HomeMy WebLinkAboutResolution 18369 Amending Below Market Rate Housing Program Administrative GuidelinesCITY OF MOUNTAIN VIEW
RESOLUTION NO. 18369
SERIES 2019
A RESOLUTION AMENDING THE BELOW -MARKET -RATE HOUSING PROGRAM
ADMINISTRATIVE GUIDELINES ASSOCIATED WITH THE
ORDINANCE AMENDING THE BELOW -MARKET -RATE HOUSING PROGRAM,
MOUNTAIN VIEW CITY CODE, SECTIONS 36.40 TO 36.40.70
WHEREAS, on September 12, 2017, the City Council initiated consideration of
modifying existing rental and ownership housing policies and programs (BMR
Program) with the goal of obtaining more affordable housing units instead of accepting
payment of housing fees associated with new development; and
WHEREAS, on February 27, 2018, the City Council adopted modifications to the
BMR Program, including requirements for rental development projects, modifications
to in -lieu fee requirements, and alternative mitigations (BMR Phase I Modifications);
and
WHEREAS, on May 14, 2019, the City Council initiated discussion of additional
modifications to the BMR Program related to increasing the BMR ownership program,
modifying the in -lieu fee and methodology, and adopting alternative mitigation
parameters (BMR Phase Il Modifications); and
WHEREAS, on May 31, 2019, the Environmental Planning Commission (EPC) held
a duly noticed public hearing and recommended that the Council consider amendments
to the City's Below -Market -Rate Ordinance and program, including administrative
guidelines associated with the ordinance; and
WHEREAS, on June 18, 2019, the City Council held a duly noticed public hearing,
considered the recommendations from the EPC, and approved amendments to the BMR
Program with minor modifications; and
WHEREAS, on June 25, 2019, the City Council held a duly noticed public hearing
and approved final amendments to the BMR program;
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NOW, THEREFORE, BE 1T RESOLVED by the City Council of the City of
Mountain View that:
1. The Administrative Guidelines associated with the Ordinance Amending the
Below -Market -Rate Housing Program, Mountain View City Code Sections 36.40
through 36.40.70, are hereby amended as shown in Exhibit A.
2. The effective date of this resolution shall be the same as the effective date of
the Ordinance Amending the Below -Market -Rate Housing Program, Mountain View
City Code Sections 36.40 through 36.40.70.
3. The City Council further directs and authorizes staff to make those changes
necessary to the guidelines to ensure consistency and conform to the BMR ordinance.
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The foregoing Resolution was regularly introduced and adopted at a Regular
Meeting of the City Council of the City of Mountain View, duly held on the 25th day of
..., June 2019, by the following vote:
AYES: Councilmembers Clark, Hicks, Karnei, McAlister, Ramirez, Vice
Mayor Abe-Koga, and Mayor Matichak
NOES: None
ABSENT: None
ATTEST: APPROVED:
SA NATUSCH
CITY CLERK
KC/ 6/ RESO
011-06-18-19r
Exhibit: A. Amended BMR Guidelines
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LISA MATICHAK
MAYOR
I do hereby certify that the foregoing Resolution was
passed and adopted by the City Council of the City of
Mountain View at a Regular Meeting he -d on the 25th
day of June 2019, by the foregoing vote,
Qtif Clerk
City of Mountain View
Exhibit A
CITY OF MOUNTAIN VIEW
BELOW -MARKET -RATE HOUSING PROGRAM
ADMINISTRATIVE GUIDELINES
ADOPTED BY THE MOUNTAIN
VIEW CITY COUNCIL ON
JANUARY 26,1999
REVISED: MAY 14,1999
REVISED: FEBRUARY 27, 2018
REVISED: JUNE 25, 2019
THIS PAGE INTENTIONALLY LEFT BLANK.
SECTION A; PURPOSE OF SMR HOUSING PROGRAM
The purpose of the Below -Market -Rate (BMR) Housing Program (Program) is to
address the extraordinarily high cost of housing in the City of Mountain View by
increasing the diversity and supply of affordable housing through the provision of
mixed -income residential developments that integrate both market -rate and affordable
units. The delivery of affordable housing and its integration with market -rate units are
fundamental priorities of the Program, which facilitates inclusive, economically
sustainable, and complete communities for a diverse range of families and households.
Therefore, the basic, objective standard of the Program is the provision of affordable
rental and ownership units on-site in compliance with the on-site requirements for
BMR units. These Guidelines are issued pursuant to the City's Below -Market -Rate
Housing Program (the "Program.") found in Article XIV of Chapter 36 of the City
Code. City Code Section 36.40.10(k) requires the City to adopt administrative
guidelines necessary to implement the Program. Accordingly, these Guidelines are
adopted to satisfy City Code requirements and are intended to be a source of objective
standards and requirements under Government Code Section 65589.50) that are
applicable to all residential developments in the City, unless otherwise specified by the
Program or these Guidelines.
