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HomeMy WebLinkAboutGPU-Land Use and Housing ElementsCITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT Agenda Item No. 2 June 15, 2006 TO: PLANNING COMMISSION FROM: City Manager's Office Sharon Wood, Assistant City Manager 949 -644 -3222, swood @city.newport- beach.ca.us SUBJECT: General Plan Update: Land Use and Housing Elements PROPONENT: City of Newport Beach RECOMMENDATION: Receive public comments on the referenced elements of the Draft General Plan; provide direction to staff, and continue public hearing to June 22, 2006. DISCUSSION: The Planning Commission continued their review of the Land Use Element on June 1, 2006, and made recommendations to the City Council regarding the "Other Land Use Areas," additional policy questions, the Circulation Element, the Draft Environmental Impact Report and the format of the Implementation Program. The City Council will consider those recommendations at their June 13, 2006 hearing. The actions of the City Council will be reported to the Commission at the meeting. Areas and Issues for Discussion at this Hearing At this hearing, staff recommends that the Planning Commission consider the land use plan for Banning Ranch, revised policies for the Airport Area, and the policy additions and revisions requested by the Planning Commission and City Council at prior hearings on the Land Use Element. Also, staff recommends that the policy comparison table for the Housing Element be reviewed, including the specific policy regarding the inclusionary housing requirement previously discussed by the Planning Commission. Banning Ranch The owners of Banning Ranch have been working with the City on a letter of understanding, through which they would agree on a process and timeline to make the property available for acquisition for open space, while at the same time processing applications for developing a General Plan Update June 15, 2006 Page 2 residential village through the City of Newport Beach. The City would commit to including 1,375 dwelling units, 75,000 square feet of commercial space, and 75 hotel rooms in the General Plan, and to working with the property owners on a pre- annexation and development agreement. Staff expects the letter of understanding to be reviewed by the City Council on June 27. We are asking the Commission to affirm that the development levels listed above should be included in the General Plan. Land Use Policies Staff has consolidated all the land use policy changes in one attachment (Attachment 1). Policies include Transfer of Development Rights, land use policies for the Airport Area, including a new land use category for the Campus Tract, and Newport Center policies on the conversion of hotel rooms and a development agreement requirement for new residential entitlement that does not require replacing other development. The Airport Area policies reflect the change in number of residential units and new land use designation for the Campus Tract requested by the Planning Commission and City Council, as well as additional and revised policies that respond to comments on our General Plan from the Airport Land Use Commission (ALUC). The City Council has directed staff to include policies in the General Plan that will enable Newport Beach to be deemed a "consistent agency" by ALUC; most of these policies appear in the Airport Area section of the Land Use Element. Housing Element The Housing Element Policy Comparison Table (Attachment 2) shows the changes recommended by the Planning Commission when they considered the Housing Element on March 9, 2006. At that time, the Commission recommended that the inclusionary requirement for housing affordable to lower income households be changed from 20% to 15 %. That recommendation was based on the requirements of other cities, the resources available to assist affordable housing development in Newport Beach, and the potential for housing development provided in the updated General Plan compared to an estimate of Newport Beach's share of the regional need for affordable housing over 25 years. The Planning Commission and City Council have reduced the potential for housing development as they have reviewed and adjusted the land use plan during public hearings. Revised Table H30 reflects these changes (Attachment 3). Staff has used these lower residential numbers to recalculate the comparison of Regional Housing Needs Assessment (RHNA) goals to housing potential that we provided to the Commission in March (Attachment 4). Following are the two, 25 -year estimates of RHNA goals that were prepared in March. Newport Coast #1 includes the full number of Newport Coast units that was negotiated for annexation, and Newport Coast #2 includes half that amount. Goals for a planning period of 20 years have been added, because that is the General Plan "life" that we refer to most often. General Plan Update June 15, 2006 Page 3 The total number of new units that could be developed pursuant to the revised Land Use Element is 9,286. To achieve the 25 -year affordable goals shown above would require that 20% to 30% of total new units be affordable. Assuming a 20 -year goal would require 16% to 24% affordable. And looking at a more realistic scenario again, which assumes that only the units listed below will be built during the term of this General Plan, 38% to 57% of new units would need to be affordable to achieve the estimated RHNA affordable goals over 25 years. For a 20 -year period, 30% to 45% would be needed. Airport Area Newoort Coast # 1 Newport Coast # 2 5 -Year RHNA Goal - Citv 476 476 5 -Year RHNA Goal — Coast 945 473 Total 5 -Year RHNA Goal 1,421 949 Total 1 -Year RHNA Goal 284 190 x 25 x 25 Total 25 -Year RHNA Goal 7,105 4,750 Affordable Percent x.40 x.40 25 -Year Affordable Goal 2,842 1,900 Total 20 -Year RHNA Goal 5,680 3,800 Affordable Percent x.40 x.40 20 -Year Affordable Goal 2,272 1,520 The total number of new units that could be developed pursuant to the revised Land Use Element is 9,286. To achieve the 25 -year affordable goals shown above would require that 20% to 30% of total new units be affordable. Assuming a 20 -year goal would require 16% to 24% affordable. And looking at a more realistic scenario again, which assumes that only the units listed below will be built during the term of this General Plan, 38% to 57% of new units would need to be affordable to achieve the estimated RHNA affordable goals over 25 years. For a 20 -year period, 30% to 45% would be needed. Airport Area 2,200 Banning Ranch 1,375 Mariners' Mile 300 Newport Center 450 Newport Coast 400 Balboa Peninsula Area 250 Total Likely Units 4,975 Regardless of the percent of new units required to be affordable, the City will need a system to implement this requirement. Staff and the City Council Affordable Housing Task Force have been working on an inclusionary housing ordinance, a draft of which is included as Attachment 5. Some notable provisions include Section 20.68.020, which sets forth different percent requirements, depending on which level of affordability is being provided, so that a developer meeting very low- income criteria may provide fewer units than one meeting moderate- income criteria. Sections 20.68.030 and 20.68.100 allow for the use of credits when a developer provides more than the required percent of affordable units. Section 20.68.040 provides the option of paying fees in lieu of providing affordable units for smaller projects. There are also alternatives, exemptions and waiver provisions. If the Commission favors continuing with the ordinance approach, staff recommends that Implementation Measure 2.1f be revised as follows. General Plan Update June 15, 2006 Page 4 Adopt an Inclusionary Housing Ordinance that guides implementation of Housing Element Policy H2.2, including a relationship between affordability criteria and number of units required, alternative means of satisfying the requirement, an in- lieu fee, and waivers for special circumstances. Another approach would be to require developers of housing projects, perhaps of a certain size, to prepare Affordable Housing Implementation Plans (AHIPs) to demonstrate how they will meet Newport Beach's inclusionary requirement. This would allow each developer to customize his program for affordable housing. An example of an AHIP provided by Commissioner Tucker is included as Attachment 6. In this example, a number of points are required, and points are awarded for number of affordable units, number of bedrooms, lower income criteria, conversion of market rate units to affordable units, etc. If the Commission prefers the AHIP approach, staff recommends that Housing Program 2.2.1 be amended to read as follows: Housing Program 2.2.1 Require a proportion of affordable housing in new residential developments or levy an in -lieu fee. The City's goal over the five - year planning period is for an average of 20% of all new housing units to be affordable to very low -, low -, and moderate - income households. The City shall either (a) require the payment of an in- or (b) require affordability requirement, th ' ^f a n `'eu fee, depending on the following criteria for project size: (imp 2.1) 1. Projects of fifty or fewer units shall have the option of providing the units or paying the in -lieu fee. 2. Projects where more than fifty units are proposed shall be required t re are an AHIP. ided on site usless at an A# site 'Reation appmved by the prey G4ty: Implementation of this program will occur in conjunction with City approval of any residential discretionary permits or Tentative Tract Maps. To insure compliance with the 20% affordability requirements, the City will include conditions in the approval of discretionary permits and Tentative Tract Maps to require ongoing monitoring of those projects. Finally, staff recommends the following change to Housing Program 3.2.1, in response to comments from the ALUC: General Plan Update June 15, 2006 Page 5 Housing Program 3.2.1 Identify the following sites as adequate, which will be made available through appropriate zoning and development standards and with public services and facilities needed to facilitate and encourage development of a variety