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7B - Consideration of administrative regulations for Inclusionary Zoning & Residential Growth ManageCITY OF BOULDER PLANNING BOARD AGENDA ITEM MEETING DATE: April 6, 2000 (Agenda Item Preparation Date: March 21, 2000) AGENDA TITLE: Public hearing and consideration of the administrative regulations for: 1) Inclusionary Zoning; and 2) Residential Growth Management System REQUESTING DEPARTMENT: Planning Department Peter Pollock, Planning Director Robert O. Cole, Director of Project Review Brent Bean, Senior Planner Housing & Human Services Department Susan Purdy, Director John Pollak, Director of Housing Division Cindy Pieropan, Housing Planner OVERVIEW: Revisions to the administrative regulations for Residential Growth Management and new regulations for Inclusionary Zoning are needed as a result of the changes to Title 9, Chapter 6, B.R.C. 1981. Two sets of regulations are presented; one for inclusionary zoning and the other for the Residential Growth Management System. BACKGROUND: On January 4, 2000, the City Council approved two ordinances which amended the Residential Growth Management System (RGMS.) These two ordinances separated the affordable housing s:\plan\pb-items~nemos\bbizregs.pb2 AGENDA I1'EM # 7 B Page 1 component from RGMS, creating an inclusionary zoning program and returning RGMS to a simple rate control system. As a result of these changes, new administrative regulations are necessary for inclusionary zoning and revisions must be made to the existing administrative regulations for RGN1S. ADMINISTRATIVE REGULATION PROCESS: Administrative regulations must be adopted by the Planning Board to address specific administrative procedures. This review is the required Planning Board public hearing to consider any comments and then adopt or amend the regulations. The following process has been folIowed: March 2, 2000 Administrative Regulations submitted to Planning Board for initial approval. March 5, 2000 Publication of notice, comment period commences. March 7, 2000 Administrative Regulations sent to City Council in the Weekly Information Packet for comment. March 22, 2000 Comment period expires. April 6, 2000 Planning Board public hearing for adoption of the Administrative Regulations. In addition to the required comment period, staff plans to hold meetings with various potential users of inclusionary zoning to solicit their comments on the proposed regulations. INCLUSIONARY ZONING: The Inclusionary Zoning Ordinance replaces the affordable hausing component of the previous RGMS whereby 20% of the available annual allocations were designated for permanently affordable hausing. Under Inclusionary Zoning, most new residential developments are required to contribute 20% of the total number of units as permanently affordable housing. This 20% contribution can be met by providing actual units on site, designating existing units off-site as permanently affordable, donating land for permanently affordable housing, or making a cash-in- lieu contribution. In most cases, a developer or property owner may propose an alternative to those methods described in the ordinance if such an alternative would provide additional affordable housing benefits to the community. s:\plan~pb-items~nemos\bbizregs.pb2 AGENDA ITEM # 7 B Page 2 The proposed administrative regulations are intended to guide staff in the practical application of the Inclusionary Zoning Ordinance. They spell out the procedures and paperwork needed to accomplish the goals of the ordinance. The sections that may be of particular interest to users are those describing the base assumptions used in determining the prices and rents of the permanently affordable units and the guidance regarding the several variances that may be granted by the City Manager. Since inclusionary zoning is a new program, with permanently affordable parameters that are slightly different from those of the previous RGMS, staff intends to solicit input from various developers during the public comment period. Staff will summarize those meetings and make recommendations accordingly at the Planning Board hearing on Apri16, 2000. RESIDENTIAL GROWTH MANAGEMENT: The primary changes to the Growth Management Regulations are the elimination of the affordable housing sections found in the previous regulations. The rounding section has been amended to acknowledge that requests for allocations round up to one when 0.5 or more allocations have been accumulated within a quarter. The new regulations provide a guarantee of one allocation per development per quarter, which has also been incorporated in the revised administrative regulations. SUMMARY OF COMMENTS RECEIVED: Public comment on the administrative regulations consisted of requests for clarification on specific requirements and the addition of parallel language for renters where originally only purchasers of permanently affordable housing were referenced. Those requests are reflected in the red-lined copy of the attached, proposed regulations. STAFF RECOMMENDATION: Staff recommends that Planning Board approve the attached administrative regulations for Inclusionary Zoning and Residential Growth Management. Approved By: ~ Peter Pollock Planning Director s:\plan\pb-items~nemos\bbizregs.pb2 AGENDA ITEM # 7 B Page 3 ATTACHMENTS: Attachment A: Inclusionary Zoning Ordinance Administrative Regulations Attachment B: Residential Growth Management System Administrative Regulations Attachment C: Inclusionary Zoning Summary Attachment D: 2000 RGMS Summary Document s:\plan\pb-items~nemos\bbizregs.pb2 AGENDA ITEM # 7 B Page 4 ATTACHMENT A INCLUSIONARY ZONII~TG ORDINANCE ADMINISTRATNE REGULATIONS Adopted , 2000 Adopted pursuant to Chapter 1-4, B.R.C. 1981 Agenda ftem # ~~ Page # ~ INDEX 3.1 Income El~ible Household [9-6.5-3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4.1 Determination of Com,pliance with Cha~ter 9-6.5, B.R.C. 1981 [9-6.5-4(a)] ......... 2 4.2 Determination of Asset Limitations for Income Eli~ible Households [9-6.5-4(c)J ..... 3 4.3 Application for Variance bv Projects with Pendin~ject Approval A~plications [9-6.5-4~g)~5)~ ..........................................................4 5.1 Application for Variance to Dwelling Unit Finished Size Requirement [9-6.5-5~~)~3)~ ..........................................................4 5.2 Application for Variance to Required Total Floor Area of Permanentlv Affordable Units [9-6.5-5~~)~4)~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 6.1 Documentation Required to Verif~ligible Cash-in-Lieu Contribution [9-6.5-6(a)] ... 6 6.2 Alternative Methods of Compliance for Certain Sin~le Dwelling Units [9-6.5-6~b)~ 1),~2), and (3)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6.3 Application Requirements for Waiver of Inclusionarv Zonin~Obligation for Certain Sin~le Lot Owners [9-6.5-6(b)(4)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7.1. Apnlication Requirements for Variance to On-Site Construction Requirement [9-6.S-7~)1 .............................................................8 7.2 Requirements for Dedicating Existing; Off-Site Units as Permanentlv Affordable [9-6.5-7(c)(3) and 9-6.5-8~a)~1)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 8.1 A.~nlication Requirements for a Variance for Rental Projects [9-6.5-8(a)(2)] ........ 11 8.2 Maximum Allowable Rents [9-6.5-8(b)(1)J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 8.3 Documentation Required to Verifv Income of Prospective Renters or Purchasers of Permanentlv Affordable Units [9-6.5-8(b)(2) and 9-6.5-9(c)] . . . . . . . . . . . . . . . . . . . . 12 9.1 Maximum Sales Price for Permanentlv Affordable Units [9-6.5-9(a)] . . . . . . . . . . . . . . 13 9.2 l~Iethod f'c~r Determ~~, the Average Price Within a Development [9-6.5-9(b)] .............. . .......................................14 ;::.~:~~ Agenda Item # ~._ Page ~ ~_ 9.3 Approved Purchaser of Permanently Affordable Units [9-6.5-9(d}] . . . . . . . . . . . . . . . 15 9.4 Owner Occupancy Rec~uirement [9-6.5-9( fl(1)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 9.5 Application Requirements for Request to Rent a Permanentlv Affordable Ownership Unit [9-6.5-9(~(2)(3) and (5)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 9.6 Documentation Required to Approve Purchasers on Resale of Permanentlv Affordable Units [9-6.5-9~g)~1)~ .................................................... 16 9.7 Maximum Allowable Resale Prices [9-6.5-9(g)(2) and (3)] . . . . . . . . . . . . . . . . . . . . . . 17 10.1 A~lication Requirements for Variance to Required Construction Timing [9-6.5-10(a)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 10.2 Rec~uired A~reements [9-6.5-10(c)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 10.3 Good Faith MarketingRec~uired [9-6.5-10(d)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Agenda Item # ~~ Page # ~_ INCLUSIONARY ZONING ORDINANCE ADMIlVISTRATIVE REGULATIONS The purpose of these regulations is to set forth the procedures for administration and implementation of Chapter 9-6.5, "Inclusionary Zoning," B.R.C. 1981. It should be recognized that no set of regulations can anticipate every conceivable situation in which an ordinance may apply, and it is anticipated that these may be amended or supplemented from time to time. Further, these regulations are nat intended to limit the administrative discretion of those persons implementing the Inclusionary Zoning Program on subjects not covered herein. 