HomeMy WebLinkAboutStudy Session Item a - Inclusionary Housing Memo
Study Session Item a.
Inclusionary Housing Memo
Date: September 5, 2024
To: Mayor and City Council
From: Jason Kruckeberg, Assistant City Manager/Development Services Director
C: Dominic Lazzaretto, City Manager
Mike Maurer, City Attorney
Re: INCLUSIONARY HOUSING ORDINANCE – MATERIALS REQUESTED
BY CITY COUNCIL
At the June 4, 2024, City Council Meeting, a Study Session was held related to a Draft
Inclusionary Housing Ordinance being completed by the Development Services
Department. Inclusionary Housing Ordinances are a common tool for cities to require
affordable housing units to be built along with typical market rate housing. For the City,
the Ordinance being drafted is a result of the City’s recently approved Housing Element
and is a portion of the Element that is necessary to achieve the capacity for affordable
housing units needed throughout the City.
At the conclusion of the June 4 Meeting, the City Council requested that the Staff provide
additional information and bring the Ordinance back in the near future. This memo and
the related attachments are in response to the City Council’s request. The item will be
returned to the City Council in Study Session format at the October 1, 2024, City Council
meeting.
The City Council requested the following pieces of additional information:
x Is it possible to provide priority in affordable housing units through the Ordinance
to Arcadia residents, first responders, teachers, etc. either as a percentage of
available affordable units or in projects funded by the in-lieu fees ultimately
collected?
The short answer is, it is not recommended to add these restrictions into the Ordinance.
However, the City does work with developers along these lines, and developers have
shown an interest in developing criteria for distributing their units based on local
preferences. Working with individual developers and their specific projects is a
recommended course of action rather than requiring it as part of an Ordinance.
To provide more detail, requiring affordable units to be provided through an Inclusionary
Ordinance subjects the City to various federal and state anti-discrimination and fair
housing laws. If the City’s prioritization program were challenged, the most likely statutes
implicated would be: (1) The Fair Housing Act and Fair Housing Amendments Act of 1988
(collectively the “FHA”); (2) Title VI of the Civil Rights Act; (3) The Fair Employment and
Housing Act; and (4) The Unruh Civil Rights Act. We can provide more information on
any of these individual laws as needed but the sum total of their impact is that the City
must make units available to all potential groups. By restricting units to specific groups,
the City could be found to be discriminatory against other groups. For example, the City’s
demographics do not mirror the demographics found in many areas of Los Angeles
County, both in terms of race and median income. So, if an Arcadia resident restriction
was applied, this would allow for challenge on the basis that an equal opportunity is not
being provided. Similarly, if units were restricted (per Ordinance) to various specific
groups like teachers, first responders, or city employees, similar claims of discrimination
could be lodged that this leaves out a fair chance at housing for all groups.
The answer above is softened somewhat if the City is acting as developer (e.g. City land
is being developed). But, it is recommended that this type of restriction be left out of the
Ordinance and Staff be directed to work with the development community on these issues
on a case by case basis.
x How many cities in LA County have an Inclusionary Ordinance?
A total of 21 of the 88 cities in LA County have Inclusionary Housing Ordinances.
x Describe the evolution of Inclusionary Ordinances in neighboring cities, did the
percentage increase or decrease, were Ordinances made more stringent or not?
Our consultant put together the attached document, entitled “Summary of Local
Inclusionary Housing Ordinances” to answer this question. The document includes
a table that provides information on the major highlights of 11 other cities’
ordinances (Table 1) as well as a comprehensive list of the changes that have
occurred for six different cities’ ordinances (Table 2).
x What is the percentage of affordable units in major development projects
currently being processed by the City?
Pending Mixed Use Developments with Affordable Housing Units in
Arcadia (8/20/24)
Address/Project
Name
Affordable
Unit Count
Percentage of
Affordable Units
(Rounded)
Affordability Level
34 E. Santa Clara St.
(Alexan Azalea Mixed-
Use Project)
26 out of
319 total units
8% Very Low
233 & 301 E.
