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Item 8.5 Inclusionary Housing Element
CITY OF DUBLIN PLANNING COMMISSION AGENDA STATEMENT/STAFF REPORT Meeting Date: July 1, 1991 SUBJECT: GENERAL INFORMATION: PROJECT: Inclusionary Housing Ordinance as required by the Housing Element APPLICANT: City of Dublin LOCATION: City-wide and extended planning area TO: Planning Commission FROM: Planning Staff 'if PREPARED BY: Dennis Carrington, Senior Planner Robert Schubert, Contract Planner Inclusionary Housing Ordinance ENVIRONMENTAL REVIEW: A Negative Declaration of Environmental Impact was prepared for the Inclusionary Housing Ordinance. NOTIFICATION: Public Notice of the July 1, 1991 hearing was published in the local newspaper, mailed to adjacent property owners, and posted in public buildings. ANALYSIS: Purpose of the Ordinance Section 6.3, Strategy I.B., of the Housing Element states that the City will adopt an Inclusionary Housing Ordinance. The purpose of the attached Ordinance is to enhance the public welfare and assure that further housing development contributes to the attainment of the City's housing goals by increasing the production of residential units affordable by households of lower and moderate income, and providing funds for the development of lower and moderate income ownership and rental housing. A goal of the Housing Element is to achieve a balanced community with housing available for households of a range of income levels. Increasingly, persons with lower and moderate incomes who work and/or live within the City are unable to locate housing at prices they can afford, and are increasingly excluded from living in the City. Federal and State housing subsidy programs are not sufficient by themselves to satisfy the housing needs of lower and moderate income households. The high cost of newly constructed housing does not, to any appreciable extent, provide housing ITEM NO. 8.5 COPIES TO: Agenda File Planning File Project P 40 affordable by lower and moderate income households. New development which does not include lower or moderate cost housing will aggravate the current housing shortage by reducing the supply of developable land. General Reauirements The ordinance requires that ten (10) percent of the total number of units of all new residential developments constructed within the City as it now exists (and as may be altered by annexation), containing twenty (20) or more units, shall be affordable by households of lower and moderate income. Inclusionary rental units must be affordable to lower income households earning up to 70% of the County median income. Not less than one half of the inclusionary ownership units must be affordable to lower income households which earn up to 80% of the County median income and the balance of the inclusionary ownership units must be affordable to moderate income households earning up to 120% of the county median income. A lower percentage (70%) was used for the inclusionary rental units in order to insure that the rents of the inclusionary units are below the current market rate levels in Dublin. Inclusionary units would include all unit types represented in the project and the unit types would be provided in the same proportion as the project as a whole. The exterior design of the inclusionary units would be identical to the market rate units. However, reductions in the interior amenities for the inclusionary units would be permitted upon approval by the City in order to retain project affordability. Criteria are established regarding the pricing of the units and screening the applicants for the inclusionary units. Criteria are also established for allowing off -site inclusionary units. The inclusionary requirements would run with the land for a 30 year period. The 30 year period was used because it is consistent with time period required by the State for density bonus units (Government Code Section 65915). The inclusionary requirements also apply to lot sale subdivisions; however, this ordinance requires payment of in -lieu participation fees rather than the provision of lots. Reauirements to Purchase or Rent an Inclusionary Unit Dublin residents will have first preference for inclusionary units and lots; second preference will be given to Dublin employees; third preference will be given to those who need to move to Dublin to be near Dublin residents or services; and fourth preference will be given to those who live outside Dublin. The following individuals would be ineligible to purchase or rent an inclusionary unit as their residence: (a) All employees and officials of the City who have, by the authority of their position, policy making authority or influence affecting City housing programs. -2- a/HSNGSR PAGE w-, OF t40 (b) The project Applicant or Project Owner. Resale Controls In order to maintain the availability of inclusionary ownership units, the City would impose resale conditions. The price received by the seller of an inclusionary unit would be limited to the purchase price plus an increase based on the San Francisco/Oakland/San Jose Consumer Price Index, (as published monthly by the U.S. Department of Labor) or an amount consistent with the increase in the Alameda County median income, for a family of four, since the date of purchase or the fair market value, whichever is less (refer to Attachment 1 of the Ordinance for an example of a resale price calculation). Administration and Enforcement Provisions The City Manager would develop guidelines for the administration of the Ordinance. The Ordinance would allow the City to contract with the Dublin Housing Authority, the Alameda County Housing Authority, or other similar entity to administer the rental, sales and in -lieu participation fee requirements. The owner of each project with inclusionary rental units would be responsible for obtaining and verifying information with respect to the qualifications of prospective and current tenants. The Ordinance also contains provisions for enforcement. The primary means of enforcement of resale restrictions would be a deed restriction and if applicable, a declaration of Covenants, Conditions & Restrictions which will require prior City approval for resale of an inclusionary unit. The ordinance would also allow the City to bring an action to recover excess rents charged a tenant. In addition, any person found guilty of violating the provisions of the Ordinance would be guilty of a misdemeanor or an infraction. In -Lieu Participation Fees All inclusionary units under 1,600 square feet in size, shall be constructed. The 1600 square feet includes a two car garage. In -lieu participation fees may be paid instead of providing units 1,600 square feet in size or larger, upon approval by the City Manager. The in - lieu participation fee will be calculated at least every two years on the basis of a 1,600 square foot unit. The living area of an inclusionary unit shall not be less than 1200 square feet in size. The Ordinance provides in -lieu fees as an alternative for developments that cannot satisfy the inclusionary requirement due to factors such as location, availability of services, extreme topography, development density, and environmental constraints. In - lieu participation fees for dwelling units over 1,600 square feet in size, including a two car garage, would be calculated by subtracting the amount a household could pay from the cost of the unit. Any in - lieu participation fees collected under the program would go into an exclusive fund to be spent directly on creating new affordable housing opportunities in Dublin. Consistent with the Housing Element, such in -lieu fees would have to be spent or committed by the City within -3- a/HSNGSR PAGE 3 OF 41) five years of receipt of the funds. The five-year period is recommended because it is a reasonable time period to accumulate funds, purchase land, and plan for and construct housing. A shorter time span would make the accomplishment of these goals difficult due to their long lead times and potential delays. In lieu fees, while appearing to be less than sufficient to provide housing units are leveraged to finance alternative dwelling units. The City of Petaluma leverages its in -lieu fees at a ratio of 12:1. Typically, dwelling units are not built by the City collecting the in -lieu fees, but by non-profit low cost housing providers such as the Bridge Housing Corporation. The cost of monitoring resales by the City is included in the in -lieu fee. The amount of the in -lieu participation fees charged per dwelling unit in the three density ranges of the General Plan and for rental units (refer to Attachment 2 of the ordinance for an explanation of how the fees were calculated) is as follows: Tvpe of Proiect In -Lieu Fee/Unit In Proiect Single Family (Ownership) $8,446.00 Medium Density (Ownership) 4,862.00 Medium High Density (Ownership) 3,083.00 Rental 2,808.00 Inclusionary Housing Reauirements In Other Communities The following Bay Area cities have inclusionary housing requirements: Berkeley Corte Madera Fairfax Larkspur Livermore Los Gatos Menlo Park Mill Valley Monterey Morgan Hill Novato Palo Alto Petaluma Pleasanton San Leandro San Rafael Santa Cruz Sebastopol Sunnyvale Tiburon Yountville The inclusionary requirements can be categorized into three types: 1. home ownership programs for lower and moderate income households; 2. rental programs designed to provide more lower and moderate income opportunities; and 