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1 AN ORDINANCE OF THE CITY OF SANTA CRUZ AMENDING TITLE 24 OF THE SANTA CRUZ MUNICIPAL CODE, THE ZONING ORDINANCE, BY AMENDING CHAPTER PART 3, DENSITY BONUS PROVISIONS FOR RESIDENTIAL UNITS BE IT ORDAINED By the City of Santa Cruz as follows: Section 1. to read as follows: Section Part 3 of the Santa Cruz Municipal Code is hereby amended Chapter AFFORDABLE HOUSING PROVISIONS Part 3: DENSITY BONUS PROVISIONS FOR RESIDENTIAL UNITS PURPOSE. The purposes of this Part 3 of Chapter of the Santa Cruz Municipal Code are: (1) to provide incentives for the production of housing for very low income, low income, moderate income, and senior households; (2) to provide incentives for the creation of rental housing serving lower income households; (3) to provide incentives for the construction of child care centers serving very low, low, and moderate income households; and (4) to implement Sections 65915, , , and of the California Government Code as required by Government Code Section 65915(a). In enacting this Part, it is also the intent of the city of Santa Cruz to implement the goals, objectives, and policies of the city s General Plan Housing Element to encourage the construction of affordable housing in the city. Further, it is the intent of the city of Santa Cruz to encourage the development of rental housing in order to serve an economically diverse community and to mitigate the trend, as documented in the General Plan Housing Element, that only limited rental unit development occurs without public assistance DEFINITIONS. For purposes of this Part 3 of Chapter 24.16, the following definitions shall apply. Unless specifically defined below, words or phrases shall be interpreted as to give this Part 3 its most reasonable interpretation. 1. Affordable ownership costs means a sales price resulting in projected average monthly housing costs, during the first calendar year of a household s occupancy, including mortgage payments, property taxes, homeowners insurance, and homeowners association dues, if any, and a reasonable allowance for utilities, property maintenance, and repairs, which do not exceed the following: a. For moderate income households: one hundred ten percent of area median income adjusted for assumed household size based on unit size, multiplied by thirtyfive percent, and divided by twelve.

2 b. For lower income households: seventy percent of area median income adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve. c. For very low income households: fifty percent of area median income adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve. The city may determine sales prices of affordable units by any reasonable method so long as average monthly housing payments of eligible households do not exceed those permitted by this definition. 2. Affordable rent means monthly housing expenses, including rent, utilities, and all fees for housing services, which does not exceed the following: a. For lower income households: sixty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve. b. For very low income households: fifty percent of area median income, adjusted for assumed household size based on unit size, multiplied by thirty percent and divided by twelve. 3. Affordable units are dwelling units which are affordable to very low, lower, or moderate income households as defined by this Part 3 and are subject to rental, sale, or resale provisions to maintain affordability. 4. Area median income is area median income for Santa Cruz County as published by the State of California pursuant to California Code of Regulations, Title 25, Section 6932, or successor provision. 5. Assumed household size based on unit size is a household of one person in a studio apartment, two persons in a one bedroom unit, three persons in a two bedroom unit, and one additional person for each additional bedroom thereafter. 6. Child care facility is a child day care facility other than a family day care home, as defined in Section of the Municipal Code, including, but not limited to, infant centers, preschools, extended day care facilities, and school age child care centers. 7. Commercial development is a construction project for non-residential uses. 8. Commercial development bonus is a modification of development standards mutually agreed upon by the city and a commercial developer that is provided to a commercial development eligible for such a bonus under Section Examples of a commercial development bonus include an increase in floor area ratio, increased building height, or reduced parking. 9. Density bonus is a density increase over the otherwise allowable maximum residential density on a site, granted pursuant to this Part 3 of Chapter or, if elected by the applicant, a lesser percentage of density increase, including, but not limited to, no increase in density. 2

