7A - Comments on proposed changes to the Inclusionary Housing Ordinance Administrative Regulations
CITY OF BOULDER
PLANNING BOARD AGENDA ITEM
MEETING DATE: May 5, 2011
AGENDA TITLE: Planning Board comments to the city manager on proposed changes to the
Inclusionary Housing Ordinance Administrative Regulations.
REQUESTING DEPARTMENT:
Karen Rahn, Director of Housing and Human Services
Andy Proctor, Housing Division Manager
Michelle Allen, Housing Planner
EXECUTIVE SUMNIARY:
The city is implementing the policies adopted by City Council for the Inclusionary Housing
Program. Per the B.R.C., city regulations are approved as to form by the city attorney's office,
and then adopted by the city manager after a 15 day public comment period. Because the
Inclusionary Housing Ordinance is part of Chapter 9 of the B.R.C., staff is providing the updated
administrative regulations to the Planning Board as a courtesy check-in and to record any
comments the Planning Board would like staff to convey to the city manager as adoption of the
regulations are considered.
The Inclusionary Housing Ordinance, which replaced the Inclusionary Zoning Ordinance, was
adopted as policy by City Council on Jan. 19, 2010. The proposed regulations have been updated
to implement the new ordinance and include regulations concerning the following ordinance
changes:
1. Change the name "inclusionary zoning" to "inclusionary housing".
2. Change the annual adjustment for cash-in-lieu payments.
3. Apply inclusionary housing requirements to redevelopment projects when the total
number of redeveloped or newly constructed dwelling units equals five or more.
4. Modify the land dedication option to clarify specific requirements for the dedicated land.
5. Remove references to "variances" for specific sections of the code and replace with an
"Alternative Methods of Compliance" section.
In addition, the regulations have been modified to reflect current implementation practices,
clarify or modify existing policies and procedures and were substantially reorganized to "track"
with the ordinance. For example, all regulations starting with the number three now relate to
section 9-13-3 of the ordinance and so forth.
100 Agenda Item 7A Page 1 of 69
PUBLIC COMMENT AND PROCESS:
Publication of notice of the 15 day comment period was posted in the Daily Camera on May 5t1i.
BACKGROUND:
The Inclusionary Zoning Ordinance was developed and adopted by the city in 2000 based on
recommendations from the 2000 Affordable Housing Funding and Implementation Task Force
which was carrying out the implementation phase of the Comprehensive Housing Strategy
adopted in 1999. The regulations for the ordinance were first adopted in April 2000 and
subsequently amended in 2003 and 2007, primarily to reflect minor modifications and
adjustments to requirements for affordable home buyers.
In 2008 the Affordable Housing Review was initiated to update Boulder's affordable housing
goals and policies, review inclusionary housing (previously called inclusionary zoning) and
explore new ways to meet the affordable housing needs of the community. The review consisted
of three phases:
Phase I - Goals and Strategies Review, completed in June 2009
Phase II - Regulatory Review, completed in January 2010
Phase III - New Initiatives, on hold pending recommendations by the Affordable
Housing Task Force
At its retreat in January 2010, City Council directed staff to form the Affordable Housing Task
Force to work with staff to identify the highest priority housing issues and recommend possible
housing policy and program modifications. The work of the Affordable Housing Task Force is
anticipated to be completed in late summer 2011.
The Inclusionary Housing Ordinance, which replaced the Inclusionary Zoning Ordinance, was
adopted as policy by City Council on Jan. 19, 2010. When a new ordinance is adopted, the
administrative regulations to implement any changes are subsequently revised and adopted by
the city manager. A public comment period is required prior to city manager adoption of any
regulations. This item is to inform the Planning Board of the pending review by the city manager
and to allow Planning Board an opportunity to comment.
ANALYSIS:
A detailed analysis of the proposed changes to the regulations may be found in Attachment A. A
red-lined version of the proposed regulations compared with the current regulations may be
found in Attachment B and a final copy of the proposed regulations may be found in Attachment
C.
101 Agenda Item 7A Page 2 of 69
NEXT STEPS:
Following the 15 day public comment period, the proposed Inclusionary Housing Ordinance
Administrative Regulations will be sent along with all comments received to the city manager for
adoption.
Approved By:
Karen Rahn, Director
Housing and Human Services
ATTACHMENTS:
Attachment A - Analysis of changes and updates to the Inclusionary Housing
Administrative Regulations
Attachment B - The current Inclusionary Housing Ordinance Administrative Regulations,
redlined with all proposed changes
Attachment C- Final copy of the proposed Inclusionary Housing Ordinance Administrative
Regulations
102 Agenda Item 7A Page 3 of 69
ATTACHMENT A
ANALYSIS OF CHANGES AND UPDATES TO THE INCLUSIONARY HOUSING
ADMINISTRATIVE REGULATIONS
The Inclusionary Housing Ordinance Administrative Regulations were modified to implement
the policies in the Inclusionary Housing Ordinance, adopted by City Council on Jan. 19, 2010.
The following analysis contains two sections; "New Regulations" implement new policies
adopted in the 2010 Inclusionary Housing Ordinance, "Regulation Updates" provides edits and
modifications that reflect and clarify current practices.
New Regulations
REGULATION # REGULATION NAME
3.4 Alternative Methods of Compliance
3.4.1 Alternative Methods of Compliance Request Process
3.4.3 Alternative Methods of Compliance to Required Total Floor Area of
Permanently Affordable Dwelling Units
3.5 Rebuilt Dwelling Units
Regulation 3.4 Alternative Methods of Compliance
Regulation 3.4.1 Alternative Methods of Compliance Request Process
The following regulations implement policy 9-13-3 (d) B.R.C., "Alternative Methods of
Compliance."
The Inclusionary Housing Ordinance replaced a variety of allowed "variances" with an
Alternative Methods of Compliance section. This change reflects the alternative methods of
compliance available to meet inclusionary requirements, which are not subject to the same
process, procedures and legal considerations as land use variances, which are generally based
upon hardships and situations not of an applicant's own making.
The proposed regulations specify the application and process required to apply for an alternative
method of compliance.
Regulation 3.4.3 Alternative Methods of Compliance to Required Total Floor
Area of Permanently Affordable Dwelling Units
The following regulations implement policy 9-13-5 (c) (3) B.R.C "Alternative Methods of
Compliance for Finished Floor Area."
The current administrative regulations state that a request to allow less than the required floor
area, i.e., smaller affordable units, " may be granted upon a finding by the city manager that
such a reduction in floor area would result in additional affordable housing benefit". Both the
amount of the reduction and the determination of what constitutes "additional affordable housing
benefit" were left undefined resulting in inconsistencies in the application of the request.
103 Agenda Item 7A Page 4 of 69
The proposed new regulatory language states that the average size of the affordable units may
not be less than 70 percent of the required floor area of the project incurring the inclusionary
housing obligation under any circumstances and requires at least one of the following remedies
for approval:
1. Dedicate one or more additional permanently affordable units with floor area that is at
least equal to the total deficient amount offloor area.
2. Take the deficient amount of floor area for all proposed affordable units combined and
multiply it by the applicable per-square-foot cash-in-lieu amount per the table below. The
amount will be added to the building permit amount owed for that project.
Deficiency in floor area Cash-in-lieu multiplier (Percent
required size per unit o deficient s care oot amount)
I - 10 percent 100 percent
>10 percent to <20 percent 125 percent
>20 percent to <30 percent 150 percent
> 30 percent Not allowed
Any portion of the amount calculated in number 2, above, may, at the city's discretion, be
used to reduce the selling price(s) of some or all of the permanently affordable units.
3. Substitute other, larger units that are acceptable to the city as permanently affordable
units.
The more prescriptive language included in the proposed regulations defines the extent to which
size reductions are allowable and will result in consistent application of the remedies.
Regulation 3.5 Rebuilt Dwelling Units
The following regulations implement policy 9-13-3 (e) B.R.C "Rebuilt Dwelling Units."
The Inclusionary Housing Ordinance contains a new policy to apply inclusionary requirements to
redevelopment projects when the total number of redeveloped or newly-constructed dwelling
units equals five or more units, regardless of when a demolition permit was issued.
The proposed regulations specify how this requirement will apply to redevelopment projects that
include the demolition of unsafe or uninhabitable structures and how it will be applied when the
square foot calculation is used determine a cash-in-lieu equivalency.
Regulation Updates
In addition to the regulations added to implement new policies adopted in the Inclusionary
Housing Ordinance, language was added or edited to clarify and update policies and procedures.
104 Agenda Item 7A Page 5 of 69
REGULATION # REGULATION UPDATE
3.1 Defines how inclusionary housing is applied to group quarters.
3.2 Clarifies that inclusionary housing is not applied to accessory dwelling
units or owners accessory units.
3.4.5 Establishes guidelines for allowing alternative financial or timing for in-lieu
contributions.
3.9 Modifies the unit sizes for determining the maximum allowable sales price
to ensure that prices do not exceed the income requirements in the ordinance
and allows affordable pricing to include consideration for garages.
3.15 Clarifies the asset limitations for qualified affordable home purchasers.
4.1 Clarifies how the on-site requirement will apply when 20 percent of the
dwelling units results in a fraction.
5.5 Establishes deadlines for submission of required documents.
5.6 Clarifies how the livability standards are applied to affordable units and
alternatives for compliance when the standards are not met.
9.3, 9.4, 9.5 Specifies requirements for the provision of existing or newly constructed
off-site affordable units.
While most of the modifications listed above are self explanatory, two warrant further
explanation: Guidelines for allowing alternative financial or timing for in-lieu contribution and
number; and Modify the unit sizes for determining the maximum allowable sales price and allow
sales price consideration for provision of a garage.
Regulation 3.4.5 Guidelines for allowing alternative financial or timing for in-
lieu contributions
The following regulations implement policy 9-13-9 (a) B.R.C., "Off-Site Inclusionary Housing
Options."
The standard requirement is that any cash-in-lieu contribution is due to be paid in full when the
building permit for the development incurring the inclusionary housing requirement is issued.
Larger projects may have a cash-in-lieu contribution that exceeds several million dollars,
however, making payment in the early phase of the development difficult. In the past,
recognizing that flexibility is needed to make very large projects work, the city manager has
negotiated a payment schedule with the developer on a case-by-case basis. The proposed
regulation sets appropriate boundaries for when and under what circumstances these types of
alternatives may be considered.
Regulation 3.9 Maximum Sales Price for New Permanently Affordable
Dwelling Units
The following regulations implement policy 9-13-3 (1) B.R.C "Maximum Sales Price for
Permanently Affordable Dwelling Units."
This modification to the regulations ensures that permanently affordable home prices do not
exceed those affordable to a household earning the U.S. Department of Housing and Urban
Development (HUD) low income limit as required in the Inclusionary Housing Ordinance.
105 Agenda Item 7A Page 6 of 69
Affordable housing pricing has two components, the price of the affordable home and the
income limit for affordable buyers. The income limit for inclusionary housing units is based on
the HUD determination of low income limit plus 10 percent of the area median income (HUD +
10 percent). The maximum inclusionary housing sales price is based on a household earning the
HUD low income limit. This "window" between the income used to price homes and the income
limit increases the range of households financially able to purchase the homes.
