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Ordinance No. 8750 J ORDINANCE NO. 875 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CYPRESS AMENDING APPENDIX I, "ZONING," OF THE CODE OF THE CITY OF CYPRESS BY AMENDING SECTION 9.8, "RESIDENTIAL DENSITY BONUS STANDARDS AND REGULATIONS," OWNER - OCCUPIED PROJECTS. THE CITY COUNCIL OF THE CITY OF CYPRESS DOES ORDAIN AS FOLLOWS: SECTION I. Section 9.8 -1 of Appendix I, "Zoning," of the Code of the City of Cypress is hereby amended by renumbering existing subsections (o) and (p) to (p) and (q) respectively. SECTION II. Section 9.8, "Residential Density Bonus Standards and Regulations," of Appendix I, "Zoning," of the Code of the City of Cypress is hereby amended by the addition of Section 9.8 -1(1) to read as follows: "SECTION 9.8 RESIDENTIAL DENSITY BONUS STANDARDS AND REGULATIONS Sections: 9.8 -3 Owner - Occupied Projects. 9.8 -4 Rental or Leasing of Affordable Owner - Occupied Units Unlawful. Sec. 9.8 -1 Definitions. For purposes of this Section, the following words and phrases shall have the meaning set forth below: (1) 'Owner- Occupied Projects' shall mean those Qualified Projects for which a Density Bonus has been granted and which are designed to be sold to low, lower, or very low income individuals or families as opposed to rented to such qualified individuals or families. (o) 'Reserved Retained Proceeds' shall mean the difference between the market rate resale price of the Affordable Unit(s) during the restricted period and the amount of the resale price the owner is authorized to retain under the provisions of Section 9.8 hereof. The Reserved Retained Proceeds shall constitute -1- &8o the City's security for performance of the affordability requirements and shall be in the nature of a lien on the Affordable Unit(s). Such lien shall be released by the payment to the City by the property owner of the Reserved Retained Proceeds or by the termination of the period during which the Affordable Unit(s) is /are to remain affordable. SECTION III. Section 9.8 -3, "Owner- Occupied Projects," is hereby added to Section 9.8 of Appendix I, "Zoning," of the Code of the City of Cypress to read as follows: "Sec. 9.8 -3 Owner - Occupied Projects. Whenever an Applicant agrees to construct an Owner - Occupied Project with twenty percent (20 %) or more of the units set aside for occupancy by lower income individuals or families; or ten percent (10 %) or more of the units set aside for occupancy by very low income individuals and families; or fifty percent (50 %) or more of the units set aside for qualifying residents as defined in Civil Code Section 51.2, the Applicant may request a Density Bonus as defined herein. This request for a Density Bonus shall be granted, subject to the following standards and limitations: (a) The proposed project qualifies under the applicable definitions set forth in Section 9.8 -1 above. (b) The Applicant is eligible for both a Density Bonus and at least one additional incentive or concession. (c) The additional incentive or concession shall be from the list set forth in Sections 9.8 -1(a) and /or 9.8 -1(h) above. (d) No application for a development project which includes an owner - occupied density bonus unit shall be complete unless and until the Applicant has entered into and executed a written Density Bonus Agreement provided to the Applicant by the City. This Density Bonus Agreement shall set forth specifically the terms of the Density Bonus, and identify any additional incentive or concession provided. Applicants seeking to utilize the 'Affordability Plan' option provided in Section 9.8- 3(e)(1)b shall submit such 'Affordability Plan' concurrently with the filing of the application for the development project. (e) The units set aside for lower income individuals and families, (the "Affordable Units "), shall be affordable, with affordable payments as defined in Section 9.8 -1(c), for such individuals -2- 1 cJ -s. and families for a period of at least thirty (30) years. However, if the City in approving the Project does not grant at least one incentive or concession pursuant to Section 9.8 -2(b) above, the City and Applicant may agree to limit the affordability period, to ten (10) years. (1) The initial selling price of the Affordable Unit(s) shall be based upon one of the following mechanisms: a. The total unit price for any qualified Affordable Unit shall not be more than three (3) times the income of the low, lower, and /or very low income individuals or families purchasing any such Affordable Unit. The monthly payments including principal, interest, taxes, insurance, and association dues, if any, shall not exceed thirty percent (30 %) of the income of the low or lower income individuals or families buying the Unit(s) based on a fully amortized thirty (30) year fixed rate mortgage or a thirty (30) year variable rate mortgage