3 10. Density bonus units are residential units granted pursuant to this Part 3 of Chapter which exceed the otherwise allowable maximum residential density for a housing development. 11. Development standard is any site or construction condition that applies to a housing development pursuant to any ordinance, general plan element, specific plan, or other local condition, law, policy, resolution, or regulation. A site and construction condition is a development regulation or law that specifies the physical development of a site and buildings on the site in a housing development. 12. First approval is the first of the following approvals to occur with respect to a housing development: specific plan, development agreement, planned development permit, tentative map, minor land division, use permit, design permit, building permit, or any other permit listed in Section Household income is the combined adjusted net household income for all adult persons living in a living unit as calculated pursuant to California Code of Regulations, Title 25, Section 6916, or successor provision, or its successor provision. 14. Household, low or lower income is a household whose income does not exceed the lower income limits applicable to Santa Cruz County, as published and periodically updated by the California Department of Housing and Community Development pursuant to Section of the California Health and Safety Code. 15. Household, moderate income is a household whose income does not exceed the moderate income limits applicable to Santa Cruz County, as published and periodically updated by the California Department of Housing and Community Development pursuant to Section of the California Health and Safety Code. 16. Household, very low income is a household whose income does not exceed the very low income limits applicable to Santa Cruz County, as published and periodically updated by the State Department of Housing and Community Development pursuant to Section of the California Health and Safety Code. 17. Housing development is a development project on contiguous lots that are the subject of one development application, consisting of five or more residential units (not including any density bonus units), including single-family and multifamily and single room occupancy units, for sale or for rent. For the purposes of this Part 3, housing development also includes a subdivision or a common interest development consisting of five or more residential units or unimproved residential lots, a mixed-use development that includes five or more residential units or unimproved residential lots, the substantial rehabilitation and conversion of an existing commercial building to residential use, and the substantial rehabilitation of an existing multifamily dwelling, where the rehabilitation or conversion would create a net increase of at least five residential units. In all cases density bonus units are not included for the purpose of determining whether the development consists of five or more units or lots. 18. Incentives and concessions are regulatory concessions as listed in Section

4 19. Inclusionary unit is an ownership or rental dwelling unit or single-room occupancy unit within a housing development which is required under Part 1 of Chapter to be rented at affordable rents or sold at an affordable ownership cost to specified households. 20. Major transit stop is an existing site, or a site included in the regional transportation plan, that contains a rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes each with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods. A housing development is considered to be within one-half mile of a major transit stop if all parcels within the housing development have no more than 25 percent of their area farther than one-half mile from the stop and if not more than 10 percent of the units or 100 units, whichever is less, in the housing development are farther than one-half mile from the stop. 21. Market rate unit is a dwelling unit which is not an affordable unit as defined in this Part Maximum residential density is the maximum number of residential units allowed in a housing development by the city s zoning ordinance and by the land use element of the general plan on the date that the application for the housing development is deemed complete. If the maximum density allowed by the zoning ordinance is inconsistent with the density allowed by the land use element of the general plan, the land use element density shall prevail. This definition is used to calculate a density bonus pursuant to this Part 3 of Chapter Partnered housing agreement is an agreement approved by the city between a commercial developer and a housing developer identifying how the commercial development will provide housing available at affordable ownership cost or affordable rent. A partnered housing agreement may consist of the formation of a partnership, limited liability company, corporation, or other entity recognized by the state in which the commercial developer and the housing developer are each partners, members, shareholders, or other participants, or a contract between the commercial developer and the housing developer for the development of both the commercial development and the housing development. 24. Small ownership unit or SOU is a dwelling unit containing no more than one bedroom and floor area ranging from four hundred to six hundred fifty square feet, located on a separate subdivided parcel and included in a housing development where all dwelling units are SOU units and are offered for sale to the general public. 25. Special needs housing is any housing, including supportive housing, intended to benefit, in whole or in part, persons identified as having special needs relating to mental health; physical disabilities; developmental disabilities, including without limitation intellectual disability, cerebral palsy, epilepsy, and autism; and risk of homelessness, and housing intended to meet the housing needs of persons eligible for mental health services funded in whole or in part by the Mental Health Services Fund, created by Cal. Welf. & Inst. Code Unobstructed access to a location means that a resident is able to access the location without encountering natural or constructed impediments. 4

5 ELIGIBILITY FOR RESIDENTIAL DENSITY BONUSES. A housing development, as defined in Section , is eligible for a density bonus if it: 1. Includes a request for a density bonus as part of the application for the housing development; and 2. Meets the criteria for a density bonus established in Sections , , , , or ; and 3. Provides replacement housing as required by Section DENSITY BONUSES FOR AFFORDABLE, SENIOR, AND SPECIAL NEEDS HOUSING. 1. Very Low and Lower Income Housing and Senior Housing. Subject to the findings included in Section , a housing development is eligible for a twenty percent density bonus if the applicant agrees to construct at least one of the following and any additional replacement units required by Section : a. Ten percent of the total units in the housing development are made available to lower income households based on affordable rents or affordable ownership costs; or b. Five percent of the total units in the housing development made are available to very low income households at affordable rents or affordable ownership costs; or c. The project is a senior citizen housing development of thirty-five dwelling units or more as defined in California Civil Code Section 51.3, or a mobilehome park that limits residency based on age requirements for older persons pursuant to California Civil Code Sections or The density bonus for a senior citizen housing development may be applied only to the number of senior housing units. As an example of the application of this section, if a 40-unit project includes either four lowerincome units (10%) or two very-low-income units (5%) or is a senior citizen housing development, the project would be entitled to build eight density bonus units, or a total of 48 units. None of the eight bonus units would need to be affordable. 2. Moderate Income Housing. Subject to the findings included in Section , a housing development is eligible for a five percent density bonus if it meets all of the following criteria: a. The applicant agrees to construct at least ten percent of the total units in the housing development at an ownership cost affordable to moderate income households and includes any additional replacement units required by Section ; b. The housing development is a common interest project as defined by Section 4100 of the California Civil Code; and 5