3. growth management plans which incorporate the provision of lower and moderate income housing as one criterion in prioritizing residential projects. The only cities in the Tri-Valley area that have inclusionary requirements are Livermore and Pleasanton. The City of Livermore has a 10% inclusionary requirement which allows developers the option of -4- a/HSNGSR PAGE y OF 4 ° paying an in -lieu fee. Livermore charges an $1,833 in -lieu Low Income Housing Fee for each unit in a residential project. The fee was determined by the following formula: Averaae Land Value in Livermore x % of Low Income Housing Desired Average Residential Density of Livermore or 55,000 x .10 = 1,833 3 In addition to the inclusionary housing requirements designed above, the City of Livermore's General Plan includes a growth management program. The program encourages affordable housing because lower cost residential units receive a certain percentage of the available allocations each year. The City of Pleasanton has a growth management program as well as affordable housing requirements. The growth management program sets aside a certain number of residential allocations each year for lower income housing projects. The City of Pleasanton's affordable housing requirements apply to all residential, commercial and industrial developments. The Ordinance requires 15% of all residential units to be low income units. Non- residential projects are required to construct residential units based upon the size and type of use proposed (retail office, research and development, hotel/motel and light industrial). Pleasanton also allows for the payment of fees in -lieu of constructing units. Pleasanton currently is charging a $597 fee for each new multi -family unit, a $1,790 fee for single family units and $0.40/sq. ft. of commercial and industrial floor area. The fees are based on a maximum of $17,300,000 that could be levied in in -lieu fees for low income housing. The funds would be used to construct 1,350 low income housing units over 20 years to meet the Housing Element goal of 15% of new residential construction for low income families. 9,000 dwelling units (2,250 multi -family and 6,750 single family) and 11,000,000 square feet of commercial space allowed by the General Plan remain unbuilt. The following amounts would be yielded by Pleasanton's in - lieu fees: Multi -family Units $ 597 x 2,250 units = $ 1,343,250 Single Family Units $1,790 x 6,750 units = $12,082,500 Commercial Square Footage$ .40 x 11,000,000 = $ 4.400.000 TOTAL $17,825,750 -5- a/HSNGSR PAG 4 RECOMMENDATIONS: FORMAT: 1) Open public hearing and hear Staff presentation. 2) Take testimony from the public. 3) Question Staff and the public. 4) Close public hearing. 5) Give direction to Staff and continue hearing to the July 15th Planning Commission meeting. ACTION: Staff recommends that the Planning Commission give direction to Staff and continue the hearing to the July 15th Planning Commission meeting. ATTACHMENTS: Exhibit A: Resolution recommending that the City Council approve the draft Inclusionary Housing Ordinance Exhibit B: Resolution recommending that the City Council approve in -lieu participation fees Exhibit C: Draft Inclusionary Housing Ordinance Background Attachments: Attachment 1: Example of Resale Price Calculation Attachment 2: In -Lieu Fee Calculations ° PAGE OF y RESOLUTION NO. 91 - A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF DUBLIN RECOMMENDING CITY COUNCIL APPROVAL OF AN INCLUSIONARY HOUSING ORDINANCE WHEREAS, pursuant to the City of Dublin Housing Element Strategy I.B., the City of Dublin has prepared an Inclusionary Housing Ordinance; and WHEREAS, notice of the Planning Commission public hearing was published in the local newspaper and posted in public buildings in accordance with California State Law; and WHEREAS, the Inclusionary Housing Ordinance has been reviewed in accordance with the provisions of the California Environmental Quality Act; and WHEREAS, an Environmental Impact Report, SCH #84011002, was prepared for the Dublin General Plan and certified on February 11, 1985; which Environmental Impact Report addressed impacts of the future development of the City of Dublin; and which impacts of said development of the General Plan exceed the impacts of General Plan Amendment 91-001, including the Inclusionary Housing Ordinance; and WHEREAS, the program proposed in the Inclusionary Housing Ordinance does not raise any new significant environmental issues which were not addressed in the Dublin General Plan Environmental Impact Report; and WHEREAS, data indicating the amount of cost, or estimated cost, required to provide the housing for which the in -lieu participation fee is levied and the revenue sources anticipated to provide the housing, including General Fund revenues were made available to the public at least 10 days prior to the public hearing; and WHEREAS, notice of the preparation of the Negative Declaration was published in the local newspaper and posted in public buildings to provide for a 21 day public review period in accordance with the California Environmental Quality Act (CEQA) Guidelines; and WHEREAS, on July 1, 1991, the Planning Commission adopted Resolution No. recommending City Council certification of the Negative Declaration for GPA 91-001 as adequate and complete; and WHEREAS, the Planning Commission considered all written and oral testimony submitted at the public hearing. NOW, THEREFORE, BE IT RESOLVED THAT THE Dublin Planning Commission does hereby recommend that the City Council approve the draft Inclusionary Housing Ordinance. PASSED, APPROVED AND ADOPTED this 1st day of July, 1991. AYES: NOES: ABSENT: ATTEST: Planning Director Planning Commission Chairperson PAGE. ?.- OF RESOLUTION NO. 91 - A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF DUBLIN RECOMMENDING CITY COUNCIL APPROVAL OF IN -LIEU PARTICIPATION FEES WHEREAS, pursuant to the City of Dublin Housing Element Strategy I.B., the City of Dublin has prepared an Inclusionary Housing Ordinance; and WHEREAS, notice of the Planning Commission public hearing was published in the local newspaper and posted in public buildings in accordance with California State Law; and WHEREAS, the Inclusionary Housing Ordinance has been reviewed in accordance with the provisions of the California Environmental Quality Act; WHEREAS, an Environmental Impact Report, SCH #84011002, was prepared for the Dublin General Plan and certified on February 11, 1985; which Environmental Impact Report addressed impacts of the future development of the City of Dublin; and which impacts of said development of the General Plan exceed the impacts of General Plan Amendment 91-001, including the Inclusionary Housing Ordinance and in -lieu participation fees pursuant to that ordinance; and WHEREAS, the program proposed in the Inclusionary Housing Ordinance, including in -lieu participation fees, does not raise any new significant environmental issues which were not addressed in the Dublin General Plan Environmental Impact Report; and WHEREAS, Section 8.08.050 (g) of the proposed Inclusionary Housing Ordinance states that the City Council shall establish the in -lieu participation fees by resolution; and WHEREAS, the methodology for determining the amount of the in -lieu participation fees is set forth in Attachment 2 of the Inclusionary Housing Ordinance; and WHEREAS, data indicating the amount of cost, or estimated cost, required to provide the housing for which the in -lieu participation fee is levied and the revenue sources anticipated to provide the housing, including General Fund revenues were made available to the public at least 10 days prior to the public hearing; and WHEREAS, notice of the preparation of the Negative Declaration was published in the local newspaper and posted in public buildings to provide for a 21 day public review period in accordance with the California Environmental Quality Act (CEQA) Guidelines; and WHEREAS, on July 1, 1991, the Planning Commission adopted Resolution No. recommending City Council certification of the Negative Declaration for GPA 91-001 as adequate and complete; and WHEREAS, the Planning Commission considered all written and oral testimony submitted at the public hearing. NOW, THEREFORE, BE IT RESOLVED THAT THE Dublin Planning Commission does hereby recommend that the City Council approve the in -lieu participation fees as follows: Ownership units in the Single -Family Residential designation of the General Plan - $8,446.00 per unit in the project. Ownership units in the Medium Density Residential designation of the General Plan - $4,862.00 per unit in the project. Ownership units in the Medium -High Density Residential designation of the General Plan - $3,083.00 per unit in the project. Rental units in any category of the General Plan - $2,808.00 per unit in the project. PASSED, APPROVED AND ADOPTED this 1st day of July, 1991. AYES: NOES: ABSENT: ATTEST: Planning Director Planning Commission Chairperson /INLIEURE PAGE F ORDINANCE NO. - 91 AN ORDINANCE OF THE CITY OF DUBLIN An Ordinance Adding Chapter 8.08 to Title 8 of the Dublin Municipal Code, Enacting an Inclusionary Housing Ordinance The City Council of the City of Dublin does ordain as follows: Section 1. Chapter 8.08 is hereby added to Title 8 of the Dublin Municipal Code to read as follows: "CITY OF DUBLIN INCLUSIONARY HOUSING ORDINANCE CHAPTER 8.08 OF TITLE 8 CITY OF DUBLIN MUNICIPAL CODE Article 1 General