CIC Resolution 04-127COMMUNITY IMPROVEMENT COMMISSION
RESOLUTION NO. 0 4 —12 7
ESTABLISHING AN INCLUSIONARY HOUSING POLICY FOR THE
BUSINESS AND WATERFRONT AND
WEST END COMMUNITY IMPROVEMENT PROJECTS
WHEREAS, California and the City of Alameda face a serious housing problem that
threatens their economic security. Persons of very low -, low- and moderate - income are
experiencing increasing difficulty in locating and maintaining adequate, safe and sanitary
affordable housing. Lack of access to affordable housing has a direct impact upon the health,
safety and welfare of the residents of Alameda. Alameda will not be able to contribute to the
attainment of State housing goals or to retain a healthy environment without additional
affordable housing. As noted in the City's Housing Element, a regional shortage of affordable
housing is contributing to overpayment for housing accommodations, sometimes leading to
temporary or permanent homelessness; and
WHEREAS, a lack of new Inclusionary Units will 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. Inclusionary housing policies contribute to a
healthy job and housing balance by providing more affordable housing close to employment
centers; and
WHEREAS, development of new market -rate housing encourages new residents to move
to the City. These new residents will place demands on services provided by both public and
private sectors. Some of the public and private sector employees needed to meet the needs of the
new residents earn incomes only adequate to pay for affordable housing. Employees who are
unable to find affordable housing in the City will be forced to commute long distances. This
situation adversely impacts on their quality of life, consumes limited energy resources, increases
traffic congestion and has a negative impact on air quality; and
WHEREAS, increasing the production and availability of affordable housing is
problematic. Prices and rents for affordable housing remain below the level needed to attract
new construction. At the same time, escalating land costs and rapidly diminishing amounts of
land available for development hinder the provision of affordable housing units solely through
private action. 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 City wishes to retain an economically balanced community, with
housing available to very low -, low- and moderate - income households. The City's General Plan
implements the established policy of the State of California that each community should foster
an adequate supply of housing for persons at all economic levels; and
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WHEREAS, it is appropriate to impose some of the cost of the increased burden of
providing housing for very low -, low- and moderate - income persons directly on the developers,
and indirectly upon the occupiers, whose developments necessitate the need for such housing. In
addition to the demands on services from such developments, new development without
affordable units contributes to the shortage of affordable housing. Ordinances and policies
concerning new housing in the City should be consistent with the community's goal to foster an
adequate supply of housing for persons at all economic levels; and
WHEREAS, the City Council originally approved and adopted the Community
Improvement Plan for the Business and Waterfront Improvement Project (the "BWIP ") on
June 18, 1991, by Ordinance No. 2559, as subsequently amended on December 6, 1994, by
Ordinance No. 2681, on July 6, 2000, by Ordinance No. 2835, on September 19, 2000, by
Ordinance No. 2844, on April 3, 2001, by Ordinance No. 2857, on April 1, 2003, by Ordinance
No. 2896, and on November 4, 2003, by Ordinance No. 2910; and
WHEREAS, the City Council originally approved and adopted the Community
Improvement Plan for the West End Community Improvement Project (the "WECIP ") on July 5,
1983, by Ordinance No. 2141, as subsequently amended on January 2, 1985, by Ordinance No.
2222, on December 6, 1994, by Ordinance No. 2682, on November 20, 2002, by Ordinance No.
2889, on April 1, 2003, by Ordinance No. 2897, and on November 4, 2003, by Ordinance No.
2910; and
WHEREAS, the Community Improvement Commission of the City of Alameda (the
"Commission ") has been designated as the official redevelopment agency to carry out in the City
of Alameda the functions and requirements of the Community Redevelopment Law of the State
of California (Health and Safety Code Section 33000 et seq.) and to implement the Community
Improvement Plans for the BWIP and WECIP; and
WHEREAS, the Community Redevelopment Law requires that at least 15 percent of all
new or rehabilitated dwelling units developed in a redevelopment project area by entities other
than the Commission be affordable units. (Health & Safety Code § 33413(b)(2)). The City of
Alameda desires to go above and beyond this affordability requirement in order to provide
needed affordable housing in the City. In its Housing Element, the City Council of the City of
Alameda established an inclusionary housing requirement of 25 percent for redevelopment
project areas, including the BWIP and the WECIP; and
WHEREAS, the City Council of the City of Alameda has adopted an Ordinance Adding
Section 30 -16, Inclusionary Housing Requirement for Residential Projects, to the City of
Alameda Municipal Code (the "Inclusionary Housing Ordinance "). The Inclusionary Housing
Ordinance provides that its provisions do not apply to the Community Improvement Project
Areas as long as the Community Improvement Commission adopts separate resolutions or
policies pertaining to inclusionary housing requirements in such areas. The Commission desires
to adopt this separate resolution and policy pertaining to inclusionary housing requirements in
the BWIP and the WECIP; and
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NOW, THEREFORE, THE COMMUNITY IMPROVEMENT COMMISSION OF THE
CITY OF ALAMEDA DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. The Commission hereby adopts the following policy to implement the
inclusionary housing requirement for the BWIP and the WECIP set forth in the City of
Alameda's Housing Element:
INCLUSIONARY HOUSING POLICY FOR BUSINESS AND WATERFRONT
AND WEST END COMMUNITY IMPROVEMENT PROJECT AREAS
The purpose of this Policy is to implement the goals and objectives of the Housing
Element of the City of Alameda General Plan with respect to inclusionary housing in the
Business and Waterfront and West End Community Improvement Project areas.
