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07 Staff Report - Amending Town Code Revised Below Market Price Program Guidelines~owN °F MEETING DATE: 1015109 ITEM NO. COUNCIL AGENDA REPORT ~0sca~~s. DATE: September 24, 2009 TO: MAYOR AND TOWN COUNCIL/ CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY C FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR SUBJECT: INTRODUCTION OF AN ORDINANCE AMENDING TOWN CODE CHAPTER 29, DIVISION 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 HOUSING ASSISTANCE PROGRAM AND ADOPTION OF THE RESOLUTION REPEALING RESOLUTION 2008-121 AND APPROVING THE REVISED BELOW MARKET PRICE (BMP) PROGRAM GUIDELINES RECOMMENDATION: 1. Hold the public hearing and receive public testimony on proposed ordinance and resolution (No Motion Required) 2. Close the public hearing (No Motion Required) 3. Direct Clerk to read title of proposed ordinance (Attachment 2) (No Motion Required) 4. Motion and vote to waive reading of text (Motion Required) 5. Motion to introduce ordinance (Attachment 2) (Motion Required) 6. Direct Clerk Administrator to publish notice (No Motion Required) 7. Approve the resolution repealing resolution 2008-121 and approving the revised BMP Program Guidelines (Attachment 1) (Motion Required) BACKGROUND: On December 15, 2008, the Town Council approved a Planned Development (PD) for a condominium conversion at 347 Massol Avenue (Bay Tree Apartments). The project approval necessitated some modification to the Town's Below Market Price (BMP) Program. Guidelines and Ordinance, specifically to address existing special circumstances senior households that may be displaced when the apartments are converted to condominiums. During this same time period, the Los Gatos Meadows senior living facility presented a conceptual campus redevelopment proposal to the Town Council. One of the issues raised during the presentation was the challenge of providing the required BMP units within the continuum care facility. Consequently, the Meadows requested that BMP requirements be met through an off-site option. Based on these two projects, the Town Council directed staff to make a number of changes to the PREPARED BY: WENDIE R. ROONEY, Community Development Director Reviewed by: Assistant Town Manager/ Town Attorney Clerk A n nistrator Finance Community Development NADEVICNCLRPTS1200918MP ordinance.doc PAGE 2 MAYOR, TOWN COUNCIL, CHAIR, AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: INTRODUCTION OF ORDINANCE AMENDING CHAPTER 29, DIVISION b, SECTIONS 29.10,3000 THROUGH 29.10.3040 September 24, 2009 BMP Program to accommodate these unique situations. The proposed amendments are intended to: 1. Provide an exception to the eligibility requirements for special circumstances senior households residing in apartments that are converted to condominiums; 2. Allow flexibility in phasing requirements for certain applications that are processed as a Planned Developments; 3. Allow BMP units to be provided off site if authorized by Town Council; and 4. Clean up existing language. The General Plan Committee (GPC) reviewed the draft guidelines and ordinance on April 22, 2009, and July 22, 2009; the Community Services Commission reviewed the documents at its September 3, 2009, meeting; and the Planning Commission reviewed the draft guidelines and ordinance at its September 9, 2009, meeting. The Planning Commission staff report has been incorporated into this report, and, therefore, is not included as an attachment. Each reviewing body made a number of recommended modifications that will be discussed in the following Discussion section. Exhibits 1 and 2 contain the draft ordinance and resolution. In both of these documents, recommended edits are in underline format for new text, strike-through format for deleted text, and italics for existing text that has been reformatted for clarity purposes. DISCUSSION: The principal changes to the Draft BMP Guidelines and Ordinance (Attachments 1 and 2, respectively) are as follows: Town Council Directed Changes Provide an exception to the Buyer Selection Process for special circumstances senior tenants who are residing in an apartment that is converted to a condominium (Attachment 1, Exhibit A, Page 7, Section NB.9). The tenant would have a first right of refusal to buy the BMP unit if he or she meets the income qualifications of the program. While the Town Council's direction to provide the first right of refusal to purchase a BMP unit was focused on "special circumstance seniors" who were residing in apartments that are proposed to be converted to condominiums, staff recommended expanding the exception to any tenant, regardless of age, that could be displaced through the condominium conversion process. This recommendation was based on the fact that the existing BMP Guidelines Buyer Selection Process address most types of households, including senior, disabled, single heads of households, Town employees, etc., and that the displacement could be a hardship to all tenants, not just seniors. The GPC expressed concern with allowing the first right of refusal to all tenants regardless of how long they have resided in the apartment and thus recommended narrowing the range of perspective tenants that could qualify. Staff PAGE 3 MAYOR, TOWN COUNCIL, CHAIR, AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: INTRODUCTION OF ORDINANCE AMENDING CHAPTER 29, DIVISION 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 September 24, 2009 recommended, and the GPC supported, a proposed new provision to the guidelines that limited the eligible tenants to those who resided in the apartment prior to the property owner issuing the "Notice of Intent to Convert" the apartments to condominiums. This legal, State required notice must occur a minimum of 180 days prior to the Town's public review of the proposed condominium conversion application. Finally, in order to provide the tenant the first right of refusal to purchase the unit, an exception to the First Time Home Buyers qualification requirements is also necessary. Attachment 1, Exhibit A, Page 5, Section IV.A.2 includes this recommended exception that would allow tenants who have resided in the apartment prior to the issuance of the Notice of Intent to Covert to qualify as a First Time Home Buyer and thus meet the eligibility requirements to purchase the BMP unit. The tenant would also need to meet other BMP income qualification requirements. • Provide for phasing of BMP units in Planned Development projects that are converting from apartment complexes to condominiums (Attachment 1, Exhibit A, Page 4, Section II. G). The phasing would allow the tenant to remain in his or her unit until such time that he or she vacates the unit. Once it is vacated, it would be sold as a BMP unit to a qualified buyer. Town Council directed this change be made to allow for the special circumstances seniors who were potentially be displaced with the Bay Tree condominium conversion process. Staff, however, is recommending that Council retain the ability to approve future changes in phasing for other unique circumstances that may occur by allowing the Town Council to approve changes to phasing during the Planned Development review process. • Provide an off-site construction provision for continuum care facilities, such as the Los Gatos Meadows (Attachment 1, Exhibit A, Page 3, Section ILF). Residents of a continuum care facility do not own their units and move to a new unit or room when their level of assistance and care changes. Consequently, it would be problematic to maintain on-site BMP units when the residents transition from one unit and level of care to another. The off -site provision would allow a continuum care facility to either buy or construct its required BMP unit at an off-site location that is within the Town of Los Gatos. General Plan Committee Recommended Changes During its review, the General Plan Committee (GPC) also recommended the following changes to the BMP Program (see Attachments 3 and 4 for a summary of the GPC comments): + Include a provision in the Guidelines that reflects the Deed Restriction requirement, requiring owners to occupy their BMP unit rather than renting it. Although the deed restrictions that are recorded on the BMP unit require the owner to occupy the unit, staff has added a new provision (Attachment 1, Exhibit A, Page 10, Section W.F.) that requires that the qualified owner live in the owner-occupied unit, PAGE 4 MAYOR, TOWN COUNCIL, CHAIR, AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: INTRODUCTION OF ORDINANCE AMENDING CHAPTER 29, DIVISION 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 September 24, 2009 • Prohibit the owner-occupied BMP unit recipient from upgrading to a larger or newer BMP unit. The existing Guidelines currently address this suggestion through the requirement that recipients meet the first time homebuyer definition. An existing BMP recipient would not qualify as a first time buyer since he or she presently owns a home in the Nine Bay Area Counties and thus not be able to buy another BMP unit. • Eliminate the in-lieu fee option for the smaller residential projects of five (5) to nine (9) units (Attachment 1, Exhibit A, Page 3, Section II.D.a.). The Committee felt that since the overall purpose of the program is to create BMP units that are interspersed with market rate units throughout the community, then these projects should provide a BMP rather than paying the in-lieu fee. • Eliminate the in-lieu fee option for projects that are five (5) units or more within the Hillside Residential (HR) Zone (Attachment 1, Exhibit A, Page 3, Section H.D.b.). Again, the Committee felt that since the overall purpose of the program is to create BMP units that are interspersed with market rate units throughout the community, then a hillside residential subdivision should provide a BMP unit through either buying an existing unit or constructing a unit. GPC suggested that the developer should provide the unit in a suitable off-site, non- hillside Los Gatos location. Presently, the guidelines require developments in the HR Zone District to pay an in-lieu fee that. is equal to six (6) percent of the building permit valuation for the entire project. The in-lieu fee option was presumably established for these types of developments because the Town did not want to encourage increased density and residential units in the hillsides. In order to assist the Planning Commission and Town Council with their deliberation of the aforementioned GPC recommendations, subsequent to the July 22, 2009, GPC review of the draft guidelines, staff surveyed other jurisdictions regarding the GPC's recommendations on eliminating the in-lieu fee option and off-site construction. The summary of findings is contained in Attachment 6. It is important to note that the GPC did not have this summary information during their discussions and ultimate recommendation on this issues. Of the eight jurisdictions