Provisions Section 8.08.010. Title. This Ordinance shall be called the "Inclusionary Housing Ordinance of the City of Dublin". Section 8.08.020. Findings. The City of Dublin finds that the citizens of the City are experiencing a housing shortage for lower and moderate income households. A goal of the City's adopted Housing Element is to achieve a balanced community with housing available for households of a range of income levels. Increasingly, persons with lower and moderate incomes who work and/or live within the City are unable to locate housing at prices they can afford, and are increasingly excluded from living in the City. Federal and State housing subsidy programs are not sufficient by themselves to satisfy the housing needs of lower and moderate income households. The City finds that the high cost of newly constructed housing does not, to any appreciable extent, provide housing affordable by lower and moderate income households, and that continued new development which does not include lower or moderate cost housing will serve to further aggravate the current housing shortage by reducing the supply of developable land. The City further finds that it is a public purpose of the City, and a public policy of the State of California as mandated by the requirements for a housing element of the City's General Plan, to make available an adequate supply of housing for persons of all economic segments of the community. Section 8.08.030. Purpose. The purpose of this Ordinance is to enhance the public welfare and assure that further housing development contributes to the attainment of the above -described housing goals by increasing the production of residential units affordable by households of lower and moderate income, and by providing funds for the development of lower and moderate income ownership and rental housing. A limited and finite amount of land remains for development of housing in the City and extended planning area. In order to assure that the remaining developable land is utilized in a manner consistent with the City's housing policies and needs, the City declares that ten (10) percent of the total number of units of all new residential developments constructed within the City as it now exists and as may be altered by annexation, containing twenty (20) or more units, shall be affordable by households of lower and moderate income. Inclusionary rental units must be affordable to lower income households. Not less than one half of the inclusionary ownership units must be affordable to lower income households and the balance of the inclusionary ownership units must be affordable to moderate income households. The regulations in this Chapter shall apply Citywide, including the extended planning area. Section 8.08.040. Definitions. For the purposes of this Ordinance, certain words and phrases shall be interpreted as set forth in this section unless it is apparent from the context that a different meaning is intended. (a) Affordable rent: A monthly rent (including utilities as determined by a schedule provided by the City) which does not exceed 1/12 of 30% of 70% of the Median Income for Alameda County, as adjusted for household size. (b) Amenities: Interior amenities include, but are not limited to, fireplaces, garbage disposals, dishwashers, cabinet and storage space and bathrooms in excess of one. (c) Applicant: Any person, firm, partnership, association joint venture, corporation, or any entity or combination of entities which seeks City permits and approvals for a project. (d) Approval: Adoption of a resolution by the Planning Commission and/or City Council approving a discretionary permit, such as a Tentative Map, Planned Development or Use Permit, for a project. (e) City: The City of Dublin or its designee or any entity with which the City contracts to administer this chapter. (f) Common Areas: Landscaped areas and recreation facilities that are owned in common by property owners within a project. (g) Dublin employee: Any head of household, or in the case of married couples either spouse, who has worked within the City Limits of Dublin continually for one (1) year immediately prior to the date of application for an inclusionary unit. -2- a/HSNGORD1 PAGE 11 (h) Dublin resident: Any person who has lived within the City Limits of Dublin continually for one (1) year immediately prior to the date of application for an inclusionary unit. Continually shall be construed to include lapses of residency of no longer than six months. (i) Dwelling unit: A dwelling designed for occupancy by one household. (j) First time home buyer: A person who has not held an ownership interest in a residence within the past three years. (k) Hard Costs: Project costs associated with unimproved land, construction of dwelling units and common areas. (1) Household: One person living alone; or two or more persons sharing residency whose income is available to meet the family's needs and who are related by blood, marriage or operation of law. (m) HUD: The United States Development or its successor. (n) Inclusionary unit: An required by this Ordinance which lower or moderate income. Department of Housing and Urban ownership or rental dwelling as is affordable by households with (o) Income: The gross annual household income as defined by HUD. (p) In -lieu participation fee: A fee paid to the City by an applicant for a project in the City, in lieu of providing the inclusionary units or lots required by this Ordinance. (q) Life of the inclusionary unit: A 30 year period from the date of final occupancy clearance. (r) Lower Income Household: A household whose annual income does not exceed 80% of the median income for Alameda County, as determined by HUD with adjustments for family size. HUD may establish income limits higher or lower than 80% of the median income for the area on the basis of its finding that such variations are necessary because of the prevailing levels of construction costs or unusually high or low family incomes. (s) Moderate Income Household: A household whose annual income does not exceed 120% of the median income for Alameda County, as determined by HUD with adjustments for family size. HUD may establish income limits higher or lower than 120% of the median income for the area on the basis of its finding that such variations are necessary because of the prevailing levels of construction costs or unusually high or low family incomes. -3- a/HSNGORDl PAGE LamOF 4 (t) Median Income for Alameda County: The median gross income in Alameda County as determined by HUD, adjusted for household size. (u) Off -site Inclusionary units: Lower or moderate income housing units on land within the City of Dublin other than that on which the applicant intends to construct a project. (v) Price Affordable to lower income household: A sales price which results in monthly mortgage payment (including principal and interest) which does not exceed 1/12 of 30% of 80% of the Median Income for Alameda County, as adjusted for household size. (w) Price Affordable to moderate income household: A sales price which results in monthly mortgage payment (including principal and interest) which does not exceed 1/12 of 30% of 120% of the Median Income for Alameda County, as adjusted for household size. (x) Project owner: Any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities which holds fee title to the land on which the project is located. (y) Project: A housing development at one location including all dwelling units for which permits have been applied for or approved within a twelve-month period. (z) Property owner: The owner of an inclusionary unit, excepting a "project owner". (zl) Resale controls: Legal restrictions by which the price of inclusionary ownership units will be controlled to insure that the units remain affordable by lower or moderate income households on resale. (z2) Soft Costs: Project costs associated with profit, marketing, overhead and financing (30% of hard costs). (z3) Unit type: dwelling units with similar floor area and number of bedrooms. Section 8.08.050. General inclusionary unit requirements for new residential development of twenty (20) or more lots or dwelling units. (a) Any new project involving twenty (20) or more lots or dwelling units, including but not limited to single-family dwellings, apartments or other multi -family dwellings, condominium developments, townhouse developments, cooperatives, and subdivisions, which is approved on or after the effective date of this Ordinance, shall be conditioned to provide ten (10) percent of the total number of dwelling units within the -4- a/HSNGORD1 PAGE ,.6 OF 'C development as inclusionary units affordable by lower or moderate income households. In the case of a subdivision of twenty (20) or more lots, in -lieu participation fees shall be paid for ten (10) percent of the total number of lots, rather than the provision of lots. Inclusionary ownership units shall contain a minimum floor area of 1,600 square feet (including a two car garage). For the purpose of determining the number of inclusionary units or lots required, decimal fractions of a unit shall be used. Inclusionary units and lots shall include all unit types and lot types and sizes represented in the project (unless the number of unit types and lot types and sizes exceeds the number of inclusionary units and lot types and sizes) and said unit types and lots shall be provided in the same proportion as in the project