HomeMy WebLinkAboutAPPX-H_V8-Aff Hsg Prgrm_10-00-13Affordable Housing
Program
Appendix H
OTAY LAND COMPANY
Affordable Housing Program
Implementation Plan ‐ Village 8 West
Adopted____________________
By Resolution No.____________
Draft
October 10, 2013
OTAY RANCH VILLAGE 8 WEST SECTIONAL PLANNING AREA PLAN
Affordable Housing Program
OTAY RANCH VILLAGE 8 WEST SECTIONAL PLANNING AREA PLAN
Affordable Housing Program
Table of Contents
I. INTRODUCTION..................................................................................................................1
A. Purpose and Content................................................................................................................1
B. Needs Assessment..................................................................................................................1
II. VILLAGE 8 WEST AFFORDABLE HOUSING OBLIGATION, LOCATION, PHASING,
DESIGN AND UNIT MIX.....................................................................................................3
A. Obligation................................................................................................................................3
B. Types of Affordable Housing..................................................................................................3
C. Location...................................................................................................................................4
D. Phasing....................................................................................................................................4
E. Design......................................................................................................................................5
F. Unit Mix by Bedroom Count...................................................................................................5
G. Senior Housing........................................................................................................................5
III. AFFORDABLE HOUSING RESTRICTIONS......................................................................5
A. Income Eligibility....................................................................................................................5
B. Affordable Housing Costs.......................................................................................................6
C. Underwriting Requirements....................................................................................................6
D. Resale Provisions of Owner Occupied Housing.....................................................................7
E. Term of Affordability Restrictions..........................................................................................7
IV. SUBSIDIES, INCENTIVES AND FINANCING MECHANISMS.......................................7
A. Density Bonus.........................................................................................................................8
V. COMPLIANCE......................................................................................................................8
VI. AFFIRMATIVE MARKETING PLAN................................................................................8
VII. IMPLEMENTING AGREEMENTS AND CONDITIONS..................................................9
VIII. DEFINITIONS................................................................................................................9
OTAY RANCH VILLAGE 8 WEST SECTIONAL PLANNING AREA PLAN
Affordable Housing Program
I. INTRODUCTION
A. Purpose and Content
The purpose and intent of this Affordable Housing Program (AHP) is to encourage
the development of diverse and balanced neighborhoods with a range of housing
opportunities for all identifiable economic segments of the population, including
households of lower and moderate income consistent with the City’s housing policies
and needs as specified in its General Plan Housing Element. The intent is to ensure
that when developing the limited supply of developable land, housing opportunities
for persons of all income levels are provided. The provisions of this AHP establish
standards and procedures that will encourage the development of housing affordable
to low and moderate income households within the Sectional Planning Area (SPA).
The AHP identifies the type and location of affordable housing units to be provided,
potential subsidies or incentive programs, income restrictions and methods to verify
compliance. The program may be implemented through various mechanisms
including development agreements, tentative map conditions, and specific housing
project agreements that may include additional terms and conditions, consistent with
this program.
B. Needs Assessment
According to San Diego Association of Government’s (SANDAG) Preliminary 2050
Cities/Counties Forecast, Chula Vista is expected to gain 92,454 new residents and 28,755
new households. Furthermore, SANDAG, through its Regional Housing Needs
Allocation, estimated that based on anticipated economic growth for the period
beginning January 1, 2010 to December 31, 2020, the City would experience a
demand for 12,125 new housing units, of which 6,303 new housing units affordable to
low and very low income households and 2,220 new housing units for moderate
income households.
To encourage the development of adequate housing to meet the needs of low and
moderate-income households and to further geographic and community balance, the
City’s adopted Housing Element provides for a Balanced Communities Policy,
requiring ten percent (10%) affordable housing for low and moderate income
households within developments of fifty (50) or more residential units. This
inclusionary housing program will serve as only one component of the City's overall
housing strategy and will complement other affordable housing efforts, including
preservation of existing assisted housing, development of new assisted housing with
public subsidies, first-time homebuyer assistance, and rehabilitation loans for low
income homeowners. The City does find that such an inclusionary housing policy is
beneficial to increasing the supply of housing affordable to households of lower and
moderate income incomes and to meet the City’s regional share of housing needs
given the demographics of the community and its needs, past housing production
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Affordable Housing Program
performance, and the existing opportunities and constraints as detailed in its Housing
Element.