1. Definitions. As used in this Policy:
Affordable Rent shall mean "affordable rent" as defined in Section 50053 of the
California Health & Safety Code.
Affordable Housing Guidelines shall mean guidelines adopted by the City Council to
specify location and design standards for Inclusionary Units.
Affordable Housing Plan shall mean a plan proposed by a developer to satisfy the
requirements of this Policy. The Affordable Housing Plan establishes the number and location
of Inclusionary Units, production schedule and other standards.
Affordable Ownership Cost shall mean "affordable housing cost" as defined in Section
50052.5 of the California Health & Safety Code.
City shall mean the City of Alameda.
Commission shall mean the Community Improvement Commission of the City of
Alameda.
Construction Cost Index shall mean the Engineering News - Record Construction Cost
Index for San Francisco. If that index ceases to exist, the Executive Director will substitute
another Construction Cost Index, which, in his or her judgment, is as nearly equivalent to the
original index as possible.
Executive Director shall mean the Executive Director of the Community Improvement
Commission of the City of Alameda or his or her designee.
Household shall mean one person living alone or two or more persons sharing residency
whose income is considered for housing payments.
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Inclusionary Unit shall mean a dwelling unit that must be offered at Affordable Rent or
available at Affordable Housing Cost to Very Low -, Low- or Moderate - Income Households.
In -Lieu Fee shall mean the fee described in Section 4(a) that is paid as an alternative to
the production of inclusionary housing, which fee shall be used in accordance with Section 9.
Low - Income Household shall mean a Household whose annual income does not exceed
the qualifying limits set for "lower income households" in Section 50079.5 of the California
Health & Safety Code.
Market -Rate Unit shall mean a dwelling in a Residential Development that is not an
Inclusionary Unit.
Moderate- Income Household shall mean a Household whose annual income does not
exceed the qualifying limits set for "persons and families of low or moderate income" in Section
50093 of the California Health & Safety Code.
Residential Development shall mean any planned development district, subdivision map,
conditional use permit or other discretionary land use approval that authorizes the construction of
residential dwelling units.
Very Low - Income Household shall mean a Household whose annual income does not
exceed the qualifying limits set for "very low income households" in Section 50105 of the
California Health & Safety Code.
2. Inclusionary Unit Requirements.
a. Unit Requirement. For all Residential Developments of three or more
units in the Business and Wateifiont and West End Community Improvement Project Areas, at
least 25 percent of the total units must be Inclusionary Units restricted for occupancy by Very
Low -, Low- or Moderate - Income Households. The number of Inclusionary Units required for a
particular project will be determined only once, at the time of project approval. If a change in
the Residential Development design results in a change in the total number of units, the number
of Inclusionary Units required will be recalculated to coincide with the final approved project.
b. Calculation. For purposes of calculating the number of affordable units
required by this Policy, any additional units authorized as a density bonus under California
Government Code Section 65915(b)(1) or (b)(2) will not be counted in determining the required
number of Inclusionary Units. In determining the number of whole Inclusionary Units required,
any decimal fraction less than 0.5 shall be rounded down to the nearest whole number, and any
decimal fraction of 0.5 or more shall be rounded up to the nearest whole number.
c. Types of Inclusionary Units. Six percent of the total units must be
restricted to occupancy by Very Low - Income Households; seven percent of the total units must
be restricted to occupancy by Low - Income Households; and twelve percent may restricted to
occupancy by Moderate - Income Households. For Residential Developments with 41 or fewer
total units, Inclusionary Units shall be restricted for occupancy by Very Low -, Low- or
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Moderate - Income Households in the following proportions, which are based upon the above
calculations:
Total Inclusionary
Units Units Income Levels
3 to 5 1 1 moderate
6 to 9 2 1 moderate, 1 low
10 to 13 3 1 moderate, 1 low, 1 very low
14 to 17 4 2 moderate, 1 low, 1 very low
18 to 21 5 3 moderate, 1 low, 1 very low
22 to 25 6 3 moderate, 2 low, 1 very low
26 to 29 7 3 moderate, 2 low, 2 very low
30 to 33 8 4 moderate, 2 low, 2 very low
34 to 37 9 4 moderate, 3 low, 2 very low
38 to 41 10 5 moderate, 3 low, 2 very low
d. Affordable Housing Guidelines. Inclusionary Units must conform to the
Affordable Housing Guidelines adopted by the City Council.