surveyed, all contain an in-lieu alternative to providing the Below Market Price unit and five of the eight allow off-site construction to meet the program requirements. The in-lieu fee option generally applies to the smaller development projects and, in most cases, requires the City staff or City Council approval (Attachment 6). Staff also consulted the non-profit California Coalition for Rural Housing report entitled Inclusionary Housing in California: 30 Years of Innovation. Prepared in March 2003, the report summarizes the results of a survey of the 107 California cities and counties with inclusionary housing programs. In regards to in-lieu fees and off-site construction options, the survey finds that most jurisdictions offer developers alternatives to constructing affordable units within the market rate project. Most common is paying fees in-lieu of constructing the required unit. Of the 81 percent of the reporting programs that provide an in-lieu fee option, 45 percent are PAGE 5 MAYOR, TOWN COUNCIL, CHAIR, AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: INTRODUCTION OF ORDINANCE AMENDING CHAPTER 29, DIVISION 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 September 24, 2009 automatic and 55 percent required that the developer demonstrate that on-site construction is infeasible. Lastly, 67 percent of the jurisdictions permit developers to construct units at off site locations. Often the off-site construction is allowed if the developer agrees to either increase the number of units or number of bedrooms. Another factor to consider when determining whether to eliminate the in-lieu fee option for smaller and hillside residential development is how effective the in-lieu fee fund has been at providing affordable housing opportunities. Since 1993, the BMP in-lieu fund has generated approximately $1.8 million dollars. The fund is principally used to buy units that are at-risk of losing their affordability and for administrative costs, including the contract with the County Housing Authority. As of end of 07/08, the fund has a balance of approximately $1.4 million dollars. While there has been minimal use of the fund, the recently prepared Affordable Housing Strategy identifies several existing housing programs as well as new programs for the Town to pursue with its BMP and RDA Housing Funds, including contributions to the Santa Clara County Housing Trust, First Time Homc Buyer Program, Housing Conservation Fund, Creating a Property Acquisition Fund, etc. Moreover, the report also suggests that the BMP funds, along with the RDA funds, can be leveraged to achieve a greater number of affordable units. Two additional factors to consider when determining whether to eliminate the in-lieu fee option are: (1) how the Town would respond to the case where a developer could not find an appropriately priced unit, and (2) would the conversion of a market rate unit in an existing multifamily owner-occupied development to an affordable unit raise neighbor opposition. In this latter case, it raises the question whether that Town is obligated to notify the surrounding tenants/owners. In summary, as illustrated in the two surveys, in-lieu programs are very common, especially for smaller residential developments. While most jurisdictions prefer to integrate the affordable units with the market rate units, off-site construction is often allowed if it is demonstrated that greater community benefits can be achieved with an off-site alternative. However, it is important to consider how the off-site unit is integrated into a different neighborhood, especially if an existing market rate unit is converted to a BMP. The in-lieu program has generated a respectable amount of funds over the past 16 years. While the BMP in-lieu fund has not been used to construct new units, it has provided funding to maintain existing affordable units that were in jeopardy of losing their affordability, and program monitoring and BMP eligibility verification (through a contract with the Housing Authority). The State does not mandate BMP Programs. Therefore, the Town has full discretion on how to administer the program. Community Services Recommended Chan1jes The Community Services Commission generally found the program revisions acceptable. The one issue where the Commission differed from the GPC and staff recommendation was the PAGE 6 MAYOR, TOWN COUNCIL, CHAIR, AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: INTRODUCTION OF ORDINANCE AMENDING CHAPTER 29, DIVISION 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 September 24, 2009 exception to the First Time Homebuyer qualifications and Buyer Selection Process. Presently, the guidelines state that an applicant is considered a first time home buyer, and thus eligible for a BMP, if they have not appeared on a residential title in the nine Bay Area counties within the past three (3) years. The Commission felt that a full exception to the First Time Homebuyer requirements and the Buyer Selection Process (by having first right of refusal to purchase the BMP unit) raised potential "fairness" issues with the other BMP Program applicants. However, recognizing the uniqueness of the condominium conversion situation, the Commission suggested reducing the requirements so that the tenant could be considered a First Time Home Buyer if he or she has not appeared on a residential title in the nine Bay Area counties within the past 2 years rather than the current program requirements of 3 years. Based on staff and the Planning Commission's recommendations, staff has not made this revision to the attached draft ordinance. However, should the Town Council agree with the Community Services Commission, the revision could be made during the first reading of the draft ordinance and the final adoption. Finally, Community Services Commission also recommended the Town Attorney review the proposed exceptions to ensure there are not any fairness concerns or liability issues. The Town Attorney does not believe that the exception provisions would constitute a fairness issue, since the tenant would also need to meet the income level qualifications and the Town has complete discretion on the BMP Program's implementation. PlanninEt Commission Recommended ChanlZes The Planning Commission generally agreed with the Town Council direction and GPC recommended changes (Attachment 5). The Planning Commission agreed with the GPC that hillside residential projects should construct the BMP unit rather than paying an in-lieu fee. While the GPC recommended that the BMP unit be provided off site (either through constructing a unit or purchasing and converting an existing market rate unit), the Planning Commission felt that the BMP unit should be provided on-site and only if an on-site unit is deterinined to be infeasible, then an off-site unit should be constructed or purchased. The Planning Commission further recommended that an in-lieu fee option only be allowed if the developer provides sufficient justification that both on- and off-site alternatives are not viable. Finally, the Planning Commission agreed with the GPO's recommendation to eliminate the in-lieu fee option for non- hillside smaller residential projects of five (5) to nine (9) units and the Council direction to allow exceptions to the First Time Homebuyer Selection Process and the First Time Homebuyer qualifications in cases of tenants in condominium conversion projects. Staff Recommended Chanl4es During the review of the draft guidelines and ordinance, staff recommended the following modifications to the documents: • Reformat the guidelines and include both the "Purpose" statement and "Enabling Legislation" (Attachment 1, Exhibit A, Page 1, Section LA and I.B). The "Purpose" statement helps to clarify the overall intent of the program and will offer guidance to staff PAGE 7 MAYOR, TOWN COUNCIL, CHAIR, AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: INTRODUCTION OF ORDINANCE AMENDING CHAPTER 29, DIVISION 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 September 24, 2009 statement helps to clarify the overall intent of the program and will offer guidance to staff and the Council if any exceptions are proposed to the program. The Enabling Legislation clarifies that the BMP Program is administered via the guidelines and Division 6 of the Town Code (ordinance). Inclusion of an Affordability Agreement requirement. Although the BMP requirements are recorded on the subject property, the Affordability Agreement will help ensure that the units are sold to qualified buyers and will only be released once the escrow process is completed. • As previously noted, staff also expanded the eligibility exception to the First Time Homebuyer definition and Buyer Selection Process to include all tenants living in an apartment that is proposed to be converted to a condominium if they resided in the apartment prior to the issuance of the Notice of Intent to Convert. • Finally, staff made a number of other small changes to clarify existing procedures. FINDINGS: General Plan Conformance The BMP Guidelines revisions and related Town Code Amendments are consistent with the following General Plan Policies and/or Implementing Strategies. Staff reconunended support for the finding is included in Italics. H.P.1.1 Maintain and/or adopt appropriate land use designations and other development tools to encourage development of affordable housing. The revised BMP Program addresses the changing needs of the Town's Affordable Housing Program. The revisions will address unique situations raised by continuum care facilities and condominium conversions and will help further the program goals by ensuring that these unique uses will be able to continue contributing to the affordable housing stock. H.I.1.5 Below Market Price Program: Continue to implement the BMP Program in order to increase the number of affordable units in the community... The proposed BMP Program revisions will help to ensure the continued implementation of the BMP Program by addressing unique situations and facilitating their compliance with the program goals. CONCLUSION: The attached guidelines and ordinance reflect Town Council direction, Planning Commission recommended changes, generally the GPC suggested changes, and staff revisions. The one PAGE 8 MAYOR, TOWN COUNCIL, CHAIR, AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: INTRODUCTION OF ORDINANCE AMENDING CHAPTER 29, DIVISION 6, SECTIONS 29. 