3.1 Income Eligible Household [9-6.5-3] "Household" means all individuals who will be occupying the home, the buyer's spouse or domestic partner and children including all persons whose names will appear on the warranty deed whether or not such person will occupy the residence. "Income" is defined in the same manner as it is in Section 8 of the United States Housing Act of 1937, codified at 42 U.S.C.S. 1435 a(b) (1990), as further determined by the United States Secretary of Agriculture in 24 CFR 813.206 (1997). A household seeking to be eligible to purchase a permanently affardable unit shall submit to the city manager a completed Income Certification Form with required attachments, no earlier then six months and no later than fourteen days from the signing of a contract to purchase, in order to verify that the household's income qualifies it to purchase a particular permanently affordable unit. Households entering into a contract to purchase a permanently affordable unit that is in the process of being built must be income eligible at the time the contract is signed. A househ€~ld seeking to be eligible to rent a perrnanently a.ffordable vn,it sha11 subrni# to the city manager, or ~y writt~ ~.gr~~mme3~t, from th~ city ~n~iag~r, `;~ ttes~i~gnai~ pz~gerty cir~n~r, a ,~~,: . :: ~,,~:. Agenda ftem # ~~ Page ~ g completed Income Certification Foma wi#h required attachments no earlier #han six months prior to entering into a lease agreement for a particular permanently affordable unit. 4.1 Determination of Compliance with Chapter 9-6.5, B.RC. 1981 [9-6.5-4(a)] Applicants for any residential development approval, residential building permit or Residential Growth Management Allocation or Residential Growth Management Exemption must demonstrate compliance with the Inclusionary Zoning requirements of Chapter 9-6.5, B.R.C. 1981, through on-site, off-site, cash-in-lieu, or other approved alternative methods as deternuned below, before any such approval, permit, certificate of occupancy, allocation or exemption is issued. In order to be eligible to apply for a Residential Growth Management Allocation or Exemption, or to receive approval for a Site Review, Use Review or other development approval, an Applicant must receive an approved, preliminary determination of inclusionary zoning compliance. In order to apply for a preliminary determination of compliance, the Applicant shall submit a completed copy of the "Development Review Application Form" in addition to the following information: • Total number of proposed attached residential units; • Total number of proposed detached residential units; • Total square footage of proposed attached residential market rate units; • Total square footage of proposed detached residential market rate units; • Proposed square footage, number of bedrooms, targeted household Area Median Income (AMI), and the initial sale price or rent for each attached permanently affordable unit type; ,.~. Agenda item # _~~ Page # __~ • Proposed square footage, number of bedrooms, targeted household Area Median Income (AMn, and the initial sale price or rent for each detached permanently affordable unit type; and • Date and brief description of any previous development approval or subdivision. In the alternative, an Applicant may submit a completed copy of both the "Development Review Application Form" and the "Inclusionary Zoning Requirement Determination Form." , . , . . . , - , , , 4.2 Determination of Asset Limitations for Income Eligible Households [9-6.5-4(c)) An asset is a cash or noncash item that can be converted to cash. Annual income generated from assets or income which is imputed to assets shall be included as part of a household's annual income for putposes of determining income eligibility. If a household has more than $5,000 in assets, an imputed income attributable to such assets shall be calculated by averaging three published indices and applying the resultant average rate of return to the value of the assets. T'he three indices are as follows: the average rate of return for a regular savings acconnt for the Denver metro area; the average rate of return for a three year Certificate of Deposit for the Denver metro azea; and the ten year rate of return for the Wilshire 5000 Total Market Index. This average rate of return shall be calculated and published twice each calendar year by the city manager. The greater of the actual income from assets or the imputed income attributable to assets shall be added to the household's annual income for calculating income eligibility. _ -~~R.. r,wF ~. _ ~:~ # ` x~. Agenda Item # ~~ Page # ~~ Any asset disposed of for less than fair market value during two years preceding the income certification shall be considered as if-a the household still owned that asset. Agenda {tem # ~~ Page # ~ 4.3 Ap~lication for Variance by Projects with Pending Project Ap~roval A~~licatians [9-6.5-4(g)(5)] Developers or property owners of projects which applied for development approval prior to February 4, 2000, may request that the ciry manager vary the requirements of Chapter 9-6.5, B.R.C. 1981, for such a project. In order to consider a request for a variance, the developer or property owner shall submit in writing documentation that describes the proposed project, states the results of the application of Chapter 9-6.5, B.R.C. 1981, to the proposed project, and demonstrates how this application is infeasible and how the requested variance provides equivalent affordable housing benefits to the city. The city manager shall have ten business days from receipt of the request for variance to render a finding. 5.1 Annlication for Variance to Dwelling Unit Finished Size Requirement [9-6.5-5(c)(3)] Developers of permanently affordable units may request that the city manager allow them to substitute two square feet of unfinished floor area for each one square foot of required finished floor area. The unfinished floor area must be configured to allow for simple conversion to finished space. In order for the city manager to consider a request for a variance to the required finished floor area of a permanently affordable unit, the developer or property owner shall submit the following: identification of the units for which the variance is requested; a written description of the amount of substitution requested for each unit or unit type; scaled floor plans which cleazly indicate the requested allowance for finished and unfinished floor area; and _<~; _ ..; . ,,;~;~ Agenda Item # ~_ Page # ~ documentation regarding the ability of the unfinished floor area to be converted to finished, habitable floor area, including, without limitation, evidence of the soundness of the unit's structural components, ceiling heights, construction materials, location and size of exits and windows. The city manager shall have ten business days from receipt of the request for variance to render a finding. 5.2 Apalication for Variance to Required Total Floor Area of Permanentlv Affordable Units [9-6.5-5(c)(4)] Developers of permanently affordable units may request that the city manager allow them to reduce the combined or total required floor area of the permanently affordable units for a specific project in return for some alternative affordable housing benefit to the city. Such a variance may only be granted upon a finding by the city manager that such a reduction in floor area would result in additional affordable housing benefits to the city or would prevent an unlawful taking of property without just compensation in accordance with Section 9-6.5-1 l, B.R.C. 1981. In order to consider a request for such a variance, the developer or property owner must provide a written statement as well as any documentation necessary to clearly demonstrate that the developer's proposed affvrdable housing alternative, offered in exchange for a reduction in the required total floor area of the permanently affordable units, provides additional affordable housing benefits to the city or prevents an unlawful taking of property. The city manager shall have ten business days from receipt of the request for variance to render a finding. ~genda Item # ~~ Page # ~~ 6.1 Documentation Required to Verify Eligible Cash-in-Lieu Contribution [9-6.5-6(a)] An approved preliminary determination of inclusionary zoning compliance is required to verify a developer or property owner's eligible cash-in-lieu contribution. See Section 4.1, above, for a description of how to obtain this determination. 6.2 Alternative Methods of Compliance for Certain Single Dwelling Units [9-6.5-6(b)(1),(2), and (3)] Single lot owners who wish to avail themselves of the optional methods of complying with the Inclusionary Zoning requirements of Subsection 9-6.5-6(b), B.R.C. 1981, shall submit a completed Request for Alternative Inclusionary 2oning Compliance form which indicates the requested alternative with an attached, written, sworn affidavit that attests to the following: • ownership of a total of exactly one legal building lot in the City of Boulder; and • the owner's intent to occupy the proposed residence as their primary residence for at least one year following receipt of a certificate of occupancy. Additionally, the following requirements sha11 be met for each alternative, prior to application for a building permit: • Alternative #1 - Designation of Home as a Permanently Affordable Unit. The property owner sha11 sign and record a restrictive covenant running to the benef t of the city and against the land upon which the single dwelling unit is to be constructed. The restrictive covenant must be approved in a form acceptable to the city manager and the city attorney. The covenant shall include, without limitation, the following: • the qualifying household income necessary to take title to the unit at the ~it~e'-ssubsequent t~~ansfertitle tr~s~rs; t. :~~~~;, _ Agentla Item # ~_ Page # ~_ • an owner occupancy requirement; • the method by which the maximum allowable purchase price shall be calculated; • the amount by which the resale price may increase each year; • affirmative marketing requirements; and • enforcement remedies. ~ Alternative #2 - Deferment of Cash-in-Lieu Contribution. Property owner shall sign and record a promissory note to the city and a restrictive covenant or lien running to the benefit of the city and against the real property to secure the deferred cash-in-lieu contribution. • Alternative #3 - Other In-Lieu Consideration. If a property owner wishes to offer any other type of in-lieu consideration in order to meet the Inclusionary Zoning requirement, such an offer must be made in writing and have evidence which clearly demonstrates that the value of this alternative is equivalent to the cash-in-lieu contribution required by Chapter 9-6.5, B.R.C. 1981, and results in additional affordable housing benefits to the city. The city manager shall have ten business days from receipt of the offer of an alternative in-lieu consideration by the property owner to indicate acceptance or rejection of the offer. 