The current characteristics of the City’s population, housing, employment, land
inventory, and economic conditions, that affect its housing goals, policies and
programs include:
The population has more diversity in race/ethnicity than the region, in that
20% of the population is white (non-Hispanic) and 60% is Hispanic (all races).
This compares to - percent and - percent, respectively, for the region as a
whole.
Chula Vista residents have household income characteristics that nearly match
the regional median.
There is a disparity in household median income for those households living
west of Interstate-805 ($47,969) and east of Interstate-805 ($86,032).
One in every 4 households earns less than $35,000 per year.
Household size is slightly larger than the region, at 3.21 persons per household
compared to 2.75 per household for the region.
Seniors, aged 65 years or older, comprise 10% of the total households.
Housing west of Interstate-805 was built primarily before 1980 (32% before
1960 and 50% between 1960-1980). Housing east of Interstate-805 was built
after 1980, with 41% built between 1980-2000, and 50% built after 2000.
Housing types are diverse west of I-805, with 41% multifamily housing and
41% single family housing. Single family homes comprise the majority of
housing available east of I-805 (82% of housing).
A home ownership rate of 58.1% lightly above as the region’s rate of 54%.
The median housing cost (resale) in 2011 of $305,000 is $15,000 less than the
region’s median cost of $320,000.
The well-established neighborhoods and master planned neighborhoods create
different opportunities and require a different set of policies and programs to
address housing needs.
The amount of land in the City available for new residential development is
severely limited by geography and size. The largest supply of vacant
developable land is planned for master planned communities.
A high rate of new home construction is anticipated due to the many approved
master planned communities in the City.
Reinvestment in the well-established neighborhoods of Chula Vista continues
to be needed.
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The City’s diverse employment base will grow by more than 73% between
2008 and 2050, with the majority of growth in the retail, service and
governmental sectors.
Based upon past production of housing, sufficient housing opportunities for
households with incomes at or below the Area Median Income have not been
provided.
Despite substantial investments of Federal HOME funds and funding from the
Redevelopment Agency's Low and Moderate Income Housing Fund (prior to
the dissolution of Redevelopment), the City has not been able to produce all
the units called for in the Regional Housing Needs Allocation.
Chula Vista faces a growing shortage of housing that is affordable to a wide range of
our population and needed for a healthy functioning housing market. This lack of
affordable housing is detrimental to the health, safety and welfare of the City’s
residents. Employees may be forced to live in less than adequate housing within the
City, pay a disproportionate share of their incomes to live in adequate housing within
the City or commute increasing distances to their jobs from housing located outside
the City. The City’s Balanced Communities Policy can enhance the public welfare
by increasing the supply of housing affordable to households of lower and moderate
income incomes in a balanced manner and thereby combating the adverse effects to
the City due to an insufficient supply of affordable housing.
II. VILLAGE 8 WEST AFFORDABLE HOUSING OBLIGATION, LOCATION,
PHASING, DESIGN AND UNIT MIX
A. Obligation
The City of Chula Vista Housing Element, Guidelines to the Balanced Communities
Policy, and the Otay Ranch GDP provide that ten percent of the total units will be
affordable to low and moderate income households. Of the ten percent, five percent
must be affordable to low income households and five percent must be affordable to
moderate income households. In calculating the required number of affordable units,
fractional units may result and may either be provided as one additional affordable
unit or paid as a partial in-lieu fee equal to the resulting fraction.
The estimated Village 8 West affordable housing unit obligation is based on the
Village 8 West SPA entitlement authorization of 2,050 units within the Village. The
affordable units required for Village 8 West are 102.5 low income and 102.5
moderate-income affordable units.
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B. Types of Affordable Housing
The housing policies established in the City of Chula Vista Housing Element
advocate a broad variety and diversity of housing types. The affordable housing
obligations of Village 8 West will be met through a combination of housing types
including rental and “for-sale” housing. In general, low-income housing needs will
be satisfied through the provision of rental units. Depending upon the availability of
adequate subsidies, incentives or other financing assistance, a limited number of
“for-sale” multi-family housing units affordable to low income households may be
available as well.
