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Continued`°WN F TOWN OF LOS GATOS ITEM NO. 2 PLANNING COMMISSION STAFF REPORT � os Meeting Date: May 23, 2012 PREPARED BY: Wendie Rooney, Community Development Director wrooney@losgatosca.gov losgatosca.gov APPLICATION NO: Zoning Code Amendment A -12 -001 LOCATION: Town -wide APPLICANT: Town of Los Gatos CONTACT: Wendie Rooney, Community Development Director Judith Propp, Town Attorney APPLICATION SUMMARY: PUBLIC HEARING TO CONSIDER AMENDING THE ZONING CODE TO INCORPORATE THE STATE'S DENSITY BONUS LAW, RECOMMENDATION: Forward a recommendation to the Town Council for approval of the attached ordinance codifying the requirements of California Government Code Section 65915 — 65918 and the attached resolution and guidelines that implement the Density Bonus Program CEQA: It has been determined that this program was considered in the 2020 General Plan Environmental Impact Report and therefore any potential environmental impacts have been considered and mitigated and therefore no further environmental review is required. ACTION: Forward a recommendation to the Town Council for adoption of Zoning Code Amendment A -12 -001 and Resolution which contains the implementing guidelines. EXHIBITS: 1. Draft Zoning Ordinance Amendment 2. Draft Council Resolution with Density Bonus Guidelines 3. Government Code Section 65915 -65918 (SB 1818) BACKGROUND California Government Code Section 65915 -65918 requires all municipalities adopt a density bonus ordinance consistent with this state law. Based on this directive, staff has developed a density bonus ordinance and implementing guidelines that meets all state law requirements, but also provides greater clarity on the Town review processes, application requirements, findings, relationship of this ordinance to other Town housing programs, and the inclusion of a targeted AT` ACM&ENT 1 Planning Commission Staff Report - Page 2 Zoning Code Amendment /A -12 -001 May 23, 2012 population consistent with the Town's General Plan Density Bonus Policy. The General Plan Committee provided input on the recommended additional provisions to the draft density bonus ordinance. A. State Density Bonus Law History California first passed the Density Bonus Law in 1979. The law was subsequently amended in 1989. It mandated that every city and county adopt a density bonus ordinance consistent with state law and required all local governments to grant developers who offer affordable units in their new developments a 25% density bonus. The density bonus is above the density range in the zoning code and General Plan. In 2004, the State enacted significant changes to the Density Bonus Law, which went into ..-effect 9 January— n Januaryl, _2005.,. Legislation SB 1818 (Government Code Section 65915) required cities and counties to overhaul their ordinances to bring them into conformance with new State mandates. Cities and counties must comply with, and developers may take advantage of, the State Density Bonus law, even if local regulations do not conform to State law. The changes in the law significantly reduced the amount of units that a developer must provide in order to receive a density bonus and required cities and counties to provide between one to three concessions or incentives, depending upon the percentage of affordable units that the developer provided. It also imposed a new land donation rule and statewide parking standards. Although the Town complies with state law, it has not been codified. This proposed ordinance will codify all requirements of the state law. Since the law was enacted, the Town has had only one request for the State Density Bonus Program. B. Summary of the SB 1818 (State Density Bonus Law) The overall purpose of SB 1818 is to encourage developers to build affordable housing by requiring local governments provide meaningful incentives. A density bonus means an increase of 20 to 35 percent over the maximum allowable residential density under the applicable zoning ordinance and General Plan. There are five components to SB 1818: (1) density bonus for affordable housing developments that meet prescribed affordability levels, (2) incentives or concessions, (3) waiver of development standards, (4) imposition of maximum parking standards, and (5) bonuses for land donation or childcare facilities. Units for low or very low income must be income restricted for a minimum of 30 years or longer term under another regulatory agreement, such as a development or housing agreement. In the case of for sale moderate income units, the initial occupant must meet income qualifications. However, upon sale the seller of the unit retains the value of any improvements, the down payment, and the seller's proportionate share of the appreciation. The unit generally then becomes a market rate home. A summary of the major provisions is as follows: Planning Commission Staff Report - Page 3 Zoning Code Amendment /A -12 -001 May 23, 2012 1. Land Uses Qualifying for a Density Bonus A density bonus applies to housing developments with five or more dwelling units. The density bonus requirements are triggered when the developer sets aside: a) Minimum of 5% of the total units as affordable to very low- income households; or b) Minimum of 10% of the total units as affordable to low income households; or c) At least 35 units for occupancy by qualifying residents (senior housing); or d) Minimum of 10% of total dwelling units in a condominium or planned development project affordable to moderate income households. e) Additional density bonus is allowed for qualified housing developments that include a child care facility within or adjacent to the development and for land donations for affordable housing to the local jurisdiction. Calculating the Bonus: The amount of the density bonus is based on a sliding scale that corresponds to the number of affordable units. These bonuses reach a maximum of 35% when a project provides either 11% Very Low units, 20% Low income units, or 40% Moderate income units. Senior housing developments are granted up to a 20% density bonus if at least 35 senior only units are constructed. The density bonus is calculated on the maximum allowable density under the applicable zoning ordinance. An applicant may opt to accept a lower percentage. These numbers are illustrated in the following table: Income Level* % of Affordable Bonus ' Density Bonus Increase % Affordable Granted for Each Additional 1% Units Required Units i of Inclusionary Units for Maximum (Total Maximum 35 %) 35% Bonus Very Low 5% 20% 2.5% I NmN„ 11 /o NmNmm Low 10% 1 20% 1.5% 20% m_:. 10% .5 %, Moderate — For saleT_ %0 __ .....__. 40 %. common interest development only , _........ Seniors - N/A 20% N/A N/A development of 35 j units or more *The income categories are defined by the U.S. Department of Housing and Urban Development (HUD) as adjusted by the area median household income for Santa Clara County. Planning Commission Staff Report - Page 4 Zoning Code Amendment /A -12 -001 May 23, 2012 2. Incentives/Concessions For qualifying projects, the developer is entitled to an incentive(s) or concession(s) in addition to the density bonus. A concession or incentive includes a reduction in site standards, such as dimensional standards, architectural standards, parking standards, and mixed use approvals. The law requires any incentive to "result in identifiable, financially sufficient, and actual cost reductions." The number of incentives and concessions increase to a maximum of three as the developer increases the percentage of affordable units, as illustrated in the following table. Required Percentage of Total Housing Units for Incentives or Concessions - - - -- _..._._ ...... W._...._, _....�._._....._........._..... Affordability Level* % Total Housing Units Number of Incentive(s) or i Concession(s) Very Low I 5% I 1 Low 1 10% ( 1 Moderate- Condo /Planned Developments I 10% ( 1 Very Low 1 10 % # 2 Low 1 20% 1 2 Moderate - Condo /Planned Developments 1 20% ( 2 Very Low 1 15% 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............... . . . ........................... . . . . . . . . . . . . . . . . . . . . . . . . . ..................... . . .. . . . . . . . . .. . . . . . . . `. . . . .. . . . . . . . . . . . . . . . . . . .. . . . .. . . . . . . . . . . .. . .......................................... ............................... . Low 3 0 /o I 3 i o _........_._. .......... , ......... _..._.........,_..... ............_.._._.......w..._, ....._..._......._ ....._,.........__..,.._._...._ Moderate - Condo /Planned Developments 30% 3 3. Waiver of Development Standards The law also states that a local agency cannot impose a development standard or condition of approval that would make the project that qualifies for a density bonus financially infeasible. Consequently, the law authorizes the applicant to seek waivers or modifications of development standard or conditions by demonstrating the waivers are needed to make the project economically feasible. There is not a limitation on the amount of waivers provided the applicant can Planning Commission Staff Report - Page 5 Zoning Code Amendment /A -12 -001 May 23, 2012 demonstrate the waivers are necessary to make the project financially feasible. The local agency is required to grant the waiver, concession, or incentive requested by the applicant unless it makes a written finding, based upon substantial evidence, of either of the following: a) The concession or incentive is not required in order to provide for affordable housing costs. b) The concession or incentive would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to Low- and Moderate- income households. c) The concession or incentive would be contrary to State or Federal law. Finally, the law states that granting of concessions or incentives shall not, by themselves, necessitate a General Plan amendment, zoning change, or other discretionary approval, such as a Planned Development. ( 4. Mxrimum Parking Ratios If the project meets the minimum affordability levels and qualifies for a density bonus, upon request of a developer, the local agency cannot impose parking standards greater than the following: a) bedroom = 1 b) 2 -3 bedrooms = 2 c) 4 or more bedrooms = 2 and one -half parking spaces Parking can be tandem or uncovered, but not on- street. S. Land Donation, Condominium Conversion, Child Care Facilities A density bonus may also be provided in situations where land is donated to the local agency, where rental units are converted to ownership, and /or when child care facilities are included in a housing development. Donation of land must be at least one acre or enough to develop 40 units, and affordable units must be for very low income households. The land must have a high density land use designation and zoning, be served by public facilities, be within the proposed development or within one - quarter mile, and have a source of funding for the affordable units prior to approval of the final map or development project. Planning Commission Staff Report - Page 6 Zoning Code Amendment /A -12 -001 May 23, 2012 A density bonus for a condominium conversion is allowed when an applicant who wants to convert apartments to condominiums agrees to provide at least 33 percent of total units to low and moderate income households. A bonus of 25 percent is allowed, and is to be provided within the existing structures proposed for conversion. A housing development including a child care facility within or adjacent to the development is also entitled to receive an additional density bonus and concession or incentive which contributes to the economic feasibility of construction of the child care facility. The child care facility must be in operation as long as or longer than the time which the units will remain affordable. Children of very low, low, and moderate income households shall attend the facility in equal proportion to the affordable units required. - - ANALYSIS As noted, Senate Bill (SB) 1818 (chaptered as Government Code Section 65915 - 65918) requires cities and counties to overhaul their ordinances to bring them into conformance with 2005 state mandates. Municipalities can adopt zoning regulations to allow a density bonus above what is normally permitted on the site in exchange for the provision of some below market rate housing units consistent with the state law, but cannot establish ordinances that are less than the standards established in Government Code Section 65915- 65918. Government Code Section 65915 - 65918 is included as Exhibit 3 to this report. The Town also has discretion on including clarifying language /requirements, applying the bonus program to broader range of qualifying projects, and detailing application requirements and processes in the ordinance. The following section outlines staff recommended additions to the state required ordinance. A. Application Requirements To ensure that the Town has sufficient information in which to base an analysis on a density bonus request, staff recommends inclusion of the submittal materials outlined in Section W.A. (Application Requirements, Review Procedures, and Findings) of the draft Guidelines. In particular, the draft Guidelines require submittal of information, such as a pro -forma that demonstrates that the requested concessions, incentives and waivers will result in actual cost reduction and evidence that the cost reduction allows the developer to provide affordable rents or affordable sales prices. The Guidelines require the information be sufficiently detailed to enable Town staff to examine the conclusions reached by the developer. Please see Section IV for a complete list of the recommended submittal criteria. Planning Commission Staff Report - Page 7 Zoning Code Amendment /A -12 -001 May 23, 2012 B. Review of Application The draft Guidelines also include the proposed review process in Section IV.B. (Application Requirements, Review Procedures, and Findings) of the draft Guidelines. Most notable is the inclusion of findings that would be required to approve an application where the density bonus and concessions, incentives or waivers have been requested. C. Density Bonus Housing Agreement The proposed Guidelines outline the process for ensuring continued affordability of identified housing units through a Density Bonus Housing Agreement. As proposed, the Density Bonus Housing Agreement is required to be executed before recordation of a final map or issuance of a building permit, whichever comes first. Provisions of the agreement also include details such as the location of the affordable units in the project, construction of the affordable units, and the identification of the Community Development Department as the review and enforcement agent for the agreement. Please see Section V for the Housing Agreement requirements. D. Design, Distribution and Timing of Affordable Housing Units Section No. IILF of the draft Guidelines require the affordable housing units be constructed concurrently with market -rate units. The Guidelines further require the affordable housing units be integrated into the Housing Development Project and be comparable in infrastructure (including sewer, water and other utilities), construction quality and exterior design to the market -rate units. Consistent with the Town's BMP Program, the guidelines allow the applicant the option of reducing the interior amenity level below that of large market -rate units, provided that all of the units conform to the requirements of the Town's Building and Housing Codes and the Community Development Director finds that the reduction in interior amenity level will provide a quality and healthy living environment. Finally, the Guidelines also strongly encourages the use of green building principles such as the use of environmentally preferable interior finishes and flooring, as well as the installation of water and energy efficient hardware, wherever feasible. E. Administrative Fee Section IV.D of the Guidelines require payment of administrative fees for Town review of all materials submitted in accordance with this Guidelines and for on -going enforcement of the Affordable Housing Agreement terms. The fees will be charged for staff time and materials associated with the following activities: Development review process; project lease -up; long -term compliance of the Affordable Housing Units. Planning Commission Staff Report - Page 8 Zoning Code Amendment /A -12 -001 May 23, 2012 F. Recommended Qualifying Projects SB 1818 applies to income categories (Very Low, Low, and Moderate); senior housing; and for -sale condominium or plaimed developments affordable to Moderate income category. In addition to these categories, the Town's General Plan Density Bonus Policy (Action HOU -1.3) also applies to handicapped populations. Staff recommends and the GPC concurred to include units specifically designed for the physically handicap population as a qualifying housing development in the draft ordinance. Staff recommends applying the same density bonus and qualifying ratios as those for senior housing, which is a 20 percent density bonus for housing developments that incorporate at least 35 units that are specifically designed for physically handicap. The definition for physically handicap is included in the definitions section of the Guidelines (Section I.D.). _G.