as a whole. The obligation to provide inclusionary units or lots may be satisfied in appropriate circumstances by the applicant's payment of in -lieu participation fees, as provided in Sections 8.08.110-140 of this Ordinance. In applying the ten (10) percent requirement above, any decimal fraction less than or equal to 0.50 may be disregarded and any decimal fraction greater than 0.50 shall be construed as requiring one inclusionary unit. The inclusionary requirement shall be imposed only once on a given project, regardless of changes in the character or ownership of the project. In distributing the total number of inclusionary units required into the various unit types, fractions shall be rounded upward except when rounding the number results in more than 10% of the units in the project. In those cases, fractions shall be eliminated for the unit types with the fewest number of bedrooms in the project and the unit types with the smallest floor areas. When there is an uneven (odd) number of inclusionary units required, a greater number of units shall be assigned to lower income households. Dwelling units shall be assigned to households as follows: One Person Two Persons Three & Four Persons Five Persons Six or more Persons Studio Unit One Bedroom Unit Two Bedroom Unit Three Bedroom Unit Four or more Bedroom Unit (b) Any development permit for projects of twenty (20) or more lots or units, if approved, shall be subject to conditions ensuring compliance with the provisions of this Ordinance. Such conditions shall specify the timing of construction of inclusionary units, the number of inclusionary units at appropriate levels, provisions for income certification and screening of potential purchasers and/or renters of inclusionary units, a resale control mechanism, and, if applicable, density bonuses. (c) Inclusionary units shall be subject to the requirements of this chapter for the life of the unit. Prior to the issuance -5- a/HSNGORD1 PAGE 14 OF 4 of building permits, the applicant shall record a deed restriction and if applicable, submit a declaration of covenants, conditions and restrictions subjecting the units and/or lots to the requirements of this chapter for approval by the City Attorney which deed restriction and declaration shall include a requirement of prior City approval of resale of inclusionary units. The deed restriction and declaration of covenants, conditions and restrictions shall provide that they may be enforced by the City and shall be recorded prior to the issuance of any building permits for the project. Prior to the sale of such units, the buyer(s) shall sign an acknowledgement that they are aware of the restrictions of this Chapter, the deed restriction, and the declaration of covenants, conditions and restrictions. (d) All inclusionary units shall be rented to lower income households or sold to lower and moderate income households, as certified by the City or its designee. (e) All inclusionary units in a project and phases of a project shall be constructed concurrently with or prior to the construction of non-inclusionary units. Inclusionary units shall be provided as follows: 1. Inclusionary units shall be dispersed throughout the project in areas with similar type units. 2. Inclusionary units shall include all unit types and lot types and sizes represented in the project (unless the number of required inclusionary units and lot types and sizes is less than the number of unit types and lot types and sizes) and said unit types and lot types and sizes shall be provided in the same proportion as in the project as a whole. 3. Inclusionary units shall be identical with the design of the non-inclusionary units with the following exception: a. Reduction of interior amenities for inclusionary ownership units will be permitted upon approval by the City as necessary to retain project affordability. (f) The City may contract with the Dublin Housing Authority, the Alameda County Housing Authority, or other similar entity to administer the rental, sales and in -lieu participation fee provisions of this chapter. (g) The City Council shall establish the in -lieu participation fees by resolution, which shall be adopted at least every two years. (h) The City Manager may establish administrative guidelines for administration of the provisions of this chapter. -6- a/HSNGORDI PAGES. OF y° (i) All inclusionary units under 1,600 square feet in size, including a two car garage, shall be constructed. In -lieu participation fees may be paid instead of providing units 1,600 square feet in size and larger, including a two car garage, upon approval of the City Manager. Section 8.08.060. Fee Waivers and Priority Processing. (a) To increase the feasibility of providing inclusionary units, the City Council, by Resolution may waive certain City fees applicable to the inclusionary units or the project for which they are a part. (b) A project which provides inclusionary units shall be entitled to priority processing. Upon certifying that the application is complete and eligible for priority processing, a project shall be immediately assigned to planning staff. The project shall be processed by City staff in advance of all non - priority items. The project will then be reviewed for environmental impacts; and, upon completion of the environmental review process, the project shall be scheduled for the next available meeting of the Planning Commission and/or City Council. When more than one project qualifying for priority processing is applied for at the same time, first priority will be given to the project whose application was determined to be complete earlier. Section 8.08.070. Off -site Inclusionary Units. At the discretion of the City Council, inclusionary units required pursuant to this chapter may be provided at a location within the City other than the project site. Any off -site inclusionary units must receive approval of the City Council and must meet the following criteria: (a) The off -site inclusionary units must be determined to be consistent with the City's goal of creating, preserving, maintaining, and protecting housing for lower and moderate income households. (b) The off -site inclusionary units must not result in a serious impaction of inclusionary units in any particular neighborhood. (c) An inclusionary unit shall not be transferred to another site more than once. (d) The off -site inclusionary units shall be completed prior to the final inspection of any building permit for the project and shall conform to the requirements of the applicable Building and Housing Codes and the provisions of this chapter. (e) The occupancy and rents of the off -site units shall be governed by the terms of a deed restriction, and if applicable, a -7- a/HSNGORD1 PAGE14QF4° declaration of covenants, conditions and restrictions similar to that used for the on -site inclusionary units. Section 8.08.080. Inclusionary unit requirements for rental developments. (a) Inclusionary rental units shall be offered at affordable rents as defined in this Chapter. (b) The project owner shall be responsible for obtaining and verifying information with respect to the qualifications of prospective and current tenants, including, but not limited to, information relating to applications, income and eligibility in a form satisfactory to the City Manager. The project owner shall maintain a list of qualified applicants for the duration of the program and shall allow the City Manager to inspect such information upon reasonable notice. (c) Income limits shall be adjusted by the City Manager at periodic intervals as new tables are published by HUD. (d) Dublin residents shall be given first preference for rental inclusionary units; Dublin employees shall have second preference; third preference shall be given to those who need to move to Dublin to be near Dublin residents or services; and fourth preference shall be given to those who live outside of Dublin. (e) When the eligibility of the tenants has been assured to the satisfaction of the City, the City Manager shall prepare a certification indicating that the applicant or project owner has complied with the requirements of this section. Section 8.08.090. Inclusionary unit requirements for ownership developments and subdivisions. (a) Inclusionary ownership units shall be sold at prices affordable to lower and moderate income households. Not less than one half of the inclusionary ownership units in a project must be affordable to lower income households and the balance of the inclusionary ownership units must be affordable to moderate income households. The inclusionary unit maximum sales prices corresponding to these income ranges shall be established by the City Manager at the time of project approval. (b) In land subdivisions of twenty (20) or more lots, in - lieu participation fees shall be paid for ten (10) percent of the developable lots. For fee calculation purposes, not less than one half of the inclusionary lots must be affordable to lower income households and the balance of the inclusionary lots must be affordable to moderate income households. The inclusionary unit lot sales prices corresponding to these income ranges shall be established by the City Manager at the time of project approval. In land subdivisions the lot types and sizes selected -8- a/HSNGORDl y PAGE OF for the in -lieu participation fee calculation shall be in the same proportion as they occur in the project as a whole. The