Housing opportunities to meet the needs of moderate income households will be
provided through a combination of market-rate rental units as well as “for-sale”
housing in medium-high to higher density developments.
C. Location
The location of affordable housing developments shall take into consideration
proximity to and availability of the following:
Existing or proposed public transit facilities or transportation routes;
Existing or proposed community facilities and services, such as shopping,
medical, child care, recreation areas and schools; and
Existing or future employment opportunities.
Affordable housing sites within Village 8 West are designated as multifamily and/or
mixed use development sites and are located within or adjacent to the Village Core,
as depicted in Exhibit 1: Potential Affordable Housing Sites. These sites are in close
proximity to parks, schools, public transportation, retail commercial and community
purpose facilities. .
Identification of potential target sites in this Affordable Housing Program describes
one way in which the Village 8 West affordable housing obligation might be met,
and is not meant to require that affordable units be constructed on any specific sites
or to preclude other alternatives. A final determination as to the location and type of
the affordable housing sites will occur with subsequent entitlements, approvals and
agreements and shall be in compliance with the City’s goals, policies and programs
contained within the General Plan, the Balanced Communities Policy Guidelines and
the Otay Ranch General Development Plan (GDP).
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Potential
Affordable
Housing Sites
w Exhibit 1: Potential Affordable Housing Sites
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D. Phasing
Development of Village 8 West will be completed in multiple phases to ensure
construction of necessary infrastructure and amenities for each phase as the project
progresses. The Phasing Plan is non-sequential. This recognizes that sequential
phasing is frequently inaccurate due to unforeseen market changes or regulatory
constraints. Therefore, the Village 8 West SPA Plan and Public Facilities Finance
Plan (PFFP) permits non-sequential phasing by imposing specific facilities
requirements for each phase to ensure that Village 8 West is adequately served and
City threshold standards are met.
A phased approach will also be used to ensure the implementation and production of
low and moderate-income housing units commensurate with the phasing of market
rate residential units within Village 8 West. Phasing of the low and moderate
income units in Village 8 West is designed to link progress toward the production of
such housing to the continued entitlement and development process for the Village 8
West SPA Area. The first or “Initial Phase” for construction of the low and moderate-
income housing units shall be comprised of 60% of the total number of qualified low and
moderate-income housing units and shall commence construction prior to the issuance by
the City of the 1,026th production building permit within Village 8 West ("Initial Phase").
Construction of the remaining number of required low and moderate-income housing units
shall commence prior to the City's issuance of the 1,538th production building permit
("Final Phase"). A detailed implementation schedule and building permit stipulations
for the construction and delivery of affordable units in relation to other market rate
units will be established through an Affordable Housing Agreement. Such
Agreement will be executed prior to the issuance of the first Final Subdivision Map
and recorded against the entire Village.
E. Design
Affordable housing shall be compatible with the design and use of the market rate
units, in terms of appearance, materials, and finish quality. The Developer shall
have the option of reducing the interior amenities, levels and square footage of the
affordable units.
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F. Unit Mix by Bedroom Count
The affordable units shall have an overall unit mix by bedroom count which reflects
the appropriate community need and shall be comparable to the unit mix by bedroom
count of the market rate units in the residential development. Given that 21 percent
of the households in Chula Vista (according to the 2010 Census) are large families of
five persons or more and a desire on the part of the City to provide housing
opportunities for these families throughout the City, a minimum of twenty percent
(20%) of the affordable units shall have three or more bedrooms. Affordable
housing to be sold and occupied by income eligible households (for sale units) shall
also provide a minimum of two bedrooms.
G. Senior Housing
Satisfaction of the affordable housing obligation through the provision of housing
for senior citizens as defined by Section 51.3 of the California Civil Code, is at the
sole discretion of the City of Chula Vista. The City shall consider such housing in
relation to the priority needs of the City’s low income housing population and should
such provide advantages as to location, diversity of housing types, and/or
affordability levels. Senior housing is exempt from requirements to provide three or
more bedroom units.
III. AFFORDABLE HOUSING RESTRICTIONS
A. Income Eligibility
To determine the eligibility of a household for the low and/or moderate income
housing unit, the household purchasing or renting the affordable unit must qualify as
a lower income/moderate income household, as established by and amended from
time to time pursuant to Section 8 of the United States Housing Act of 1937, as
published by the U.S. Department of Housing and Urban Development (HUD), and
as also provided in California Health and Safety Code Sections 50079.5 and 50105.