3. Exemntions. The requirements of this Policy do not apply to:
a. Reconstruction. The reconstruction of any structures that have been
destroyed by fire, flood, earthquake or other act of nature provided that the reconstruction takes
place within three years of the date the structures were destroyed.
b. Affordable three or four unit Residential Developments. Residential
Developments of three or four units in which all units are non - owner - occupied and will remain
affordable to Low- or Very Low - Income Households for a minimum of 15 years, except that one
unit may be owner - occupied with no affordability restrictions.
c. Residential building additions, repairs or remodels. Residential building
additions, repairs or remodels; provided, that such work does not increase the number of existing
dwelling units beyond two units.
d. Affordable housing projects. Residential Developments that already have
more dwelling units that qualify as affordable to Very Low -, Low- and Moderate - Income
Households than this Policy requires.
e. Residential Developments with approved maps. Residential
Developments for which a tentative map or vesting tentative map was approved, or for which a
building permit was issued, prior to the date this Resolution was adopted and which continue to
have unexpired permits.
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4. Alterpatives.
a. In -lieu fees. For Residential Developments of nine or fewer units,
including Inclusionary Units, the requirements of this Policy may be satisfied by paying an In-
Lieu Fee. The initial fee is $26,731.00 per Market -Rate Unit, which is sufficient to make up the
gap between (i) the amount of development capital typically expected to be available based on
the amount to be received by a developer or owner from Affordable Housing Cost or Affordable
Rent, and (ii) the anticipated cost of constructing the Inclusionary Units. The fee shall be
adjusted annually to reflect the percentage change in the cost of construction as reported in the
Construction Cost Index. Fees shall be paid upon issuance of building permits for Market -Rate
Units in a Residential Development. If building permits are issued for only part of a Residential
Development, the fee amount shall be based only on the number of units then permitted.
b. Off -site construction. Inclusionary Units may be constructed off -site if the
Planning Board can make a finding that the purposes of this Policy would be better served by the
construction of off -site units. In determining whether the purposes of this Policy would be better
served by this alternative, consideration should be given as to whether the off -site units would be
located in an area where, based on availability of affordable housing, the need for such units is
greater than the need in the area of the proposed development.
5. Incentive. The Commission may provide the following incentive to a developer
who elects to satisfy the inclusionary housing requirements of this Policy by producing
Inclusionary Units on the site of the Residential Development:
a. Expedited Processing. Eligibility for expedited processing of
development and permit applications for the Residential Development.
6. Compliance Procedures.
a. Conditions to carry out the purposes of this Policy shall be imposed on the
approval of any Residential Development to which this Policy pertains.
b. As part of the application for a Residential Development, the applicant
shall submit an Affordable Housing Plan demonstrating compliance with this Policy. The
Affordable Housing Plan must include: (i) a description of the number and size of each Market -
Rate Unit and each Inclusionary Unit, including the income levels to which each Inclusionary
Unit will be made affordable, (ii) a narrative describing how the plan adheres to the Affordable
Housing Guidelines adopted by the City Council, and (iii) a site map, with the location of the
Inclusionary Units clearly marked.
c. The Affordable Housing Plan shall be reviewed and approved by the
decision - making entity concurrently with the Residential Development. The Affordable Housing
Plan shall be made a condition of approval of the Residential Development. Regulatory
agreements, resale restrictions, deeds of trust and/or other documents shall be recorded against
Inclusionary Units and Residential Developments containing Inclusionary Units in accordance
with Section 8.
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d. An Affordable Housing Plan that proposes off -site construction shall
include a site map of the off -site location, a description of the arrangements made for
construction at that site and demonstration that the proposed off -site construction complies with
Section 4(b). Off -site construction may only be approved in accordance with Section 4(b).
e. All Inclusionary Units shall be constructed and occupied as specified in
the approved Affordable Housing Plan concurrently with or prior to the construction and
occupancy of Market Rate Units. In phased developments, Inclusionary Units may be
constructed and occupied in proportion to the number of units in each phase of the Residential
Development.