of housing types to meet City housing goals as identified pursuant to Government Code Section 65583(b): Banning Ranch, Airport Area, Newport Center, Test Newport Mesa; Mariners' Mile, West Newport Highway, and the Balboa Peninsula Area. Development of new housing in the Airport Area will be restricted to areas outside the 65 dB CNEL contour as defined in the Airport Environs Land Use Plan for John Wayne Airport. Public Notice: Notice of this public hearing, and subsequent public hearings on the General Plan update and EIR, was provided by a quarter page display advertisement in the Daily Pilot on June 3, 2006. Government Code Section 65091 provides that, when the number of property owners to whom notice would be required to be mailed is greater than 1,000 (which is the case with a comprehensive General Plan update), notice may be provided by placing a one - eighth page advertisement in the local newspaper. Submitted by: Sharon Wood Assistant City Manager Attachments: Prepared by: U Patricia Temple Planning Director 1. Land Use Policy changes 2. Housing Element Policy Comparison Table (previously distributed) 3. Revised Housing Element Table H30 4. March 9, 2006 staff report on Housing Element 5. Draft Inclusionary Housing Ordinance 6. Draft Affordable Housing Implementation Plan Attachment 1 Land Use Policy Changes Ci -wide General Plan Update June 15, 2006 Page 6 LU_ Transfer of Development Rights Consider the transfer of development rights from a property to one or more other properties when: a. The donor and receiver sites are within the same Statistical Area b. The reduced density /intensity on the donor site benefits the City such as the (1) provision of extraordinary open space, public visual corridor(s), parking or other amenities; (2) preservation of an historic building or property or natural landscapes; (3) improvement of the area's scale and development character; and /or (4) reduction of local vehicle trips and traffic congestion; and c. The increment of growth transferred to the receiver site complements and is in scale with surrounding development, complies with community character and design policies contained in this Plan, and does not adversely degrade local traffic conditions and environmental quality. Airport Area (Goal Policies and revised Urban Design Framework) LU 6.15 A mixed -use community that provides jobs, residential, and supporting services in close proxinaty, with pedestrian - oriented amenities that facilitates walking and enhance livability. Urban Form and Structure (REFER TO FIG URE L U22) LU 6.15.1 Land Use Districts and Neighborhoods Provide for the development of distinct business park, commercial, and airport- serving districts and residential neighborhoods that are integrated to assure a quality environment and compatible land uses. (Imp 1.1, 2.1) LU 6 15 2 Airport Compatibility Require that all development be constructed in conformance with the height restrictions set forth by Federal .Aviation Administration (F-AA) Federal Aviation Regulations (EiLkR) Part 77 Caltrans Division of Aeronautics and the Aimort I'n- irons Land Use Plan (AFL UP) for John Wayne Airport (Imp 21 3.1 41. 12.1. 12 19.3 7 General Plan Update June 15, 2006 Page 7 a., °t^ as Park Mixed Use Districts (Subarea C, "MU -52 H2" designation) vva111 -5- v__c Land Uses LU 6.15.23 Priority Uses Accommodate office, research and development, and similar uses that support the primary office and business park functions such as retail and financial services, as prescribed for the "CO -G" designation, while allowing for the re -use of properties for the development of cohesive residential villages that are integrated with business park uses. (Imp 2.1, 12.1) LU 6.15.34 Underperforming Land Uses Promote the redevelopment of sites with underperforming retail uses located on parcels at the interior of large blocks for other uses, with retail clustered along major arterials (e.g., Bristol, Campus, MacArthur, and Jamboree), except where intended to serve and be integrated with new residential development. (Imp 2.1, 34.6) Campus Tract (Subarea B, "M9-92 AO" designation) Land Uses LU 6.15.45 Primary Uses Accommodate professional office, aviation retail, automobile rental serAe- ketels, and eerap" Ae- incillarTretail restaurant and service uses that are related to and support the functions of John Wayne Airport, as permitted by the "G r1O" Strategy LU 6.15.56 Economic Viability Provide incentives for lot consolidation and the re -use and improvement of properties located in the "Campus tract," west of Birch Street. (Imp 2.1, 34.6) LU 6.15.47 Automobile,%Rental and Supporting Uses Work with automobile rental and supporting uses to promote the consolidation and visual improvement of auto storage, service, and storage facilities. (Imp 12.1, 34.6) LU 6.15.7$ Site Planning and Architecture Encourage and, when subject to redevelopment, require property owners within the Campus Tract to upgrade the street frontages of their properties with landscape, well- designed signage, and other amenities that improve the area's visual quality. (Imp 12.1) r General Plan Update June 15, 2006 Page 8 Commercial Nodes (Subarea A, "CG-C" designation) LU 6.15.59 Priority Uses Encourage the development of retail, financial services, dining, hotel, and other uses that support the John Wayne Airport, the Airport Area's office uses, and, as developed, its residential neighborhoods, as well as automobile sales and supporting uses at the MacArthur Boulevard and Bristol Street node. (Imp 2.1, 12.1, 34.6) Residential Villaaes (Subarea C and Subarea B, "MU -92� H2" designation) Land Uses LU 6.15.$10 Residential and Supporting Uses Accommodate the development of a maximum of 2,200 multi- family residential units, including work force housing, and mixed -use buildings that integrate residential with ground level office or retail uses, itratta� and along with supporting retail, grocery stores, and parklands. ;iris may— eeeuxResidennal units may be developed as the replacement of existing buildings with a maximum of 550_units -or as infill on surface parking lots on properties east of MacArthur Boulevard, provided that the parking is replaced in - stfu e !aeated on -site. (Imp 2.1, 12.1, 12.2) Minimum Size and Density LU 6.15.101 Number and Size of Residential Villages (refer to Figure LU23) Allow development of a maximum of four (4) mixed use residential villages, each centered on a neighborhood park and other. amenities (as conceptually illustrated in Figure LU23). The first phase of residential development in each —YMWe rteighberhood -shall encompass at least 4-05 gross acres of land, exclusive of existing rights -of- -way. Theis-10 awes acr�ea re may include multiple parcels provided that they are contiguous or face one another across an existing street. The 40 ftere requ4emen .h ieve, the _bjeet _._, fet tt_�: -part Area. The "Comprehensive Plan" area shown on Fignue LU23 shall be exempt from the 5 -acre minimum but a comprehensive plan described in policy LU 615.15 shall be required.(Imp 2.1, 3.1, 4.1, 12.1, 12.2) 9 General Plan Update June 15, 2006 Page 9 LU 6.15.12 Overall Density and Housina Types Require that residential units be developed at a minimum density of 30 units and maximum of 50 units per net acre. Net acreage shall be exclusive of existing and new rights-of-way, public pedestrian ways and neighborhood parks Within these densities, provide for the development of a mix of building types ranging from townhomes to high -rises to accommodate a variety of household types and incomes and to promote a diversity of building masses and scales LU 6.15.E-1-13First Phase Development Density Require a minimxtrt-residential density of 50 units per net acre, averaged over the first phase for each residential village. This shall be applied to 100% of properties in the first phase development area whether developed exclusively for residential or integrating service commercial horizontally on the site or vertically within a mixed use building. (Imp2.1,3.1,4.1,12.1,12.2) LU 6.15.4214 Subsequent Phase Development Location and Density Subsequent phases of residential development shall abut the first phases or shall face the first phases across a street. The minimum density of residential development (including residential mixed -use development) shall be 30 units per net acre and shall (Imp 2.1, 3.1, 4.1, 12.1, 12.2) WWFIWMIFW� --WAWA Strategy and Process LU 6.15.145 Regulatory Plans Require the development of a regulatory plan for each residential village to coordinate the location of new parks, streets, and pedestrian ways, set forth a strategy to accommodate neighborhood- serving commercial uses and other amenities, establish pedestrian and vehicular connections with adjoining land uses, and assure compatibility with office, industrial, and other nonresidential uses. (Imp 2.1, 3.1, 4.1, 15.1) 10 General Plan Update June 15, 2006 Page 10 LU 6 15.16 Koll Center and Conexant Development Plans Require the development of gone comprehensive plan for the Koll Center and structures olen spaces and other improvements with existing non - residential structures in addition to the elements rewired for all tegulaIM 121ans defined by Policy 6.15.14. (Imp 2.1.3.1 4.1. 