6 c. All of the dwelling units in the housing development are offered to the public for purchase. 3. Special Needs Housing. Subject to the findings included in Section , a housing development is eligible for a density bonus of twenty percent of the type of units listed in subparagraph (a) if the applicant agrees to construct all of the following and any additional replacement housing units required by Section : a. Ten percent of the total units in the housing development for transitional foster youth, as defined in Section of the Education Code; disabled veterans, as defined in Section of the Government Code; or homeless persons, as defined in the federal McKinney-Vento Homeless Assistance Act (42 USC Sec et seq.; and b. The units described in subparagraph (a) above are subject to a recorded restriction requiring that the units remain affordable to very low income households for 55 years. 4. Additional Density Bonus. The density bonus for which the housing development is eligible shall increase if the percentage of very low, lower, and moderate income housing units exceeds the base percentage established in subsections (1) and (2) above, as follows: a. Very low income units For each one percent (1%) increase above five percent (5%) in the percentage of dwelling units affordable to very low income households, the density bonus shall be increased by two and half percent (2.5%) up to a maximum of thirty-five percent (35%). b. Lower income units For each one percent (1%) increase above ten percent (10%) in the percentage of dwelling units affordable to lower income households based on density bonus affordable rents and affordable ownership costs, the density bonus shall be increased by one and half percent (1.5%) up to a maximum of thirtyfive percent (35%). c. Moderate income ownership units For each one percent (1%) increase above ten percent (10%) of the percentage of dwelling units offered for sale at an ownership cost affordable to moderate income households, the density bonus shall be increased by one percent (1%) up to a maximum of thirty-five percent (35%). d. An additional density bonus may be given for a senior citizen housing development only if it includes the required percentage of very low, lower, or moderate income units CITY DENSITY BONUSES FOR HOUSING DEVELOPMENTS. The city rental housing density bonus provided pursuant to this section is provided as an alternative to the density bonuses provided elsewhere in this Part 3. A housing development is eligible for a 27.5% density bonus if all of the units in the housing development are offered to the public for rent, and the developer agrees to enter into an enforceable restriction to ensure that no 6

7 subdivision map will be recorded or no community apartment or stock cooperative will be created to create parcels containing single dwelling units that may be sold individually. If the 27.5% bonus is greater than that to which the developer would otherwise be entitled pursuant to Section , the city rental housing bonus shall be considered to be one incentive or concession for purposes of Section REPLACEMENT HOUSING REQUIREMENTS. 1. Replacement housing shall be provided on the site of a housing development which meets both of the following conditions: a. Rental housing is now located or was located on the site at any time in the fiveyear period preceding the date of submittal of the density bonus application; and b. The rental housing is or was, during that five-year period: (1) Subject to a recorded covenant, ordinance, or law restricting rents to levels affordable to very low and lower income households; (2) Subject to any form of public rent or price control; or (3) Occupied by very low or lower income households. 2. A housing development subject to this Section is not eligible for a density bonus, incentive, concession, waiver, or parking reduction provided by this Part 3 unless the proposed housing development contains one of the following, whichever results in a greater number of affordable units: a. The percentage of affordable units specified in Section ; or b. The replacement affordable units specified in Cal. Gov t Code 65915(c)(3)(B) and (C) INCENTIVES AND CONCESSIONS FOR AFFORDABLE HOUSING. An applicant for a density bonus may seek incentives and concessions as described in Section as follows: 1. One incentive or concession for housing developments where at least ten percent (10%) of the total units are affordable to lower income households, at least five percent (5%) of the total units are affordable to very low income households, or at least ten percent (10%) of the total units in a common interest development are available to moderate income households at affordable ownership costs. 2. Two incentives or concessions for housing developments where at least twenty percent (20%) of the total units are affordable to lower income households, at least ten percent (10%) of the total units are affordable to very low income households, or at least twenty percent (20%) of the total units in a common interest development are available to moderate income households at affordable ownership costs. 7