Affordable prices are set by ordinance based on the HUD determined low income limit for
Boulder (2010 - 2011 HUD low income limits are $51,550 for a family of two and $58,000 for a
family of three). Income is then used to determine an affordable mortgage using a standard
mortgage calculation. The resulting affordable price is referred to as the "base price" and applied
to a specific unit size in the regulations. Additional prices are calculated by adjusting this base
price for the subtraction or addition of specific-unit square footage, bedrooms and/or bathrooms.
The bold price on the pricing sheet is the "base price" as currently identified in the administrative
regulations. See the Affordable Unit Pricing Sheet 2nd Qtr. 2011 below.
The size of the affordable units must equal 80 percent of the size of the market rate units in a
development and be proportional in number of bedrooms to the market units. Typically, a two
bedroom market unit will range from 900 to 1,300 square feet, a 3 bedroom from 1,100 to 1,500
square feet. The regulations adopted in 2000 identify relatively small "base price" units of 800 to
900 square feet for a two bedroom and 900 to 1,000 square feet for a three bedroom unit. In
addition, low interest rates have resulted in much higher prices for affordable units. When prices
are adjusted for additional square feet, they can in some cases exceed the HUD low income
target required by the ordinance.
The modification moves the "base price" to a slightly larger unit and allows the pricing sheet to
be adjusted such that typically sized affordable units will not exceed the HUD plus ten percent
household income target.
Currently, provision of garages are not mandatory for permanently affordable homeownership
units. Often though garages are either included or proposed for affordable units but no price
consideration is allowed for the added benefit to the buyer and cost to the developer. The
proposed modification allows for a pricing adjustment when garages are provided with
affordable units.
The intent of inclusionary housing is that the affordable units are indistinguishable from the
market rate units in a development. For this reason it is desirable that developments which
include garages for the market rate units also include them for the affordable units. In addition,
garages provide a secure, sheltered place to store a car, serve as a storage area and are desirable
for affordable owners. The additional pricing for affordable units with garages will be
implemented such that the cost of the affordable units remain affordable to low and moderate
income buyers.
106 Agenda Item 7A Page 7 of 69
Affordable Unit Pricing Sheet 2nd Qtr. 2011
a.
Off ~ ~ N f`-
o N 1 c~ 1 6,
9Aa M ■ M ■ M
T - N • CV • CV
b+Z Sf3 E}3C:Y ~ d d
aca : 0 1 c° 1
T - ■ Cr! ■ 00
o a 1 N 1 CIA
N r ■ Efi ■ ffS
C_
•
CT • Q Q
C4 -
_ _1 C,fl NI ~1 rn
T o - N N N N
r 31 car s~ 1 4A.1
ss
° :a 1 to 1 C 1
O?
_ - u OQ LC-; C6 N
0 0 l o f CIA N I C-J
N ~ =t3 . Ef3 iIF?. C~3 . Cf3
N ■ s Q-y ■
O ~.i N I~ • ~
f7C N Eft EIS, . E.S 1 1
Cn o o o v 1 1
G •
T
d era co 1 cfl w 1 00 1: 1
U
W o o a o 0 o G W
Z °o 0 01 cal B ~1 1 1
t- Lri - • -S 1 • O OQ •
CA; o r•7 li? 1 1 cQ tD I R 1 1
f r
r ~ r
o. C=-. O
o O 4 o ti
cn ~j MI
D o M v d- 's'
W oa tfr j ci j j 1 1"
U a °o E1 C=)~1 C=) 1 1- 1,
Q o cN., CY; 1 C; 1 V-C>, 1 1 1
r- ~ -
1' 1`1
o
1 1 1 1 ' 1.
con 1 1 1 1 1
0 1 1 1 1 1
.
1 1. 1 1: 1
0
BAD
0
1 1 1,: 1. 1
■ ■
0 1 1" 1 1 1
v 1 1 1 1 1
~ N CV N ■ C?
ai ea o o a o 0
pp o 0 1 ~s'? 1~ 1za ti t 1~
CV CV
CJ~
C
m r N N CV CM C"9 sV ~ -:Zr ~ ~ 1 1 1 1 1
107 Agenda Item 7A Page 8 of 69
ATTACHMENT B
INCLUSIONARY 4NING HOUSING ORDINANCE
ADMINISTRATIVE REGULATIONS
Adopted April 6, 2000
Amended May, 2003
Amended December, 2007
Amended XXXXX, 2011
Adopted pursuant to Chapter 1-4, B.R.C. 1981
Note: Due to a simplification of the B.R.C. 1981 Title 9 (July 2006) code citations have
changed. This amended version of the regulations contains current applicable code citations.
108 Agenda Item 7A Page 9 of 69
Table of Contents
1.0 Findings X
3.0 General Inclusionary Requirements
MOVED TO SECTION 3.13 '
-3.1 ineenie Eligible Household [9 16 1j -3.2 D°"maaet4ly n+ a~t,io rT,,;t [9 13 91 NOW WITHIN SECTION 1.0 AND 5.3 '
3.1 Inclusionary Housing Requirements for Group Quarters X
3.2 Inclusionary Housing Requirements for Accessory D«velling Units and Owner
Accessory Units y X
3.3 Developments Subject to Annexation Agreements X
3.4 Alternative Methods of Compliance X
RELATED TO FORMER REGULATIONS SECTION 6.2
3.4.1 Alternative Methods of Compliance Request Process X
3.4.2 Alternative Methods of Compliance for
On-Site Construction Requirement X
MOVED FROM SECTION 7.1
3.4.3 Alternative Methods of Compliance to Required Total Floor
Area of Permanently Affordable Dwelling Units X
MOVED FROM SECTION 5.2
3.4.4 Appheation faf Vafianee to Dwelling Unit Finished Size Reqiaiffement Alternative
Methods of Compliance to Substitute Unfinished Floor Area for Finished Floor Area X
MOVED FROM SECTION 5.1
3.4.5 Alternative Methods of Compliance for Financial Alternatives and Timing When
Cash-in-lieu Contribution is Made X
3.5 Rebuilt Dwellinu Units X
3.6 Req "'ea _^_gre meats Covenant(s) Required X
MOVED FROM SECTION 10.2
3.8 Good Faith Marketing Required X
MOVED FROM SECTION 10.3
3.9 Maximum Sales Price for New Permanently Affordable I)Nvelling Units X
MOVED FROM SECTION 9.1 AND 9.2
3.10 Sales Price Consideration for Rental Housing Units X
3.11 Approved Purchasers of Permanently Affordable D« elling Units X
MOVED FROM SECTION 9.3
3.12 Income Eligible Household X
MOVED FROM SECTION 3.1
3.13 Documentation Required to Verify Income of Prospective Renters or Purchasers of
Permanently Affordable Dwelling Units X
MOVED FROM SECTION 8.3
3.14 Determination of Assets for Qualified Households X
3.15 Determination of Income Derived from Assets Limitations for- ifteeffie Eligible for
Qualified Households X
MOVED FROM SECTION 4.2
109 Agenda Item 7A Page 10 of 69
4.0 On-Site Inclusionary Housing Requirement
41~ Dete-Emiiric'cr t:9n of Compliance 1 R 1Q~1
~y Chapter- 9 ~-r_~~D rcC z- rTr MOVED TO SECTION
5.4 2
4.2 Detefmi "t;"" o Asset r,,..,.,v,o Eligible uOUsehOIE S MOVED To
SECTION 3.16 3
SECTION REMOVED 4
4.1 Rounding Rule to Determine On-site Requirement for Fractions of a Unit X
4.2 Required Documents to Determine On-Site Affordable Units X
5.0 Development Requirements
5.1 Appheation fef Vai:ianee to Dwelling Unit Finished Size MOVED To
SECTION 3.4.4 4
5.2 Application for- Var-ianee- to Required Total Floor- Area of Permanently Aff-er-dable
Units MOVED To SECTION 3.4.3 5
5.1 Acceptance of a Bedroom X
5.2 Size of Permanently Affordable Units X
5.3 Home O«nership Associations X
MOVED FROM SECTION 3.2
5.4 Required Agreements X
MOVED FROM SECTION 4.1 AND 10.2
5.5 Document, Agreement and Time Requirements
5.6 Livability Standards
6.0 Developments Containing a Single Dwelling Unit
6.1 Doetffnen+ation Requir-ed to Ver-ify Eligible Cash in Lieu Gantr4kition SECTION
REMOVED 5
642 zn T4rrvce-t]ht4dg vr fCej pliancc for- ^0 i,, Single n•~~~1IiRg t;144° MOVED To
rxccrxrcrcrvc znvcrol.vizzPrxurn r~cxrcP#Arxxruabzc-av~r~.rrxxr~vrirco~
SECTION 6.1
c;„ R1 e Lot nWfie,.S MOVED To SECTION 6.1 7
6.1 Alternative Methods of Complianee Options for Certain Single Dwelling Units X
MOVED FROM SECTIONS 6.2 AND 6.3
7.0 Homeownership Requirements
MOVED
To SECTION 3.4.2 7
MOVED To SECTION 9.3 4
7.1 Residency and Owner Occupancy Requirement X
MOVED FROM SECTION 9.4
7.2 A-pplieatiaft Requifements for- Request to Rent a Rental Restrictions for Permanently
Affordable Ownership Dwelling Units X
MOVED FROM SECTION 9.5
7.3 Maximum Allowable Resale Prices X
MOVED FROM SECTION 9.7
7.4 Documentation Required to Approve Purchasers on Resale of Permanently
Affordable Dwelling Units X
MOVED FROM SECTION 9.2 AND 9.6
-1-
110 Agenda Item 7A Page 11 of 69
8.0 Affordable Housing Requirements for Rental Developments
9.1 pplic-atio n°,,,,:,-e-ment° for- a Var-iaN^° f Rental Project SECTIONREMOVED 9
8.2 Mffli Allowable Re MOVED TO SECTION 8.1 1 n
MOVED TO SECTION 3.14 11
8.1 Maximum Allowable Rents X
MOVED FROM SECTION 8.2
9.0 Off-Site Inclusionary Housing Options
1 N4--;44- i S-l°r nr;,.o f r no,- ,a„0Hfl-y n ff dab1e U itS MOVED TO SECTION 3.912
9.:~, Method f r note,-,,,;, ing the Average- Pr;^ea llyi in a Dove ^pmo„r SECTION REMOVED 12
MOVED TO SECTION 3.2 1-
MOVED TO SECTION 7.1 13
9.5 Application Requirements to Approve- Puf chasers A-in- Res-ale- A- f Permanently
MOVED TO SECTION 7.4 13
9.6 D°,,uire'1 to n,,,,roye D,,-ehase,-s en D°s"1° of Pen: aflently
MOVED TO SECTION 7.4 14
n r r x;, ,,.n Allowable nes 1° n MOVED TO SECTION 7.3 1 n
9.1 Off-Site Option Timing Requirements X
9.2 Cash-in-lieu Adjustment
9.3 Total Affordable Unit and Floor Area Requirements for Off-site Receiving Sites X
9.4 Requirements for Dedicating Existing Off-Site Dwelling Units as Permanently
Affordable X
MOVED FROM SECTION 7.2
9.5 Requirements for Dedicating Newly Constructed Off-Site Dwelling Units as
Permanently Affordable X
10.0 No Taking of PFopeirtyAithout just Compensation
SECTION
REMOVED i5
10.2 Dequifea n en's MOVED TO SECTION 3.6 16
10.3 Goo Fait ra.,fketing D°,,,,;,-°a MOVED TO SECTION 3.8 16
-2-
111 Agenda Item 7A Page 12 of 69
INCLUSIONARY ZA4N4NG HOUSING ORDINANCE
ADMINISTRATIVE REGULATIONS
The purpose of these regulations is to set forth the procedures for administration and
implementation of Chapter 9-13, "Inclusionary Zenin Housing," 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. Fui4 °r these- regulations
are not intended to limit the adffiinistr-a4ive diser-etion E)f the lementing the inelusionafy
ubjeets net Covered herein. These rules are intended to be consistent with Chapter 9-
t-tIr-am on 13, and facilitate the implementation of Chapter 9-13 by specifying forms, procedures and requirements in
more detail than set forth in Chapter 9-13. City staff will implement the rules consistent with the intent and
as provided in Chapter 9-13.
