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HomeMy WebLinkAbout10/05/2004, PH 3 - HOUSING ELEMENT PROGRAM IMPLEMENTATION U council Mrd.D. 10-5-04 j acEnaa Repoin '� 3 CITY OF SAN LU I S O B I S P O FROM: John Mandeville, Director of Community Development Prepared By: Jeff Hook,Senior Planner SUBJECT: HOUSING ELEMENT PROGRAM IMPLEMENTATION CAO RECOMMENDATION Introduce ordinances amending the Municipal Code to implement Housing Element programs: 1) Inclusionary Housing (Ch. 17.91); 2) Residential Growth Management (Ch. 17.88); 3) Downtown Housing Conservation (Ch; 17.86); 4) Architectural Review Commission exemption for Small Residential Projects (Ch. 2.48); and 5) Non-Residential Uses Right To Continue (Ch. 17.22); and adopt a resolution amending the Community Design Guidelines. DISCUSSION Background Last March, after 18 months of public meetings and detailed review, Council adopted the updated General Plan Housing Element. The Housing Element is a policy and program "rich" document and requires changes to city codes and standards to implement. The proposed ordinance changes follow closely,and carry out, Council's direction on important housing goals. The Housing Element charts an ambitious course to expand housing opportunities for all income groups in San Luis Obispo and its effectiveness depends, in part, on timely follow-up actions. To that end, staff has prepared five ordinance amendments that will help jump-start our affordable housing efforts. The draft ordinances are ready to introduce for adoption. In addition, the Community Design Guidelines should be amended by resolution to include an exemption for small residential development projects. Planning Commission Action Table 2A, the Housing Element's new method of determining the inclusionary housing requirement, necessitated more ordinance changes than did the other new programs due to the new "affordability by design" provisions built into the Housing Element. Consequently, while the amendments do not set new policy direction and are consistent with Council direction, staff referred the draft inclusionary ordinance to the Planning Commission for review. At its September 22nd meeting, the Commission recommended that Council approve the proposed amendments on a 5:0 vote (Attachments 1 and 2). Ordinance Amendments Summary The targeted Housing Element programs and a summary of the proposed ordinance amendments .that implement them are summarized below. Detailed legislative drafts are provided in Attachments 3-8. The amendments carry out adopted Housing Element programs. In a few sections, minor changes are included to clarify adopted policy or procedures already in effect. 3 - I Housing Element Implementation,October 5,2004 Council Meeting Page 2 Program 2.3.1 — "Inclusionary Housing." The amendments modify the formula under which new residential subdivisions and residential development projects meet the inclusionary requirement, as shown in Tables 2 and 2A, as further described in the Planning Commission Staff Report, Attachment 2. Higher density, compact housing developments that tend to be more affordable by design have a lower inclusionary housing requirement than larger homes in low- density developments. All non-exempt development projects are responsible for building at least one affordable dwelling or paying equivalent in-lieu fees. The amendments also: 1) clarify how in-lieu fees are determined for projects in which the adjustment factor under Table 2A equals zero (Ch. 17.91.040.2) and for custom lot residential subdivisions (Ch. 17.91.060), 2) explain how the adjustment factor is applied (Ch. 17.91.050.13), and 3) clarify how the inclusionary housing requirement applies to mixed-use development projects (Ch. 17.91.050.C). (Attachment 3) Program 6.3.1 — "Growth Management Exemption for Moderate Income Housing." The Residential Growth Management Regulations (SLOMC Ch. 17.88) already exempt housing that is affordable to very-low and low-income households. This amendment expands the exemption to include new housing in the Downtown Core (C-D zone) and new housing in other zones that is enforceably restricted to moderate income households. In expansion areas, the overall number of dwellings built must still conform to the growth management phasing plan. (Attachment 4) Program 3.3.5 — "Downtown Housing Conservation." The amendments establish a "no net loss" housing conservation program by amending the Downtown Housing Conversion Permit ordinance. It does this by requiring developers within the Downtown Planning Area to ensure their development projects will not remove more dwellings than have been built in the downtown planning area since March 30, 2004. If the Community Development Director determines a development project would result in a net housing loss, the developer must replace the dwellings to be removed, whether occupied or not. Dwellings must be replaced on a one — for - one basis and built concurrently with the development project. Replacement units may be of any size, type, or tenure, consistent with Zoning Regulations and as approved by the Architectural Review Commission or the Director. Replacement dwellings must be located within the same sub-area as the dwellings lost (either the Downtown Core or the area surrounding the Downtown Core and within the Downtown Planning Area), but need not be located on the same site as previously existed. Exceptions to the no net loss requirement require Council approval, subject to specific findings in the ordinance. (Attachment 5) Program 6.3.14 — "Architectural Review Commission Exemption for Small Residential Projects." The amendment exempts the construction, relocation, rehabilitation or remodeling of up to four dwellings of up to 1200 square feet each from Architectural Review Commission review. New multi-unit housing would require "minor or incidental" or staff level architectural review, unless the dwellings are located on a sensitive or historically significant site. (Attachment 6) The ordinance change also requires a change to the Community Design Guidelines section describing when architectural review is required. This latter change is accomplished by Council resolution. (Attachment 8) 3 Housing Element Implementation,October 5,2004 Council Meeting Page 3 Program 11.3.1 — "Continuance of Legal Non-residential Uses." This amendment addresses concerns that new mixed-use developments may threaten the ability of legal, conforming non- residential uses to continue where new housing is proposed on adjacent or nearby sites. The proposed ordinance adds a section to Zoning Regulations requiring that housing developments adjacent to or within 300 feet of such uses shall include a condition requiring constructive notice to new home buyers and/or renters of possible characteristics associated with non-residential uses, such as noise,odors, vibration, and lighting. (Attachment 7) ATTACHMENTS 1. Draft Planning Commission Minutes, September 22, 2004 2. Planning Commission Staff Report on Inclusionary Housing Ordinance Amendments, September.22, 2004 3. Draft Ordinance Amending SLOW Ch. 17.91, modifying the Inclusionary Housing Requirement 4. Draft Ordinance amending Ch. 17.88 to exempt Downtown Housing and Affordable Moderate-Income Housing from Residential Growth Management Regulations. 5. Draft Ordinance Amending SLOMC Ch. 17.86 to Establish a Downtown Housing Conservation Program. 6. Draft Ordinance Amending SLOMC Ch. 2.48 regarding Architectural Review for small residential development projects. 7. Draft Ordinance Amending SLOW Ch. 17.22 to Protect Legal, Conforming Non-Residential Uses Adjacent To Or Nearby Proposed New Housing Developments. 8. Draft Resolution amending the Community Design Guidelines regarding what projects require architectural review. JhWhousing element implementation/CAR10-5-04HEimpkment � - 3 Draft Planning Commissio, inutes September 22, 2004 Page 3 Attachment 1 COMMISSION COMMENTS: Commission discussion focuse/one project's consistency with the Airport Land Use Plan (ALUP). Commr. Loh moved the staff rendation with finding #8 deleted and modifying Condition 46 which requires/the proiect to be consistent with the ALUP to the satisfaction of the Community evelo ment Director. Seconded by Commr. Miller. Commr. Osborne noted that a could not support the motion because he felt it would create a housing imbalance ecause it would be adding more businesses in town with insufficient housing. AYES: Commrs. Loh, Mil r, Aiken, and Caruso NOES: Commr. Osborne ABSENT: Commrs. Boswell and ristianson ABSTAIN: None The motion carried on a 4:1 vote. 3. 55 Broad Street. PD and ER 163-02; Re uest to modify an existing Planned Development Zoning district to accommodate 0 residential units; R-4-PD zone; Morrison, LLC, applicant. (Phil Dunsmore) To be ontinued to October 13, 2004. This item was continued without discussion to the mee ing of October 6, 2004. 4. 715 Tank Farm Road. PD 78-04; Request to amend the property's large office Planned Development to allow medical offices- -S-SP-PD zone; Bill Lee, applicant. (Tyler Corey) Application Withdrawn. This item was withdrawn; there was no di ussion. 5. 735 Tank Farm Road. PD 1 -04; Request to amend the property's large office Planned Development to allo medical offices; C-S-SP-PD zone; Edna Valley Office LLC, applicant. (Tyler Co ) Application Withdrawn. This item was withdrawn; there was no di cussion. 6. City-Wide. GPI 160-04; Amend the Inclusionary Housing Requirement (SLOMC Ch. 17.91) to implement Housing Element Program 2.3.1 regarding Table 2A adjustment factors and other procedural changes; City of San Luis Obispo, applicant. (Jeff Hook) Senior Planner Jeff Hook presented the staff report requesting that the Planning Commission recommend the City Council amend SLOMC Ch. 17.91 to implement Housing Element Program 2.3.1. , Draft Planning Comm issio,___�inutes September 22, 2004 Page 4 Attachment 1 PUBLIC COMMENTS: There were no comments made from the public. COMMISSION COMMENTS: Commr. Loh moved to recommend to City Council to amend this Chapter 17.91 to implement Housing Element Program 2.3.1. Seconded by Commr. Osborne.. AYES: Commrs. Loh, Osborne, Miller, Aiken, and Caruso NOES: None ABSENT: Commrs. Boswell and Christianson ABSTAIN: None The motion carried on a 5:0 vote. --elDWENT AND DISCUSSION. 7. Staff: A. Agenda Forecast: Deputy Director Ronald W senand gave an agenda forecast of upcoming projects. 