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HomeMy WebLinkAbout991 - Ordinance ORDINANCE NO. 991 AN ORDINANCE OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, ADDING CHAPTER 3.76 TO THE RANCHO CUCAMONGA MUNICIPAL CODE TO ESTABLISH AN AFFORDABLE HOUSING DEVELOPMENT IMPACT FEE A. RECITALS 1. There is a shortage of affordable housing in the City of Rancho Cucamonga, as evidenced in the City's Housing Element. 2. New non-residential (e.g. retail/commercial, office, industrial, warehouse, and research and development) development creates a variety of new jobs with varied degrees of compensation for workers in such developments. 3. The addition of new workers in these new non-residential developments generates housing demand for households at extremely low, very low, low, and moderate incomes. 4. Due to housing and market conditions, new market-rate development projects in the City have provided a disproportionate quantity of housing units that are not affordable to all income groups, creating an unbalanced housing stock. 5. There is a low vacancy rate for housing affordable to persons of extremely low, very low, low, and moderate income households. 6. Rancho Cucamonga has one of the least affordable real estate markets in San Bernardino County. 7. Due to these factors, workers of extremely low, very low, low, and moderate income are experiencing increasing difficulty in locating and maintaining adequate, safe, and sanitary affordable housing within or near the City. 8. The failure to provide adequate affordable housing for lower-wage workers can force these workers to live in less than adequate housing within the City, pay a significantly disproportionate share of their incomes to live in adequate housing within the City, or commute ever-increasing distances to their jobs from housing located outside the City. 9. The lack of affordable housing has detrimental impacts on traffic, transit, and related air quality impacts and the demands placed on the regional transportation infrastructure. 10. Non-residential uses in the City benefit from the availability of housing close to their employees. 11. The City has commissioned the preparation of a Non-Residential Linkage Fee Nexus Study, prepared by Keyser Marston Associates, Inc., dated October 5, 2021 ("Nexus Study"), to analyze the relationship between non-residential development,job creation, and the demand for affordable housing, in compliance with the Mitigation Fee Act (California Government Code Sections 66000 et seq.). 12. According to the Nexus Study (pgs. 10-25), a nexus exists between the addition of new non- residential development and the jobs/new workers that this development creates, and the workers' 7 Ordinance No. 991 — Page 1 of 7 need for additional housing in proximity to the jobs, a portion of which must be affordable to low- income workers. 13. More specifically, the Nexus Study documents the linkage between new and expanded non- residential development, the net number of new employees and employee households generated by businesses occupying these land use buildings, and the housing demands of these households. 14. As discussed in detail in the Nexus Study, new housing affordable to persons identified in the Nexus Study is not now being added to the supply in sufficient quantity to meet the needs of the new employee households associated with new or expanded non-residential development. 15. The Nexus Study quantifies the cost mitigation associated with developing affordable housing units based on the identified need resulting from employees generated by new non-residential development. 16. The City Council is imposing the fee established by this Ordinance in order to partially close this gap by using the fee to help finance additional affordable housing stock. 17. The Rancho Cucamonga Municipal Code does not currently establish an adequate mechanism to account for the impact that non-residential development has on increasing the need for affordable housing. 18. Requiring non-residential developers to assist in the production of affordable housing is also consistent with the City's long-standing commitment to achieve and maintain a suitable living environment, including housing for all economic levels. 20. This municipal commitment conforms with State and Federal policies and is an important goal of the City's draft Housing Element, which is expected to be adopted in the coming months. 21. Program HE-12 of the City's draft 2021-2029 Housing Element states: "The City has seen a significant increase in non-residential development in recent years, resulting in job increases in multiple business sectors and an increased associated need for affordable housing. To mitigate the impact of newly generated jobs on the local housing market, the City will explore a linkage fee for non-residential development." 22. This fee program will benefit the City as a whole since each development which contributes to affordable housing through the payment of this fee assists in augmenting the City's housing mix, helps to increase the supply of housing for all economic segments of the community, and addresses the affordable housing need generated by the development, thereby supporting a balanced community which is beneficial to the public health, safety, and welfare of the City. 23. The City wishes to impose an affordable housing development impact fee on non- residential development, and to deposit such fees into a newly-established and stand-alone fund to partially fund development of affordable housing in the City. 24. All prerequisites necessary to the adoption of this ordinance have occurred, including the noticing procedures outlined in the Mitigation Fee Act. B. ORDINANCE The City Council of the City of Rancho Cucamonga does ordain as follows: Section 1. Findings 7 Ordinance No. 991 — Page 2 of 7 A. The provision of safe and stable housing for households at all income levels is essential for the