__ _- Relationship Between the State Density Bonus and the Town's General Plan Density Bonus Provisions to the Same Residential Project The Town Council adopted a resolution clarifying that the Town does not apply General Plan Policy (Action HOU -1.3) as well as the provisions of the State Density Bonus law to the same residential project. This requirement has been incorporated into both the Guidelines and the Ordinance. CEQA DETERMINATION It has been determined that this program was considered in the 2020 General Plan Environmental Impact Report and therefore any potential environmental impacts have been considered and mitigated and therefore no further environmental review is required. PUBLIC COMMENTS No public comments have been received at the time of this report preparation. CONCLUSION AND RECOMMENDATION A. Conclusion The attached draft density bonus ordinance, resolution and guidelines meets the required provisions of state law while providing the Town clarity on application materials, processes, findings and provisions for enforcement of the obligations to continue providing affordable housing consistent with state law and Town housing goals. Finally, the ordinance also removes the ambiguity of which Town affordable housing programs apply to the various housing projects. Planning Commission Staff Report - Page 9 Zoning Code Amendment /A -12 -001 May 23, 2012 B. Recommendation Forward a recommendation to the Town Council for adoption of Zoning Code Amendment A -12 -001, and the implementing resolution and guidelines. 0 ��. Prepared by: die R. Roone Director of Community Development WRR: ct N:\DEV \PC REPORTS\2012\Codification State Density Bonns Law.final.PC 5- 23- 12.doc This Page Intentionally Left Blank ORDINANCE I ORDINANCE OF THE TOWN OF LOS GATOS ADDING A NEW DIVISION 8 TO CHAPTER 29, ARTICLE I OF THE LOS GATOS TOWN CODE ENTITLED "DENSITY BONUS (STATE MANDATED)" WHEREAS, pursuant to California Government Code Section 65915, the Town is required to adopt a density bonus ordinance that applies to housing developments that provide a specified percentage of housing dedicated to and affordable to very low income, low income, senior housing, and moderate income housing; and WHEREAS, the Density Bonus Program provides incentives and concessions for affordable housing projects to meet State mandated housing goals; and WHEREAS, the Town of Los Gatos Density Bonus Ordinance will meet the requirements under State law. THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS: SECTION I Chapter 29, Article I, Division 8, entitled "Density Bonus (State Mandated)" is hereby added to the Los Gatos Town Code, and shall read as follows: CHAPTER 29 ARTICLE I. In General Division S. State Mandated Density Bonus 29.10.405 Intent and Authority. The density bonus ordinance in this chapter is intended to comply with the State Density Bonus Law codified in California Government Code Section 65915 et seq., which provides that a local government shall grant a density bonus and an additional concession, or financially equivalent incentive(s), to a qualified housing development agreeing to construct a specific percentage of housing for lower income households, very low income households, or senior housing as defined by state law. EEXHIBIT 1 29.10.410 Applicability of Regulations. (a) In addition to providing a density bonus and additional concession or equivalent incentives to a qualified housing development for lower income and very low income households or senior housing, it is the intent to apply the state law density bonus to qualified physically handicapped persons. The term "physically handicapped" shall be defined pursuant to California Health and Safety Code Section 50070 and the Density Bonus Program Guidelines initially adopted by Town Council in 2012 and amended from time to time thereafter. (b) Applicant who elects to proceed with a housing development using the state law density bonus shall not be eligible for any density increases under the Town's General Plan Density Bonus Policy set forth in the Town's Housing Element portion of the General Plan. 29.10.415 General Requirements. Applicants who voluntarily agree to develop a housing development project that complies with the affordability requirements referenced in Government Code 65915 et seq. shall conform to the Density Bonus Program Guidelines adopted by Town Council (initial adopted in 2012) and as may be amended from time to time. 29.10.420 Grounds for Denial of a Project. (a) Nothing in Division 8 of this Chapter 29 limits the Town's right to deny an affordable housing project electing to proceed under the state law density bonus provisions, if the Council makes written findings, based on substantial evidence, any of the following: 1. The Town has adopted a Housing Element as part of the General Plan, and the Town has met or exceeded its share of the regional housing needs for the income category proposed for the development project; 2. The project as proposed would have a specific, adverse impact upon the public health or safety which cannot be satisfactorily mitigated without rendering it unaffordable to lower- income households; 3. The denial of the project or imposition of conditions is required in order to comply with State or Federal law and there is no feasible method to comply without rendering the development unaffordable to lower- income households; 4. The development project is proposed on land zoned for agriculture or resource preservation which is surrounded on at least two sides by land being used for agricultural or resource preservation purposes, and which does not have adequate water or wastewater facilities to serve the project. 5. The development project is inconsistent with the Town's General Plan land use designation as it existed on the date the application was deemed complete, and the Town has adopted a housing element pursuant to state law. (b) Nothing in this chapter limits the Town's right to deny a senior housing project if the Town finds, based on substantial evidence, that the project would have a specific, adverse impact upon the public health or safety; and there is no feasible method to satisfactorily mitigate or avoid the adverse impact identified. 29.10.425 Housing Agreement Applicant requesting a state law density bonus on any rental or for sale project shall agree to enter into a density bonus housing agreement with the Town as required under the Density Bonus Program Guidelines. This housing agreement shall be made a condition of the planning permits for all residential developments pursuant to this Division and shall be recorded as a restriction on any parcels on which the density bonus units will be constructed. 29.10.430 Requirements to Maintain the Affordable Units. (a) All affordable units shall be occupied by the household type specified in the written housing agreement required under this Division. The applicant's obligation to maintain these units as affordable housing shall be evidenced by the housing agreement which shall be recorded as a deed restriction running with the land. (b) The Town may establish fees associated with the setting up and monitoring of affordable units. (c) The owner shall submit an annual report to the Town, on a form provided by the Town. The report shall include for each affordable unit the rent, income, and family size of the household occupying the unit. (d) The owner shall provide to the Town any additional information required by the Town to insure the long -term affordability of the affordable units by eligible households. 29.10.435 Administrative Fee. An administrative fee shall be charged to the applicant for the review of all materials submitted in accordance with this Division and for future monitoring of the affordability of the project. The fee amount shall be established and will be included in the Town's Master Fee Schedule. Fees will be charged for staff and consultant time associated with the development review process, project marketing and leasing, and compliance with the affordability requirements of the project. 29.10.440 Appeals. Any person aggrieved by the denial, conditioning, suspension, or revocation of a density bonus housing development in compliance with the provisions of this Division may appeal such action or determination to the Council in compliance with Chapter 29, Article II (Administration and Enforcement) of the Town Code. SECTION II In the event that any part of this ordinance is held to be invalid, the invalid part or parts shall be severed from the remaining portions which shall remain in full force and effect. SECTION III This ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on June 4, 2012 and adopted by the following vote as an ordinance of the Town of Los Gatos at a regular meeting of the Town Council of the Town of Los Gatos on 2012. This ordinance takes effect 30 days after it is adopted. 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 ti:'d)[i V \Crii_(.)4U.)cnt;it} Boom Ordimnce (I own Coda 1 10405--i) tinal.doc RESOLUTION 2012 - RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS ADOPTING DENSITY BONUS GUIDELINES WHEREAS, pursuant to California Government Code Section 65915, the Town is required to prepare and adopt a density bonus program that applies to senior, affordable housing, and condominium or planned development moderate income for -sale housing developments that provide a specified percentage of affordable or senior units; and WHEREAS, the Town of Los Gatos adopted an ordinance to establish a Density Bonus Housing Program to implement the requirements of California Government Code Section 65915; and WHEREAS, the Density Bonus Program helps the Town meet State mandated housing goals; and WHEREAS, the Density Bonus Guidelines will provide clear direction for applicants requesting the provisions of the Density Bonus Program. NOW, THEREFORE, BE IT RESOLVED, that Town Council of the Town of Los Gatos adopts the Town of Los Gatos Density Bonus Program Guidelines attached as Exhibit A. EXHIBIT 2 PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the day of , 2012, and effective on the same date as Density Bonus Ordinance 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 NADE V\RESOS \2012\Density Bonus Guidelines Implementation Resolution.doc Exhibit A TOWN OF LOS GATOS DENSITY BONUS PROGRAM GUIDELINES I. PURPOSE, AUTHORITY, AND DEFINITION A. Pu ose: The density bonus regulations in these Guidelines are intended to comply with the State Density Bonus Law codified in California Government Code Section 65915 et seq., which provides that a local government shall grant a density bonus and an additional concession, or financially equivalent incentive(s), to a qualified housing development agreeing to construct a specific percentage of affordable housing and senior housing as defined by state law. In enacting these guidelines, it is the intent of the Town of Los Gatos to implement the goals, objectives, and policies of Town of Los Gatos 2020 General Plan and further to implement and be subject to California Government Code Section 65915. In the event that any provision in these Guidelines conflicts with State law, State law shall control. B. Enabling Legislation The Density Bonus Program is governed by Chapter 29, Article I, Division 8 (Section 29.10.400 et seq.) of the Town Code. The Density Bonus Program is administered under these Program Guidelines. C. General Plan Density Bonus Policy Action HOUS -1.3 Applicant who elects to proceed with a housing development using the state law density bonus shall not be eligible for any density increases under the Town's General Plan Density Bonus Policy Action HOU -1.3. D. Definitions The following terms used in the section shall be defined as follows: 1. Affordable Housing /Affordable Housing Unit. A housing unit which is available for sale to moderate income households or for rent to low and /or very low income households, as those terms are defined in this Section. 2. Affordable Rent. Monthly rent charged to low and very low income households for housing units as calculated in accordance with Section 50053 of the Health and Safety Code. 3. Child Care Facility. A child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and school age child care centers as defined in California Government Code Section 65915(h)(4), 4. Density Bonus. A density increase for residential units over the otherwise allowed residential density under the applicable zoning and land use designation on the date an application is deemed complete. 5. Density Bonus Housing Agreement. A legally binding agreement between a developer and the Town to ensure that continued affordability of the affordable housing units required by these Guidelines and to ensure the units are maintained in accordance with these Guidelines. EXHIBIT A of Exhibit 2 6. Density Bonus Units. Those additional residential units granted pursuant to the provisions of these Guidelines. 7. Housing Development. A development project for five or more residential units. Within these Guidelines, it shall also include a subdivision or common interest development, a project which substantially rehabilitates and converts a commercial building to a residential use and a condominium conversion of an existing apartment building as more fully defined in California Government Code Section 65915(1). 8. Incentives or Concessions. Regulatory concessions which include, but are not limited to, the reduction of site development standards or zoning code requirements, approval of mixed -use zoning in conjunction with the housing development, or any other regulatory incentive which would result in identifiable, financially sufficient, and actual cost reductions that are offered in addition to a density bonus. 9. Initial Subsidy. The fair market value of the home at the time of initial sale minus the initial sale price to the moderate income household, plus the amount of any down payment assistance or mortgage assistance. If upon resale the market value is - - - - - - - - - lower--than- the - initial market value, -then the value at - the - time -of the -resale-shall -be used as the initial market value. (e.g., X (fair market value of the home to be purchased) - Y (the price the moderate income family paid for the home) + Z (amount of any down payment assistance) = Initial Subsidy). 10. Low Income Household. A household whose income does not exceed 80 percent of the area median income for Santa Clara County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50079.5 of the California Health and Safety Code. 11. Moderate Income Household. A household whose gross income does not exceed 120 percent of the area median income for Santa Clara County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Sections 50079.5 and 50052.5 of the California Health and Safety Code. 12, Physically Handicapped Housing. Housing designed specifically for a family in which the head of the household suffers from an orthopedic disability impairing personal mobility or has a physical disability that substantially limits one or more major life activities; has a record of such impairment; or is regarded as having such an impairment or a single person with such a disability, where the family or person requires special care or facilities in the home 13. Proportionate Share of Appreciation. The ratio of the local government's initial subsidy as defined above to the fair market value of the home at the time of initial sale. (e.g., X (initial subsidy) /Y (fair market value) = Proportionate Share of Appreciation). 