8. Commission: Commr. Miller commented o e traffic on Santa Rosa and asked if it were possible to change the timing on the traffic sl Is. Commr. Loh noted that all the traffic is div d to Casa Street, which is very narrow, and suggested the issue be addressed. ADJOURMENT: With no further business before the Co ssion, the meeting adjourned at 9:10 p.m. to a special meeting scheduled October 6, 2004, at 7:00 p.m. in Council Chamber. Respectfully submitted by Irene Pierce Recording Secretary 3 - S� Attachment 2 CITY OF SAN LUIS OBISPO PLANNING COMMISSION STAFF REPORT ITEM# �o FROM: Michael Draze,Deputy Community D velopment Dir. MEETING DATE: 9/22/04 Prepared By: Jeff Hook, Senior Plan r FILE NUMBER: GPI 160-04 PROJECT ADDRESS: Citywide SUBJECT: Amend the Inclusionary Housing Requirement (SLOMC Ch. 17.91) to implement Housing Element Program 2.3.1. regarding Table 2A adjustment factors and other procedural changes. RECOMMENDATION: Recommend the City Council amend SLOMC Ch. 17.91 to implement Housing Element Program 2.3.1. as shown in Attachment 1. BACKGROUND Situation/Previous Review Last March, after 18 months of public meetings and detailed review, Council adopted the updated General Plan Housing Element. The Housing Element is a policy and program "rich" document and requires changes to city codes and standards to implement. One of the highlights of the new Housing Element is the Commission-initiated change to the Inclusionary Housing Requirement to promote "affordability by design." As required by HE Program 2.3.1, staff has drafted an amended ordinance to implement the adopted policy, shown in Attachment 1. The City Council adopted the Commission's recommended Program 2.3.1 and modified the recommended "Tables 2 and 2A." The amended ordinance follows closely, and carries out, Commission and Council direction on this important housing program. The amendments also: 1) clarify how in-lieu fees are determined for projects in which the adjustment factor under Table 2A equals zero (Ch. 17.91.040.2) and for custom lot residential subdivisions (Ch. 17.91.060), explain how the adjustment factor is to be applied (Ch. 17.91.050.B), and clarify how inclusionary housing requirement applies to mixed-use development projects (Ch. 17.91.050.C). These are essential details to implement the program, but which were not discussed by the Commission. The amendments do not, however, set new policy direction and are consistent with the intent of previous Commission direction. So while the amendments are essentially "housekeeping", given the program's importance staff felt it necessary to refer to the Commission for concurrence. DISCUSSION What the Commission Recommended The Commission recommended a new table be added to the Housing Element, Table 2A, which would provide incentives for the construction of more compact, higher-density housing. For developments of 20 or more dwellings, the inclusionary requirements would be reduced or eliminated for compact housing, and equal to or increased beyond the base requirement for larger, low-density housing. Residential developments with an average floor area of up to 1,200 3 - (0 Attachment 2 Housing Element Implementation,GPI 160-04 Page 2 square feet required only one affordable unit, regardless of density. The inclusionary requirement for 5-19 dwellings was not subject to Table 2A. The Commission also shifted more responsibility to commercial development to provide affordable housing by increasing the in-lieu fees from two percent to five percent, and increased the in-lieu fee for residential developments in expansion areas from ten to fifteen percent to more closely reflect actual costs of building affordable housing. These requirements are shown in Recommended Table 2 and 2A below. Recommended TABLE 2 Indusionag Housing R uirement Type of Developmiw Project Residential,5-19 Dwellings Residential,20 or more Commercial Dwemm Build 3%low or 5%moderate cost Adjust base requirement Build 2 ADUs per acre,but not less than I ADU Affordable Dwelling Units(ADUs2),but per Table 2A per project; Or a not less than 1 ADU per project: U`o or pay in-lieu fee equal to 596 of building pay in-lieu fee equal to 5%of building valuation. valuation.3 °o Build 5%low-and 10%modcrate-cost Build 2 ADUs per acre,but not less than I ADU ADUs,but not less than I ADU per per project: project, or W e- or Adjust base requirement pay in-lieu fee equal to 5%of building 5 pay in-lieu fee equal to 15%of building per Table 2A valuation. valuation. - in-lieu fee based on the above formula.or dedicate real property. Developer may build affordable housing in the requited amounts.pay . 'Affordable Dwelling Units must meet City affordability criteria listed in Goal 1.22. 3"Building Value"shan mean the total value of all construction wort for which a permit would be issued as determined by the Chief Building Official using the Uniform Building Code. Recommended TABLE 2A Projed Dens4 inclusionary Housing Requirement (1ensiU, Adjustment Factor= UnitWNet Acre)r Average Unit Size(sq.M) Upto1,209 1,201-1,500 1301-2000 2,001-2,500 2,501-3,000 >3.000 36 or more 0 0 .75 1 1.25 1.5 24-35.99 0 0 .75 1.25 1.25 1.5 12-23.99 0 .25 1 1.25 1.5 1.75 7-11.99 0 .5 1 1.5 1.5 1.75 A 0 .5 i 35 11.5 11.75 2 Including allowed density bonus,where applicable. =Multiply the total base lnclasionary Housing Requirement(either housing or in-lieu percentage) by the adjustment factor to determine requirement. What Council Approved Council supported the Commission's recommendation and made some changes to Table 2A. The finally Adopted Table 2 and 2A is shown below. As adopted, Table 2A applies to all non- exempt residential developments of five or more dwellings. 1,100 square feet is the maximum average floor area at which Table 2A doesn't apply. Council also slightly modified the Table 2A � 1 Attachment 2 Housing Element Implementation, GPI 160-04 Page 3 multipliers, but overall, the Commission's "affordability by design" program remained intact. The Housing Element charts an ambitious course to expanded housing opportunities for all income groups in San Luis Obispo, and its effectiveness depends, in part, on timely program implementation. One of the Element's new programs calls for amending the Inclusionary Housing Requirement to encourage housing that is "affordable by design." Adopted TABLE 2 Inclusionary Housing Requirement Type of Development Project' Residential-Adjust base requirement per Table 2A Commercial 9 Build 3%low or 5%moderate income Affordable Dwelling Units Build 2 ADUs per acre,but not less than I ADU E (ADUsr),but not less than l ADU per project; per project; o,3 or tj pay in-lieu fee equal to 5%of building valuation.` pay in-lieu fee equal to 5%of building e valuation. C ` er 7 Build 5%low-and 10%moderate income ADUs,but not less than 1 Build 2 ADUs per acre,but not less than 1 ADU ADU per project; per project; aor or Q pay in-lieu fee equal to 15%of building valuation. pay in-lieu fee equal to 5%of building valuation. C Residential developments of four or less dwellings,and commercial developments of 2,500 gross square feet of floor area or less:are exempt from these requirements. 2Affordable Dwelling Units must meet City affordability criteria listed in Goal 2.1. ;Developer may build affordable housing in the required amounts,pay in-lieu fee based on the above formula,or dedicate real property,or a combination of these,to City approval. `"Building valuation" shall mean the total value of all construction work for which a permit would be issued, as determined by the Chief Building Official using the Uniform Building Code. Adopted TABLE 2A Project Density Inclusionary Housing Requirement (Density Adjustment Factor' Units/Net Acre)' Average Unit Size(sq.ft.) Up to 1,100 11101-1,500 1,501-2000 2,001-2,500 2501-3,000 >3,000 36 or more 0 0 .75 1 1.25 1.5 24-35.99 0 0 .75 l 1.25 1.5 12-23.99 0 .25 1 1.25 1.5 1.75 7-11.99 0 .5 1 1.25 15 1.75 <7 1 0 .5 1.25 11.5 1.75 2 Including allowed density bonus,where applicable. 'Multiply the total base Inclusionary Housing Requirement (either housing or in-lieu percentage) by the adjustment factor to determine requirement. At least one enforeeably-restricted affordable unit is required per development of five or more units. Ordinance Refinements The proposed amendments include refinements to the Inclusionary Housing Requirement that were not apparent when the Housing Element was adopted. Council emphasized in the action to approve Program 2.3.1 that all non-exempt development projects should be responsible for building (or paying an equivalent in-lieu fee for) at least one enforceably-restricted, affordable 3 ---� Attachment 2 Housing Element Implementation, GPI 160-04 Page 4 dwelling. To implement the program, it became necessary to clarify in the ordinance procedures for developers who chose to pay in-lieu fees instead of building affordable housing since for some "compact" developments, the Table 2A multiplier would be "0", resulting in no in-lieu fee. The ordinance sets a minimum adjustment factor of 0.25 (resulting in a minimum in-lieu fee of 1.25% in-city or 3.75% for residential development in expansion areas). The Inclusionary Housing Requirement for mixed-use developments of five or more dwellings is based on the commercial requirement, as adjusted by Table 2A. The ordinance also specifies that for custom- lot residential subdivisions in which the construction value of the homes is not known, the Director estimates the construction value based on lot size, maximum lot coverage, and Construction Valuation Data issued by the Building Official based on locally-adjusted, statewide building costs. Upon ordinance adoption, footnotes will be added to Table 2 and 2A to note these requirements. RECODMENDATION Recommend Council approved the amendments to SLOW Ch. 17.91, modifying the Inclusionary Housing Requirement, as shown in Attachment 1. Attachments: 1. Legislative Draft Ordinance. 2. Excerpt, Adopted Housing Element, Program 2.3.1 JAMOOKUiousing Elemt Imp1ementatlon\PCsmffreport19-22-04.doc 3-��i Attachment 2 2.3 Programs 2.3.1 Amend the Inclusionary Housing Regulations to require that new residential subdivisions and residential development projects meet the inclusionary requirement by: 1) building the required affordable housing on- or off-site, 2) dedicating real property, or 3) rehabilitating units with guarantees the units remain affordable, pursuant to the Affordable Housing Standards, as shown in Tables 2 and 2A, and as further described in the Inclusionary Housing Ordinance. Table 2 Inclusionary Housing Requirement Type of Development Project' Residential-Adjust base requirement per Table 2A Commercial Build 3%low or 5%moderate income Affordable Build 2 ADUs per acre,but not less a Dwelling Units(ADUs 2),but not less than 1 ADU per than 1 ADU per project; project; oto Or pay in-lieu fee equal to 5%of building valuation.4 pay in-lieu fee equal to 5%of building valuation. C SBuild 5%low-and 10%moderate income ADUs,but Build 2 ADUs per acre,but not less not less than 1 ADU per project; than 1 ADU per project; e ° or or °' pay in-lieu fee equal to 15%of building valuation. pay in-lieu fee equal to 5%of building a valuation. Residential developments of four or less dwellings, and commercial developments of 2,500 gross square feet of floor area or less are exempt from these.requirements. 