6.3 Application Requirements for Waiver of Inclusionary Zoning Obligation for Certain Sin~le Lot Owners [9-6.5-6(b)(4)] Owners of single lots created prior to October 5, 1995, who are willing to permanently restrict the size of the proposed unit to a maximum of 1,600 square feet and who wish to request a ~ ~~ ~~:w: Agenda Item # ~_ Page # ~~ waiver for the Inclusionary Zoning requirements of Subsection 9-6.5-6(b), B.R.C. 1981, shall submit a completed Single Lot Owner Inclusionary Zoning Waiver Request Form with an attached, written, sworn affidavit that attests to the following: ownership of a total of exactly one legal building lot in the City of Boulder; the owner's intent to occupy the proposed residence as their primary residence for at least one year following receipt of a certificate of occupancy; and the property owner has never received such a waiver previous to this request. If the property owner's request is approved by the city, prior to application for a building permit, the property owner shall sign and record a restrictive covenant running to the benefit of the city and against the land upon which the single dwelling unit is to be constructed that permanently limits the size of the single dwelling unit to a maximum of 1,600 square feet. 7.1 Application Requirements for Variance to On-Site Construction Requirement [9-6.5-7(b)) Developers of permanently affordable units may request that the city manager allow them to provide permanently affordable units off-site, in a number greater than that allowed by Chapter 9-6.5, B.R.C. 1981. Such a variance may be granted only upon a finding by the city manager that one of the following conditions applies: Providing more than fifty percent of the total permanently affordable units off-site will provide housing benefits to the city in addition to those that would be provided by constructing at least fifty percent of the required permanently affordable units on-site; or ~ . ._..... ~ ,,~ ,~,. ~ >~t ~'~ . . ~. Agenda Item # ~_ Page # ~~ • Zoning, environmental or legal restrictions make it unfeasible to provided the required number of on-site units. In order to consider a request for such a variance, the developer or property owner must provide a written statement as well as documentation necessary to clearly demonstrate that the developer's proposed alternative provides additional affordable housing benefits to the city or is necessary given zoning, environmental or legal constraints on the property that are beyond the control of the developer or property owner. Unless the city manager makes an express finding to the contrary based upon unique facts applicable to a particular project, it shall be presumed that any variance request which would result in an additional fifly percent or more permanently affordable units above that number of units which would otherwise have been provided in the absence of such variance, shall constitute sufficient additional affordable housing benefits to justify the granting of such variance. A variance request which would result in a net increase of at least fifty percent in the total floor area of permanently affordable units shall also be presumed to be adequate to justify such variance in the absence of an express finding to the contrary based upon unique facts applicable to a particular project. The city manager shall have ten business days from receipt of the request for variance to render a finding. 7.2 Requirements for Dedicating Existing Off-Site Units as Permanently Affordable [9-6.5-7(c)(3) and 9-6.5-8(a)(1)] To assist in determining whether proposed existing unit(s) are of an equivalent value, quality, and size to those which would have been constructed on-site, the developer or property owner shall, at his or her own expense, hire a rehabilitation specialist certified by the city to inspect t~genda Item # ~~ Page # ~ each proposed unit and determine whether the proposed unit meets current housing and building codes, and estimate the life cycle replacement timing and costs of the principle building structures and interior fixtures. These estimates or identified deficiencies will be considered regarding the acceptability of the proposed unit(s) and the allowable sale price or rent if the units are accepted by the city manager. Any proposed unit which fails to meet current housing and building codes must be brought into compliance at the developer's expense before that unit may be considered as fulfilling an inclusionary zoning requirement. The inspection report and any necessary documentation required to support the findings or conections related to the inspection report shall be submitted with an appraisal by an independent, certified appraiser chosen from a list maintained by the city ox otherwise approved by the city with a written request to consider the proposed unit(s) as satisfaction to fulfill the inclusionary zoning requirement. In the alternative, the city manager and developer may agree to some other means of valuation. The city manager shall have ten business days from receipt of the request to indicate acceptance or rejection of the proposed unit(s). Proposed off-site units may be rejected if their location would cause any off-site development in which they are Iocated to contain fifty percent or more permanently affordable units. If the proposed unit(s) are acceptable to the city, the developer or property owner shall sign and record a restrictive covenant running to the benefit of the city and against the land upon which the dedicated dwelling unit(s) are located. The restrictive covenant must be in a form acceptable to the city manager and ttie city attorney. The covenant shall include, without limitation, the following: the qualifying household income necessary to purchase or rent the dwelling unit; .~-:~~a Agenda Item # _~_ Page # ~~ • the method by which the maximum allowable purchase price or rent shall be calculated; • the amount by which the resale price or rent may increase each year; • affirmative marketing requirements; and • enforcement remedies. No unit which was deed restricted to be permanently affordable prior to February 4, 2000, shall be eligible to fulfill any off-site inclusionary zoning requirement. 8.1 A~plication Re~uirements far a Variance for Rental Pro~cts [9-6.5-$(a)(2)] In order to consider a request for a variance to the requirements of Chapter 9-6.5, B.R.C. 1981, the developer or property owner must provide a written statement as well as any documentation necessary to clearly demonstrate that the developer's proposed alternative provides affordable housing benefits to the city in addition to those which would otherwise be provided by compliance with Chapter 9-6.5, B.R.G 1981. Unless the city manager makes an express finding to the contrary based upon unique facts applicable to a particular project, it shall be presumed that any variance which results in an additional fifty percent or more permanently affordable units above that number of units which would otherwise have been provided in the absence of such variance shall constitute sufficient additional affordable housing benefits to justify the granting of such variance. A variance request which would result in a net increase of at least fifty percent in the total floor area of permanently affordable units shall also be presumed to be adequate to justify such variance in the absence of an express finding to the contrary based upon unique facts applicable to a particular project. Agenda Item # _~~ Page # ~,_ The city manager shall have ten business days from receipt of the request for variance to render a finding. 8.2 Maximum Allowable Rents [9-6.5-8(b)(1)] Maximum allowable unit rents are calculated based upon a presumed household applying no more than twenty-eight percent of its monthly gross income from all sources to a rental payment. "Rental payment" shall include, without limitation, all customary charges and fees to manage the dwelling units including water, sewer, and trash service and shall not include all other utilities. If other utilities are included, maximum allowable rents may be calculated based upon a household applying no more than up to thirty percent of its monthly gross income from all sources for a rental payment combined with utilities. To determine the maximum allowable rental payment that may be charged for permanently affordable units, the following assumptions regarding unit size, household size and Area Median Income (AMI) shall be used: Minimum Floor Area Maximum Floor Area Household Size ~iaimtrm ~~ Maximum AMI Average AMI L 10% 600 Square Feet 750 Square Feet 1 ~neeme~,imit 10% > HUD ow Income Limit < HUD Low Income Limit 10 751 Square Feet 900 Square Feet 2 ~nee:ne-~rnit 10% > HUD Low Income Limit % < HUD Low Income Limit > L 10 901 Square Feet 1,050 Square Feet 3,$ ~neernc~imit ow 10% HLID Income Limit % < HUD Low Income Limit l0 D L > < 10 D 1,051 Square Feet 1,200 Square Feet 4.5 ~n;orne~imi# % ow HU Income Limit ~ % Low Income Limit 8.3 Documentation Rec~uired to Verify Income of Prospective Renters or Purchasers of Permanently Affordable Units [9-6.5-8(b)(2) and 