with payment increases of no more than seven - and - one -half percent (7- 1/2%) per year. With the variable rate mortgage and increases thereon the total monthly payments shall not exceed thirty percent (30 %) of the monthly income of the low or lower income individuals or families purchasing the Unit(s). Down payment requirements shall not exceed that customarily required in the lending industry for units selling at a comparable price. b. The total unit price for the Affordable Unit(s) may be based on an 'Affordability Plan' submitted by the Applicant with the application for a Density Bonus. Such Affordability Plan shall demonstrate to the satisfaction of the City Planning Director that the Affordable Unit(s) sold under the Affordability Plan will be affordable to individuals and families of low and lower income. Utilization of the Affordability Plan shall only be available to an Applicant if the Plan is specifically approved by the City Council at the time the Council approves the Project. The failure of the City Council to approve or the Applicant to request or submit an Affordability Plan at the time the application for the Project is complete or deemed complete shall mean the pricing mechanism set forth in subparagraph a. above controls. (2) Resale of any Affordable Units restricted to remain 'affordable' for a ten year period when such resale occurs within said ten (10) year -3- 082 period shall be at the prevailing market rate. The proceeds of the Affordable Unit(s) on resale shall be divided between the initial purchaser and the City during the ten (10) year period. In addition to the proceeds retained by the initial purchaser, the initial purchaser shall also be entitled to the reasonable costs of any capital improvements made to the Affordable Unit(s). During said ten (10) year period, the initial purchaser shall be entitled to retain ten percent (10 %) of the proceeds for each year of ownership. After year ten (10), the initial purchaser shall be entitled to one - hundred percent (100 %) of the proceeds of the Affordable Unit(s) on resale. a. The City's share of any proceeds from the resale of an Affordable Unit during said ten (10) year period, shall be used solely and exclusively to assist individuals and families of low, lower, and /or very low income with the purchase of a home in the City. b. When the Reserved Retained Proceeds obtained by the City pursuant to subparagraph a. above, are used to finance the purchase of a home for individuals or families of low, lower, or very low income, these homes shall be subject to the same restrictions as in subsection (e)(2) above. Upon resale during the ten (10) year period, the resale shall occur at the prevailing market rate, and the City shall be reimbursed for its loan to the homeowner and shall share in the proceeds of the sale to the degree that the City's contribution represented to the purchase price by the homeowner. In addition to the proceeds retained by the homeowner, the homeowner shall also be entitled to the reasonable costs of any capital improvements made to the home. (3) Resale of any Affordable Unit restricted to remain 'affordable' for a thirty (30) year period when such resale occurs within said thirty (30) year period shall be at the prevailing market rate. The proceeds of the Affordable Unit(s) on resale shall be divided between the initial purchaser and the City during the thirty (30) year period. In addition to the proceeds retained by the initial purchaser, the initial purchaser shall also be entitled to the reasonable costs of any capital improvements made to the Affordable Unit(s). During said thirty (30) year period, the initial purchaser shall be entitled to retain 3.3% of the proceeds for each of the first twenty -nine (29) years in which the initial purchaser owns the Affordable Unit(s) and the balance of the -4- Ora proceeds, (approximately 4.3 %), after the thirtieth (30th) year of ownership. After year thirty (30), the initial purchaser shall be entitled to one - hundred percent (100 %) of the proceeds of the Affordable Unit(s) on resale. a. The City's share of any of the proceeds from the resale of an Affordable Unit during said thirty (30) year period shall be used solely and exclusively to assist individuals and families of low, lower, or very low income with the purchase of a home in the City. b. When the Reserved Retained Proceeds obtained by the City pursuant to subparagraph a. above, are used to finance the purchase of a home for individuals or families of low, lower,, or very low income, these homes shall be subject to the same restrictions as in subsection (e)(3) above. Upon resale during the ten (10) year period, the resale shall occur at the prevailing market rate, and the City shall be reimbursed for its loan to the homeowner and shall share in the proceeds of the sale to the degree that the City's contribution