City Manager shall select comparable lots in the Tri-Valley area for the purpose of calculating the in -lieu fees. The City Manager may hire an appraiser to identify lots of comparable value and determine the in -lieu participation fee. (c) All purchasers of inclusionary units shall be first time home buyers. (d) Every purchaser of an inclusionary unit shall verify on a form acceptable to the City Manager that the unit is being purchased for the purchaser's primary residence. (e) Dublin residents shall have first preference for ownership inclusionary units and lots; second preference shall be given to Dublin employees; third preference shall be given to those who need to move to Dublin to be near Dublin residents or services; and fourth preference shall be given to those who live outside Dublin. (f) The foregoing provisions of this section shall not apply to transfers by gift, devise or inheritance to the property owner's spouse or children; transfers of title to a spouse as part of a divorce or dissolution proceeding; acquisition of title or interest therein in conjunction with marriage; provided, however, that the deed restrictions and, if applicable, covenants, conditions and restrictions shall continue to run with the title to said property following such transfers. Section 8.08.100. Control of resale. In order to maintain the availability of inclusionary units which may be constructed pursuant to the requirements of this Chapter, the City shall impose the following resale conditions of approval of any project for which inclusionary units or lots are required under this Chapter: (a) The property owner of an inclusionary ownership unit, on its sale or resale, shall sell the unit to a household in the same income category. Lower income households may only sell the unit to a household which meets the income limits for a lower income household. Moderate income households may only sell the unit to a household which meets the income limits for a moderate income household. The sales price shall not be in excess of the maximum sales price set by the City Manager. (b) Prior to offering a unit for sale, the property owner shall send a written Notice of Intent to Sell to the City Manager. The City Manager will then notify the property owner of the current maximum sales price. Prior to the close of escrow, the property owner shall notify the City Manager of the proposed sales price and the City Manager shall review the sales contract to assure conformance with this chapter. -9- a/HSNGORD1 PAGE OF 40 (c) Closing costs and title insurance shall be paid pursuant to the custom and practice in Dublin at the time of opening of escrow. No charges or fees shall be imposed by the seller on the purchaser of an inclusionary unit which are in addition to or more than charges imposed upon purchasers of market rate units, except for administrative fees charged by the City. (d) The price received by the seller of an inclusionary unit shall be limited to 1) the purchase price originally paid by the seller plus a percentage increase based on the percentage increase in the San Francisco/Oakland/San Jose Consumer Price Index (as published monthly by the U.S. Department of Labor); or 2) the purchase price originally paid by the seller plus a percentage increase consistent with the increase in the median income for Alameda County for a family of four since the date of purchase; or, 3) the fair market value, whichever is less, as determined by the City Manager (refer to Attachment 1 for a sample calculation). (e) The City Manager shall monitor the resale of inclusionary units. Section 8.08.110. In -lieu participation fees. In -lieu participation fees may be appropriate for particular projects not suitable for inclusionary units due to factors such as, but not limited to, location, availability of services, extreme topography, development density, and environmental constraints. In such cases, the applicant, upon approval of the City Manager, may contribute fees in lieu of providing the inclusionary units. Such fees shall be known as "in -lieu participation fees." All inclusionary units under 1,600 square feet in size, including a garage, shall be constructed. In -lieu participation fees may be paid instead of providing units 1,600 square feet in size and larger, including garage, upon approval by the City Manager. The in -lieu participation fee will be calculated on the basis of a 1,600 square foot unit, including a two car garage. The City Council shall establish the in -lieu participation fees by resolution, which shall be adopted at least every two years. Section 8.08.120. In -lieu participation fees for ownership units and subdivisions. (a) In -lieu participation fees for projects with ownership units including land subdivisions shall be determined using the method of calculation set forth in Attachment 2 hereto. Not less than half of the inclusionary ownership units included in the calculation must be affordable to lower income households and the -10- a/HSNGORD1 PAG balance of the inclusionary ownership units must be affordable to moderate income households. Per unit in -lieu participation fees shall be calculated on the basis of the difference between the maximum affordable purchase price of a dwelling unit for a lower or moderate income household, and the estimated cost of constructing the unit, which shall be determined by the City Manager. Said differential shall be calculated for each required inclusionary unit based upon the following requirements: (1) The calculation shall be based upon a two bedroom unit with a floor area of 1,600 square feet (including the garage). In land subdivisions where the applicant does not intend to construct the dwelling units, the lot types and sizes selected for the in -lieu participation fee calculation shall be in the same proportion as they occur in the project as a whole. The City Manager shall select comparable lots in the Tri-Valley area for the purpose of calculating the in -lieu fees. (2) The estimated construction costs of the inclusionary units shall be based upon the City of Dublin Fee Schedule for Building Regulation Permits (costs/square foot for average construction) in effect at the time of approval of the project. In addition, for ownership units with common areas, construction costs for common areas shall be included (to be calculated at 15% of the total construction cost of the project divided by the total number of units in the project). (3) The estimated unimproved land costs (estimated cost of land with an approved Tentative Map) for the inclusionary units shall be determined by the City Manager. (4) The soft costs shall be based on 30% of the construction cost plus the unimproved land cost. Soft costs shall include the following (as a percentage of the construction cost plus the unimproved land cost): Profit 12% Marketing 4% Finance 10% Overhead 4% 30% (5) Total cost per inclusionary unit type shall be determined by adding estimated construction costs, costs of common area improvements, if any, and unimproved land costs (hard costs) and soft costs. (6) The following household and unit sizes shall apply for establishing household ability to pay: One Person Studio Unit Two Persons One Bedroom Unit -11- a/HSNGORD1 PAGE3! N0 Three & Four Persons Five Persons Six or more Persons Two Bedroom Unit Three Bedroom Unit Four or more Bedroom Unit (7) The maximum affordable loan amount shall be obtained from a standard Monthly Mortgage Payment Table for the average fixed interest rate (30 year loan) for Northern California in effect at the time the fees are established by the City Council. (8) In determining the maximum loan amount a 90% loan to value ratio shall be used. (b) For lot sale subdivisions, the developer shall provide in -lieu participation fees rather than lots. (c) The in -lieu participation fees for projects with ownership units or lots shall be paid in full prior to recordation of the final map. Section 8.08.130. In -lieu participation fees for rental projects. (a) In -lieu participation fees for projects with rental units shall be determined using the method of calculation set forth in Attachment 2 . In -lieu participation fees for all rental projects shall be calculated on the basis of the difference between the ability to pay of lower income households and the market rent of comparable units. Said differential shall be calculated for each required inclusionary unit based upon the following requirements: unit. 1. The calculation shall be based upon a two bedroom 2. The following household and unit sizes shall apply for establishing household ability to pay: ability 30 year One Person Two Persons Three & Four Persons Five Persons Six or more Persons Studio Unit One Bedroom Unit Two Bedroom Unit Three Bedroom Unit Four or more Bedroom Unit 3. The market rents of comparable units and the to pay of lower income households shall be based upon a period. 