15.1) LU 6.15.17 Development Agreements Require the execution of Development Agreements for residential and mixed use development projects that use the 550 infill units identified in Policy Lli 6.15.9. Development Agreements shall define the improvements and benefits to be Design and Development Neighborhood Parks LU 6.15.1418Standards To provide a focus and identity for the entire neighborhood and to serve the daily recreational and commercial needs of the community within easy walking distance of homes, require dedication and improvement of at least eight percent of the gross land area (exclusive of existing rights -of -way) or one -half acre, whichever is greater, of the first phase of development in each neighborhood as a neighborhood park. This requirement rnabe waived by the City where it can be demonstrated that the development parcels are too small to feasibly accommodate the park or inappropriately located to serve the needs of local residents, and when an in -lieu fee is paid to the City for the acquisition and improvement of other properties as parklands to serve the Airport Area. In every case, the neighborhood park shall be at least one -aere- eight percent of the total Residential Village Area or one -half acre in area whichever is greater, and shall have a minimum dimension of 150 feet. Park acreage shall be exclusive of existing or new rights -of -way, development sites, or setback areas. A neighborhood park shall satisfy some or all of the requirements of the Parkland Dedication Ordinance, as prescribed by the Recreation Element of the General Plan. dtuing daylight ctrs. (Imp 2.1, 3.1, 4.1, 12.1, 12.2, 33.1, 44.3) General Plan Update June 15, 2006 Page 11 LU 6.15.4419Location Require that each neighborhood park is clearly public in character and is accessible to all residents of the neighborhood. Each park shall be surrounded by public streets on at least two sides (preferably with on -street parking to serve the park), and shall be linked to residential uses in its respective neighborhood by streets or pedestrian ways. (Imp 2.1, 3.1, 4.1, 12.1, 12.2) LU 6.15.20 Aircraft Notification Require that all neighborhood parks be posted w-ith a notification to users regarding proximity to Iohn Wayne :'airport and aircraft overflight and noise. On-Site Recreation and Open Space LU 6.15.21 Standards Require developers of multi- family residential developments on parcels eight acres or larger, to provide on -site recreational amenities. For these developments, 44 square feet of on -site recreational amenities shall be provided for each dwelling unit in addition to the requirements under the City's Park Dedication Ordinance and in accordance with the Parks and Recreation Element of the General Plan. On -site recreational amenities can consist of public urban plazas or squares where there is the capability for recreation and outdoor activity. These recreational amenities may also include swimming pools, exercise facilities, tennis courts, and basketball courts. Where there is insufficient land to provide on -site recreational amenities, the developer shall be required to pay cash in -lieu that would be used to develop or upgrade nearby recreation facilities to offset user demand as defined in the City's Park Dedication Fee Ordinance. The acreage of on -site open space developed with residential projects may be credited against the parkland dedication requirements where it is accessible to the public during daylight hours, visible from public rights -of -way, and is of sufficient size to accommodate recreational use by the public. However, the credit for the provision of on -site open space shall not exceed 30% of the parkland dedication requirements. (Imp 2.1, 3.1, 4.1, 12.1, 12.2, 44.3) Streets and Pedestrian Ways LU 6.15.U22Street and Pedestrian Grid Create a pattern of streets and pedestrian ways that breaks up large blocks, improves connections between neighborhoods and community amenities and is scaled to the predominantly residential character of the neighborhoods. (Imp 3.1, 4.1, 11.1, 12.2, 21.1) LU 6.15.4923Walkable Streets Retain the curb -to -curb dimension of existing streets, but widen sidewalks to provide park strips and generous sidewalks by means of dedications or easements. Except where traffic loads preclude fewer lanes, add parallel parking to calm traffic, buffer General Plan Update June 15, 2006 Page 12 pedestrians and provide short -term parking for visitors and shop customers. (Imp 3.1, 41, 12.2, 21.1, 29.1) LU 6.15.2024Connected Streets Require dedication and improvement of new streets as shown on Figure LU23. The illustrated alignments are tentative and may change as long as the routes provide the intended connectivity. If traffic conditions allow, connect new and existing streets across Macarthur Boulevard with signalized intersections, crosswalks, and pedestrian refuges in the median. (Imp 11.1, 12.2, 21.1) LU 6.15.2-1- 25Pedestrian Improvements Require the dedication and improvement of new pedestrian ways as shown on Figure LU23. The alignment is tentative and may change as long as the path provides the intended connectivity. For safety, the full length of pedestrian ways shall be visible from intersecting streets. To maintain an intimate scale and to shade the path with trees, pedestrian ways should not be sized as fire lanes. Pedestrian ways shall be open to the public at all hours. (Imp 11.1, 12.2, 21.12) Parking and Loading LU 6.15.2226Required Spaces for Primary Uses Consider revised parking requirements that reflect the mix of uses in the neighborhoods and overall Airport Area, as well as the availability of on- street parking. (Imp 2.1) Relationship of Buildings to Street LU 6.15.23271luilding Massing Require that high -rise structures be surrounded with low and mid -rise structures fronting public streets and pedestrian ways or other means to promote a more pedestrian scale. (Imp 3.1, 4.1, 12.1, 12.2) LU 6.15AQSSustainable Development Practices Require that development achieves a high level of environmental sustainability that reduces pollution and consumption of energy, water, and natural resources. This may be accomplished through the mix and density of uses, building location and design, General Plan Update June 15, 2006 Page 13 transportation modes, and other techniques. Among the strategies that should be considered are the integration of residential with jobs - generating uses, use of alternative transportation modes, maximized walkability, use of recycled materials, capture and re -use of storm water on -site, water conserving fixtures and landscapes, and architectural elements that reduce heat gain and loss. (Imp 3.1, 4.1, 12.2, 21.12, 23.1, 25.1 -27.1) Newport Center LU_ Development Agreements Require the execution of Development Agreements for residential and mixed use development projects that use the 450 units identified in Figure LU 21. Development Agreements shall define the improvements and benefits to be contributed by the developer in exchange for the Cityrs commitment for the number, density, and location of the housing units. LU Conversion of Hotel Rooms Consider the conversion of hotel entitlement to residential entitlement when it is demonstrated that no additional vehicle trips will result from the conversion. Hotel rooms existing at the time of adoption of this plan may not be converted to residential use. 19 ♦ � R k e�P!'W".W F f L .. . 'pe f �EEiZP N ♦;h� °,k N>�� ...' / 4@ ^E f � f 1 1 A i 3 war. ♦a f ♦ < ♦ !C ♦ 4! 2! ♦ so t °s a � ♦♦ T r Y ♦ as r A r. °. OPPORTUNITYSITES � PROPOSED OPEN SPACES V IMPROVED RESIDENTIAL STREETS ., BRISTOL STREET NORTH PRO POSED RESIDENTIAL STREETS .. ... ,: i Milli PROPOSED PEDESTRIAN WAYS S i ',(,�j x ':: � >.�:♦ I . �!� *>'� "�' ��' 65CNEL NOISE CONTOUR COMPREHENSIVE PLAN REQUIRED URBAN DESIGN FRAMEWORK Newport Beach Airport Business Area Pr?arrd for shr Cary 4 Aregm &"b 6y AOMA Dar CraNP JUNE 12. 200E General Plan Zoning Dwelling Unit Site DesghcrHon Designation Capacity* Density (dulacre) Vacant Banning (Newport) RV and OS PC 1,375 development plan Ranch" Infillifted Use 2,200 units with 1,650 as replacement of existing office. retail and/or industrial uses at a maximum density of 50 Airport Area MU -621-12 PC and APF 33002 200 units per adjusted net acre and 550 units as infill on surface parking lots..50-d6lacre-(Wo- ase) 30 du/aGre (subsequent phase) Newport MU -61-13 (RH- PC, MFR, 688450 Up to 450 multi- family units Center 9) APF M Newpe 4W-A nec„ , P_APP, 4.,000 26.9 to 40 dulacfe-knet-ar� Mesa GE4F 20 .1 te 264 .+ l@GFe (ne Mariner's MU G! and ■ MU -W -1: Mixed -Use FAR: 1.25 Mile SP 3400 and MU-HI Multi - Family Residential: 12 dulacre and MU-HI r MU -H -1: Mixed Use: FAR 1.5 Multi- Family Residential: 22.1 -26.7 dulacre Balboa Peninsula Area 4;0004;300500.700 "°"" "y Village MU -H64 SPIRSC -MM MU -Hl32 = Mixed Use Horizontal 2132 ■ Mixed Use: FAR 1.5 MU+I93 = Mixed Use Horizontal 93 MU W3= Mixed Use Water 3 MU -H4: = Mixed Use Horizontal 4 HDR = High Density Residential ■ Multi- Family 20.1 to 26.7 du/acre MU -V62 = Mixed Use4 Vertical 2 MU -G2-W3 and Lido Village MU- RSC Mixed Use: FAR 1.5 and 18 du /acr FAO, '.FAO A2TFR/HDR Balboa MU -A2V2 SP Mixed Use: FAR 1.512 ,-4—.a o °ten Village McFadden MG42MU -W2 SP Mixed Use: FAR: 444G- 2,01.25 Square Old NewpeR s4e SR F 4 R 1 5 to P O BGutevard ' 925- Total 5_,O25T675- SOURCE: City of Newport Beach Planning Department and General Plan MU4 -H1 = Mixed Use &IHorizontal t RH4MU_W1 =Mixed Use 1iigh- Deng ity-ResideatWWater t MU -Hl32 = Mixed Use Horizontal 2132 WAMU W2= =High Density Residentim Mixed Use Water 2 MU+I93 = Mixed Use Horizontal 93 MU W3= Mixed Use Water 3 MU -H4: = Mixed Use Horizontal 4 HDR = High Density Residential RV = Residential Village MU -V62 = Mixed Use4 Vertical 2 /, PC = Planned Community TRF= Two Family Reside ntialMV=G3 � SP = Specific Plan RSC- MM= Recreational Marine Commercial, Manners Mile Overlay APF = Administrative, Professional, Financial MFR = Multi- Family Residential APF = Administrative, Professional, Financial r e r institutional OS = Open Space Above existing uses " Due to the high proportion of sensitive habitat areas, the actual number of buildable acreage will be determined in subsequent studies to be conducted in accordance with state and federal regulations. 