10.3000 THROUGH 29.10.3040 September 24, 2009 recommended change that has not been -made to either the guidelines or the ordinance is the Community Services Commission's reconunendation that tenants in condominium conversion not be granted a complete exception to the Buyer Selection Process or the First Time Home Buyer definition. As discussed above, the Community Services Commission supported reducing the qualifications for tenants in condominium conversions from the mandatory 3 year period of time since owning a home in the Bay Area to 2 years; however, they did not support a complete exception to the requirements for fairness reasons. Should the Town Council agree with the Community Services Commission recommendation, staff would recommend introducing the draft ordinance and staff would revise the ordinance between introduction and adoption to reflect the Community Services Commission recommendation. Staff would also recommend continuing the resolution so it can be revised consistent with the Community Services Commission recommendation and it can be adopted concurrently with the adoption of the ordinance. ENVIRONMENTAL ASSESSMENT: It has been determined that the project could not have a significant impact on the environment and is not subject to the California Environmental Quality Act (Section 15061 (b)(3)). FISCAL IMPACT: There is no direct fiscal impact to the Town to amend the Below Market Price Housing Program. However, if the Town Council approves the Planning Commission and GPC recommendations to generally require that the developer of HR Zone District subdivisions construct the BMP unit rather than paying in-lieu fees, the fund will decrease over time and ultimately be exhausted. Moreover, the Town will need to determine an appropriate funding source for the costs associated with administering the BMP Program, including the contract with the Santa Clara County Housing Authority. Attar imPntw 1. Draft Council Resolution with BMP Guidelines 2. Draft Zoning Ordinance Amendments 3. April 22, 2009, GPC Minutes 4. July 22, 2009, GPC Minutes 5. September 9, 2009, Planning Commission Minutes 6. Survey of Eight Bay Area Jurisdictions' In-Lieu Fee and Off-Site Construction Provisions WRR: cgt NADEVICNCLRPTS120091BMP Ordinanmdoc RESOLUTION 2009 - RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS ADOPTING REVISED BELOW MARKET PRICE HOUSING GUIDELINES AND REPEALING RESOLUTION 2008-121 WHEREAS, the Town of Los Gatos Zoning Ordinance Sections 29.10.3000 through 29.10.2040 establishes a Below Market Price (BMP) Housing Program to assist low and moderate income Los Gatos citizens purchase homes at prices below market value; and WHEREAS, the Program requires construction of dwellings that persons and families of low and moderate income can afford to rent or buy, and assures to the extent possible that the resale prices of those dwellings units and rents, if they are rented, will be within the means of persons and families of low and moderate income; and WHEREAS, the Program helps the Town meet State mandated housing goals; and WHEREAS, this resolution revises the Town of Los Gatos Below Market Price Housing Program Guidelines. NOW, THEREFORE, BE IT RESOLVED, that Town Council of the Town of Los Gatos (1) repeals Resolution 2008-121; and (2) adopts the Town of Los Gatos Below Market Price Housing Program Guidelines attached as Exhibit A. Attachment 1 PASSED AND ADOPTED at a regular meeting of the Town Council held on the day of , 2009, by the following vote: COUNCIL MEMBERS: AYES : NAYS : ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA N:5DEYVLES0SMMP GUIDFLTHES-2009 DOC 2 Exhibit A TOWN OF LOS GATOS BELOW MARKET PRICE HOUSING PROGRAM GUIDELINES (September 2009 Draft) 1. Purpose A. Purpose-..-- The overall purpose of the Below Market Price (BMP) Housing Program is to provide the Town of Los Gatos with a supply of affordable housin2. While the program is available to all qualified applicants, the general intent of the program is to provide affordable housing for households who work or currently live in Los Gatos. The main goal is to increase the housing supply for households that have median and low incomes compared to the median income for Santa Clara Couulty and meet the housing needs identified in the Town's General Plan Housing Element. The Program further intends to ensure, to the greatest extent possible, that rent and re-sale of these housing units will remain affordable to median and low income levels in perpetuity. Although the Town has a fee-in- lieu of constructing actual units option for defined circumstances, the primary objective of the BMP Program is to obtain actual "rental" or "for sale" housing units rather than equivalent finds. All off-site BMP units shall be constructed within the Town of Los Gatos. The construction and occupancy of the BMP unit is _deterixrined according to these Town Council established guidelines and Ordinance No. 2009- B. Enablinp, Lep-islation: The Below Market Price Program is governed by Division 6 of the Town Code. 'rhe BMP Program is administered under these Below Market Price Housing Program Guidelines. it, Below Market Price Housing Requirements - General A. Applicability: The BMP Program requirements shall apply to all residential developlnerrl projects that include five (5) or more residential units or parcels Which involve: 1. Neiv construction of OlVnership or rental housing units, including inixed use developments and addition of knits to existing projects, or 2. Subdivision of property for single family or duplex housing development, or 3. Conversion of rental apartments to condominiums or other common interest oivnership, or 4. Conversion of non-residential use to residential use. B. Number of BMP Units: All residential developments consisting of five (5) or more units are required to participate in the BMP Program. The requirements for participation increase by development size as shown below: BMP Guidelines Page 1 Five (5) to Nineteen 19 market rate units: The developer shall provide a minimum number of BMP units equal to ten (10) percent of the number of market rate units. 2. Twenty (20) to one hundred (100) market rates units: The developer shall provide a minimum of BMP units as determined by the following formula: Number of BMP units = (.225 x total # of market rate units) - 2.5 This formula acts to increase the number of BMP units required, as a percentage of market-rate units, from 10% to 20% over the range of 20 to 100 market rate units. One hundred and one (101) units or more: The developer shall provide a minimum number of BMP units equal to twenty (20) percent of the number of market rate units. BMP dwellings within a project of rental units shall also be rental units. BMP units within a project of owner-occupied units shall also be designated as units for purchase. BMP Units within a project that contains both rental and owner- occupied units shall also be designated as both rental and as units for purchase, in a ratio similar to that of the market rate units. The Town and developer may negotiate to provide more BMP units than required by the rules listed in these guidelines to fulfill a development's Community Benefit requirements. C. Fraction of a BMP Housing Units: In determining the number of BMP units required, any decimal fraction of .5 or above shall be rounded up to the nearest whole number. D. Residential In-Lieu Payments: The_ general intent of the BMP Program is to provide the Town of Los Gatos with a supply of affordable housing for households who work or currently live in Los Gatos. However. there may be circumstances when the construction of the BMP unit is unpractical or there are unusual circumstances that make the construction of the unit inconsistent with Town policy. The Town, at its sole discretion, may consider an in-lieu payment alternative to the required BMP unit in the case of Planned Unit development with an underlying zone of HR. Prior to approving the in-lieu fee alternative, the applicant must demonstrate to the satisfaction of the Town wlia BMP unit cannot be (1) developed on the same site as the market rate units, and if it caiunot be provided on the same site then, (2) develop at an appropriate off -site location within the Town limits. If the developer provides sufficient justification that both of these alternatives are not viable, then a fee in-lieu option may be considered. The rewired in-lieu fee is as established by a separate resolution and is to be paid to the Town prior to issuance of the certificate of occupancy for the market rate BNII' Guidelines Page 2 residential unit_that triggered the_BMP requirement. The provision for a BMP unit applies if the project is built under the rules of an overlay zone unless the rules of the overlay zone provide otherwise. The in-lieu fee shall be equal to the amount of six (6) percent of the building permit valuation for the entire project. The total building permit valuation shall be determined by the Town Building Official. Fees shall be paid prior to or at time of final occupancy as follows: 1. Multi-Family Owner Occupied Developments: Prior to occupancy of each phase, a proportional amount of fees shall be paid, as determined during the Planning approval process, 2. Multi-Family Renter Occupied Developments: Prior to occupancy of each phase, a proportional amount of fees shall be paid, as determined during the Planning approval process. 3. Single-Family Planned Developments: At time of final occupancy for each unit. E. Housing Fund: In-lieu fees will be deposited into the Town's Affordable Housing Fund. Applications and or recommendations for use of remaining funds will be reviewed as received. Possible use of the funds include, but is not limited to, the following: 1. Subsidizing the cost of owner occupied units to make them affordable to low/moderate income households 2. Purchasing rental units to make them affordable to low/moderate income households 3. Purchasing land for the future development of affordable housing 4. Developing affordable housing 5. Supplementing of affordable housing projects developed through the Los Gatos Redevelopment Agency 6. Funding administration of the program, as approved by the Town Council in its annual budget process F. Off-Site Construction: The Town Council may consider off-site construction of BMP units for continuum care facilities and for Hillside Residential (HR) Zone District moiects that have Drovided sufficient iustification to the Town that an on- site BMP unit is not viable. BMP Guidelines Page 3 G. Phasing of the Construction of On- and Off-Site BMP Units: On- and off-site BMP units shall be constructed and Certificate of Occupancies secured concurrently with or prior to the construction of the market-rate units. The BMP requirement will be calculated on the basis of the whole development. The Town Council may grant an exception to these phasing requirements during the Planned Development project approval process for condominium conversion developments. H. Affordability Agreement: The developer of "for sale" BMP units shall enter into an affordability Tagreement with the Town. The agreement will ensure that the BMP units are sold to qualified buyers and will be released by the Town through the escrow process once the BMP is sold to a qualified bum III. Characteristics of BMP Units A. Size of units: The size and design of BMP dwelling units shall be reasonably consistent with the market rate units in the project. The Town and