7. Requirements for Inclusionary Units.
a. Eligibility Requirements. No Household may occupy an Inclusionary Unit
unless the Commission or its designee has approved the Household's eligibility in accordance
with City- approved policies. Each Household that occupies a rental Inclusionary Unit or
purchases an owner - occupied Inclusionary Unit must occupy that unit as that Household's
principal residence.
b. Initial Sales Price of Owner- Occupied Units. The initial sales price of an
owner - occupied Inclusionary Unit shall be set so that the eligible Household will pay an
Affordable Ownership Cost. Resale and other restrictions on the Inclusionary Unit will be
governed by the regulatory agreements, resale restrictions, deeds of trust or other recorded
agreements recorded against the Inclusionary Unit.
c. Rent of Rental Units. Rental Inclusionary Units shall be offered to eligible
Households at an Affordable Rent.
8. Continued Affordability.
a. Regulatory agreements, resale restrictions, deeds of trust and/or other
documents acceptable to the Executive Director, all consistent with the requirements of this
Policy, shall be recorded against Inclusionary Units and Residential Developments containing
Inclusionary Units. These documents shall legally restrict occupancy of Inclusionary Units to
Households of the income levels for which the units were designed for a minimum of 59 years.
The forms of regulatory agreements, resale restrictions, deeds of trust and all other documents
authorized by this Policy, and any change in the form of any such document which materially
alters any policy in the document, shall be approved by the Executive Director.
b. The resale restrictions required by this Policy shall allow the City a right
of first refusal to purchase any owner - occupied Inclusionary Unit at the maximum price which
could be charged to a qualified purchaser Household, at the time the owner proposes a sale.
9. Limited Uses of Fees.
a. Use and Disbursement of Fees. In -Lieu Fees collected under this Policy
shall be used in accordance with and in support of affordable housing as determined by the
Executive Director. Expenditures of In -Lieu Fees shall be limited to direct expenditures for
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capital projects or incidental non - capital expenditures related to capital projects, including but
not limited to pre - development expenses, land acquisition, construction, rehabilitation,
subsidization, counseling or assistance to other governmental entities, private organizations or
individuals to expand affordable housing opportunities to very low -, low- and moderate - income
households. Authorized expenditures also include, but are not limited to, assistance to housing
development corporations, equity participation loans, grants, predevelopment loan funds,
participation leases, loans or other public /private partnership arrangements to develop affordable
housing or other public /private partnership arrangements. The In -Lieu Fees may be expended
for the benefit of either rental or owner- occupied housing. The In -Lieu Fees may not be used to
support operations, or on -going housing services not directly related to the construction,
acquisition, rehabilitation or preservation of affordable housing units.
b. Accounting of Fees. All In -Lieu Fees shall be deposited into a segregated
account and all expenditures of funds from the same shall be documented and included in an
annual report that shall be made available for public inspection.
10. Adjustments, Waivers.
a. Adjustment. The requirements of this Policy may be waived, adjusted or
reduced if an applicant shows that there is not a reasonable relationship between the impact of a
proposed Residential Development on the demand for affordable housing in the City and the
requirements of this Policy or that applying the requirements of this Policy without the requested
waiver, adjustment or reduction would constitute a taking in violation of the United States or
California Constitutions or be otherwise illegal. Under current law, mere economic hardship or
diminution in value does not constitute an unlawful taking of property. Such a request shall be
made in writing and filed with the Commission at the time of initial submittal of an application
for approval of a Residential Development and/or as part of any appeal from a decision regarding
such an application. The request shall state completely and in detail: (i) the requested waiver,
adjustment or reduction of the requirements, (ii) the factual basis for the request, and (iii) the
legal basis of this request. If the Commission determines that the requirements of this Policy
lack a reasonable relationship to the impact of a proposed Residential Development on demand
for affordable housing in the City or that those requirements constitute a taking in violation of
the United States or California Constitutions, the requirements of this Policy shall be modified,
adjusted or waived to the extent necessary to avoid an unconstitutional result or illegal outcome.
b. Fee for Adjustment Request. The cost of the consideration of a request for
adjustment or waiver of the requirements of this Policy shall be borne by the applicant in an
amount set forth in the Master Fee Resolution of the City Council.
Section 2. The Commission Secretary is hereby directed to send a certified copy of
this resolution to the City.
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I, the undersigned, hereby certify that the foregoing Resolution was duly and regularly
adopted and passed by the Community Improvement Commission of the City of Alameda in a
Special Community Improvement Commission meeting assembled on the 1st day of June, 2004, by
the following vote to wit:
AYES: Commissioners Daysog, Gilmore, Matarrese, and Chair Johnson - 4.
NOES: Commissioner Kerr - 1.
ABSENT: None.
ABSTENTIONS: None.
IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official seal of said
Commission this 2°a day of June, 2004.
Lara Weisiger, Secretary
Community Improvement Commission
Beverly Johnson, Chair
Community Improvement Commission