Huntington Drive
(Derby Mixed-Use
Project)
9 out of
214 total units
4% Very Low
1101 W. Huntington
Drive
(Huntington Village
Mixed-Use Project)
26 out of
278 total units
9% Not Yet Determined
325 N. Santa Anita
Avenue
(Alexan Arroyo Mixed-
Use Project)
35 out of
359 total units
10% Very Low
Total 96
Please let us know if you need any additional information prior to the meeting on October
1.
Attachments:
1) Summary of Local Inclusionary Housing Ordinances
2) PowerPoint presentation slides from June 4, 2024, City Council Study Session
(Revised)
Summary of Local Inclusionary Housing Ordinances 1
SSummary of Local IInclusionary
HHousing OOrdinances
Summary of Local Inclusionary Housing Ordinances 2
SUMMARY OF LOCAL INCLUSIONARY HOUSING ORIDNANCES
Successful Inclusionary Housing Ordinances are drafted with intention and applicability in mind.
Jurisdictions often engage in studies to determine what policies are appropriate to facilitate
affordable housing development in the respective community. While jurisdictions may rely on
studies and due diligence to guide the development of Inclusionary Housing policies, there are
general guiding principles and factors that influence the effectiveness of Inclusionary Housing
policies.
Factors That Influence the Effectiveness of Inclusionary Housing:
x Code Structure: The common elements of an Inclusionary Housing Ordinance are:
applicability, set-aside requirements, income targeting, and alternatives and incentives.
The structure and details of these code elements can have a considerable influence on
the effectiveness of an Inclusionary Housing Ordinance in a jurisdiction.
x Code Clarity and Accessibility: Inclusionary Housing Ordinances that are clearly
written and user friendly are more likely to be successful. Policies that are only
mandatory based on feasibility tend to be unclear and weaker than straightforward
policies that apply to all qualifying applicants. Also, according to best practices for
successful inclusionary housing programs, alternatives and incentives should be
authorized in the ordinance for the sake of clarity. In general, the cities with the most
successful Inclusionary Housing Ordinances have firm unconditional requirements and
alternatives that are authorized in their codes. Conversely, jurisdictions whose
requirements are mandatory, dependent on feasibility, have had relatively less
successful policies.
x Staff Support and Political Will: The final factor that influences the success of an
Inclusionary Housing Ordinances is the level of support coming from city staff and
elected officials; even community members and developers. Staff and City Council
members in virtually all cities with Inclusionary Housing policies support inclusionary
housing in their cities for several reasons including that: it allows their cities to grow
wisely, it will meet the needs of the community, and it helps balance development.
As of July 2024, 21 out of 88 Cities in Los Angeles County currently have an Inclusionary
Housing Ordinance, including:
x Agoura Hills
x Alhambra
x Avalon
x Beverly Hills
x Burbank
x Calabasas
x Claremont
x Cudahy
x Downey
x El Monte
x Glendale
x Huntington Park
x Long Beach
x Lynwood
x Monterey Park
x Pasadena
x Pomona
x Santa Monica
x South Gate
x South Pasadena
x West Hollywood
x Los Angeles
County
Summary of Local Inclusionary Housing Ordinances 3
The table below analyzes the progress of local jurisdictions’ Inclusionary Housing efforts. It is
difficult to determine why jurisdictions decide to adopt or not to adopt Inclusionary Housing
Ordinances but the information below presents findings from public hearings and publicly
available sources.
Summary of Local Inclusionary Housing Ordinances 4
Table 1: Summary of Local Inclusionary Housing Ordinances
Jurisdiction Inclusionary Housing Context
Pasadena Pasadena Municipal Code Chapter 17.42:
x Ten or more units shall provide 20% of the total number of units for affordable housing
x Alternatives include offsite construction, in-lieu fees, and land dedication
x Incentives include waiving of certain development impact fees
x Affordability period of 45 years ownership units and in perpetuity for rental units
Alhambra Alhambra Municipal Code Chapter 23.89: Inclusionary Housing:
x Seven or more units shall provide 15% of the total number of units for affordable housing.
x Projects of five or six units shall pay in-lieu fees.
x Alternatives include offsite construction, in-lieu fees, and land dedication.
