Ord 2366 - Density Bonus OrdinanceORDINANCE 2366
AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
AMENDING CHAPTER 29, "ZONING," OF THE TOWN CODE TO UPDATE
THE TOWN'S DENSITY BONUS ORDINANCE TO REFLECT CHANGES
MADE IN STATE LAW
WHEREAS, Sections 65915 et seq. of the California Government Code, known as State
Density Bonus Law, requires the Town of Los Gatos to provide a developer that proposes a
housing development within the jurisdictional boundaries of the Town of Los Gatos containing
affordable and other types of housing with a density bonus and other incentives; and
WHEREAS, California Government Code Section 65915(a) requires that all jurisdictions
within the state adopt an ordinance that specifies how compliance with State Density Bonus Law
will be implemented; and
WHEREAS, since adoption of the Town's density bonus ordinance, the State Legislature
has passed, and the Governor has signed into law numerous changes to State Density Bonus Law;
and
WHEREAS, the 2023-2031 Housing Element, which was adopted on June 4, 2024, and
subsequently found in compliance with housing element law on July 10, 2024, by the California
Department of Housing and Community Development, provides that the Town will update its
density bonus ordinance to comply with State law amendments; and
WHEREAS, the Planning Commission has reviewed the proposed amendments to the
Town Code, has found that the proposed amendments are consistent with goals and policies of
the Town's General Plan, and recommends adoption of the proposed amendments by the Town
Council; and
WHEREAS, the Town finds and determines that the proposed amendments to the Town
Code are adopted pursuant to the Town's police power authority to protect the public health,
safety, and welfare.
NOW, THEREFORE, BE IT ORDAINED by the Town Council of the Town of Los Gatos as
follows:
SECTION I. Incorporation of Recitals.
The Town of Los Gatos Town Council finds that the above Recitals are true and correct
and are incorporated herein by reference.
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SECTION II. Amendments to Chapter 29 of the Town of Los Gatos Town Code.
Sections 29.10.405 through 29.10.440 of Chapter 29 of the Town of Los Gatos Town Code
are repealed and replaced with a new Division 8 of Article I of Chapter 29 to read as follows:
"Division 8, Affordable Housing Density Bonsu
Sections
29.10.410 Purpose.
29.10.420 Definitions.
29.10.430 Application requirements.
29.10.440 Review process.
29.10.450 Density bonus agreement.
29.10.460 Density bonus calculations.
29.10.470 Development standards.
29.10.480 Density bonus for commercial development.
29.10.490 Interpretation
Sec. 29.10.410. Purpose.
In accordance with California Government Code Sections 65915, et seq., this Division specifies
how compliance with State Density Bonus Law will be implemented. Specifically, the purpose of
this Division is to provide density bonuses, incentives, concessions, and waivers of development
standards for the production of housing for very low-, low-, and moderate -income households,
senior households, provision of daycare facilities, student housing, and donations of land, and
for other housing types as provided by state law. In enacting this Division, it is also the intent of
the Town to implement the goals, objectives, and policies of the Town's Housing Element of the
General Plan.
Sec. 29.10.420. Definitions.
The definitions found in State Density Bonus Law shall apply to the terms contained in this
Division. "Incentives" include "concessions" as defined in State Density Bonus Law.
Sec. 29.10.430. Application Requirements.
(a) An applicant for a "housing development" as defined in State Density Bonus Law shall
be eligible for a density bonus and other regulatory benefits that are provided by State Density
Bonus Law when the applicant seeks and agrees to provide housing as specified in Government
Code Section 65915(b), (c), (f), (g), (h), and (v), or in Government Code Section 65195.5, or
successor provisions. The density bonus calculations shall be made in accordance with State
Density Bonus Law.
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(b) The granting of a density bonus, incentive, or concession, pursuant to this Division, shall
not be interpreted, in and of itself, to require a general plan amendment, development code
amendment, zone change, other discretionary approval, or the waiver of a Town ordinance or
provisions of a Town ordinance unrelated to development standards.