These Guidelines are consistent with the Program. The provisions of Article XIV of
Chapter 36 of the City Code shall control to the extent any inconsistency with these
Guidelines is identified. The Community Development Director may promulgate
additional administrative procedures that are consistent with these Guidelines.
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SECTION B: EFFECTIVE DATE
The provisions of the Program shall become effective as of August 24, 2019 and apply
to all residential developments as defined in these Guidelines, except the following
types of residential developments, which are exempt from the Program:
a. Non -Gatekeeper projects with formal applications submitted by June 30, 2019,
provided that, prior to August 24, 2019, applicants must submit all of the
additional information as requested in the City's 30 -day letter responding to the
applicant's formal application submittal.
b. "Gatekeeper" developments processed in accordance with City Code Sections
36.50.90, 36.52.20, and 36.52.55 and that have been deemed ready by December 20,
2019 for a public hearing regarding project approval.
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SECTION C: DEFINITIONS
The following definitions shall apply to terms used throughout these Guidelines:
• "BMR unit" and "affordable unit" shall be used interchangeably in this document
to describe a residential unit with an affordability deed restriction subject to the
provisions of the Program.
• "Density bonus" means an approval of additional dwelling units, reduced
parking, incentives and concession, or waivers of development standards under
City Code Section 36.14 and Government Code Section 65915.
• "For -sale" and "ownership" shall be used interchangeably in this document to
describe a residential development whose units are meant to be sold and
subsequently owned by individual households.
• "Gross household income" means the earned and unearned household income of
all members of the household.
— "Area Median Income" (AMI) means the level of gross income for Santa
Clara County as published periodically by the State Department of Housing
and Community Development, generally defined as 100 percent of the area
median income, adjusted for household size.
— "Above Moderate -Income household" means the level of gross income for
Santa Clara County between 120 percent and 150 percent of the AMI,
adjusted for household size, as based on the 120 percent AMI level published
periodically by the State Department of Housing and Community
Development.
— "Moderate -Income household" means the level of gross income for Santa
Clara County as published periodically by the State Department of Housing
and Community Development, generally defined as between 80 percent and
120 percent of the AMI, adjusted for household size.
— "Low -Income household" means the level of gross income for Santa Clara
County as published periodically by the State Department of Housing and
Community Development, generally defined as between 50 percent and 80
percent of the AMI, adjusted for household size.
— "Very Low -Income household" means the level of gross income for Santa
Clara County as published periodically by the State Department of Housing
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and Community Development, generally defined as less than 50 percent of
the AMI, adjusted for household size.
• "Guidelines" means these Program Guidelines adopted by resolution under City
Code Section 36.10.10(k).
• "Income category" means Moderate -Income, Low -Income, and Very Low -Income
household as defined in this section.
• "Income level" means the income at a specified percentage of AMI, such as 65
percent AMI, 110 percent AMI, etc. Each income category is composed of various
income levels. For example, 85 percent of AMI, 90 percent of AMI, 11.0 percent of
AMI, etc., each represent various income levels within the Moderate -Income
household category.
• "Off-site" means that the affordable housing units as required by the Program are
not part of the same residential development and not integrated with the project's
market -rate units.
• "On-site" means that the affordable housing units as required by the Program are
integrated with the project's market -rate units and dispersed throughout the
development according to the Program requirements. Except when required to
develop senior housing in compliance with applicable laws, development of the
affordable units in a separate, stand-alone structure, even if that stand-alone
structure was on the same parcel or APN as a separate market -rate building, does
not meet the definition of on-site.
• "Program" means the Program found in Article XIV of Chapter 36 of the City
Code.
• "Rental" means any residential development that creates one or more additional
dwelling units that cannot be lawfully sold individually in conformance with the
Subdivision Map Act.
• "Residential development" means any development that includes an application
to the City for planning or building permits to create one or more dwelling units,
to convert nonresidential uses to residential uses, or to convert residential units
from rental to for -sale. As used in these Guidelines, "residential development"
includes, without limitation, rental housing; for -sale housing; mixed -tenure
housing; mixed-use residential; detached single-family dwellings; duplexes;
triplexes; multiple -family dwelling structures; condominium or townhouse
developments; condominium conversions; and land subdivisions intended to be
sold or rented to the general public. However, accessory dwelling units and
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licensed care facilities are excluded from the definition of residential
developm-ent.
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SECTION D: GENERAL REQUIREMENTS
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2.