18 CITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT Agenda Item No. 3 March 9, 2006 TO: CHAIRMAN AND MEMBERS OF THE PLANNING COMMISSION FROM: Sharon Wood, Assistant City Manager 949 - 644 -3222, swood @city.newport- beach.ca.us SUBJECT: Housing Element Affordable Housing Requirements RECOMMENDATION: Provide direction to staff for further drafting of the General Plan Housing Element. DISCUSSION: When the Planning Commission reviewed the draft Housing Element at their study session of January 31, 2006, there were a number of questions regarding the existing Housing Element policy that requires residential developers to make an average of 20% of new housing units affordable to low- and moderate - income households. The Commission requested additional information on the policies that other California cities use to meet the requirements of State housing element law. Attached are two reports prepared by EIP Associates, one dealing with inclusionary housing and the other with commercial development linkage fees. The Commission also requested that staff estimate Newport Beach's Regional Housing Needs Assessment (RHNA) goals over the 25 -year planning horizon of the General Plan Land Use Element, and relate that to a percent of the new residential units included in the draft Land Use Element. The Commission should understand that this is a very speculative exercise, since the method for RHNA calculation is not well understood. The basic assumption for this analysis is that Newport Beach's future RHNA goals will remain the same as for the 2000 -2005 planning period. That number'is 476 units for Newport Beach prior to annexation of Newport coast. Because the current number for Newport Coast was not calculated in the usual manner, but rather negotiated between the City and County at the time of annexation, I have used two different assumptions for Newport Coast, the full number of 945 units and half of that, 473 units. Another basic assumption is that the income distribution of Newport Beach's future RHNA goals will remain similar to the 2000 -2005 planning period. For the City prior to annexation, 46% of the housing need was for very low -, low- and moderate - income households. For Newport Coast, only a low- income amount of 10% was shown (again, an amount negotiated with the County). For this analysis, I have assumed that 40% of long -term need is for very low -, low- and moderate - income households. 17 Housing Element Affordable Requirements March 9, 2006 , Page 2 The total number of new units that could be developed pursuant to the draft Land Use Element, as analyzed in the environmental impact report (EIR) is 15,000. To achieve the 25- year affordable goals noted above would require that 13% to 19% of total new units be affordable. However, the EIR analyzes the worst case scenario, and staff does not believe it is realistic to assume that all 15,000. units will be developed, even if they are included in the Land Use Element that is approved by the City Council and the voters. We know that the EIR includes more development potential than is likely to be approved because it includes maintaining R -2 zoning in West Newport and on Balboa Island, the potential for all original lots on Lido Isle to be developed, and 4,300 units in the Airport Area, when the City Council has already indicated a desire to reduce that number to 3,300. In addition, even if R -2 zoning is maintained on the Balboa Peninsula and in Corona del Mar, the actual development trend in these areas is for single - family housing. To reflect a more realistic scenario, I also calculated the percent of affordable units needed based on the likely number of new residential units, listed below. On this basis, 26% to 39% of new units would need to be affordable to achieve the estimated RHNA goals for very-low, low- and moderate - income households. Airport Area Coast # 1 Newport Coast # 2 5 -Year RHNA Goal - City _Newport 476 476 5 -Year RHNA Goal — Coast 945 473 Total 5 -Year RHNA Goal 1,421 949 Total 1 -Year RHNA Goal 284 190 x25 x25 Total 25 -Year RHNA Goal 7,105 4,750 Affordable Percent x.40 x._40 25 -Year Affordable Goal 2,842 1,900 The total number of new units that could be developed pursuant to the draft Land Use Element, as analyzed in the environmental impact report (EIR) is 15,000. To achieve the 25- year affordable goals noted above would require that 13% to 19% of total new units be affordable. However, the EIR analyzes the worst case scenario, and staff does not believe it is realistic to assume that all 15,000. units will be developed, even if they are included in the Land Use Element that is approved by the City Council and the voters. We know that the EIR includes more development potential than is likely to be approved because it includes maintaining R -2 zoning in West Newport and on Balboa Island, the potential for all original lots on Lido Isle to be developed, and 4,300 units in the Airport Area, when the City Council has already indicated a desire to reduce that number to 3,300. In addition, even if R -2 zoning is maintained on the Balboa Peninsula and in Corona del Mar, the actual development trend in these areas is for single - family housing. To reflect a more realistic scenario, I also calculated the percent of affordable units needed based on the likely number of new residential units, listed below. On this basis, 26% to 39% of new units would need to be affordable to achieve the estimated RHNA goals for very-low, low- and moderate - income households. Airport Area 3,300 Banning Ranch 1,375 Mariners' Mile 454 Newport Center 600 Newport Coast 400 West Newport Mesa 1.000 Total Likely Units 7,129 Submitted by: C./ S aron Wood Assistant City Manager Attachments: Inclusionary Housing in California Key Findings from the Survey of Commercial Development Linkage fee Programs Z6 DRAFT ORDINANCE NO. 2006- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, ADDING CHAPTER 20.68 TO THE NEWPORT BEACH MUNICIPAL CODE PERTAINING TO INCLUSIONARY HOUSING REGULATIONS AND AMENDING SECTION 20.03.030 PERTAINING TO DEFINITIONS OF THE NEWPORT BEACH MUNICIPAL CODE WHEREAS, the City of Newport Beach ( "City ") is a Charter City, governed by a charter adopted by the citizens of the City; and WHEREAS, it is a public purpose of the City and a policy of the State to achieve a diverse and balanced community with housing available for households of all income levels; and WHEREAS, economic diversity fosters social and environmental conditions that protect and enhance the social fabric of the City and are beneficial to the health, safety and welfare of its residents; and WHEREAS, the lack of affordable housing has a direct impact upon the health, safety and welfare of the residents of the City; and WHEREAS, State law pertaining to general plans and the Housing Element of the City General Plan require that City ordinances regulate land use development and that the City and its agencies otherwise use their authority in a manner that provides an adequate supply of housing for all economic segments of the community; and WHEREAS, the City is experiencing an increasing shortage of housing affordable to very low -, low- and moderate - income households and will not be able to fully contribute to the attainment of the State housing goals or to retain a healthy environment without additional affordable housing; and WHEREAS, new residential development does not provide housing opportunities for very low -, low- and moderate - income households due to the high cost of land in the City; and WHEREAS, as a result, very low -, low, and moderate - income households are de facto excluded from many new neighborhoods, creating economic stratification in the City detrimental to the public health, safety and welfare; and 21 WHEREAS, an increasing number of persons in very low -, low, and moderate - income households live in overcrowded or substandard housing and devote an overly large percentage of their income to pay for housing; and WHEREAS, the amount of land in the City available for residential development is limited; and WHEREAS, the consumption of this remaining land for residential development without providing affordable housing to persons of all income levels would work counter to housing, environmental and planning policies and have a substantial negative impact on the environment and economic climate because (i) housing will have to be built elsewhere, far from employment centers and therefore, commutes will increase, causing increased traffic and transit demand and consequent noise and air pollution; and (ii) City businesses will find it more difficult to attract and retain the workers they need; and WHEREAS, new residential development in the City which does not provide for affordable units aggravates the existing shortage of affordable housing by absorbing the supply of available residential land, reducing the supply of land for affordable housing and increasing the price of the remaining residential land; and WHEREAS, at the same time, new residential development contributes to the demand for goods and services in the City, increasing local service employment at wage levels which often do not permit employees to afford housing in the City; and WHEREAS, Federal and State funds for the construction of new affordable housing are insufficient to fully address the problem of affordable housing within the City; and WHEREAS, the private housing market has failed to provide adequate housing opportunities for very low -, low -, and moderate- income households; and WHEREAS, on March 14, 2000 the City Council established an Affordable Housing Task Force that was charged with recommending an appropriate affordable housing program; and WHEREAS, the Affordable Housing Task Force conducted an investigation, held hearings and solicited comments from the community regarding a range of options; and WHEREAS, on the Affordable Housing Task Force recommended this ordinance to the Planning Commission; and 2Z WHEREAS, on the Planning Commission held a public hearing on this ordinance and recommended this ordinance to the City Council for adoption; and WHEREAS, the City is aware that there may be times when the inclusionary housing requirements make market -rate housing more expensive; and WHEREAS, in weighing all the factors, including the significant need for affordable housing, the City Council has made the decision that community's interests are best served by the adoption of inclusionary housing regulations; and WHEREAS, to implement the City General Plan, to carry out the policies of the State and federal law and policy, and to ensure the benefits of economic diversity of the residents of the City, it is essential that new residential development in the remaining new growth areas of the City contain housing opportunities to households of very low -, low- and moderate - income, and that the City provide a regulatory framework which ensures development of an adequate supply and mix of new housing to meet the future housing needs of all income segments of the community; and WHEREAS, the City Council finds that