1.0 Findings
Generally, definitions of terms used in Chapter 9-13 have the same definition as contained in
Chapter 9-16 of the Code, or as provided in this chapter. However, a few definitions require additional
clarification as follows:
"Dwelling Unit" means one room or rooms with internal connections for residential occupancy and
including bathroom and kitchen facilities. Multiple dwelling units exist if there is more than one meter for
any utility, address to the property, or kitchen; or if there are separate entrances to rooms which could be
used as separate dwelling units; or if there is a lockable, physical separation between rooms in the dwelling
unit such that a room or rooms on each side of the separation could be used as a dwelling unit, or rooms
with no internal connections. For purposes of this chapter, dwelling unit does not include quarters which
have more than four bedrooms per kitchen. A dwelling unit may be created as part of a new development,
remodel of an existing development, or conversion from a residential or non-residential use to a residential
use.
"Permanently Affordable Unit" and "Permanently Affordable Dwelling Unit" means a dwelling unit
a dwelling i , nanently a-4,0r-4-ah-le 1-14-4-4, an Applicant m-M-1-4 submit for- city manager approv-al
eanstfuetion detail drawings, fixtuf e, fkiish and applianee speeifieations, and sealed floor- plans f6r- beth the
-3-
112 Agenda Item 7A Page 13 of 69
shall review the floof plan, fixt~afes, finish and eabine4y of the pefmanently aff-efdable tMits sha
pub! is he d anau a! ly by the City of Boulder un-der 4-4-te tithe "Livability stan-da-r-d-s- -Pemianently A ffo r-dable
Nvith ongoing resale restrictions that are designed to keep the dwelling unit affordable, in
perpetuity, to income eligible households. The terms of the resale restrictions are contained in a covenant
in a form provided by the City that is recorded against each property.
Permanently af fordable units pr-o- vidde d- C6 A-1- A-F-A d-A- C OMMOH ifiter-e St ()Wfler-Ship C OMMU
preserving the peffnanen+ly affordability of the unit. The deelar-ant shall submit the deelar-ations for- the
eeoinninnon- i4aterest ownefship eemmuni:Py or- homeowners association for- approval by the ~-ef
e-ammen elements shetild be assessed aly te eaeh pefmanently aff-efdable and market rate tmit
between the allowable sales pr-iee(s) far- the pefmanen+ly aff-er-dable unit(s) end the mafket rate units.
(MOVED TO 1.0 AND 5.3)
3.0 General Inclusionary Requirements
3.1 iseome Eheible Household (MOVED TO 3.13)
3z Permanently Affordable T?~~* (MOVED TO 1.0 AND 5.3)
3.1 Inclusionary- Housing Requirements for Group Quarters [9-13-3]
Inclusionary housing requirements do not apply to any type of group quarter accommodations as
included in Section 9-6-1, Table 6-l: Use Table under the heading of "Group Quarters" unless units in the
development are configured such that there is a private kitchen for the sole use of the occupant, or are
otherwise configured as a dwelling unit. Inclusionary housing will apply to any such units.
3.2 Inclusionary Housing Requirements for Accessory Dwelling Units and Owner Accessory
Units [9-13-3]
Inclusionary housing requirements do not apply to Accessory Dwelling Units (ADUs) or
Ownership Accessory Units (OAUs) as defined in Chapter 9-16.
3.3 Developments Subject to Annexation Agreements (9-13-3)
-4-
113 Agenda Item 7A Page 14 of 69
Unless specifically provided otherwise in an annexation agreement with the city, all development
shall comply with Chapter 9-13 "Inclusionary Housing" B.R.C. regardless of when annexed into the city.
3.4 Alternative Methods of Compliance [9-13-3(d)] (RELATED TO FORMER REGS 6.2)
A developer may request an alternative method of compliance for any Inclusionary housing
requirement pursuant to Section 9-13-3(d) B.R.C. The purpose of alternative methods of compliance is to
provide additional housing benefit to the community in order to provide diversity of home size, home type,
home features for varying income levels. Criteria for additional housing benefit include but are not limited
to the provision of more or larger affordable units than required, detached homes in lieu of condominiums,
duplex or townhomes in lieu of "stacked" units, or a larger cash-in-lieu contribution than would otherwise
be required.
3.4.1 Alternative Nlethods of Compliance Request Process [9-13-3(d)]
The Alternative Method of Compliance process is required to vary any provision of Chapter 9-13
B.R.C. or to satisfy the requirements of Chapter 9-13 by provision of off-site affordable housing. The
purpose of alternative methods of compliance is to provide additional housing benefit to the community in
order to provide diversity of home size, home type, home features for varying income levels.
To make a request for an alternative method of compliance, the developer or property owner shall
fill out, sign and submit the Request for Alternative Methods to Comply with Inclusionary Housing form
as well as submit any documentation necessary to clearly demonstrate that the developer's proposed
affordable housing alternative meets the criteria for approval as outlined in Section 9-13-3 and these
regulations. The City may initiate a request for an alternative method of compliance.
Final approval or denial will be the sole decision of the city manager. The Request for Alternative
Methods to Comply with Inclusionary Housing form shall be approved or denied prior to signing the
Determination of Inclusionary Housing Compliance form.
3.4.2 Application Requirements for Alternative Alethods of Compliance for On-
Site Construction Requirement [9-13-3(d) & 9-13-4] (MOVED FROM 7.1)
Developers of pefmanently affefdable,,mits may request that the eity tRanagef allow ~hem to
pi:avide pefmanen4y aff-ar-dable iinits off site, in a niaiffibei: gfeatel: than that allowed by Chapter-
9 13, B.R.C. 199 1. Sueh a- ...ay be gt:ai4ed an!), upen a findingby the eity managef that one of
-5-
114 Agenda Item 7A Page 15 of 69
Pfeviding ffiefe than fifty per-eent of the total pefmanepAly aff-efdableanits off site wi44
pfavide haiasiiig benefits to the ei:Py in addition to these that would be pfavided b
at least fifty per-cent of the required pen~nanffitly aff-or-dable U
9i3-sitt~;~
Zoning, er- legal restrieti-&-n-'s; M-Ake it- 4_14H -fe -As i b- le to provided the require
wfi4en statement as well as deeafnentation neeessaiFy to elear-ly demenstfate that the developer-'s pfopesed
altemative provides additional aff-er-dable housing benefits to the City of: is neeessary given zoning-,
envifenmental or- legal eanstr-airAs an the property that are beyond the eentr-el of the developer- or- pfepeiAy
owner-
~;nless the eity manager- makes an express finding to the eeatrai~y based tipen uai"e &ets
additional fifty per-eefA E)r- tnefe pefmanendy affordable anits above that n-timbef of iaflits which would
ot4er-wise have been provided in the absence of such variance, shall constitute sufficient additional
PT-eca4mod to he ade-quate to justify such- in- the abse-nee of an expr-ess Anding te the- centrar-y base
The eity ffianagef shall have ten business days fr-effi feeeipt of the fequest fef vafianee to fend
Wing.
A developer may request an alternative method of compliance to allow them to provide fewer than
50% of the required permanently affordable units on-site. This request will be reviewed by the city
manager to determine what, if any, additional affordable housing benefit would be provided and
community housing needs.
The following factors will be considered - none of which are a guarantee of approval and are not
inclusive:
a. Provision of larger more desirable units provided off-site than would be provided on-site
such as detached homes or town homes in lieu of condominiums.
b. A request which would result in a net increase in permanently affordable units over what
would have been provided on-site.
c. A request which would result in a net increase in the total floor area of permanently
affordable units.
d. In cases where the request includes some on-site units, provision of additional accessible
units, or targeting lower incomes (i.e. lower selling prices).
If the request includes the following, there is a presumption that the request will be approved:
-6-
115 Agenda Item 7A Page 16 of 69
a. A request that would result in a net increase of at least fifty percent more permanently
affordable units, equivalent to those that would have been provided on-site.
b. A request that would result in a net increase of fifty percent in the total floor area of
permanently affordable units.
c. A request that would result in a minimum of fifty percent (1.50 times the standard cash-in-
lieu amount) more than the standard amount of applicable cash-in-lieu for the units required
on-site but not built on-site.
3.4.3 Alternative Methods of Compliance to Required Total Floor Area of
Permanently Affordable D-welling Units [9-13-3(d) & 9-13-5(c)] (MOVED FROM 5.2)
Developers of permanently affordable dwelling 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
proj ect.
i~A V-0441fn fAf ';AVAP LAIV;i~Ag benefit to the City. Sueha varri-w-m-e-e- request may only be
gfanted upon a finding by the eity manager- that sueh a r-ediaetian in fieei: area would r-estilt in additia
.
in order- to eensider- a r-e"est for- stieh a var-ianee, the developer- or- pr-apei:l-y awner- Must pr-av
proposed affer-d-ah-he" 114-A-1-4sin- altemative, offered in exchange for -A in the required- 4-1-60POrr area
an unlawftil taking of pi:apefof.
The eity iffianager- shall have ten business days from r-eeeipt of the r-eqtlest fef var-ianee to r-endei: a
Finding.
In evaluating such requests, the manager shall consider the following:
1. The average size of the affordable units may not be less than 70% of the required floor area
under any circumstances.
2. At least one of the following is included within the request:
a. Dedicate one or more permanently affordable units in addition to those required with
floor area that is at least equal to the total deficient amount of floor area in excess of
the number of affordable units required.
b. Take the deficient amount of floor area for all proposed affordable units combined
and multiply it by the applicable per square foot cash-in-lieu amount per the table
below. The amount will be added as an affordable housing cash-in-lieu contribution
due at the time of the building permit for that project.