8 3. Three incentives or concessions for housing developments where at least thirty percent (30%) of the total units are affordable to lower income households, at least fifteen percent (15%) of the total units are affordable to very low income households, or at least thirty percent (30%) of the total units in a common interest development are available to moderate income households at affordable ownership costs DENSITY BONUS FOR LAND DEDICATION. 1. A housing development is eligible for a fifteen percent (15%) density bonus when an applicant for a housing development chooses to dedicate land to the city for the construction of very low income housing. For each one percent (1%) increase above the minimum ten percent (10%) land dedication described in subparagraph (2)(b) of this section, the maximum density bonus shall be increased by one percent (1%), up to a maximum of thirty-five percent (35%). This density bonus shall be in addition to any density bonus allowed by Section , up to a maximum combined density bonus of thirty-five percent (35%) if an applicant seeks both the density bonus authorized by this section and a density bonus authorized by Section The city may approve the density bonus described in this section if it makes all of the following findings when approving the housing development: a. The applicant will dedicate and transfer the land no later than the date of approval of the final map, parcel map, or development application for the housing development. b. The developable acreage and zoning regulations of the land to be transferred will permit construction of dwelling units affordable to very low income households in an amount not less than ten percent (10%) of the total number of dwelling units in the proposed housing development, or will permit construction of a greater percentage of very low income dwelling units if proposed by the developer to qualify for a density bonus of more than fifteen percent (15%). c. The transferred land is at least one acre in size or is large enough to permit development of at least forty units, has the appropriate general plan land use designation, has the appropriate zoning and development standards for development at a density of 20 units per acre, and at the time of project approval is, or at the time of construction will be, served by adequate public facilities and infrastructure. d. No later than the date of approval of the final map, parcel map, or other development application for the housing development, the transferred land will have all of the applicable development permits and approvals, other than any required building permit approval, necessary for the development of the very low income housing units on the transferred land. e. The transferred land and the very low income units constructed on the land will be subject to a recorded developer affordable housing agreement ensuring continued affordability of the units consistent with Section (1), which restriction shall be filed for recordation by the city with the Santa Cruz County recorder s office on the property at the time of dedication. 8

9 f. The land will be transferred to the city or to a housing developer approved by the city. The city reserves the right to require the applicant to identify a developer for the very low income units and to require that the land be transferred to that developer. g. The transferred land is within the site boundaries of the proposed housing development. The transferred land may be located within one-quarter mile of the boundary of the proposed housing development provided that the city council finds, based on substantial evidence, that off-site dedication will provide as much or more affordable housing at the same or lower income levels, and of the same or superior quality of design and construction, will not create or exacerbate residential segregation, and will otherwise provide greater public benefit than donating land on site. h. A proposed source of funding for the very low income units shall be identified no later than the date of approval of the final subdivision map, parcel map, or development application DENSITY BONUS OR INCENTIVE FOR CHILD CARE FACILITIES. 1. A housing development that is eligible for a density bonus and includes a child care facility that will be located on the premises of, as part of, or adjacent to the housing development, is eligible for either of the following, at the option of the city, if requested by the applicant: 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; or b. An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the child care facility. 2. The developer affordable housing agreement shall require that: a. The child care facility may be used only for child care 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 pursuant to Section (1); and b. Of the children who attend the child care facility, the percentage of children of very low income households, lower income households, or moderate income households shall be equal to or greater than the percentage of dwelling units that are proposed to be affordable to very low income households, lower income households, or moderate income households; and c. The developer or successor in interest shall be responsible for all costs of monitoring and reporting required by this subsection (2). 9

10 3. Notwithstanding any requirement of this section, the city shall not be required to provide a density bonus or concession for a child care facility if it makes a written finding, based upon substantial evidence, that the community already has adequate child care facilities DENSITY BONUS FOR CONDOMINIUM CONVERSIONS. 1. A housing development for a conversion of existing rental apartments to condominiums is eligible for a density bonus or other incentives of equivalent financial value if the applicant agrees to provide thirty-three percent (33%) of the total units in the proposed condominium project as affordable to lower income or moderate income households based on density bonus affordable ownership costs, or to provide fifteen percent (15%) of the total units in the condominium conversion project as affordable to lower income households based on density bonus affordable ownership costs. All such density bonus affordable units shall remain affordable in perpetuity. 2. For purposes of this section, a density bonus means an increase in units of twenty-five percent over the existing number of apartments. Pursuant to state law, the density bonus units must be provided within the existing structure or structures proposed for conversion. Incentives of equivalent financial value may include fee reductions or waivers at the city s sole discretion but shall not include monetary subsidies from the city. 3. No condominium conversion shall be eligible for a density bonus if the apartments proposed for conversion constitute a housing development for which a density bonus or other incentives were previously provided pursuant to the Santa Cruz Municipal Code or Government Code Section Nothing in this section shall be construed to require the city to approve a proposal to convert rental apartments into condominiums. 10