it is necessary to adopt an inclusionary housing ordinance to address the City's housing crises. NOW THEREFORE, the City Council of the City of Newport Beach, California, hereby ordains as follows: SECTION 1: Chapter 20.68 of the Newport Beach Municipal Code is hereby added to read as follows: CHAPTER 20.68 INCLUSIONARY HOUSING REGULATIONS Sections: 20.68.010 Purpose 20.68.020 Inclusionary Housing Regulations 20.68.030 Credit Transfers 20.68.040 In -Lieu Fees 20.68.050 Alternatives 20.68.060 Exemptions 20.68.070 Adjustments, Waivers 20.68.080 Compliance Procedures 20.68.090 Eligibility for Affordable Units 20.68.100 Affordable Unit Credits 2J 20.68.110 Affordable Housing Trust Fund 20.68.120 Enforcement 20.68.130 Appeals 20.68.010 Purpose The purpose of this Chapter is to: A. Provide a balanced residential community comprised of a variety of housing types, designs, and opportunities for all social and economic segments, including very low -, low -, and moderate - income households. B. Promote the City's goal to add affordable housing units to the City's housing stock in proportion to the overall increase in new housing units. C. Offset the demand on housing that is created by residential development and mitigate environmental and other impacts that accompany residential development by protecting the economic diversity of the City's housing stock, reducing traffic, transit and related air quality impacts, promoting jobs /housing balance and reducing the demands placed on transportation infrastructure in the region. D. Ensure that the limited remaining developable land in the City's planning area is utilized in a manner consistent with the City's housing policies and needs. 20.68.020 Inclusionary Housing Regulations A. Affordability Requirement. Unless otherwise provided in this Chapter, all new residential development projects of eleven or more dwelling units, designed and intended for permanent occupancy, shall construct the following percentage of the total number of dwelling units within the residential development project as affordable units restricted for occupancy by very low -, low- or moderate - income households: (1) 11.5 percent very low- income households; (2) 20 percent low- income households; or (3) 30 percent moderate - income households. The number of affordable units required for a particular residential development project will be determined only once, at the time of tentative or parcel map approval, or for developments not processing a tentative or parcel map, prior to issuance of a building permit, regardless of the changes in the character or ownership of the residential development, provided the total number of units does not change. If 2y a change in the residential development project design results in a change in the total number of units, the number of affordable units required will be recalculated to coincide with the final approved residential development project. B. Calculation. In determining the number of whole affordable units required, any decimal fraction less than 0.50 shall be rounded down to the nearest whole number, and any decimal fraction greater than or equal to 0.50 shall be rounded up to the next whole number. For purposes of calculating the number of affordable units required by this Section, any additional units authorized as a density bonus under California Government Code Section 65915(b) (1) or (2) will not be counted in determining the required number of affordable units. C. Design and Distribution of Affordable Units. All affordable units shall reflect the range of numbers of bedrooms provided in the residential development project as a whole and shall be comparable in infrastructure (including sewer, water, and other utilities), construction quality and exterior design to the market -rate units. The affordable units may be smaller in aggregate size and have different interior finishes and features than the market -rate units in the residential development project so long as the interior features are durable, of good quality and are consistent with contemporary standards for new housing. The affordable units shall be dispersed throughout the residential development, unless clustering is expressly authorized by the City. D. Tenure of Affordable Units. For all affordable units provided pursuant to this Section, the applicant shall have the option of selling the affordable units at an affordable housing price or renting the affordable units at an affordable rent subject to the terms and conditions imposed on the residential development project and the provisions contained in the Affordable Housing Agreement. E. Timing. All affordable units shall be constructed and offered for occupancy concurrently with or prior to the construction and marketing of the market -rate units. In phased residential development projects, affordable units may be constructed and marketed in proportion to the number of market -rate units constructed and marketed in each phase of the residential development project. If the Planning Commission determines that extenuating circumstances exist and that the concurrent construction of affordable units is infeasible or impractical, the Planning Commission may waive the requirements of this Subsection or impose reasonable conditions to effectuate the intent 2,3 of this Subsection. F. Duration of Affordability Requirement. Affordable units required by this Chapter shall be legally restricted to occupancy by households of the income levels for which the affordable units were designated for a minimum of 30 years. G. Conditions of Approval. Any tentative map, parcel map, use permit, site plan review, coastal residential development permit, or other discretionary permit approving a residential development project subject to this Chapter shall contain conditions sufficient to ensure compliance with the provisions of this Chapter, including the execution of an Affordable Housing Agreement imposing, among other things, appropriate resale controls and/or rental restrictions on the affordable units. 20.68.030 Credit Transfers An applicant may fully or partially satisfy the requirements of Section 20.68.020 through the use of transferable affordable unit credits created pursuant to Section 20.68.100. Credit certificates shall only be used to satisfy the requirements for affordable units of the income category (i.e., very low -, low -, or moderate - income) and number of bedrooms for which the affordable unit credits are issued. 20.68.040 In -Lieu Fees A. General Requirements. For residential development projects of 11 to 50 dwelling units, the requirements of this Chapter may be satisfied by paying a fee in -lieu of constructing all or a portion of the affordable units required by this Chapter. 2. For residential development of 50 or more dwelling units, the applicant may not pay a fee in -lieu of constructing the required affordable units. B. Timing of Payment. For residential development projects that are not phased residential development projects, the in -lieu fee shall be paid at the time of issuance of any building permit for the residential development project. For phased residential development projects, payment of the in -lieu fee shall be made for each portion of the residential development project at the time any building permit is issued for that phase of the residential development project. When payment is phased, the amount of the in -lieu fee payable under this Section shall be based upon the in -lieu fee schedule in effect at the time the in -lieu fee is paid. 24 C. Amount of Fee. The amount of the in -lieu fee shall be set by resolution of the City Council and the amount of the in -lieu fee may be amended from time to time to reflect changes in residential construction costs and other conditions in the City and the region. D. Partial Payment. Developers electing to provide a portion of the affordable units required by Section 20.68.020 within the residential development project, may pay an in -lieu fee for the remainder of the required affordable units that are not provided. The in -lieu fee shall be paid at the time of issuance of any building permit for the residential development project. 20.68.050 Alternatives A. Proposal. An applicant may propose one of the following alternative means of compliance with Section 20.68.020 by submitting an application for discretionary approval in accordance with Chapter 20.90 and this Section. B. Off -Site Construction Projects. An applicant may propose to construct some or all of the affordable units required by Section 20.68.020 at a location not physically within the residential development project in -lieu of constructing some or all of the affordable units within the residential development project. The Planning Commission shall approve or conditionally approve the proposal on the basis of the application, plans, materials, and testimony submitted if the Planning Commission finds: That the purpose of this Chapter would be served by implementation of the proposed alternative. That construction of the off -site units in -lieu of constructing on -site units is consistent with the Chapter's purpose. That the off -site units to be constructed are located within the City of Newport Beach and are consistent with the requirements of Section 20.68.020. 4. That it would be infeasible or impractical to construct on -site units. C. Off -Site Rehabilitation Projects. An applicant may propose to rehabilitate existing off -site units and convert the off -site units to affordable units in -lieu of constructing some or all of the affordable units required to be provided under Section 20.68.020 within the Z residential development project. The Planning Commission shall approve or conditionally approve the proposal on the basis of the application, plans, materials, and testimony submitted if the Planning Commission finds: 1. That the purpose of this Chapter would be served by implementation of the proposed alternative. 2. That rehabilitation of the proposed dwelling units in -lieu of constructing units on -site is consistent with this Chapter's purpose. 3. That the proposed dwelling units to be rehabilitated off -site are located within the City of Newport Beach and are consistent with the requirements of Section 20.68.020. 