14, Senior Citizen Housing Development. A residential development developed, substantially rehabilitated or renovated, and having at least 35 dwelling units for senior citizens in compliance with the requirements of Section 51.3 and 51.12 of the California Civil Code, or a mobile home park that limits residency based on age requirements for housing for older persons pursuant to Section 798.76 or 799.5 of the Civil Code. 2 15. Very Low Income Household. A household whose income does not exceed 50 percent of the area median income for Santa Clara County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50105 of the California Health and Safety Code. II. DENSITY BONUS HOUSING REQUIREMENTS A. Eligibility Criteria for Density Bonus The Town of Los Gatos shall consider a density bonus and provide incentives or concessions as described in these Guidelines when a developer of a housing development seeks and agrees to construct a housing development that will contain at least one of the following: 1. Five percent of the total units of a housing development strictly for very low income households as defined herein; 2. Ten percent of the total units of a housing development strictly for low income households as defined herein; 3. A senior citizen housing development, as defined herein; 4. Housing development dedicated to and designed for physically handicap, as defined herein; or 5. Ten percent of the total dwelling units in a condominium or planned unit development for persons and families of moderate income households as defined herein, provided that all units in the development are offered to the public for purchase. III. IMPLEMENTATION A. Project Specific Density Bonus: The Town of Los Gatos will allow a housing development a density bonus and concessions or incentives meeting all the applicable eligibility requirements of these Guidelines according to the following density bonus options. In the event that the minimum requirements for granting density bonus units or number of applicable concessions or incentives as set forth in California Government Code Section 65915 is amended or modified after the adoption of these Guidelines by the Town, then the lowest minimum requirements shall apply. All density bonus calculations resulting in fractional units shall be rounded up to the next whole number. The granting of a density bonus shall not be interpreted, in and of itself, to require a General Plan amendment, zoning change, or other discretionary approval. Density bonus for very low income households. If a housing developer elects to construct units for very low income households, the development shall be entitled to the following density bonus calculation: Table A - Provision of Very Low Income Units Percentage of Very Low Income Units Affordable Density Bonus Available Number of Incentives or Concessions 5% 20% 1 6 % 22.5% 1 7% 25% 1 8% 27.5% 1 9% 30% 1 10% 32.5% 2 11% 35 % 2 15 % 35% 3 2. Density bonus for low income households. If a housing developer elects to construct units for low income households, the housing development shall be entitled to the following density bonus calculation: Table B - Provision of Low Income Units Percentage of Low Income Units Affordable Density Bonus Available Number of Incentives or Concessions 10% 20 % 1 11 % 21.5% 1 12% 23 % 1 13% 24.5% 1 14% 26 % 1 15% 27.5% 1 16 % 29% 1 17% 30.5 % 1 18% 32% 1 19% 33.5 1 20% 35 % 2 30% 35 % 3 n 3. Senior housing. If a housing developer elects to construct a senior citizen housinrr development, the density bonus shall be 20 percent of the total number of allowed housing units without the density bonus. 4. Physically handicap housing. If a housing developer elects to construct a housing development design for and restricted to physically handicap citizens, the density bonus shall be 20 percent of the total number of allowed housing units without the density bonus. 5. Moderate income units in condominiums and planned developments. If a housing developer elects to construct units for sale to moderate income households, the development shall be entitled to the following density bonus calculation: 5 Table C - Provision of Moderate Income Units Percentage of Moderate Income Units Affordable Density Bonus Available Number of Incentives or Concessions 10% 5 % 1 11 %0 6% 1 12% 7% 1 13% 8% 1 14% 9% 1 15% 10% 1 16% 11% 1 17% 12% 1 18% 13% 1 -_ - - - - -19% . _ .. - . - ... - -1.4 %- . - - -- -- .._..._ _.- ._ _ ._._ . i - - 20% 15% 2 21% 16% 2 22% 17% 2 23% 18% 2 24% 19% 2 25% 20% 2 26% 21% 2 27% 22% 2 28 % 23% 2 29% 24% 2 30% 25 % 3 31% 26 % 3 32 %a 27% 3 33% 28% 3 34% 29 % 3 35 % 30% 3 36 % 31% 3 37% 32% 3 38% 33% 3 39% 34% 3 40% 35% 3 6. Density bonus for land donation. When an applicant for a tentative map, parcel map, or other residential development approval donates at least one acre of land or enough land to develop 40 units, then the applicant shall be entitled to a 15 percent increase above the otherwise maximum allowable residential density for the entire housing development as follows: Table D - Land Donation Percentage of Very Low Income Units Percentage Density Bonus 10% 15% 11% 16% 12% 17% 13% 18% 14% 19% 15% 20% 16% 21% 17% 22% 18% 23% 19% 24% 20% 25% 21% 26% 22% 27% 23% 28% 24% 29% 25% 30% 26% 31% 27% 32% 28% 33% 29% 34% 30% 35% a) Nothing in this subsection shall be construed to enlarge or diminish the authority of the Town to require a developer to donate land as a condition of development. b) The density bonus for land dedication shall be in addition to any density bonus earned pursuant to these Guidelines and up to a maximum combined increase of 35 percent. 7 c) An applicant with a land donation shall be eligible for the increased density bonus if all of the following conditions are met: (i). The applicant donates and transfers the land to the Town no later than the date of approval of the Town of the final subdivision map, parcel map, or housing development application, whichever occurs first, for the proposed housing development seeking the density bonus. (ii) The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households in an amount not less than 10 percent of the number of residential units of the proposed housing development seeking the density bonus. (iii). The land proposed to be donated to the Town: 1. The transferred land is at least 1 acre in size or of sufficient size to permit development of at least 40 units, has the appropriate General Plan designation and is appropriately zoned for development at the density described in paragraph (3) of subsection (c) of Section 65533.2; and 2. Is or will be served by adequate public facilities and infrastructures; and 3. Is donated no later than the date of approval of the final subdivision map, parcel map or housing development application, seeking a density bonus and has all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land; and 4. Is transferred to the Town or a Housing developer approved by the Town by the date established in Section III.A.6 (c)(i); and 5. Shall be within the Town and within the boundary of the proposed development or within one - quarter mile of the boundary of the proposed development; and 6. Must have a proposed source of funding for the very low income units not later than the approval of the final subdivision map, parcel map or housing development application seeking the density bonus. d) The transferred land and the affordable housing units shall be subject to a deed restriction, which shall be recorded on the property at the time of the transfer, ensuring continued affordability of units for at least 30 years or longer term under another regulatory agreement from the date of initial occupancy. A longer period of time may be specified if required by any construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program applicable to the housing development. 9 7. Condominium conversions. When an Applicant's residential development project is the conversion of an existing apartment complex to a condominium complex and the Applicant agrees to make at least thirty -three percent (33 %) of the total units of the proposed condominium residential development project affordable to Low or Moderate Income households for thirty years (30), or fifteen percent (15 %) of the total units of the proposed condominium residential development project to Lower Income households for thirty years (30), and agrees to pay for the administrative costs incurred by the Town related to process the application and monitor the future status of the Affordable Housing Units, the Town shall either (i) grant a condominium conversion Density Bonus or (ii) provide other incentives of equivalent financial value to be determined by the Town. B. Density Bonus for Development of Child Care Facility A housing development meeting the requirements of Section II.A. and including a child care facility that will be located on the premises of, as part of, or adjacent to, such a housing development shall receive either of the following: 1. An additional density bonus that is an amount of square feet of residential space that is equal to or greater than the amount of square feet in the child care facility. 2. An additional incentive or concession that contributes significantly to the economic feasibility of the construction of the child care facility. When a housing development is providing a child care facility consistent with the Guidelines then the conditions of approval shall require that: 1. The child care facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the affordable units are required to remain affordable; and 2. Of the children who attend the child care facility, the children of very low income households, lower income households, or persons or families of moderate income shall equal a percentage that is equal to or greater than the percentage of affordable units that are required pursuant to Section II.A. The Town shall not be required to provide a density bonus or incentive or concession for a child care facility if it makes a written finding, based upon substantial evidence, that the Town has adequate child care facilities. C. Nothing in these Guidelines limits the Town's right to deny an affordable, senior or physically handicap housing project electing to proceed under the state law density bonus provisions, if the Council finds, based on substantial evidence, any of the following: 1. The Town has adopted a housing element, and the Town has met or exceeded its share of the regional housing needs for the income category proposed for the development project; 2. The project as proposed would have a specific, adverse impact upon the public health or safety which cannot be satisfactorily mitigated without rendering it unaffordable to lower- income households; �. The denial of the project or imposition of conditions is required in order to comply with State or Federal law and there is no feasible method to comply without rendering the development unaffordable to lower - income households; 4. The development project is proposed on land zoned for agriculture or resource preservation which is surrounded on at least two sides by land being used for agricultural or resource preservation purposes, and which does not have adequate water or wastewater facilities to serve the project. 5. The development project is inconsistent with the Town's General Plan land use designation as it existed on the date the application was deemed complete, and the Town has adopted a housing element pursuant to state law. D. Incentives or Concessions Applicants who request a density bonus and voluntarily agree to develop a housing development project that complies with the affordability requirements referenced in Government Code 65915 may submit to the Town a proposal for the specific incentive(s) or concession(s) provided by applicable state law. A proposal shall. be submitted concurrently with the application for the development and a density bonus. In accordance with Government Code Section 65915(4)(2), the applicant xeccive_the number of incentives or concessions that correspond to the percentage of density bonus as outlined in Section III (A) Tables A through C. The Town shall award the incentive(s) or concession(s) requested by the applicant in compliance with state law requirements unless the Town Council adopts a written finding that the incentive or concession is not required to make the units affordable. The decide body may deny a request for an incentive or concession if it makes a written finding, based upon substantial evidence, of either of the following: 1. The incentive or concession is not required to provide for affordable rents or affordable ownership costs; or 2. The incentive or concession would have a specific adverse impact upon public health or safety, or the physical environment, 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 development unaffordable to low, very 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 was deemed complete. E. Reduction or Waivers of Development Standards The Town shall not apply any development standard that would have the effect of precluding the construction of a proposed housing development meeting the requirements of these Guidelines at the densities or with the incentives permitted by these Guidelines. An applicant may submit with its application to the Town a proposal for the waiver or reduction of development standards. A reduction or waiver of development standards, the application of which would physically preclude the development, shall not reduce nor increase the number of incentives or concessions being requested. 10 Nothing in this subsection, however, shall be interpreted to require the Town to waive or reduce development standards if the waiver or reduction would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5 of the California Government Code, upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which the Town determines there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Furthermore, the applicant shall be required to prove that the waiver or modification is necessary to make the affordable units economically feasible. The decide body may deny a request for waiver if it makes a written finding, based upon substantial evidence, of either of the following: 1. The modification would have a specific adverse impact upon health, safety, or mitigate or avoid the physical environment, and there is no feasible method to satisfactorily specific adverse impact without rendering the development unaffordable to low, very 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 was deemed complete; or 2. The modification would have an adverse impact on any real property that is listed in the California Register of Historic Resources; or 3. The incentive or concession would be contrary to State or Federal law F. Parking Standard Upon request by the applicant, the Town shall not require the proposed housing development eligible for a density bonus pursuant to these Guidelines to provide a parking ratio, including physically handicapped and guest parking, which exceeds the following: a. Zero to one bedrooms: one onsite parking space. b. Two to three bedrooms: two onsite parking spaces. C. Four and more bedrooms: two and one -.half onsite parking spaces. If the total number of parking spaces required for the proposed housing development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subsection, a development may provide onsite parking through tandem parking or uncovered parking, but not through on- street parking. G. Design, Distribution and Timing of Affordable Housing Units Affordable Housing Units must be constructed concurrently with market -rate units. The Affordable Housing Units shall be integrated into the Housing Development Project, be similar in size, have comparable infrastructure (including sewer, water and other utilities), and construction quality and exterior design to the market -rate units. The applicant may have the option of reducing the interior amenity level, provided that all of the units conform to the requirements of the Town's Building and Housing Codes and the Community Development Director finds that the reduction in interior amenity level will provide a quality and healthy living environment. The Town strongly encourages the use of green building principles such as the use of environmentally preferable interior finishes and 11 flooring, as well as the installation of water and energy efficient hardware, wherever feasible. The Affordable Housing Units must also comply with the following criteria: 1. Rental Residential Development Projects: When Affordable Housing Units are required in rental Residential Development Projects, the units should be integrated with the project as a whole. All Affordable Housing Units shall reflect the range and numbers of bedrooms provided in the project as a whole, and shall not be distinguished by exterior design, construction, or materials. All Affordable Housing Units shall be reasonably dispersed throughout the project. 