-7-
116 Agenda Item 7A Page 17 of 69
Deficiency in floor area Cash-in-lieu multiplier (Percent
required size per unit of deficient square foot amount)
1 - 10% 100%
>10% to <20% 125%
>20% to <30% 150%
>30% Not allowed
Any portion of the amount calculated by the chart, may, at the city's discretion, be
used to reduce the selling price(s) of some or all of the permanently affordable units.
c. Reduce the selling price for the proposed units to target lower income households
than required.
3.4.4 Appliention for Varionee to Dwelling Unit Finished Size Requiremen Alternative Methods of
Compliance to Substitute Unfinished Floor Area for Finished Floor Area [9-13-3(d) & 9-13-
5(c)(3)] (MOVED FROM 5.1)
Developers of permanently affordable units may request that the city manager allow them to
substitute two square feet of unfinished floor area for each square foot of required finished floor area up to
a maximum of 400 unfinished square feet per dwelling unit. The unfinished floor area fflust shall be
configured to allow for simple conversion to finished, habitable space. , inel ding, ;_40hout 1-imi ^M
In evaluating the requests, the manager shall consider the following:
1. Whether roughed-in plumbing fixtures for areas intended to be bathrooms or utility
rooms are included in the unfinished area.
2. An adequate foundation and sound structural components;
3. Installation of adequate HVAC systems to support the finished and unfinished areas as if
all is habitable;
4. Weather-resistant roofs and;
5. The ability to provide adequate automobile parking for the unfinished space once
finished.
-8-
117 Agenda Item 7A Page 18 of 69
of a permanently affordable unit, the developer or- property avane_v sh-al-1- submi The request shall include
the following information:
1. Identification of the units for which the var-ianee substitution is requested;
2. A written description of the amount of substitution requested for each unit or unit type;
3. Scaled floor plans which clearly indicate the requested allowance for finished and
unfinished floor area; and
4. 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 eity manager- shall have ten business days ffem r-eeeipt E)f the request fal: var-iaflee to r-efider- a
Wig.
3.4.5 Alternative Methods of Compliance for Financial Alternatives and Timing When Cash-in-lieu
Contribution is Made [9-13-3]
Developers may request that the city manager allow alternative methods of compliance for the
provision of cash-in-lieu payments when the total cash-in-lieu contribution due exceeds one million
dollars. The maximum amount of cash-in-lieu that may be deferred or provided in an alternative method
shall not exceed fifty percent of the cash-in-lieu amount due for the development at the time of issuance of
the building permit. The full amount of the cash-in-lieu payment required including any escalators shall be
provided to the city prior to scheduling of final inspections for certificate of occupancy for the
development. In evaluating the request, the city manager shall consider whether the development can
provide acceptable surety that the cash-in-lieu can be collected with minimal risk to the city.
Any applicant approved for an alternative method of compliance for financial alternatives and
timing when a cash-in-lieu contribution is made shall enter into a written agreement with provisions
including but not limited to the following:
1. For multi-building projects, the cash-in-lieu amount will be allocated proportionally for
each building. The full amount of the portion allocated to a building shall be paid prior to
scheduling of final inspections pursuant to issuance of a certificate of occupancy for that
building;
2. Security acceptable to the city for the deferred amount;
-9-
118 Agenda Item 7A Page 19 of 69
3. On the date of the issuance of the building permit, an adjustment of 8% shall be applied.
This adjustment will be applied annually, thereafter.
4. There will be no prorating of the annual adjustment for partial years.
5. A clause which specifies when the deferred amount is due; and
6. Penalties for non-performance.
3.5 Rebuilt Dwelling Units [9-13-3(e)]
In the event that a development with four or fewer dwelling units is proposed for a site at which an
existing dwelling unit will be demolished, inclusionary housing requirements may be waived for the new
dwelling units if the developer applies for a building permit within one year of the date of the demolition
permit. This waiver expires if a building permit is not issued within four years of application. This waiver
shall not be issued in any of the following circumstances:
1. The dwelling unit to be demolished, at the time of demolition, is considered to be an unsafe
structure, a structure unfit for human occupancy, or a dangerous structure under the 1997
Uniform Code for the Abatement of Dangerous Buildings, Section 302 adopted by the city
by section 10-5-3, B.R.C., unless otherwise excepted by the Boulder Revised Code.
2. The development to be demolished contains five or more dwelling units and/or the
redevelopment contains five or more dwelling units.
In developments where the waiver applies, if the developer is meeting their inclusionary housing
requirement on the new development by making a cash-in-lieu contribution based on the square foot
calculation, the credit for the demolished unit shall be equal to the average square footage of the proposed
new dwelling units. When the developer is making a cash-in-lieu contribution based on the unit
calculation, the credit for one demolished unit shall be one unit.
3.6 Required Agreements Covenant(s) Required [9-13-3 (t)] (MOVED FROM 10.2)
When permanently affordable units are provided on or off site, a covenant to insure permanent
affordablity of the homes shall be signed by the owner of the property and recorded in the records of
Boulder County. All covenants run with the land as a permanent encumbrance on the property. Covenants
include but are not limited to an Interim Homeownership Covenant, a Permanently Affordable
Homeownership Covenant or a Permanantly Affordable Rental Covenant.
-10-
119 Agenda Item 7A Page 20 of 69
The qualifying household income necessafy to pur-ehase or- r-ent the dwellingianit;
zrffin:nnAtiye Raafketiag regl~~~@2~e~t~; i+Ad
Enf "eeffie t edict
Definitions:
An Interim Homeownership Covenant is used when a development is to be subdivided or
condominiums created prior to sale of the housing to the homeowner and secures the owner's commitment
to produce affordable units including the following requirements:
1. How many, and which units will be deed restricted as permanently affordable;
2. The number of bedrooms, bathrooms, square footage of each unit; and
3. The initial maximum allowable sales price of the units.
The Interim Homeownership Covenant also commits the owner to follow:
1. The city's fair marketing procedures;
2. Buyer selection process;
3. Notification; and
4. Other program requirements.
The Interim Homeownership Covenant is replaced with a Permanently Affordable Covenant for each
affordable unit when the subdivision or declaration of condominium is finalized.
The Permanently Affordable Homeownership Covenant is signed by the owner of the property. The
owner may be the developer if the permanent covenant is to replace the Interim Homeownership Covenant,
or it may be the ultimate purchaser of the unit and recorded at the time the purchaser receives title to the
property.
The permanently affordable homeownership covenant commits the owner and all subsequent buyers to:
1. Sell only to an income-eligible purchaser;
2. Sell only at an affordable price as described in the covenant;
3. Follow the city's fair marketing procedures;
-11-
120 Agenda Item 7A Page 21 of 69
4. Grant the city a first option to buy the property;
5. Limit appreciation the seller may receive,
6. Follow the capital improvement credit policy of the city;
7. Agreements about excessive damage and home maintenance;
8. Rental restrictions; and
9. Owner occupancy requirements.
The Permanently Affordable Rental Covenant is signed by the owner of the property and commits
the owner as landlord to:
1. Control the rents charged and income requirements for the occupancy of the property;
2. Maintain annual leases which protect the rights of the tenant and landlord;
3. Adopt written tenant selection policies which are consistent with the fair housing marketing
guidelines established by the City Manager;
4. Assure the City's right to acquire the owner's interest in the event of foreclosure; and
5. Maintain the property in good, safe and habitable conditions.
3.8 Good Faith Marketing Required [9-13-3(g)] (MOVED FROM 10.3)
Elements of a good faith marketing effort shall include the following:
• Hosting at least two open houses or showing the home to all interested buyers by
appointment;
• Listing all properties in the Multiple Listings Service (MLS) or placement of at least two
advertisements during separate weeks in a local newspaper of general circulation;
• Provision of information about each property to the City of Boulder, including square foot,
number of bedrooms, price and amenities, so that such information
may be disseminated by the City of Boulder; and
• Maintaining each unit on the open market for a period to be determined by the city
manager which shall not exceed two months. minimum of ~hit4y days. Con-e- -
The seller shall maintain a marketing log that shows the advertisements and other information that
were disseminated about the pr-ejeet sale and keep a list of prospective buyers who have expressed
-12-
121 Agenda Item 7A Page 22 of 69
interest in an advertised permanently affordable unit.,
size. buyers coneerning their income, place of work, el-wre-1-44 resideflee and household 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.
At the conclusion of the mandatory marketing period, if more than one income-certified buyer has
expressed an interest in purchasing the property, the City of Boulder Division of Housing shall utilize a fair
selection process to select among the prospective purchasers. Preference may be given to the following:
• A household that lives and works in the City of Boulder;
• A household that works in the City of Boulder;
• A household that lives in the City of Boulder;
• A household that has been income certified and placed on the City of Boulder's referral list for at
least one year; and,
• A household with dependents.
Income-certified buyers who have viewed a property and wish to be considered in the selection
process shall file an Intent to Purchase form referencing the property with the city no later than twenty-four
hours before the end of the mandatory marketing period.
Upon the expiration of the mandatory marketing period, if only one income-certified buyer has
filed an Intent to Purchase the property, eentfaet was -eeeive , the develepe seller may enter into a
contract with that buyer that meets the affordable housing requirements of the city and the terms of the
Covenant.
fair Sele-e-4-on preeess to Seleet among the prospective purehaser-s. offhe following faeters is
Pr-efefenee inay be given to a household thm has been ineenie eeFtified and placed e
Upon Fequest, the City of Boulder will previde -A s; e he ea t i on pr-eeess model which, if ,
satisfy the r-equirement fbir fa-i-r- 4-:1n-Arl-keting. A developer- or seller- may choese te If49111-wX the city's se-lectie
-13-
122 Agenda Item 7A Page 23 of 69
3.9 Maximum Sales Price for New Permanently Affordable Dwelling Units [9-13-3(i)] (MOVED
FROM 9.1 AND 9.2)
To determine the maximum allowable sales price that may be charged for a new permanently
affordable unit, the following variables regarding unit size, unit configuration, household size and Area
Median Income (AMI) shall be used:
Minimum Floor Maximum Floor Household Minimum Minimum AMI
Area Area Size Bedrooms Bathrooms
701 Square Feet 800 Square Feet 1 1 1 HUD Low
Income Limit
x44 901 Square 990 1,000 Square 2 2 1.5 HUD Low
Feet Feet Income Limit
994 1,001 Square 14-,000 1,100 3 3 1.75 HUD Low
Feet Square Feet Income Limit
494 1,301 Square 4-00 1,400 5 4 1.75 HUD Low
Feet Square Feet Income Limit
The following methodology is used to determine the maximum allowable sales price for new
affordable homes in Boulder.
1. The income limit for Inclusionary Housing (IH) units is based on the US Department of Housing
and Urban Development (HUD) determination of low income limit plus 10% of AMI for the region
containing the City of Boulder. The maximum Inclusionary Housing sales price is based on a
household earning the HUD low income limit. This "window" between the income used to price
homes and the income limit increases the range of households financially able to purchase the
homes.