2Affordable Dwelling Units must meet City affordability criteria listed in Goal 2.1. 3Developer may build affordable housing in the required amounts, pay in-lieu fee based on the above formula,or dedicate real property,or a combination of these,to City approval. `"Building valuation" shall mean the total value of all construction work for which a permit would be issued,as determined by the Chief Building Official using the Uniform Building Code. 3 - l0 Attachment 2 TABLE 2A Project Inclusionary Housing Requirement Density Adjustment Factor' (Density Average Unit Size (sq. ft.) Units/Net Acre)' Up to 1,101-1,500 1,501-2000 2,001-2,500 2,501- >3,000 1,100 3,000 36 or more 0 0 .75 1 1.25 1.5 24-35.99 0 0 .75 1 1.25 1.5 12-23.99 0 .25 1 1.25 1.5 1.75 7-11.99 0 .5 1 1.25 1.5 1.75 <7 0 .5 1.25 1.5 1.75 2 Including allowed density bonus,where applicable. 'Multiply the total base Inclusionary Housing Requirement (either housing or in-lieu percentage) by the adjustment factor to determine requirement. At least one enforceably-restricted affordable unit is required per development of five or more units. _ Attachment 3 Housing Element Implementation,October 5,2004 Council Meeting Legislative Draft ORDINANCE NO. (2004 Series) AN ORDINANCE AMENDING SLOW CH. 17.9 1,MODIFYING THE INCLUSIONARY HOUSING REQUIREMENT Proposed changes: (new text in Italics; deleted twin stFikeeet) Sections: 17.91.000 Title. 17.91.010 Purpose. 17.91.020 Definitions. 17.91.030 Applicability and Exclusions. 17.91.040 General standards. 17.91.050 Procedures. 17.91.060 In-lieu housing fee. 1791.070 Affordable Housing fund. 1791.080 Real Property Dedication. 1791.090 Incentives. 17.91.100 Project Application. 1791.110 Conditions of development approval. 1791.120 Program Requirements. 17.91.130 Eligibility Screening. 17.91.140 Affordability Restrictions. 17.91.150 Shared Equity Purchase Program 17.91.151 Early Resale of Shared Equity Properties. 17.91.160 Management and Monitoring. 17.91.170 Enforcement and Appeals. 17.91.180 Severability. 17.91.000 Title. The provisions of this chapter shall be known collectively as the Inclusionary Housing Requirement of the City of San Luis Obispo. 17.91.010 Purpose. The purpose and intent of this chapter is to promote the public welfare by increasing the production and availability of affordable housing units, and to establish an inclusionary housing requirement which implements General Plan policies guiding land use and housing development. 17.91.020 Defmitions. For the purposes of this chapter, the following words and phrases shall have the meaning set forth below: A. "Affordable" means housing which can be purchased or rented by a household with very-low, low, or moderate income, as described in the City's Affordable Housing Standards 11� ham,--17.20, SLON4G). Attachment 3 Housing Element implementation,October 5,2004 Council Meeting B. "Affordable Housing Agreement" shall mean a written agreement between the developer, City and possibly additional parties which specifies the terms and conditions under which affordable housing requirements are to be met. C. "Affordable Housing Fund" means a fund established and administered by the City, containing in-lieu fees and other funds held and used exclusively to increase and improve the supply of affordable housing. D. "Affordable Housing Project" shall mean a development project in which one hundred percent of the dwellings to be built will be sold or rented in conformance with the City's Affordable Housing Standards. E. "Building Valuation" shall mean the total value of all construction work for which a construction permit is required, as determined by the Chief Building Official using the Uniform Building Code. F. "Commercial Project" means a development project involving primarily non-residential uses, including retail, office, service-commercial, light-industrial, neighborhood commercial, tourist- commercial, and manufacturing uses as further described in the zoning regulations. G. "Density" means residential density as defined in Section 17.16.010 of this code. H. "Density bonus" means a density increase of at least twenty-five percent over the maximum density otherwise allowable under the zoning regulations. I. "Development project" shall mean an activity for which a subdivision map or construction permit is required, including new buildings and building additions or remodels as described in Section 17.91.030,but not including changes in ownership, occupancy, management or use. J. "Director" means the Community Development Director or his authorized representative. K. "Equity Build-up" shall mean a property's sales price at first resale, less the initial purchase price and less the City's equity share as described in Section 17.91.150. L. "Expansion Area" - A land area proposed for annexation to the City or annexed after the adoption date of this ordinance. M. "Inclusionary housing unit" means a dwelling which is built under the provisions of this chapter, and which meets the City's Affordable Housing Standards. N. "In-lieu fee" means a fee paid to the City as an alternative to the production of inclusionary housing, to be used in the acquisition, construction, or rehabilitation of affordable housing. O. "Low" or "lower income households" shall have the meaning set forth in California Health and Safety Code, Section 50079.5; provided the income of such persons and families shall not exceed eighty percent of the median income within the county. P. "Market Value" shall mean the highest price a willing buyer would pay and a willing seller would accept, both being fully informed and in an open market, as determined by an appraiser or other qualified professional. Q. "Mixed Use Development Project" shall mean a development project which combines residential and non-residential uses on the same lot, pursuant to city Zoning Regulations. R. Q"Moderate income households" shall include those persons and families whose incomes exceed eighty percent but are less than or equal to one hundred twenty percent of the median income within the county. (Ord. 1035 0 1 (part), 1985) S. R."Real Property" shall mean land and improvements, if any, including anything permanently affixed to the land, such as buildings, walls, fences, and paved areas. T. &"Residential Project" shall mean development projects which result in the subdivision of land and/or the construction or conversion of dwellings, including, but not limited to: single family detached homes, apartments, condominiums, live/work studios, mobile homes, and group 3-- ) 5 Attachment 3 Housing Element Implementation,October 5,2004 Council Meeting housing. U. T."Very-low income" shall have the meaning set forth in California Health and Safety Code, Section 50105; provided that such income level shall not exceed 50 percent of median income within the county. 17.91.030 Applicability and Exclusions. A. This chapter shall apply to development projects consisting of five or more lots or new dwelling units, and to commercial development projects consisting of 2,500 square feet of gross floor area or larger. B. The following types of development projects are excluded: 1. Residential developments of 4 units or less; 2. New commercial developments of less than 2,500 square feet gross floor area; 3. Residential and commercial building additions, repairs or remodels, provided that such work does not increase the number of existing dwellings by four or more units; or result in an increase in gross floor area of 2,500 square feet; 4. The conversion of less than five dwelling units to condominiums within any five-year period. 5. Commercial condominium conversions which do not result in the creation of new dwellings; 6. Affordable housing projects; 7. Emergency projects, or projects which the City Council determines are necessary to protect public health and safety; 8. Development projects which the City Council determines are essentially non-commercial or non-residential in nature, which provide educational, social or related services to the community and which are proposed by public agencies, non-profit agencies, foundations and other similar organizations; 9. Projects which replace or restore a structure damaged or destroyed by fire, flood, earthquake or other disaster within three years prior to the application for the new structure(s). 10. Projects for which an approved tentative map or vesting tentative map exists, or for which a construction permit was issued prior to the effective date of this ordinance and which continue to have unexpired permits. 17.91.040 General Standards. A. Methods of meeting requirements. New development projects shall satisfy the inclusionary housing requirement, as specified in Table 1 Tables 2 and 2A of the General Plan Housing Element, which provide that all non-exempt development projects shall contribute toward the production of affordable housing by constructing at least one affordable dwelling unit or paying an in-lieu fee. To meet the requirement, the developer shall comply with one or more of the following methods; 1. Construct the required number of affordable dwelling units, as specified in Table 2, as adjusted by Table 2A; Table 1, or 2. Pay an in-lieu fee as described in Table 2, as adjusted by Table 2A. For development projects in which the adjustment factor under Table 2A equals zero ("0"), the minimum adjustment factor shall be 0.25 (resulting in a minimum in-lieu fee of 1.25% of the building valuation for in-city development projects and commercial developments in expansion areas, and 3.75% of building valuation for residential developments in expansion areas); or 3 - t4 A«acnrnent 3 Housing Element Implementation,October 5,2004 Council Meeting 3. Dedicate real property for affordable housing; or 4. Use a combination of the above methods, to the approval of the City Council. B. Affordable housing standards. Affordable dwelling units constructed must meet City Affordable Housing Standards, and must be consistent with affordability policies in the General Plan Housing Element. C. Concurrent development. The required inclusionary units shall be constructed concurrently with market rate units unless the developer and the City Council agree within an Affordable Housing Agreement to an alternative development schedule. 