9-6.5-9(c)] ~genda Item # ~~ Page # ~.s~_ Prospective purchasers or renters of permanently affordable units shall be required to submit to the city manager, or by written agreement from the city manager, a designated property owner, the following documents in order to verify that the prospective purchaser's or renter's income qualifies them to purchase or rent a particulaz permanently affordable unit: • A letter from the employer on letterhead indicating annual gross wage or a completed employer verification form; • If self-employed, a year-to-date profit/loss statement plus the last three years of completed federal income tax forms and corresponding ~~s1099 forms; • Verification of all benefit payrnents; • A copy of the most recent federal income tax form and corresponding W-2s; • Bank verification form documenting the six month average balance of all checking accounts or six months of all checking account statements; • Bank verification of all savings accounts; • A current statement from each asset indicating the current balance, interest rate or annual dividend earned; • If divorced with minor children, a copy of the divorce decree indicating the custody arrangements and child or alimony payments; and • Purchasers of permanently affordable units must also submit a copy of a preapproval letter from a lender of their choice demonstrating that they are financially able to purchase the unit or financial documentation that they can purchase the unit on their own. ---_ ~.,, ~~A: qgenda Item # _~ Page # .~[.~. All required documentation submitted to verify household income shall be kept confidential and is not subject to public disclosure. 9.1 Maximum Saies Price for Permanentlv Affordable Units [9-6.5-9(a)] To determine the maximum allowable sales price that may be charged for a permanently affordable unit, the following assumptions regarding unit size, household size and AMI shall be used: Minimum Floor Area Maximum Floor Area Household Size ~i~rimum ~~ Maximum AMI Average AMI 600 Square Feet 750 Square Feet 1 ~tcanic-~imit 10% > HUD Low Income Limit HUD Low Income Limit 0 L 751 Square Feet 900 Square Feet 2 ~neeme-~imit 1 % > HiTD ow Income Limit HUD Low Income Limit 901 Square Feet 1,050 Square Feet 3.5 ~~'~ 10% > HUD Low Income Limit HUD Low Income Limit 1,051 Square Feet 1,200 Square Feet 4.5 ~-~t 10% > HUD Low Income Limit HUD Low Income Limit 9.2 ' ~e;~o~ : far ~~e,~rm~t~ia~ °~te Average Price Within a Development [9-6.5-9(b)] , ~. . nrfnrrnRtionThe prices ~harg~ ft~r perman~nt~~,~ff'~dable ci~unersbip iuriits`' i~ri aaiy flne pmject sha1~ average a price affsarctable ta a hvusel~l+~ e~ai~ig #h+~,~iUD Ltivv ~c~~~"i~mit for suckth~ c~ty v~ Boulder, with nc~ single permanently affordable unit. exceeding a pri~e that is affordable #o a hous~ehold earning ~~ 10~ perc~nt m~~e ~~~ ~ I~w In~~ i.~it ~'+~r the eity of Bvuld.er, -.- a; ~~~,; . .~ qgenda Item # _~ Page # ~._.. Prior to signing and recording any restrictive covenant securing permanent affordability for a unit within a development, the developer shall submit to the ciry manager the following in€c~rma#ion far each permanently affordable unit: • legal description; • total finished square footage; • number of bedrooms; • number of bathrooms; • pnce; • targeted AMI; and • estimated construction schedule. 9.3 Ap~roved Purchaser of Permanently Affordable Units [9-6.5-9(d)] Only those households which have a valid income certification from the City of Boulder may purchase or enter into a contract to purchase a permanently affordable unit. Upon request, the city may provide the developer or owner of a permanently affordable housing unit with a list of income certified households. Upon closing, the warranty deed and a copy of the HUD-1 Settlement shcet5heet, or alte~native docurnentation in a~vrr~ ~cep#able tu, tl~e;.~city ma~~er which conveys similar, verifiable infonnativn, shall be forwarded to the Division of Housing to verify the sale of the permanently affordable unit. 9.4 Owner Occu~„ancy Rec~uirement [9-6.5-9(~(1)] Purchasers of permanently affordable units are required to occupy the purchased permanently affordable unit within thirty days of closing on the unit. Owners of permanently affordable units are tigenda Item # ~ Page # ~~ required to occnpy those units as tl2eir primary residence which includes occupying the unit the majority of each calendar year. 9.5 Application Rec~uirements for Request to Rent a Permanently Affordable Ownershi~ Unit [9-6.5-9( fl(2)(3) and (5)] A permanently affordable ownership unit must be owner occupied as the owner's principle residence for at least one year before the unit may be rented to another household. Following this initial year of owner occupancy, rental of the unit shall be limited to an aggregate of one year of rental for every seven years of consecutive ownership. The property owner shall provide written notice to the city manager of its intent to rent the permanently affordable unit prior to actually renting the unit. This written notice shall include, without limitation, the following: • the homeowner's name, contact telephone number and mailing address during the rental period; • the address of the permanently affordable unit; • the anticipated date the unit will be rented or leased and the duration of the lease; • the prospective tenant's name, if known; • a copy of the lease or rental agreement to be used; and • a statement that the property owner agrees to comply with all applicable local, state and federal regulations pertaining to the renting of a dwelling unit. The tenant's household must meet the income requirements of the covenant for the permanently affordable unit. Verification of the prospective tenant's household income and assets must be submitted to the city manager for review and approval prior to the execution of any lease _ ~~-. Eiganda Item ~ _~~~ Page # _____Z_- or rental agreement along with those documents which the city finds to be reasonably necessary in order to determine compliance with the restrictions of the permanently affordable unit. 9.6 Documentation Rec~uired to Approve Purchasers on Resale of Permanently Affordable Units [9-6.5-9(g)(1)J Prior to purchasing a permanently affordable unit, a prospective buyer shall be required to submit to the city manager a completed Income Certification Form with required attachments in order to verify that the prospective purchaser's income qualifies them to purchase a particular permanently affordable unit. All required documentation submitted to verify household income shall be kept confidential and is not subject to public disclosure. Upon closing, the warranty deed and a copy of the HUD-1 Settlement sheet shall be forwarded to the Division of Housing to verify the sale of the permanently affordable unit. 9.? Maximum Allowable Resale Prices [9-6.5-9(g)(2) and (3)] The maximum allowable resale price shall be calculated using the original homeowner's acquisition price as the base from which calculation is made. That base price may be increased by utilization of any of the following factors: • Customary closing or settlement costs attendant to the original homeowner's acquisition. Customary closing costs include title insurance and one-half of the real estate settlement fee to the title company and if financed by FHA can also include a document review fee, a taac service fee and a tax certificate fee. • Costs incurred to sell the unit, including the cost of a real estate commission paid by the seller if a licensed real estate agent or realtor is employed and if that agent or ngenda item # _~~ Page # ~_ realtor charges commissions at a rate customary in Boulder Counry. If the owner of the unit chooses to sell without utilizing the services of a realtor or real estate agent then the homeowner may be eligible to add a fixed fee as determined by the city manager. • An annual adjustment based on the value of eligible capital improvements. A list of eligible capital improvements shall be published and maintained by the city manager. The maximum amount of eligible capital improvements is limited on an annual basis by the amount specified in the permanently affordable covenant for each unit and is adjusted annually based upon the change in the Consumer Price Index for All Urban Consumers (CPI-U) for the City of Boulder. Capital improvements shall be of a permanent nature and have long-term added value. Luxury items will not be included on the list of eligible improvements. • An annual adjustrnent based upon the lesser of the change in the CPI-U for Boulder or the AMI for Boulder up to a maximum fixed percentage change as stated in the covenant for the specific pernianently affordable unit. The base price may be decreased by imposition af an excessive damage charge if the homeowner has failed to maintain the property as required by the City of $o~t~dzr ~][at~sing'sBaulder's ~-laus~n~ Code. The calculated maximum allowable sales price is not a guarantee that the unit will be resold at that price. It is anticipated that market conditions may, from time to time, cause a permanently affordable unit to be sold for less than the maximum allowable resale price. 10.1 Annlication Requirements for Variance to Reyuired Construction Timing [9-6.5-10(a)] F~g~nda Item # ~ Page # ~ In order to consider a request for a variance to the requirement that permanently affordable units be constructed so as to ensure that they are marketed concurrently with or prior to the market rate units, the developer or property owner must provide a written statement as well as documentation necessary to clearly demonstrate that the developer's proposed alternative scheduling provides affordable housing benefits to the city in addition to those benefits otherwise allowed by Chapter 9-6.5, B.R.C. 1981. The city manager shall have ten business days from receipt of the request for variance to render a finding. . •1.