Alhambra to review the Inclusionary Housing Ordinance biannually for effectiveness. No evaluations have been
published. Fees have not been revised since adoption.
Azusa Inclusionary Housing Ordinance included as a program in their 2021-2029 Housing Element. The City of Azusa will
study Inclusionary Housing Ordinances and adopt an ordinance if appropriate.
According to the City’s 2023 Annual Progress Report these studies have not begun.
Baldwin Park Inclusionary Housing Ordinance included as a program in their 2021-2029 Housing Element. The City study
Inclusionary Housing Ordinances and adopt an ordinance if appropriate.
No further actions have been taken.
Duarte The City of Duarte temporarily suspended its Inclusionary Housing Ordinance in 2016 and did not reinstate its
Inclusionary Housing Ordinance as a result of the Inclusionary Housing Feasibility Study prepared by Harris &
Associates in August 2020.
x Main findings:
o The city’s rate of return is lower than the average in Los Angeles County without in-lieu fees (4.32%)
and is even lower with in-lieu fees (4.30%).
o Only two cities in the San Gabriel Valley have Inclusionary Housing Requirements.
Pasadena and Claremont – both cities have high rent rates and high housing demands.
Summary of Local Inclusionary Housing Ordinances 5
Table 1: Summary of Local Inclusionary Housing Ordinances
Jurisdiction Inclusionary Housing Context
o The State provides incentives for the development of affordable housing.
o Inclusionary Housing Ordinances could negatively impact the amount of residential construction.
El Monte El Monte Municipal Code Chapter 17.102:
x Inclusionary housing ordinance applies to new developments of ten or more dwelling units unless exempt by
section 17.102.030 of the El Monte Municipal Code.
x 15% of units at low (9%) and moderate (6%) incomes.
x Alternatives include in-lieu fees, off-site construction, off-site rehabilitation, and land dedication.
Planning Commission
x First study session April 26, 2022 (Minutes are not available).
x Second Study Session March 15, 2023 (Minutes are not available).
x Public Hearing March 28, 2023 (Minutes not available).
x Public Hearing April 13, 2023(Minutes not available).
o Planning Commission recommended the code amendments.
City Council
x Adopted Inclusionary Housing Ordinance – May 2, 2023.
o No further actions have been taken.
Monrovia On January 18, 2022 Monrovia’s City Council approved Sagecrest Planning and Environmental as the consultants to
prepare their Inclusionary Housing Ordinance.
x Monrovia’s 2023 Annual Progress Report confirms a feasibility study is currently being reviewed by city staff
and that the city plans to continue this effort but the market conditions continuous changes have delayed this
study.
o There is no information on what is being proposed currently, but per the 6th cycle adopted Housing
Element the Inclusionary Housing ordinance would have a minimum of 20% set aside for affordable
housing.
Monterey Park Inclusionary Housing Ordinance adopted September 6, 2023 (Chapter 21.19 Zoning Code)
x Applies to developments of five or more units.
x 15% for rental projects (9% very low & low-income and 6% moderate-income) and 15% for-rent projects at
Summary of Local Inclusionary Housing Ordinances 6
Table 1: Summary of Local Inclusionary Housing Ordinances
Jurisdiction Inclusionary Housing Context
moderate-income.
x Deed-restrictions – 55 years for rental projects and 45 years for for-sale units.
x Alternatives; off-site units, land dedication, and in-lieu fees.
San Gabriel April 10, 2023, Planning Commission – Inclusionary Housing Ordinance was introduced.
Background:
x September 6, 2022 – feasibility study presented to Planning Commission – Planning Commission requested
to expand the study.
Feasibility study takeaways:
x As inclusionary percentages increase, development decreases and feasibility percentages decrease.
x Study recommends for the city to take a conservative approach.
o Consider inclusionary requirement for for-sale development of no more than 10%.
o Do not consider inclusionary for rental development.
Planning Commission adopted a resolution recommending:
x Rental properties with ten or more units shall provide 10% inclusionary units and/or an in-lieu fee.
x For-sale properties with five or more units shall provide 15% inclusionary requirement and/or an in-lieu fee.