developer may negotiate regarding the size of units if more units than required are to be provided under the Community Benefit requirements. BMP units should be provided proportionately in the same unit type mix (number of bedrooms) as the market rate units. In consideration of the household size of the households on the current program interest list, the Town and developer may negotiate to provide a greater proportion of a particular unit type. There shall not be significant identifiable difference between the BMP and market-rate units visible from the exterior. The size and design of the BMP units must be reasonably consistent with the market- rate units in the development. B Location of units: BMP units shall be dispersed throughout the development, to the extent feasible; in all buildings, on each floor, and in each project phase. A concentration of BMP units in one location is not desirable and will generally no be allowed. C. Finish of units: The external appearance of BMP writs should be indiscernible to that of the market rate units in the project. The internal finish of BMP units should be identical to that of the market rate units in the project, except that the developer may request Town approval of substitutions for luxury interior finishes, appliances, or fixtures, if such substitutions do not violate any Town code requirement. D. Project Facilities: All project facilities and amenities, including parking, must be available on the same basis to the BMP units as to the market rate units in the project, to the extent feasible. IV. The BMP Unit Purchase Process; Buyer Selection, and BMP Unit Sale and Resale Procedures. BMP Guidelines Page 4 A. Owner Occupied Units 1. Applicant Eligibility a. Household Income: In order to be eligible to purchase an owner- occupied BMP unit, an applicant's annual household income must be no greater than 100% of the Median Family Income (MFI), adjusted for household size, as defined by the United States Department of Housing and Urban Development (HUD) for the San Jose, CA Primary Metropolitan Statistical Area (PMSA). Household assets, such as real property, may also be considered in determining eligibility. b. Housing Costs: In order to be eligible to purchase an owner- occupied BMP unit, an applicant must also demonstrate the ability to pay monthly housing costs. The monthly housing cost shall include the following factors: 1. unit price 2. current lending rates 3. estimated property taxes 4. estimated homeowner's insurance costs homeowners' association fees, if applicable 5. other expenses as determined necessary by the lender c. All persons must qualify for their own mortgage without assistance from the Town. Qualifications must include the ability to pay taxes, insurance, closing costs and any homeowner association fees in addition to the mortgage. 2. First Time Horne Buyers: The Below Market Price (BMP) Program is for First Time Home Buyers. A First Time Home Buyer, by definition, is an applicant whose name has not appeared on a residential title in the counties covered by the Association of Bay Area Governments (ABAG) or Association of Monterey Bay Governments (AMBAG) which are Alameda, Contra Costa, Marin, Monterey, Napa, San Benito, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano and Sonoma for at least three (3) years prior to application. Exception is made for people who were homeowners prior to a divorce settlement and tenants residing in a rental apartment proposed to be converted to a condominium or other common interest ownership prior to a Notice of Intent to Convert the development to an ownership residential unit. B. Buyer Selection: A point system is used to establish a ranking of applicants for the purchase of an available unit. Applicants will be ranked according to total points and must have at least one point to be eligible to purchase a unit. In BMP Guidelines Page 5 addition, applicant households must contain at least the same number of persons as the number of bedrooms in a unit, at the time of application, in order to be eligible to purchase that unit, if the unit contains three bedrooms or more. All points are calculated per household, not for each individual within the household. For example, a household in which two members are senior citizens would receive six points for senior citizen status, not twelve points for two members having senior citizen status. Points are awarded as follows: 1. Six points: a. Senior citizens who reside in the Town at the time of application and have lived in the Town for at least the prior two years. A senior citizen is defined as any person 62 years of age or older at time of application or married couples living together when at least one spouse is 62 years of age or older at time of application. b. Senior Citizens who have lived in the Tow for at least two years and have moved out of the Town within the last five years prior to the time of application. C. Disabled persons who reside in the Town at the time of application and who have lived in the Town for at least the prior two years. The definition of "disabled" for the purpose of assigning points under this section shall be that used by the U.S. Social Security Administration for the purpose of determining eligibility for Social Security disability benefits. d. Households required to relocate their residence as a result of Council action or mobile home park closure. C. Regular Full-Time and Regular Part-Time Town employees as defined in the Tow's Persotulel Rules, who have been employed by the Town for a period of no less than 12 months prior to the time of application. f. Single heads of household with dependent children who reside in the Town at the time of application and have lived in the Town for at least the prior two years. 2. Four points: a. Persons who live in the Town of Los Gatos at time of application and who have lived in the Town at least the prior two years. b. Persons who work in the Town of Los Gatos at time of application BMP Guidelines Page 6 and have worked in the Town for at least the prior two years. 3. Two points: a. Households who have lived in the Town for at least 10 years and have moved out within the last ten years prior to the time of application, b. Household size is worth two points per person. 4. One point: a. Households who live or work within Santa Clara County at the time of application. b. Households with an annual household income at or below 60% of the Median Family Income (MFI), adjusted for household size, as defined by the United States Department of Housing and Urban Development (HUD) for the San Jose, CA Primary Metropolitan Statistical Area (PMSA). 5. A lottery will be used to rank each qualified applicant in the case of a tie. 6. Applicants are provided the opportunity to purchase available units in order of point ranking, from most points to least points. An applicant has two opportunities to refuse to purchase a unit before being removed from the current applicant pool. 7. Applicants who do not qualify for a particular project or who are not provided the opportunity to purchase a unit in a particular project shall retain their eligibility to apply for future projects. 8. An applicant must obtain pre-approval for a mortgage loan within one week after notification of eligibility to purchase a unit. The applicant must submit documentation of loan approval within three weeks of notification of eligibility to purchase a unit. 9. Exception to the Buyer Selection Process: An exception to the Buyer Selection Process may be granted to a resident of a rental apartment that is proposed to be converted to an "owner occupied" condominium or other common interest ownership development. In order to qualify for the exception, the resident must have resided in the rental apartment prior to the issuance of the Notice of Intent to Convert the development to an ownership project and shall meet the financial eligibility requirements to qualify for a BMP unit. The resident shall be provided first right of refusal regardless of point ranking, for units in the following order: BMP Guidelines Page 7 a. The unit they reside in if it is designated as a BMP unit, b. Any other available BMP unit. C. Determination of Initial Selling Price: BMP units shall be priced to be affordable to households in two income categories: Median Income Households (those whose income is above 80%, but no greater than 100%, of the County Median Income); and Low Income Households (those whose income is above 50%, but no greater than 80%, of the County Median Income). I. Nifty percent (50%) of the units in a project shall be priced to be affordable to Median Income Households; fifty percent (50%) shall be priced to be affordable to Low Income Households. Whenever the calculations result in fractional units, then the number of units priced to be affordable to Low Income Households shall be rounded up to the next whole number, and the number of units priced to be affordable to Median Income Households shall be rounded down to the next whole number, including zero (0). The following table applies this formula to projects with 1, 2, and 3 units: Total Number of BMP Units in Project Units Priced for Low Income Households Units Priced for Median Income Households 1 1 0 2 1 1 3 2 1 The Town and developer may negotiate regarding the affordability mix of units, to fulfill a development's Community Benefit requirements. The affordability level of a unit shall be for the purpose of setting the initial selling price only, and do not prevent its sale to any household eligible to purchase an owner-occupied BMP unit, as set forth in these Guidelines. 2. Annually, the Town shall set the initial unit sales price for each unit type (number of bedrooms), for each of the two income categories. These initial sales prices shall be set using the most recent Median Family Income (MFI) figures from the United States Department of Housing and Urban Development (HUD) for the San Jose, CA Primary Metropolitan Statistical Area (PMSA), and through the following calculations: BMP Guidelines Page 8 a. For units to be priced to be affordable to Median Income Households: the average of the 100% MFI annual income and the 80% MFI annual income (assuming household size appropriate to size of unit) x Multiplier = Initial Sales Price. 