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Objective Standard
All residential development is required to provide rental and ownership
affordable units on-site or satisfy the requirements for an alternative compliance
mechanism in accordance with the Program and these Guidelines.
Applicability
The provisions of the Program shall apply to all residential development as
defined in these Guidelines, except those residential developments that are
exempt under Section B of these Guidelines.
Size of Project
All residential developments as defined in the Guidelines shall be subject to the
provisions of the Program. Residential developments with seven or more units,
including ownership, rental, mixed-use, and mixed -tenure developments, shall be
required to provide BMR units on-site. Residential projects with less than seven
units shall have the option of paying a fee in lieu of the fractional affordable
housing unit.
On -Site BMR Requirement
a. Rental: All nonexempt rental residential developments shall include at least
15 percent of the total number of rental dwelling units within the
development as units affordable to Low- and Moderate -Income households
representing income levels between 50 percent and 120 percent AMI as
required by the Program and Guidelines.
The affordable rental units must be provided at a minimum of two income
levels, with a resulting income level no greater than a weighted average of 65
percent of the AMI when considering all of the affordable rental units
cumulatively. BMR rental units set an income level less than 50 percent AMI
may count toward meeting the project's BMR requirement provided that the
SMR units cumulatively meet the AMI weighted average requirement.
The calculation of weighted average is as follows:
(AM: )(# of units @ AMI A) RAMI B)(# of units @ AMI B) b5 percent
++ etc. —< AMI
Total # of affordable Units Total # of affordable Units weighted
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b. Ownership: All nonexempt ownership residential developments other than
rowhouses and townhouses (as defined in Article IV of Chapter 36 of the
City Code) shall include at least 15 percent of the total number of ownership
dwelling units within the development as units affordable to Moderate -
Income households making between 80 percent and 120 percent AMI as
required by the Program and Guidelines. The affordable ownership units
must be provided at a minimum of two income levels, with a resulting
income level equal to a weighted average of 100 percent of the AMI when
considering all of the affordable ownership units cumulatively. Rowhouses
and townhouses in residential ownership developments shall be subject to a
25 percent on-site BMR requirement, with 15 percent at a weighted average
of 100 percent with a range of 80 percent and 120 percent AMI; AND a 10
percent on-site BMR requirement at a weighted average of 135 percent AMI
with a range of 120 percent and 150 percent AMT.
The City does not allow BMR ownership units set at an income level lower
than 80 percent AMI to count toward a for -sale project's BMR requirements,
unless a reserve is established that can be utilized by lower-income owners
to fully pay for future expenses related to increases in homeowners
association (HOA) fees or other assessments, such that the overall housing
cost of homeownership is maintained at an affordable level.
The calculation of weighted average is as follows for all ownership projects
and shall also apply to rowhouse/townhouse projects for the 135 percent
AMI weighted average requirement applicable to that product type:
(AMI A)(# of units @ AMI A) AMI B)(# of units @ AMI B 100 percent
++etc. = AMI
Total # of affordable Units Total # of affordable Units weighted
C. The BMR units at the various income levels shall be proportionately
distributed among and representative of the various unit types within the
overall development.
d. The weighted average methodology provides flexibility to developers in the
various income levels that they may choose. However, the determination of
income levels shall meaningfully incorporate City input on desired income
levels depending on the housing goals and priorities at the time, including,
but not limited to, progress toward meeting the City's regional housing
needs allocation (RHNA).
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5. Fees for Fractional Units
A project with less than seven units may pay an in -lieu for fractional units. A
project with seven or more units may pay an in -lieu fee when the BMR obligation
results in a fractional BMR unit that is less than 0.5 (i.e., less than half a unit); a
fractional unit equal to 0.5 or greater shall be rounded up and the project must
provide one BMR unit on-site to satisfy the fractional obligation. The fee level
shall be equivalent to providing the BMR units on-site and be based on a per net
new habitable square foot amount as applied to the total project and as published
in the Master Fee Schedule. Payment of an in -lieu fee for quali=ging fractional
units shall be made in full prior to issuance of the project's first building permit
and the Community Development Director or designee shall be authorized to
adjust the rental and ownership fees annually based on the Consumer Price Index
(CPI), All Urban Consumers, San Francisco -Oakland -San Jose, published by the
U.S. Department of Labor, Bureau of Labor Statistics. The fee levels shall be
reviewed and updated as needed every five years.
6. Location and Design of BMR Units
All BMR units shall be reasonably dispersed throughout the residential
development and consistent with Federal and State fair housing laws, have a
distribution of units by number of bedrooms proportionate to the market -rate
units, and be of comparable size based on net habitable square footage of the
units, except that BMR units for seniors shall comply with applicable
requirements for senior housing. The actual location of the BMR rental units
within a complex shall be permanently assigned to a particular unit.