City Council
x On June 20, 2023 City Council considered adopting an Inclusionary Housing Ordinance. City Council directed
staff to come back with a revised Inclusionary Housing Ordinance and a revised feasibility study that uses pro
forma numbers.
o Recommendations include: no more than 10% inclusionary requirement for for-sale unit sand no
requirement for rental units.
x No further updates.
South Pasadena South Pasadena’s City Council adopted the Inclusionary Housing Ordinance on May 5, 2021 and added division
36.375 to Chapter 36 of the City’s Zoning Code.
x A minimum of 15% of new developments.
x Alternatives include off-site units, rehabilitation/conversion of units, dedication of land, and in-lieu fees.
Summary of Local Inclusionary Housing Ordinances 7
Table 1: Summary of Local Inclusionary Housing Ordinances
Jurisdiction Inclusionary Housing Context
x No in-lieu fees adopted as of 2024.
Temple City On June 21, 2022, Temple City partnered with the San Gabriel Valley Council of Governments (SGVCOG) to study
the feasibility of adopting an Inclusionary Housing Ordinance.
x July 5, 2023 - City Community Development Director reported to the Planning Commission that they received
the Inclusionary Housing Ordinance feasibility study, but the Agenda did not attach the study and the meeting
minutes did not include the discussion on the topic.
x City Council - Consultant Services Agreement 10/17/23 for economic analysis for an inclusionary housing
ordinance.
x No further updates.
Summary of Local Inclusionary Housing Ordinances 8
Table 2 - Changes in Inclusionary Housing Ordinances
Jurisdiction Current Inclusionary Housing Ordinance Changes / Considerations
Glendale Glendale Municipal Code Chapter 30.35
x Requires 15% of total units to be affordable
for projects with eight or more units
x Ownership projects exempt
x Deed restriction of 55 years minimum
x Alternatives include
o Off-site units
o Acquisition and rehabilitation of
existing units
o In-lieu fees (fee x sq ft)
8-units $28.71 - sq. ft.
9-units $30.69 - sq. ft.
10-units $33.00 - sq. ft.
11-15 units $44.00 - sq. ft.
16-20 units $49.50 - sq. ft.
21 units or more - $55.00 -
sq. ft.
Originally adopted in 2004, nullified in 2009 and reinstated in 2019.
Changes made:
x August 16, 2011 – Ordinance 5747
o Changes were made to reflect change in department name
no major changes to the ordinance itself
x May 7, 2019 – Ordinance 5928
o Inclusionary requirement made applicable to developments
of eight or more units rather than 5 or more units
o In-lieu fee payment deferred to time of issuance of temporary
or final certificate of occupancy
o Ownership projects made exempt from ordinance
x In-lieu fees have not been increased since 2019
x Inclusionary percentage has not changed since 2019
Irvine Irvine Municipal Code Chapter 2-3
x Requires 15% of new construction to be
affordable units at 5% very-low, 5% low-
income, and 5% moderate-income with a
minimum affordability period of 30 years
x Alternatives include:
o Convert existing market rate housing
to affordable housing for a period of
at least 30 years
o Extend the term of affordability for
affordable units for a period of at
least 40 years
Originally adopted in 2003 with no amendments since adoption.
In-lieu fees are determined using a formula: The cost of vacant residential
land in the City divided by the density at which non -profit developers are
building affordable units within the City. An additional $250 per unit
predevelopment cost allowance and an 11.11%share of cost for 10% of the
units is added to this number.
The City of Irvine is in the process of updating their Inclusionary Housing
Ordinance.