1. Assumptions of household size by size of unit are as follows: Household Size Studio 1 1 Bedroom 1 2 Bedroom 2 3 Bedroom 3 4 Bedroom 4 These assumptions of household size by size of unit shall be for the purpose of setting the initial sales price only, and do not prevent the sale of any unit to any household eligible to purchase an owner-occupied BMP unit, as set forth in these Guidelines. b. For units to be priced to be affordable to Low Income Households: the average of the 80% MFI annual income and the 50% annual income (assuming household size appropriate to size of unit) x Multiplier - Initial Sales Price. c. Calculation of Multiplier. A Multiplier shall be calculated, based on reasonable assumptions about unit sales prices, based on the most recent comparable sales of BMP units; current lending rates, as determined by the most recent Primary Mortgage Market Survey (PMMS) conducted by the Federal Home Loan Mortgage Corporation (Freddie Mac); and related costs; and using the following formula: 1. Determination of Total Housing Cost: Sample sales price - 10% down payment - mortgage. Annual debt service on mortgage + annual property taxes + amiual homeowners fees + annual private mortgage insurance (PMI) = Total Annual Housing Cost. 2. Determination of Minimum Household Income: Assuming one-third of household income goes for housing expenses, Total Annual Housing Cost x 3 = Minimum Annual BMP Guidelines Page 9 Household Income. 3. Determination of Multiplier: Sample Sales Price/Minimum Annual Household Income = Multiplier. Copies of the initial sales prices, and the calculations made, shall be available on request from the Town's Community diets Development Department. D. Deed Restrictions: Council approved Deed Restrictions shall be recorded with each Below Market Price dwelling unit. E. Resale of Units: 1. If the owner elects to sell his/her twit, the Town must be notified in writing by the owner. 2 When a Below Market Price dwelling unit becomes available for resale, the Town shall set the resale price and make the unit available for purchase through the BMP process. 3 The Town determines the resale price in accordance with the deed restriction recorded on the property. F. Occupancy of Units: Consistent with the deed restriction that will be recorded on the subject property, the household purchasing a BMP unit must occupy the unit as his or her primary residence durina his or her ownershiD of said unit. V. Requirements for BMP Rental Development A. Administration: The program shall be administered by the Town or its designee. B. Applicant Eligibility 1. Household Income: In order to be eligible to rent a BMP rental unit, a household's annual income must be no greater than 80% of the Median Family Income (MFI), adjusted for household size, as defined by the United States Department of Housing and Urban Development (HUD) for the San Jose, CA Primary Metropolitan Statistical Area (PMSA). Priority will be given to those households whose income is less than 50% of the MFI. Household assets may also be considered in determining eligibility. 2. Ability to Pay Rent: A tenant's ability to pay monthly rent will also be considered in determining tenant eligibility. BMP Guidelines Page 10 C. Tenant Selection: The property owner or manager of the development shall market the BMP unit(s), and solicit rental applications. Applications from tenants selected by property owner or manager will be forwarded to Town or designee for verification of income eligibility. D. Management 1. BMP rental units shall be managed by the property owner or manager in the same manner as other units in the development. 2. Tenants of BMP rental units are eligible to receive conciliation and mediation services provided through the Town's Rental Dispute Resolution Program except as they regard rent increases. E. Unit Rents: Rents may not exceed 80% of the most current Fair Market Rents as determined by the Santa Clara County Housing Authority. F. Annual Review: If a tenant's income increases so that it falls between 80 and 100 percent of MFI, then the rent may be increased in accordance with the Town's Rental Dispute Ordinance; and the unit shall still be considered a BMP Rental Unit. However, if a tenant's income exceeds 100 percent of MFI, the rent may be increased to the average rent of similar units in the complex; in this latter case, the unit will no longer be a BMP unit and the next available unit that is comparable in size shall be designated as a BMP unit in its place, and must be rented to an eligible household so that the number of BMP units within the project remains the same. G. Deed Restrictions: Council approved Deed Restrictions shall be recorded for each Below Market Price rental dwelling unit. V1. RENTAL UNITS -NEW SECOND DWELLING UNITS A. Administration: The program shall be administered by the Town or its designee. B. Second Unit Incentive Program: 29.10.310 of the Town Code, may choose to participate in the Second Unit Incentive Program (SUIP) as referenced in Section 29.10.320(a) of the Town Code and as set forth below. I. The SUIP consists of a no interest construction loan to a property owner who intends to develop a new second unit. The loan amount shall be determined based on the square foot construction cost as set forth in the current version Uniform Building Code as adopted by the Town for new construction and remodels. The loan amount will be calculated at 100% of the construction cost if the unit is income and rent restricted to serve households with incomes below 50% of the Median Family Income (MFI), adjusted for household size, as defined by the United States BMP Guidelines Page 1 1 Department of Housing and Urban Development (HUD) for the San Jose, CA Primary Metropolitan Statistical Area (PMSA), or 80% of the construction cost if the unit is income and rent restricted to serve households with incomes below 80% of MFI. 2. When a property owner participates in the SUIP, a deed restriction shall be recorded on the property. The deed restriction shall stipulate the rental rate, tenant income level, duration of affordability and loan repayment requirement as well as any other criteria as determined appropriate by the Town. 3. A SUIP loan to construct a second unit within the Central Los Gatos Redevelopment Project area shall be funded using Redevelopment Affordable Housing Funds and shall remain affordable for 55 years. A SUIP loan to construct a second unit outside the Central Los Gatos Redevelopment Project area shall be funded using BMP Program Funds and shall remain affordable for 30 years. The SUIP affordability restrictions as set forth in this section may only be amended by action of the Town Council. 4. A tenant's ability to pay monthly rent will also be considered in determining tenant eligibility. Applications from tenants selected by the property owner or manager will be forwarded to the Town or its agent for verification of income eligibility. Rental agreements shall be submitted to the Town or its agent to verify compliance with the provisions of this section. Tenants are eligible to receive conciliation and mediation services provided through the Town's Rental Dispute Resolution Program except as they regard rent increases. 5. Units targeted to households with incomes up to 80% of the Median Family Income (MFI) shall have rents restricted to 80% of Fair Market Rents as determined by the Santa Clara County Housing Authority. Units targeted to households with incomes up to 50% of CMI shall have rents restricted to 50% of Fair Market Rents as determined by the Santa Clara County Housing Authority. Tenant rents and incomes will be monitored annually, (Adopted by Resolution 2009- September , 2009) N:%DEVIJOEL10RD1NANCE AMENDMENMBMP Program Guidelines Final.doc BMP Guidelines Page 12 ORDINANCE AN ORDINANCE OF THE TOWN OF LOS GATOS AMENDING TOWN CODE CHAPTER 29, DIVISON 6, SECTIONS 29.10.3000 THROUGH 29.10.3040 HOUSING ASSISTANCE PROGRAM THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS: SECTION I Town Code Chapter 29, Division 6 (Sections 29.10.3000 through 29.10.3040, Housing Assistance Program) is deleted in its entirety. SECTION II Town Code Chapter 29, is hereby amended to read as follows: ZONING REGULATIONS Article I. In General DIVISION 6. HOUSING ASSISTANCE PROGRAM Sec. 29.10.3 000. Intent. Sec. 29.10.3005. Below market price program - Established. Sec. 29.10.30t0. Same - Intent. Sec. 29.10.3015. Application. Sec. 29.10.3020. Definitions. Sec. 29.10.3025 Scope. Sec. 29.10.3030. Price. Sec. 29.10.3035. Project denial. Sec. 29.10.3040. Administration. SECTION III Town Code Chapter 29, Division 6 is replaced as follows: Page 1 of 6 Attach-ment 2 DIVISION 6. HOUSING ASSISTANCE PROGRAM Sec. 29.10.3000. Intent. This division is adopted to meet housing needs shown in the housing element of the general plan. (Ord. No. 1316, § 3.90.010, 6-7-76; Ord. No. 1430, 6-4-79) Sec. 29.10.3005. Below market price program--Established. This division establishes the below market price program (BMP) (Ord. No. 1316, § 3.90.100, 6-7-76; Ord. No. 1430, 6-4-79) Sec. 29.10.3010. Same--Intent. The below market price (BMP) program requires suction the provision of dwellings that persons and families of moderate income can afford to buy or rent, and assures to the extent possible that the resale prices of those dwellings, and rents if they are rented, will be within the means of persons and families of moderate income. (Ord. No. 1316, § 3.90.105, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 16853 6-2-86) See. 29.10.3015. Application. This division shall apply to all multiple-family dwelling projects, residential condominium projects, condominium conversions, and to all residential planned development projects (division 2 of article VIII of this chapter) either approved after July 4, 1979, or whose approval includes a condition requiring eonstrue-tio the provision of BMP dwellings. Projects in the R-1 and HR zones are excepted from BMP participation. The exception does not apply if the project is built under the rules of an overlay zone unless the rules of the overlay zone provide otherwise. (Ord. No. 1316, § 3.90.110, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 1685, 6-2-86) See. 29.10.3020. Definitions. For the purposes of this division the following definitions shall apply: BMP dwelling means any residential dwelling unit designated for very low, low, and moderate income under the rules of this section. Person of moderate income means one whose income falls within the range specified by the Town Council in the resolution authorized by section 29.10.3040. (Ord. No. 1316, § 3.90.115, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 16855 6-2-86; Ord. No. 2115, § II, 9-15-03) Sec. 29.10.3025. Scope. Page 2 of 6 9- xeF i: i ltif il t l d lli ~ 4 t th ti f b ildi it , y n i affl y fen a we ng pFE ee a e me o u perm , ng t 4 d t i e ti l t l 4 - ; eyef a artment or unit ro apar projee an men evefy jeet at the tim f bdi i i s n e -s ee [ eeep€ra i ,~e if th t ti i l p p a4 the t subdivision e o su v s on ime of sale if R d h ll t e r-a*sae eft nvo ves , BMP 1 t i , dL s--aESe in -t , oes no , s a -een b l ~ 4h th th l ) a none ( ti th t l d g g e develo ment with an u e ow aa e ru es e nder-l in zone of T 4 R 4 all l b eiEeep on a any p anne i d t i li p y g , - - fl- - s on y e f equ re o pa-y an n eu The Below Market Price Program requirements shall apply to all residential development projects that include five (5 or more residential units or parcels which involve. 