4. The proposed dwelling units to be rehabilitated off -site are in need of substantial rehabilitation. 5. That the proposed dwelling units to be rehabilitated off -site are not already subject to affordability income restrictions. 6. That it would be infeasible or impractical to construct the on- site dwelling units. 7. That the off -site dwelling units will be substantially rehabilitated, such that the unit is returned to the City's housing supply as decent, safe and sanitary housing and meet all applicable housing and building code requirements. D. Land Dedication. An applicant may propose to dedicate land to the City or City- designated local non - profit housing developer in -lieu of construction of some or all of the affordable units required by Section 20.68.020. The Planning Commission shall recommend and the City Council shall approve or conditionally approve this proposal if the City Council finds all of the following: 1. That the purpose of this Chapter would be served by implementation of the proposed alternative. 2. That dedication of land in -lieu of constructing units is consistent with this Chapter's purpose. 3. That the dedicated land is useable for its intended purpose and has the appropriate general plan and zoning designation for the development of affordable housing, is free of toxic 26 substances and contaminated soils, and is or will be fully improved with infrastructure and adjacent utilities. 4. That the conditions of approval for the residential development project are adequate to ensure that title to the dedicated land, or lease /rights useful for the life of the housing improvements, shall be conveyed to the City or City - designated local non - profit housing developer before a building permit is issued for all or any portion of the residential development project. 5. That all property taxes and special taxes be current before the title is conveyed to the City or City- designated local non- profit housing developer. 6. That the proposed land dedication meets the following requirements: a. The dedication includes land sufficient to construct, at a minimum, the number of affordable units that the applicant would otherwise be required to construct by Section 20.68.020; and b. The proposed land dedication has an equivalent or greater value than the in -lieu fee that would be required to be paid under Section 20.68.040 if applied to the overall project. The value of the proposed land dedication shall be appraised by a certified appraiser selected by the City. The applicant shall pay for all costs and expenses associated with the appraisal. At the time the applicant submits the application provided for in this Section, the applicant shall deposit the estimated cost and expense for the appraisal as determined by the Planning Director. After the appraisal is prepared, the Planning Director shall provide the applicant with a Notice of Decision regarding the value of the proposed land dedication and a copy of the appraisal. If the applicant disputes the decision of the Planning Director, the applicant shall file an appeal in accordance with Chapter 20.95. At the hearing on appeal, the appellate body shall consider any material provided by the applicant regarding the value of the proposed land dedication. 20.68.060 Exemptions A. Natural Disasters. The requirements of this Chapter do not apply to the reconstruction of any structure that has been destroyed by fire, flood, earthquake or other act of nature provided that the reconstruction of the site does not increase the number of residential units. B. Other Governmental Entities. The requirements of this Chapter do not apply to housing constructed by other governmental agencies. 20.68.070 Adjustments, Waivers The City Council, at its discretion, may waive, wholly or partially, the requirements of this Chapter and approve alternative methods of compliance with this Chapter if the applicant demonstrates, and the City Council finds that either: A. There is no reasonable relationship between the impact of a proposed development and the requirements of this Chapter; and applying the requirement of this Chapter would take property in violation of the United States or California Constitutions; or B. There are special circumstances unique to the residential development that justify the granting of an adjustment or waiver; the residential development would not be feasible without the modifications; a specific and financial hardship would occur if the modification was not granted; and no alternative means of compliance are available which would be effective in attaining the purpose of this Chapter than the relief requested. 20.68.080 Compliance Procedures A. General. Except as provided herein, entry into an Affordable Housing Agreement, in a form approved by the City Attorney, is a condition of any tentative map, parcel map or building permit for any residential development for which this Chapter applies. This Section does not apply to exempt residential development projects or to residential development projects where the requirements of this Chapter are fully satisfied by payment of an in -lieu fee under Section 20.68.040 or land dedication as provided under Section 20.68.050(D). B. Affordable Housing Agreement. The form of the Affordable Housing Agreement will vary depending on the manner in which the provisions of this Chapter are satisfied for a particular residential development. All Affordable Housing Agreements should include, at )D a minimum, the following: A description of the residential development project, how the requirements of this Chapter will be met by the applicant, and whether the affordable units will be rented or owner - occupied; 2. The number, size and location of each very low -, low- or moderate - income units; 3. Inclusionary incentives by the City (if any), including the nature and amount of any local public funding; 4. Provisions and /or documents for resale restrictions, deeds of trust, rights of first refusal or rental restrictions; 5. Provisions for monitoring the ongoing affordability of the units, and the process for qualifying prospective households for income eligibility; 6. Security provisions, such as a cash deposit, bond, or letter of credit, adequate to complete the requirements of this Chapter concurrently with the completion of the construction of the residential development project consistent with Section 20.68.020(E); and C. Recording of Agreement. All Affordable Housing Agreements that are acceptable to the City Attorney must be recorded against the owner - occupied affordable units and the projects containing rental affordable units. Additional rental or resale restrictions, deeds of trust, rights of first refusal and /or other documents acceptable to the City Attorney must also be recorded against owner - occupied affordable units. In cases where the requirements of this Chapter are satisfied through the development of off -site units or off -site rehabilitated units, the Affordable Housing Agreement must simultaneously be recorded against the property where the off -site units are located and off -site rehabilitated units are located. 20.68.090 Eligibility for Affordable Units No household shall be permitted to occupy an affordable unit designated for a very low -, low -, or moderate - income household unless the City or its designee determines that the household is eligible to occupy the applicable affordable unit based on the household income, as determined in accordance with Title 25 of the California Code of Regulations Sections 6910 through 6932. The developer shall use an equitable selection method established in conformance with the terms of 3/ this Chapter, which shall be neutral as to age, race, religion, sex, creed and ethnic origin or any other impermissible standard established by the United States or State of California Constitution. Additionally, the selection criteria may not distinguish between adults and children, except as provided in Federal and State law for units designated for senior citizens. 20.68.100 Affordable Unit Credits A. Creation. One affordable unit credit shall be issued for each affordable unit constructed in excess of the number of affordable units required to be constructed for the project by Section 20.68.020(A). Affordable unit credits shall be issued by the Planning Director and shall designate a specific income category (i.e., very low -, low -, or moderate - income) and number of bedrooms for which they are issued. B. Ownership and Use of Credits. Affordable unit credits are issued to and become the possession of the project owner, who may then use them to satisfy the requirements of this Chapter for another residential development project in the City. If a project owner proposes to sell credit certificates, the parties shall first notify the Planning Director, who will document the transfer. 20.68.110 Affordable Housing Trust Fund A. Trust Fund. There is hereby established a separate Affordable Housing Trust Fund ( "Fund "). The Fund shall receive all in -lieu fees contributed under Sections 20.68.040 and may also receive monies from other sources. B. Purpose and Limitations. All monies deposited in the Fund, together with any interest earnings on such monies, less reasonable administrative charges or related expenses associated with the administration of this Section including, but not limited to, reasonable consultant and legal expenses related to the establishment and /or administration of the Fund and reasonable expenses for administering the process of calculating, collecting, and accounting for fees, shall be used or committed solely to increase the supply of housing affordable to very low -, low -, and moderate - income households. C. Expenditures. Fund monies shall be used in accordance with City's Housing Element to construct, rehabilitate or subsidize affordable housing or assist other governmental entities, private organizations or individuals to do so. Permissible uses of Fund monies include, but are not limited to: (1) assistance to housing development 3Z corporations; (2) equity participation loans; (3) grants; (4) pre -home ownership co- investment; (5) pre - development loan funds; (6) participation leases; (7) other public - private partnership arrangements; (8) the acquisition of property and property rights; and (9) construction of affordable housing including costs associated with planning, administration, and design, as well as actual building or installation, as well as any other costs associated with the construction or financing of affordable housing. The Fund may be used for the benefit of both rental and owner - occupied housing. 