Planning Commission August 3, 2023
Summary of Local Inclusionary Housing Ordinances 9
o In-lieu fees
o Transfer control of units to a
nonprofit housing agency
o Transfer of off-site credits for
affordable units not provided on the
site
o Provision of alternative housing
o Dedication of land
o An alternative option acceptable to
the city
x Program in 6th Cycle Housing Element – revisiting IHO as a result of
growing need for affordable housing.
x July 2023 – Draft Affordable Housing Requirement and Affordable
Housing In-Lieu Fee Update Study which recommends that the City:
x Increase percent required from 15% to 20%
o 9% very-low income, 6% low-income, and 5% moderate-
income
x Update in-lieu fees methodology and calculation
o Three option methods: 1) per unit land cost calculation, 2)
affordability gap calculation, 3) new construction full cost
recovery calculation
o Recommends the affordability gap calculation and for the
city to review the in-lieu fees once every five years
x Homeownership requirements:
o 20% not found to be feasible, 15% and 10% feasible
requirement
x Staff Recommendation
o Increase affordability period to 55 years
Commissioners motioned to move the item into a second public hearing
which has yet to happen due to multiple cancellations of planning
commission meetings.
No further action has been taken.
Long Beach Long Beach Municipal Code Chapter 21.67
x Applicable to 10 or more units
developments in the Downtown and
Midtown areas
x Percentages required correspond with the
calendar year the first approval is granted.
o Ownership development:
2021 - 4%
2022 - 5%
2023+ - 10%
o Rental development:
Originally adopted February 2021.
In-lieu fee study was conducted in 2019 prior to adoption of the Inclusionary
Housing Ordinance. No further updates have been made. In -Lieu fees are
as follow:
Summary of Local Inclusionary Housing Ordinances 10
2021 5%
2022 6%
2023+ 11%
x Alternatives include
o In-lieu fees
o Land dedication
o Alternative compliance method
approved by the City Council
Amended in February 2022
x Section 21.67.110(c)
o 2021: 70% of the money in the housing trust fund expended
on low-income housing and 30% to moderate-income
o Current: all funds for “newly constructed housing affordable
to very-low-income households”
City staff was directed to evaluate the Inclusionary Housing Ordinance and
recommend changes in 2024.
x City staff presented updates and potential amendments to the
inclusionary housing ordinance to Long Beah City Council on May
14, 2024, and presented to the Housing and Public Health
Committee on June 11, 2024.
x City committed to expanding inclusionary requirement citywide in
their 6th Cycle Housing Element
x City has seen an increase in affordable housing development since
the adoption of the inclusionary housing requirements
x Staff present the committee with three courses of action for rental
developments affordability requirements:
o Option A: Expand requirements citywide
o Option B: Apply mixed-income requirements citywide
o Option C: Apply affordability requirements based on
opportunity areas
x Other proposed policy modifications:
o Round up fractional units when calculating number of
Summary of Local Inclusionary Housing Ordinances 11
affordable units
o Make the Planning Commission the approving body for
alternative compliance options rather than the City Council
o Remove requirement for land dedication to be one mile away
from housing development but still have staff or decision-
making body approve the location
o Ownership units shall be sold to first-time homebuyers
o Additional flexibility for developments that exceed
affordability requirement
City staff to conduct next community and stakeholder meeting from August
to early September with a Planning Commission study session currently
scheduled for August 15.
Montclair Montclair Municipal Code Chapter 11.81
x Requires 15% of all new residential
development in redevelopment project
areas to be affordable units
x Deed Restricted 55 years minimum
x Alternatives on a case-by-case basis:
o In-lieu fees
o Combined inclusionary housing
projects
Original adopted in 2005.
City committed to update their Inclusionary Housing Ordinance in their 6th
Cycle Housing Element. Proposed changes include:
x Requiring new developments of three or more units to include
inclusionary units. The number of inclusionary units would be
determined by the tenure and unit type proposed
x Allow in-lieu fees as a by-right alternative
As of 2022, the in-lieu fee is $15,400 per unit. There is no further
information readily available regarding the methods and yearly changes
made to the in-lieu fee.
Pasadena Pasadena Municipal Code Chapter 17.42
x Ten or more units shall provide 20% of the total
number of units for affordable housing
x Alternatives include offsite construction, in-lieu
fees, and land dedication
x Incentives include waiving of certain
development impact fees
x Affordability period of 45 years ownership units
and in perpetuity for rental units
Originally adopted in 2001.