1. New construction of ownership or rental housina units. including mixed use developments and addition of units to existing projects, or 2. Subdivision of property for single family or duplex housing development, or 3. Conversion of rental apartments to condominiums or other common interest ownership, or 4. Conversion of non-residential use to residential use. The residential developments consisting of five or more units are required to provide the following number of BMP units: (1) Projects containing five (5) or more but less than twenty (20) market rate units must provide a number of BMP units equal to ten (10) percent of the number of market rate units. -R PFcq crots v~44 five (5) or- +nefe but less than ten (10) fflarket fate ~ff~s iiia-y Ve'Y fee in lieu of building a BMP unit in oFcler to eemply with this r-eEf4r-ement. -(3)fQ Projects with from twenty (20) to one hundred (100) market rate units must provide BMP units as determined by the following formula: Number of BMP units = .225 (total # of market rate units) - 2.5 (4)_3 All projects in excess of one hundred (100) market rate units must provide a number of BMP units equal to twenty (20) percent of the market rate units. (5)_C4) Whenever the calculations of BMP units result in a fraction of one-half or more, the number of units to be reserved is increased to the next whole number. 5) The Town, at its sole discretion. may consider an in-lieu pavment alternative to the required BMP unit in the case of Planned Unit development with an underlying zone of HR. Prior to approving the in-lieu fee alternative, the applicant must demonstrate to the satisfaction of the Town why a BMP unit cannot be (1) developed on the same site as the market rate units, and- if it cannot be provided on the same site then, (2) develop at an Page 3 of 6 a ro riate off -site location within the Town limits. If the developer provides sufficient justification that both of these alternatives are not viable, then a fee in-lieu option may be considered. The required in-lieu fee is as established by a separate resolution and is to be 12aid to the Town prior to issuance of the certificate of occupancy for the market rate T residential unit that triggered the BMP requirement. The provision for a BMP unit applies if the project is built under the rules of an overlay zone unless the rules of the overlay zone provide otherwise. BMP units shall be constructed and Certificate of Occupancies secured concurrently with or prior to the construction of the market-rate units. The BMP requirement will be calculated on the basis of the whole development. The Town Council may rant an exception to the phasing requirements during the project approval process. (Ord. No. 1316, § 3.90.120, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 1685, 6-2-86; Ord. No. 1687, 8-4-86; Ord. No. 1838, § I, 11-5-90) Sec. 29.10.3030. Price. The price of BMP units is controlled for the first buyer and for future buyers by the BMP Guidelines as adopted and amended from time to time by Council resolution and as follows: (1) The initial price is limited to direct construction cost and a proportionate share of the costs of preparing working drawings and specifications and providing on-site and off- site improvements, determined according to rules set by the Council. (2) The initial price does not include the cost of land, profit, or marketing costs. (3) Each BMP unit will be subjected to recorded title restrictions concerning manner of future sales, occupancy and leasing. (4) Each buyer of a BMP unit must agree to sell the unit to a moderate income buyer designated by the Town. The Town will designate moderate income persons according to rules adopted by the Council in effect at the time the seller purchased the unit. (5) The resale price cannot exceed the original selling price plus the value at the time of sale of improvements added by the owner, and plus an amount equal to the increase in cost of living or housing during the owner's tenure. The index or method to be used in calculating the increase is established by the Council. (6) If a BMP unit to be resold has not been properly maintained or for any other reason is in poor condition and in need of cleaning or repair, the Town may elect to do the work or have it done and recover the cost from the sale price limited as provided in subsection (5). (7) The regulations will specify the period for controlled resales. The time period will be ui per ep tuity or for as long as is practical. Page 4 of 6 (Ord. No. 1316, § 3.90.125, 6-7-76; Ord. No. 1430, 6-4-79) Sec. 29.10.3035. Project denial. If an applicant for zoning approval declines to provide BMP units required by ordinance, the zoning approval shall be denied. (Ord. No. 1316, § 3.90.130, 6-7-76; Ord. No. 1430, 6-4-79) Sec. 29.10.3040. Administration. The Council shall adopt by resolution regulations concerning all aspects of the BMP program, including the elements of location of the units, price, buyer eligibility standards, rent, the length of the period during which a unit will be subject to BMP restrictions, the form of recorded instruments and any other matter consistent with the provisions of this section. (Ord. No. 1316, § 3.90.135, 6-7-76; Ord. No. 1430, 6-4-79; Ord. No. 1685, 6-2-86) SECTION IV If any of the provisions of this ordinance or the application thereof to any person or property is held invalid, such invalidity shall not affect the other provisions of this ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are declared to be severable. SECTION V Any judicial review of this ordinance shall be by writ of mandate, under Code of Civil Procedure 1085. Any action or proceedings seeking to attack, review, set aside, void or annul this ordinance shall be commenced within 90 days after adoption of this ordinance. This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on , 2009, and adopted by the following vote as an ordinance of the Town of Los Gatos at a meeting of the Town Council of the Town of Los Gatos on 2009. This ordinance takes effect 30 days after it is adopted. COUNCIL MEMBERS: AYES: NAYS: Page 5 of 6 ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMIONISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA Page 6 of 6 TOWN OF LOS GATOS 110 East Main Street, Los Gatos, CA 95030 (408) 354-6872 SUMMARY MINUTES OF A REGULAR MEETING OF THE GENERAL PLAN COMMITTEE OF THE TOWN OF LOS GATOS APRIL 22, 2009 HELD AT THE NEIGHBORHOOD CENTER, 208 EAST MAIN STREET, LOS GATOS, CALIFORNIA. The meeting was called to order at 5:30 pm by Jane Ogle. ATTENDANCE Members present: John Bourgeois, Barbara Cardillo, Marcia Jensen, Tom O'Donnell, Jane Ogle, Joe Pirzynski, Chuck Sloan, Barbara Spector Members absent: None Staff present: Wendie Rooney, Director of Community Development, Suzanne Davis, Associate Planner; Joel Paulson, Associate Planner. Public attendees: Ray Davis, Laura Worthington-Forbes, Rick Freeman VERBAL COMMUNICATIONS: Ray Davis stated that having the General Plan Community meeting on a Saturday precluded parents from attending the meeting due to conflicts with weekend youth sports. ITEM 1 Below Market Price Housing Program Joel Paulson introduced the item, noting the BMP Ordinance amendments and revised guidelines are tentatively scheduled to be considered by the Planning Cormmission on May 13, 2009. The Community Services Commission will consider the draft documents on May 3, 2009. Mr. Paulson summarized the following principal changes to the Below Market Price Housing Draft Guidelines and Ordinance dated April 16, 2009. BMP Housing Program Guidelines: • Made changes to specifying when BMP units are required to be included in a project (Draft Guidelines, Page 1, Section I.A). • Added exception allowing BMP units to be developed off-site (Draft Guidelines, Page 2, Section B.2). • Added a provision to allow current residents within a condominium conversion project to qualify under the First Time Buyer requirements (Draft Guidelines, Page 4, Section II.3). Attachment 3 General Plan Committee April 22, 2009 Page 2 of 3 Committee Comments: • Use of the word "fewer" versus "less" should be consistent and follow rules of grammar. • Clarify the rationale behind allowing a developer to provide units off-site and incorporate criteria for determining the appropriateness of allowing off-site units (indicate how and when off-site units are appropriate). • Add provisions to ensure that BMP units are to be distributed throughout a project rather than clustering the units. • Indicate circumstances that will constrain the Town from obtaining affordable units. • The guidelines should clearly indicate that the Town's objective is to have the units provided on-site rather than paying an in-lieu fee. • Develop criteria that would be used for determining if a Planned Development application is exempt from providing BMP units. • The guidelines should clearly state the goal and purpose of the program are to provide on-site BMP units. • Create a framework that would be used to determine when BMP units can be provided off-site and when an in-lieu fee can be paid. This should be contained in a separate "Exception Provision" rather than in the "General Provisions". • The Community Services Commission should review the Draft prior to Town Council consideration. • Add a requirement that off-site units must be developed within the Town of Los Gatos. • The Guidelines should include phasing requirements for BMP units that are developed off-site and the original project should have conditions or triggers that require the development of the off-site units at a prescribed time. • Section B.3 should include criteria for determining qualifications of a resident in a condominium conversion project to purchase a BMP. The criteria could be based on length of residency or the tenant residing in the unit prior to the Notice of Intent to convert the building to a condominium (Section B.3, Page 6). BMP Ordinance: Mr. Paulson summarized the proposed changes to the Draft BMP Ordinance. The proposed changes are as follows: • Added "condominium conversions" to the applicability Section (Section 29.10.3015). • Added exception criteria to allow the Town Council to grant exceptions to the BMP requirements (Section 29.10.3025). Included provisions that allow the Town Council to modify the price of the BMP units and the in-lieu fees (Section 29.10.3030). • Added to the Administration Section that the Town Council can modify the requirements for where the BMP units are constructed (Section 29.10.3040). General Plan Committee April 22, 2009 Page 3 of 3 Committee Comments: • Ensure that the Ordinance numbering is accurate. • The "Scope Section" {Sec. 29.10.3025) should provide better clarity on when BMP units are required and when a fee can be paid in lieu of providing the units. + The Draft Ordinance does not address non-compliance. Revise to include a non- compliance section. + Units should remain affordable for as long as practical or as long as can be required by State law. The Town prefers to have units restricted in perpetuity. APPROVAL