4. The apartment units used for determination of comparable market rental cost must be located in the Tri-Valley area (Dublin, San Ramon, Livermore and Pleasanton). -12- a/HSNGORD1 PAGE 2. (b) The in -lieu participation fees for rental units shall be paid in full prior to the final inspection clearance of any building permit for any unit in the project. Section 8.08.140. Inclusionary Housina In -Lieu Participation Fee Fund. (a) The in -lieu participation fees for ownership units and rental units shall be deposited into a fund known as the "Inclusionary Housing In -Lieu Participation Fees Fund" ("Fund") and shall be used or committed to use only for the purposes set forth in subsection (b) below. (b) All monies in the Fund, together with any interest earnings on such monies less reasonable administrative charges, shall be used by the City for the purpose of providing lower and moderate income ownership or rental housing in the City of Dublin through land acquisition, land writedowns, construction, direct contributions to non-profit associations or corporations for construction of lower and moderate income housing, landbanking (including property exchanges) and any other mechanism available to the City to provide lower and moderate income housing. (c) The monies in the Fund shall be used or committed to use only for the purposes set forth in subsection (b) above within five (5) years of the date of payment into the Fund. Any monies remaining unexpended or uncommitted at the end of the five year period shall be refunded to the then -current property owners or project owner or may be contributed to a non-profit association or corporation for the purpose of providing lower and moderate income ownership housing in Dublin, at the option of the City Council. (d) No later than June 30 of each year, the City Manager shall pea eortth Cinilifig h inte adthower and moderate income housing provided and any monies committed to providing lower and moderate income housing. The annual report shall also include a review of administrative charges. The City Council shall receive and consider the report. Section 8.08.150. Availability of aovernment subsidies. It is the intent of this ordinance that the requirements for inclusionary units shall not be reduced by the availability of government subsidies, nor precluded by the use of such programs and subsidies. Section 8.08.160. Conflict of Interest. Following are those individuals who, by virtue of their position or relationship, are found to be ineligible to purchase or rent an inclusionary unit as their residence: -13- a/HSNGORD1 PAGE ZOF yo (a) All employees and officials of the City of Dublin who have, by the authority of their position, policy making authority or influence affecting City housing programs. (b) The Applicant or Project Owner. Section 8.08.170. Violations. (a) It shall be unlawful for any person, firm, corporation, partnership or other entity to violate any provision or to fail to comply with any of the requirements of this Chapter. A violation of any of the provisions or failing to comply with any of the requirements of this Chapter shall constitute a misdemeanor; except that notwithstanding any other provisions of this Code, 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) Any person convicted of an infraction under the provisions of this Code, unless provision is otherwise herein made, shall be punishable as provided by the Government Code of the State of California. Section 8.08.180. Enforcement. (a) The provisions of this chapter shall apply to all agents, successors and assigns of an applicant. No building permit or final inspection clearance shall be issued, nor any development approval be granted which does not meet the requirements of this chapter. The City Manager may suspend or revoke any building permit or approval upon finding a violation of any provision of this chapter. (b) The City Manager is designated as the enforcing authority. (c) In the event that it is determined that rents in excess of those allowed by operation of this Chapter have been charged to a tenant residing in an inclusionary rental unit, the City may take appropriate legal action to recover, and the project owner shall be obligated to pay to the tenant or to the City in the event the tenant cannot be located, any excess rents charged. Section 8.08.190. Appeals. Any person aggrieved by any action or determination of the City Manager under this ordinance, may appeal such action or determination to the City Council in the manner provided in Section 1.04.050 of the Municipal Code." Section 2. Severabilitv. The provisions of this Ordinance are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, -14- a/HSNGORD1 PAGE z3 invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words or parts thereof of the ordinance or their applicability to other persons or circumstances. Section 3. Effective date and posting of Ordinance. This Ordinance shall take effect and be in force thirty (30) days from and after the date of its passage. The City Clerk of the City of Dublin shall cause this Ordinance to be posted in at least three (3) public places in the City of Dublin in accordance with Section 36933 of the Government Code of the State of California. PASSED AND ADOPTED by the City Council of the City of Dublin on this day of , 1991. AYES: NOES: ABSENT: ATTEST: Mayor City Clerk -15- a/HSNGORD1 PAGE z u OF 14 ATTACHMENT 1 City of Dublin Resale Price Calculation for Inclusionary Units (Example for Illustrative Purposes Only) I. The example assumes: A. Purchase Price of Inclusionary Unit = $175,000 B. Period Owned = 5 years C. Percentage Increase in the Bay Area Consumer Price Index over five year period = 15% D. Percentage increase in the Alameda County Median Income over five year period = 6% E. Fair Market Value of the unit = $200,000 II. Purchase Price plus a Percentage Increase based upon the Percentage Increase in the San Francisco/Oakland/San Jose Consumer Price Index = $175,000 x .15 = $26,250 + $175,000 = $201,250 III. Purchase Price plus a Percentage Increase consistent with the Percentage Increase in the Median Income for a family of four for Alameda County = $175,000 x .06 = $10,500 + $175,000 = $185,500 IV. Fair Market Value = $200,000 V. Allowable Sales Price (whichever amount is less) = $185,500 /atchla ATTACHMENT 2 In -Lieu Participation Fee Calculations I. Introduction Under the State Housing Law (Government Code Section 65580), local governments have a responsibility to facilitate the development of housing for all economic segments of the community. Pursuant to the State Housing Law, the City has adopted a Housing Element as part of its General Plan. In the Housing Element, the city has identified the provision of low and moderate income housing units or the payment of in -lieu participation fees as methods to implement the affordable housing goals. The purpose of this attachment is to provide a methodology to support the application of in -lieu participation fees. The need for a methodology that provides a link or nexus between the type of development and the application of the fee has been established by recent court decisions (e.g. Nollan v. California Coastal Commission) and State of California Legislation (e.g. Assembly Bill 1600). The subject of what constitutes an acceptable nexus and the application of AB 1600 to in -lieu participation fees has not been completely clarified by court decisions. However, the stronger the link established, the more defensible the requirement. The nexus for residential development fees is generally based on the rationale that the construction of market rate housing utilizes land that could otherwise be used for the development of low-income units. II. Methodoloav The in -lieu participation fees are based upon two methodologies; one for ownership units and one for rental units: A. Ownership Units In -lieu participation fees for projects with ownership units would be calculated based upon the difference between the maximum affordable purchase price of a dwelling unit for a lower or moderate income household and the estimated cost of the inclusionary unit. The following steps were followed in calculating in -lieu participation fees for projects with ownership units: 1. Determine the estimated cost of each inclusionary unit. a. Estimate the construction cost of each inclusionary unit. The construction costs would be calculated on a square foot basis using the City's Fee Schedule for building Regulation Permits (cost/square foot for average construction). In addition, construction costs for any common areas are included (15% of the 1 /atch2 total construction cost). The estimate of the construction cost of the common areas is based upon a recent survey of projects in the Tri-Valley area. b. Estimate the unimproved land cost (estimated cost of land with an approved Tentative Map) for each inclusionary unit. c. The total of the construction cost, cost of common area (if any) and the unimproved land costs equals the hard cost of the unit. d. Determine the soft costs. Soft costs include the following (30% of the construction cost plus the unimproved land cost (hard costs)): Profit 12% Marketing 4% Finance 10% Overhead 4% 30% The estimate of soft costs is based upon a recent survey of projects in the City of San Ramon. e. Determine the total cost per inclusionary unit by adding the hard costs and soft costs. 