~~"=[;.;"r.' +'~ ~ - . T~ lagenda Item # ~~ Page # ~ 10.2 Required Agreements [9-6.5-10(c)] Restrictive covenants intended to secure the permanent affordability of designated units must be in a form acceptable to the city manager and the city attorney and shall include, without limitation, the following: • the qualifying household income necessary to purchase or rent the dwelling unit; • the method by which the maximum allowable purchase price or rent shall be calculated; • the amount by which the resale price or rent may increase each year; • affirmative marketing requirements; and • enforcement remedies. 10.3 Good Faith Marketing Rec~uired [9-6.5-10(d)] Elements of a good faith marketing effort shall include the following: • Hosting at least one open house; • Listing all properties in the MLS or placement of at least two advertisements during separate weeks in a local newspaper of general circulation; • Provision of information about each property, including, square foot, number of bedrooms, price and amenities, to the Ciry of Boulder so that such information may be disseminated by the City of Boulder; and • Maintaining each unit on the open market for a minimum of thirty days. Contracts-to-purchase may be submitted during the marketing period, however, no contract can be accepted until the mandatory marketing period has expired. --_ ~~:.;w ;;~~ E~ganda item # ~_ Page # ~~ The seller shall maintain a marketing log that shows the advertisements and other information that was disseminated about the project and keep a list of prospective buyers who have expressed interest in an advertised permanently affordable unit, including any information provided by such prospective buyers concerning their income, place of work, current residence and household size. The City of Boulder, upon request, shall have a right to review such log and written materials to ensure that a fair marketing effort was implemented. Upon the expiration of the marketing period, if only one contract was received, the developer/seller may accept that offer. If more than one contract has been received, the developer/seller shall utilize a fair selection process to select among the prospective purchasers. Consideration of the following factors is consistent with a fair selection process: • Preference may be given to a household that lives or works in the City of Boulder; • Preference may be given to a household that has been income certified and placed on the City of Boulder's referral list for at least one year; and • Preference may be given to a hausehold that can document that it has lived or worked in the City of Boulder for a minimum of five years. Upon request, the City of Boulder will provide a selection process model which, if followed, will satisfy the requirement for fair marketing. A developer or seller may choose to follow the city's selection process model in-lieu of developing his or her own fair selection process.view ~~~enda Item # ~~ Page # o~.~ _ ATTACHMENT B RESIDENTIAL GROWTH MANAGEMENT ORDINANCE ADMINISTRATIVE REGULATIONS Adopted February 28, 1985 Amended May 16, 1985 Amended September 4, 1986 Amended November 5, 1987 Amended March 19, 1992 Amended December 12, 1996 Revised Adopted pursuant to Chapter 1-4, B.R.C. 1981 , 2000 K~PLLRVC-REGSZ.ADS Agenda ttem # ~ Page ~ ~~ TABLE OF CONTENTS 2.01 Transfer of Allocations 9-6-2, 9-6-3(a) and 9-6-8(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.02 T~es of Units Requirin~Allocations 9-6-2, 9-6-3(a) and 9-6-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.03 Determinin.g Existing Units 9-6-2, 9-6-3(a) and 9-6-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.04 Lots Platted or Parcels Created Prior to November 10. 1976 9-6-2 anc3 9-b-9(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3.01 Buildin~ Permit Deficiencies 9-6-3 ..................................................................3 3.02 Advance Allocations 9-6-3~g) ...............................................................3 5.01 Rounding Rules 9-6-5~), 9-6-6(e) and 9-6-7(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 6.01 Content of Applications 9-6-6 ..................................................................4 6.02 "Ten or Less" Rule 9-6-6(fl ................................................................4 6.03 Allocation Review Process ~ 9-6-6 ..................................................................4 7.01 Random Selection 9-6-7(d) ...............................................................5 7.02 Combination of Parcels by Planning Board 9-6-7(d) and 9-6-7~)~5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 8.01 Allocation Extension Requests 9-6-8(a) ...............................................................7 8.02 Banking Provisions 9-6-8(h) ...............................................................7 K:\PLLRtX-REGSZ.ADS .~genda Item # _~~ Page # 3 8.03 Reassignment of Allocations Within a Development 9-6-8(c), 9-6-8( fl and 9-6-8~g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 9.01 Exemptions 9-6-9(a)and 9-6-9(b) .....................................................9 9.02 Allocations for Potentiallv Exempt Units 9-6-9(a)(2) and 9-6-9(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 K:~PLLRV{-REGS2.ADS ~yenaa Item # i ~ Page # ~ 3~ GROWTH MANAGEMENT ORDINANCE ADMINISTRATIVE REGULATIONS The purpose of these regulations is to set forth the procedures for the administration and implementation of the Residential Growth Management System, Chapter 9-6, B.R.C. 1981. It should be recognized that no set of regulations can anticipate every conceivable situation in which an ordinance may apply, and it is anticipated that these may be amended or supplemented from time to time. Further, these regulations are not intended to limit the administrative discretion of those persons implementing the Residential Growth Management System on subjects not covered herein. 2.01 Transfer of Allocations 9-6-2, 9-6-3(a) and 9-6-8(c) Allocations are approved for specific developments and are not transferable between developments. Therefore, allocations will be issued to a development's owner unless the owner has designated in writing at the time of allocation application that another person or firm is designated as agent for receiving the allocation. 2.02 Types of Units Requiring Allocations 9-6-2, 9-6-3(a) and 9-6-4 a. Relocated Units - An existing unit may be moved from one location to another within the city without an allocation. If a unit is to be relocated from a location outside the city to within the city, an allocation is required prior to receiving a moving permit. Existing city units relocated within the city will not be counted against the allocations available under Section 9-6-4, B.R.C. 1981. b. Demolition and Replacement of Units - If an existing unit is demolished and a replacement unit is constructed in the same development within one year of the demolition, no allocation is required prior to applying for a building permit. If the building permit for a replacement unit is not applied for within one year of the issuance of the demolition the demolition permit for a previously existing unit or the replacement unit is not placed in the same development as the demolished unit, the replacement unit will require an allocation. K:~PLLRVC-REGS2.ADS agenda item ~ ~~ Page # ~33 _ - Replacernent units not requiring an allocation will not be counted against the allocations available under Section 9-6-4, B.R.C. 1981. c. Renovation or Expansion of Units - An existing unit may be remodeled, renovated, or expanded in size as long as no new unit is created without obtaining an allocation prior to applying for a building permit. d. Mobile Homes - Place:ment of a mobile home upon an existing legal mobile home pad within the city will not require an allocation. An allocation will be required to construct any additional mobile home pad in the city. 2.03 Determinin~Existing Units 9-6-2, 9-6-3(a) and 9-6-4 In order for a structure to be considered an existing unit for any purpose, it must (1) have been inhabited for at least six of the preceding twelve months and (2) be identified in one of the following inventories: The 1962 City of Boulder Utility Department Survey; the "1952 Marden Maps" on file with the City's Planning Department; the City's Building Inspection Division's microfilm files; or the City's Rental Housing licensing records. 2.04 Lots Platted or Parcels Created Prior to November 10 1976 9-6-2 and 9-6-9(b) For the purposes of reviewing exemption requests under Subsection 9-6-9(b) for lots platted or parcels created prior to November 10, 1976, to determine what development the lot or parcel is part of, the definition of "development" shall be applied in the same manner as if the lot or parcel was platted or created after November 10, 1976. K:IPLLR~?C-REGS2.ADS ~agenda ltem ~ ~ Page # 1~ 3.01 Buildin~ Permit Deficiencies 9-6-3 Building permits that are applied for pursuant to allocations or exemptions must meet all applicable city codes prior to their issuance. Receipt of an allocation or exemption is a prerequisite to building permit application but is not a guarantee for building permit issuance. 3.02 Advance Allocations 9-b-3(g) The city manager may award a single allocation to a development prior to the application deadline in an allocation period, upon finding that the allocation would not prejudice the allocation process, if: 1. The application is for the last remaining buildable lot in a development; or 2. All other owners of vacant lots within the development consent to the allocation on a form provided by the city manager. The applicant shall provide proof of the number of remaining vacant lots and current ownership of each lot. Such allocation shall be considered as the first allocation awarded to the development in the next available allocation period. Additional applications for allocations in the same development shall be awarded according to the prora.ted formula. No such allocation may be granted between the application deadline for the last allocation in ~ a calendar year and the first day of the next calendar year. 5.01 Roundin_„g Rules 9-6-5(b), 9-6-6(e) and 9-6-7(a) For the purpose of Subsection 9-6-5(b), B.R.C. 1981, if one-quarter of the allocations available results in a fractional number, the city manager may use any rounding rule which does not result in exceeding the number of allocations available under Subsection 9-6-4(a), B.R.C. 1981. K:~PLLRVC-REGS2.ADS agenda ~tem ~ _~~ Page # .