O2385City Council Meeting: 12/13/2011 Santa Monica, California
ORDINANCE NUMBER 2385 (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE SECTION 9.56.050
AND SECTION 9.56.060 TO AUTHORIZE THE ESTABLISHMENT BY RESOLUTION
OF COMPLIANCE MONITORING FEES BASED ON THE REASONABLE
REGULATORY COSTS OF ENSURING COMPLIANCE WITH THE CITY'S
AFFORDABLE HOUSING PRODUCTION PROGRAM AND ANNUALLY MONITORING
AFFORDABLE HOUSING UNITS
WHEREAS, the City's Affordable Housing Production Program, Chapter 9.56
of the Santa Monica Municipal Code (the "AHPP "), requires developers of multi - family
housing project to contribute to affordable housing production and thereby help the City
meet its affordable housing goals; and
WHEREAS, the requirements of the AHPP 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; and
WHEREAS, subject to certain exceptions, the requirements of the AHPP can be
met through various alternatives including providing affordable housing units on -site,
providing affordable housing units off -site, acquiring land for affordable housing, and
paying an affordable housing fee; and
WHEREAS, when a developer has chosen to meet the requirements of the
AHPP through the provision of on -site or off -site rental housing and is preparing to rent
the affordable unit(s), the developer must select households from a City - developed list
of income - qualified households except for ownership projects of four or more units
where income- eligible households may be selected by the developer, submit a copy of
the proposed lease agreement for City review /approval, and prepare a deed restriction
to be recorded on the property consistent with the requirements of the AHPP; and
WHEREAS, when a developer has developed an ownership project and is
preparing to initially sell the affordable unit(s), the developer must submit a brief
marketing plan and a description of the buyer selection process which includes
implementation of the City's local preference policy, submit the buyer's income - eligibility
documentation for City review /verification, and provide information regarding buyer
financing terms for City review for consistency with affordability criteria established in
Section 9.56.100 and the Administrative Guidelines for the AHPP; and
WHEREAS, after the developer has rented the affordable unit(s), the developer
or his /her successor must 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
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information for each affordable unit for the prior year, verification of income of the
household occupying each affordable rental unit throughout the prior year, and such
other information as may be required by City staff to determine compliance with the
AHPP; and
WHEREAS, when a vacancy for an affordable rental unit occurs and the
developer is preparing to re -rent the unit, the developer must select households from a
City - developed list of income - qualified households unless ownership housing; and
WHEREAS, when the owner of an affordable ownership unit seeks to sell that
unit, the owner must submit a brief marketing plan and a description of the buyer
selection process which includes implementation of the City's local preference policy,
submit the buyer's income - eligibility documentation for City review /verification; and
provide information regarding buyer financing terms for City review for consistency with
affordability criteria established in Section 9.56.100 and the Administrative Guidelines
for the AHPP; and
WHEREAS, when a developer seeks initially to lease his /her affordable unit(s),
City staff must engage in the following work efforts: review sample lease agreement,
obtain prospective tenant names from City- administered waiting list, interview applicant
and review income /asset documentation for eligibility, provide referral list of income -
qualified applicants to developer, review deed restriction and add the record to
monitoring database for new unit; and
WHEREAS, when a developer seeks initially to sell an affordable ownership unit,
City staff must engage in the following work efforts: review deed restriction and add
record to monitoring database for unit, review draft marketing plan, review buyer
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income /asset documentation, review purchase agreement and buyer financing terms,
and provide program information to buyer regarding resale restrictions; and
WHEREAS, when a developer submits his /her annual report for an affordable
rental unit, City staff must engage in the following work efforts: prepare letter to owner
regarding the annual report, review submitted report, schedule monitoring appointment,
engage in compliance monitoring, and review tenant annual income recertification files;
and
WHEREAS, when a developer submits his /her annual report for an affordable
ownership unit, City staff must engage in the following work efforts: prepare letter to
owner regarding the annual report and review annual report documentation to confirm
that designated owner still lives in unit; and
WHEREAS, when a developer seeks to re -lease an affordable unit, City staff
must engage in the following work efforts: obtain prospective tenants from City -
administered waiting list and schedule appointment, interview applicant and review
income /asset documentation for eligibility, and provide referral list of income - qualified
applicants to developer; and
WHEREAS, when an owner seeks to re -sell an affordable unit, City staff must
engage in the following work efforts: review new buyer income /asset documentation for
eligibility, review purchase agreement and new buyer financing terms, and provide
program information to new buyer regarding resale restrictions; and
WHEREAS, on June 14, 2011, the City Council directed staff to prepare an
ordinance authorizing the establishment of a fee to recover the City's reasonable
regulatory costs of performing investigations and audits to ensure that the affordable
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housing units comply with the AHPP and this ordinance has been prepared in response
to Council's direction; and
WHEREAS, the November 8, 2011 City Council staff report details the tasks that
staff must undertake, the time for performing these tasks, the classification of the
employees performing these tasks, their hourly rate, and the overall staff costs of
ensuring compliance with the AHPP and monitoring affordable housing units; and
WHEREAS, compliance monitoring fees are necessary to permit the City to
offset the reasonable regulatory costs associated with ensuring compliance with the
AHPP and monitoring the affordable housing units,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Santa Monica Municipal Code Section 9.56.050 is hereby amended
to read as follows:
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: (1) twenty percent of the total units as
ownership units for moderate - income households, or as an
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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(b) and 1954.53(a)(2).