(c) All requests for density bonuses, incentives, parking reductions, and waivers for a
housing development shall be filed with and on a form provided by the Community
Development Director, or their designee, concurrently with the filing of the planning
application for the first discretionary or ministerial permit required for the housing
development, whichever permit is earliest. The applicant shall be informed whether the
application is complete consistent with Government Code Section 65943.
(d) The application shall include the required fee and the following minimum information:
1. For a requested density bonus.
a. Summary table showing the maximum number of dwelling units permitted by the
zoning and general plan excluding any density bonus units, proposed affordable units
by income level, proposed bonus percentage, number of density bonus units
proposed, total number of dwelling units proposed on the site, and resulting density
in units per acre.
b. Subparagraph of Government Code Section 65915(b)(1) under which the housing
development qualifies for a density bonus and reasonable documentation
demonstrating that the housing development is eligible for a bonus under that
subparagraph.
c. Where the housing development is seeking an additional bonus, the subparagraph
of Government Code Section 65915(v)(1) under which the housing development
qualifies for an additional density bonus and reasonable documentation
demonstrating that the housing development is eligible for the additional bonus
under that subparagraph.
d. A tentative map or preliminary site plan, drawn to scale, showing the number and
location of all proposed units, designating the location of proposed affordable units
and density bonus units.
e. The zoning and general plan designations and assessor's parcel number(s) of the
housing development site.
f. A description of all dwelling units existing on the site in the five-year period
preceding the date of submittal of the application and identification of any units
rented in the five-year period; subject to any form of rent control through a public
entity's valid exercise of its police power; or subject to a recorded covenant ordinance,
or law restricting rents to levels affordable to households of lower or very low income.
g. If dwelling units on the site are currently rented, income and household size of all
residents of currently occupied units, if known. If any dwelling units on the site were
rented in the five-year period, but are not currently rented, the income and household
size of residents occupying the dwelling units when the site contained the maximum
number of dwelling units, if known.
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h. The phasing of the construction of the affordable housing units in relation to the
nonrestricted units in the housing development.
i. If a density bonus is requested for a land donation, the location of the land to be
dedicated, proof of site control, and reasonable documentation that each of the
requirements included in Government Code Section 65915 (g) can be met.
2. Requested incentives. Incentives are those defined by State Density Bonus Law. The
number of incentives that may be requested shall be based upon the number the
applicant is entitled to pursuant to State Density Bonus Law. The application shall include
the following minimum information for each incentive requested, shown on a site plan (if
appropriate):
a. The Town of Los Gatos's usual regulation and the requested regulatory incentive
or concession.
b. Except where mixed -use zoning is proposed as a concession or incentive,
reasonable documentation to show that any requested incentive will result in
identifiable and actual cost reductions to provide for affordable housing costs or
rents.
c. If approval of mixed -use zoning is proposed, reasonable documentation that
nonresidential land uses will reduce the costs of the housing development, that the
nonresidential land uses are compatible with the housing development and the
existing or planned development in the area where the proposed housing
development will be located, and that mixed -use zoning will provide for affordable
housing costs and rents.
3. Requested waivers. For each waiver requested, the applicant shall include a list, and
shown on a site plan (if possible), the Town's required development standard and the
requested development standard.
4. Parking reductions. If a housing development is eligible for a density bonus pursuant
to State Density Bonus Law, the applicant may request an on -site vehicular parking ratio
specified in Government Code Section 65915(p). An applicant may request this parking
reduction in addition to the incentives and waivers permitted by paragraphs (2) and (3)
of this subsection. The application shall include a table showing parking required by the
zoning regulations, parking proposed under State Density Bonus Law, paragraph under
Government Code Section 65915(p) (or other statute) under which the project qualifies
for the parking reduction, and reasonable documentation that the project is eligible for
the requested parking reduction.
5. Density bonus or incentive for a childcare facility in a housing development. The
application shall include reasonable documentation that all of the requirements included
in Government Code Section 65915(h) can be met.
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6. Density bonus or incentive for a condominium conversion. The application shall
include reasonable documentation that all of the requirements included in Government
Code Section 65915.5 can be met.
Sec. 29.10.440. Application review process.