20.68.120 Enforcement A. Penalty for Violation of Terms. It shall be unlawful for any person, firm, corporation, partnership or other entity to violate any provisions of this Chapter. A violation of any of the provisions of this Chapter or failing to comply with any of the requirements of this Chapter shall constitute a misdemeanor; except that notwithstanding any other provisions of this Chapter, any such violation constituting a misdemeanor under this Chapter, may in the discretion of the enforcing authority, be charged and prosecuted as an infraction. B. Legal Action. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this Chapter including, but not limited to: (1) actions to revoke, deny or suspend any permit, including a building permit, certificate of occupancy, or discretionary approval; (2) actions to recover from any violator of this Chapter civil fines, restitution to prevent unjust enrichment from a violation of this Chapter, and/or enforcement costs, including attorneys fees; (3) actions to recover on behalf of the tenant, or to the City in the event the tenant cannot be located, any excess rents charged and /or enforcement costs, including attorneys fees; (4) eviction or foreclosure; and (5) any other appropriate action for injunctive relief or damages. Failure of any official or agency to fulfill the requirements of this Chapter shall not excuse any person, owner, household or other party from the requirements of this Chapter. C. Remedies Cumulative. The remedies provided for herein shall be cumulative and not exclusive and shall not preclude the City from any other remedy or relief to which it otherwise would be entitled under law or equity. 33 20.68.130 Appeals A. Appeals. Decisions of the Planning Director may be appealed to the Planning Commission and decisions of the Planning Commission may be appealed to the City Council. B. Procedures. Procedures for appeals shall be as prescribed by Newport Beach Municipal Code Chapter 20.95: Appeals. SECTION 2: The following definitions are hereby added to Section 20.03.030 of Title 20 of the Newport Beach Municipal Code to read as follows: "Affordable Housing Agreement" means the agreement entered into pursuant to Chapter 20.68 which provides legal restrictions by which the affordable units shall be restricted to ensure that the unit remains affordable to very low -, low -, and moderate - income households, as applicable, for a period of not less than 30 years. With respect to rental units, such rent restrictions shall be in the form of a regulatory agreement recorded against the applicable property. With respect to owner - occupied units, such resale controls shall be in the form of resale restrictions, deeds of trust, and /or other similar documents recorded against the applicable property. "Affordable Housing Price" means a sales price that is no more than 3 times the maximum income level for very low -, low -, and moderate - income households, as adjusted for household size by the United States Department of Housing and Community Development. [Is this correct?] "Affordable Rent" means an annual rent that does not exceed 30 percent of maximum income level for very low -, low -, and moderate - income households, as adjusted for household size by the United States Department of Housing and Community Development. [Is this correct ?] "Affordable Unit" means an ownership or rental- housing unit, including senior housing, affordable to households with very low -, low -, and moderate - incomes as defined in this Chapter. "Conversion" means a change of a dwelling unit to a condominium, cooperative, or a similar form of ownership; or a nonresidential use. "Low- income" means between 50% and 80% of the median income, adjusted for actual household size, as determined by the California Department of Housing and Community Development for Orange County. "Moderate- income" means between 80% and 120% of the median income, adjusted for actual household size, as determined by the California Department of Housing and Community Development for Orange County. 3y "Residential Development" means detached single - family dwellings, multiple dwelling structures, groups of dwellings, condominium or townhouse developments, cooperative developments, mixed use developments that include housing units, and residential land subdivisions intended to be sold to the general public. [is this term consistent with its use in other parts of the code?] "Very low -, low -, and moderate - income" means those income and eligibility levels determined periodically by the California Department of Housing and Community Development based on Orange County median income levels adjusted for family size. Such levels shall be calculated on the basis of gross annual household income considering household size and number of dependents, income of all wage earners, elderly or disabled family members, and all other sources of household income and will be recertified as set forth by local standards, and State and Federal housing law. "Very low- income" means 50% or less of the median income, adjusted for actual household size, as determined by the California Department of Housing and Community Development for Orange County. SECTION 3: If any section, subsection, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional. SECTION 4: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the same to be published once in the official newspaper of the City, and it shall be effective thirty (30) days after its adoption. SECTIONS: This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the _ day of 2006, and adopted on the _ day of 2006, by the following vote, to wit: AYES, COUNCILMEMBERS NOES, COUNCILMEMBERS ABSENT COUNCILMEMBERS 2s M For Discussion Purposes 0n1v OSA Affordable Housing Concept May 24, 2006 [Note: This "Concept" is intended to serve as a bullet point list of deal points to be placed into a formal agreement or AHIP which will be included as an exhibit to the Development Agreement.] A. Definitions. 1. "Affordable Units" means residential units, whether attached or detached, for sale or for rent, which are affordable to Very Low Income Households, Low Income Households, or Moderate Income Households, as those terms are defined below. 2. "Housing Purchase Cost" means the total payments for a single month for principal and interest on a mortgage loan and any associated mortgage loan insurance costs, property taxes and assessments, fire and casualty insurance covering the replacement value of property improvements, and a reasonable allowance for utilities, and homeowner association fees. 3. "Housing Rental Cost' means the total payments for a single month for rent (other than security deposits), plus a reasonable allowance for utilities. 4. "Low Income Household" means a household whose annual income is greater than fifty percent (50 %) but do not exceed eighty percent (80 %) of the median family income for the area, as published by the California Department of Housing and Community Development, adjusted for family size. 5. "Moderate Income Household" means a household whose annual income is greater than eighty percent (80 %) but does not exceed one hundred twenty percent (120 %) of the median family income for the area, as published by the California Department of Housing and Community Development, adjusted for family size. 6. "Offsite" means outside of the boundaries of the entire Opportunities Study Area. 7. "Project' refers to the development of each of the six individual project areas defined in the Opportunities Study Area General Plan Amendment. Thus, there are six "Projects" and this policy shall be applied individually to each Project, rather than to the OSA as a whole or all six Projects collectively. 8. "Second Unit" refers to an "accessory living quarters /second unit "as those terms are used in Section 9.180.050 of the City's Municipal Code and which meets the standards of Section 9.180.050(D). 1- NM For Discussion Purposes Only 9. "Very Low Income Households" means a household whose annual income does not exceed fifty percent (50 %) of the median family income for the area, as published by the California Department of Housing and Community Development, adjusted for family size. B. "Planning Principles" for Affordable Housing. 1. The developer of each Project will provide or facilitate the production of Affordable Units in conjunction with the development of its Project. Participation will be based on the "Point System" set forth in Section C below. 2. The types and locations of Affordable Units in all income categories may include, among other variations, onsite and offsite units (subject to Paragraph C3(b) below), for -sale and :rental units, attached and detached units, and units of varying size and bedroom counts. Consistent with City policy as set forth in Section 5 of the Housing Plan of the City's Housing Element (entitled "Expedited Project Review "), the City shall: (a) Prioritize the review and approval of all development applications for all aspects of the Project (including, but not limited to, those for area plans, subdivision maps, site development permits, grading permits, and building permits); and (b) Retain an independent contracting firm to expedite the processing of all such development applications, upon the developer's agreement to pay the full cost of such retention. 4. The developer, at its sole discretion, may satisfy the "point" requirement of this policy through the provision of either rental or for sale housing. 