2. The- prices ehai:ged for- permanently ewner-ship unit, in an., project shall aver-age The
sum total of all permanently affordable prices within a project may not exceed the sum of prices
derived strictly from the pricing sheet. Within a project, prices may be averaged to reflect unit
variables. However, no single permanently affordable unit may exceed a price that is a flee
single pe eatly °ff r-Elable unit ° eedi g e affordable to a household earning ten (10)
percent more than the HUD Low Income Limit for the city of Boulder.
within a development, the developer- shall submit to the ei'l the following infafmatio
-14-
123 Agenda Item 7A Page 24 of 69
3. The maximum sales price is calculated based on principal, interest, taxes, insurance, and
homeowner's association dues that do not exceed 28% of gross monthly household income. Taxes
and insurance are assumed to be a percentage of the affordable housing payment as determined
annually by the city manager.
4. The maximum sales price is based on a 30-year fixed-rate mortgage at prevailing interest rates. A
5% down payment is assumed.
5. Estimates of homeowner association dues are based on a survey of local HOAs.
6. Maximum sales prices are determined based on a fixed number of people per bedroom. The actual
number of persons in a household can vary.
7. The bolded sales price on the Inclusionary Housing pricing sheet is the base price for a unit with a
set number of bedrooms and bathrooms per the chart above and is the price required per chapter 9-
13. Adjustments to that price are made for variations in unit size and number of bathrooms.
8. Interest rates are calculated quarterly.
9. Prices for permanently affordable ownership dwelling units are finalized when a covenant is signed
for the affordable unit.
10. The Price Sheet and methodology for the Pricing Sheet will be reviewed and adjusted as needed.
11. The maximum allowable sales price for a permanently affordable unit may be adjusted when a
developer provides a one to two car garage. The garage must be a fully enclosed structure, a
minimum of 240 square feet, designed to house one or more automobiles, sold with the
permanently affordable unit, and with access controlled by the unit owner.
3.10 Sales Price Consideration for Rental Housing Units [9-13-3(i)]
If a rental housing unit is being sold to a Housing Authority or an approved Similar Agency the
maximum sales price will be determined by the City Manager. Criteria for the pricing will include but is
not limited to:
1. Unit type and size;
2. The income limit for the unit;
3. The maximum allowed rent for the income limit;
4. Pro forma vacancy rate
5. Reasonable operating costs of the unit;
6. A calculation of net income available for debt service on the unit;
-15-
124 Agenda Item 7A Page 25 of 69
7. An identification of replacement reserve annual funding
8. Prevailing terms for multifamily debt financing; and
9. Number of persons per bedroom
3.11 Approved Purchasers of Permanently Affordable D'vvellina Units [9-13-3(j)] (MOVED FROM
9.3)
Only those households which have completed the forms of the city to qualify as an eligible
purchaser and have a valid income certification €rem acceptable by the City of Boulder may purchase ef
a permanently affordable unit. Upon , the eity may provide t
developer or Al-Al-ner- of A pefManerAly 4-4- -A J- i- IS t A- f i- H V-2 A- M - P- 0-- P- 44 A- 1114 P- 4-4- A- No
purchaser shall be approved to purchase a permanently affordable unit unless the number- of per-sons in the
pufehaser-'s hatisehold is at least one less than if the number of bedrooms in the permanently affordable unit
exceeds the number of persons in the purchaser's household by more than one unless otherwise approved
by the city manager. The city manager may create additional requirements for purchasers of permanently
affordable units which further the goals of inclusionary housing. An example of such requirements
includes without limitation, employment requirements.
3.12 Income Eligible Household [9-13-3(k)] (MOVED FROM 3.1)
"Household" is defined in the same manner as in 24 CFR 92.2 of the United States Central Federal
Register '
and ehildfen ineluding all per-sens whese names will appear- on the wafraft~y deed Whethef er- not sideh
per-son will eeeup , the reside e. or such similar requirement of the United States applicable to the city.
"Income" will be defined in the same manner as it is in 24 CFR 5.609 United States Central Federal
Register Seetion 8 of the United States Heusing Aet E)f 1937, eedified a4 42 U.S.C.S. 1435a(b) (1990), as
, or such similar
requirement of the United States applicable to the city.
A household seeking to be eligible to purchase a permanently affordable unit shall submit to the
city manager a completed Income Certification € Application, Recertification Application, or valid
Income Certification with required attachments, tie °ar-'i°f 4ia within six months and tie later- thafl.
f tn4ee da 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.
-16-
125 Agenda Item 7A Page 26 of 69
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. [9-13-8]
Affordability and income eligibility for home buyers are defined in terms of the Area Median
Income (AMI).
3.13 Documentation Required to Verify Income of Prospective Renters or Purchasers of
Permanently Affordable Dwelling Units [9-13-3(k)] (MOVED FROM 8.3)
Prospective renters and purchasers or- r-entei:s of permanently affordable units from housing
authorities or other similar agencies, shall be required to submit the following documents in order to verify
that the prospective purchaser's or renter's income and assets qualifyies them to purchase or rent a
particular permanently affordable unit:
1. A letter from the employer on letterhead indicating annual gross wage, start of employment, pay
schedule, expected wage increases and any overtime, bonuses, tips or commissions or a completed
employer verification form;
2. The most recent pay stubs for each wage-earner in the household for the past month. If wages
varied, pay stubs for the most recent three months,
3. If self-employed, a year-to-date profit-loss statement plus the last three years of completed federal
income tax forms and corresponding 1099 forms;
4. Verification of a4} all benefit payments;
5. Verification of all other sources of income (Social Security, pension, etc.);
6. Complete copies of the two A eapy of the most recent federal income tax forms and corresponding
W-2s and attached schedules;
7. Bank verification form documenting the six-month average balance of all checking accounts or six
months of all checking account statements;
8. Bank verification of all savings accounts, including interest rates;
9. A current statement from each asset indicating the current balance; and interest rate or annual
dividend earned;
10. If divorced with minor children, a copy of the divorce decree indicating division of marital assets,
the custody arrangements and child support or alimeny maintenance payments; aftd
-17-
126 Agenda Item 7A Page 27 of 69
11. Purchasers of permanently affordable units ni shall submit a copy of a prequalification 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; and
12. Any other documentation requested by the city manager to assist in ascertaining the income or
assets of a prospective renter or purchaser.
All required documentation submitted to verify household income and assets shall be kept
confidential and is not subject to public disclosure. The documentation shall be submitted to the city
manager, or by written agreement from the city manager, a designated property owner.
3.14 Determination of Assets for Qualified Households [9-13-3(1)]
Qualified one-person households may not have more than $55,000 in liquid assets. For households
over one person, $15,000 is added to the asset limit for each additional household member. The city
manager may adjust the one person household and additional household member limits and will determine
annually the asset limits for middle income, recently divorced and retired households. The city manager
will determine a certain amount of retirement assets, depending on the ages of the household members, to
be exempt from the asset limit.
3.15 Determination of Income Derived from Assets Limitations for- income EZgible for Qualified
Households [9-13-3(l)] (MOVED FROM 4.2)
An asset is a cash or non-cash item that can be converted to cash based on the HUD Low Income
Limit published annually by the U.S. Department of Housing and Urban Development. Annual income
generated from assets or income which is imputed to assets shall be included as part of a household's
annual income for purposes 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 multiplying the value of the assets by the HUD passbook rate as reported to the city
manager by CHFA (Colorado Housing Finance Authority).
aver-aging the festiltant avefage fate of fe4twn to thevahie of the assets. The thfee indiees are as follows: the avefage
fate of r-etum for- a r-eg-alaf savings aeeettfA fer- the Denver- fnetr-e afea; the fate of fetmuffi a thfee Yeff
Of PeffSit fhP_ Den-ver metr-o area; and the ten year rate aff re-44-14FIn for the AAA-1-sh-ire 50-00 Teataall
Maf-ket index. This aver-age rate of r-elidfn shall be ealeulated and published twiee eaeh ealendar- yeaf by the
-18-
127 Agenda Item 7A Page 28 of 69
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.
Any asset disposed of for less than fair market value during two years preceding the income
certification shall be considered as if the household still owned that asset.
4.0 On-Site Inclusionary Housing Requirement
4.1 Detefminntion of r'~.....';a eewith Chapter- 9-13, & D r 1981 (MOVED TO 5.4)
4.2 DetefinhwWoi Asset Limitationsfef ineome EfiEr ble Households (MOVED TO 3.16)
(SECTION DELETED)
4.1 Rounding Rule to Determine On-site Requirement for Fractions of a Unit [9-13-4]
To determine the number of affordable units required to be provided on-site, standard rounding will
apply. Any portion of an on-site unit less than 0.5 will be rounded down while any portion 0.5 or more will
be rounded up.
4.2 Required Documents to Determine On-Site Affordable Units [9-13-4]
Before the city manager accepts a dwelling unit as a permanently affordable unit, an applicant shall
submit such documents as may be required by city manager to determine the appropriate size, location,
construction requirements and finish elements of the proposed permanently affordable unit. A list of the
required documents will be published in the Inclusionary Housing Summary and Process for Developers
and updated as needed.
5.0 Development Requirements
5.4 Appliention For Vnfin ee to Dwelline Unit Finished Size eguire en (MOVED TO 3.4.4)
(MOVED TO 3.4.3)
5.1 Acceptance of a Bedroom [9-13-5(b)]
The minimum size for a bedroom is 81 sq. ft.
5.2 Size of Permanently Affordable Units [9-13-5(c)]
The city manager may accept permanently affordable dwelling units larger than 1,200 square feet if
they are voluntarily offered by the developer.
-19-
128 Agenda Item 7A Page 29 of 69
Dwelling unit measurements for on or off site penmanently affordable dwelling units are calculated
using the definition of "Floor Area" Chapter 9-16-1 (c) "Definitions" B.R.C.
5.3 Home Ownership Associations [9-13-5(g)] (REFERENCES 3.2)
Common Interest Ownership Communities: A) In order to preserve the affordability of the
permanently affordable units for persons of low or moderate income, the Owner acting as the Declarant of
a common interest community created under the Colorado Common Interest Ownership Act, C.R.S. §38-
33.3-101 et. seq. ("CCIOA") shall, for assessment purposes only, create appropriate unit type
classifications for assessments for common and special expenses. The declaration of the common interest
community shall contain the formula for determining the assessments for the permanently affordable units,
which shall be subject to review and approval by the city manager prior to recording the declaration. It is
anticipated that the formula will be based on the size of the units or a fraction or percentage of the rate of
assessment for the expenses of the community for units that are not permanently affordable units; B) In
accordance with C.R.S. §38-33.3-205(1)(1) of CCIOA, those portions of the declaration, and all other
constituent documents of the common interest community as applicable, necessary to accomplish the
restrictions and classifications for assessments and to state the restrictions necessary for the permanently
affordable units, including without limitation buyer income certification, marketing to and selection of
eligible buyers, sale price limitations, owner occupancy and rental limitations, shall be subject to approval
by the city manager prior to the earlier of the sale of any unit or the issuance of a certificate of occupancy
for the building in which such permanently affordable unit is located and may not at any time be amended
without the approval of the city manager, provided that all such provisions shall be consistent with the
requirements of the CCIOA.
