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HomeMy WebLinkAboutPA2023-0053_20230623_Affordable Housing Implementation Plan and Density Bonus Application 1526 PLACENTIA AVENUE AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS APPLICATION RESUBMITTED June 20, 2023 Prepared by 1526 Placentia Ave Affordable Housing Plan June 20, 2023 2 1526 PLACENTIA AVENUE AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS APPLICATION RESUBMITTED JUNE 20, 2023 Project Description & Affordability Level The developer, 1526 Placentia Avenue, is proposing demolition of the current market and development of an apartment building on a .37 net acre site. The site is located North of the intersection of W 15th Street and Placentia Avenue. The Newport Beach General Plan designates the project site as Multiple-Unit Residential and the zoning is Multiple-Unit Residential (RM). The site is currently developed with a Liquor Store. The development will consist of 11 residential units and open parking garage. The is Multiple-Unit Residential (RM) Zoning has a Floor Area limit of 1.75 and 2,420 square feet per residential unit. This results in the following requirements: Minimum of 4 residential units Maximum of 7 residential units (before applying density bonus) Eligibility for Density Bonus The 1526 Placentia Avenue development will provide 1 unit affordable to Very Low Income households, 14% of the Base Units as described in Table 1 on the next page. This will comply with the provisions of Government Code Section 65915(f)(2) applicable to a 46.25% density bonus. Rents for the Very Low Income units will be computed in accordance with Health and Safety Code Sec. 50053, as required by Government Code Section 65915(c)(1). Density Bonus Computation and Term of Affordability The density bonus computation for the project per Government Code Section 65915 is shown in Table 1: Table 1 Density Bonus Computa on Project Area 16,275 SF Minimum Lot Area Per Unit 2,420 SF Allowable Residential Units Before Density Bonus (Base Units) 7 Eligible Density Bonus (46.25%) 4 Density Bonus Utilized 4 Total Units 11 1526 Placentia Ave Affordable Housing Plan June 20, 2023 3 The Developer intends to operate the apartment project as a rental community. The 1 Very Low Income unit will remain rent restricted for 55 years, per Government Code Section 65915(c)(1). Reduction in Parking The 1526 Placentia Ave development meets the criteria of subdivision (b) of Government Code Sec. 65915 and Section 20.32.030 of the City’s Zoning Code by providing more than five percent (5%) of the total units of a housing development (excluding any units permitted by the density bonus awarded pursuant to that section) for Very Low-Income households. Government Code Section 65915(p) and Section 20.32.040 of the City’s Zoning Code provides the following: (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 bedrooms: one onsite parking space. b. Two to three bedrooms: two onsite 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 street parking. Table 2 on the next page is a summary of Government Code Sec. 65915 parking requirements vs. spaces to be provided: Table 2 Parking Requirements Unit Type Number of Units Stalls/Unit per Gov. Code Total Stalls per Gov. Code 2 Bedroom 7 1.5 11 3 Bedroom 4 1.5 6 Total Parking Stalls Required 17 Total Parking Stalls Provided 27 The Developer requests that parking requirements be calculated in accordance with Government Code Sec. 65915(p). 1526 Placentia Ave Affordable Housing Plan June 20, 2023 4 Development Incentive Request Pursuant to Government Code Section 65915(d)(1) and Section 20.32 of the City’s Zoning Code, the Developer is entitled to two concessions or incentives as a result of providing at least fourteen percent (14%) of the units as affordable for Very Low Income households. The Developer does not request any incentives currently. The Developer reserves the right to request one or both incentives and concessions in the future. Income Limits and Examples of Eligible Tenants for Affordable Homes Very Low Income Households are defined as households whose gross income does not exceed 80% of area median income, adjusted for household size. Table 4 below shows the maximum income limits for 2022 determined by the U.S. Department of Housing and Urban Development and the California Department of Housing and Community Development (“HCD”) for Very Low-Income households with household sizes appropriate for the 1526 Placentia Avenue development: Table 4 Maximum Income Limits Household Size Very Low Income Units Maximum Annual Income-2022 2 person 54,200 3 person 61,000 4 person 67,750 Higher income limits apply to larger families; those families however are not considered to be a target market for 1526 Placentia Avenue, where the unit mix for the affordable homes is anticipated to consist of two-bedroom apartment homes. The 1 affordable apartment that Developer will provide will be rented to eligible Very Low Income Households. As shown in Table 4, Very Low Income Households includes incomes ranging from $54,200 per year for a two-person household to $67,750 per year for a four-person household. As such this could include retail and food service industry employees, certain City employees, school district employees, health care professionals, and other occupations which provide needed services to our community. In order to provide opportunities to workers to live in one of the affordable homes, the City could provide guidelines providing for acceptance of applications on a priority basis from classes of individuals who qualify under the income limits in effect. The guidelines could provide for priority treatment for local residents, City employees, employees of the local school district, and other categories identified by the City for priority treatment. 1526 Placentia Ave Affordable Housing Plan June 20, 2023 5 Rental Rate Limits for Affordable Homes The 1 Very Low Income units shall be rented at an affordable rent calculated in accordance with the provisions of Section 50053 of the Health and Safety Code. Section 50053 of the Health and Safety Code limits affordable rent to 30% of total income for a Very Low Income household, as calculated in Table 5 below. That section also requires that the rent for a two-bedroom unit assumes a four-person household for rent calculation purposes. The rents calculated are then adjusted by a utility allowance as determined annually by the County of Orange Housing & Community Services Department. As of October 1, 2022, the reduction for the utility allowance is $150.00 per month for a two-bedroom unit. The utility allowance utilized assumes gas cooking, space heating, and water heating, as well as electricity, water, and sewer, and trash fees which will be paid by the tenant. The maximum rent levels for 2023 are shown in Table 5 below: Table 5 Maximum Rents by Bedroom Count Bedrooms Maximum Annual Rent Maximum Monthly Rent Utility Allowance Affordable Rent 2 bedroom $20,325 $1,694 $150 $1,544 The Developer will enter into an affordable housing agreement, in recordable form, with the City prior to obtaining the first building permit for any residential unit. That agreement will ensure that the maximum rents for the affordable apartment homes will be calculated using the methodologies as utilized in Table 5. The rental rates shown will be updated prior to the commencement of rental activities and on an ongoing basis to reflect current income limits, utility allowances, and any changes in applicable regulations and statutes. Unit Mix, Design, and Location of Affordable Homes While the exact location of each of the affordable homes within the 1526 Placentia Avenue development has not yet been determined, the affordable homes will be spread throughout the development to avoid concentration of affordable homes in any area. As required by Section b 20.32.070 of the City’s Zoning Code, the affordable homes shall be comparable in the facilities provided and in the quality of construction and exterior design to the market rate homes. Requested City of Newport Beach Assistance Financial Assistance Developer is not requesting any direct financial assistance from the City of Newport Beach for this project. However, due to the complexities of this development and the importance of affordable housing, we would kindly request an expedited planning and plan check process.