2. Owner- occupied Residential Development Projects: When Affordable Housing Units are required in owner- occupied Housing Development Projects, the units should be integrated with the project as a whole. Affordable Housing Units may have different interior finishes and features than market -rate units so long as the interior features are durable, of good quality and consistent with contemporary standards for new housing. All Affordable Housing Units shall reflect the range and numbers _of bedrooms. _provided in the _proiect as a whole, except that if the market -rate units provide more than four bedrooms, the Affordable Housing Units need not provide more than four bedrooms. No building permits will be issued for market -rate units until permits for all Affordable Housing Units have been obtained, unless Affordable Housing Units are to be constructed in phases pursuant to a plan approved by the Town. Market -rate units will not be granted final occupancy until all Affordable Housing Units have been granted final occupancy, unless Affordable Housing Units are to be constructed in phases pursuant to a plan approved by the Town. IV. APPLICATION REQUIREMENTS, REVIEW PROCEDURES, AND FINDINGS A. Application Requirements At the time the applicant of a proposed housing development, seeking a density bonus and concessions or incentives under these Guidelines files a formal application for approval of the proposed development with the Community Development Department, the following information shall be submitted with the fees and required application(s): 1. Identification of the location, acreage, and the maximum number of base units allowed under the zoning and the land use designated under the General Plan without the Density Bonus. 2. Identification of the total number of units proposed, specifically identifying the Density Bonus units and the Affordable Units which will demonstrate eligibility under these guidelines. 3. Identification of the requested concessions or incentives or a list of any alternative concessions or incentives which would provide, in the developer's opinion, an equivalent financial value to the concession or incentive requested. This requirement does not impair the applicant from substituting a new incentive or 12 concession from what is initially proposed; however, the identified incentives or concessions may not be changed once the environmental review for the proposed housing development has commenced. Any change subsequent to the environmental review process may require additional environmental. 4. For waivers of development standards, evidence demonstrating that the development standard for which the waivers are requested would have the effect of physically precluding the construction of the residential development project at the density. 5. A pro forma demonstrating that any requested incentives and concessions result in identifiable, financially sufficient and actual cost reductions. The pro forma shall include: (a) the actual cost reduction achieved through incentive or concession; and (b) evidence that the cost reduction allows the developer to provide affordable rents or affordable sales prices. The information shall be sufficiently detailed to enable Town staff to examine the conclusions reached by the developer. The Town may require that any pro forma submitted pursuant to this section include information regarding capital costs, equity investment, debt service, projected revenues, operating expenses, and such other information as is required to evaluate the pro forma, including but not limited to the cost to the Town of hiring a consultant to review the pro forma, shall be borne by the applicant. 6. Any additional information and materials required with a Planned Development and Architecture and Site Application. 7. Technical studies required by the Town to evaluate the applications. 8. If a density bonus is requested for land donation, the application shall show the location of the land_to be dedicated and provide evidence that each of the findings in Government Code Section 65915(h) can be made. If a density bonus or concession is requested for a child care facility, the application shall provide evidence that the findings in Governmental Code Section 69515 (i) can be made. 9. Other pertinent information as the Director of Community Development may require enabling the Town to adequately analyze the identifiable, financially sufficient and actual cost reductions of the proposed housing development with respect to the requested additional concession or incentive and other concessions or incentives which may be made available. B. Review Procedures Any request for a density bonus, incentive, concession, parking reduction, or waiver pursuant to these Guidelines shall be submitted as part of the first approval of any residential development project and shall be processed, reviewed, and approved or denied concurrently with the discretionary applications required for the project. Planning Commission/Town Council. When a proposed housing development needs only Architecture and Site approval, then the Planning Commission will consider and act on the density bonus request when the Architecture and Site application is considered. If the project requires additional entitlements such as a planned development application review, then the Town Council will consider and act on the density bonus request concurrent with the applicable project entitlement /environmental clearance. The Community Development Director 13 and /or the Planning Commission may refer an application for a density bonus and any other entitlements to the Town Council if for final consideration and action. ` C. Required Findings The Town shall grant a request for a density bonus, incentive, concession, parking reduction, or waiver, unless the deciding body can make the following written findings based on substantial evidence, as applicable: 1. The Town has adopted a housing element, and the Town has met or exceeded its share of the regional housing needs for the income category proposed for the development project; 2. The project as proposed would have a specific, adverse impact upon the public health or safety which cannot be satisfactorily mitigated without rendering it unaffordable to lower- income households; 3. The denial of the project or imposition of conditions is required in order to comply with State or Federal law and there is no feasible method to comply without rendering the development unaffordable to lower- income households; 4. The development project is proposed on land zoned for agriculture or resource _.._preservation_ which_ s_surrounded__on at_ least _.two sides by land being used for agricultural or resource preservation purposes, and which does not have adequate water or wastewater facilities to serve the project. 5. The development project is inconsistent with the Town's General Plan land use designation as it existed on the date the application was deemed complete, and the Town has adopted a housing element pursuant to state law. D. Application and Administrative Fees Application and administrative fees shall be charged to the applicant for the review of all materials submitted in accordance with these Guidelines and for future monitoring of the affordability of the project. The fee amount shall be established by Town Council resolution and will be included in the Town's Comprehensive Fee Schedule. Fees will be charged for staff and consultant time associated with the development review process, analysis of all pro forms and financial feasibility documents related to the request for the density bonus, project marketing, and compliance with the affordability requirements of the project. V. DENSITY BONUS HOUSING AGREEMENT A. Required Density Bonus Agreement and Terms of Agreement Once the proposed Housing Development has received its approval for the development application and the Density Bonus, as described above, the developer shall file an application, including the payment of any processing fees with the Community Development Department for approval and finalization of the Density Bonus Housing Agreement in compliance with the following requirements: 1. A Density Bonus Housing Agreement must be executed prior to recording any final map for the underlying property or prior to the issuance of any building permit for the housing development, whichever comes first, unless the Community Development Director approves an alternative phasing plan. The 14 Density Bonus Housing Agreement shall be binding on all future owners and successors of interests of the housing development. 2. The Density Bonus Housing Agreement shall: a) Identify the type, size and location of each Affordable Housing Unit required hereunder; b) Identify the term of the agreement, which would define the term of affordability of the required units; c) Require that the Affordable Housing Units be constructed and completed by the developer as specified in these Guidelines and in accordance with state law; d) Require that each Affordable Housing Unit be kept available only to members of the identified income group at the maximum affordable rent during the term of the agreement. e) Identify the means by which such continued availability shall be secured and enforced and the procedures under which the Affordable Housing Units shall be leased and shall contain such other terms and provisions, the Town may require. The agreement, in its form and manner of execution, shall be in a form able to be recorded with the Santa Clara County Recorder. f) The Density Bonus Housing Agreement shall be reviewed and approved by the Director of Community Development and Town Attorney. The agreement shall also include the procedures for annual submission of information, including any applicable review fees, sufficient to determine continued compliance with the agreement to the Director of Community Development. 3. Required Terms for the Continued Availability of Affordable Units: a) Low and Very Low Income Households. A housing developer providing Low and Very Low income units in accordance with these Guidelines must continue to restrict those units to Low or Very Low Income households for a minimum of 30 years or longer term under another regulatory agreement from the date of initial occupancy. A longer period of time may be specified if required by any construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program applicable to the housing development. b) Moderate Income Households. In the case of a Housing Development providing Moderate Income units, the initial occupant of the unit must be a person or family of Moderate Income. (i). Upon resale, the seller of the unit shall retain the value of any improvements, the down payment, and the seller's proportionate share of appreciation. The Town shall recapture any Initial Subsidy and its Proportionate Share of Appreciation; which shall be used within five years for any of the purposes described in subdivision 15 (e) of Section 33334,2 of the Health and Safety Code that promote home ownership. N: \DEV\PC REPORM20120ensity Bonus Guidelines - Exhibit A.docx 16 Y1 1 3,10 1.U«JVVdJ Page 1_of 11 CALIFORNIA CODES GOVERNMENT CODE SECTION 65915 -65918 65915. (a) When an applicant seeks a density bonus for a housing development within, or for the donation of land for housing within, the jurisdiction of a city; county, or city and county, that local government shall provide the applicant with incentives or concessions for the production of housing units and childcare facilities as prescribed in this section. All cities, counties, or cities and counties shall adopt an ordinance that specifies how compliance with this section will be implemented. Failure to adopt an ordinance shall not relieve a city, county, or city and county from complying with this section. (b) (1) A city, county, or city and county shall grant one density bonus, the amount of which shall be as specified in subdivision (f), and incentives or concessions, as described in subdivision (d), when an applicant for housing development seeks and agrees to construct a housing development, excluding any units permitted by the density bonus awarded pursuant to this section, that will contain at least any one of the following: (A) Ten percent of the total units of a housing development for lower income households, as defined in Section 50079.5 of the Health and Safety Code. (B) Five percent of the total units of a housing development for very low income households, as defined in Section 50105 of the Health and Safety Code. (C) A senior citizen housing development, as defined in Sections 51.3 and 51.12 of the Civil Code, or mobilehome park that limits residency based on age requirements for housing for older persons pursuant to Section 798.76 or 799.5 of the Civil Code. (D) Ten percent of the total dwelling units in a common interest development as defined in Section 1351 of the Civil Code for persons and families of moderate income, as defined in Section 50093 of the Health and Safety Code, provided that all units in the development are offered to the public for purchase. (2) For purposes of calculating the amount of the density bonus pursuant to subdivision (f), the applicant who requests a density bonus pursuant to this subdivision shall elect whether the bonus shall be awarded on the basis of subparagraph (A), (B), (C), or (D) of paragraph (1). (3) For the purposes of this section, "total units" or "total dwelling units" does not include units added by a density bonus awarded pursuant to this section or any local law granting a greater density bonus. (c) (1) An applicant shall agree to, and the city, county, or city and county shall ensure, continued affordability of all low- and very low income units that qualified the applicant for the award of the density bonus for 30 years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. Rents for the lower income density bonus units shall be set at an affordable rent as defined in Section 50053 of the Health and Safety Code. Owner- occupied units shall be available at an affordable housing cost as defined in Section 50052.5 of the Health and Safety Code. (2) An applicant shall agree to, and the city, county, or city and county shall ensure that, the initial occupant of the FaRIBIT 3 mhtml:file: / /C: \Users \hbradley\AppData \Local \Microsoft\ Windows \Temporary Internet Fil... 1/18/2012 WAIS Document Retrieval moderate- income units that are directly related to the receipt of the density bonus in the common interest development, as defined in Section 1351 of the Civil Code, are persons and families of moderate income, as defined in Section 50093 of the Health and Safety Code, and that the units are offered at an affordable housing cost, as that cost is defined in Section 50052.5 of the Health and Safety Code. The local government shall enforce an equity sharing agreement, unless it is in conflict with the requirements of another public funding source or law. The following apply to the equity sharing agreement: (A) Upon resale, the seller of the unit shall retain the value of any improvements, the downpayment, and the seller's proportionate share of appreciation. The local government shall recapture any initial subsidy, as defined in subparagraph (B), and its proportionate share of appreciation, as defined in subparagraph (C), which amount shall be used within five years for any of the purposes described in subdivision (e) of Section 33334.2 of the Health and Safety Code that promote home ownership. (B) For purposes of this subdivision, the local government's initial subsidy shall be equal to the fair market value of the home at the time of initial sale minus the initial sale price to the moderate- income household, plus the amount of any downpayment assistance or mortgage assistance. If upon resale the market value is . - lower than - the initiafi market =value, - °the value -at the - time -_o. - -- -._ the resale shall be used as the initial market value. (C) For purposes of this subdivision, the local government's proportionate share of appreciation shall be equal to the ratio of the local government's initial subsidy to the fair market value of the home at the time of initial sale. (d) (1) An applicant for a density bonus pursuant to subdivision (b) may submit to a city, county, or city and county a proposal for the specific incentives or concessions that the applicant requests pursuant to this section, and may request a meeting with the city, county, or city and county. The city, county, or city and county shall grant the concession or incentive requested by the applicant unless the city, county, or city and county makes a written finding, based upon substantial evidence, of any of the following: (A) The concession or incentive is not required in order to provide for affordable housing costs, as defined in Section 50052.5 of the Health and Safety Code, or for rents for the targeted units to