public welfare of the City of Rancho Cucamonga. Housing in the City has become steadily more expensive and housing costs have gone up faster than incomes. Federal and state government programs do not provide enough affordable housing to satisfy the needs of very low, low, or moderate income households. As a result, there is a severe shortage of adequate, affordable- housing for very low, lower, and moderate income households, as evidenced by the following findings in the City's draft 2021-2029 Housing Element: 1. The City had a regional housing need between 2013 and 2021 to construct 209 very low income units, 141 low income units and 158 moderate income units. According to the 2020 Housing Element Annual Progress Report, between 2013 and 2020, 18 very low income units, 11 low income units and 171 moderate income units were permitted. Less than 40 percent of the very low, low and moderate allocated units were permitted during the current housing cycle period. 2. The City has a regional housing need between 2021 and 2029 to construct 3,245 extremely low/very low income units, 1,920 low income units, and 2,031 moderate income units (Draft Housing Element 2021-2029, Table HE-47, Page 72). According to the draft Housing Element, after accounting for potential future Accessory Dwelling Units, the City still needs to construct 3,209 extremely low/very low income units and 1,864 low income units. Therefore, the City's current policies have not been sufficient to generate enough new housing affordable to Extremely Low Income, Very Low Income, and Low Income households. B. The City Council finds that there is a dire need for housing to accommodate the significant workforce increase caused by non-residential development in recent years. Such job increases in multiple business sectors is correlated with an increased associated need for affordable housing. To mitigate the impact of newly generated jobs on the local housing market, the City Council finds that there is a need for non-residential development to support the resulting workforce's affordable housing demand. Section 2. A new Chapter 3.76 entitled "Affordable Housing Linkage Fee" is hereby added to Title 3 ("Revenue and Finance") of the Rancho Cucamonga Municipal Code to read as follows: Chapter 3.76 AFFORDABLE HOUSING DEVELOPMENT IMPACT FEE 3.76.010 Purpose and Intent. 3.76.020 Definitions. 3.76.030 Affordable Housing Development Impact Fee. 3.76.040 Adjustments or Waivers. 3.76.050 Conversion. 3.76.060 Use of Funds. 3.76.010 Purpose and Intent. A. The purpose of this chapter is to facilitate the development and availability of housing affordable to a range of households with varying income levels within the city through creation and imposition of a fee on new non-residential development, which will partially fund the need for affordable housing created by the workforce of new development. B. The requirements of this chapter are based on a number of factors including, but not limited to, the city's long-standing commitment to increasing opportunities for affordable housing; the immediate need for affordable housing, as reflected in local, state, and federal housing regulations and policies; the demand for affordable housing created by non-residential development; and the impact that the lack of affordable housing production has on the health, safety, and welfare of the city's residents including its impacts on traffic, transit and related air quality impacts, and the demands placed on the regional transportation infrastructure. Imposing a fee that is reasonably related to the burdens created 7 Ordinance No. 991 — Page 3 of 7 by new non-residential development on the city's need for affordable housing will enable the city to fund development of affordable housing units that will contribute to addressing these impacts and fulfilling these goals. C. It is the intent of the city council that the fee required by this chapter shall be supplementary to any conditions imposed upon a development project pursuant to other provisions of this code, the Subdivision Map Act, the California Environmental Quality Act, and other state and local laws, which may authorize the imposition of project-specific conditions on development. 3.76.020 Definitions. For the purpose of this chapter, the following words, terms, and phrases shall be defined as set forth below: "Affordable housing development impact fee" means the fee paid by a developer of a non-residential development project to mitigate the impacts that such a project has on the demand for affordable housing in the city. "Affordable housing development impact fund" means a fund or account designated by the city to maintain and account for all monies received pursuant to this chapter. "Non-residential development project" means the construction or the addition of new non-residential gross floor area, or the conversion from a use exempt from the affordable housing development impact fee to a use subject to the affordable housing development impact fee. Non-residential development includes retail/commercial, office, industrial, warehouse, and research and development uses. "Community land uses which serve the public" means uses that include, but are not limited to, hospitals, places of worship, museums, educational facilities (public K-12 schools, community colleges, and colleges and universities), youth and recreational facilities, retirement or rest homes, emergency shelters, and other such institutional uses which serve the public, as determined by the director. "Developer" means any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities, which seeks or applies for city approvals, permits or entitlements for all or part of a non-residential development project. "Director" shall mean the engineering services director. "Gross floor area" shall have the same meaning as set forth in section 17.126.020 ("Floor area, gross"). "Mixed-use development" shall have the same meaning as that set forth in section 17.126.020 ("Development, mixed use"). 