B. Affordable Housing Costs
The allowable housing expense paid by a qualifying household shall not exceed a
specified fraction of the gross monthly income, adjusted for household size, for the
following classes of housing:
1. Very low-income, rental and for-sale units: 30 percent of the gross monthly
income, adjusted for household size, at 50 percent of the Area Median Income
(AMI) for San Diego County, or as provided in Section 50053 (b)(2) and 50052.5
(b)(2) of the California Health and Safety Code.
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2. Lower-income, rental units: 30 percent of the gross monthly income, adjusted
for household size, at 60 percent of the Area Median Income (AMI) for San
Diego County, or as provided in Section 50053 (b)(3) of the California Health and
Safety Code.
3. Lower-income, for-sale units: 30 percent of the gross monthly income, adjusted
for household size, at 70 percent of the Area Median Income (AMI) for San
Diego County or as provided in Section 50052.5 (b) (3) of the California Health
and Safety Code.
4. Moderate-income, rental units: 30 percent of the gross monthly income,
adjusted for household size, at 110 percent of the Area Median Income (AMI) for
San Diego County or as provided in Section 50053 (b)(4) of the California Health
and Safety Code.
5. Moderate-income, for-sale units: 35 percent of the gross monthly income,
adjusted for household size, at 110 percent of the Area Median Income (AMI) for
San Diego County or as provided in Section 50052.5 (b)(4) of the California
Health and Safety Code.
To determine the “Allowable housing expense” include all of the actual or projected
monthly or annual recurring expenses required of a household to obtain shelter.
1. For a for-sale unit, allowable housing expenses include payments for principal
and interest on a mortgage loan, including any loan insurance fees, property taxes
and assessments, fire and casualty insurance, homeowner association fees, and a
reasonable allowance for utilities, or as defined in 25 California Code of
Regulations Section 6920.
2. For a rental unit, allowable housing expenses include payments for rent and a
reasonable allowance for utilities, or as defined in 25 California Code of
Regulations Section 6918.
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C. Underwriting Requirements
To ensure the preservation of affordability of proposed low and moderate-income
housing and financial viability of program participants, the City shall encourage the
following policies:
Fixed rate mortgages only. No adjustable rate mortgages;
Affordable monthly housing payments no more than 33 percent of
household income (“Front End Ratio”).
Total debt payments no more than 45 percent of household income (“Back
End Ratio”).
No “teaser” rates; and,
No non-occupant co-borrowers.
D. Resale Provisions of Owner Occupied Housing
In order to ensure the continued affordability of the units, resale of the units must be
restricted for the required term of thirty (30) years. After initial sale of the affordable
units to a low-income household, all subsequent buyers of such units must also be
income eligible and the unit must be sold at an affordable price. A developer may
opt to have no income or sales price restriction for subsequent buyers, provided
however that restrictions to the satisfaction of the City are in place that would result
in the recapture by the City or its designee of a financial interest in the units equal to
the amount of subsidy necessary to make the unit affordable to a low income
household and a proportionate share of any equity. Funds recaptured by the City
shall be used to provide assistance to other identified affordable housing production
or contributions to a special needs housing project or program. To the extent
possible, projects using for-sale units to satisfy the obligations of developers under
the City’s Affordable Housing Program shall be designed to be compatible with
conventional mortgage financing programs including secondary market
requirements.
E. Term of Affordability Restrictions
The term of the affordability restrictions shall be thirty years (30) years from
issuance of the Certificate of Occupancy for the first structure providing income and
rent restricted units, or the longest period of time if required by the construction or
mortgage financing assistance program, mortgage insurance program, or rental
financing subsidy or incentive program. The term of affordability and resale
restrictions for affordable for-sale units are more appropriately described above in
“Resale Provisions of Owner Occupied Housing.”