be set as specified in subdivision (c). (B) The concession or incentive would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65509.5, upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low- and moderate- income households. (C) The concession or incentive would be contrary to state or federal law. (2) The applicant shall receive the following number of incentives or concessions: (A) One incentive or concession for projects that include at least 10 percent of the total units for lower income households, at least 5 percent for very low income households, or at least 10 percent for persons and families of moderate income in a common interest development. (B) Two incentives or concessions for projects that include at least 20 percent of the total units for lower income households, at Page 2 of 1 1 mhtml:flle: / /C: \Users \hbradley \AppData \Local \Microsoft \Windows \Temporary Internet FiL.. 1/18/2012 YY —l3 LuLuuir-in tceLrleval least 10 percent for very low income households, or at least 20 percent for persons and families of moderate income in a common interest development. (C) Three incentives or concessions for projects that include at least 30 percent of the total units for lower income households, at least 15 percent for very low income households, or at least 30 percent for persons and families of moderate income in a common interest development. (3) The applicant may initiate judicial proceedings if the city, county, or city and county refuses to grant a requested density bonus, incentive, or concession. If a court finds that the refusal to grant a requested density bonus, incentive, or concession is in violation of this section, the court shall award the plaintiff reasonable attorney's fees and costs of suit. Nothing in this subdivision shall be interpreted to require a local government to grant an incentive or concession that has a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon health, safety, or the physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Nothing in this subdivision shall be interpreted to require a local government to grant an incentive or concession that would have an adverse impact on any real property that is listed in the California Register of Historical Resources. The city, county, or city and county shall establish procedures for carrying out this section, that shall include legislative body approval of the means of compliance with this section. (e) (1) In no case may a city, county, or city and county apply any development standard that will have the effect of physically precluding the construction of a development meeting the criteria of subdivision (b) at the densities or with the concessions or incentives permitted by this section. An applicant may submit to a city, county, or city and county a proposal. for the waiver or reduction of development standards that will have the effect of physically precluding the construction of a development meeting the criteria of subdivision (b) at the densities or with the concessions or incentives permitted under this section, and may request a meeting with the city, county, or city and county. If a court finds that the refusal to grant a waiver or reduction of development standards is in violation of this section, the court shall award the plaintiff reasonable attorney's fees and costs of suit. Nothing in this subdivision shall be interpreted to require a local government to waive or reduce development standards if the waiver or reduction would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65589.5, upon health, safety, or the Physical environment, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Nothing in this subdivision shall be interpreted to require a local government to waive or reduce development standards that would have an adverse impact on any real property that is listed in the California Register of Historical Resources, or to grant any waiver or reduction that would be contrary to state or federal law. (2) A proposal for the waiver or reduction of development standards pursuant to this subdivision shall neither reduce nor increase the number of incentives or concessions to which the applicant is entitled pursuant to subdivision (d). (f) For the purposes of this chapter, "density bonus" means a density increase over the otherwise maximum allowable residential density as of the date of application by the applicant to the city, county, or city and county. The applicant may elect to accept a lesser percentage of density bonus. The amount of density bonus to Page 3 of 11 mhtml :file: / /C:\ Users \hbradley\AppData \Local \Microsoft \Windows \Temporary Internet Fil... 1/18/2012 WAIS Document Retrieval which the applicant is entitled shall vary according to the amount by which the percentage of affordable housing units exceeds the percentage established in subdivision (b). (1) For housing developments meeting the criteria of subparagraph (A) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows: Percentage Low- Income Units 10 11 12 13 14 15 17 18 i9 20 Percentage Density Bonus 20 21.5 23 24.5 26 27.5 30.5 32 33.5 35 Page 4 of 11 (2) For housing developments meeting the criteria of subparagraph (B) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows: Percentage Very Low Income Units 5 6 7 8 9 10 11 Percentage Density Bonus 20 22.5 25 27.5 30 32.5 35 (3) For housing developments meeting the criteria of subparagraph (c) of paragraph (1) of subdivision (b), the density bonus shall be 20 percent of the number of senior housing units. (4) For housing developments meeting the criteria of subparagraph (D) of paragraph (1) of subdivision (b), the density bonus shall be calculated as follows: Percentage Moderate - Income Units 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Percentage Density Bonus 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 mhtml;file.//C; \Users \hbradley \AppData\ Local \Microsoft \Windows \Temporary Internet Fil_ 1/18/2012 vain 1��:u1l.VCL1 Page 5 of 11 27 Percentage Density Bonus Income 22 28 15 11 23 29 17 13 24 30 19 15 25 31 21 17 26 32 23 19 27 33 25 21 28 34 27 23 29 35 29 25 30 36 31 27 31 37 33 29 32 38 35 33 39 34 40 35 (5) All density calculations resulting in fractional units shall be rounded up to the next whole number. The granting of a density bonus shall not be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval. (g) (1) When an applicant for a tentative subdivision map, parcel map, or other residential development approval donates land to a city, county, or city and county in accordance with this subdivision, the applicant shall be entitled to a 15- percent increase above the otherwise maximum allowable residential density for the entire development, as follows: Percentage Very Low Percentage Density Bonus Income 10 15 11 16 12 17 13 18 14 19 15 20 16 21 17 22 18 23 19 24 20 25 21 26 22 27 23 28 24 29 25 30 26 31 27 32 28 33 29 34 30 35 (2) This increase shall be in addition to any increase in density mandated by subdivision (b), up to a maximum combined mandated density increase of 35 percent if an applicant seeks an increase pursuant to both this subdivision and subdivision (b). All density calculations resulting in fractional units shall be rounded up to the next whole number. Nothing in this subdivision shall be construed to enlarge or diminish the authority of a city, county, or city and county to require a developer to donate land as a condition of development. An applicant shall be eligible for the increased density mhtml:file: / /C:\ Users \hbradley \AppData \Local \Microsoft\Windows \Temporary Internet Fil... 1/18/2012 WAIS Document Retrieval N 6 of 11 bonus described in this subdivision if all of the following conditions are met: (A) The applicant donates and transfers the land no later than the f date of approval of the final subdivision map, parcel map, or residential development application. (B) The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households in an amount not less than 10 percent of the number of residential units of the proposed development. (C) The transferred land is at least one acre in size or of sufficient size to permit development of at least 40 units, has the appropriate general plan designation, is appropriately zoned with appropriate development standards for development at the density described in paragraph (3) of subdivision (c) of Section 65583.2, and is or will be served by adequate public facilities and infrastructure. (D) The transferred land shall have all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land, not later than the date of approval of the final subdivision map, parcel map, or residential development application, except that the local government may subject the proposed development to subsequent design review to the extent authorized -by °subdivision -O of Section - if the design is not reviewed by the local government prior to the time of transfer. (E) The transferred land and the affordable units shall be subject to a deed restriction ensuring continued affordability of the units consistent with paragraphs (1) and (2) of subdivision (c), which shall be recorded on the property at the time of the transfer. (F) The land is transferred to the local agency or to a housing developer approved by the local agency. The local agency may require the applicant to identify and transfer the land 'to the developer. (G) The transferred land shall be within the boundary of the proposed development or, if the local agency agrees, within one - quarter mile of the boundary of the proposed development. (H) P, proposed source of funding for the very low income units shall be identified not later than the date of approval of the final subdivision map, parcel map, or residential development application, (h) (1) When an applicant proposes to construct a housing development that conforms to the requirements of subdivision (b) and includes a child care facility that will be located on the premises of, as part of, or adjacent to, the project, the city, county, or city and county shall grant either of the following: (A) An additional density bonus that is an amount of square feet Of residential space that is equal to or greater than the amount of square feet in the child care facility. (B) An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the child care facility. (2) The city, county, or city and county shall require, as a condition of approving th•e housing development, that the following occur: (A) The child care facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the density bonus units are required to remain affordable pursuant to subdivision (c). (B) of the children who attend the child care facility, the children of very low income households, lower income households, or families of moderate income shall equal a percentage that is equal to mhtml:file:HC: \Users \hbradley \AppData \Local\ Microsoft \Windows \Temporary Internet Fil.- 1/18/2012 rr tz.ty LVl. U111G1111 \G 111G Val or greater than the percentage of dwelling units that are required for very low income households, lower income households, or families of moderate income pursuant to subdivision (b). (3) Notwithstanding any requirement of this subdivision, a city, county, or a city and county shall not be required to provide a density bonus or concession for a child care facility if it finds, based upon substantial evidence, that the community has adequate child care facilities. (4) "Child care facility," as used in this section, means a child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and schoolage child care centers. (i) "Housing development," as used in this section, means a development project for five or more residential units. For the purposes of this section, "housing development" also includes a subdivision or common interest development, as defined in Section 1351 of the Civil Code, approved by a city, county, or city and county and consists of residential units or unimproved residential lots and either a project to substantially rehabilitate and convert an existing commercial building to residential use or the substantial rehabilitation of an existing multifamily dwelling, as defined in subdivision (d) of Section 65863.4, where the result of the rehabilitation would be a net increase in available residential units. For the purpose of calculating a density bonus, the residential units shall be on contiguous sites that are the subject of one development application, but do not have to be based upon individual subdivision maps or parcels The density bonus shall be permitted in geographic areas of the housing development other than the areas where the units for the lower income households are located. (j) The granting of a concession or incentive shall not be interpreted, in and of itself, to require a general plan amendment, local coastal plan amendment, zoning change, or other discretionary approval. This provision is declaratory of existing law. (k) For the purposes of this chapter, concession or incentive means any of the following: (1) A reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission as provided in Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code, including, but not limited to, a reduction in setback and square footage requirements and in the ratio of vehicular parking spaces that would otherwise be required that results in identifiable, financially sufficient, and actual cost reductions. (2) Approval of mixed use zoning in conjunction with the housing project if commercial, office, industrial, or other land uses will reduce the cost of the housing development and if the commercial, office, industrial, or other land uses are compatible with the housing project and the existing or planned development in the area where the proposed housing project will be located. (3) Other regulatory incentives or concessions proposed by t'he developer or the city, county, or city and county that result in identifiable, financially sufficient, and actual cost reductions. (1) Subdivision (k) does not limit or require the provision of direct financial incentives for the housing development, including the provision of publicly owned land, by the city, county, or city and county, or the waiver of fees or dedication requirements. (m) Nothing in this section shall be construed to supersede or in any way alter or lessen the effect or application of the California Page 7 of 11 mhtml:file: / /C : \Users \hbradley\AppData\ Local \Microsoft\Windows \Tempora Internet Fil... 1/18/2012 WAIS Document Retrieval Page 8 of 11 Coastal Act (Division 20 (commencing with Section 30000) of the Public Resources Code). (n) If permitted by local ordinance, nothing in this section shall t. ,. be construed to prohibit a city, county, or city and county from granting a density bonus greater than what is described in this section for a development that meets the requirements of this section or from granting a proportionately lower density bonus than what is required by this section for developments that do not meet the requirements of this section. (o) For purposes of this section, the following definitions shall apply: (1) "Development standard" includes a site or construction condition, including, but not limited to, a height limitation, a setback requirement, a floor area ratio, an onsite open - space requirement, or a parking ratio that applies to a residential development pursuant to any ordinance, general plan element, specific plan, charter, or other local condition, law, policy, resolution, or regulation. (2) "Maximum allowable residential density" means the density allowed under the zoning ordinance and land use element of the general plan, or if a range of density is permitted, means the maximum allowable density for the specific zoning range and land use element of the general plan applicable to the project. Where the density all -bwed- under - -- the— zoning--ordinance -is - rncons- isten-t -- with - -the density allowed under the land use element of the general plan, the general plan density shall prevail. (p) (1) Upon the request of the developer, no city, county, or city and county shall require a vehicular parking ratio, inclusive of handicapped and guest parking, of a development meeting the criteria of subdivision (b), that exceeds the following ratios: (A) Zero to one bedroom: one onsite parking space, (B) Two to three bedrooms: two onsite parking spaces. (C) Four and more bedrooms: two and one -half parking spaces. (2) If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number, For purposes of this subdivision, a development may provide "onsite parking" through tandem parking or uncovered parking, but not through onstreet parking. (3) This subdivision shall apply to a development that meets the requirements of subdivision (b) but only at the request of the applicant. An applicant may request parking incentives or concessions beyond those provided in this subdivision pursuant to subdivision (d) . 