Amended 2003, 2004, 2005, 2006, 2013, 2017, and 2019. Changes include:
x Inclusionary Housing requirement increased from 15% to 20% for
projects with ten or more units
x Eliminated trade-down provisions
The City has completed in-lieu fee analysis using and affordability gap
analysis to determine if in-lieu fees should be revised.
x The table below contains the fee schedule for the past five fiscal
Summary of Local Inclusionary Housing Ordinances 12
years.
Summary of Local Inclusionary Housing Ordinances 13
Pomona Pomona Municipal Code Chapter 74 Article VIII
x Inclusionary requirement can be met for for-
sale units by:
o If developing single-family detached
units allocate 7% of units to
moderate-income households,
o If developing townhomes,
condominium, or similar attached
dwelling units allocate 11% to
moderate-income households, or
have 15% rental development within
or outside the boundaries of the
development for low-income
households
x Inclusionary requirement can be met for
rental developments by:
o Allocating 13% of units to moderate-
income
o Or allocate 15% of units off-site
x For-sale units 45 cumulative years of
affordability – for rent units 55 years
minimum
x Alternatives include:
o In-lieu Fees
o Land Dedication
Originally adopted February 1, 2021. Fees have not been amended since
adoption.
Summary of Local Inclusionary Housing Ordinances 14
Santa Ana Santa Ana Municipal Code Article XVIII.I
x For sale units 5% inclusionary requirement
x Rental units could be
o 15% low-income units
o 10% very-low-income units
o 5% extremely low-income units
o 10% affordable units at 5% low-
income, 3% very-low income, 2%
extremely low income
x Alternatives include:
o Off-site units
o In-lieu fees
5—9 units: $6.00 per sq ft
10—14 units: $9.00 per sq ft
15—19 units: $12.00 per sq
ft
20 or more: $15.00 per sq ft
Originally adopted in 2011.
Amendments
x 2015- Ordinance No. NS-2881 introduced alternatives to the
inclusionary requirements and introduced in-lieu fees
x 2020 – Ordinance No. NS-2994 city reduced in-lieu fees due to the
COVID-19 Pandemic
x 2021- ordinance repealed and reinstated
No information readily available regarding method to calculate in -lieu fees or
past changes.
Inclusionary
Housing
June 4, 2024
City Council Study Session
1
What is Inclusionary
Housing?
An Inclusionary Housing Ordinance (IHO)
requires that residential developments
include some affordable housing units.
An inclusionary housing ordinance’s key
objective is:
To expand the affordable housing stock
within a community through the
establishment of standards and
provisions that require the
development of housing affordable to
lower and moderate-income
households
2
Housing Affordability Income Levels
Los Angeles County Income Limits 2024
(Based on Household Size)
123 45 6 7 8
Extremely
Low 29,150 33,300 37,450 41,600 44,950 48,300 51,600 54,950
Very Low
Income 48,550 55,450 62,400 69,350 74,900 80,450 86,000 91,550
Low
Income*77,700 88,800 99,900 110,950 119,850 128,750 137,600 146,500
Median
Income 68,750 78,550 88,400 98,200 106,050 113,900 121,750 129,600
Moderate
Income 82,500 94,300 106,050 117,850 127,300 136,700 146,150 155,550
Why is an
Ordinance
Needed?
Arcadia’s 6th Cycle Regional Housing
Needs Assessment (RHNA)
Why is an
Ordinance
Needed?
(Continued)
Funding Limitations
– No other
dedicated funding
source
Lack of city-owned
land and public
housing
Enables affordable
units to be integrated
into larger
developments and
appear as coordinated,
cohesive projects
Most “bang for the
buck” because of
density bonus and
other incentives
Timeframe of the Housing Element &
Implementation
February 15,
2022: City Council
Approves 2021-
2029 Housing
Element Update
February 6, 2024:
City Council
Approves Citywide
rezoning effort
related to the
approved Housing
Element Update
February 9, 2024:
Department of
Housing and
Community
Development
certifies Arcadia’s
Housing Element
2022 - 2029:
Implementation
Plan follow-up
actions underway.