3.76.030 Affordable Housing Development Impact Fee. A. Requirement. An affordable housing development impact fee is hereby imposed on all non-residential development projects, except those exempt projects identified below. No application for a building permit for a non-residential development project shall be approved, nor shall any such non- residential development project be constructed, without first complying with this chapter. The fee imposed by this chapter shall be paid by each developer no sooner than issuance of a building permit and no later than issuance of a certificate of occupancy for the structure. No certificate of occupancy shall be issued for a non-residential development project that has not paid the fee required under this chapter. The amount of the fee shall be calculated at the time the fee is paid, based upon the rate then in effect. B. Exemptions. Notwithstanding subsection A above, this chapter shall not apply to the following: Ordinance No. 991 — Page 4 of 7 1. Any non-residential development project with a gross floor area of 10,000 square feet or less; 2. Community land uses which serve the public, as defined by this ordinance; 3. Reconstruction of any building that was destroyed by fire, flood, earthquake or other act of nature, so long as the square footage does not exceed the square footage before the loss; 4. The residential portion of a mixed-use development project; 5. Utility, transportation, public facility, and communication uses; 6. Any non-residential development project developed by a public agency; 7. The non-residential area of any mixed-use project that includes at least 5% of the total number of residential units reserved for extremely low/very low or low income households. The applicant shall enter into a regulatory agreement with the city to preserve the units at such income levels for at least 45 years. The agreement shall be recorded as a deed restriction against the property. C. Calculation of the fee. The affordable housing development impact fee shall be charged on new gross floor area, subject to section 3.76.050. The amount of the fee shall be established by resolution of the city council. 3.76.040 Adjustments or Waivers. A. The requirements of this chapter may be adjusted or waived by the City Council if the developer demonstrates that an insufficient nexus exists between the proposed use and the affordable housing development impact fee. The developer shall submit documentation demonstrating this with a request for an adjustment or waiver in writing to the director no later than ten days prior to the public hearing on the development permit application for the project or, if no development permit is required, at the time of the filing of the request for a building permit. The developer shall provide such additional information as may be required by the director to process the request for consideration by the City Council. B. The requirements of this chapter may be adjusted or waived by the City Council if the developer demonstrates that applying this chapter would constitute a taking of property without just compensation in violation of the United States and/or California Constitutions. The developer shall submit a request for an adjustment or waiver in writing to the director no later than ten days prior to the public hearing on the development permit application for the project or, if no development permit is required, at the time of the filing of the request for a building permit than the date it files its initial development application with the city. The developer shall provide such additional information as may be required by the director to process the request for consideration by the City Council. 3.76.050 Conversion. If a development is exempt from the fee at initial construction, but later converts to a non-residential development project subject to the fee, the converted square footage will be deemed new gross floor area and the affordable housing development impact fee shall be paid pursuant to section 3.76.030. The amount of the fee shall be calculated at the time the fee is paid, based upon the rate then in effect. 3.76.060 Use of Funds. All funds derived from this chapter shall be placed in a separate and distinct affordable housing development impact fund and used solely to increase the supply of housing affordable to extremely 7 Ordinance No. 991 — Page 5 of 7 low, very low, low and moderate income households, the demand for which is created by the development of new non-residential development in the city. Section 3. This ordinance and the affordable housing development impact fee shall apply to all non-residential development projects except those that have received all required discretionary entitlements prior to the effective date of this ordinance. Section 4. The City Council declares that, should any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. Section 5. The City Clerk shall certify to the adoption of this Ordinance and shall cause the same to be published in the manner prescribed by law. Ordinance No. 991 — Page 6 of 7 PASSED, APPROVED, AND ADOPTED this 5' day of January, 2022. P �P6ennigMichael, " ayor ATTEST: �; anic C. Reynol s, Clerk STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) ss CITY OF RANCHO CUCAMONGA ) I, JANICE C. REYNOLDS, City Clerk of the City of Rancho Cucamonga, California, do hereby certify that the foregoing Ordinance was introduced at a Regular Meeting of the City Council of the City of Rancho Cucamonga held on the 15' day of December 2021, and was passed at a Regular Meeting of the City Council of the City of Rancho Cucamonga held on the 5m day of January 2022. AYES: Hutchison, Kennedy, Michael, Scott, Spagnolo NOES: None ABSENT: None ABSTAINED: None Executed this 5tn day of January 2022, at Rancho Cucamonga, California. Ja ' . Reyno 7 Ordinance No. 991 — Page 7 of 7