65915.5. (a) When an applicant for approval to convert apartments to a condominium project agrees to provide at least 33 percent of the total units of the proposed condominium project to persons and families of low or moderate income as defined in Section 50093 of the Health and Safety Code, or 15 percent of the total units of the proposed condominium'project to lower income households as defined in Section 50079.5 of the Health and Safety Code, and agrees to pay for the reasonably necessary administrative costs incurred by a city, county, or city and county pursuant to this section, the city, county, or city and county shall either (1) grant a density bonus or (2) provide other incentives of equivalent financial value. A city, county, or city and county may place such reasonable conditions on the granting of a density bonus or other incentives of equivalent financial value as it finds appropriate, including, but not limited mhtml: file: / /C: \Users \hbradley \AppData\ Local \Microsoft\Windows \Temporary Internet FiL„ 1/18/2012 e — — vvIU1111,11L 1\GLIIGVQI to, conditions which assure continued affordability of units to subsequent purchasers who are persons and families of low and moderate income or lower income households. (b) For purposes of this section, "density bonus" means an increase in units of 25 percent over the number of apartments, to be provided within the existing structure or structures proposed for conversion. (c) For purposes of this section; "other incentives of equivalent financial value" shall not be construed to require a city, county, or city and county to provide cash transfer payments or other monetary compensation but may include the reduction or waiver of requirements which the city, county, or city and county might otherwise apply as conditions of conversion approval. (d) An applicant for approval to convert apartments to a condominium project may submit to a city, county, or city and county a preliminary proposal pursuant to this section prior to the submittal of any formal requests for subdivision map approvals. The city, county, or city and county shall, within 90 days of receipt of a written proposal, notify the applicant in writing of the manner in which it will comply with this section. The city, county, or city and county shall establish procedures for carrying out this section, which shall include legislative body approval of the means of compliance with this section. (e) Nothing in this section shall be construed to require a city, county, or city and county to approve a proposal to convert apartments to condominiums. (f) An applicant shall be ineligible for a density bonus or other incentives under this section if the apartments proposed for conversion constitute a housing development for which a density bonus or other incentives were provided under Section 6591'5. 65916. Where there is a direct financial contribution to a housing development pursuant to Section 65915 through participation in cost of infrastructure, write -down of land costs, or subsidizing the cost of construction, the city, county, or city and county shall assure continued availability for low- and moderate- income units for 30 years. When appropriate, the agreement provided for in Section 65915 shall specify the mechanisms and procedures necessary to carry out this section. 65917. In enacting this chapter it is the intent of the Legislature that the density bonus or other incentives offered by the city, county, or city and county pursuant to this chapter shall contribute significantly to the economic feasibility of lower income housing in proposed housing developments. In the absence of an agreement by a developer in accordance with Section 65915, a locality shall not offer a density bonus or any other incentive that would undermine the intent of this chapter. 65917.5. (a) As used in this section, the following terms shall have the following meanings: (1) "Child care facility" means a facility installed, operated, and maintained under this section for the nonresidential care of Page 9 of 11 mhtml: file : / /C: \Userslhbradley \AppData\ Local \Microsoft\Windows \Temporary Internet Fil... 1/18/2012 WAIS Document Retrieval Pal 10 of 1 1 children as defined under applicable state licensing requirements for the facility. (2) "Density bonus" means a floor area ratio bonus over the otherwise maximum allowable density permitted under the applicable zoning ordinance and land use elements of the general plan of a city, including a charter city, city and county, or county of; (A) A maximum of five square feet of floor area for each one square foot of floor area contained in the child care facility for existing structures. (E) A maximum of 10 square feet of floor area for each one square foot of floor area contained in the child care facility for new structures. For purposes of calculating the density bonus under this section, both indoor and outdoor sauare footage requirements for the child care facility as set forth in applicable state child care licensing requirements shall be included in the floor area of the child care facility. (3) "Developer" means the owner or other person, including a lessee, having the right under the applicable zoning ordinance of a city council, including a charter city council, city and county board of supervisors, or county board of supervisors to make an application for development approvals for the development or redevelopment of a commercial or industrial project. (4 ) Floor - area - means =as to - a commercial -- or-- ndustria 1. -project, -- - -- _ the floor area as calculated under the applicable zoning ordinance of a city council, including a charter city council, city and county board of supervisors, or county board of supervisors and as to a child care facility, the total area contained within the exterior walls of the facility and all outdoor areas devoted to the use of the facility in accordance with applicable state child care licensing requirements. (b) A city council, including a charter city council, city and county board of supervisors, or county board of supervisors may establish a procedure by ordinance to grant a developer of a commercial or industrial project, containing at least 50,000 square feet of floor area, a density bonus when that developer has set aside at least 2,000 square feet of floor area and 3,000 outdoor square feet to be used for a child care facility. The granting of a bonus shall not preclude a city council, including a charter city council, city and county board of supervisors, or county board of supervisors from imposing necessary conditions on the project or on the additional square footage. Projects constructed under this section shall conform to height, setback, lot coverage, architectural review, site plan review, fees, charges, and other health, safety, and zoning requirements generally applicable to construction in the zone in which the property is located. A consortium with more than one developer may be permitted to achieve the threshold amount for the available density bonus with each developer's density bonus equal to the percentage participation of the developer. This facility may be located on the project site or may be located offsite as agreed upon by the developer and local agency. If the child care facility is not located on the site of the project, the local agency shall determine whether the location of the child care facility is appropriate and whether it conforms with the intent of this section. The child care facility s': be of a size to comply with all state licensing requirements in order to accommodate at least 40 children. (c) The developer may operate the child care facility itself or may contract with a licensed child care provider to operate the facility. In all cases, the developer shall show ongoing coordination with a local child care resource and referral network or local mhtml:file://C:\ Users \hbradley\AppData \Local \Microsoft \Windows \Temporary Internet Fil... 1/18/2012 Yaae 11 of 11 governmental child care coordinator in order to qualify for the density bonus. (d) If the developer uses space allocated for child care facility purposes, in accordance with subdivision (b), for purposes other than for a child care facility, an assessment based on the square footage of the project may be levied and collected by the city council, including a charter city council, city and county board of supervisors, or county board of supervisors. The assessment shall be consistent with the market value of the space. If the developer fails to have the space allocated for the child care facility within three years, from the date upon which the first temporary certificate of occupancy is granted, an assessment based on the square footage of the project may be levied and collected by the city council, including a charter city council, city and county board of supervisors, or county board of supervisors in accordance with procedures to be developed by the legislative body of the city council, including a charter city council, city and county board of supervisors, or county board of supervisors. The assessment shall be consistent with the market value of the space. A penalty levied against a consortium of developers shall be charged to each developer in an amount equal to the developer's percentage square feet participation. Funds collected pursuant to this subdivision shall be deposited by the city council, including a charter city council, city and county board of supervisors, or county board of supervisors into a special account to be used for child care services or child care facilities. (e) Once the child cars facility has been established, prior to the closure, change in use, or reduction in the physical size of, the facility, the city, city council, including a charter city council, city and county board of supervisors, or county board of supervisors shall be required to make a finding that the need for child care is no longer present, or is not present to the same degree as it was at the time the facility was established. (f) The requirements of Chapter 5 (commencing with Section 66000) and of the amendments made to Sections 53077, 54997, and 54998 by Chapter 1002 of the Statutes of 1987 shall not apply to actions taken in accordance with this section. (g) This section shall not apply to a voter - approved ordinance adopted by referendum or initiative. 65918. The provisions of this chapter shall apply to charter cities. mhtml: file: / /C:\ Users \hbradley \AppData\ Local \Microsoft\Windows \Temporary Internet Fil... 1/18/2012 This Page Intentionally Left Blank TOWN OF LOS GATOS ITFM Nn; I PLANNING COMMISSION STAFF REPORT DESK ITEM Meeting Date: May 23, 2012 10MN OY PREPARED BY: Wendie Rooney, Community Development Director wrooney@losgatosca.gov APPLICATION NO: LOCATION: APPLICANT: CONTACT: APPLICATION SUMMARY: EXHIBITS: STAFF REMARKS Zoning Code Amendment A -12 -001 Town -wide Town of Los Gatos Wendie Rooney, Community Development Director Judith Propp, Town Attorney Public hearing to consider amending the Zoning Code to incorporate the State's Density Bonus Law. 1 -3. Previously received with May 23, 2012, Planning Commission Staff Report Staff has received a number of Commissioner comments regarding the wording of section III.E.1. Given the importance of this section, staff felt it was important to correct the Guidelines through a desk item. The following is the corrected sentence with strikeout for deleted text and underline for new text. The modification would have a specific adverse impact upon health, safety, or initi gate or- avoid the physical environment, and there is no feasible method to satisfactorily mitigate or avoid specific adverse impact without rendering the development unaffordable to low, very 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 was deemed complete; or �,�/ cat., @ate Prepared by: Wendie R. Rooney Director of Community Development WRR: ct N:\DEV \PC REPORTS\2012 \Codification State Density Bonus Law Desk Item,doc AT3 °A NT 2 This Page Intentionally Left Blank I Ub rn & Ae c� C4 S / - 23/12- ?(- M ce-Na item 3 b /23 /2ui ;2 vianrnng Lommission Hgenaa: zoning uoae Hmenament rage i Mav 23,2012 To: Chair Marcia Jensen and the Planning Commission RECEIVED From: Lee Quintana MAY 2 3 201;? Re: Proposed Amendment to the Zoning Code A -12 -001 TOWN OF LOS GATOS Chairman Jensen and the Planning Commission: PLANNING DIVISION The following are my comments on the proposed code amendment. As written the Ordinance and Guidelines are very repetitive, very confusing and in need of reorganization and clarification. Suggested Reorganize: • In order to cut down on repetitiveness reference and attach a copy of the current State Density Bonus (as amended in 2008) to the proposed Ordinance • Identify and list the sections of the sections of the State Law that may be modified by local ordinance. • List only the sections of the State Law that will be modified by the proposed Ordinance, include the proposed modified text and provide an explanation of how the changes are consistent with the State Law. • Clarify how the proposed Ordinance relates to the Town's GP Density Bonus Policies, the Town's requirements for BMP's and the Affordable Housing Overlay Zones. Please Provide Further Clarify • Currently the Towns proposed Ordinance only states that the proposed Ordinance density bonus cannot be combined with the GP Density Bonus policies - that a choice must be made between the two. • The Proposed Ordinance is mute on whether BMP requirements are in addition 35% maximum density bonus allowed by the Proposed ordinance or the 35% cap still applies. Nor does the Ordinance address whether it is additive to the increased densities allowed under the Affordable Housing Overlay Zones. Clarify how the the State Density Bonus Law, the Town's GP policies on Density Bonus, the Town's BMP requirements and the increased density allowed under the Affordable Housing Overlay Zone apply funder the proposed Ordinance. These are summarized very briefly below: - State Density Bonus Law: As written the Town's proposed Ordinance to bring the Town into compliance with State Law provides for a density bonus of up to a maximum 35% depending on the type and % of qualifying units proposed For apartments project moderate rate units do not qualify. Since the bonus units will likely exceed the allowed density provided in a General Plan the State simply exempts these project from requiring a to change the zoning or General Plan Land Use Designation. AT ACHWNT 3 item J 5i23i2ui ;:� manning uommission Hgenaa: z-oning uoae Hmenarnent rage 2 Town's GP Density Bonus Policies As implemented in the past the GP bonus policies allow for an up to 100% density bonus for projects that propose 100% low or very low income, senior, or handicapped housing.. Town BMP(Below Market Rate) Ordinance: Up to 20% BMP units are required to be included in proposed residential project. The actual % is dependent on the number of units proposed. The Town handles the fact that the required BMP units or allowed GP Density Bonus units will likely exceed the maximum density allowed differenty than the State by employing an "emperors new cloths" approach. Instead of not requiring a GP or Zoning change (i.e. granting an exemption from the maximum densities allow), the Town calculate the projects density as if the additional BMP units did not exist. Affordable Housing Overlay Zone • Further define and clarify the differences between incentives, concessions and waivers. • More fully explain and clarify how the incentives, concessions and waivers impact the Town's ability to affect change at A &S review _ Thank you for your consideration. Lee Quintana Exhibit A TOWN OF LOS GATOS DENSITY BONUS PROGRAM GUIDELINES I Re-zsions from 5/23 Planning Commission i1JLe ina I. PURPOSE, AUTHORITY, AND DEFNITION A. Purpose The density bonus regulations in these Guidelines are intended to comply with the State Density Bonus Law codified in California Government Code Section 65915 et seq., which provides that a local government shall grant a density bonus and an additional concession, or financially equivalent incentive(s), to a qualified housing development agreeing to construct a specific percentage of affordable housing and senior housing as defined by state law. In enacting these guidelines, it is the intent of the Town of Los Gatos to implement the goals, objectives, and policies of Town of Los Gatos 2020 General Plan and further to implement and be subject to California Government Code Section 65915. In the event that any provision in these Guidelines conflicts with State law, State law shall control. B. Enabling Legislation The Density Bonus Program is governed by Chapter 29, Article I, Division 8 (Section 29.10.400 et sect.) of the Town Code. The Density Bonus Program is administered under these Program Guidelines. C. General Plan Density Bonus Policy Action HOUS -1 3 Applicant who elects to proceed with a housing development using the state law density bonus shall not be eligible for any density increases under the Town's General Plan Density Bonus Policy Action HOU -1.3. D. Definitions The following terms used in tk &—s -these Guidelines shall be defined as follows: 1. Affordable Housing /Affordable Housing Unit. A housing unit which is available for sale to moderate income households or for rent to low and /or very low income households, as those terms are defined in this Section. 