covenantor provision contained in
this Agreement is held to be invalid,. void or unenforceable by any court of competent
jurisdiction, the remaining portions of this 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
Admims,nsiva Cuidelires
Afiardabla Housing Pmductian Pmgrum
Attachment 3-E: Pagel
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 manrier 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 Cduncil, boards and commissions, officers, agents, servants or employees
from and against any and all claims, loss, damage, charge or expense, whether director
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
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
Propertyfor the benefit of the 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 Subject 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 22 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 of the
subject. property on the basis of sex, race, color, religion, ancestry, national origin, sexual
AAmwsrsiva Guideli,us
AffuNablc Hwsmg PmAuainn Pm~rum
Attachment 3-E: Page 8
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 proceeding in a court of competent jurisdiction by any aggrieved party, including but
not limited to, the parties hereto, or there respective successors, heirs and assigns.
The right to specific performance of this Agreement shall be an appropriate remedy
for a breach of this Agreement because of the uniqueness of the Property and the inherent
difficulty in calculating adequate damages.
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.
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. CITY AUTHORITY TO ENFORCE LAW
The obligation of the Owner pursuant to this Agreement are in addition to, and in no
way limit, the authority of the City to enforce all laws and regulation applicable to the
Subject Property. Nothing in this Agreement shall limit the authority of the City to take
appropriate action to enforce the terms of any permit issued by the City relating to the
Subject Property.
19. DURATION OF AGREEMENT.
This Agreement shall terminate and become null and void fifty-five (55) years from
the date of recordation hereof.
20. AMENDMENT OF AGREEMENT.
Admws[m[ive Guidelivcs
Affivdable Hovs ing Pmduttiov Pro~mm
Attachment 3-E: Page9
This Agreement, and any Section, subsection, or covenant contained herein, may
be terminated or amended only upon the written consent of all parties hereto.
21. RECORDING OF AGREEMENT.
The parties hereto shall cause this Agreement to be recorded in the Official Records
of the County of Los Angeles.
22. 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 of the
Housing Act of 1937, the number of occupants in the household, whether there have been
any changes in the composition of the household, whether any vacancies have occurred
during the reporting year, and any changes in income of the residents of the affordable
units:
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]
IN WITNESS WHEREOF, the parties hereto have caused-this Agreement to be executed
as of the day-and year first above written.
.1dmi,iistn[ive G~idelires
rdable Houcins PmJvc,ion Pmgam
Attachment 3-E: Page 70
ATTEST: "CITY"
CITY OF SANTA MONICA
a Municipal Corporation
MARIA STEWART
City Clerk By:
P. Lamont Ewell
APPROVED AS TO FORM: City Manager
SANTA MONICA CITY ATTORNEY
MARSHA JONES MOUTRIE
City Attorney "DEVELOPER"
[Name], LLC
a California limited liability company
[name, and title, i.e. Manager, trustee,
owner etc]
Admi~ds~.a~ive G~iJSlines
AffNable Hmisivg Production Pmgam
Attachment 3-E: Page 11
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 OF THE COUNTY RECORDER OF SAID
COUNTY.
(Insert Complete Legal Description)
APN
Administrerire GuiJdiucs
AfE rdeble Housing Raluetiav Progrem
Attachment 3-E: Page 12
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
ss.
On f ; 2008, before me
the undersigned, Notary Public personally appeared [project applicant], who proved 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, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
Type of Document:
Document Date:
Address:
Number of Pages:
WITNESS my hand and official seal.
Notary Public in and for said State
Aaaa~~~rari~o cmaaNes
Affordable Hnacivy Production Pm~ram
Attachment 3-E: Page 13
ATTACHMENT 4-A
Sample Application for Affordable Housing Waiting List
(pending)
ndnuNSr~~mz c~~azr
AfioNvble Horsing Pcadocfion Progwn
Attachment 4-A
ATTACHMENT 4-B
Referral Status Form
(pending)
Admwmm~va Galdcl'mze
AftoMabk HousmS Production Program
Attachment 4-B
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