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IV. SUBSIDIES, INCENTIVES AND FINANCING MECHANISMS
The obligation to provide affordable housing shall not be dependent upon the
availability of subsidies, incentives or financing mechanisms. The City shall
consider providing incentives, assistance, and subsidies to those qualifying projects
and supporting any applications for assistance that requires approvals from, or
allocations by other agencies, to the extent feasible, in a manner that offsets the cost
of providing for affordable units. Offsets will be offered by the City to the extent that
resources and programs for this purpose are available to the City and to the extent
that the qualifying projects, with the use of the offsets, assists in achieving the City’s
housing goals. To the degree such offsets are available, the Developer may make
application to the City. The City agrees to use its reasonable best efforts to assist the
Developer in pursuing the benefit of certain financing mechanisms, subsidies and
other incentives to facilitate provision of affordable housing for Village 8 West.
These mechanisms include, but are not limited to, local, state and federal subsidies
and City density bonuses, planning, and design and development techniques and
standards, and City fee waivers or deferrals which reduce the cost of providing
affordable housing (collectively, the “Cost Reducing Mechanisms”).
The parties acknowledge that the City is not hereby committing, directly or through
implication, a right to receive any offsets from City or any other party or agency to
enable the Developer to meet the obligations and cannot guarantee the availability of
any Cost Reducing Mechanisms to the Developer for Village 8 West. The City
reserves the right to approve, approve with conditions or disapprove, in its sole
discretion, any Developer request for subsidized financing sponsored by the City.
A. Density Bonus
Projects that meet the applicable requirements of State law (Government Code
Section 65915) as a result of affordable housing units, are entitled to a density bonus
or other incentives in accordance with the provisions of such law.
V. COMPLIANCE
Terms related to occupancy and affordability restrictions shall be recorded as a
separate deed restriction or regulatory agreement on the property designated for the
affordable units and shall bind all future owners and successors in interest for the
term of years specified therein.
The City shall monitor affordable units for compliance with those terms and
conditions of all relevant Affordable Housing Agreements or other restrictions. The
Developer shall submit compliance reports in the frequency and manner prescribed
by the City of Chula Vista Development Services Department.
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VI. AFFIRMATIVE MARKETING PLAN
The Developer shall provide a marketing plan acceptable to the City, in the City’s
reasonable discretion, for proactively marketing the low and moderate income
housing units to low and moderate income tenants and purchasers. Developer shall
use good faith and reasonable best efforts to market the low and moderate income
housing units to low and moderate income tenants and purchasers according to the
affirmative marketing plan. The City will use good faith and reasonable best efforts
to assist the Developer in marketing low and moderate income housing units to low
and moderate income tenants and purchasers obtaining the services of a third-party
organization in connection with such marketing efforts, processing the applications
of prospective tenants and purchasers of low and moderate income housing units,
and complying with the reporting requirements as required herein.
VII. IMPLEMENTING AGREEMENTS AND CONDITIONS
This AHP may be implemented through various mechanisms including development
agreements, tentative map conditions, and specific housing project agreements that
may impose additional terms and conditions consistent herewith.
VIII. DEFINITIONS
Affirmative Marketing Plan
An outline that details actions the Developer will take to provide information and
otherwise attract eligible persons in the housing market area to the available housing
without regard to race, sex, sexual orientation, marital status, familiar status, color,
religion, national origin, ancestry, handicap, age, or any other category which may
be defined by the law now or in the future.
Low Income Household
A household of persons who claim primary residency at the same unit with
combined incomes that are greater than 50%, but not more than 80% of the Area
Median Income for the San Diego area based on household size as determined
annually by the U.S. Department of Housing and Urban Development (HUD).
Household size is calculated by the number of persons residing at the same unit as
their primary residency.
Moderate Income Household
A household of persons who claim primary residency at the same unit with
combined incomes between 80% to 120% of the Area Median Income for the San
Diego area based on household size as determined annually by the U.S. Department
of Housing and Urban Development (HUD). Household size is calculated by the
number of persons residing at the same unit as their primary residency.
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San Diego Area Median Income
The San Diego County area median income level as determined from time to time by
HUD, based on household size.
Subsidized Financing
Any financing provided by any public agency specifically for the development and
construction of low or moderate income housing units, including but not limited to
the following:
Low Income Housing Tax Credits (LIHTC) – statewide competition;
Housing Bonds – State;
Housing Bonds – City of Chula Vista;
HOME – City of Chula Vista and County of San Diego;
Community Development Block Grants – City of Chula Vista; and,
Other Public Financing – State and Federal.
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