represented to the purchase price by the homeowner. In addition to the proceeds retained by the homeowner, the homeowner shall also be entitled to the reasonable costs of any capital improvements made to the home. (f) After evaluating any additional incentive or concession which could result in the Owner - Occupied Project being produced at the reduced cost, the City Council may make a written finding that the additional incentive or concession is not required in order for the Affordable Unit(s) to qualify as affordable pursuant to Section 9.8 -1(c) above. (g) Any units constructed as an Owner - Occupied Project which Owner- Occupied Project receives direct financial assistance from the federal or state government or from the City Redevelopment Agency, or housing authority, including local construction or mortgage financing assistance, mortgage insurance, rent subsidies, reduced cost realty, or similar financial participations shall be reserved for a period of thirty (30) years or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. Units financed under Section 1472 and 1490(a) of Title 42 of the United States Code, shall be subject to the applicable restrictions of that Title. The Applicant shall insure, and the City shall review for compliance, that the units designated for -5- 04 lower income individuals and families contain a bedroom mix representative of the entire development and contain comparable quality amenities representative of the entire project. In no instance shall the Applicant be entitled to downgrade the Affordable Units or to make them of lesser quality or in any way prejudice or stigmatize the unit and /or the residents therein. (h) The recorded covenants for the Owner - Occupied Project shall provide for liquidated damages to be paid to the City, or any housing authority acting on the City's behalf, in the event of a breach of the terms of the Agreement required under this Section. The liquidated damages shall be set forth in the Agreement, determined in advance by the City, and relate directly to the anticipated costs of providing replacement Affordable Units for the balance of the term of the Agreement required pursuant to this Section. (i) The Applicant may participate in the County of Orange Single Family Revenue Bond Program and shall conform to the criteria established by the Bond Program requiring affordability of lower income or very low income individuals and families. However, the Applicant shall also be required to meet the standards, requirements, conditions, and terms of the Density Bonus Program and this Section established by the City. In the event of conflict between the terms and conditions of the County program and this Section, such conflict shall be resolved in the Agreement between the City and the Applicant. Such Agreement shall govern the conflicts therein." SECTION IV. Section 9.8 -4, "Rental or Leasing of Affordable Owner - Occupied Units Unlawful," is hereby added to Section 9.8 of Appendix I, "Zoning," of the Code of the City of Cypress to read as follows: "Sec. 9.8 -4 Rental or Leasing of Affordable Owner - Occupied Units Unlawful. It shall be unlawful and an infraction, subject to punishment in accordance with Section 1 -7(b) and (c) of the Code of the City of Cypress, for the owner(s) of any Owner - Occupied Affordable Unit subject to the provisions of this Section to rent, lease, sublease, sublet, subrent, hire -out, let, underlease, underrent, or otherwise let for consideration said unit. The restriction provided above shall not prohibit owner - occupant(s) from having roommates as paying tenants of the unit so long as the owner - occupant(s) resides at said unit." SECTION V. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance, is for any reason 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, -6- 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 VI. The City Clerk is hereby authorized and directed to certify as to the passage of this Ordinance and to give notice thereof by causing copies of this Ordinance to be posted in three public places throughout the City. FIRST READ at a regular meeting of the City Council of said City held on the 23rd day of September , 1991 and finally adopted and order posted at a regular meeting held on the 28th day of October , 1991. ATTEST: MAYOR OF THE CITY OF CYPRESS CITY CLERK' OP THE CI OF CYPRESS STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss I, DARRELL ESSEX, City Clerk of the City of Cypress, California DO HEREBY CERTIFY that the foregoing Ordinance was duly adopted at a regular meeting of the City Council of the City of Cypress, held on the 28th day of October , 1991, by the following roll call vote: AYES: NOES: 5 COUNCIL MEMBERS: Age, Kerry,Nichsolson, Partin and Bowman 0 COUNCIL MEMBERS: None ABSTAINED: 0 COUNCIL MEMBERS: None ABSENT: 0 COUNCIL MEMBERS: None CITY LLERK 0 IT C y OF CYPRESS 0