11 SUMMARY TABLES. The following tables summarize the available density bonuses, incentives, and concessions for housing developments. Types of Affordable Units Providing Eligibility for a Density Bonus Density Bonus Summary Additional Bonus for Each 1% Increase in Affordable Units % Affordable Units Required for Maximum 35% Bonus Minimum % Bonus Granted A density bonus may be selected from only one category, except that bonuses for land donation may be combined with others, up to a maximum of 35%, and an additional sq. ft. bonus may be granted for a child care center. Very low income 5% 20% 2.5% 11% Lower-income 10% 20% 1.5% 20% Moderate income (ownership units only) 10% 5% 1% 40% Senior housing 100% senior 20% Units for Transitional Foster Youth, Disabled Veterans, or Homeless 10% (Units must also be affordable to very low income households) 20% of designated units Rental housing (A) No map 27.5% Land donation for very low income housing 10% of market-rate units 15% 1% Condominium conversion moderate income Condominium conversion lower income Child care center Notes: 30% of market-rate units 33% 25% (B) 15% 25% (B) Sq. ft. in child care center (B) (A) City bonus; not required by State law. Rental housing bonus is considered an incentive if greater than bonus allowed by State law. City bonuses are alternatives to State density bonus. (B) Or an incentive of equal value, at the city s option. See table below. 11

12 Incentives and Concessions Summary Target Units of Category Pursuant to State Density Bonus % of Target Units Very low income 5% 10% 15% Lower income 10% 20% 30% Moderate income (ownership units only) 10% 20% 30% Maximum Incentive(s)/Concessions (A)(B)(C) Notes: (A) Concessions or incentives may be selected from only one category (very low, lower, or moderate). (B) No concessions or incentives are available for land donation. (C) Condominium conversions and child care centers may have one concession or a density bonus at the City s option, but not both CALCULATION OF DENSITY BONUS FOR HOUSING DEVELOPMENTS. 1. When calculating the maximum residential density and number of permitted density bonus units, any calculations resulting in fractional units shall be rounded to the next larger whole number. 2. The density bonus units shall not be included in the total units when determining the number of affordable units required to qualify a housing development for a density bonus pursuant to Section (1), (2), or (3). When calculating the required number of affordable units, any calculations resulting in fractional units shall be rounded to the next larger whole number. 3. The applicant may request a lesser density bonus than the project is entitled to, but no reduction may be permitted in the number of affordable units or land dedication required to qualify a housing development for a density bonus. Regardless of the number of affordable units or land dedication, no housing development may be entitled to a total density bonus of more than thirty-five percent (35%). 4. Each housing development is entitled to only one density bonus, which may be selected by the applicant based on the percentage of either very low income dwelling units, lower income dwelling units, or moderate income ownership dwelling units; the project s status as either a senior housing project; the project s provision of housing for transitional foster youth, disabled veterans, or homeless persons; or as a project eligible for a city rental housing bonus. Density bonuses from more than one category may not be combined, except that bonuses for land dedication pursuant to Section may be combined with bonuses granted pursuant to Section , up to a maximum of thirty-five percent (35%), and an additional square footage bonus for child care centers may be granted as described in Section