5.4 Determination of Complianee with Chapter 9 B.R.C Required Agreements [9-13-5(g)]
(MOVED FROM 4. 1, AND 10.2, WHICH WAS DELETED)
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 Housing requirements of Chapter 9-13, B.R.C. 1981, by signing
a Determination of Inclusionary Housing Compliance Form thfeiigh an site, off site, eash in , of ath-e.f
approved ak°~-Mire m-°*'-^d-° d°*°rffliH°d , before any such approval, permit, certificate of
-20-
129 Agenda Item 7A Page 30 of 69
occupancy, allocation or exemption is issued. A preliminary Determination of Inclusionary Housing
Compliance is required to be submitted as part of any application for Site or Use RevieW.
in order- to be eligible to apply for- a Residential Growth Manageffient A110eati0il or- Exempt'
i- appr-eval for a Site Review, Use Review or other- development approval, an Appheant must
in order to apply for a
Total aumber- of proposed at4aehed residential units;
1 . Total number- of proposed detaehed ;
,
and the initial sale p..'11 - -4 aeh at4aehed pefmanently affordable unit t~,pe;
5. 14oposed square footage-, number- of bedr-eems, targeted household Area Median income (AM
and the initial sale pr-iee or- r-en+ far- eaeh detaehed pefiffianently affer-dable unit type; and
6. Date an-d- b--rief deser-iPtion of A;A5 I development approval or Sub-divisi
in the altemative, an Applicant may submit a completed copy of both the "Pe-ve-lopment Revi
a fefm acceptable to the and the city attemey and shall include, without limitation, thee
rn'
the qualifying household in-e-A-m-e- im-e-e-essary to purchase or- reat the dwelling
nenfer-eemen+ r-emedies.
5.5 Document, Agreement and Time Requirements [9-13-5(g)]
The following table includes required timelines for submitting Determination of Compliance and
related forms.
Form or Action By-right projects 1-4 housing By-right projects 5 or Projects requiring land use
units more housing units approval
Preliminary Determination not applicable not applicable Submit with land use application
of Inclusionary Housing
Compliance
Determination of Prior to building permit Prior to building permit Prior to approval of the
Inclusionaiy Housing subnuttal** submittal** development agreement**
Compliance Form (DOC) Not applicable for development of
A.K.A.: the "Affordable one single family home making a
Housing Agreement" CIL contribution
-21-
130 Agenda Item 7A Page 31 of 69
Amendment to the Prior to building permit issuance** Prior to building perlnit Prior to building permit issuance
Determination of Not applicable for development of issuance
Inclusionary Housing one single family home snaking a
Compliance Agreement* CIL contribution
Restrictive Covenants; After the DOC is signed, prior to After the DOC is signed, After the DOC is signed, prior to
recorded with the County building permit issuance prior to building permit building permit issuance
Clerk issuance
Cash-in-lieu Payment, No later than building permit No later than building No later than building permit
added to the building permit issuance permit issuance issuance
amounts due upon issuance.
Amount determined when the
payment is made
Request for Alternative Subinitted and approved or denied Submitted and approved Submitted and approved or
Methods of Compliance* prior to signing the DOC and prior or denied prior to signing denied prior to signing the DOC
to building pen-nit issuance** the DOC and prior to and prior to development
building permit agreement approval**
sllblmuttal * *
*not required; submitted on an as needed basis.
**to avoid delays, it is recommended that the developer meet with a housing planner as soon as possible before submitting for a
building permit. It typically takes 2 -4 wks to finalize all required documents.
5.6 Livability Standards [9-13-5(g)]
To ensure the safety and habitability of homes, units must meet the "Livability Standards for
Permanently Affordable Housing" published by the City. Developers of permanently affordable dwelling
units are required to submit documentation for each affordable unit to show compliance with the
requirements. Units which do not meet the Livability Standards will not be accepted until the standards are
met. If the city determines that a modification for any deficiencies is not feasible, these permanently
affordable units may have a reduction of the maximum allowable sales price for the deficiency, or may be
assessed a monetary penalty to be paid prior to receiving a certificate of occupancy for the building, or the
City may reject the units and require payment of the cash-in-lieu amount.
6.0 Developments Containing a Single Dwelling Unit
6.1 Docntnt3eeged to 'ei*~ r^sl;-in =enrtAen (SECTION DELETED)
6.Altet!native "tea of C plianee foF Certain Single T'-=,^' iTs (MOVED TO 6.1)
6.3 Applic-ationRequiirementsf~oFM'aii,eFofinclusionar-yZoninE, Oblij!ation-foF Certain
Lot Awnetas (MOVED TO 6.1)
-22-
131 Agenda Item 7A Page 32 of 69
6.1 Alternative Methods of Comps;°"^^ Options for Certain Single Dwelling Units [9-13-6]
(MOVED FROM 6.2 and 6.3)
Single lot owners who wish to avail themselves of the alternative methods of complying with the
Inclusionary Zoning Housing requirements of Subsection 9 6.5 (b) 9-13-5(b), B.R.C. 1981, shall submit a
wed request in writing which indicates the
requested a e option 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.
ipplieation
Ad-d-itionally, the following requiFements shall b-te M-et -for each altemati .
Wilding pe
Aheffiative #
z.
Lot owners who wish to designate their home as a Permanently Affordable Unit. The crepe-A y
owner shall sign and record a e.s4iet_ive Permanently Affordable Homeownership Covenant ee i g
running to the benefit of the city and against the land upon which the single dwelling unit is to be
constructed.
2. An owner- occupane,
5-Affifmirtiv sting requirements; and
Enf r-ee e t edict-s.
;er-y note- to the city and a restr-ic-tive or- lien Fanning W thle bkenlpeafilt ef the city -
in lieu eensider-ation in or-Eler- to meet the inclusionar-y Ze"' ..ent, such an offer- must
made i 1 have evidenee whieh elear-ly demenstr-ates that ~he value of ~his alter-native ts.
e"ivale I the - ash ill 1i eu c- uti an- quir-e d by Chap ter- 9 6.5, B. R. C. 19 9 1, and result s In
housing bed-m-ea-fits te the
7.0 Homeownership Requirements
7.1 A1212liention Requirements for Vor-innee to On Site Construetion Reguirement (MOVED TO
3.4.2)
- 23 -
132 Agenda Item 7A Page 33 of 69
(MOVED TO
9.3)
7.1 Residency and Owner Occupancy Requirement [9-13-7] (MOVED FROM 9.4)
Owners of permanently affordable units are required to occupy those units as their primary
residence. Owner occupancy means occupying the unit ni+w- ten months of each calendar year.
7.2 Appliention Requirements for Request to Ren Rental Restrictions for Permanently
Affordable Ownership Dvvellina Units [9-13-7(b)] (MOVED FROM 9.5)
faf at least five yeafs before theianit may be fepAed te another- household. Following this initial five yea.r-
pefied of owner- eeetipaney, r-en~al of the unit shall be limited !E) an aggfegaie of One yeat: ef
evefy seven years of consecutive ewne-r4tip-.
The property owner of a permanently affordable ownership unit 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 imitation, the following:
1. The homeowner's name, contact telephone number and mailing address during the rental period;
2. The address of the permanently affordable unit;
3. The anticipated date the unit will be rented or leased and the duration of the lease;
4. The prospective tenant's name;
5. A copy of the lease or rental agreement to be used; and
6. 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 ~he ineemp Its ef the eevenant fbi: the petmianently
the eity manager- for- r-eview and appi:aval pizier- to the execution of any lease E)r- r-ental agfeement aleng with
these doeuments whieh the eity finds to be reasonably neeessafy in order- to deten:nine eemplimee with the
r-est-fietions of the pen:naaently affordable unit.
7.3 Maximum Allowable Resale Prices [9-13-7(c)] (MOVED FROM 9.7)
The maximum allowable resale price shall be calculated on an individual basis using the original
homeowner's acquisition price as the base from which calculation is made. That base price fflayhe may be
increased by utilization of any of the following factors:
homeowner-'s aeEtuisition.
Custom ar-y elesing Costs lu dde ~iflle A-4-4-pe, Inallf of 4-4-e- re-All Pest ate se4 lement f~es to
the
-24-
133 Agenda Item 7A Page 34 of 69
- The eest of a feal estate eeffiffiissieft paid by the seller- if a heensed Feal estate agen~ of r-eahef is
af4er- consider-ing the availability of professional real estate seFviees at of: below the ffia-Aifilum
rate. if the owner- of theianit ehooses to sell withatit titilizing the Sen4ees Of a r-ealtOf- E)f- real
estate agen~ then the homeowner- may be eligible to- -Ad-d- -A -fixed fee as detearined by the eity
mana-ger-:
1. An adjustment based on the value, as determined by the city manager, of eligible capital
improvements.. installed by the seller that were approved in advance by the city manager. A list
of eligible capital improvements shall be published and maintained by the city manager.
Capital impf evements shall be of a pefmanen~ nmuf e and have long tefm addedvaltie. Luxufy
41-is Will not be ineluded an the list of eligible impr-evements.
2. An annual adjustment based upon the lesser of the change in the Consumer Price Index, all
Urban Areas (CPI-U) for Boulder or the AMI for Boulder up to a maximum fixed percentage
change as stated in the covenant for the specific permanently affordable unit. The city manager
may establish an annual minimum amount for this adjustment.
3. A shared appreciation factor as stated in a community land trust lease for a specific permanently
affordable unit.
The base price may be decreased by imposition of an excessive damage charge if the unit
has not been reasonably maintained.'^m°owner B°- filed to m-- M*°i„ N „°t to 44-° stan-d rdr reA
by the eovenant for- the speeifie pettmanen+ly affordable unit-.
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.
7.4 Documentation Required to Approve Purchasers on Resale of Permanently Affordable
Dwelling Units [9-13-7(c)(1)] (MOVED FROM 9.3 and 9.6)
Prior to purchasing a permanently affordable unit, a prospective buyer shall be required to submit to
the ty manager a completed Income Certifications Application or valid Income Certification with
required attachments in order to verify that the prospective purchaser's income qualifies them to purchase a
particular permanently affordable unit.
-25-
134 Agenda Item 7A Page 35 of 69
Upon closing, the warranty deed and a copy of the HUD-1 Settlement Sheet, at: altem ti e
in- a -form aeeeptable to the eity manager which conveys similar-, ver-ifi-A-le
shall be forwarded to the Division of Housing to verify the sale of the permanently affordable unit.