OF MINUTES Barbara Spector noted that some areas of minutes are unclear. Joe Pirzynski agreed and said that the minutes should clearly document decisions.. The February 25 and March 25, 2009 minutes will be reviewed by staff and returned to the Committee for action. ADJOURNMENT Meeting was adjourned at 6:35 PM. The next meeting of the General Plan Committee is scheduled for May 13, 2009. Prepared by: Suzanne Davis, Associate Planner N:UDF V IGP CVo09mi nuteslGYC-042209. do u TOWN OF LOS GATOS I10 East Main Street, Los Gatos, CA 95030 (408) 354-6872 SUMMARY MINUTES OF A REGULAR MEETING OF THE GENERAL PLAN COMMITTEE OF THE TOWN OF LOS GATOS JULY 22, 2009 HELD AT THE NEIGHBORHOOD CENTER, 208 EAST MAIN STREET, LOS GATOS, CALIFORNIA. The meeting called to order by Chair Jane Ogle at 5:00 pm. ATTENDANCE: Members present: John Bourgeois, Barbara Cardillo, Marcia Jensen, Tom O'Donnell, Jane Ogle, Chuck Sloan and Barbara Spector. Members absent: Joe Pirzynski Staff present: Bud Lortz, Deputy Town Manager; Wendie Rooney, Director of Community Development; Suzanne Davis, Associate Planner; Joel Paulson, Associate Planner. Town consultants: Agnes Chan, Chad Markell and Joanna Jansen, Design, Community & Environment (DC&E). VERBAL COMMUNICATIONS: None ITEM 2 HOUSING ELEMENT UPDATE: HOUSING SITES INVENTORY Joanna Jansen, DC&E, introduced the item, explaining that a default density standard has been set by the State Department of Housing & Commmunity Development (HCD). For Los Gatos the default density is 20 units per acre. The Town's high density residential zoning (RM:13-20) allows 20 units per acre. The (nixed use commercial land use designation has no maximum density. The goal is to demonstrate that land can be rezoned to provide higher density housing. State law requires Housing Elements to identify a list of housing sites that can accommodate the Town's Regional Housing Needs Allocation (RHNA). To achieve 374 affordable units (very low, low and moderate income) at 20 units per acre, a total of 18.7 acres needs to be identified. If projects include 20% affordable housing, a total of 93.5 acres needs to be identified. A sites inventory list has been drafted that includes a total of 88.4 acres. The maximum development capacity is 1,759 units if the land is developed at 20 units per acre and, using the Town's existing inclusionary housing requirements, would yield 351 affordable -u its. The North 40 area has not been included in the inventory. Three options have been identified as follows: Attachment 4 General Plan Committee July 22, 2009 Page 2 of 4 Option 1: Identity 18.7 acres for affordable housing. The land would need to be rezoned to High Density Residential or apply an Affordable Housing Overlay Zone. Option 2: Utilize existing Mixed-Use Commercial sites (primarily car dealership sites). These sites total 28.3 developable acres. The Town would need to apply an Affordable Housing overlay zone (with density of 20 units per acre). Option 3: Identify additional sites. A total of 93.5 acres is needed to accommodate affordable housing assuming 20% of units developed are affordable. John Bourgeois asked how the 20% figure was arrived at, and whether it is an optimistic number. It was noted that the BMP Ordinance requires 20% for projects of 100 units or more. Tom O'Donnell commented that the cost for the different scenarios is an important consideration. Bud Lortz said that a fiscal analysis will be needed for elements of the three options. Wendie Rooney noted that once policies are developed an implementation plan will be done. Barbara Cardillo clarified that an overlay zone is a rezoning. Bud Lortz noted that an overlay zone retains the underlying zoning designation whereas a rezoning changes the zoning designation specifically to high density residential. Barbara Spector commented that changing the land use designation to high density (20 units per acre) raises issues such as traffic and impact on school districts. Bud Lortz said that traffic would need to be evaluated. Both school districts are basic aid. School impact fees can be applied. The Town is working with the school districts on demographic data. Marcia Jensen commented that it is a bad idea to designate all the sites on Los Gatos Blvd. because of the potential traffic impact. Wendie Rooney noted that there are other sites including Vasona Junction and the former courthouse on Capri Drive that could be considered. Joanna Jansen noted that the sites on Los Gatos Blvd do not need to be rezoned since the Mixed Use Commercial designation already allows high density residential. Bud Lortz said that the goal is to achieve a certified Housing Element. A map of school districts will be obtained for the next meeting. John Bourgeois asked about mixed use opporturi ties on Los Gatos Blvd. being counted versus other locations such as Oka Road, as it is desirable to have affordable units throughout the community. It was clarified that a hybrid between two scenarios is possible. General Plan Committee July 22, 2009 Page 3 of 4 Barbara Cardillo asked about senior development. Wendie Rooney noted that locations should be near services. She cited the Terraces as a good example of planning senior facilities near services (grocery stores, banks, etc.). Tom O'Donnell commented on meeting the requirements in an intelligent manner. How much effort and time should go into this relative to the likelihood that it will actually happen. Jane Ogle asked about the history of the housing plans and how they have worked over time. Bud Lortz said the Town has worked hard on providing affordable housing and would probably be graded a B+. Discussion ensued on whether to provide higher level direction or to go through and comment on the individual sites included in the inventory. Barbara Cardillo suggested providing a set of guidelines and principles that take into consideration impacts on school districts, traffic and not concentrating units in one area. Marcia Jensen asked for clarification on where direction is needed. There have been a number of comments that affordable housing should be dispersed. Barbara Spector commented that housing should not be concentrated on Los Gatos Blvd. and affordable housing should be dispersed throughout Town. She indicated that she likes the Dittos Lane site. Wendie Rooney said the table will be revised with sites that can accominodate 20 to 50% affordable units. ITEM 1 BELOW MARKET PRICE HOUSING PROGRAM: GUIDELINES AND ORDINANCE AMENDMENTS (June 2009 Draft) Wendie Rooney introduced the item stating that comments received from a discussion two weeks ago are noted in the margins of the draft document. There are two areas where input is needed from the Committee: (1) Payment of an in-lieu fee for smaller projects (5 to 9 units) is proposed to be eliminated and (2) Addition of criteria allowing the ability to provide off-site units in circumstances where they can't be provided as part of the project, such as a continuum care facility. There was an extended discussion on continuum care facilities and how the BMP regulations should be applied. It was decided that convalescent hospital should be deleted. The Committee consensus was to recommend that the Town Council be asked to reconsider payment of an in-lieu fee for hillside projects. General Plan Committee July 22, 2009 Page 4 of 4 Barbara Cardillo wanted to make sure there is a requirement for the owner(s) to live in the BMP unit versus renting it out. She also felt there is a need to limit or prohibit existing BMP owners from upgrading to a new unit and displacing new buyers. ITEM 3 APPROVAL OF MINUTES Tom O'Donnell made a motion to approve the minutes of June 24, 2009. The motion was seconded by Chuck Sloan and passed 6-0-1 (Barbara Spector abstained). OTHER BUSINESS Chuck Sloan requested a schedule of the remaining meetings for 2009. ADJOURNMENT The meeting was adjourned at 6:50 PM. The next meeting of the General Plan Committee is scheduled for August 11, 2009. Prepared by: Suzanne Davis, Associate Planner N.1BF V\GPCVC09minu[cs1CPC-072209.doc TOWN OF LOS GATOS PLANNING COMMISSION MEETING ACTION MINUTES TOWN COUNCIL CHAMBERS 110 E. MAIN STREET WEDNESDAY, SEPTEMBER 9, 2009 Chair Thomas O'Donnell called the meeting to order at 7:00 p.m. ROLL CA 1.1, Present: Chair Thomas O'Donnell, Vice Chair John Bourgeois, Commissioner Charles Erekson, Commissioner Marcia Jensen, Commissioner Marico Sayoc, and Commissioner Joanne Talesfore. Absent: Commissioner Philip Micciche. Others: Community Development Director Wendie Rooney, Associate Planner Joel Paulson, Assistant Planner Marni Moseley, Assistant Planner Jennifer Savage, Assistant Civil Engineer Trang Tu-Nguyen, and Recording Secretary Linda Rowlett. PLEDGE OF ALLEGIANCE Led by Chair Thomas O'Donnell. APPROVAL OF MINUTES OF AUGUST 26, 2009 Commissioner Joanne Talesfore commented she will abstain from voting on the minutes of August 26, 2009, because she had recused herself from part of that meeting. Motion by Commissioner Charles Erekson and seconded by Vice Chair John Bourgeois to approve meeting minutes of August 26, 2009. Motion carried 5-0 with Commissioner Philip Micciche excused and Commissioner Joanne Talesfore abstaining. WRITTEN COMMUNICATIONS Chair Thomas O'Donnell commented that desk items were received for Item #1 and Item #4. Planning Conunission Page 1 September 9, 2009 Attachment 5 REQUESTED CONTINUANCES NONE SUBCOMMITTEE REPORTS General Plan Committee Vice Chair John Bourgeois reported that the committee met earlier tonight to review the revised draft Housing Element goals and policies. The next step is to bring it to the Planning Commission. General Plan Update Advisory Committee Vice Chair John Bourgeois reported the committee met last week to go over the new proposed goals and policies for the Environment and Sustainability section of the General Plan. Chair Thomas O'Donnell commented that there is currently a lot of activity on the General Plan and invited the public to attend the meetings. VERBAL COMMUNICATIONS (AUDIENCE) Ray Davis • Commented that he would like an apology from Commissioner Philip Miceiche because of what happened at the meeting of August 26, 2009. • Commented he could not believe the assumptions made by the Town Council regarding the Planning Commission's denial of the Francis Oaks Way project, and that he does not understand why Los Gatos does not have the Chair of the Planning Commission speak to the Town Council and answer questions at the Town Council meeting regarding appeals. • Commented that the cement plant discussion will be on September 17, 2009, at the Quinlan Community Center in Cupertino. CONSENT CALENDAR NONE CONTINUED PUBLIC HEARINGS 1. 