2. Affordable Rent. Monthly rent charged to low and very low income households for housing units as calculated in accordance with Section 50053 of the Health and Safety Code. 3. Child Care Facility. A child day care facility other than a family day care home, including, but not limited to, infant centers, preschools, extended day care facilities, and school age child care centers as defined in California Government Code Section 65915(h)(4). 4. Density Bonus. A density increase for residential units over the otherwise allowed residential density under the applicable zoning and land use designation on the date an application is deemed complete. 5. Density Bonus Housing Agreement. A legally binding agreement between a developer and the Town to- that ensures thfat - the continued affordability of the affordable housing units required by these Guidelines and to ensure the units are maintained in accordance with these Guidelines. 6. Density Bonus Units. Those additional residential units granted pursuant to the provisions of these Guidelines. 7. Housing Development. A development project for five or more residential units. Within these Guidelines, it shall also include a subdivision or common interest development, a project which substantially rehabilitates and converts a commercial building to a residential use and a condominium conversion of an existing apartment building as more fully defined in California Government Code Section 65915(1). 8. Incentives or Concessions, Regulatory concessions which include, but are not limited to, the reduction of site development standards or zoning code requirements, approval of mixed -use zoning in conjunction with the housing development, or any other regulatory incentive which would result in identifiable, financially sufficient, and actual cost reductions that are offered in addition. to a density bonus. 9. Initial Subsidy. The fair market value of the home at the time of initial sale minus the initial sale price to the moderate income household, plus the amount of any down payment assistance or mortgage assistance. If upon resale the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value. (e.g., X (fair market value of the home to be purchased) - Y (the price the moderate income family paid for the home) + Z (amount of any down payment assistance) = Initial Subsidy). 10. Low Income Household. A household whose income does not exceed 80 percent of the area median income for Santa Clara County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50079.5 of the California Health and Safety Code. 11. Moderate Income Household. A household whose gross income does not exceed 120 percent of the area median income for Santa Clara County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Sections 50079.5 and 50052.5 of the California Health and Safety Code. 12. Physically Handicapped Housing. Heusi g A residential clevelo rrient developed. substantially rehabilitated or renovated. and having at least 35 dwelling units designed specifically for a family in which the head of the household suffers from an orthopedic disability impairing personal mobility or has a physical disability that substantially limits one or more major life activities; has a record of such impairment; or is regarded as having such an impairment or a single person with such a disability, where the family or person requires special care or facilities in the home 13. Proportionate Share of Appreciation. The ratio of the local government's initial subsidy as defined above to the fair market value of the home at the time of initial sale. (e.g., X (initial subsidy) /Y (fair market value) = Proportionate Share of Appreciation). 14. Senior Citizen Housing Development. A residential development developed, substantially rehabilitated or renovated, and having at least 35 dwelling units for senior citizens in compliance with the requirements of Section 51.3 and 51.12 of 2 the California Civil Code, or a mobile home park that limits residency based on age requirements for housing for older persons pursuant to Section 798.76 or 799.5 of the Civil Code. 15. Very Low Income Household. A household whose income does not exceed 50 percent of the area median income for Santa Clara County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section 50105 of the California Health and Safety Code. II. DENSITY BONUS HOUSING REQUIREMENTS A. Eligibility Criteria for Density Bonus The Town of Los Gatos shall consider a density bonus and prey incentives or concessions as described in these Guidelines when a developer of a housing development seeks and agrees to construct a housing development that will contain at least one of the following: 1. Five percent of the total units of a housing development strictly for very low income households as defined herein; 2. Ten percent of the total units of a housing development strictly for low income households as defined herein; 3. A senior citizen housing development, as defined herein; 4. reusing- -dezlo handic Physically handicap housing development as defined herein; or 5. Ten percent of the total dwelling units in a condominium or planned unit development for persons and families of moderate income households as defined herein, provided that all units in the development are offered to the public for purchase. III. IMPLEMENTATION A. Project Specific Density Bonus The Town of Los Gatos will allow a housing development a density bonus and concessions or incentives meeting all the applicable eligibility requirements of these Guidelines according to the following density bonus options. In the event that the minimum requirements for granting density bonus units or number of applicable concessions or incentives as set forth in California Government Code Section 65915 is amended or modified after the adoption of these Guidelines by the Town, then the lowest minimum requirements shall apply. All density bonus calculations resulting in fractional units shall be rounded up to the next whole number. The granting of a density bonus shall not be interpreted, in and of itself, to require a General Plan amendment, zoning change, or other discretionary approval. 1. Density bonus for very low income households. If a housing developer elects to construct units for very low income households, the development shall be entitled to the following density bonus calculations: 9 Table A - Provision of Very Low Income Units Percentage of Very Low Income Units Affordable Density Bonus Available Number of Incentives or Concessions 5% 20 % 1 6% 22.5% 1 7% 25% 1 8% 27.5% 1 9% 30% 1 10% 32.5% 2 11% 35% 2 15 % 35% 3 2. Density bonus for low income households. If a housing developer elects to construct units for low income households, the housing development shall be entitled to the following density bonus calculation: d' Table B - Provision of Low Income Units Percentage of Low Income Units Affordable Density Bonus Available Number of Incentives or Concessions 10% 20 % 1 11% 21.5% 1 12% 23% 1 13% 24.5% 1 14% 26% 1 15 % 27.5% 1 16% 29% 1 17% 30.5 % 1 18% 32% 1 19% 33.5 1 20% 35% 2 30% 35% 3 M 3. Senior Citizen hHousin Development If a housing developer elects to construct a senior citizen housing development, the density bonus shall be 20 percent of the total number of allowed housing units without the density bonus. 4. Physically hHandicap hHousin Development If a housing developer elects to construct a housing development design for and restricted to physically handicap citizens, the density bonus shall be 20 percent of the total number of allowed housing units without the density bonus. 5. Moderate income units in condominiums and planned developments. If a housing developer elects to construct units for sale to moderate income households, the development shall be entitled to the following density bonus calculation: 5 Table C - Provision of Moderate Income Units Percentabe of Moderate Income Units Affordable Density bonus Available Number of Incentives or Concessions 10 % 5% 1 11 % 6% 1 12% 7 % 1 13% 8 % 1 14% 9% 1 15% 10% 1 16% 11% 1 17% 12% 1 18% 13% 1 1.9% o - 14% 1 20% 15% 2 21% 16% 2 22% 17% 2 23% 18% 2 24 % 19 % 2 25% 20% 2 26 % 21% 2 27 % 22% 2 28% 23% 2 29 % 24% 2 30 % 25 % 3 31% 26% 3 32% 27% 3 33% 28% 3 34% 29% 3 35% 30% 36% 31% 3 37% 32% 3 38 % 33% 3 39 % 34% 3 40% 35% 3 6. Density bonus for land donation. When an applicant for a tentative map, parcel map, or other residential development approval donates at least one acre of land or enough land to develop 40 units, then the applicant shall be entitled to a 15 percent increase above the otherwise maximum allowable residential density for the entire housing development as follows: Table D - Land Donation Percentage of Very Low Income iJnits Percentage Density Bonus 10% 15% 11% 16% 12% 17% 13% 18% 14% 19% 15% 20% 16% 21% 17% 22% �- 18% 23% 19% 24% 20% 25% 21% 26% 22% 27% 2 _3 % 28% 24% 29% 25% 30% 26% 31% 27% 32% 28% 33% 29% 34% 30% 35% a) Nothing in this subsection shall be construed to enlarge or diminish the authority of the Town to require a developer to donate land as a condition of development. b) The density bonus for land dedication shall be in addition to any density bonus earned pursuant to these Guidelines and up to a maximum combined increase of 35 percent if an applicant seeks an increase pursuant to both this section and Section III Al C) An applicant with a land donation shall be eligible for the increased density bonus if all of the following conditions are met: (i). The applicant donates and transfers the land to the Town no later than the date of approval of the Town of the final subdivision map, parcel inap, or housing development application, whichever occurs first, for the proposed housing development seeking the density bonus. (ii) The developable acreage and zoning classification of the land being transferred are sufficient to permit construction of units affordable to very low income households in an amount not less than 10 percent of the number of residential units of the proposed housing development seeking the density bonus. (iii). The land proposed to be donated to the Town meets the following: 1. The transferred land is at least 1 acre in size or of sufficient size to permit development of at least 40 units, has the appropriate General Plan designation and is appropriately zoned for development at the density described in paragraph (3) of subsection (c) of Section 65583.2; and 2. Is or will be served by adequate public facilities and infrastructures; and 3. Is donated no later than the date of approval of the final subdivision map, parcel map or housing development application, seeking a density bonus and has all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land; and 4. Is transferred to the Town or a housing developer approved by the Town by the date established in Section III.A.6 (c)(i); and 5. Shall be within the Town and within the boundary of the proposed development or within one - quarter mile of the boundary of the proposed development; and 6. Must have a proposed source of funding for the very low income units not later than the approval of the final subdivision map, parcel map or housing development application seeking the density bonus. 0 d) The transferred land and the affordable housing units shall be subject to a deed restriction, which shall be recorded on the property at the time of the transfer, ensuring continued affordability of units for at least 30 years or longer term under another regulatory agreement from the date of initial occupancy. A longer period of time may be specified if required by any construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program applicable to the housing development. 7. Condominium conversions. When an Applicant's residential development project is the conversion of an existing apartment complex to a condominium complex and the Applicant agrees to make at least thirty -three percent (33 %) of the total units of the proposed condominium residential development project affordable to Low or Moderate Income households for thirty years (30), or fifteen percent (15 %) of the total units of the proposed condominium residential development project to Lower Income households for thirty years (30), and agrees to pay for the administrative costs incurred by the Town related to process the application and monitor the fixture status of the Affordable Housing Units, the Town shall either (i) grant a condominium conversion Density Bonus or (ii) provide other incentives of equivalent financial value to be determined by the Town. B. Density Bonus for Development of Child Care Facility A housing development meeting the requirements of Section II.A. and including a child care facility that will be located on the premises of, as part of, or adjacent to, such a housing development shall receive either of the following: Am additional density bonus that is an amount of square feet of residential space that is equal to or greater than the amount of square feet in the child care facility. 2. An additional incentive or concession that contributes significantly to the economic feasibility of the construction of the child care facility. When a housing development is providing a child care facility consistent with the Guidelines, then the conditions of approval shall require that: The child care facility shall remain in operation for a period of time that is as long as or longer than the period of time during which the affordable units are required to remain affordable; and 2. Of the children who attend the child care facility, the children of very low income households, lower income households, or persons or families of moderate income shall equal a percentage that is equal to or greater than the percentage of affordable units that are required pursuant to Section II.A. The Town shall not be required to provide a density bonus or incentive or concession for a child care facility if it makes a written finding, based upon substantial evidence, that the Town has adequate child care facilities. 9 C. Nothing in these Guidelines limits the Town's right to deny an affordable, senior or physically handicap housing project electing to proceed under the state law density bonus provisions, if the Council finds, based on substantial evidence, any of the following: 1. The Town has adopted a housing element, and the Town has met or exceeded its share of the regional housing needs for the income category proposed for the development project; 2. The project as proposed would have a specific, adverse impact upon the public health or safety which cannot be satisfactorily mitigated without rendering it unaffordable to lower- income households; 3. The denial of the project or imposition of conditions is required in order to comply with State or Federal law and there is no feasible method to comply without rendering the development tinaffordable to lower- income households; 4. The development project is proposed on land zoned for agriculture or resource preservation which is surrounded on at least two sides by land being used for agricultural or resource preservation purposes, and which does not have adequate water or wastewater facilities to serve the project. 