8.0 Affordable Housing Requirements for Rental Developments
8.1 A.,..cabin R,,,,,,;,,,,,,,ents for a v°rianee for Ren'ta Projects- (SECTION DELETED)
8.2 Maximum Allowable Dent. (MOVED TO 8.1)
(MOVED
TO 3.14)
8.1 Maximum Allowable Rents [9-13-8(b)] (MOVED FROM 8.2)
thaa:kventy five- percent of its --n-ea fid-4-m- -All seufees to a rental pa~~e
include all other-wilities. if othef utilities are- included, maximum allowable rents may be- ealcrulated based
To ahe F-e-m-n-t-al payment that may be charged for- permanent!
aff-efdable,anits, the fallowing ass gaf ding anit size, tinit eanfig-afation, hatisehold size and Afea
Minimum Maximum Household Minimum Minim AA11
Peer-A+t t Floor-Ar SLe Bedvoe RaAT-o 9
47 47 -1 10 -04 lH Dhow lneenw-Liffii4
9414t& 666 Q- r
in of 4 HUD how r., a, or:
inn c„ ~ 4 4 4-~5 10 of < HUD row lncen w r ;,-n
A ehai4 shall be published annually by the The City of Boulder shall publish annually that details
the maximum allowable rents for required permanently affordable r-ental dwelling units sold or otherwise
transferred or ultimately owned entirely or in part by a housing authority or similar agency as permanently
affordable rental units.
9.0 Off-Site Inclusionary Housing Options
-26-
135 Agenda Item 7A Page 36 of 69
Sri Maximum Sales Ariee of PeFmzrienfly A ff-o .d fable Units (MOVED TO 3.9)
9.2 ethodazn~cr of Det the AyeFaee Wiee within a Development (SECTION DELETED)
9.3 Approved Purchaser- „end, Affordable Uiyits (MOVED TO 3.2)
9..4 Owner Oeeupaney Regui>'e ent (MOVED TO 7.1)
9.5 Application Requirements for- Request to Rent a Permanently Affordable Ownership-41nit
(MOVED TO 7.4)
(MOVED TO 7.4)
9.7 M.,v;,,,um A Uowable Resale Wiees (MOVED TO 7.3)
9.1 Off-Site Option Timing Requirements [9-13-9]
An agreement and covenants must be signed for provision of any off-site dedicated existing or
newly built affordable units or a deed signed granting land to the City prior to application for a building
permit by the sending site (development that generated the need for the off-site units). Cash-in-lieu
contributions must be completed prior to issuance of the building permit.
9.2 Cash-in-lieu Adjustment [9-13-9]
Cash-in-lieu amounts are adjusted annually on the first day of July. Cash in lieu amounts are
determined at the time payment is made to the city.
9.3 Total Affordable Unit and Floor Area Requirements for Off Site Receiving Sites
Sites where off-site permanently affordable units may be provided are referred to as receiving sites.
Receiving sites are subject to the following Inclusionary Housing requirements:
1. Number of affordable units - the total number of affordable units provided must equal 20% of
all units built on both sites. If the development only provides housing as a receiving site and no
additional market rate units, this equates to 25% of the units on the sending site.
2. Floor area of the Affordable units - the size of the affordable units shall be the greater of no less
than 80% of the average size of the units on the sending site or 80% of the average size of the
units on the sending site plus any market units provided on the receiving site.
9.4 Requirements for Dedicating Existing Off-Site Dwelling Units as Permanently Affordable [9-
13-9(b)] (MOVED FROM 7.2)
Acceptance of any off-site unit in place of strict application of Chapter 9-13 shall be at the sole
discretion of the City based on individual property characteristics.
1. Prior to issuance of a building permit for the development that created the off-site requirement:
-27-
136 Agenda Item 7A Page 37 of 69
a. The Developer shall sign a Determination of Inclusionary Housing Compliance form
indicating that the inclusionary requirement will be met through the dedication of existing
off-site dwelling unit(s);
b. The Developer shall enter into and sign a Provision of an Off-site Permanently Affordable
Unit (Acquisition of an Existing Unit) Agreement; and
c. The Developer shall provide the City a Letter of Credit to secure the affordable housing
requirement until such time as the off-site unit is deemed acceptable for the affordable
housing program.
2. The Provision of an Off-site Permanently Affordable Unit (Acquisition of an Existing Unit)
Agreement - This Agreement may include but is not limited to the following:
a. The process and requirements for identifying the unit and for city approval of the unit;
b. The total number of required affordable units;
c. Unit type i.e. detached, town home, attached multifamily etc.;
d. Size of the unit including finished and unfinished square feet;
e. Amount of square footage and type of use allowed in below grade space;
f. Number of bedrooms and bathrooms;
g. Size of garage or location and number of parking spaces where applicable;
h. Amount of required storage space;
i. A reasonably standard floor plan and layout;
j. Maximum allowable homeowners association dues;
k. General location requirements of the affordable unit;
1. Condition of structural, electrical, mechanical and other home elements;
m. Condition of siding, roofing, flooring and bath and kitchen fixtures, appliances and cabinets
n. Requirement and process for completion of any required rehabilitation and maintenance;
o. Allocation of costs of the sale;
p. Process and requirements for marketing and completing the sale; and
q. Maximum allowable sales price.
3. Number of Proposed Off-site Units for Evaluation - Units proposed to be provided off-site are
evaluated by the city to determine if they meet the standard of "functionally equivalent" to those
units that would have been provided on-site. They are also evaluated per the standards and
requirements in the off-site agreement. If one to eight off-site affordable units are required, the
-28-
137 Agenda Item 7A Page 38 of 69
Developer shall provide the City with a minimum of two proposed units for each required unit to
evaluate.
4. Acceptance of a Proposed Units - Once an off-site unit is deemed acceptable to the City, the City
will issue a Letter of Acceptance for Proposed Off-site Affordable Unit.
5. Required Rehabilitation or Maintenance of Proposed Property - If rehabilitation or maintenance is
required for the off-site unit to be accepted by the City, the City will issue a Letter of Required
Rehabilitation or Maintenance for Off-site Affordable Property. No certificate of occupancy will be
issued for the development that created the off-site requirement until all required rehabilitation and
maintenance is completed by the Developer and the unit is deemed acceptable by the City.
6. Restrictive Covenant - An affordable housing restrictive Covenant shall be signed by the Developer
within four weeks of receipt of the Letter of Acceptance for Proposed Off-site Affordable Property.
No certificate of occupancy will be issued for the development that created the off-site requirement
until an affordable covenant is signed for the required off-site unit.
7. Livability Standards - The city manager may require that off-site affordable unit(s) be improved at
the developer's expense to meet the Livability Standards described in Section 5.6 herein.
8. Security Requirements - To secure the affordable housing requirement for newly built off-site
affordable units a letter of credit for the full amount of cash-in-lieu plus one year annual adjustment
of 8% will be required. If the Letter of Credit is cashed, the principal plus adjustment will be
required for the first year, thereafter for any portion of subsequent years the Letter of Credit is in
place. The Letter of Credit will be released upon issuance of the certificate of occupancy for the
off-site unit(s). No certificate of occupancy will be issued for the development that created the off-
site requirement until an affordable covenant is signed for the required off-site unit or the letter of
credit is cashed.
9. Independent Inspection - 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
developef-the city may require the developer or property owner sh" to hire, at his or her own
expense, an inspector approved by the city to inspect 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
-29-
138 Agenda Item 7A Page 39 of 69
the city manager. At a minimum, Aany 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 zening housing requirement.
e-affeetions related to the i )oft shall be submitted with an appraisal by an independerA, eer-tifie
to e-&-m-sid-er the proposed unit(s) as satisfiaeti&fl to ful 11 t4he iniclluslioflafy zening t. in the
afteffiative, the eit-y manager- and developer- may agree to sefae other- means of vabiation. The eity manage
tfflk(s).
-Proposed off-site units may be r-ejee4ed if their- leeation would ea-use any off-site developmen
whieh they afe loeated to contain fifty pereen4 or more permanent!), affor-4able uni
if the proposed unit(s) are aceept-ah-le to th-e- e4y, the developer- or- pr-eper-ty owner- shall sign and
T- :-h- e M - e 4 -1 A- d- b Y w h i e h t he P-n-ax-im-um- allowable purchase pr-iee or- r-ent shall be
The amount by which the sale price or- "t ~c year; ma, 0 0 9.5 Requirements for Dedicating Newly Constructed Off-Site Dwelling Units as Permanently
Affordable [9-13-9(b)]
Acceptance of any off-site unit in place of strict application of the Chapter 9-13 shall be at the sole
discretion of the city based on individual property characteristics.
1. Prior to issuance of a building permit for the development that created the off-site requirement:
a. The Developer shall have signed a Determination of Inclusionary Housing Compliance
form indicating that the inclusionary requirement would be met through the dedication of a
newly built off-site dwelling unit(s);
b. The developer shall enter into and sign a Provision of an Off-site Permanently Affordable
Unit (Newly Built Unit) Agreement; and
c. The Developer shall provide the City a Letter of Credit to secure the affordable housing
requirement until such time as the off-site unit is completed and deemed acceptable for the
affordable housing program.
-30-
139 Agenda Item 7A Page 40 of 69
2. The Provision of an Off-site Permanently Affordable Unit (Newly Built Unit) Agreement - This
Agreement may include but is not limited to the following:
a. Location of the site and number of off-site affordable units including those affordable units
required from the receiving site.
b. Unit type i.e. detached, townhome, attached multifamily etc.;
c. Size of the unit including finished and unfinished square footage;
d. Amount of square footage and type of use allowed in below grade space;
e. Number of bedrooms and bathrooms;
a. Size of garage or location and number of parking spaces where applicable;
f. Amount of required storage space;
g. A reasonably standard floor plan and layout;
h. The initial homeowner's association (HOA) documents, budget and HOA management
plan;
i. City approval of proposed structural, electrical, mechanical and other system elements;
j. City approval of building materials: roofing, siding, furnace, landscaping; heating and
cooling systems, flooring and bath and kitchen fixtures, appliances and cabinets;
k. Penalties for non-performance in completing the permanently affordable units;
1. Inspections during the construction process;
in. Administrative fees;
n. Process and requirements for marketing and completing the sale; and
o. Maximum allowable sales price or rent as appropriate.
3. When off-site units are allowed to be provided in developments with more than 20% affordable
owners additional requirements may be included in the Off-site Permanently Affordable Unit
Agreement as determined by the city manager. Such requirements may include but are not limited
to the following:
a. The city housing division shall review and approve the site plan. Factors that may be taken
into account include: overall layout of the buildings, parking and open spaces, landscaping,
location of affordable units within the development, presence of excessive noise or other
nuisance conditions.
b. The Owner will provide, at its expense, city-approved HOA training to the buyers of the
Off-Site Units within one month of closing on the final unit. The HOA budget and
-31-
140 Agenda Item 7A Page 41 of 69
management plan shall be based on a reserve study to determine reasonable and accurate
reserve levels and shall provide for the use of a professional management company.
c. The amount and location of parking spaces and or garages where applicable.
4. Acceptance of a Proposed Property - Once a proposed site is deemed acceptable to the City, the
City will issue a Letter of Acceptance for Proposed Off-site Affordable Site.
5. Restrictive Covenant - An affordable housing restrictive Covenant shall be signed by the Developer
within four weeks of receipt of the Letter of Acceptance for Proposed Off-site Affordable Property.
No certificate of occupancy will be issued for the development that created the off-site requirement
until an affordable covenant is signed for the required off-site unit(s).