2. Determine the affordable purchase prices for both lower and moderate income households. a. Determine the household size for each inclusionary unit. For the purpose of calculating in -lieu fees, the Ordinance includes a table for converting the number of bedrooms into the number of persons/household that would occupy the unit. b. Based upon the household size, determine the maximum household income for each household type using the median income for Alameda County. Lower income households may not earn more than 80% of the County median income. Moderate income households may not earn more than 120% of the County median income. c. Determine the maximum affordable monthly mortgage payment (including principal and interest) for each unit. Households may not spend more than 30% of their income for the mortgage payment. A 10% down payment is used. d. Determine the maximum affordable loan amount for each inclusionary unit using a standard monthly mortgage payment table for the average fixed 2 /atch2 PAGE 21 OF ° interest rate (30 year loan) for Northern California in effect at the time the City Council establishes the fees. 3. Determine the in -lieu fee payment. The maximum affordable loan amount (plus 10% downpayment) is subtracted from the cost of each type of inclusionary unit and the in -lieu fees for each unit are totalled. B. Rental Projects In -lieu participation fees for projects with rental units would be calculated based upon the difference between the ability to pay of lower income households and the market rents of comparable units. The following steps would be followed in calculating in -lieu participation fees for projects with rental units: 1. Determine the market rents of units comparable to the required inclusionary units. a. Determine the monthly market rents of units comparable to each inclusionary unit. The apartment units used must be located in the Tri- Valiey area. b. Determine the amount that would be spent on rent (market rate) over a 30 year period for each type of comparable market rate unit (multiply the monthly market rents by 360 months). Increases in market rents over time are not considered in this calculation because they are offset by increases in wages over time. 2. Determine the affordable rent based on the ability to pay of lower income households. a. Determine the household size for each inclusionary unit using the table in the Ordinance. b. Based upon the household size, determine the maximum affordable monthly rent for lower income households (70% of 30% of the median income for Alameda County adjusted for family size). c. Determine the amount that would be spent over a 30 year period (multiply the monthly affordable rent by 360 months). 3. Determine the in -lieu fee payment. The 30 year affordable rent for each inclusionary unit is subtracted from the 30 year rent of a comparable unit (market rate). 3 PAGE OF 4a /atch2 III. Fee Calculations Since the land cost/unit (which is used in the ownership methodology) is based upon the density of the project, separate in -lieu fee calculations are required for each of the following residential land use designations (from the Dublin General Plan): Residential Lane Density Range Use Designations (Units/Acre) Single Family Medium Density Medium High Density .9 - 6 6.1 - 14 14.1 - 25 The high end of each density range is used in the fee calculations because it would result in more affordable housing. Pursuant to the requirements of the Ordinance, each of the fee calculations for an ownership unit is for a 1,600 square foot, two bedroom unit (including a two car garage). Fee calculations are required for the following types of projects: Type of Project - Single Family (Ownership) - Medium Density (Ownership) - Medium High Density (Ownership); and - Rental A. Single Family Residential (Ownership] 1. Determination of Hard Costs/Unit: Unit Cost of Construction + Common + Unimproved = Hard Costs/ Cost' Area/Unit Land Cost2 Unit3 $92,800 + 0 + $72,600 = $165,400 2. Determination of Soft Costs4/Unit: Hard Costs x .3 = Soft Costs $165,400 x .3 = $49,620 4 /atch2 PAGE 4C. 3. Total Cost of Inclusionary Unit: Hard Costs Soft Costs Unit Cost of Unimproved Total Cost/ Construction + Common + Land + Soft = Inclusionary Cost Area/Unit Costs/Unit Cost/Per Unit Unit $92,800 + 0 $ 72,600= $165,400 x .3= $165,400 $ 49,620 + $165,400 = $215,020 'Unit Construction Cost is based upon $58.00/square foot (for average construction of Type V Wood Frame Dwellings from the City of Dublin fee schedule for building regulation permits) for a 1,600 square foot, two bedroom dwelling unit (including a two car garage) 2Unimproved Land Cost (estimated cost of land with an approved Tentative Map) is based upon an appraisal for the site prepared within three months and acceptable to the City Manager ($435,600/acre and 6 units/acre are used in this example) =Hard Costs consist of unit construction cost, plus cost of common area, plus unimproved land cost 4Soft costs include the following (30% of the construction cost plus the unimproved land cost(hard costs)): Profit 12% Marketing 4% Finance 10% Overhead 4% 30% 4. Lower and Moderate Income Affordable Purchase Price a. Determination of Household Size (see chart in ordinance): Number of Bedrooms Number of Persons 2 4 b. Alameda County Median Income By Household Type: Household 80% 120% of Type of Median Income Median Income Lower Income $35,280 Moderate Income $52,920 c. Determination of Maximum Affordable Monthly Mortgage Payment: 5 /atch2 PAGE 3f OF . yo 4Maximum Household Type Low Income Moderate Income Maximum Household Income (B) $35,280 $52,920 Maximum Affordable Monthly Mortaage Pavment4_ affordable monthly mortgage payment = AxBxC, 12 $ 794 $1,191 where A = .3 (30% of income) B = maximum household income C = .9 (90% loan to value ratio, 10% down payment) d. Determination of Maximum Loan Amounts supported by maximum affordable monthly mortgage payment: Household Type Lower Income Moderate Income Maximum Affordable Monthly Mortaage Payment $ 794 $1,191 Maximum Affordable Loan Amounts $ 95,000 $140,000 5The maximum affordable loan amount shall be obtained from a standard Monthly Mortgage Payment Table for the average fixed interest rate (30 year loan) for Northern California in effect at the time the City Council establishes the fees. The above calculation assumes: Loan Period = 30 years (self -insuring) Interest Rate = 9.75% (fixed rate in effect at time of project approval) 10% down payment (90% loan to value ratio) e. Determination of Maximum Purchase Price: Household Type Lower Income Moderate Income Maximum Affordable 10% Down- Maximum Loan Amount + Pavment2 = Purchase Price $ 95,000 + $10,555 = $105,555 $140,000 + $15,555 = $155,555 6The maximum purchase price is calculated as follows: Maximum Affordable loan amount divided by .9. 7The 10% downpayment is calculated as follows: Maximum Purchase Price x .1. 6 PAGE 31 OF 40 5. In -Lieu Fee Payment Total Cost/ Household Inclusionary Type Unit Maximum Purchase Price In -Lieu Fee Inclusionary Unit Lower Income $215,020 - $105,555 = $109,465 Moderate Income $215,020 - $155,555 = $ 59,465 Average In -Lieu Fee/ 109,465 + 59,465 Inclusionary Unit - 2 = $ 84,465 In -Lieu Fee/ Unit In Projects - $84,465 x .1 = $ 8,446 8Add the in -lieu participation fees for a lower income unit and a moderate income unit and divide by 2 to get the average fee per inclusionary unit. 9Determine in -lieu fee per unit in the development by multiplying the average in -lieu fee per inclusionary unit by 10%. B. Medium Density (Ownership) 1. Determination of Hard Costs/Unit4: Unit Cost of Construction + Common + Unimproved = Hard Cost/ Cost' Area/Unite Land Cost3 Unit4 $92,800 + $92,800 x .15 = $13,920 + $31,111 = 2. Determination of Soft Costs'/Unit: Hard Costs x .3 = Soft Costs $137,831 x .3 = $41,349 3. Total Cost of Inclusionary Unit: $137,831 Total Cost/ Hard Costs/ + Soft Inclusionary Unit4 Costs Unit Unit Cost of Unimproved Total Cost/ Construction + Common + Land Cost/ + Soft = Inclusionary Cost Areas/Unit Unit Costs Unit $92,800 + $13,920 + $31,111 + $41,349 = $179,180 'Unit Construction Cost is based upon $58.00/square foot (for average construction of Type V Wood Frame Dwellings from the City of Dublin fee schedule for building regulation permits) for a 1600 dwelling unit (including a two car garage) 7 PAGE _zuOF 46 /atch2 2Common areas include common landscaped areas and recreation facilities (15% of the construction cost) 3Unimproved Land Cost is based upon an appraisal for the site prepared within three months and acceptable to the City Manager ($435,600/acre and 14 units/acre) 4"Hard Costs" consist of unit construction cost, plus cost of common area, plus unimproved land cost. 'Soft costs include the following (30% of the construction cost plus the improved land cost(hard costs)): Profit 12% Marketing 4% Finance 10% Overhead 4% 30% 4. Lower and Moderate Income Affordable Purchase Price a. Determination of Household Size (see chart in ordinance): Number of Bedrooms Number of Persons 2 4 b. Alameda County Median Income By Household Type: 80% 120% of Household Type of Median Income Median Income Lower Income $35,280 Moderate Income $52,920 c. Determination of Maximum Affordable Monthly Mortgage Payment: Household Type Lower Income Moderate Income Maximum Household Maximum Household Income (B) Mortgage Payment4 $35,280 $52,920 4Maximum monthly mortgage payment AxBxC, 12 where A = .3 (30% of income) B = maximum household income C = .9 (90% loan to value ratio, 10% down payment $ 794 $1,191 /atch2 8 PAGE 33 OF uo d. Determination of Maximum Loan Amounts supported by maximum monthly mortgage payment: Household Type Lower Income Moderate Income Maximum Monthly Maximum Loan Mortgage Payment Amounts $ 794 $1,191 $ 95,000 $140,000 The maximum loan amount shall be obtained from a standard Monthly Mortgage Payment Table for the average fixed interest rate (30 year loan) for Northern California in effect at the time of earliest discretionary approval including, but not limited to Prezoning, Planned Development, or Tentative Map. The above calculation assumes: Loan Period = 30 years (self -insuring) Interest Rate = 9.75% (fixed rate in effect at time of project approval) 10% down payment (90% loan to value ratio) Household Type Lower Income Moderate Income e. Determination of Maximum Purchase Price: Maximum Affordable 10% Down - Loan Amount Payment $ 95,000 $140,000 $10,555 $15,555 6The maximum purchase price is calculated as follows: Affordable loan amount divided by .9. 