17.91.050 Procedures. A. Fractional numbers. In determining the number of dwellings that are required to be built pursuant to Table 2, fractional units less than 0.50 shall be rounded down to the first whole number unit, and fractional units of 0.50 or greater shall be rounded up to the next higher whole number unit, as calculated by the Director. B. Determining adjustment factor using project density and average tutu size. To determine the adjustment./actor in Table 2A, project density shall be calculated by dividing the total number of density units proposed (including density bonus where applicable) by the development project site's net area. Average floor area shall be calculated by dividing the total gross floor area of all dwellings (excluding garages) within the development project by the total number of dwellings. C. Mixed-use development projects. For mixed-use development projects with five or more dwellings, the inclusionary housing requirement is determined by: 1) using Table 2 to calculate the base inclusionary requirement for the commercial use, and 2) using Table 2A to adjust the base requirement based on project density and average unit.rite, as described in 17.91.050.B. For mixed-use development projects with less than five dwellings, the base inclusionary housing requirement for the commercial use shall apply. ED. Timing. The inclusionary housing requirement shall be met prior to issuance of a Certificate of Occupancy for the first unit in a building, or the first building in a complex to be constructed or remodeled; or for subdivisions, prior to final map approval; or prior to building permit issuance, for projects for which a Certificate of Occupancy is not issued; or as otherwise agreed to by the City Council as part of tentative map, rezoning, conditional use permit or other development approval. EE. Affordable housing agreement. To meet the requirement, the developer may enter into an agreement with the City, the City's Housing Authority, non-profit housing provider, or other qualified housing provider approved by the City Council to construct, refurbish, convert, operate and maintain the required affordable housing. Such Affordable Housing Agreements shall be to the approval of the Director and shall be in a form approved by the City Attorney. 17.91.060 In-lieu Housing Fee. A. Payment of in-lieu fee. Developer may, at his discretion, choose to pay a fee to the City or dedicate real property in lieu of constructing affordable dwellings to meet this requirement. B. Amount and method of payment. The dollar amount and method of payment of the in-lieu fee shall be as described in Table 2, and where applicable, as adjusted by Table 2A Table I of the General Plan Housing Element, as further described in Section 17.91.040.A.2, to the approval of the Director. For subdivisions in which the construction valuation is not known, the Director shall estimate the average construction valuation based on lot area, land value, and applicable Afii2Flt 3 L. Housing Element Implementation, October 5,2004 Council Meeting City development standards. Developer shall use the estimated average construction valuation to detenni.ne the amount of in.-lieu fees. C. Timing. In-lieu fees shall be paid prior to release of occupancy of the first dwelling within a residential development; or for residential subdivisions to be built out by others, prior to final subdivision map approval; or prior to occupancy for new commercial buildings or remodels; or prior to building permit issuance, for projects for which a certificate of occupancy is not issued; or as otherwise provided by written agreement between the developer and City, to the approval of the Director. 17.91.070 Affordable Housing Fund. Affordable Housing Fund established. The City hereby establishes an Affordable Housing Fund. Said fund shall be administered by the Finance Director and shall be used exclusively to provide funding for the provision of affordable housing and for reasonable costs associated with the development of affordable housing, at the discretion of the City Council. A. In-lieu fees. In-lieu fees collected shall be deposited into the Affordable Housing Fund, to the satisfaction of the Director. 17.91.080 Real Property Dedication A. Irrevocable offer to dedicate real property. At the discretion of the City Council, an irrevocable offer to dedicate real property equal or greater in value to the in-lieu fee which would otherwise be required may be offered to the City, or to a housing provider designated by the City, instead of providing the required number of affordable dwellings or paying in-lieu fees. In considering an offer to dedicate real property, the City Council must find that the dedication of real property will provide equal or greater public benefit than constructing affordable units or paying in-lieu fees, based on the following criteria: 1. Valuation of the land and/or improvements to be dedicated relative to other methods of meeting the requirement; 2. Suitability of the land and/or improvements for housing, including General Plan conformity, size, shape,topography, and location; and 3. Feasibility of developing affordable housing, including general plan consistency, and availability of infrastructure. B. Real Property valuation. The valuation of real property offered in-lieu shall be determined by the Director, based upon an appraisal made by a qualified appraiser mutually agreed to by the developer and the City. Costs associated with the appraisal, title insurance and transfer, recordation and related costs shall be borne by the developer. C. Agreement and Timing. The real property dedication shall be by deed or other instrument acceptable to the City, and shall be completed by recordation with the Recorder of the County of San Luis Obispo prior to occupancy release of the first residential unit or commercial building in the development; or prior to building permit issuance, for projects for which a certificate of occupancy is not issued; or as otherwise provided by written agreement between the developer and the City. 17.91.090 Incentives. A. Eligibility for incentives. The developer may be eligible to receive, or to request development incentives in return for constructing affordable housing in connection with a development project, pursuant to the Affordable Housing Incentives (SLOMC Chapter 17.90), as 3- 1cP •l Attachment 3 Housing Element Implementation,October 5,2004 Council Meeting part of a City planning application. Incentives or other forms of financial assistance may be offered by the City to the extent that resources are available for this purpose and to the degree that such incentives or assistance will help achieve the City's housing goals. B. Affordable Housing Agreement. Any incentives provided by the City, beyond those incentives to which a developer may be automatically entitled to under Ch. 17.90 of this code, shall require City Council approval and shall be set out in an Affordable Housing Agreement. The form and content of such agreement shall be to the approval of the City Attorney and the Director. Developers are further encouraged to utilize other local, state or federal assistance, when available, to meet the affordable housing standards. 17.91.100 Project Application. A. Method of application. An applicant/developer proposing a project for which affordable housing is required shall submit a statement with the standard planning application, describing the inclusionary housing proposal. The developer's statement shall include: 1. A brief description of the proposal, including the method chosen to meet the inclusionary housing requirement, number, type and location of affordable units, term of affordability, preliminary calculation of in-lieu fees, or offer of land dedication; 2. How the proposal meets General Plan policies and inclusionary housing requirement; 3. Plans and other exhibits showing preliminary site layout, grading, building elevations, parking and other site features, location of affordable dwelling units and (where applicable), market-rate dwelling units; 4. Description of incentives requested, including exceptions from development standards, density bonuses, fee waivers or other incentives; and 5. Other information which the Director determines necessary to adequately evaluate the proposal. B. Director response. After receiving a complete planning application, including an affordable housing proposal, the Director shall respond to the applicant or developer's affordable housing proposal. The City response shall identify: 1) affordable housing issues and concerns; 2) incentives which the Director can support when making a recommendation to the decision- making body; and 3) procedures which will need to be followed to comply with the inclusionary housing requirement. 17.19.110 Conditions of Development Approval. A. Submittal of an Affordable Housing Agreement. Applicants and developers for development projects subject to this chapter shall, as a condition of development approval, prepare and submit an Affordable Housing Agreement for City approval. The draft agreement shall be reviewed by the Director and City Attorney for compliance with project approvals, City policies and standards, and applicable codes. Following approval and signing of the agreement by the parties, the final agreement shall be recorded and relevant terms and conditions shall be recorded as a deed restriction on those lots or affordable units subject to affordability requirements. The Affordable Housing Agreement shall be binding to all future owners and successors in interest. B. Agreements for constructing affordable units. For development projects meeting their inclusionary requirement through construction of affordable dwelling units, the Affordable Housing Agreement shall specify: 1. The number and location of affordable units; 2. The size (square footage), number of bedrooms, and design of the affordable units; 3- 11 Alachrilent 3 Housing Element Implementation,October 5,2004 Council Meeting 3. Terms of affordability; 4. Schedule for construction of the affordable units; 5. Incentives or other assistance to be provided by the City; 6. Where applicable, the procedures to be used for qualifying tenants or buyers, setting rental/sales costs, renting or selling units, filling vacancies, and managing the units; and 7. Other terms or conditions requested by City. B. Agreements for real property dedication. For development projects meeting their inclusionary housing requirement through real property dedication, the agreement shall specify: 1. The method of conveyance, schedule, and appraised value of the proposed dedication; 2. Calculation of housing in-lieu fees otherwise applicable to the project at the time of recordation; 3. Title report and insurance; 4. Description of location, condition, improvements, and other relevant factors applying to the property; and 5. Other information required by the City. C. Payment of in-lieu fees. An Affordable Housing Agreement shall not be required for projects which meet their inclusionary housing requirement through the payment of in-lieu fees. 17.91.120 Program Requirements. Only households qualifying as very low, low or moderate income, pursuant to the Affordable Housing Standards, shall be eligible to rent, purchase or occupy inclusionary units developed or funded in compliance with this requirement. For sale inclusionary housing units shall be owner occupied for the term of the Affordable Housing Agreement. 