(a) All requests under State Density Bonus Law shall be part of the planning application and
shall be applied for, reviewed, and acted upon concurrently with the planning application by
the approval body with authority to approve the development, within the timelines prescribed
by California Government Code Section 65950 et seq. or other statute. Appeals of the planning
application in accordance with the requirements of Division 4 of Chapter 29 of the Town Code
shall include all requests under State Density Bonus Law if appeals are authorized for the
discretionary or ministerial permit applied for.
(b) To ensure that an application for a housing development conforms with the provisions
of State Density Bonus Law, the staff report presented to the decision -making body shall state
whether the application conforms to the following requirements of State Density Bonus Law, as
applicable:
1. The housing development provides the housing required by State Density Bonus Law
to be eligible for a density bonus and any incentives, parking reduction, or waivers
requested, including housing required to replace units rented or formerly rented to very
low- and low-income households as required by California Government Code Section
65915(c)(3).
2. If applicable, the housing development provides the housing required by State Density
Bonus law to be eligible for an additional density bonus under Government Code Section
65915(v)(1).
3. If an incentive is requested, reasonable documentation has been presented showing
that any requested incentive will result in identifiable and actual cost reductions to
provide for affordable housing or costs or rents; except that, if a mixed -use development
is requested, the application must instead meet all of the requirements of Government
Code Section 65915(k)(2).
4. If a waiver is requested, the development standards for which a waiver is requested
would have the effect of physically precluding the construction of the housing
development at the densities or with the incentives permitted.
5. The housing development is eligible for any requested parking reductions under
Government Code Section 65915(p) or other statute.
6. If the density bonus is based all or in part on donation of land, the requirements of
Government Code Section 65915(g) have been met.
7. If the density bonus or incentive is based all or in part on the inclusion of a child care
facility or condominium conversion, the requirements included in Government Code
Section 65915(h) or 65915.5, as appropriate, have been met.
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(c) The decision -making body shall grant an incentive requested by the applicant unless it
makes a written finding, based upon substantial evidence, of any of the following:
1. The proposed incentive does not result in identifiable and actual cost reductions to
provide for affordable housing costs, as defined in Health and Safety Code Section
50052.5; or for affordable rents, as defined in Health and Safety Code Section 50053;
or
2. The proposed incentive would be contrary to state or federal law; or
3. The proposed incentive would have a specific, adverse impact upon the public
health or safety or on any real property that is listed in the California Register of Historic
Resources, and there is no feasible method to satisfactorily mitigate or avoid the specific
adverse impact without rendering the housing development unaffordable to low- and
moderate -income households. For the purpose of this subsection, "specific, adverse
impact" means a significant, quantifiable, direct, and unavoidable impact, based on
objective, identified, written public health or safety standards, policies, or conditions as
they existed on the date that the application for the housing development was deemed
complete as defined in Government Code Section 65589.5.
(d) The decision -making body shall grant the waiver of development standards requested by
the applicant unless it makes a written finding, based upon substantial evidence, of any of the
following:
1. The proposed waiver would be contrary to state or federal law; or
2. The proposed waiver would have an adverse impact on any real property listed in
the California Register of Historic Resources; or
3. The proposed waiver would have a specific, adverse impact upon the public health
or safety, and there is no feasible method to satisfactorily mitigate or avoid the specific
adverse impact without rendering the housing development unaffordable to low- and
moderate -income households. For the purpose of this subsection, "specific, adverse
impact" means a significant, quantifiable, direct, and unavoidable impact, based on
objective, identified, written public health or safety standards, policies, or conditions as
they existed on the date that the application for the housing development was deemed
complete as defined in Government Code Section 65589.5.
(e) If a child care center complies with the requirements of Government Code Section
65915(h), the decision -making body may deny a density bonus or incentive that is based on the
provision of child care facilities only if it makes a written finding, based on substantial evidence,
that the Town already has adequate child care facilities.
(f) A request for minor modification of an approved density bonus housing plan may be
granted by the Town Manager, or their designee, if the modification substantially complies with
the original density bonus housing plan and conditions of approval. Other modifications to the
density bonus housing plan shall be processed in the same manner as the original plan.
