The applicant requesting a density bonus under this chapter shall agree to construct operate and maintain the affordable units for lower and very low income households in accordance with a density bonus housing agreement with the city that is in a form acceptable to the Director and the City Attorney. The density bonus housing agreement shall include, but is not limited to, the following:
(A) Identification of affordable units. Affordable units shall be identified by address and legal description, type (floor area, number of bedrooms/baths, unit size, etc.), and designated household income category. The density bonus housing agreement shall also identify the total number of affordable units and the total number of units approved for the housing development.
(B) Term of affordability. The term of affordability for each affordable unit shall begin on the date a certificate of occupancy is issued for the affordable unit.
(l) Rental units. Rental affordable units shall be available only to qualifying tenants at an affordable rent for a minimum of 55 years or a longer period of time if required by the construction or mortgage financing assistance program, or mortgage insurance program or rental subsidy program.
(2) For sale units. For sale affordable units shall be available only to qualifying owners at an affordable housing cost for a minimum of 45 years.
(C) Density bonus housing agreement.
(1) Rental affordable units. For rental affordable units, the density bonus housing agreement shall include the following conditions governing the use of the affordable units during the term of affordability:
(a) Qualification of tenants. The rules and procedures for determining and verifying if a tenant qualifies as a qualifying tenant, establishing affordable rent, filling vacancies, and maintaining the affordable units for qualifying tenants.
(b) Maintenance of records. Provisions requiring a monitoring program to verify tenant incomes and the maintenance of books and records to demonstrate compliance with this chapter.
(c) Annual report. Provisions requiring submittal of an annual report in March of each calendar year to the Director, which includes the name, address and income of each qualifying tenant occupying each affordable unit, and which identifies the bedroom count and monthly rent of each affordable unit. The report shall be filed on a form designed by the Director and shall include the number of units, the annual income of the qualifying tenants in those units and the rental amount for each affordable unit. Failure to file such a report shall amount to a default under the density bonus housing agreement.
(d) Determination of rent. A maximum rent schedule shall be submitted to the Director prior to the issuance of a certificate of occupancy for any rental affordable units, and shall be updated annually on the anniversary date of occupancy of the affordable unit.
(e) Deposit amount. Total move-in costs for qualifying tenants shall be limited to first month's rent plus a security/cleaning deposit not to exceed one month's rent.
(f) Upward mobility allowance. When a qualifying tenant occupying an affordable unit no longer qualifies under the income requirements, verified through the monitoring program required as part of the density bonus housing agreement, that tenant may then be charged market rate rent. If this occurs, any currently vacant unit of similar type to the affordable unit in question shall then be designated as an affordable unit, and the owner shall immediately attempt to secure tenants in accordance with this chapter. The owner is required to maintain at all times during the term of affordability the minimum number of affordable units identified in the density bonus housing agreement.
(g) Subletting of affordable units. Subletting of designated affordable units shall be prohibited.
(h) Monitoring program. A monitoring program shall be required, specifying the party responsible for certifying qualifying tenant incomes and affordable rent, maintaining the required number of affordable units, and marketing and filling unit vacancies.
(2) For-sale affordable units. In the case of for-sale affordable units, the density bonus housing agreement shall include the following conditions governing the sale and use of affordable units during the term of affordability:
(a) Affordable units shall, upon initial sale and any resale, be sold only to qualifying owners, or to qualifying residents in the case of a for sale senior citizen housing development.
(b) Upon initial sale and any resale, affordable units shall be sold at an affordable housing cost.
(c) The purchaser of each affordable unit shall execute a covenant or agreement approved by the city restricting the sale of the affordable unit in accordance with this chapter during the applicable term of affordability. Such covenant or agreement shall be recorded against the parcel containing the affordable unit and shall contain such provisions as the city may require to ensure continued compliance with this chapter and the state density bonus law.
(d) Sale clause. The density bonus housing agreement shall stipulate that, when the term of affordability has expired on an affordable unit, the city and/or a non-profit housing organization shall have a first right of purchase option 60 days prior to the affordable unit being advertised on the market.
(e) Rental of for-sale units. Rental of for-sale affordable units shall be prohibited unless the proposed renter(s) qualify as qualifying tenants.
(D) Remedies. The density bonus housing agreement shall include a description of remedies for breach of the density bonus housing agreement by either party (the city may identify qualifying tenants or qualifying owners as third party beneficiaries under the agreement). Recovery of public costs of default shall be provided for in all density bonus housing agreements. For rental affordable units, default shall result in assessment for repayment of all rent revenues from the affordable units that were designated as affordable units for at least the prior three years or for the life of the density bonus housing agreement, whichever is shorter. The density bonus housing agreement shall set forth the repayment period upon default. The repayment may occur over a reasonable period of time but not to exceed the time elapsed under the density bonus housing agreement prior to the default.
(E) Incentives and concessions. The density bonus housing agreement shall include a description of the incentives and/or concessions, if any, approved by the city.
(F) Schedule. The density bonus housing agreement shall include a schedule for completion and occupancy of the affordable units.
(G) Other provisions. The density bonus housing agreement may include such other provisions required by the Director and the City Attorney to ensure implementation and compliance with this chapter.
(H) Expiration of density bonus. An approved density bonus application shall be utilized within the time specified in the density bonus housing agreement or within the time limit that applies to any other discretionary or ministerial entitlement application required for the housing development, whichever is longer. If the approved density bonus application is not utilized within such time period, it shall become null and void and of no effect except, where an application requesting an extension is filed prior to the expiration date, which extension may be approved by the Director upon a finding of unavoidable delay.
(Ord. 3391 § 5, 2024.)