13 5. For purposes of calculating the number of inclusionary units required by Part 1 of this chapter, any dwelling units authorized as a density bonus pursuant to this Part 3 shall not be counted as part of the housing development. However, if a developer elects to receive a City Rental Housing Bonus as authorized by Section , then all of the dwelling units in the project, including the dwelling units authorized as a density bonus, shall be counted as part of the housing development for purposes of calculating the inclusionary units required by Part STANDARDS FOR INCENTIVES AND CONCESSIONS AND WAIVERS FOR HOUSING DEVELOPMENTS. 1. For purposes of this Part 3, concessions and incentives include the following: a. A reduction of site development standards or a modification of zoning code requirements or architectural design requirements which exceed the minimum building standards provided in Cal. Health & Safety Code Division 13, Part 2.5 (commencing with Section 18901) and which result in identifiable and actual cost reductions to provide for affordable ownership costs or affordable rents. b. Approval of mixed-use development in conjunction with the housing development if nonresidential land uses will reduce the cost of the housing development and if the city finds that the proposed nonresidential uses are compatible with the housing development and with existing or planned development in the area where the proposed housing development will be located. c. Other regulatory incentives or concessions proposed by the developer or the city which result in identifiable and actual cost reductions to provide for affordable ownership costs or affordable rents. 2. Tier 1 Concessions No Financial Pro Forma Required. The following concessions and incentives may be approved by the planning and community development director, unless the housing development or other concessions otherwise require approval by the planning commission or city council, and without any requirement that the applicant demonstrate to the city that the requested concession or incentive results in identifiable and actual cost reductions to the project to provide for affordable ownership costs or affordable rents: a. Up to a twenty percent (20%) reduction in a yard setback requirement, with each structure in a required yard setback counting as one concession or incentive; b. Up to a twenty percent (20%) increase in maximum lot coverage; c. Up to a twenty percent (20%) reduction in required landscape area; d. Up to a twenty percent (20%) reduction in required common open space area or private open space area per unit, or the elimination of private open space for twenty percent (20%) of units; e. Reduction of off-street parking requirements as described in Section (5); 13

14 f. Approval of a 27.5% city rental housing density bonus pursuant to Section (1), if the density bonus is greater than that to which the developer would otherwise be entitled; g. Approval of a floor area ratio bonus pursuant to Section (2); or h. Approval of fee waivers pursuant to Part 4 of this Chapter Tier 2 Concessions - Planning Commission Approval and Financial Pro Forma Required. The following concessions and incentives may be approved by the planning commission, unless the housing development or other concessions otherwise require approval by the city council. The applicant shall provide a pro forma demonstrating to the city that the requested concession or incentive results in identifiable and actual cost reductions to the project to provide for affordable ownership costs or affordable rents. a. Greater increases in lot coverage than included in Tier 1; b. Greater reductions in front, side, or rear setbacks than included in Tier 1; c. Greater reductions in required landscape area than included in Tier 1; 4. Tier 3 Concessions City Council Approval and Financial Pro Forma Required. The following concessions and incentives may be approved by the city council. The applicant shall provide a pro forma demonstrating to the city that the requested concession or incentive results in identifiable and actual cost reductions to the project to provide for affordable ownership costs or affordable rents: a. Deferring collection of impact fees on market rate units until issuance of certificate of occupancy; b. Reduction in the minimum requirements for lot area; lot width; or distance between residential structures; c. Increases in the maximum permitted building height; percentage of compact parking spaces; floor area ratio for non- residential housing development in mixed use project; fence height; or sign area or dimensions; d. Reduced parking space dimensions; driveway width; parking aisle width; garage and carport dimensions; or bicycle parking requirements; e. Parking spaces located within required setback areas; f. Reduction of off-street parking ratios below those permitted by Government Code Section (p) and Section (5); g. Approval of mixed use buildings or uses as part of the residential housing development, if non-residential land uses will reduce the cost of the residential housing development, and if the city finds that the proposed non-residential 14

15 uses are compatible with the residential housing development and with existing and planned development in the area where the proposed residential housing development will be located; h. Any direct financial assistance, including that for purchasers of affordable units; i. Any additional regulatory incentives or concessions not included in Tier 1 or Tier Applicants may seek a waiver or modification of development standards that will have the effect of physically precluding the construction of a housing development eligible for a density bonus at the density or with the incentives or concessions permitted by this Part 3. The applicant shall bear the burden of demonstrating that the development standards that are requested to be waived will have the effect of physically precluding the construction of the housing development with the density bonus and incentives. 6. Nothing in this section requires the city to provide direct financial incentives for the housing development, including but not limited to the provision of publicly owned land or waiver of fees or dedication requirements MODIFIED PARKING STANDARDS FOR HOUSING DEVELOPMENTS. 1. Upon the request of the developer, the city shall not require off-street parking for a housing development eligible for a density bonus that exceeds the following: a. Zero to one bedroom units: one on-site parking space. b. Two to three-bedroom units: two on-site parking spaces. c. Four and more bedroom units: two and one-half parking spaces. 2. For certain other housing developments that are eligible for a density bonus, upon the request of the developer, the city shall not require a vehicular parking ratio that exceeds the ratios shown in the following table. However, if the city, at its cost, has conducted an area wide or citywide parking study in the last seven years, then the city may find, based on substantial evidence, that a higher parking ratio is required than shown in the following table. In no event may the required parking be greater than the ratio provided in subsection (1) of this section. The parking study must conform to the requirements of Cal. Gov t Code 65915(p)(7). 15