17.91.130 Eligibility Screening. The City, its housing authority, or other housing provider designated by the City shall screen prospective renters or buyers of affordable units. Renters or buyers of affordable units shall enter into an agreement with City, its housing authority or other housing provider to comply with the Affordable Housing Standards. 17.91.140 Affordability Restrictions. Developers of affordable units for sale shall specify the type of affordability restriction to be applied The developer shall choose to either: 1) participate in a Shared Equity Purchase Program, as described in Section 17.91.150, or 2) to enter into an affordable housing agreement to ensure that affordability is maintained for a period of not less than 30 years, or as otherwise required by State law. Affordable rental units shall be subject to a 30 year term of affordability. 17.91.150 Shared Equity Purchase Program. Under this program, the qualified buyer of a designated affordable dwelling unit shall enter into a shared equity agreement with the City. Said agreement shall be recorded as a second trust deed against the purchased property, at no interest, securing and stating the City's equity share in the property. The City's equity share shall be calculated by the Director, and shall be the decimal percentage of the property's value resulting from: (a) the difference between the property's market value and the actual price paid by the homeowner, divided by the market value, and/or when applicable, 3 - �� Attachment 3 Housing Element Implementation,October 5,2004 Council Meeting (b) the amount of subsidy provided by the City to the homeowner to purchase the property, divided by the property's market value. Upon sale, the City's equity share shall be repaid to the City from the proceeds of the sale, less the City's percentage share of title insurance, escrow fees and documentary transfer taxes, at the close of escrow. 17.91.151.Early Resale of Shared Equity Properties. In the event of"early resale", owners of properties subject to the Shared Equity Purchase Program shall either 1) pay an equity recapture fee to the City as described in the schedule below, in addition to the City's equity share,or 2)sell the property to another eligible household. "Early resale" shall mean the sale, lease or transfer of property in within five (5) years of the initial close of escrow. If owner chooses to pay the equity recapture fee, the recapture fee shall be paid to the City upon resale at close of escrow, based on the following schedule: Year % of Equity Build-up Recaptured: 0-2 100% 3 75% 4 50% 5 25% 6 and after 0% The recapture amount shall be determined prior to the calculation of escrow closing costs. 17.91.160 Management and Monitoring. Inclusionary rental units shall be managed and operated by the property owner, or the owner's agent, for the term of the Affordable Housing Agreement. Sufficient documentation shall be submitted to ensure compliance with this chapter, to the satisfaction of the Director. 17.91.170 Enforcement and Appeals. A. Enforcement. No final subdivision map shall be approved, nor building permit issued, nor shall any other development entitlement be granted for a development project which does not meet these requirements. No inclusionary unit shall be rented or sold except in accordance with these requirements and the affordable housing standards. B. Appeals. The Director shall administer and interpret these requirements, subject to applicable codes and City procedures. Decisions of the Director are appealable, subject to the zoning regulations appeal provisions. (SLOMC Ch.17.66). 17.91.180 Severability. If any provision of this chapter or the application thereof to any person or circumstances is held invalid, the remainder of the chapter and the application of the provision to other persons or situations shall not be affected thereby. Attachment 4 Housing Element Implementation,October 5,2004 Council Meeting Legislative Draft ORDINANCE NO. (2004 Series) AN ORDINANCE AMENDING SLO MUNICIPAL CODE CH.. 17.88,EXEMPTING DOWNTOWN DEVELOPMENT AND AFFORDABLE MODERATE INCOME HOUSING FROM THE RESIDENTIAL GROWTH MANAGEMENT REGULATIONS Municipal Code amendment Proposed changes: (new text in /talics; deleted text in eaw) Chapter 17.88 RESIDENTIAL GROWTH MANAGEMENT REGULATIONS Sections: 17.88.010 Purpose and justification. 17.88.020 Allocations. 17.88.030 Adjustments to allocations requested by property owners. 17.88.040 Periodic city council review and consideration of revisions. 17.88.010 Purpose and justification. A. The regulations codified in this chapter are intended to assure that the rate of population growth will not exceed the city's ability to assimilate new residents and to provide municipal services, consistent with the maximum growth rates established in the general plan. Also, these regulations are to assure that those projects which best meet the city's objectives for affordable housing, infill development, open space protection, and provision of public facilities will be allowed to proceed with minimum delay. B. San Luis Obispo is a charter city, empowered to make and enforce all laws concerning municipal affairs, subject only to the limitations of the city Charter and the Constitution and laws of the state. Regulation of the rate of residential development is a reasonable extension of municipal authority to plan overall development, in furtherance of the public health, safety and general welfare. C. According to the general plan land use element, the city should achieve a maximum annual average population growth rate of one percent. The reserve of developable land within the city and the capacity of proposed annexations could sustain growth rates which would exceed the objectives of the general plan. D. General plan policies and the annexation-area phasing schedule required by these regulations reduce the likelihood that any property within the city might be deprived of reasonable development entitlements through the operation of these regulations. E. The growth rate policies of the general plan reflect the city's responsibility to accommodate a reasonable share of expected state and regional growth. 3-� iachi-aent 4 Housing Element Implementation,October 5,2004 Council Meeting F. To avoid further imbalance between the availability of jobs and of housing within the city, the general plan also manages expansion of growth-inducing activities. The burdens of growth management are not being placed solely on the residential sector, since it largely responds to demands caused by other sectors. G. Considering the likely levels of housing demand and construction throughout the housing market area, nearly coinciding with San Luis Obispo County, these regulations are not expected to affect the overall balance between housing supply and demand in the market area. These regulations will not impede and may help meet the needs of very-low, low, and moderate-income households. (Ord. 1359 § 3 (part), 1999) 17.88.020 Allocations. A. The city council shall, by resolution, adopt a phasing schedule that allocates potential residential construction among annexation areas, consistent with the general plan and with these regulations. B. The limitations on residential development established by these regulations apply to new residential construction within certain areas that have been annexed to the city or that will be annexed to the city. Development in such areas is subject to development plans or specific plans, which shall contain provisions consistent with these regulations and with the phasing schedule. C. For locations which the phasing schedule shows as "allowed," allocations shall be implemented by the timing of issuance of building permits. D. These regulations shall not limit the issuance of building permits for locations which the phasing schedule shows as having an "assumed"rate of construction. E. Dwellings affordable and enforceably-restricted to residents with very-low, of low or moderate incomes, as defined in the city's general plan housing element, and new dwellings in the Downtown Core (C-D zone as shown in the most official Zoning Map) shall be exempt from these regulations. Enforceably-restricted shall mean dwellings that are subject to deed restrictions, development agreements, or other legal mechanisms acceptable to the City to ensure long-term affordability, consistent with city Affordable Housing Standards. In expansion areas, the overall number of units built must conform to the city-approved phasing plan. F. It shall not be necessary to have dwellings allocated for a particular time interval or location to process and approve applications for general plan amendment, zone change or other zoning approval, subdivision, or architectural review. (Ord. 1359 § 3 (part), 1999) 17.88.030 Adjustments to allocations requested by property owners. Upon verified written request by each owner for whom the timing of property development would be affected by a proposed change (either hastened or delayed), the community development director may adjust the allocation of dwellings among expansion areas shown in the 3-t4i C Attachment 4 Housing Element Implementation,October 5,2004 Council Meeting phasing schedule, so long as the total number of dwellings for all expansion areas within an interval does not change. The director shall approve such requests upon determining that there would be no substantial difference in provision of affordable housing, necessary public facilities, or open space protection as a result of the adjustment. (Ord. 1359 § 3 (part), 1999) 17.88.040 Periodic city council review and consideration of revisions. A. The community development department shall provide status updates to the city council concerning implementation of these regulations, coordinated with the annual report on the general plan. The status update will describe actual construction levels and any adjustments to allocations that have been approved by the director, and may include recommendations for revisions. B. Following consideration of the annual report, or at such other times as it deems appropriate, the city council may revise the phasing schedule. Such revisions shall be consistent with the general plan. City council approval shall be