IHO is identified in
the Plan (Program
5-19)
6
The Housing Element includes timeframes for the City to complete required
Implementation Actions, which includes implementation of an IHO
Future Affordable Housing in Arcadia
7
Pending Mixed Use Developments with Affordable Housing Units in Arcadia
8/20/24
Address/Project Name Affordable Unit
Count
Percentage of
Affordable Units
(Rounded)
Affordability Level
34 E. Santa Clara St.
(Alexan Azalea Mixed-Use Project)
26 out of
319 total units 8% Very Low
233 & 301 E. Huntington Drive
(Derby Mixed-Use Project)
9out of
214 total units 4% Very Low
1101 W. Huntington Drive
(Huntington Village Mixed-Use Project)
26 out of
278 total units 9% Not Yet Determined
325 N. Santa Anita Avenue
(Alexan Arroyo Mixed-Use Project)
35 out of
359 total units 10% Very Low
Total 96
Los Angeles County
Inclusionary Ordinances
Across Los Angeles County,
IHOs typically:
•Have a threshold trigger from
3 –10 units
•% of affordable units required:
15% -20%
•Affordability period: 45 years –
perpetuity
8
Have an IHO
Pasadena
South Pasadena
Alhambra
Claremont
Los Angeles County
Pomona
Key Componentsof
Arcadia’s Draft IHO
•Applicable to projects with 10+ units
•Both ownership and rental units
•For rental projects, provides affordability options at various percentages
•Provides compliance options and incentives
•Establishes an Affordable Housing
Trust Fund
9
What are the right numbers for Arcadia?
10
% of affordable units required for both rental and
ownership projects
Compliance options available such as in-lieu fees or
off-site units
City Contracted with Keyser Marston Associates, Inc. to answer
these questions
Financial
Evaluation
1. Prototype projects in various zones to be
evaluated for reality of building units.
2. Variables include size, density, height, parking,
and land value.
3. Pro Formas Developed to evaluate different
development types.
11
Financial
Evaluation,
cont.
Pro Forma Analysis:
1. Land Value supported by 100%
market rate project
2. Magnitude of value enhancement
created by recent rezoning standards
3. The share of value enhancement that can reasonably be committed to the provision of inclusionary units within a market rate development
12
Proposed
Affordable Unit
Requirements
13
9%Very low-income households.
11%
At least 5% of the total number of units in
the residential project shall be rented to
very low-income households. The
remaining 6% shall be rented to low-
income households.
14%
At least 14% of the total number of units in
the residential project shall be rented to
low-income households.
??Moderate-income households could be
combined with other levels of affordability.
Rental Units
Percentage of Proposed Affordable Units Required
(Rental Units)
Proposed
Affordable
Unit
Requirements
14
Ownership Units
In ownership projects, 5% of all
required affordable units shall be sold
to moderate-income households
Alternatives to
Providing Units on Site
1. Offsite Construction
2. Convert Existing Market Rate Units to
Affordable Housing
3. In-Lieu Fees
15
In-Lieu Fees
9 In lieu fees would be an option for all ownership projects.
9 In-lieu fees would be an option for rental projects between 10-20 units.
9 In-lieu fee should be paid for any fraction of an Inclusionary Unit that results
from the production calculations.
9 Collected fees placed in City's Affordable Housing Trust Fund (to be established)
16
Affordable Housing Standards & Procedures
17
Affordable Housing
Plan Required
Submitted with
development
application
Includes number of
proposed affordable
units, location of units,
level of affordability, etc.
Cohesion
Affordable units
dispersed throughout
site with materials and
finishes comparable
with the market rate
units
Same access to
amenities as market-
rate units
Units required to be
retained at designated
affordability level for:
45 years for for-sale units
55 years for rental units
City Council Considerations
Is the % of affordable units appropriate?
Is an in-lieu fee right for Arcadia and what rate is ideal?
Should we consider offsite production or conversion?
Other questions or issues?
18
Discussion &
Next Steps
Planning Commission Study Session
Finalize preparation of Inclusionary
Housing Ordinance
Public hearings at Planning
Commission and City Council
Implementation