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CIC Resolution 04-128COMMUNITY IMPROVEMENT COMMISSION RESOLUTION NO. 0 4 —12 8 ESTABLISHING AN INCLUSIONARY HOUSING POLICY FOR THE ALAMEDA POINT IMPROVEMENT PROJECT 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 3 16768v2 21942/0020 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 Alameda Point Improvement Project (the "APIP ") on March 3, 1998, by Ordinance No. 2754, as subsequently amended on April 1, 2003, by Ordinance No. 2895; 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 seg.) and to implement the Community Improvement Plan for the APIP; 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)). In a Settlement Agreement dated March 20, 2001, by and between the City of Alameda, the Commission, the Alameda Reuse and Redevelopment Authority, the Alameda Housing Authority, Catellus Development Corporation, Renewed Hope Housing Advocates and Arc Ecology, the City agreed to provide that 25 percent of all newly constructed housing units at Alameda Point be made permanently affordable. In its Housing Element, the City Council of the City of Alameda implemented this provision by establishing an inclusionary housing requirement of 25 percent for the APIP; 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 APIP; and 2 316768v2 21942/0020 NOW, THEREFORE, THE COMMUNITY IMPROVEMENT COMMISSION OF THE CITY OF ALAMEDA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The Community Improvement Commission hereby adopts the following policy to implement the inclusionary housing requirement for the APIP set forth in the Settlement Agreement and the City's Housing Element: INCLUSIONARY HOUSING POLICY FOR ALAMEDA POINT IMPROVEMENT PROJECT AREA The purpose of this Policy is to implement the terms of the Settlement Agreement and the goals and objectives of the Housing Element of the City of Alameda General Plan with respect to inclusionary housing in the Alameda Point Improvement Project area. 1. Definitions. As used in this Policy: Affordable shall mean that the Housing Cost shall not exceed 30 percent of the stated maximum household income adjusted for family size appropriate for the unit. The phrase "adjusted for family size appropriate for the unit" shall have the same meaning as set forth in California Health & Safety Code Section 50052.5(c), as it may be amended, or in any successor statute. 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. City shall mean the City of Alameda. Commission shall mean the Community Improvement Commission of the City of Alameda. 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. Housing Cost shall have the same meaning as given the following terms in Title 25 of the California Code of Regulations: (a) for rental units, "Housing Cost" shall have the same meaning as "rent" as defined in Section 6918 of Title 25 of the California Code of Regulations, as it may be amended, or in any successor section, and (b) for units offered for purchase, 3 316768v2 21942/0020 "Housing Cost" shall have the same meaning as set forth in Section 6920 of Title 25 of the California Code of Regulations, as it may be amended, or in any successor section. 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. 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, as it may be amended, or in any successor statute. 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, as it may be amended, or in any successor statute. 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, as it may be amended, or in any successor statute. 2. Inclusionary Unit Requirements. a. Unit Requirement. For all Residential Developments of three or more units in the Alameda Point Improvement Project area, 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; ten percent of the total units must be restricted to occupancy by Low - Income Households; and nine percent may be restricted to occupancy by Moderate - Income Households. For Residential Developments with 41 or fewer 4 316768v2 21942/0020 total units, Inclusionary Units shall be restricted for occupancy by Very Low -, Low- or 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 low 6 to 9 2 1 moderate, 1 low 10 to 13 3 1 moderate, 1 low, 1 very low 14 to 17 4 1 moderate, 2 low, 1 very low 18 to 21 5 2 moderate, 2 low, 1 very low 22 to 25 6 2 moderate, 2 low, 2 very low 26 to 29 7 2 moderate, 3 low, 2 very low 30 to 33 8 3 moderate, 3 low, 2 very low 34 to 37 9 3 moderate, 4 low, 2 very low 38 to 41 10 4 moderate, 4 low, 2 very low d. Affordable Housing Guidelines. Inclusionary Units must conform to the Affordable Housing Guidelines adopted by the City Council. 3. Exemptions. 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. 4. Alternative 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 5 316768v2 21942/0020 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. 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 maybe constructed and occupied in proportion to the number of units in each phase of the Residential Development. 6 316768v2 21942/0020 7. Reauirements 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: (i) for a Low - Income Household, to ensure that the sales price is Affordable, and (ii) for a Very Low- or Moderate - Income Household, to ensure that the Inclusionary Unit is affordable under the criteria set forth in California Health & Safety Code Section 33413(b)(2), as it maybe amended, or in any successor statute. 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. The rent of a rental Inclusionary Unit shall be set: (i) for a Low - Income Household, to ensure that the rent is Affordable, and (ii) for a Very Low - or Moderate - Income Household, to ensure that the Inclusionary Unit is affordable under the criteria set forth in California Health & Safety Code Section 33413(b)(2), as it may be amended, or in any successor statute. 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. 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 waived, 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 7 316768v2 21942/0020 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 the 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 or Appeal. 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. 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. ABSTENTIOUS: None. IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official seal of said Commission this 2nd day of June, 2004. Lara Weisiger, Secretary Community Improvement Commission BeverlJohnson, Chair Community Improvement C ©Inm fission