~ 5 For the purposes of Subsection 9-6-6(e), B.R.C. 1981, in determining the number of allocations over twenty which may be applied for, no rounding up of partial allocations will be accepted. For example, a forty-seven unit development could apply for twenty-six not twenty-seven allocations. (47-20 = 27, 27 = 4= 6.75 round down to 6, 20 + 6= 26). For the putposes of granting allocations under Subsection 9-6-7(a}, B.R.C. 1981, allocations will be rounded up to a full allocation if the amount is 0.5 or greater. 6.01 Content of Applications 9-6-6 An allocation application will be evaluated based upon the relevant facts provided in the written application. Also, the city manager may take into account facts of general knowledge, such as the city's zoning map, site conditions, and the provisions of Title 9, "Land Use Regulation," B.R.C. 1981, in its evaluation. While the applicant may not modify its submitted application, if the city manager discovers, in its review, obvious errors or miscalculations in the application, the city manager may correct the application after notification to the applicant. 6.02 "Ten or Less" Rule 9-6-6(fl Existing units, as determined under regulation 2.03 "Determining Existing Units" above, will be included in the total number of units in the development for the puzposes of calculating the number of units which may be applied for under Subsection 9-6-6( fl, B.R.C. 1981. 6.03 Allocation Review Process 9-6-6 In addition to the application requirements set forth in Section 9-6-6, B.R.C. 1981, the applicant shall complete the following before the issuance of an allocation certificate. An allocation certificate is a prerequisite for application for a building permit: K:~PLLRV{-REGS2.ADS ~tgenaa Item-r _ ' ~ Page # : 3~ 1. Final documentation that documents compliance with the provisions of Inclusionary zoning will be approved by the Housing Division. The applicant shall obtain written verification from the Housing Division approving the applicant's method of compliance meets the requirements of Chapter 9-6.5, "Inclusionary Zoning," B.R.C. 1981. 2. Applications forthe quarterly allocation process or allocation certificates for dwelling units that are exempt may be made to the Planning Department on forms provided by the city manager. 3. All allocation certificates for dwelling units will be issued by the Planning Department. 4. The Applicant may apply for a building permit at any time during the allocation validity time. Allocation Certificate will document the time period in which the Allocation is valid. 7.01 Random Setection 9-6-7(d) After allocations are granted to developments with multiple applicants, the city manager will send each applicant within such developments a unanimous consent form by first class mail. Applicants will have five working days from the date of the letter to retum such forms to the planning department indicating their consent to a particular distribution of allocations among the applicants in their development. All responsibility for coordination and communication among the applicants in any development will be the applicants'. If all forms indicating unanimous consent have not been received by the planning departrnent within the specified time limitarion, the planning director shall determine the order of granting the allocations at a random selection process open to K\PLLRVC-REGS2.ADS uiEnua -tem ~ _~!3 Page # = ~ the affected applicants. Applicants will receive reasonable notice of the time and place of such selection. If unanimous consent to a particular distribution of allocations among applicants in a development is reached, the applicants shall establish a priority preference within that development in future allocation periods. If the applicants cannot establish a priarity preference one will be established by random selection. In carrying out any random selection under this ordinance, each individual allocation will be weighted equally in a random selection. After a.random selection is held under the provisions of Subsection 9-6-6(b), 9-6-7(c), or 9-6-7(d), B.R.C. 1481, each applicant will receive a priority equal to the number of allocations requested, but not filled in each preceding quarter for the next random selection. That is, an applicant requesting four allocations in a preceding quarter not receiving an allocation, would have the equivalent of eight allocations requested for the current quarter (four for the initial quarter and four for the current quarter}. 7.02 Combination of Parcels by Planning Board 9-6-7(d) and 9-6-7(b)(5) For the purposes of determining whether the provisions of Subsection 9-6-7(d) and pazagraph 9-6-7(b)(5), B.R.C. 1981, apply to a particular development, for existing approved developments, the provisions of Subsection 9-6-7(d), B.R.C. 1981, are presumed to take priority. Applicants for new developments or the city manager may request the planning board, at its quarterly allocation hearing or at the approval hearing for the development, to find that more than one development under the provisions of 9-6-7(b)(5) exists for the purposes of the growth management ordinance. The notice for such hearing will specify that such a request is being heard. K:~PLLR~X-REGS2.ADS ~~gGnda Item r ~/_5 Pa~e # :38~ _. The standard for granting such request is that the combination of parcels achieved an improved land use design over that which would likely result from individual development of separate parcels. 8.01 Allocation Extension Requests 9-6-8(a) After the allocation award hearing, no request for extension of allocations will be accepted. The applicants will have the opportunity at or before the allocation hearing to request that the time period specified in the ordinance be modified by the planning board as a condition of the initial allocation award. 8.02 Bankin~ Provisions 9-6-8(h) Normally, an applicant requesting banking must apply for the maximum number of allocations permitted under Subsections 9-6-6(e) and ( fl, B.R.C. 1981. However, in the case where an applicant is banking allocations for the multi-family portion of a development which includes both single family and multi-family structures, the number of allocations for which banking must be applied for is reduced proportionally, based on the ratio of multi-family units to single family units within the development, i.e., for a development with sixty multi-family units and forty single family units, the applicant must apply for at least twenty-four allocations (60/100 X 40 = 24). In each allocation period of a calendar year, an applicant banking such allocations must apply for at least twenty-five percent of the prorated maximum to be applied towazd the banked allocations until such prorated maximum is reached. In any case, where banking is occurring, the maximum number of allocations possible for the development must be applied for within the calendar yeaz. Banking requests will be evaluated on an individual applicant basis, rather than on a development-wide basis. K:IPLLR~7(-REGS2.ADS ~~,dn~~ Itam ~, __~~ Pa~e ~ ~ For the purposes of subparagraph 9-6-8(h)(1)(A), B.R.C. 1981, "minimum building size" will be defined as the building containing the smallest number of units or the smallest severable building component, requested in the particular application. For the purposes of complying with paragraph 9-6-8(h)(5), B.R.C. 1981, each applicant banking allocations shall file a banking allocation confirmation form, which will be available at the office of the planning departrnent, within ten days after the allocation hearing. Any person that is banking allocations to a minimum building size that fails to apply for an allocation by the application deadline set by the planning board pursuant to Subsection 9-6-5(a), B.R.C. 1981, for a quarterly allocation wil] be allowed to carry the portions of the allocation banked from previous quarters forward to the next quarter, but shall not receive any allocations from the allocation period in which an application was not received by the application deadline. If an allocation grantee has banked allocations and does not apply in two consecutive allocation periods, pursuant to paragraph 9-6-8(h)(4), B.R.C. 1981, the banked allocations shall become void and the penalty provisions of Subsections 9-6-8(fl and (g), B.R.C. 1981, will apply. 