'The 10% downpayment is calculated as follows: Maximum Purchase Price x .1. Maximum Purchase Price $105,555 $155,555 5. In -Lieu Fee Payment: Household Type Lower Income Moderate Income Total Cost/ Inclusionary Unit $179,180 $179,180 Maximum Purchase Price - $105,555 - $155,555 Average In -Lieu $73,625 Fee/Inclusionary Unit° _ In -Lieu Fee/ Unit In Project9 + $23,625 2 $48,625 x °Add the in -lieu participation fees for moderate income unit and divide by 2 to inclusionary unit. .1 a lower get the Maximum In -Lieu Fee/ Inclusionary Unit $73,625 _ $23,625 $48,625 $4,862 income unit and a average fee per /atch2 9 PAGE .3 u OF 4 d 9Determine in -lieu fee per unit in the development by multiplying the average in -lieu fee per inclusionary unit by 10%. C. Medium High Density (Ownership) 1. Determination of Hard Costs/Unit: Unit Cost of Construction + Common + Unimproved = Hard Cost' Area/Unite Land Costs3 Costs4 $92,800 x .15 = $92,800 $13,920 + $17,424 = $124,144 2. Determination of Soft Costs/Unit: Hard Cost/ Unit x .3 Soft Costs $124,144 x .3 = $37,243 'Construction Cost is based upon $58.00/square foot (for average construction of Type V Wood Frame Dwellings from the City of Dublin fee schedule for building regulation permits) for a 1,600 dwelling unit (including a two car garage) 2Common areas include common landscaped areas and recreation facilities (15% of the construction cost) 3Unimproved Land Cost is based upon an appraisal for the site prepared within three months and acceptable to the City Manager ($435,600/acre and 25 units/acre) 4"Hard Costs" consist of unit construction cost, plus cost of common area, plus unimproved land cost. Soft costs include the following (30% of the construction cost plus the improved land cost(hard costs)): Profit 12% Marketing 4% Finance 10% Overhead 4% 30% 3. Total Costs of Inclusionary Unit: Hard Costs/ Unit Soft Costs Unit Cost of Unimproved Total Cost/ Construction + Common + Land Cost/ + Soft = Inclusionary Cost Area/Unit Unit Costs Unit $92,800 + $13,920 + $17,424 + $37,243 = $161,387 10 PAGE 3 OF 4° /atch2 Household Type 4. Lower and Moderate Income Affordable Purchase Prices: a. Determination of Household Size (see chart in ordinance): Number of Bedrooms Number of Persons 2 4 b. Alameda County Median Income By Household Type: 80% 120% of of Median Income Median Income Lower Income $35,280 Moderate Income $52,920 c. Determination of Maximum Affordable Monthly Mortgage Payment: Maximum Household Maximum Household Household Type Income (B) Mortgage Payment4 Lower Income Moderate Income $35,280 $52,920 4Maximum monthly mortgage payment = AxBxC, where 12 $ 794 $1, 191 A = .3 (30% of income) B = maximum household income C = .9 (90% loan to value ratio, 10% down payment d. Determination of Maximum Loan Amounts supported by maximum monthly mortgage payment: Maximum Monthly Maximum Loan Household Type Mortgaqe Payment Amounts Lower Income Moderate Income $ 794 $1, 191 $ 95,000 $140,000 The maximum loan amount shall be obtained from a standard Monthly Mortgage Payment Table for the average fixed interest rate (30 year loan) for Northern California in effect at the time of earliest discretionary approval including, but not limited to Prezoning, Planned Development, or Tentative Map. The above calculation assumes: Loan Period = 30 years (self -insuring) Interest Rate = 9.75% (fixed rate in effect at time of project approval) 10% down payment (90% loan to value ratio) 11 /atch2 PAGE 34 OF 4 0 Household Type Lower Income Moderate Income e. Determination of Maximum Purchase Price: Maximum Affordable Loan Amount $ 95,000 $140,000 6The maximum purchase price is Affordable loan amount divided 10% Down - Payment' $10,555 $15,555 calculated as follows: by .9. 'The 10% downpayment is calculated as follows: Price x .1. 5. In -Lieu Fee Payment: Household Type Lower Income Moderate Income Total Cost/ Inclusionary Unit $161,387 $161,387 Average In -Lieu Fee/Inclusionary Unite = In -Lieu Fee/ Unit In Project9 = $55,832 Maximum Purchase Price $105,555 $155,555 + $5,832 2 $30,832 x .1 a lower get the Maximum Purchase Price6 $105,555 $155,555 Maximum Maximum Purchase In -Lieu Fee/ Inclusionary Unit $55,832 $ 5,832 $30,832 $3,083 °Add the in -lieu participation fees for a moderate income unit and divide by 2 to inclusionary unit. 9Determine in -lieu fee per unit in the development by multiplying average in -lieu fee per inclusionary unit by 10%. D. Rental 1. Unit Type 2 bedroom 2. income unit and average fee per the Rents of Comparable Unit: Comparable 30 Year Rent of Monthly Rent Comparable Units $850 x 360 = $306,000 Ability to Pay of Lower Income Household: a. Determination of Household Size (Refer to Table in Ordinance: Number of Number of Bedrooms Persons/Household 2 4 /atch2 12 PAGE 31 0 b. Alameda County Median Income By Household Size: Household Size Alameda County Median Income 4 $44,100 c. Determination of Maximum Affordable Monthly Rent:' Alameda County Maximum Affordable Median Income Monthly Rent $44,100 x .7 x .3 divided by 12 = $772 1Refer to Section 8.08.040(a) of ordinance. d. Maximum Affordable Rent Over 30 Year Period: 30 Year Affordable Rent $772 x 360 = $277,920 3. In -Lieu Fee Payment: 30 Year Rent of Comparable Units $306,000 In -Lieu Fee/ Unit In the Project 30 Year In -Lieu Fee Affordable Rent (Per Inclusionary Unit) 277,920 = $28,080 $28,080 x .1 = $ 2,808 /atch2 13 PACE 38 OF 4d Administrative Guideline for Inclusionary Rental Protects The Property Owner of each project is responsible for obtaining and verifying information with respect to the qualifications of tenants. The Owner may delegate performance of the necessary duties, by means of a resident manager. The Property Owner shall: 1. Maintain an application log showing name, date and time of application and dwelling unit size requested for each applicant. 2. Complete a Verification of Income form (to be obtained from the Dublin Housing Authority) for each prospective tenant and attach a copy of the relevant income verification to the form. In order to maintain eligibility, the Certification of Tenant Eligibility form must be completed annually for each Lower -Income Tenant. In the event a tenant who qualifies as a Lower -Income Tenant subsequently ceases to meet the income or other requirements of a Lower -Income Tenant, such tenant will be deemed to be a Lower -Income Tenant as long as such tenant continues to reside in the residential unit resided in at the time such tenant qualified as a Lower -Income Tenant, but only so long as the Annual Income of such tenant does not exceed 120% of the median income in Alameda County for purposes of the Program and for one year determination of that status by City Staff, at which time, if the tenant deemed to be a Lower -Income Tenant continues to fail to meet the income or other requirements of a Lower -Income Tenant, such tenant will no longer be deemed to be a Lower -Income Tenant and shall vacate the dwelling. At the time that a tenant no longer is deemed to be a Lower -Income Tenant, the unit occupied by such tenant no longer qualifies to be designated as a unit for occupancy by Lower -Income Tenants, and the tenant is no longer entitled to rent such unit at an Affordable Rent. 3. Maintain prospective tenant documentation in an easily accessible 4. Maintain rejected applicant easily accessible filing system. files and all supporting filing system. files and filed in an 5. Keep all records for at least three years. 6. Obtain at the time of initial rental and annually thereafter and to maintain on file from each individual or family occupying an inclusionary unit, a copy of such Tenant's federal income tax return for the taxable year immediately preceding or, if such tax return is unavailable, other reasonably satisfactory evidence of income for such year. /hsngordl PAGE 39 OF t4© 7. Permit any duly authorized representative of the City to inspect the books and records of the Property Owner pertaining to the incomes of Tenants or other individuals or families occupying inclusionary units. 8. Prepare and submit to the City at the initial occupancy of the project, within 15 days after the end of each calendar quarter thereafter and at such other times as shall be required in order to confirm compliance with the occupancy requirements, a Certificate of Continuing Program Compliance (to be provided by the City), executed by the Property Owner, and stating the percentage of the residential units of the project which were occupied by Lower -Income Tenants, or held vacant and available for occupancy by Lower -Income Tenants. 9. Maintain on file for examination during business hours by authorized City representatives, all tenant lists, application, waiting lists, certifications and verifications relating to the project, and to deliver to such representatives written certifications of the status of the occupancy of the project on a monthly basis and vacancy lists on a current basis. /hsngordl PAGE L'iO OF uo