Sec. 29.10.450. Density bonus housing agreement.
(a) If a density bonus, incentive, parking reduction, or waiver is approved pursuant to this
Division, the applicant shall enter into a binding affordable housing agreement and/or
restrictive covenant, as described below, with the Town, which sets forth the conditions and
guidelines to be met in the implementation of State Density Bonus Law and that ensures
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compliance with all of the provisions of this chapter. The agreement will also establish specific
compliance standards and remedies available to the Town upon failure by the applicant to
comply with State Density Bonus Law, this Division, or the affordable housing agreement.
(b) For rental projects, the applicant shall enter into an affordable housing agreement with
the Town, running with the land, in a form approved by the Town Attorney, to be executed by
the Town Manager, or their designee. The agreement shall require the continued affordability
of all rental units that qualified the applicant for the receipt of the density bonus, incentive,
waiver, or parking reduction for a minimum of 55 years or a longer period of time if required by
the construction or mortgage financing assistance program, mortgage insurance program, or
rental subsidy program; shall identify the type, size and location of each affordable unit; shall
specify the eligible occupants; shall specify phasing of the affordable units in relation to the
market -rate units; and shall contain other relevant provisions approved by the Town Attorney.
Rents for the lower income density bonus units shall be set at an affordable rent as defined in
State Density Bonus Law.
(c) For for -sale projects, the applicant shall enter into an affordable housing agreement with
the Town of Los Gatos, running with the land, in a form approved by the Town Attorney, to be
executed by the Town Manager, or their designee. The affordable housing agreement shall
require that, the initial purchasers of those for -sale units that qualified the applicant for the
receipt of the density bonus, incentive, waiver, or parking reduction are persons and families of
lower or moderate income, as applicable, or if any for -sale unit is not purchased by an income -
qualified household within one -hundred eighty (180) days after the issuance of the certificate
of occupancy, then the unit(s) must be sold pursuant to a contract that satisfies the
requirements of Revenue and Taxation Code Section 402.1(a)(10) to a qualified non-profit
housing corporation as defined in State Density Bonus Law and that the units are offered at an
affordable housing cost, as that cost is defined in Health and Safety Code Section 50052.5; and
shall contain other relevant provisions approved by the Town Attorney. The Town shall enforce
an equity sharing agreement consistent with State Density Bonus Law unless it is in conflict with
the requirements of another public funding source or law. The affordable housing agreement
shall require the continued affordability of the for -sale units for 45 years.
(d) Where a density bonus, waiver, or parking reduction is provided for a market -rate senior
housing development, the applicant shall enter into a restrictive covenant with the Town,
running with the land, in a form approved by the Town Attorney, to be executed by the Town
Manager, or their designee, to require the housing development to be operated as "housing for
older persons" consistent with state and federal fair housing laws.
(e) The executed affordable housing agreement shall be recorded against the housing
development prior to final or parcel map approval, or, where a map is not being processed,
prior to issuance of building permits for the housing development, whichever is earliest. The
affordable housing agreement shall be binding on all future owners and successors in interest.
Sec. 29.10.460. Density bonus calculations.
(a) In determining the total number of units to be granted, each component of any density
calculation, including base density and bonus density, resulting in fractional units shall be
separately rounded up to the next whole number.
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(b) When calculating the number of affordable units needed to qualify for a given density
bonus, any fractions of affordable dwelling units shall be rounded up to the next whole
number.
(c) Except where a housing development is eligible for an additional bonus, pursuant to
Government Code Section 65915(v), each housing development is entitled to only one density
bonus. If a housing development qualifies for a density bonus under more than one category,
the applicant shall identify the category under which the density bonus is requested to be
granted.
(d) In determining the number of affordable units required to qualify a housing
development for a density bonus pursuant to State Density Bonus Law, units added by a density
bonus are not included in the calculations. Any on -site units that satisfy the Town of Los Gatos's
inclusionary housing requirements in Division 6 of Chapter 29 of the Town Code and are
required to be constructed concurrently with the housing development may qualify the housing
development for a density bonus if those units meet the requirements of State Density Bonus
Law.