16 Type of Development Rental or ownership housing development with: 1. At least 11 percent very low income or 20 percent lower income units; and 2. Within one-half mile of a major transit stop; and 3. Unobstructed access to the major transit stop. Rental housing development with: 1. All units affordable to lower income households except manager s unit(s); and 2. Within one-half mile of a major transit stop; and 3. Unobstructed access to the major transit stop. Senior citizen rental housing development with: 1. All units affordable to lower income households except manager s unit(s); and either 2. Has paratransit service; or 3. Is within one-half mile of fixed bus route service that operates eight times per day, with unobstructed access to that service. Special needs rental housing development with: 1. All units affordable to lower income households except manager s unit(s); and either 2. Has paratransit service; or 3. Is within one-half mile of fixed bus route service that operates eight times per day, with unobstructed access to that service. Maximum Number of Required Off-Street Parking Spaces 0.5 per bedroom 0.5 per unit 0.5 per unit 0.3 per unit Guest parking and handicapped parking shall be included within the maximum number of spaces that may be required. If the total number of parking spaces required for a housing development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this section, a housing development may provide on-site parking through tandem parking or uncovered parking, but not through on-street parking COMMERCIAL DEVELOPMENT BONUS. 1. When a developer proposes to construct a commercial development and has entered into a partnered housing agreement approved by the city, the city shall grant a commercial development bonus mutually agreed upon by the developer and the city. The commercial development bonus shall not include a reduction or waiver of fees imposed on the commercial development to provide for affordable housing. 2. The partnered housing agreement shall include all of the following provisions: a. The housing development shall be located either on the site of the commercial development or on a site within the city that is within one-half mile of a major transit stop and is located in close proximity to public amenities, including schools and employment centers. 16

17 b. At least 30 percent of the total units in the housing development shall be made available at affordable ownership cost or affordable rent for low-income households, or at least 15 percent of the total units in the housing development shall be made available at affordable ownership cost or affordable rent for very low-income households. c. The commercial developer must agree either to directly build the affordable units; donate a site consistent with subparagraph (a) above for the affordable units; or make a cash payment to the housing developer for the affordable units. 3. The housing development shall remain eligible for any density bonuses, incentives, concessions, waivers, and parking reductions the housing development would otherwise be eligible for and that are provided by this Part Any approved partnered housing agreement shall be described in the city s housing element annual report as required by Government Code Section (k) STANDARDS FOR DENSITY BONUS HOUSING DEVELOPMENTS. 1. Affordable units qualifying a housing development for a density bonus shall remain affordable as follows: a. Rental units affordable to very low and lower income households shall remain affordable to the designated income group for a minimum of fifty-five years or for a longer period of time if required by any construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program applicable to the dwelling units, except that lower income units in a condominium conversion project shall remain affordable in perpetuity. b. For-sale units affordable to very low, lower, or moderate income households shall remain affordable in perpetuity. 2. Affordable units qualifying a housing development for a density bonus shall be reasonably dispersed throughout the housing development and compatible with the design of market rate units in terms of appearance, materials, and finished quality. The applicant may reduce the interior amenities and square footage of affordable units, provided all units conform to all requirements of Titles 18 and 19 of the Santa Cruz Municipal Code and meet the minimum square footage requirements included in Table 1. 17

18 TABLE 1 Minimum Size (sq. ft.) Single- Room Occupancy 250 Small Ownership Unit 500 or the average size of the market rate units, whichever is smaller One Two Three Four Studio Bedroom Bedrooms Bedrooms Bedrooms ,100 1, For developments with multiple market rate unit types containing differing numbers of bedrooms, affordable units qualifying a housing development for a density bonus shall be representative of the market rate unit mix. 4. All building permits for affordable units qualifying a housing development for a density bonus shall be issued concurrently with, or prior to, issuance of building permits for the market rate units, and the affordable units shall be constructed concurrently with, or prior to, construction of the market rate units. Occupancy permits and final inspections for affordable units qualifying a housing development for a density bonus shall be approved concurrently with, or prior to, approval of occupancy permits and final inspections for the market rate units LOCAL COASTAL PLAN CONSISTENCY 1. State density bonus law provides that it shall not be construed to supersede or in any way alter or lessen the effect or application of the California Coastal Act of For development within the coastal zone, the requested density bonus and any requested incentive, concession, waiver, modification, modified parking standard, or commercial development bonus shall be consistent with all applicable requirements of the certified Santa Cruz Local Coastal Program, with the exception of density SUBMITTAL OF APPLICATION FOR AFFORDABLE HOUSING PLAN 1. An application for a density bonus, incentive, concession, waiver, modification, modified parking standard, or commercial development bonus pursuant to this Part 3 shall be submitted as part of the first approval of the housing development or commercial development in the form of an affordable housing plan which shall be processed concurrently with all other applications required for the housing development or commercial development. 2. Upon submittal, the director of the planning and community development department shall determine if the affordable housing plan is complete and conforms to the provisions of this chapter. No application for a first approval for a housing development or commercial development requesting a density bonus, incentives, concessions, waivers, modified parking standard, or commercial development bonus may be deemed complete unless an affordable housing plan is 18