The exterior design of the BMR units shall be consistent with the market -rate
units in the project and be comparable in terms of interior design, appearance,
materials, and quality of finish. However, the BMR units may differ from market -
rate units in the project by using lower-cost alternatives to certain amenities
considered to be luxury items. For example, more expensive plumbing and
lighting fixtures, hardwood floors, and marble entries may be considered luxury
items, and less-expensive materials may be substituted. BMR units shall have
access to all project amenities and recreational facilities available to market -rate
units.
7. Qualifying Households
a. All BMR rental units shall be rented only to qualified Low- or Moderate -
Income households between 50 percent and 120 percent AMI, and all BMR
ownership units shall be sold only to qualified Moderate -Income households
between 80 percent and 120 percent AMI, except rowhouse/townhouse
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projects could allow a household income up to 150 percent AMI if applicable
per Section D.4.b. The City or its designee will maintain a waiting list of
qualified persons.
b. In addition to income limits, BMR ownership units are subject to asset limits.
The assets of an owner of a BMR unit cannot exceed 30 percent of the
purchase price of the BMR unit or $150,000, whichever is lower, excluding
funds dedicated to Federally recognized retirement programs. The
maximum allowable down payment is 30 percent of the purchase price of
the unit. All-cash purchases are not allowed. A 5 percent minimum down
payment based on the purchase price is required; a minimum of 50 percent
of the down payment must be the applicant's own funds; and a maximum of
50 percent of the down payment may be gifts. Income and assets of
applicants will be verified by the City or its designee.
C. BMR units shall be rented or sold based on income limits for a household
size using the "bedrooms + 1" formula, and the minimum occupancy level
shall be one person per bedroom, as follows:
• Studios:
— Housing cost based on 1 -person household
-- Minimum occupancy is 1 -person household
• 1 bedroom;
— Housing cost based on 2 -person household
— Minimum occupancy is 1 -person household
• 2 bedrooms:
— Housing cost based on 3 -person household
— Minimum occupancy is 2 -person household
• 3 bedrooms:
-- Housing cost based on 4 -person household
— Minimum occupancy is 3 -person household
• 4 bedrooms:
— Housing cost based on 5 -person household
— Minimum occupancy is 4 -person household
An exception to the minimum occupancy standards shall be made if a
reasonable accommodation is required.
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d. Preference is given to eligible applicants for a BMR unit if they live or work
in the City of Mountain View, to the extent permitted by State or Federal law
or other fair housing laws.
8. Determination of Rents for Rental Units
A residential development's SMR rental units shall have rents affordable to Very
Low-, Low-, and Moderate -Income households (approximately between 50
percent and 120 percent AMI), with a cumulative weighted average of 65 percent
AMI, and shall be based on the income level of the presumed household size that
corresponds with the various unit sizes as stipulated in Section D.7.c.
The monthly rents are based on rental levels that do not exceed 30 percent of the
selected income level for that unit and the presumed household size that
corresponds with the various unit sizes as stipulated in Section D.7.c of the
Guidelines, and a utility allowance shall be factored into the total housing cost.
The eligible household income range may be adjusted annually to reflect
adjustments in income categories published periodically by the State Department
of Housing and Community Development for Santa Clara County.
9. Determination of Sale Prices for Ownership BMR Units
The purchase price of a residential development's BMR ownership units shall be
affordable to Moderate -Income households (approximately between 80 percent
and 1.20 percent AMI, except units in rowhouse/townhouse projects could go up
to 150 percent AMI as applicable based on Section DA.b), with a cumulative
weighted average of 100 percent AMI (except rowhouse/ townhouse projects shall
comply with the weighted average requirements as applicable based on Section
DA.b), and shall be based on the selected income level for that unit and the
presumed household size that corresponds with the various unit sizes as
stipulated in Section D.7.c of these Guidelines. The eligible household income
range may be adjusted annually to reflect adjustments in the median household
income published periodically by the State Department of Housing and
Community Development for Santa Clara County. The total monthly payment
that shall not exceed 30 percent of the selected income level for that unit adjusted
by unit size and presumed household size, and 'includes mortgage, taxes, utilities,
HOA dues, insurance, and private mortgage insurance and the sales price shall be
set accordingly. The monthly housing cost assumes a 5 percent down payment.
The developer shall set aside a reserve for households in BMR units sold for less
than 80 percent AMI, and the reserve shall be described in the CC&Rs to cover
future special assessments and increases in HOA dues for those households, such
that the total housing cost will not exceed 30 percent of the household's selected
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income level for the unit over the life of the mortgage. The Community
Development Director or designee may establish standards for calculating the
amount of the reserve.