(e) The applicant may elect to accept a lesser percentage of density bonus than the housing
development is entitled to, or no density bonus, but no reduction will be permitted in the
percentages of affordable units required by State Density Bonus law. Regardless of the number
of affordable units, no housing development shall be entitled to a density bonus greater than
what is authorized under State Density Bonus Law.
(f) Nothing in this Division requires the provision of direct financial incentives from the
Town for the housing development, including, but not limited to, the provision of financial
subsidies, publicly owned land, fee waivers, or waiver of dedication requirements. The Town, at
its sole discretion, may choose to provide such direct financial incentives.
Sec. 29.10.470. Development standards.
(a) Building permits and final inspections or certificates of occupancy shall be issued
concurrently for the market rate units and for any affordable units that qualified the project for
a density bonus, incentive, waiver, or parking reduction, so that the affordable units comprise
the required percentage of total units.
(b) The external finish appearance of affordable units shall be indiscernable from that of the
market rate units in the project. The internal finish of affordable units shall be identical to
those of the market rate units in the project, except that the applicant may request Town
approval of substitutions for luxury interior finishes, appliances, or fixtures, if such substitutions
do not violate any other Town Code requirement.
(c) To comply with fair housing laws, the affordable units shall contain the same
proportional mix of bedroom sizes as the market -rate units. In mixed -income buildings, the
occupants of the affordable units shall have the same access to the common entrances and to
the common areas, parking, and amenities of the project as the occupants of the market -rate
housing units, and the affordable units shall be located throughout the building and not
isolated on one floor or to an area on a specific floor.
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Sec. 29.10.480. Density bonus for commercial development.
A Commercial Development may request and receive a Development Bonus pursuant to the
provisions of Government Code Section 65915.7.
Sec. 29.10.490. Interpretation.
If any portion of this Division conflicts with State Density Bonus Law or other applicable state
law, state law shall supersede this Division. Any ambiguities in this Division shall be interpreted
to be consistent with State Density Bonus Law. Statutory references in this Division include
successor provisions."
SECTION III. California Environmental Quality Act (CEQA) Considerations.
The Town Council finds that this Ordinance is exempt from the provisions of CEQA
pursuant to CEQA Guidelines Section 15061(b)(3) (the common sense exemption) because it can
be seen with certainty that there is no possibility that the adoption of this ordinance may have a
significant effect on the environment, in that the ordinance merely implements the provisions of
state law and includes no provisions beyond those included in State Density Bonus Law that may
result in a direct or indirect impact on the physical environment.
SECTION IV. Severability.
In the event that a court of competent jurisdiction holds any Section, subsection,
paragraph, sentence, clause, or phrase in this Ordinance unconstitutional, preempted, or
otherwise invalid, the invalid portion shall be severed from this Ordinance and shall not affect
the validity of the remaining portions of this Ordinance. The Town hereby declares that it would
have adopted each Section, subsection, paragraph, sentence, clause, or phrase in this
Ordinance irrespective of the fact that any one or more Sections, subsections, paragraphs,
sentences, clauses or phrases in this Ordinance might be declared unconstitutional, preempted,
or otherwise invalid.
SECTION V. Publication.
In accordance with Section 63937 of the Government Code of the State of California,
this Ordinance takes effect 30 days from the date of its passage. The Town Council hereby
directs the Town Clerk to cause this Ordinance or a summary thereof to be published or posted
in accordance with Section 36933 of the Government Code of the State of California.
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SECTION VI. Effective Date.
This Ordinance was introduced at a regular meeting of the Town Council of the Town of
Los Gatos on the 17th day of December, 2024, and adopted by the Town Council of the Town of
Los Gatos at its regular meeting on the 17th day of December, 2024, by the following vote:
COUNCIL MEMBERS:
AYES: Mary Badame, Rob Moore, Rob Rennie, Maria Ristow, Mayor Matthew Eludes
NAYS: None
ABSENT: None
ABSTAIN: None
SIGNED:
44
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
TOWN CLbk OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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