(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 of the
project for low 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
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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 minimum 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 significant identifiable
differences between affordable housing units and market
rate units visible from the exterior of the dwelling units,
provided that all dwelling units conform to the requirements
of the applicable Building and Housing Codes. However,
each affordable housing unit provided shall have at least two
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bedrooms unless: (1) the proposed project comprises at
least ninety -five percent one bedroom units, excluding the
manager's unit, in which case the affordable housing units
may be one bedroom; (2) the proposed project comprises at
least ninety -five percent zero bedroom units, excluding the
manager's unit, in which case the affordable housing units
may be zero bedroom units; (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 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 feet
0
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 a multi - family
project or a phase of a multi - family project shall be
constructed concurrently with the construction of market rate
units in the multi - family project or phase of that project.
(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 - qualified
households.
(h) Each multi - family project applicant, or his or
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
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information for each affordable unit for the prior year,
verification of income of the household occupying each
affordable unit throughout the prior year, and such other
information as may be required by City staff.
(i) A multi - family project applicant in a residential
district who meets the requirements of this Section shall be
entitled to the density bonuses and incentives provided by
Sections 9.04.10.14.050 and 9.04.10.14.060 and the
waiver /modification of development standards provided by
Section 9.04.10.14.070. A multi - family project applicant in a
commercial or industrial district shall be entitled to the
development bonuses and incentives provided in the Land
Use and Circulation Element and implementing ordinances.
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.
(k) The City Council may by resolution establish
compliance monitoring fees which reflect the reasonable
regulatory cost to the City of ensuring compliance with this
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Section when affordable housing units are being initially
rented or sold, when the required annual reports are
submitted to the City, and when the units are being re -sold
or re- leased:
SECTION 2. Santa Monica Municipal Code Section 9.56.060 is
hereby amended to read as follows:
9.56.060 Off -site option.
The following requirements must be met to satisfy
the off -site option of this Chapter:
(a) The multi - family project applicant for
ownership projects of four or more units in multi - family
residential districts shall agree to construct twenty -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.,
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purchase agreement, option to purchase, lease) subject to
City review to ensure that the proposed development is
consistent with the City's housing objectives and projects.
(d) The off -site units shall be located within a
one - 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, based upon substantial
evidence, that the location of off -site units in a location
different from that specified in this Section better
accomplishes the goals of this Chapter, including maximizing
affordable housing production and dispersing affordable
housing throughout the City.
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(h) The Housing Division of the Resource
Management Department shall prepare administrative
guidelines to implement this Section.
(i) The City Council may by resolution establish
compliance monitoring fees which reflect the reasonable
regulatory cost to the City of ensuring compliance with this
Section when affordable housing units are initially being
rented or sold, when the required annual reports are
submitted to the City, and when the units are being re -sold
or re- leased.
SECTION 3. 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 4. 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.
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SECTION 5. The Mayor shall sign and the City Clerk shall attest to the passage
of this Ordinance. The City Clerk shall cause the same to be published once in the
official newspaper within 15 days after its adoption. This Ordinance shall become
effective 30 days from its adoption.
APPROVED AS TO FORM:
MAR HA,lq S MO RIE
City orn y
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Approved and adopted this 13th day of December, 2011.
if
Richard Bloom, Mayor
State of California )
County of Los Angeles ) ss.
City of Santa Monica )
I, Denise Anderson - Warren, Acting City Clerk of the City of Santa Monica, do
hereby certify that the foregoing Ordinance No. 2385 (CCS) had its introduction
on November 22, 2011, and was adopted at the Santa Monica City Council
meeting held on December 13, 2011, by the following vote:
Ayes: Council members:
Noes: Council members:
McKeown, O'Connor, Shriver
Mayor Pro Tern Davis, Mayor Bloom
Holbrook
Absent: Council members: O'Day
A summary of Ordinance No. 2385 (CCS) was duly published pursuant to
California Government Code Section 40806.
ATTEST:
Denise Anderson- Warren, Acting City Clerk