Any affordable unit provided to fulfill a requirement of this chapter shall be permanently reserved for and occupied by qualified households meeting the affordable income requirement specified for the unit in the resolution of approval, agreement imposing restrictions on real property, and all other eligibility requirements. Eligibility requirements and a rental and sales price schedule for very low-, low-, and moderate-income households shall be established annually by Council resolution. Newly constructed inclusionary units shall first be offered to eligible households displaced by the demolition necessary to construct the project.
(A) Rental of units.
(1) If units are offered for rent, the project owner or developer shall rent the units directly to the required number of very low-, low- and moderate-income households at the rental rate established by Council resolution.
(2) The rental rate shall include charges for the unit, parking, pets, water and trash, and all building amenities, unless otherwise specified in the resolution of approval.
(3) A security deposit equal to the greater of one month's rent or $500 can be required.
(4) A pet deposit may be in addition to the security deposit but cannot exceed 25% of the security deposit.
(B) Limitations on purchasers and sales prices.
(1) The sale and resale of affordable units constructed for purposes of using a state density bonus shall be in accordance with Cal. Gov't Code § 65915(c)(2).
(2) All purchasers of inclusionary units shall meet the city's income guidelines for the income range targeted for that unit. Proof of income eligibility shall be submitted to the City Manager. Resale of units shall require that the City Manager or designee first verify the purchaser as very low-, low-, or moderate-income. This requirement shall be included in the recorded covenant.
(3) Newly constructed inclusionary units shall first be offered to eligible very low-, low- and moderate-income households displaced by the demolition necessary to construct the project; then the offer shall be made to other very low-, low-, or moderate-income displaced households in the city.
(4) In a building undergoing conversion to common interest development, an equal number of units in the resulting development as the existing project shall be offered to very low-, low-, and moderate-income households.
(5) Lower income inclusionary units shall be sold at a price that is no more than two and one-half times 65% of the median income of the city and adjusted by the "bedroom factor." Qualifying income levels shall be established annually by the City Council.
(6) Moderate-income inclusionary units shall be sold at a price that is no more than two and one-half times the median income of the city. Qualifying income levels shall be established annually by the City Council.
(7) The sales price of the inclusionary unit is dependent on the unit size established annually by the City Council.
(8) Expected homeowners' association fees shall be included in the calculation of total unit costs.
(C) Right of first refusal. After offering the units to eligible households displaced by demolition, the developer of a project shall be required to give right of first refusal to purchase any or all inclusionary units to the city, or a city-designated agency or organization, for at least 60 days from the date of construction completion.
(D) Lottery. If the city chooses not to exercise its right of first refusal, it shall conduct a lottery to establish a list of eligible purchasers within that same time period. If the list is not provided, the developer may select the low- or moderate-income purchasers as long as the city verifies income eligibility, and the units are sold at a price no more than two and one-half times the median income for the city.
(E) Resale of units. Upon resale, the affordable units shall remain affordable to the targeted income group. The resale price shall be set as follows. The price resulting from the total costs, including homeowners' association fees, shall be:
(1) Moderate-income units: a total cost of no more than two and one-half times the median income for the city, for moderate income households.
(2) Lower-income units: a total cost of no more than two and one-half times 65% of the median income for the city for low income households.
(3) The sales price of the inclusionary unit is dependent on the unit size.
(4) Expected homeowners' association fees shall be included in the calculation of total unit costs.
(Ord. 2021-03, passed 12-7-2021)