10. Term
All BMR rental and ownership units shall be maintained as affordable housing
according to the requirements of the Program in perpetuity.
11. Density Bonus
If an applicant requests a density bonus, the affordable units required by Density
Bonus Law may count toward the project's on-site BMR requirement, provided
that the units meet both the BMR Program's requirements and the requirements
of Density Bonus Law. If the requirements of both programs are not met, the
BMR Program may require that affordable units be provided in addition to the
affordable units provided to qualify for a density bonus.
12. Rental Housing with Condominium Maps and Condo Conversions
Residential developments requesting a condominium subdivision map but that
intend to rent the units initially instead of selling the units will be subject to the
F on-site BMR rental requirements. If an applicant requests payment of fees in lieu
of providing units on-site, the applicant shall comply with the alternative
mitigations in Section B and the Council shall have discretion in granting the
request. The in -lieu fee amount shall exceed the rental in -lieu fee basis as
published in the Master Fee Schedule, and shall be paid in full prior to the
issuance of the first building permit issue of the development.
If and when the on-site BMR rental units are converted to BMR ownership units,
the BMR ownership units shall maintain the same level of affordability as the
BMR rental units for those units initially rented between 80 percent and 120
percent AMI. For example, a BMR rental unit at 90 percent AMI shall remain
affordable to a homeowner at 90 percent AMI when converted to a BMR
ownership unit. BMR rental units at income levels between 50 percent and 80
percent AMI shall be allowed to: (1) maintain those lower affordability levels if a
reserve is set aside for future special assessments and HOA increases to maintain
the affordability of the unit; or (2) set those units at between 80 percent and 120
percent AMI, such that the cumulative weighted average for all BMR ownership
units is 100 percent AMI. However, if a residential development is a density
bonus project, converted units that were used to qualify the project for a density
bonus shall continue to be affordable at the income level that qualified the
development for the density bonus and shall otherwise comply with the
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requirements of Density Bonus Law. Existing tenants in BMR rental units shall
have right of first refusal to purchase a converted BMR unit and relocation
payments shall be made according to the City's Tenant Relocation Assistance
Ordinance if the tenant does not exercise their first right of refusal.
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SECTION E: ALTERNATIVE MITIGATIONS
The basic objective standard of the Program is the creation of affordable housing
integrated into market -rate residential developments. As an alternative to building the
BMR units on-site, developers of market -rate residential developments may submit a
request to meet their affordable housing obligations through other means, such as the
dedication of land, the provision of other resources, payment of an in -lieu fee, or other
alternatives.
The applicant has the burden to demonstrate that the request for an alternative
mitigation satisfies the findings requirements; however, meeting the findings
requirements does not constitute automatic approval of the alternative mitigation
request. Such requests may only be granted if the City Council determines that such
alternative will further affordable housing opportunities in the City to a greater extent
than providing BMR units on-site based on the standards in these Guidelines and that
the alternative mitigation is preferred to the on-site requirement. Prior to City Council
approval of the requested alternative mitigation, the applicant shall demonstrate at
least the following:
• The alternative mitigation requested exceeds the minimum affordability
requirements of the Program by including deeper affordability, a greater number
of BMR units, or both; and
• The alternative mitigation advances other City goals for housing as expressed by
written guidance in administrative procedures as issued by the Community
Development Director or designee regarding the specific income levels or
residential product types desired by the City, including, but not limited to,
housing needs based on income level and progress toward meeting the City's
RHNA. Applicants must be consistent with any guidance in determining if the
proposed alternative advances the City's goals for housing.
Furthermore, the applicant shall demonstrate compliance with additional requirements
if one or more of the following alternative mitigations is requested:
• Dedication of land—The value of the dedicated parcel shall be greater than the
value of providing the BMR housing units on-site. The minimum parcel size for a
dedicated site shall be 0.75 acre of developable area and shall be reasonably able
to accommodate more than the number of affordable units as would have been
provided on-site. Developable area is defined as the site area exclusive of streets,
sidewalks, and street or other public rights-of-way. The site shall have sufficient
width and depth to permit the development of a greater number of BMR units
that comply with applicable development standards than would be required if the
units were provided on-site.
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The dedicated site must be suitable for affordable housing development in terms
of its configuration, physical and environmental characteristics, access, location,
adjacent uses, and other relevant planning criteria, and the location shall not tend
to cause or exacerbate residential segregation. The site must comply with the
following:
— Environmental Compliance. The applicant must submit environmental
conditions reports to the City, including, but not limited to, Phase 1 and
Phase 11 reports, and must perform any necessary remediation identified by
such reports on the site prior to transferring to the City.