8.03 Reassi~nment of Allocations Within a DeveloQment 9-6-8(c), 9-6-8( fl and 9-6-8(g) If an applicant within a development with multiple owners receives allocations under Subsection 9-6-7(d), B.R.C. 1981, the applicant may assi,gn its allocations, or a portion thereof, to another owner/applicant within the development. In that event, the assignee is subject to all terms and conditions imposed on the original allocations as provided in Subsection 9-6-8(c), B.R.C.1981, except that the original grantee shall be subject to the penalty provisions of Subsections 9-6-8( fl and (g), B.R.C. 1981, if the assigned allocations are surrendered or become void. K:~PLLR~X-REGS2.ADS ~ l~d~riaa ~tF;m ~, __. ~1~ _ ~'a~e # '~~_ 9.01 Exemptions 9-6-9(a) and 9-6-9(b) A prerequisite to an application for a building permit for the construction of a new dwelIing unit is an allocation certificate. In addition to building permits that expressly require a residential growth management allocation, an allocation certificate is also required for dwelling units that are exempt from the growth management system listed in Subsections 9-6-9(a) and (b), B.R.C. 1981. Applicants for building pennits for dwelling units that are exempt from the residential growth management system under Section 9-6-9 shall request an allocation certificate from the Planning Department. The applicant shall submit, for the review and approval of the Planning Department, a written request for an allocarion certificate and provide documentation, in a form acceptable to the city manager, demonstrating that the request is eligible for the exemption. Upon a finding that the request meets the exemption standards set forth in Section 9-6-9, the allocation certificate will be issued within 10 working days. The following are eligible for allocation certificates for exempt dwelling units: (1) Permanently affordable dweiling units approved by the city manager; (2) Dwelling units built pursuant to a development right pursuant to the intergovernmental agreement between the city and Boulder County, dated Apri14,1995, that is transferred into the city; (3) Housing projects built by the University of Colorado for the sole purpose of providing housing for students, staff, and faculty of the university; (4) Dwelling units that are not permanently affordable units in developments with a minimum of thirty-five percent permanently affordable dwelling units and a phasing plan K:~PLLR~X-REGS2.ADS ~;y ;naa ~tem ~ _ _~~ __ Paae # ~._-- approved by the city manager that provides for the concuirent construction of the permanently affordable and non-permanently affordable dwelling units; (5) Mixed use developments; and (6) Detached dwelling units on single family lots plotted on or before November 10, 1976. 9.02 Allocations for Potentiall~Exemat Units 9-6-9(a)(2) and 9-6-9(a)(4) Applications for allocation awards to landmarked buildings, and group housing for special populations will be accepted for the pro-rated system review, and allocation awards to such units may occur even though such units may ultimately be determined to be exempt. If such units are ultimately determined to be exempt units, upon issuance of a building permit therefor, the allocations represented by such units may be reallocated in accordance with the conditions imposed by the planning board on that application. K:~PLLRVC-REGS2.ADS ,;~~:.,nJa;~emr: .. ~~___~'age~ y~ _. ATTACHMENT C INCLUSIONARY ZONING This paper is intended to provide general, introductory information about the provisions of the inclusionary zoning ordinance which is contained in Chapter 9-6.5 of the Boulder Revised Code, 1981. What is "inclusionary zonin~"? Inclusionary zoning requires that most new residential development contribute something toward permanently affordable housing in the City. Generally speaking, Inclusionary Zoning requires that 20% of the total number of units be permanently affordable to low income households. There are a variety of ways to meet the inclusionary requirement, including units on-site, dedicating existing units off-site, land donation and cash-in-lieu contribution. Inclusionary Zoning replaces the affordable housing element that had been part of the Residential Growth Management System (RGMS) since 1995. Which ~rojects are sub~ect to inclusionarv zonin~? All projects with residential units, except the following, are subject to the requirements of inclusionary zoning: l) Projects with development plan approvals given prior to October 5, 1995 may choose to either meet the requirements of inclusionary zoning or build according to the previously issued development approval as long as those units are completed by December 31, 2001. Any units not completed by December 31, 2001 will be subject to the inclusionary zoning requirements; 2) Projects with Reservation Agreements may develop in accordance with their reservation agreement until December 31, 2001. Any units for which building permits are applied for after December 31, 2001 will be subject to the inclusionary zoning requirements; 3) Developments with affordable housing requirements in their annexation agreements made prior to February 4, 2000; and 4) Developments which applied for project approval prior to February 4, 2000 may request a variance to the requirements of inclusionary zoning in order to develop according to their development application. General Inclusionarv Zonin~ Rec~uirement Inclusionary zoning requires that new residential development contribute at least 20% of the total units as permanently affordable housing. ~'he City's preference is for on-site units. However, in most cases there is some flexibility in how the contribution may be met. These options include ~genaa Item ~ 1-~ f'age # 'y~~ on-site units, off-site existing units, vacant land, or money. For-sale projects must provide at least half of the reGuired permanently affordable units on-site; rental projects may choose to fulfill the inclusionary zoning requirement on- or off-site. For-sale projects must provide permanently affordable for-sale units and rental projects must provide permanently affordable rental units. The perinanently affordable units are to be constructed at the same time as or prior to the market rate units. What does "~ermanentlv affordable" mean? Permanently affordable means a given unit has an ongoing rent or resale restriction that is designed to keep the unit affordable, in perpetuiiy, to low income households. The exact terms of the rent or resale restriction are contained in the covenant which is recorded against each property. Permanently affordable units must also be occupied by income eligible households. Affordability and income eligibility are defined in terms of the Area Median Income (AMI). The AMI is a figure set by the Federal government each year, for Boulder, and is given in terms of household size. The Department of Housing and Urban Development (HUD) then defines "low income" for the city of Boulder as a percentage of the AMI. For example, the 1999 AMI for a household of three was $61,800, while the HUD low income limit was approximately 70% of the AMI or $43,000 for a three-person household. In terms of prices, for a 1,200 square foot attached unit, the average price woutd be approximately $134,000; for a detached unit the price would be approximately $143,000. A rental unit of 1,200 square feet would need to rent for an average of $990 per month. Smaller units result in lower prices and rents. Prices are calculated on a quarterly basis to take into account interest rate changes and coincide with the allocation process for RGMS. Rents are calculated once per year whenever HUD publishes the new AMI figures. There is a separate sheet which details the allowable prices and rents for the various sized permanently affordable units. Permanently Affordable Unit Minimum Sizes In addition to the requirement that the total number of permanently affordable units be at least 20% of the total number of units in the development, there is a minimum size requirement. The total finished floor area of all the detached permanently affordable units must equal 12% of the total floor area of the market rate units, up to a maximum average of 1,200 square feet for each permanently affordable unit. The total finished floor area for all the attached permanently affordable units must equa120% of the total floor azea of the market rate units, up to a maYimum average of 1,200 square feet for each permanently affordable unit. Off-Site O~tions For-Sale developments have the option of providing up to half of the inclusionary requirement off-site; rental projects have the option of providing any or all of the inclusionary requirement off-site. There are three off-site options: Hyencla Item # 7Q Page # '`-~. Existing Unit Dedication Any existing units proposed to fulfill the inclusionary requirement are subject to inspection and must be generally equivalent to the new units that would have been built on-site. If accepted, a permanently affordable covenant is recorded against the property to secure its affordability. Land Dedication There are two possible approaches for determining an acceptable land dedication. One is to provide land that is equivalent in value to the calculated cash-in-lieu contribution, plus an additional 50% to cover transaction costs. The other is to provide land that is of equivalent value to the land of the original development and that is appropriately zoned to allow for at least the same number of units that would have otherwise been constructed on-site. Cash-in-Lieu Contribution In certain cases, money may be paid in lieu of providing a permanently affordable unit. For each detached market rate unit to be built, the cash-in-lieu amount is equal to the lesser of $13,200 or $55 multiplied by 20% of the total floor area of the market rate unit. For each attached market rate unit to be built, the cash-in-lieu amount is equal to the lesser of $12,000 or $50 multiplied by 20% of the total floor area of the market rate unit. What about small ~rojects? Projects with four or less units may choose to provide one on- or off-site permanently affordable unit, dedicate land or pay a cash-in-lieu contribution as calculated above. What if I only own one lot? There are three additional alternatives for single lot owners. 1) An owner of a single lot may have their inclusionary zoning obligation waived one time if all of the following conditions are met: * The lot was created prior to October 5, 1995; * The new unit will be the primary residence of the lot owner for at least one yeaz following construction; and * The floor area does not exceed 1600 square feet now and in the future. 