5. The development project is inconsistent with the Town's General Plan land use designation as it existed on the date the application was deemed complete, and the Town has adopted a housing element pursuant to state law. D. Incentives or Concessions Applicants who request a density bonus and voluntarily agree to develop a housing development project that complies with the affordability requirements referenced in Government Code 65915 may submit to the Town a proposal for the specific incentive(s) or concession(s) provided by applicable state law. A proposal shall be submitted concurrently with the application for the development and a density bonus. In- accordance with Government Code Section 65915(d)(2), the applicant shall receive the number of incentives or concessions that correspond to the percentage of density bonus as outlined in Section III (A) Tables A through C. The Town shall award the incentive(s) or concession(s) requested by the applicant in compliance with state law requirements unless the Town Council adopts a written finding that the incentive or concession is not required to make the units affordable. The deciding body may deny a request for an incentive or concession if it makes a written finding, based upon substantial evidence, of either of the following: 1. The incentive or concession is not required to provide for affordable rents or affordable ownership costs; or 2. The incentive or concession would have a specific adverse impact upon public health or safety, or the physical environment, 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 development unaffordable to low, very 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, 10 written public health or safety standards, policies, or conditions, as they existed on the date that the application was deemed complete. E. Reduction or Waivers of Development Standards The Town shall not apply any development standard that would have the effect of precluding the construction of a proposed housing development meeting the requirements of these Guidelines at the densities or with the incentives permitted by these Guidelines. An applicant may submit with its application to the Town a proposal for the waiver or reduction of development standards. A reduction or waiver of development standards, the application of which would physically preclude the development, shall not reduce nor increase the number of incentives or concessions being requested. Nothing in this subsection, however, shall be interpreted to require the Town to waive or reduce development standards if the waiver or reduction would have a specific adverse impact, as defined in paragraph (2) of subdivision (d) of Section 65559.5 of the California Government Code, upon public health and safety or the physical environment or on any real property that is listed in the California Register of Historical Resources and for which the Town determines there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. Furthermore, the applicant shall be required to prove that the waiver or modification is necessary to make the affordable units economically feasible. The deciding body may deny a request for waiver if it makes a written finding, based upon substantial evidence, of either of the following: 1. The modification would have a specific adverse impact upon health, safety, or "raitigat&-er -- av id --the physical environment, and there is no feasible method to satisfactorily mitigate or avoid specific adverse impact without rendering the development unaffordable to low, very 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 was deemed complete; or 2. The modification would have an adverse impact on any real property that is listed in the California Register of Historic Resources; or 3. The incentive or concession would be contrary to State or Federal law F. Parking Standard Upon request by the applicant, the Town shall not require the proposed housing development eligible for a density bonus pursuant to these Guidelines to provide a parking ratio, including physically handicapped and guest parking, which exceeds the following: a. Zero to one bedrooms: one onsite parking space. b. Two to three bedrooms: two onsite parking spaces. C. Four and more bedrooms: two and one -half onsite parking spaces. If the total number of parking spaces required for the proposed housing development is other than a whole number, the number shall be rounded up to the next whole number. 11 For purposes of this subsection, a development may provide onsite parking through tandem parking or uncovered parking, but not through on- street parking. G. Design, Distribution, and Timing of Affordable Housing Units Affordable Housing Units must be constructed concurrently with market -rate units. The Affordable Housing Units shall be integrated into the Housing Development Project; be similar in size; and have comparable infrastructure (including sewer, water, and other utilities), construction quality and exterior design to the market -rate units. The applicant may have the option of reducing the interior amenity level, provided that all of the units conform to the requirements of the Town's Building and Housing Codes and the Community Development Director finds that the reduction in the interior amenity level will provide a quality and healthy living environment. The Town strongly encourages the use of green building principles, such as the use of environmentally preferable interior finishes and flooring, as well as the installation of water and energy efficient hardware, wherever feasible. The Affordable Housing Units must also comply with the following criteria: 1. Rental Residential Development Projects: When Affordable Housing Units are required in rental Residential Development Projects, the units should be integrated with the project as a whole. All Affordable Housing Units shall reflect the range and numbers of bedrooms provided in the project as a whole, and shall not be distinguished by exterior design, construction, or materials. All Affordable Housing Units shall be reasonably dispersed throughout the project. 2. Owner- occupied Residential Development Projects: When Affordable Housing Units are required in owner- occupied Housing Development Projects, the units should be integrated with the project as a whole. Affordable Housing Units may have different interior finishes and features than market -rate units so long as the interior features are durable, of good quality, and consistent with contemporary standards for new housing. All Affordable Housing Units shall reflect the range and numbers of bedrooms provided in the project as a whole, except that if the market -rate units provide more than four bedrooms, the Affordable Housing Units need not provide more than four bedrooms. No building permits will be issued for market -rate units until permits for all A tfordable Housing Units have been obtained, unless Affordable Housing Units :ire to be constructed in phases pursuant to a plan approved by the Town. Market -rate units will not be granted final occupancy until all Affordable. Housing Units have been granted final occupancy, unless Affordable Housing Units are to be constructed in phases pursuant to a plan approved by the Town. IV. APPLICATION REQUIREMENTS, REVIEW PROCEDURES, AND FINDINGS A. Application Requirements At the time the applicant of a proposed housing development, seeking a density bonus and concessions or incentives under t'.iese Guidelines files a 12 formal application for approval of the proposed development with the Community Development Department, the following information shall be submitted with the fees and required application(s): 1. Identification of the location, acreage, and the maximum number of base units allowed under the zoning and the land use designated under the General Plan without the Density Bonus. 2. Identification of the total number of units proposed, specifically identifying the Density Bonus units and the Affordable Units which will demonstrate eligibility under these guidelines. 3. Identification of the requested concessions or incentives or a list of any alternative concessions or incentives which would provide, in the developer's opinion, an equivalent financial value to the concession or incentive requested. This requirement does not impair the applicant from substituting a new incentive or concession from what is initially proposed; however, the identified incentives or concessions may not be changed once the environmental review for the proposed housing development has commenced. Any change subsequent to the environmental review process may require additional environmental review 4. For waivers of development standards, evidence demonstrating that the development standard for which the waivers are requested would have the effect of physically precluding the construction of the residential development project at the density. 5. A pro forma demonstrating that any requested incentives and concessions result in identifiable, financially sufficient and actual cost reductions. The pro forma shall include: (a) the actual cost reduction achieved through incentive or concession; and (b) evidence that the cost reduction allows the developer to provide affordable rents or affordable sales prices that could not otherwise be provided The information shall be sufficiently detailed to enable Town staff to examine the conclusions reached by the developer. The Town may require that any pro forma submitted pursuant to this section include information regarding capital costs, equity investment, debt service, projected revenues, operating expenses, and such other information as is required to evaluate the pro forma, including but not limited to the cost to the Town of hiring a consultant to review the pro forma, —, �e- he.... th 6. Any additional information and materials required with a Planned Development and Architecture and Site Application. 7. Technical studies required by the Town to evaluate the applications. 8. If a density bonus is requested for land donation, the application shall show the location of the land to be dedicated and provide evidence that each of the findings in Government Code Section 65915(h) can be made. If a density bonus or concession is requested for a child care facility, the application shall provide evidence that the findings in Governmental Code Section 69515 (i) can be made. 9. Other pertinent information as the Director of Community Development may require enabling the Town to adequately analyze the identifiable, financially sufficient and actual cost reductions of the proposed housing development with respect to the requested additional concession or incentive and other concessions or incentives which may be made available. 13 B. Review Procedures Any request for a density bonus, incentive, concession, parking reduction, or waiver pursuant to these Guidelines shall be submitted as part of the first approval of any residential development project and shall be processed, reviewed, and approved or denied concurrently with the discretionary applications required for the project. Planning Commission /Town Council. When a proposed housing development needs only Architecture and Site approval, then the Planning Commission will consider and act on the density bonus request when the Architecture and Site application is considered, If the project requires additional entitlements such as a planned development application review, then the Town Council will consider and act on the density bonus request concurrent with the applicable project entitlement /environmental clearance. 17ollowing_ Plannin iCommission consideration of the applic the Community Development Director and /or the Planning Commission may refer -an - the application for a density bonus and any other entitlements to the Town Council i-f-for final consideration and action. C. Required Findings The Town shall grant a request for a density bonus, incentive, concession, parking reduction, or waiver, unless the deciding body can make the following written findings based on substantial evidence, as applicable: 1. The Town has adopted a housing element, and the Town has met or exceeded its share of the regional housing needs for the income category proposed for the development project; 2. The project as proposed would have a specific, adverse impact upon the public health or safety which cannot be satisfactorily mitigated without rendering it unaffordable to lower- income households; 3. The denial of the project or imposition of conditions is required in order to comply with State or Federal law and there is no feasible method to comply without rendering the development unaffordable to lower- income households; 4. The development project is proposed on land zoned for agriculture or resource preservation which is surrounded on at least two sides by land being used for agricultural or resource preservation purposes, and which does not have adequate water or wastewater facilities to serve the project. 5. The development project is inconsistent with the Town's General Plan land use designation as it existed on the date the application was deemed complete, and the Town has adopted a housing element pursuant to state law. D. Application and Administrative Fees Application and administrative fees shall be charged to the applicant for the review of all materials submitted in accordance with these Guidelines and for future monitoring of the affordability of the project. The fee amount shall be established by Town Council resolution and will be included in the Town's Comprehensive Fee Schedule. Fees will be charged for staff and consultant time associated with the development review process, analysis of all pro formas and financial feasibility documents related to the request for the density bonus, project marketing, and compliance with the affordability requirements of the project. 14 V. DENSIT r' BONUS HOUSING AGREEMENT A. Required Density Bonus Ageement and Terms of Agreement Once the proposed Housing Development has received its approval for the development application and the Density Bonus, as described above, the developer shall file an application, including the payment of any processing fees with the Community Development Department for approval and finalization of the Density Bonus Housing Agreement in compliance with the following requirements: 1. A Density Bonus Housing Agreement must be executed prior to recording any final map for the underlying property or prior to the issuance of any building permit for the housing development, whichever comes first, unless the Community Development Director approves an alternative phasing plan. The Density Bonus Housing Agreement shall be binding on all fixture owners and successors of interests of the housing development. 2. The Density Bonus Housing Agreement shall: a) Identify the type, size and location of each Affordable Housing Unit required hereunder; b) Identify the term of the agreement, which would define the term of affordability of the required units; C) Require that the Affordable Housing Units be constructed and completed by the developer as specified in these Guidelines and in accordance with state law; d) Require that each Affordable Housing Unit be kept available only to members of the identified income group at the maximum affordable rent during the term of the agreement. e) Identify the means by which such continued availability shall be secured and enforced and the procedures under which the Affordable Housing Units shall be leased and shall contain such other terms and provisions, the Town may require. The agreement, in its form and manner of execution, shall be in a form able to be recorded with the Santa Clara County Recorder. f) The Density Bonus Housing Agreement shall be reviewed and approved by the Director of Community Development and Town Attorney. The agreement shall also include the procedures for annual submission of information, including any applicable review fees, sufficient to determine continued compliance with the agreement to the Director of Community Development. I Required Terms for the Continued Availability of Affordable Units: a) Low and Very Low Income Households. A housing developer providing Low and Very Low income units in accordance with these Guidelines must continue to restrict those units to Low or Very Low Income 15 households for a minimum of 30 years or longer term under another regulatory agreement from the date of initial occupancy. A longer period of time may be specified if required by any construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program applicable to the housing development. b) Moderate Income Households. In the case of a Housing Development providing Moderate Income units, the initial occupant of the unit must be a person or family of Moderate Income. (i). Upon resale, the seller of the unit shall retain the value of any improvements, the down payment, and the seller's proportionate share of appreciation. The Town shall recapture any Initial Subsidy and its Proportionate Share of Appreciation; which shall be used within five years for any of the purposes described in subdivision (e) of Section 33334.2 of the Health and Safety Code that promote home ownership. N: \DEV \PC REPORTS \2012 \Density Bonus Guidelines - Exhibit A.docx 16