A. The city shall maintain or cause to be maintained an inventory of not less than 712 residential hotel or comparable units in the central city; and to this end shall replace or cause to be replaced the residential hotel units subject to this chapter that are to be withdrawn, converted, or demolished. The replacement units shall be provided within seven years of the date that the conversion certificate is approved for the units to be replaced; provided that the time may be extended upon determination by the city council that the production of the replacement units is delayed due to the unavailability of anticipated financing or other circumstances beyond the city's control.
B. To assist in the accomplishment of this requirement, the director shall recommend for city council approval replacement housing plans for residential hotel units regulated by this chapter that are the subject of an application for a conversion certificate. The city may replace units prior to the approval of conversion certificates.
C. Residential hotel units may be replaced through any of the following methods:
1. Construction of new housing;
2. Rehabilitation of existing nonregulated property, including conversion of commercial property into residential units or residential mixed-use; and
3. Acquisition or purchase of covenants of existing housing that is neither currently regulated for affordability nor regulated by this chapter.
D. Replacement units shall meet the following requirements:
1. Comparable, as defined in section 18.20.030;
2. Rental costs not exceeding 40% of the Sacramento metropolitan area median income, adjusted for household size. Project-based rental assistance shall qualify as meeting the rent affordability standard. If an entire project consists of comparable units, all units whose rents are regulated at or below 50% of the Sacramento metropolitan area median income may count as replacement units so long as the average rents of those units does not exceed 40% of the Sacramento metropolitan area median income;
3. Located in close proximity to transportation and services;
4. Recorded affordability covenants for the longest feasible time, but not less than 55 years.
E. Within 90 days of the approval of a conversion certificate, the city shall adopt a replacement housing plan which includes the following:
1. If the units have been replaced, a description of their location, unit types, rent levels, occupancy income limits, and any project-based rental assistance, if available;
2. If some or all of the units have not been replaced, the following information is required:
a. Description of the type of project through which the replacement units will be provided (subsection C of this section),
b. A schedule for replacing the units indicating that they will be available no later than seven years after the adoption of the replacement housing plan,
c. Proposed financing plans,
d. Location of replacement units,
e. Survey of rents and incomes of the eligible tenants in the residential hotel units being converted or with-drawn. This information may be taken from the notice of withdrawal (section 18.20.070),
f. Proposed rents and occupancy limits;
3. A draft of the city's replacement housing plan shall be made available to the general public at least 30 days prior to the city council's adopting the replacement housing plan.
F. The director will report annually to the Sacramento housing and redevelopment commission and city council on the number of residential hotel units withdrawn, the number of new units expected based on approved replacement housing plans, and units constructed in anticipation of conversions or withdrawals. (Ord. 2016-0043 § 6; Ord. 2006-056 § 1)