— Site Infrastructure. The applicant shall provide all infrastructure necessary
to serve the units, including sewer, utilities, water, light, street access,
roadways, and sidewalks on the site, and must meet all Precise Plan
infrastructure, if applicable, and open space requirements. Alternately, the
project applicant may provide funding to the City to complete all or a
portion of the required 'infrastructure according to the NBAHP phasing and
implementation strategy.
— Special Conditions. 'The applicant must submit a comprehensive budget
demonstrating that the dedicated site is not subject to any conditions when I
compared to the site of the residential development that would create higher L
cost burdens for affordable housing development (e.g., poorer soil
conditions).
— Site Condition. The dedicated site shall be delivered vacant and
unimproved except for required utilities (without any existing buildings).
— Timing of Land Dedication. The dedicated site must be transferred to the
City prior to the issuance of the first building permit for the entire residential
development.
• Development of affordable housing units off-site—An applicant may meet its on-
site 3MR requirement by developing the BMR housing units off-site. "Off-site"
may mean another location within the market -rate project or on a separate parcel
elsewhere. The off-site units shall be at least 20 percent of the total number of
residential units for the residential development, defined as the combined total of
the market -rate residential units and the off-site affordable housing units.
-- Location: The off-site location of the BMR units shall be in a location
consistent with the City's goals for housing as expressed in written guidance
issued by the Community Development Director or designee.
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— Suitability: The proposed BMR units must be deemed suitable by the City
based on location, type of project, number of units/bedrooms, compliance
with BMR requirements, adjacent uses, comparability to market -rate units,
and other planning criteria.
— Timing of delivery: The off-site BMR units shall be completed and receive
the Certificate of Occupancy no later than issuance of the Certificate of
Occupancy for the market -rate units.
• Provision of fees in lieu of units —The in -lieu fee amount shall be greater than the
value of developing the BMR units on-site; be paid by the applicant prior to
issuance of the first building permit; and be higher than the per square foot levels
stipulated in Section D.5 ("Fees for Fractional Units"). The applicant shall
demonstrate why it is in the City's interest to receive fees instead of on-site units,
and considerations may include, but are not limited to: the ability for the in -lieu
fees to create more affordable units and/or deeper affordability levels than could
be provided on-site; the ability to create affordable housing for special -needs
populations; helping 100 percent affordable housing projects in the City's pipeline
move forward that would not have otherwise been able to move forward or to
move forward sooner than otherwise possible; and, if an applicant proposes an
early or prepayment of in -lieu fees, the time value of such payment. If the
residential development is constructed in multiple phases, the full amount of the
in -lieu fee for the whole development shall be paid prior to issuance of the first
building permit for the first phase.
An applicant may request an alternative mitigation composed of more than one
strategy, such as providing a combination of BMR units on-site and fees in lieu of
units, and would be required to demonstrate the merits of the request based on
the parameters provided in this section.
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SECTION F: TIMING OF DELIVERY OF BMR REQUIREMENTS
1. On-site BMR requirement--• All SMR units in residential developments shall be
constructed on-site concurrently with market -rate units. The Certificate of
Occupancy for the BMR units shall be issued no later than the Certificate of
Occupancy for the market -rate units.
In phased developments, the total SMR requirement shall be calculated on the
basis of the whole development; each phase shall include the required number of
BMR units based on the number of market -rate units in that phase; and on-site
units shall be developed concurrently with the market -rate units in each phase.
The Certificate of Occupancy for the SMR units shall be issued no later than the
Certificate of Occupancy for the market -rate units in each phase., For a residential
mixed-use project with one or more phases, the Certificate of Occupancy for the
BMR units shall be issued no later than the Certificate of Occupancy for the
market -rate units in each phase and prior to issuance of the Certificate of
Occupancy for the nonresidential portion of the development.
2. - Alternative mitigation— If an applicant requests an alternative mitigation and it is
granted by the City Council, satisfaction of the residential development's BMR
requirements shall occur based on the following:
a. Land dedication—The parcel shall be deeded to the City prior to issuance of
the development's first building permit. For a phased project, the parcel
shall be deeded to the City prior to issuance of the first building permit for
the entire project. For a residential mixed-use project with one or more
phases, the parcel shall be deeded to the City prior to the issuance of the
development's first building permit, including if the first building permit is
for a nonresidential use.
b. Build off-site—Entitlement and construction of the BMR off-site units shall
occur concurrently with the market -rate project and at a minimum 20
percent BMR requirement. The BMR units shall be completed and receive
the Certificate of Occupancy no later than issuance of the Certificate of
Occupancy for the market -rate units. In phased developments, the total
BMR requirement shall be calculated on the basis of the whole development,
and the Certificate of Occupancy for the market -rate units in the first phase
shall not be issued until issuance of the Certificate of Occupancy for the BMR
off-site units.