19 submitted conforming to the provisions of this section. The applicant shall be informed whether the application is complete consistent with Government Code Section The affordable housing plan shall include at least the following information: a. Site plan showing total number of units, number and location of affordable units, and number and location of proposed density bonus units. b. A description of any requested density bonuses, incentives, concessions, waivers or modifications of development standards, modified parking standards, or commercial development bonus. c. Summary table showing the maximum number of units permitted by the zoning and general plan excluding any density bonus units, affordable units qualifying for the project for a density bonus, level of affordability of all affordable units, proposed bonus percentage, number of density bonus units proposed, and total number of dwelling units proposed on the site. d. Tenure (rental versus for-sale) of target units and proposals for ensuring affordability. e. A description of all dwelling units existing on the site in the five-year period preceding the date of submittal of the application and identification of any units rented in the five-year period. If dwelling units on the site are currently rented, income and household size, if known, of all residents of currently occupied units. If any dwelling units on the site were rented in the five-year period but are not currently rented, the income and household size, if known, of residents occupying dwelling units when the site contained the maximum number of dwelling units. f. Description of any recorded covenant, ordinance, or law applicable to the site that restricted rents to levels affordable to very low or lower income households in the five-year period preceding the date of submittal of the application. g. For all incentives and concessions except those listed in Section (2), a pro forma demonstrating that the requested incentives and concessions result in identifiable and actual cost reductions and evidence that the cost reduction allows the applicant to provide affordable rents or affordable ownership costs. If a mixed-use building or project is proposed as an incentive, the applicant shall also provide evidence that nonresidential land uses will reduce the cost of the residential project and that the nonresidential land uses are compatible with the residential project and the existing or planned surrounding development. h. Any pro forma submitted to comply with paragraph (2)(f) of this section may not include the lost opportunity cost of any affordable units (i.e., the revenue that would have been generated had the units been rented or sold at market rate) and may include as an additional cost only those additional expenses that are required solely because of the proposed construction of the affordable units. The cost of reviewing any required pro forma data submitted in support of a request for a concession or 19

20 incentive, including but not limited to the cost to the city of hiring a consultant to review the pro forma, shall be borne by the applicant. The pro forma shall also include: (1) the actual cost reduction achieved through the incentive or concession; and (2) evidence that the cost reduction allows the developer to provide affordable rents or affordable sales prices. i. For waivers or modifications of development standards: the application shall provide evidence that each development standard for which the waiver is requested will have the effect of physically precluding the construction of the housing development at the densities or with the incentives or concessions permitted by this Part 3. j. If a parking modification is requested, a table showing parking required by the zoning ordinance and proposed parking. If a parking reduction provided by Section is requested, evidence that the project is eligible for the requested parking reduction. k. In phased housing projects, for each construction phase, the affordable housing plan shall specify, at the same level of detail as the application for the housing development: the number, unit type, tenure, number of bedrooms and baths, approximate location, size, and design, construction and completion schedule of all affordable units, phasing of all other affordable units in relation to market rate units, marketing plan, and intended rent or sale price and basis for calculation. l. If the affordable units will not be constructed concurrently with the market rate units, the affordable housing plan shall describe the proposed phasing and specify the security to be provided to the city to ensure that the affordable units will be constructed. m. If a density bonus or concession is requested for a land donation, the application shall show the location of the land to be dedicated and provide evidence that each of the findings included in Section can be made. n. If a density bonus or concession is requested for a child care center, the application shall show the location and square footage of the child care center and provide evidence that the each of the standards included in Section has been met. o. If a density bonus or incentive is requested for a condominium conversion, the application shall provide evidence that all of the requirements found in Section have been met. p. If a commercial development bonus is requested for a commercial development, the application shall include the proposed partnered housing agreement, the proposed commercial development bonus, and evidence that each of the standards included in Section has been met. 20