A. Requirement. Subject to the provisions of this section, in lieu of paying the housing trust fund fee, an applicant for a nonresidential development project may construct dwelling units. The required number of dwelling units shall be calculated by multiplying the gross square feet of nonresidential space within the nonresidential development project by the applicable housing factor, as follows:
Type of Use* | Housing Factor/Square Foot |
Office | .000127 |
Hotel | .000042 |
Commercial | .000106 |
Manufacturing | .000042 |
Warehouse | .000021 |
Nonresidential development projects that do not fall within a specific type of use category will be evaluated on a case-by-case basis to determine the appropriate housing factor.
If this calculation produces a decimal number, the number shall be rounded up to the nearest whole number to yield the required number of dwelling units. The dwelling units may be of any value or tenure type. Dwelling units constructed in compliance with this option may not be used to satisfy the housing trust fund fee requirement for more than one nonresidential development project.
B. Application and fee. To proceed under this section, an applicant must do the following:
1. Submit to the city manager an application that includes the following:
a. Sufficient information, as determined by the city manager, to enable the city manager to conclude that the applicant, within its financial means, will construct or cause to be constructed the required number of dwelling units within the timeframe set forth in this section; and
b. If an applicant intends to construct the dwelling units through a joint venture, partnership, or similar arrangement, the applicant must certify that it has paid to the joint venture, partnership, or under its similar arrangement, an amount equal to or greater than 60% of the housing trust fund fee it would otherwise pay to the city for the nonresidential development project. The applicant must certify that the joint venture, partnership, or similar arrangement will use these funds to construct the dwelling units.
2. Pay a fee equal to 40% of the housing trust fund fee otherwise due on the applicant's nonresidential development project. This fee may be paid in two installments of equal value as follows:
a. The first half of the fee must be paid at the time of submittal of the application to proceed under this section; and
b. The second half of the fee must be paid prior to the issuance of a building permit for the applicant's non-residential development project.
C. City manager approval. The city manager may approve or deny the application to proceed under this section.
D. Timeline for construction of the dwelling units.
1. Commencement. Within one year of the issuance of the first building permit for the applicant's nonresidential development project, the applicant must provide written certification to the city manager that it has commenced construction of the dwelling units. No certificate of occupancy for the nonresidential development project shall be issued until the applicant complies with this subsection.
2. Completion. The applicant's dwelling units must pass the city's final inspection within two years of the issuance of the first building permit for the nonresidential development project.
3. Extensions. The deadlines to commence and complete construction of the dwelling units may each be extended by a maximum of two one-year periods if the city manager determines, based on information submitted by the applicant, all of the following:
a. There is good cause for an extension or an additional extension;
b. The failure to comply with the time limits in this subsection D is beyond the applicant's control; and
c. The applicant has made a reasonable effort to comply with this subsection.
E. Location of dwelling units. Dwelling units constructed under this section shall be located on infill sites that either have adequate improvements and facilities or are located in a proposed or existing assessment district that will ensure the provision of adequate improvements and facilities.
F. Failure to construct dwelling units. If an applicant fails to construct dwelling units as required by this section, the applicant shall pay the housing trust fund fee for its nonresidential development project, together with interest accrued from the date of issuance of the first building permit for the project, less any amounts paid towards the fee under subsection B.1.b. of this section. Interest shall accrue at a rate equal to the city's annual earnings rate on Pool A funds for the previous fiscal year, per annum.
G. The city manager may issue guidelines for the administration of this section. (Ord. 2017-0013 § 1)