C. In -lieu fees --Fees in lieu of providing on-site affordable units shall be paid
in full prior to issuance of the project's first building permit. If an applicant
wishes to pay the fee early and early payment would be of value to the City
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per the requirements in Section E of these Guidelines, the timing of the early
payment shall be determined between the applicant and the City. In phased
developments, the total in -lieu fee amount shall be calculated on the basis of
the whole development and paid in full prior to issuance of the project's first
building permit. For a residential mixed-use development with one or more
phases, delivery of the affordable housing obligation shall occur prior to the
issuance of the development's first building permit, including if the first
building permit is for a nonresidential use.
d. Other—If an applicant requests an alternative mitigation not listed above,
the general requirement is that the BMR requirement must be satisfied prior
to issuance of the first building permit for any part of the entire
development, including developments with multiple phases and/or are
mixed-use.
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SECTION G: ADMINISTRATION
1, BMR Waiting List
The City or its designee shall maintain a waiting list for BMR rental and
ownership units. A separate set of procedures may be developed to implement
the administration, maintenance, and oversight of the waiting list in accordance
with the requirements of the Program, including determination of eligibility and
placement of qualified households into available BMR units.
The property owner/ management representative of rental units shall accept all
tenants who meet their screening criteria and the City's BMR eligibility
requirements, provided the screening criteria for BMR tenants is reasonable, is no
stricter than for those tenants in market -rate units, and complies with State and
Federal fair housing laws. In situations where potential tenants meet the BMR
eligibility requirements but do not meet the screening criteria of the property
owner/ management representative, such as minimum credit scores or minimum
income multiples of rent (for example, incomes that are three times the rent), the
property owner/ management representative shall have final discretion in the
placement of those potential tenants but shall first work with the City/ designee to
review in good faith the ability to place those tenants in a BMR unit before
disqualifying them.
2. Lease Agreement
Written lease agreements signed by both tenants and property
owner/ management representative shall be required for BMR rental units and
shall have a minimum term of one year. Shorter lease terms are allowable if it is
mutually agreeable between the tenant and the property owner/ management
representative. The property owner/ management representative shall
simultaneously notify the tenant and the City/ designee a minimum of 60 days
prior to the conclusion of an existing lease with an offer to renew the lease for the
same term or different term that is mutually agreeable between the tenant and the
property owner/ management representative. If the tenant chooses to vacate the
BMR unit instead of renewing the lease, the tenant shall provide written and
signed notice to the property owner/ management representative and the
City/ designee a minimum of 30 days prior to the conclusion of the lease.
3. Primary Place of Residence
Each tenant of a BMR rental unit or purchaser of a BMR ownership unit shall
certify, prior to close of escrow in a form acceptable to the City/designee, that the
unit being rented or purchased shall be the household's primary place of
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residence, defined as occupancy for a minimum of 10 months in a calendar year.
The household has the burden of proof to demonstrate that the BMR unit is the
primary place of residence.
4. Subletting of SMR Units Prohibited and Hardship Provision
BMR units or rooms within a BMR unit, including BMR rental and ownership
units, shall not be sublet for any duration of time. However, if the BMR
tenant/owner experiences and can demonstrate a financial hardship, the unit or
rooms within a unit may be rented or sublet at an "up -to" amount with prior
approval from the Community Development Director or designee. Prior
approval from the property owner/ management representative to sublet a BMR
rental unit shall also be required. In no event shall the hardship exemption
exceed six months unless it can be demonstrated that the financial hardship is
longer-term, nor shall subletting allow the BMR tenant/ owner to earn a profit on
the BMR unit by collecting rent that exceeds the affordable rent or affordable
housing cost or that exceeds the balance of the affordable rent or affordable
housing cost that the BMR tenant/owner is unable to pay after taking the
financial hardship into account. Failure to comply with this provision shall
subject the tenant/ owner to penalties under Section G.7 of these Guidelines.