5. To maintain the affordability of "for sale" Affordable Units for a period of thirty (30) years after their original sale, an Affordable Housing Covenant, in the form approved by the City as part of each Project's development agreement, shall be recorded against each Affordable Unit at the time that the developer records its grant deed to the original home purchaser. An affordability covenant shall not be required for Affordable Units sold to Moderate Income Households if the developer declines to receive the additional one (1.0) point credit for a moderate for sale unit as provided in Paragraph C4 below. 6. The provisions of this policy pertaining to the recording of affordability covenants shall apply to pre - existing rental units converted to "for sale" units which are treated under the Point System below as "for sale" units. -2- Ir R For Discussion Purposes Dnly C. The Point System. 1. Required Points. The number of Affordable Units to be provided will be based upon a "Point System." The number of required "points" will be equal to 15% of the total number of market rate units approved and built within a Project. For example, if 2,815 units are built within a Project, then a total of 422 "points" will be required. 2. Offsite Affordable Units. Offisite Affordable Units will be provided points only if they are affordable to Very Low and Low Income Households. 3. Base Points. Subject to Paragraph C2 above and to an increase for "Additional Points" as described below: (a) One Base Point (1.0) shall be awarded for each home sold or rented to households within any affordable income category (moderate, low, and very low), constructed onsite, and (b) An additional one half Base Point (0.5) shall be awarded for each home sold or rented offsite to Low or Very Low Income Households. Thus, for example, an offsite Affordable Unit sold or rented to a Low Income Household shall receive one and one -half (1.5) Base Points. 4. Additional Points. Because of the City's interest in (1) providing certain amenities, (2) serving lower income categories, and (3) providing onsite Alfordable Units, points shall be awarded in addition to Base Points, as set forth below, for each Affordable Unit in any income category, whether onsite or offsite, which meets the following criteria: (a) To encourage units for families, additional points based upon bedroom counts shall be provided as follows, with points awarded for only one bedroom count category in this subparagraph (a) (for example, a four bedroom unit receives one (1.0) additional point, not 0.2 +0.7 +1.0): (i) 0.2 additional point for two - bedroom units (ii) 0.7 additional point for three - bedroom units. (iii)1.0 additional point for four- bedroom units. (b) In addition, to encourage development of Affordable Units in the Low and Very Low Income Household categories, one -half (0.5) additional point shall be provided for rental units affordable to Low Income Households and one -3- ay is For Discussion Purposes Only (1.0) additional point shall be provided for rental units affordable to Very Low Income Households. (c) In addition, to encourage the development of "for sale" Affordable Units, for each for -sale unit with an affordability deed restriction, the following points will be provided for thirty -year deed restrictions: (i) 3.0 additional points for very low income units (ii) 2.0 additional points for low income units (iii)1.0 additional point for moderate income units An additional point will be added for each additional ten (10) years beyond thirty (30) years than an Affordable Unit is deed restricted. 5. Other Considerations. (a) Points may be provided for any net increase in Affordable Units in the City through any combination of housing units which are affordable to Moderate, Low, or Very Low Income Households, including, but not limited to: (i) Apartments, including the conversion of existing market rate units to Affordable Units, provided that the Developer assumes all tenant relocation obligations created by law and in effect on the date of the Project's development agreement; (ii) For sale housing, including the conversion of off -site existing market rate rental or for sale units to Affordable Units with 30 -year affordability covenants recorded against them, provided that the Developer assumes all tenant relocation obligations created by law and in effect on the date of the Project's development agreement; (iii)The inclusion of Second Units on lots within the Project (all Second Units shall be deemed to be "Moderate" units). (b) All "points" are cumulative, with a single Affordable Unit receiving points for all criteria which it meets, except as expressly provided within this Concept. (c) An additional one (1.0) point shall be provided for a Second Unit. However, a Second Unit may have a cumulative total of no more than one and one -half (1.5) points in addition to any points allocated to the primary unit on the lot. No more than 25% of the total Affordable Units for a Project may receive Second Unit credit. 96 For Discussion Purposes Oniy (d) Moderate Income Affordable Units may account for no more than one -third (1(3) of the total number of "points" provided to a Project. (e) Subject to Paragraph B5 above, an on -site .for -sale unit sold to a Moderate Income Household need not be deed restricted (unless the unit is converted from existing market -rate housing). (f) In calculating points, fractions equaling one half (0.5) or greater shall be rounded to the next highest whole number. 6. Term of Affordability Restrictions. The affordability restrictions will commence with the first occupancy of the Affordable Unit by a Very Low, Low, or Moderate Income Household and will terminate in thirty (30) years, except when sources of funding dictate longer periods of affordability restriction. 7. Related Calculations. Calculations related to qualification shall include: (a) The Housing Rental Cost shall not be greater than: (i) For Moderate Income Households: 35% of 120% of the area median income adjusted for family size appropriate for the unit; (ii) For Low Income Households, 30% of 80% of the area median income adjusted for family size appropriate for the unit; (iii)For Very Low Income Households, 30% of 50% of the area median income adjusted for family size appropriate for the unit. (b) The Housing Purchase Cost shall not be greater than: (i) For Moderate Income Households: 35% of 120% of the area median income adjusted for family size appropriate for the unit; (ii) For Low Income Households, 30% of 80% of the area median income adjusted for family size appropriate for the unit; (iii)For Very Low Income Households, 30% of 50% of the area median income adjusted for family size appropriate for the unit. The provisions of California Health & Safety Code Sections 50052.5 or 50053 shall be used in determining Housing Rental Cost or Housing Purchase Cost where, and only where, the City provides housing assistance. -5- `/j r For Discussion Purposes Only (c) Household size shall be deemed to equal the number of bedrooms multiplied by two, plus one additional person. For example, a two bedroom dwelling unit could accommodate a 5- person household. (d) Unless private mortgage insurance is required by the mortgage lender, mortgage interest rate assumptions shall assume a fully amortized 30 -year fixed rate loan with no requirement for private mortgage insurance (due to the loan to value ratio based on the unrestricted home value). (e) Down payment on for -sale Affordable Units shall be assumed to be 5% of the Affordable Unit sales price, increased by any state of local flmding actually granted. 8. Updating of Pricing Estimates. Pricing estimates required by this policy may be updated to reflect then- current eligibility requirements at any time before the . Affordable Units are sold. 9. Payment of In -Lieu Fees. An affordable housing in -lieu fee may be paid by the developers of those Projects built upon Sites 5 and 6 in the OSA GPA. The affordable housing in -lieu fee shall be $12,000 per dwelling unit for each home within each Project. The fee is adjustable each year based on the latest California Consumer Price Index published by the State of California Department of Finance. 10. Phasing. Before or with the submittal of the first application for a Site Development Permit (an "SDP ") for a Project, the developer of that Project shall estimate the total number of market rate residential units which it anticipates to build on the Project site (the "Total Units "). This number may be revised, at the developer's discretion, upon the submittal of future SDPs to reflect increases or decreases in the Total Units proposed to be built. (a) With each application for an SDP, the developer shall provide an updated Affordable Housing Plan which shows the anticipated type (for -sale or rental), size, estimated price or rent, and location of each proposed Affordable Unit to be provided through the completion of the development contemplated by that SDP (an "SDP Cycle "). Additionally, the developer shall indicate the number of "points" that it shall earn upon the completion of the Affordable Units within that SDP Cycle. The Affordable Housing Plan may be revised during the course of the SDP Cycle to reflect updated assumptions. (b) Building permits must be issued for Affordable Units which will generate one -fourth (25 %) of the total required affordable housing "points" before the issuance of building permits beyond 60 %+ 1 of the then current anticipated number of Total Units. rem i For Discussion Purposes Only (c) Building permits must be issued for Affordable Units which will generate an additional one -fourth (for a total of 50 %) of the total required affordable housing "points" before the issuance of building permits beyond 70 %+ 1 of the then current anticipated number of Total Units. (d) Building permits must be issued for Affordable Units which will generate an additional one - fourth (for a total of 75 %) of the total required affordable housing "points" before the issuance of building permits beyond 80% + 1 of the then current anticipated number of Total Units. (e) Building permits must be issued for Affordable Units which will generate an additional one - fourth (for a total of 100 %) of the total required affordable housing "points" before the issuance of building permits beyond 97 %+ 1 of the then current anticipated number of Total Units. 70034731.6 -7- 93