14680 Quito Road. Architecture and Site Application S-09-005. Requesting approval to demolish a pre-1941 home, to construct a new single family residence, to exceed the allowed. FAR, and to construct two new accessory structures with reduced setbacks on property zoned R-1:10. APN 407-14-001 PROPERTY OWNER: Lyle Wagner. APPLICANT: Dennis Hayes. PLANNER: Marni Moseley, Assistant Planner. (Continued from June 24, and July 8, 2009) Assistant Planner Marni Moseley presented the staff report and referenced Desk Item #1. Chair Thomas O'Donnell opened the public hearing. Dennis Hayes, Applicant • Handed out copies of a diagram to the Commission and gave a presentation on the proposed project. Planning Commission Page 2 September 9, 2009 • Commented that Mr. Wagner met with the Laughlins and the Popes and was able to get written agreements with them regarding a remedy to their concerns on the art studio and the garage. • Commented that Mr. Wagner spoke with Mr. McCarney who indicated he felt comfortable with the new location of the building as long as the Popes signed the agreement. • Commented that Mr. Wagner spoke with Ms. Lungard and got a sense that she is more comfortable with the proposal. Dennis McCarney • Referenced the Pope's agreement and commented he supports everything in it as written, noting that it differs from the agenda. Chair Thomas O'Donnell • Commented that Desk Item #1 includes the signed agreements referenced by Mr. McCarney, and closed the public hearing. Motion by Commissioner Joanne Talesfore and seconded by Commissioner Charles Erekson to approve Architecture and Site Application S-09-005. The required findings were made as noted in Exhibit 2 of staff report dated June 24, 2009, and the application incorporated conditions as noted in Exhibit 9 of staff report dated June 24, 2009, and Exhibit 15 of staff report dated September 9, 2009, including Conditions # 12 and # 13 of Desk Item 41 dated September 9, 2009. Motion carried 6-0 with Commissioner Philip Miceiche excused. Community Development Director Wendie Rooney recited appeal rights. 2. BMP Ordinance and Guidelines Zoning Code Amendment A-49-01. Consider adoption of an ordinance amending Town Code Chapter 29, Division 6, Sections 29.10.300 through 29.10.3040 Housing Assistance Program and approval of a resolution revising the Below Market Price (BMP) Guidelines. APPLICANT: Town of Los Gatos. PLANNER: Wendie Rooney, Director of Community Development. (Continued from August 26, 2009) (Heard out of order.) Community Development Director Wendie Rooney gave a presentation on the BMP (Below Market Price) Program Zoning Ordinance Amendment A-09-01. Commission Questions: • Asked if only $400,000 of the $1.8 million in-lieu funds have been spent. • Asked if the fund has been used to create any new units. • Asked about the exception for first time home buyers and if the tenants need to be notified if a conversion process is in place, and if there is a distinction between current tenants and future tenants. • Asked for clarification on the First Time Home Buyer 2-year exception. • Asked for clarification if all First Time Home Buyer eligibility requirements would have to be met for tenants renting an apartment being converted to condominiums. Planning Commission Page 3 September 9, 2009 • Asked if the in-lieu program only applies to the Hillside Residential (HR) Zone. • Asked about General Plan Committee's (GPC) recommended change about prohibiting owner-occupied BMP unit recipients from upgrading to a larger unit and if it also applied to downgrading to a smaller unit. • Asked if the problem with building on-site in the HR is density or financial considerations. • Asked if it is the Council's preference to have actual units purchased or to augment the fiend for a future strategy of buying homes that would be more affordable. • Asked for clarification on what specifically is being decided regarding the in-lieu option. • Asked why there is not a third option to consider of including a BMP unit in the HR Zone if it does not increase density. Community Development Director Wendie Rooney responded to Commission Questions: • Commented the in-lieu funds have not consistently maintained the $1.8 million balance and that the fund balance varies depending on what units have been bought and sold. • Commented the fund has not been used to construct new units. • Commented that prior to the Notice of Intent to Convert, a current tenant would qualify, but not new tenants after notification process has begun. • Commented the Community Services Commission's (CSC) recommendation is to not eliminate the eligibility requirements, but to reduce the length of period from when a tenant owned their previous home from 3 years to 2 years for first time home buyers rather than granting an exception. • Commented that the only other First Time Home Buyer eligibility requirement would be income. • Commented that the in-lieu program currently applies to all projects of five to nine units in both the HR Zone and non-Hillside and the proposed change is to continue to allow the U1_ lieu fee option only for HR. • Commented the GPO's concern involved upgrading to a larger or newer unit, but whether upgrading or downgrading, tenants would not be eligible because they were already a homeowner. If someone decided to move out and rent for 3 years, they could come back and reapply for a BMP unit if they qualified income wise. • Commented the main concern for building on-site in the HR Zone is trying to keep the intensity and density down, but financial assumptions may have also been included. • Commented she could not speak to Council's preference, but the overall program goal is to produce as many units as possible. • Commented the decision is whether to keep the current guidelines, which give the applicant the option of on-site or in-lieu fee or eliminating the option of the in-lieu fee. • Commented the BMP is not counted in the density, but you do end up with more density if you require it on-site, and there is a heightened level of concern for density in the hillsides. Vice Chair John Bourgeois • Commented he appreciates the CSC's concern but is in favor of granting the exception to a tenant of a condominium conversion project prior to the Notice of Intent to Convert. Chair Thomas O'Donnell confirmed that all Commissioners agreed with Vice Chair Bourgeois's comment of granting the exception, and asked for clarification on the two issues. Planning Conunission Page 4 September 9, 2009 Community Development Director Wendie Rooney • Commented the first issue is that an exception to the First Time Home Buyer provision be allowed in a condominium conversion, and the second issue is to put the burden on the developer in HR Zones to prove why they cannot construct a unit in the development, or buy a unit in town, or failing that, they would be allowed the in-lieu option. Chair Thomas O'Donnell acknowledged the arrival of Lee Quintana and advised her that the discussion was completed and the Commission had already reached a consensus on the issues. He reviewed the Commission's actions for Ms. Quintana, and following her request, Chair O'Donnell invited her speak on the issue. Lee Quintana * Commented she agrees with keeping the density in the hillsides down, and believes a developer can build an extra smaller size BMP unit without having the appearance of adding to the intensity. She believes the goal of the Town is to have affordable housing in Town and does not understand why it cannot happen in the hillsides as well. Motion by Commissioner Marcia Jensen and seconded by Commissioner Joanne Talesfore to: 1. Forward the draft BMP Guidelines (Attachment 1) to the Town Council with a recommendation to adopt the draft resolution approving the program revisions, including the two supplemental recommendations that were made by a consensus of the Planning Commission on September 9, 2009 to: • Modify the fee in-lieu option for the projects in the Hillside Residential Zone District by requiring that the developer provide sufficient justification to the Town why a BMP unit cannot be (1) developed on the same site as the market rate units, and if it cannot be provided on site then, (2) develop at an appropriate off -site location within the Town limits. If the developer provides sufficient justification that both of these alternatives are not viable, then a fee in-lieu option may be considered. • Provide an exception to the First Time Home Buyers qualification requirements for tenants who are residing in an apartment that is converted to a condominium. 2. Make the required finding that the Zoning Ordinance Amendments are consistent with the General Plan (contained in the report). 3. Forward a recommendation to Town Council for adoption of the amendments to the Zoning Ordinance (Attachment 2). Motion carried 6-0 with Commissioner Philip Micciche excused. NEW PUBLIC HEARINGS (Heard out of order) 347 Massol Avenue. Architecture and Site Application S-09-21 Subdivision Application M-09-05. Requesting approval of exterior modifications to the existing multi-family structures, parking lot modifications and site improvements, and a 56 lot subdivision to convert the existing apartments to condominiums on property zoned RM:12-20:PD. APN 510-14-004. PROPERTY OWNER: Lyon Bay Tree Apartments LLC. APPLICANT: Lyon Realty Advisors. PLANNER: Joel Paulson, Associate Planner. Planning Commission Page 5 September 9, 2009 Survey of Eight Bay Area Jurisdictions' Below Market Price/Rate Program Provisions Jurisdiction Provide an In-Lieu Fee Option Provide an Off- site Construction Option San Carlos Yes, in-lieu fee option is available for developments that Yes, but must yield a are one (1) unit to (6) six units - Council discretion. greater number of units than on-site option - Council discretion. Lafayette Yes, in-lieu fee option is available for developments for Yes, but must exceed all developments that are 30 or more units - Council the Below Market discretion. Rate (BMR) Program requirements Council discretion. Cupertino Yes, in-lieu fee option is available of one (1) to six (6) No units. Projects of seven (7) or more units must provide on-site BMR units. Campbell Yes, in-lieu fee option is available for projects that have a Yes, if the City density of six (6) or fewer units/acre - Council determines that the discretion. off-site construction will provide greater public benefit. Mountain Yes, in-lieu fee option is available for development of No View three (3) or more units under two circumstances. In-Lieu fee is allowed if the obligation results in a fraction of a unit or when the price of the homes in the development is too expensive to be practical for a BMR unit. San Mateo Yes, in-lieu fee option is available for projects consisting Yes, if the City finds of five (5) to ten (10) units or when the calculation of that on-site BMR units in projects results in a fractional unit less than constriction is 0.5, infeasible. Menlo Park Yes, in-lieu fee option is available for projects consisting Yes of five (5) or more units City staff discretion. City of Santa Yes, for low or very low housing - Council discretion. No Cruz Minimum size is five (5) units and no maximum project size. Attachment 6