required to do any of the following: 1. Change the total number of dwellings that may be permitted within an interval; 2. Change the number of dwellings assumed for demolition or infill development or small annexations, or allocated in total to expansion areas; 3. Reduce the number of dwellings previously allocated to a certain expansion area, when there is not verified written approval by each affected owner; 4. Shift the years covered by intervals. C. Before approving a revision, the city council must conduct a public hearing. Notice of the hearing shall be provided at least ten but not more than thirty days prior to the hearing, by publication in a newspaper of general circulation in the city and by first-class mail to each owner of property potentially affected by a delay in building permit issuance as compared with the schedule in effect at that time. Owner information may be obtained from the county property assessment role, or from other sources which the community development director determines will provide complete and current information. Failure of an owner or owners to receive notice shall not invalidate any duly adopted revision. D. For in-city development and for minor annexations, the annual report shall compare the actual number of permitted dwellings with the assumed rate of permit issuance. When the previously assumed number of in-city and small-annexation permitted dwellings exceeds those actually permitted, and expected to be permitted based on current trends and project processing, the city council shall consider revising the phasing schedule to make the difference available to the current phases of large annexations. E. If an annexation area does not fully use its allocation within the previously indicated interval, the city council shall consider assigning the unused potential to that same area in future intervals. It is the intent of this part to encourage completion of neighborhoods that have been started; provided, that doing so does not cause the allowed citywide growth rate to be exceeded; and further provided, that the allocations previously assigned to other annexation areas will not be reduced without the approval of the affected landowners. (Ord. 1359 § 3 (part), 1999) 3 'o - Attachment 5 Housing Element Implementation,October 5,2004 Council Meeting Legislative Draft ORDINANCE NO. (2004 Series) AN ORDINANCE AMENDING SLOMC CH. 17.86 TO ESTABLISH A DOWNTOWN HOUSING CONSERVATION PROGRAM Proposed changes: (new text in Italics; deleted text in s*�;;«) Chapter 17.86 DOWNTOWN HOUSING CONSERVATION REGULATIONS Sections: 17.86.010 Purpose and intent. 17.86.020 Area of application. 17.86.030 Definitions. 17.86.0430 Land uses affected. 17.86.050 No Net Housing Loss 17.86.0640 Exceptions. no.....:. r-equired7 17.86.0760 Findings required. 17.86.0870 Conditions of approval. 17.86.0960 Public hearing-Notification. 17.86.091 Interpretation and Conditions. 17.86.092 Severability. 17.86.010 Purpose and intent. It is the desire and intent of the city to preserve housing in the central business district and surrounding Downtown Planning Area. It is also the intent of the city to preserve housing that is 3-23 Attachment 5 Housing Element Implementation,October 5,2004 Council Meeting Legislative Draft ORDINANCE NO. (2004 Series) AN ORDINANCE AMENDING SLOMC CH. 17.86 TO ESTABLISH A DOWNTOWN HOUSING CONSERVATION PROGRAM Proposed changes: (new text in Italics; deleted text in strikeeat) Chapter 17.86 DOWNTOWN HOUSING CONSERVATION REGULATIONSG-i���c Sections: 17.86.010 Purpose and intent. 17.86.020 Area of application. 17.86.030 Definitions. 17.86.0430 Land uses affected. 17.86.050 No Net Housing Loss 17.86.0640 Exceptions. Pef:Fnk Fega+Fed 17.86.0760 Findings required. 17.86.08-70 Conditions of approval. 17.86.0960 Public hearing -Notification. 17.86.091 Interpretation and Conditions. 17.86.092 Severability. 17.86.010 Purpose and intent. It is the desire and intent of the city to preserve housing in the central business district and surrounding Downtown Planning Area. It is also the intent of the city to preserve housing that is Attachment 5 Housing Element Implementation,October 5,2004 Council Meeting affordable to very-low, low- and moderate-income households and to encourage mixed residential and commercial office uses, where appropriate, to implement General Plan goals. that this b The provisions of this chapter are intended to achieve these goals by regulating the conversion of downtown housing to nonresidential uses. (Prior code § 9900) 17.86.020 Area of application. Provisions of this chapter shall apply to eeft6., t5'PeS Of FeSi ential iafid Uses WithiR ^^^'"^" ^£ the downtown planning area shown on Figure 1. 17.86.030 Definitions. Where not defined herein, terms shall be as defined in Title 17 of the Municipal Code. A. Commercial Core. That central downtown area of the City zoned "C-D" (Downtown Commercial) in the most recently adopted Zoning Map. B. Conversion. A change in the primary use of at least 51 percent of the floor area of a legally permitted dwelling or building from residential to non-residential use, or physical change in design of 51 percent of an individual dwelling's or building's floor area to accommodate non- residential uses. C. Development Project. Any public or private action for which a City construction permit or planning approval is required, including architectural review, use permit, variance, subdivision or other approval. D. Downtown Planning Area. The central part of the City, generally bounded by Highway 101, the railroad, and High Street, including the commercial core and surrounding neighborhoods, as shown in Figure 1. E. Net Housing Loss. Where the number of residential units removed through demolition, remodeling or conversion to non-residential uses exceeds the number of dwellings added through new construction, additions, remodeling, or relocation within the Downtown Core, or in the area outside the Downtown Core but within the Downtown Planning area. The cumulative number of dwellings added and residential units removed within each of the above 3 - �S Attachment 5 Housing Element Implementation,October 5,2004 Council Meeting areas shall be determined separately, and shall be based on the number of dwellings existing on March 30, 2004, as determined by the Director. F. Replacement Unit. A dwelling which is built, moved or remodeled to replace a residential unit lost through demolition or remodeling or conversion to non-residential use. G. Residential Use. A land use which includes "dwellings," "boarding/rooming house," "dormitory, " "residential care facilities," "caretakers' quarters," "hotel/motel," "hostel," "bed and breakfast inn," 'fratentity(or sorority) house," or "live-work unit, " as defined by the Zoning Regulations and listed in Table 9, Chapter 17.22 of the Municipal Code. H. Residential Unit. A structure on a permanent foundation with provisions for sleeping and sanitation, and with permanent connections to utilities. A residential unit may or may not contain provisions for cooking, and may be single, detached or in a multiple, attached configuration. 1. Subarea. Either the Downtown Core or the area outside the Downtown Core but within the Downtown Planning Area, as shown on Figure 1. 17.86.0430 Land uses affected. Provisions of this chapter shall apply to properties land—wies that contain one €ems or more residential dwelling units and to all group housing, including "boarding or rooming houses" or "dormitories," "residential care facilities" or "caretakers' quarters", "hotels and motels" or "hostel" or "bed and breakfast inn", 'fraternity(or sorority) house" hatels, ;,etels, of nes which have one €ew or more individual rooms for rent,: and to "live-work units", as defined by the Zoning Regulations and listed in Table 9, Chapter 17.22 of the Municipal Code. 17.86.050 No net housing loss. Development projects within the downtown planning area shall not result in a net housing loss. If the Director determines that a development project would result in a net housing loss, the developer shall replace residential units to be removed, whether the units to be removed are occupied or not. Residential units shall be replaced on a one—for- one basis, and shall be built concurrently with the development project. Replacement units may be of any size, type, or tenure, consistent with Zoning Regulations and as approved by the Architectural Review Commission or the Director. Replacement units shall be located within the same subarea as the units removed, but need not be located on the same site as previously existed. Development projects shall meet the following standards, to the approval of the Director: A. Vacation of Unit. Each tenant shall have the right to remain not less than sixty days from the date of city eeuneil approval of a development project exception . The Director Attachment 5 Housing Element Implementation,October 5,2004 Council Meeting or council may grant an extension to this right to remain for a period of time not to exceed an additional thirty days. B. No Increase in Rent. A tenant's rent shall not be increased during the period provided in subsection A of this section. (Prior code § 9906) C. Affordability of Units. The development project shall include dwelling units affordable to low and moderate income persons, at refits or sales prices that meet the City's Affordable Housing Standards. The number of dwellings to be rented or sold at affordable levels shall equal the maximum number of affordable dwellings that existed within the 24-month period immediately prior to the application for the conversion permit, but in no case less than that required under the Inclusionary Housing Affordable Housing Requirement in the general plan housing element. D. Tenant Relocation Assistance. For very-low, low-, or moderate-income residents displaced by the development project, the developer shall provide relocation assistance, to the approval of the Director. Such assistance may include, but is not limited to: giving tenants the first right of refusal to purchase or rent affordable replacement units, reimbursement of moving costs, and/or providing rental 17.86.0640 Exceptions. PeFfnit r-eqUiFed-. The council may grant exceptions to the provisions of this chapter, subject to the findings listed in 17.86.070. In granting an exception, council may establish conditions to ensure the intent of general plan policies is met, as described in 17.86.080. The application requirements and procedures shall be as required for a planning commission use permit as provided in SLOW Ch. 17.58. 