5. City's Option, Resale Provisions, and Deed Restrictions
All BMR units shall be subject to deed restrictions, covenants, resale restrictions,
and other applicable conditions and documentation to ensure compliance with
the Program, and which includes an option that entitles the City or its designee
the first right to purchase a BMR ownership unit at the lower of: (1) market
value; (2) the purchase price paid by the seller, plus one-third of the increase
(during the period of seller's ownership) in a CPI, All Urban Consumers, San
Francisco -Oakland -San Jose, published by the U.S. Department of Labor, Bureau
of Labor Statistics; or (3) an amount equal to the price affordable to household
earning the income level specific to the BMR unit. To qualify for an exception to
the City -imposed restriction that the BMR unit be sold to a City -approved BMR
household, the requesting party must demonstrate an inability to obtain a
qualified buyer within a 1$0 -day period and the City has determined not to
exercise its option. If an exception is granted, the seller will be entitled to receive
the lowest of sales prices as described in Items 1 through 3 above. The balance of
the proceeds shall be paid to the City of Mountain View to be deposited in the
City's BMR Housing Fund. The deed restrictions will prohibit sales or transfers
of the property except with the written consent of the City and at a price
computed as above.
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Owners of BMR ownership units shall provide the City/designee a notification of
intent to sell prior to listing the unit. If an owner intends to refinance, change
title, or transfer ownership of the BMR ownership unit, the owner shall notify and
receive approval from the City/designee prior to initiating a refinance, title
change, or transfer of ownership. The City is entitled to pursue all available
remedies against an owner if an owner fails to notify and receive approval from
the City/ designee, including the City's exercise of its option to purchase the BMR
ownership unit or a City action to foreclose on the BMR ownership unit under the
City's deed of trust.
The SMR ownership deed restrictions and conditions shall contain such other
provisions as are considered necessary by the City to implement the Program and
the City may require that an additional notice or other document(s) be recorded.
A reference to the deed restrictions and conditions shall be included in all deeds
or conveyances of BMR units. Such deeds or conveyances shall be recorded in the
County Recorder's Office, and a conformed copy shall be sent to the Community
Development Department, City of Mountain View, P.O. Box 7540, Mountain
View, California, 94039-7540.
b. Annual Verification of Eligibility
Annual verification of household eligibility for each BMR ownership and rental
units shall also be conducted to ensure compliance with the Program's
requirements, including primary place of residence, subletting due to financial
hardship (if applicable), and any other applicable requirements.
Additionally, the income of each household of a BMR rental unit shall be verified
at least annually by the City or its designee to confirm the household's continued
eligibility for the unit:
• A household qualifying for a BMR rental unit with rents up to 80 percent
AMI may earn up to 95 percent AMI for any BMR unit in this range and still
remain in the unit. If a low-income household exceeds the 95 percent AMI
threshold, the household has up to one year to transition out of the SMR
unit.
• A household qualifying for a BMR rental unit with rents at greater than 80
percent AMI up to 100 percent AMI may earn up to 105 percent AMI for any
BMR unit in this range and still remain in the unit. If a household exceeds
the 5 percentage point threshold, the household has up to one year to
transition out of the BMR unit.
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• A household qualifying for a BMR rental unit with rents greater than 100
percent AMI up to 120 percent AMI may not become over -income for any
BMR unit in this range, If a household exceeds the AMI level of tle unit, the
household has up to one year to transition out of the BMR unit. For
example, a household that qualifies for a BMR unit with rents se_ at the 120
percent AMT affordability level can earn up to 720 percent AMI and still
remain in the unit. Once the household earns above 120 percent of AMI,
then the household has up to one year to vacate the BMR unit.
BMR households failing to cooperate in the annual review shall be subject to
Section G.7 of these Guidelines.
7. Compliance with Program Requirements
Any individual or household that rents, purchases, or sells a BMR unit in
violation of the Program requirements or the intent of the BMR Program shall be
subject to penalties, and shall be required to forfeit all monetary amounts so
obtained in excess of the permitted resale price or rental rates. Such amount shall
be deposited in the City's BMR Housing Fund. Furthermore, violations of these
provisions may result in civil or criminal prosecution. If the City/designee
undertakes any enforcement action to obtain compliance with the requirements,
the City/designee shall be entitled to recover its attorney's fees and staff costs for
such enforcement effort.
S. BMR Housing Fund
A BMR Housing Fund is established for the deposit of all in -lieu fees,. penalties,
interest earnings, and all payments, including resale payments, made to the City
under the Program. The purpose of the fund is to assist in providing affordable
housing to very low-, low-, and moderate -income households and to cover
administrative costs of the Program.
9. Appeals Process
Appeals of determinations based on the requirements of Section G of these
Guidelines must be in the form of a written request by the appellant and be
addressed to the Community Development Director. The Community
Development Director or designee shall make the ruling and all rulings shall be
final, The City may establish cost recovery fees for appeals.
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10. City Designee
The City may enter into an agreement with one or more outside agency to
administer and manage all or parts of the Program as the City's designee(s),
including, but not limited to, the screening, selection, and placement of qualified
households for the Program, asset management services, determination of
appeals, and compliance and monitoring services.
WC/3/CDD
821-04-29--19G
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