2) The newly constructed unit could be dedicated as permanently affordable with subsequent owners meeting the requirements of that permanent affordability. In other words, the original owner of the single lot would not have to be income qualified but any subsequent owners would be and the maximum allowable sale price would be set by the City. 3) The single lot owner could defer payment of the calculated cash-in-lieu contribution until the subsequent transfer of the property. The amount to be paid at that time would be the original cash-in-lieu amount plus an adjustment that reflects the change in the median sale price for housing in the city of Boulder. ; ;genda Item # 7Q Page #.~~, Variances That Ma,~.Be A~plied For There are several variances to the general inclusionary requirements that a developer or property owner may apply for and which may or may not be granted at the discretion of the city manager. They are as follows: Projects with Pending Application Approvals Projects for which applications were filed prior to February 4, 2000 may request to be allowed to develop in conformity with the application submittal. In return, the applicant must provide affordable housing benefits equivalent to those that would have been provided if the project were to develop according to the Inclusionary Zoning Ordinance. Finished F[oor Area Requirement The floor area requirements set forth in the ordinance refer to finished, habitable floor area. Unfinished floor area may be substituted for finished floor area in a 2:1 ratio; a maximum of 250 square feet of finished floor area may be requested to be substituted in this manner. Total Floor Area Requirement far tlre Project A developer or property owner may request to be allowed to build a lesser amount of total square footage than that required by the Inclusionary Zoning Ordinance if doing so would accomplish additional affordable housing benefits for the City. On-Site Construction Requirement Developers of for-sale projects are required to build at least 50% of the required permanently affordable units on-site. Developers may request to be allowed to provide more than 50% of the required units off-site if doing so would accomplish additional affordable housing benefits for the City or if zoning, environmental or legal restrictions make it impossible to provide 50% of the permanently affordable units on-site. Rental Projects Developers of rental projects may propose to satisfy their inclusionary requirement in ways not listed in the ordinance as long as such a proposal would resuit in additional affordable housing benefits to the City. Construction Timing Permanently affordable units are required to be constructed such that they are able to be mazketed concurrently with the market-rate units. A developer may request an alternative phasing arrangement if doing so would result in additional affordable housing benefits to the City. Other Considerations for Permanentl,y Affordable Housin~ Permanently affordable units aze exempt from the RGMS. In projects with at least 35% of the units as permanently affordable, all the units are exempt from RGMS. Permanently affordable units are exempt from paying the Housing Excise Tax and may be eligible for a waiver from the Development Excise Ta~c. Projects which wish to provide more than 20% of their units as permanently affordable or wish to make the required inclusionary units affordable to lower income households are eligible to apply for housing subsidy funds. These funds are distributed one time per year through the Housing and Human Services Department. ;3~enda Item #~ ~ Page # y'~ ATTACHMENT D 2000 Residential Growth Management System Summary Background The City of Bouider has had a Residential Growth Management system since the fall of 1976. The purpose of the system has been to control the rate of growth within the city on an annual basis. The original regulation limited the city to a two percent annual rate. In 1995 the annual rate was reduced to one percent. There are approximately 400 allocations available every year under the current system. Before a building permit for a new unit or replacement of an existing unit can be made, one allocation per unit to be constructed on the property must be acquired. The availability of an allocation for a specific property is confirmed by the issuance of an "Allocation Certificate" by the Planning Department. Certificates for construction of a new home will only be issued when an allocation has been made available to a property through one of the processes described below. Once an allocation has been assigned to a property, a request for the "certificate" must be made to the Growth Management Planner. A certificate will be issued within five working days of the when the Growth Management Planner receives the request and verifies that an "allocation" has been awarded to the property. New development which includes the construction of one or more residential units must have an "Allocation" before an application for a building permit can be made. There are a number of ways that an allocation can be obtained. The following discussion is intended to provide general information on how the current Residential Growth Management System (RGMS) works. There are several types of allocations available within the system. The primary allocation is for construction of a market rate home. There are several exceptions to the rule for how a market rate home may apply for an allocation (discussed in following paragraphs), but the quarterly allocation process is the main way allocations can be obtained. Application Process Quarterly Allocation Process: Allocations are awarded every quarter (three month intervals). The number of allocations available each quarter varies based on a number of factors, but in general, 100 allocations are available every quarter. Applications for an allocation must be made by a specific date, because the award of allocations requires a public hearing with the Planning Board. Application forms for applying for the quarterly allocation process are available in the Building Service Center. When an allocation has been awarded through the quarterly allocation system, the allocation must be used by the end of the quarter following the quarter the allocation was awarded (approximately 5 months). Every development will receive one allocation per quarter based on the provisions of section 9-6-3(g), "guarantee of one allocation per development." If there are more developments then allocations available within a quarter, allocations will be borrowed from the next quarter to meet this criteria. Banked allocations: Larger developments can "bank" allocations until the number of allocations needed to support the project have been obtained. A special request must be made the first quarter a request for banking is made. This request can be made on the quarterly allocation application form. Planning Board will consider the request to bank allocations at the first meeting the requests is considered by the Board. Banked allocations are valid to the end of the quarter following the quarter in which all banked allocations have been accumulated (approximately 5 months). ~~genda Item # 7~ Page # ~~ Exceptions to obtaining an allocation through the quarterly allocation system. Pre November 10,1976: Lots or parcels that were developed before November 10, 1976 may obtain an aNocation outside of the quarterly system (section (9-6-9(b)). A request for an allocation must be made to the Planning Department for the allocation. The allocation will be made avaifabie within 5 working days. The allocation will be valid to the end of the quarter following the quarter in which it is issued (approximately 4 to 6 months). Demolition of an Existing Unit: When a residential unit is demolished or moved to a new location, an " Allocation Certificate" will need to be obtained from the city. Once the demolished permit has been issued, a copy of the demolition permit should be given to the Growth Management Planner to complete the necessary paper work documentirrg the demolition of an existing unit. The Growth Management Planner wil( complete an "Allocation Certificate" verifying the demolition of the existing residential unit. A(focation Certificates for demolished units are valid for one year from the date the unit was demolished. This date is established based on the date the Demolition permit is issued. Special Housing Types: There are four housing types that are exempt from the provisions of Growth Management system. An allocation certificate will be issued for these allocations confirming the project conforms to the pravisions of the specific exception: a. Accessory Dwelling Unit (ADU) b. Owner's Accessory Unit (OAU) c. Bed and Breakfast d. Hostel, hotel or motel There are five types of residential units that require allocation certificates, but are not counted in the total number of allocations available within a calendar year as follows: a. Permanently affordable dwelling units approved by the City Manager; b. Transfer of a development right (TDR) from a Boulder County location within the City of Boulder sending area; c. Housing built for the University of Colorado solely for students, staff or faculty of the University; d. Developments with a minimum of thirty-five percent permanently affordable dwelling units; and e. Mixed use developments within the BMS, CB, IG, IM, IMS, fS, MU, RB, RB1, R82, RB3, or TB zones. Maximum Allocations Available to a Development within a Calendar Year: Developments are limited to a maximum of 40 units per year (section 9-6-9(b)) unless there are "excess allocations" that were not awarded in a proceeding quarter(s). However, when excess allocations are available, a maximum of 25 allocations or 10% of the excess allocation, whichever is less may be requested in addition to the 40 per year for a specific development. A request for excess atlocations may be made on approved application forms available in the Building Services Center. ~;~~nda Item # ~~, page # _ ~~