17.86.0760 Findings required. In ewe To grant an exception L FmA, the council must make each of the following findings: And that approval of the peRnit is eansistefit with the adepte.d Safi I.HiS QNSPO e e ..1 n (Prior code § 9905) Findings: 3� Attachment 5 Housing Element Implementation,October 5,2004 Council Meeting A. Approval of an exception is consistent with the San Luis Obispo general plan and specifically, with Housing Element policies regarding no net housing loss, affordable housing, and mixed uses in the Downtown Planning Area. B. Granting the exception will not adversely affect affordable housing opportunities for very-low, low, or moderate income persons, either individually or cumulatively. C. The proposed project will not result in a significant loss of housing when compared with the total number of existing dwellings in the Downtown Core or Downtown Planning Area outside the Core. D. Granting the exception will further the achievement of other community goals, such as removing substandard or dangerous housing, improving physical accessibility, rehabilitating a historic structure, or Downtown beautification. E. It is physically infeasible to rehabilitate or relocate the housing to be removed or converted. F. No public purpose would be served by the strict enforcement of the no net loss policy due to mitigating factors (include specific mitigating factors). 17.86.0870 Conditions of approval. The council may establish conditions of approval which provide for the general health, safety and welfare of residents terms displaced by the proposed development, and to achieve the intent of general plan housing conservation policies and mitigate the loss of housing 17.86.0950 Public hearing- Notification. Prior to acting on an exception request applieations, the council shall hold a public hearing, and notice of the time, date, place and purpose of the hearing ivNeh.shall be given to the residents tis of the proposed conversion and to owners and residents within 300 feet of the affected posted the property. Said property shall be posted, and an advertisement shall be published in a newspaper of general circulation, at least ten days before the public hearing # . (Prior code § 9904) 3 . 2� Ci Attachment 5 Housing Element Implementation,October 5,2004 Council Meeting Figure 1 Downtown Planning Area ® Railroad ®®® ® right-of-way_ Highway 101 �® Planning Area 9 bounda Downtown Core Street thin® � 0 Jh/U6ousingclemrntiaplementation/downtownhousingconvusionamendments7-21-04 Attachment 6 Housing_Element Implementation,October 5,2004 Council Meeting Legislative Draft ORDINANCE NO. (2004 Series) AN ORDINANCE AMENDING SLO MUNICIPAL CODE CH. 2.48 EXEMPTING SMALL RESIDENTIAL DEVELOPMENT PROJECTS FROM ARCHITECTURAL REVIEW COMMISSION REVIEW 2.48.50 Projects subiect to architectural review. Proposed changes: (new text in Italics) A. Architectural review shall be required for all structures and physical improvements except individual built single-family dwellings and small residential development projects. The exception for the individual single-family dwellings shall not apply: (1) when architectural review is required as a condition of a subdivision, use permit or other discretionary entitlement; (2) when a developer proposes to construct three or more units, and these units do not constitute a "small residential developinent projects" as defined herein; (3) when the director determines the site is sensitive as set forth in the procedures document; "sensitive sites" shall include, but are not limited to, open space zoning areas designated by resolution of the planning commission, architectural review commission or council; (4) where the scale or character of the proposed dwelling contrasts significantly with adjacent or neighboring structures; and (5) where any required parking space that is covered is converted to another use and replacement parking is proposed. "Small residential development projects" are projects consisting of the construction, rehabilitation or remodel of less than five dwellings, where the gross floor area of individual dwellings does not exceed 1200 square feet. The Director may require minor or incidental architectural review where necessary to meet the intent of the city's design guidelines. B. Architectural review shall be required for all projects, including individual-built single family dwellings and small residential development projects, located in or along any creek or waterway as defined by the city's floodplain management policy. Approval shall be granted if a finding can be made that a project complies with the uniform storm design criteria for waterways, all other applicable policies and standards for floodplain management, and otherwise satisfies relevant architectural criteria. Projects involving any building or bridge proposed to be constructed in or over any portion of any of the four major creeks or waterways, as defined by said policy, or any major creek modification project shall be referred to council for review and specific directional guidance prior to any architectural review. 3 - �� J - -_ Attachment 7 Housing Element Implementation,October 5,2004 Council Meeting ✓ Legislative Draft ORDINANCE NO. (2004 Series) AN ORDINANCE AMENDING SLOW CH. 17.22 TO PROTECT THE CONTINUANCE OF LEGAL, CONFORMING NON-RESIDENTIAL USES ADJACENT TO OR NEARBY PROPOSED NEW HOUSING DEVELOPMENTS Municipal Code amendment Proposed changes: (new text in Italics, Section H only; deleted text-none proposed) Chapter 17.22: USE REGULATION Section: 17.22.010 Uses allowed by zones. (Add new paragraph section H.,as follows:) H. Right to Continue Existing Non-Residential Uses. Legal, conforming non-residential uses shall have the right to continue operation, subject to compliance with applicable Zoning Regulations when established prior to the development of housing on adjacent or nearby sites. City approvals of housing developments adjacent to or within 300 feet of such uses shall include a condition requiring constructive notice to new home buyers and/or renters of possible characteristics associated with non-residential uses, such as noise, odors, vibration, and lighting. Attachment 8 RESOLUTION NO. (2004 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO AMENDING THE COMMUNITY DESIGN GUIDELINES TO CLARIFY ARCHITECTURAL REVIEW REQUIREMENTS FOR SMALL RESIDENTIAL DEVELOPMENT PROJECTS WHEREAS, on March 30, 2004, the City Council adopted an updated General Plan Housing Element; and WHEREAS, The Housing Element charts an ambitious course to expand housing opportunities for all income groups in San Luis Obispo and its effectiveness depends, in part, on timely program implementation; and WHEREAS, Housing Element Program 6.3.14 calls for the City to exempt small residential projects from Architectural Review Commission review to facilitate the production of housing affordable to very-low, low and moderate income persons; and WHEREAS, The Community Design Guidelines, that describe architectural review requirements in San Luis Obispo, must be amended to implement this new program. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. The Community Design Guidelines are hereby amended, as further described in Exhibit A. SECTION 2. The City Council has determined that this action is ministerial, as it consists of policy implementation and does not constitute a "project" under Section 21065 of the California Environmental Quality Act (CEQA) Guidelines. Consequently, this action is exempt under CEQA Section 15268 and is not subject to environmental review requirements. Upon motion of , seconded by , and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this day of ,2004. R 3 __�a Attachment 8 Resolution No. (2004 Series) Page 2 Mayor David F. Romero ATTEST: Audrey Hooper City Clerk APPROVED AS TO FORM: Jona an well City Attorney Attachment: Exhibit A—Community Design Guidelines Amendments WUhousingelemendMlemenmuon/CARResoluriouARC 10-5-04 3-33 Attachment 8 Housing Element Implementation,October 5,2004 Council Meeting EXHIBIT A Community Design Guidelines Amendment (Legislative Draft) Revise Chapter 1.2—"Applicability of the Design Review Process"to read as follows: (new text in Italics; deleted text in strikeeat) When is Design Review Required? Design review is required for all new development projects, except single family homes and small residential development projects, as described below. and- rvemedeled multi family residential, eemmereial, and ind-u-stii-al development . Single family homes are required to have design review in the specific instances listed below. Some changes to existing buildings and site development are considered "aesthetically insignificant" and can be reviewed by a planner at the counter. Other minor projects can be handled by a streamlined application process known as minor or incidental review. A. Single Family homes. Plans for a single family home need design review when: 1. Required for a parcel as a condition of approval of a subdivision, use permit, or other discretionary entitlement; 2. A single applicant proposes to build three or more homes in the same area which do not meet the definition of a "small residential development project 3. The location is a"sensitive site" (see subsection E D below); 4. The scale or character of the proposed dwelling contrasts significantly with adjacent or neighboring structures; 5. A required covered parking space is converted to another use and replacement parking is proposed. B. Small Residential Development Projects. The construction, rehabilitation, or remodeling of up to four dwellings is exempt from Design review, provided that the gross floor area of individual dwellings does not exceed 1200 square feet. The Community Development director may require minor or incidental architectural review where necessary to achieve the intent of these guidelines. BC. Aesthetically insignificant projects. The Community Development Director may determine that a new small structure, or a change or addition to an existing building or other site feature, will not conflict with the objectives of design review due to its size, location, form, materials, or colors. This determination will be noted in the building permit file, if one exists, or in the site address file. ED. Minor or incidental projects. The Community Development Director may determine that a project such as sign, building addition or remodel, is minor or incidental to a 3-34 Attachment 8 Housing Element Implementation,October 5,2004 Council Meeting larger, previously approved project. Plans for projects which an applicant believes are minor or incidental are submitted for staff review, along with a design review application and fee. The Director will decide within about 10 days if the project is required to be reviewed by the Architectural Review Commission (ARC). The Director's action may be appealed to the ARC. DE. Sensitive sites. The Community Development Director, Planning Commission or City Council may require design review on certain "sensitive sites." A project site is considered sensitive when: 1. It has been designated through an "S", Special Consideration, overlay zone, use permit, or a condition of a tentative parcel or subdivision map as a site with special development concerns; 2. It is located adjacent to Laguna Lake, a creek, or a designated sensitive hillside; 3. It is a property included on the City's Inventory of Historic Resources, or is near a historic resource where the development might adversely impact the historic resource; or The Director may ask the developer of a sensitive site to use a multidisciplinary design team, including architects, engineers and landscape architects, to ensure appropriate site development. EF. Demolitions and moved buildings. A request to demolish a structure that is listed on the Inventory of Historical Resources may require review by the ARC. The ARC also reviews permits to move structures from one site to another within the City. See Appendix A to these guidelines. FG. Other projects subject to ARC review. Sometimes a development project (for example, a subdivision) may need several different approvals by both the ARC and Planning Commission. The Director may refer certain projects to the ARC prior to Planning Commission review, to address basic site planning issues early in the process, and minimize conflicts in project purview between review authorities. The City's zoning regulations enable the ARC to approve use permits for minor site development exceptions. This streamlines the planning process by reducing application fess and the number of hearings required for a project. The ARC also reviews City projects, including municipal parks and public spaces,streetscape enhancements, and street furniture. O/V j Housing Element Implerrit. .tion-Inclusionary Housing Requirer'., Amendment Page 4 non-residential in nature, which provide educational, social or related services to the community and which are proposed by public agencies, non-profit agencies, foundations and other similar organizations; 9. Projects which replace or restore a structure damaged or destroyed by fire, flood, earthquake or other disaster within three years prior to the application for the new structure(s). 10. Projects for which an approved tentative map or vesting tentative map exists, or for which a construction permit was issued prior to the effective date of this ordinance and which continue to have unexpired permits. 17.91.040 ; General Standards. A. Methods of meeting requirements. New development projects shall satisfy the inclusionary housing requirement, as specified in Table-1 Tables 2 and 2A of the General Plan Housing Element, which provide that all non-exempt development projects shall contribute toward the production of affordable housing by constructing at least one affordable dwelling unit or paying an in-lieu fee.. To meet the requirement, the developer shall comply with one or more of the following methods; 1. Construct the required number of affordable dwelling units, as specified in Table 2, as adjusted by Table 2A; Table 1, or 2. Pay an in-lieu fee as described in Table 2, as adjusted by Table 2A. For development projects in which the adjustment factor under Table 2A equals zero ("0"), the minimum adjustment factor shall be 0.25 (resulting in a minimum in-lieu fee of 1.25% of the building valuation for in-city development projects and commercial developments in expansion areas, and 3.75% of building valuation for residential developments in expansion areas); or 3. Dedicate real property for affordable housing; or 4. Use a combination of the above methods, to the approval of the City Council. B. Affordable housing standards. Affordable dwelling units constructed must meet City Affordable Housing Standards, and must be consistent with affordability policies in the General Plan Housing Element. C. Concurrent development. The required inclusionary units shall be constructed concurrently with market rate units unless the developer and the City Council agree within an Affordable Housing Agreement to an alternative development schedule. 17.91.050 Procedures. A. Fractional numbers. In determining the number of dwellings that are required to be built pursuant to Table 2, fractional units less than 0.50 shall be rounded down to the first whole number unit, and fractional units of 0.50 or greater shall be rounded up to the next higher whole number unit, as calculated by the Director. B. Determining adjustment factor using project density and average unit size. To determine the adjustment factor in Table 2A, project density shall be calculated by dividing the total number of density units proposed (including density bonus where applicable) by the development project site's net area. Average floor area shall be calculated by dividing the total gross floor area of all dwellings (excluding garages) within the development project by the total number of dwellings. Dedicated open space is not included in a site's net area. Housing Element hnplerri .tion—Inclusionary Housing Requiref Amendment o/6 Page 8 17.91.120 Program Requirements. Only households qualifying as very low, low or moderate income, pursuant to the Affordable Housing Standat~ds, shall be eligible to rent, purchase or occupy inclusionary units developed or unde in compliance with this requirement. For sale inclusionary housing units shall be owner occupied for the term of the Affordable Housing Agreement. 17.91.130 Eligibility Screening. The City, its housing authority, or other housing provider designated by the City shall screen prospective renters or buyers of affordable units. Renters or buyers of affordable units shall enter into an agreement with City, its housing authority or other housing provider to comply with the Affordable Housing Standards. , 17.91.140 Affordability Restrictions. Developers of affordable units for sale shall specify the type of affordability restriction to be applied. The developer shall choose to either: 1) participate in a Shared Equity Purchase Program, as described in Section 17.91.150, or 2) to enter into an affordable housing agreement to ensure that affordability is maintained for the longest period allowed or required by State law, but a-peiied e€ not less than 30 ye Affordable rental units shall be affordable for the longest period allowed or required by State law, but not less than subjeet to 30 years _ _ffiffbrd-R644y. 17.91.150 Shared Equity Purchase Program. Under this program, the qualified buyer of a designated affordable dwelling unit shall enter into a shared equity agreement with the City. Said agreement shall be recorded as a second trust deed against the purchased property, at no interest, securing and stating the City's equity share in the property. The City's equity share shall be calculated by the Director, and shall be the decimal percentage of the property's value resulting from: (a) the difference between the property's market value and the actual price paid by the homeowner, divided by the market value, and/or when applicable,- (b) the amount of subsidy provided by the City to the homeowner to purchase the property, divided by the property's market value. Upon sale, the City's equity share shall be repaid to the City from the proceeds of the sale, less the City's percentage share of title insurance, escrow fees and documentary transfer taxes, at the close of escrow. 17.91.151. Early Resale of Shared Equity Properties. In the event of"early resale", owners of properties subject to the Shared Equity Purchase Program shall either 1) pay an equity recapture fee to the City as described in the schedule below, in addition to the City's equity share, or 2) sell the property to another eligible household. "Early resale" shall mean the sale, lease or transfer of property in within five (5) years of the initial close of escrow. If owner chooses to pay the equity recapture fee, the recapture fee shall be paid to the City upon resale at close of escrow, based on the following schedule: Housing Element Implemt .ion—Downtown Housing Conservat ?rogram Page 2 residential and commercial uses, where appropriate, to implement General Plan goals. that this heasifirg . The provisions of this chapter are intended to achieve these goals by regulating the conversion of downtown housing to nonresidential uses. (Prior code § 9900) 17.86.020 Area of application. Provisions of this chapter shall apply to the downtown planning area shown on Figure 1. 17.86.030 Definitions. Where not defined herein, terms shall be as defined in Title 17 of the Municipal Code. A. Commercial Core. That central downtown area of the City zoned "C-D" (Downtown Commercial) in the most recently adopted Zoning Map. B. Conversion. A change in the primary use of at least 51 percent of the floor area of a legally permitted dwelling or building from residential to non-residential use, or physical change in design o)'51 percent of an individual dwelling's or building's floor area to accommodate non- residential uses. C. Development Project. Any public or private action for which a City construction permit or planning approval is required, including architectural review, use permit, variance, subdivision or other approval. D. Downtown Planning Area. The central part of the City, generally bounded by Highway 101, the railroad, and High Street, including the commercial core and surrounding neighborhoods, as shown in Figure 1. E. Net Housing Loss. Where the number of residential units removed through demolition, remodeling or conversion to non-residential uses exceeds the number of dwellings added through new construction, additions, remodeling, or relocation within the Downtown Core, or in the area outside the Downtown Core but within the Downtown Planning area. The cumulative number of dwellings added and residential units removed within each of the above areas shall be determined separately, and shall be based on the number of dwellings existing on March 30, 2004, as determined by the Director. F. Replacement Unit. A dwelling which is built, moved or remodeled to replace a residential unit lost through demolition or remodeling or conversion to non-residential use. G. Residential Use. A land use which includes "dwellings," "boarding or rooming house" or .'dormitories," "residential care facilities" or "caretakers' quarters", "hoteUmotel", "hostel" or "bed and breakfast inn", 'fraternity(or sorority) house or "live work unit" as defined by the Zoning Regulations and listed in Table 9, Chapter 17:22 of the Municipal Code. H. Residential Unit. A structure on a permanent foundation with provisions for sleeping and sanitation, and with permanent connections to utilities. A residential unit may or may not