6. Livability Standards - The city manager may require that off-site affordable unit(s) meet the
Livability Standards described in Section 5.6 herein.
7. Security Requirements - To secure the affordable housing requirement for newly built off-site
affordable units a letter of credit for the full amount of cash-in-lieu plus one year annual adjustment
of 8% will be required. If the Letter of Credit is cashed, the principal plus adjustment will be
required for the first year, thereafter for any portion of subsequent years the Letter of Credit is in
place. The Letter of Credit will be released upon issuance of the certificate of occupancy for the
off-site unit(s). No certificate of occupancy will be issued for the development that created the off-
site requirement until an affordable covenant is signed for the required off-site unit or the letter of
credit is cashed.
10.0 No T-11URg Of PFopeFty ii4thout just Compensation
10.1 Applienble Requirements for Variance to Required Gonstr-ueflon-T4mift (SECTION
DELETED)
102 Re iFedi gt!eenw is (MOVED FROM 3.6)
10.3 Good Faith " itine Requiired (MOVED FROM 3.8)
-32-
141 Agenda Item 7A Page 42 of 69
ATTACHMENT C
INCLUSIONARY HOUSING ORDINANCE
ADMINISTRATIVE REGULATIONS
Adopted April 6, 2000
Amended May, 2003
Amended December, 2007
Amended XXXXX, 2011
Adopted pursuant to Chapter 1-4, B.R.C. 1981
Note: Due to a simplification of the B.R.C. 1981 Title 9 (July 2006) code citations have
changed. This amended version of the regulations contains current applicable code citations.
142 Agenda Item 7A Page 43 of 69
Table of Contents
1.0 Findings 2
3.0 General Inclusionary Requirements
3.1 Inclusionary Housing Requirements for Group Quarters 3
3.2 Inclusionary Housing Requirements for Accessory Dwelling Units and Owner
Accessory Units 3
3.3 Developments Subject to Annexation Agreements 3
3.4 Alternative Methods of Compliance 3
3.4.1 Alternative Methods of Compliance Request Process 3
3.4.2 Alternative Methods of Compliance for On-Site Construction Requirement 4
3.4.3 Alternative Methods of Compliance to Required Total Floor Area of Permanently
Affordable Dwelling Units 5
3.4.4 Alternative Methods of Compliance to Substitute Unfinished Floor Area for Finished
Floor Area 6
3.4.5 Alternative Methods of Compliance for Financial Alternatives and Timing When
Cash-in-lieu Contribution is Made 6
3.5 Rebuilt Dwelling Units 7
3.6 Covenant(s) Required 8
3.8 Good Faith Marketing Required 9
3.9 Maximum Sales Price for New Permanently Affordable Dwelling Units 10
3.10 Sales Price Consideration for Rental Housing Units 12
3.11 Approved Purchasers of Permanently Affordable Dwelling Units 12
3.12 Income Eligible Household 13
3.13 Documentation Required to Verify Income of Prospective Renters or Purchasers of
Permanently Affordable Dwelling Units 13
3.14 Determination of Assets for Qualified Households 14
3.15 Determination of Income Derived from Assets for Qualified Households 15
4.0 On-Site Inclusionary Housing Requirement
4.1 Rounding Rule to Determine On-site Requirement for Fractions of a Unit 15
4.2 Required Documents to Determine On-Site Affordable Units 15
5.0 Development Requirements
5.1 Acceptance of a Bedroom 15
5.2 Size of Permanently Affordable Units 15
5.3 Home Ownership Associations 16
5.4 Required Agreements 16
5.5 Document, Agreement and Time Requirements 17
5.6 Livability Standards 17
6.0 Developments Containing a Single Dwelling Unit
6.1 Alternative Options for Certain Single Dwelling Units 18
7.0 Homeownership Requirements
7.1 Residency and Owner Occupancy Requirement 18
7.2 Rental Restrictions for Permanently Affordable Ownership Dwelling Units 18
143 Agenda Item 7A Page 44 of 69
7.3 Maximum Allowable Resale Prices 19
7.4 Documentation Required to Approve Purchasers on Resale of Permanently
Affordable Dwelling Units 19
8.0 Affordable Housing Requirements for Rental Developments
8.1 Maximum Allowable Rents 20
9.0 Off-Site Inclusionary Housing Options
9.1 Off-Site Option Timing Requirements 20
9.2 Cash-in-lieu Adjustment 20
9.3 Total Affordable Unit and Floor Area Requirements for Off-site Receiving Sites 20
9.4 Requirements for Dedicating Existing Off-Site Dwelling Units as Permanently
Affordable 20
9.5 Requirements for Dedicating Newly Constructed Off-Site Dwelling Units as
Permanently Affordable 23
-1-
144 Agenda Item 7A Page 45 of 69
INCLUSIONARY HOUSING ORDINANCE
ADMINISTRATIVE REGULATIONS
The purpose of these regulations is to set forth the procedures for administration and
implementation of Chapter 9-13, "Inclusionary Housing," 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. These rules are intended to be
consistent with Chapter 9-13, and facilitate the implementation of Chapter 9-13 by specifying forms,
procedures and requirements in more detail than set forth in Chapter 9-13. City staff will implement the
rules consistent with the intent and as provided in Chapter 9-13.
1.0 Findings
Generally, definitions of terms used in Chapter 9-13 have the same definition as contained in
Chapter 9-16 of the Code, or as provided in this chapter. However, a few definitions require additional
clarification as follows:
"Dwelling Unit" means one room or rooms with internal connections for residential occupancy and
including bathroom and kitchen facilities. Multiple dwelling units exist if there is more than one meter for
any utility, address to the property, or kitchen; or if there are separate entrances to rooms which could be
used as separate dwelling units; or if there is a lockable, physical separation between rooms in the dwelling
unit such that a room or rooms on each side of the separation could be used as a dwelling unit, or rooms
with no internal connections. For purposes of this chapter, dwelling unit does not include quarters which
have more than four bedrooms per kitchen. A dwelling unit may be created as part of a new development,
remodel of an existing development, or conversion from a residential or non-residential use to a residential
use.
"Permanently Affordable Unit" and "Permanently Affordable Dwelling Unit" means a dwelling unit
with ongoing resale or rental restrictions that are designed to keep the dwelling unit affordable, in
perpetuity, to income eligible households. The terms of the resale or rental restrictions are contained in a
covenant in a form provided by the City that is recorded against each property.
-2-
145 Agenda Item 7A Page 46 of 69
3.0 General Inclusionary Requirements
3.1 Inclusionary Housing Requirements for Group Quarters [9-13-3]
Inclusionary housing requirements do not apply to any type of group quarter accommodations as
included in Section 9-6-1, Table 6-1: Use Table under the heading of "Group Quarters" unless units in the
development are configured such that there is a private kitchen for the sole use of the occupant, or are
otherwise configured as a dwelling unit. Inclusionary housing will apply to any such units.
3.2 Inclusionary Housing Requirements for Accessory Dwelling Units and Owner Accessory
Units [9-13-3]
Inclusionary housing requirements do not apply to Accessory Dwelling Units (ADUs) or
Ownership Accessory Units (OAUs) as defined in Chapter 9-16.
3.3 Developments Subject to Annexation Agreements (9-13-3)
Unless specifically provided otherwise in an annexation agreement with the city, all development
shall comply with Chapter 9-13 "Inclusionary Housing" B.R.C. regardless of when annexed into the city.
3.4 Alternative Methods of Compliance [9-13-3(d)]
A developer may request an alternative method of compliance for any inclusionary housing
requirement pursuant to Section 9-13-3(d) B.R.C. The purpose of alternative methods of compliance is to
provide additional housing benefit to the community in order to provide diversity of home size, home type,
home features for varying income levels. Criteria for additional housing benefit include but are not limited
to the provision of more or larger affordable units than required, detached homes in lieu of condominiums,
duplex or town homes in lieu of "stacked" units, or a larger cash-in-lieu contribution than would otherwise
be required.
3.4.1 Alternative Methods of Compliance Request Process [9-13-3(d)]
The Alternative Method of Compliance process is required to vary any provision of Chapter 9-13
B.R.C. or to satisfy the requirements of Chapter 9-13 by provision of off-site affordable housing. The
purpose of alternative methods of compliance is to provide additional housing benefit to the community in
order to provide diversity of home size, home type, home features for varying income levels.
-3-
146 Agenda Item 7A Page 47 of 69
To make a request for an alternative method of compliance, the developer or property owner shall
fill out, sign and submit the Request for Alternative Methods to Comply with Inclusionary Housing form
as well as submit any documentation necessary to clearly demonstrate that the developer's proposed
affordable housing alternative meets the criteria for approval as outlined in Section 9-13-3 and these
regulations. The City may initiate a request for an alternative method of compliance.
Final approval or denial will be the sole decision of the city manager. The Request for Alternative
Methods to Comply with Inclusionary Housing form shall be approved or denied prior to signing the
Determination of Inclusionary Housing Compliance form.
3.4.2 Alternative Methods of Compliance for On-Site Construction Requirement [9-13-3(d) &
9-13-4]
A developer may request an alternative method of compliance to allow them to provide fewer than
50% of the required permanently affordable units on-site. This request will be reviewed by the city
manager to determine what, if any, additional affordable housing benefit would be provided and
community housing needs.
The following factors will be considered - none of which are a guarantee of approval and are not
inclusive:
a. Provision of larger more desirable units provided off-site than would be provided on-site
such as detached homes or town homes in lieu of condominiums.
b. A request which would result in a net increase in permanently affordable units over what
would have been provided on-site.
c. A request which would result in a net increase in the total floor area of permanently
affordable units.
d. In cases where the request includes some on-site units, provision of additional accessible
units, or targeting lower incomes (i.e. lower selling prices).
If the request includes the following, there is a presumption that the request will be approved:
a. A request that would result in a net increase of at least fifty percent more permanently
affordable units, equivalent to those that would have been provided on-site.
b. A request that would result in a net increase of fifty percent in the total floor area of
permanently affordable units.
-4-
147 Agenda Item 7A Page 48 of 69
c. A request that would result in a minimum of fifty percent (1.50 times the standard cash-in-
lieu amount) more than the standard amount of applicable cash-in-lieu for the units required
on-site but not built on-site.
3.4.3 Alternative Methods of Compliance to Required Total Floor Area of Permanently Affordable
Dwelling Units [9-13-3(d) & 9-13-5(c)]
Developers of permanently affordable dwelling 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
proj ect.
In evaluating such requests, the manager shall consider the following:
1. The average size of the affordable units may not be less than 70% of the required floor area
under any circumstances.
2. At least one of the following is included within the request:
a. Dedicate one or more permanently affordable units in addition to those required with
floor area that is at least equal to the total deficient amount of floor area in excess of
the number of affordable units required.
b. Take the deficient amount of floor area for all proposed affordable units combined
and multiply it by the applicable per square foot cash-in-lieu amount per the table
below. The amount will be added as an affordable housing cash-in-lieu contribution
due at the time of the building permit for that project.
Deficiency in floor area Cash-in-lieu multiplier (Percent
required size per unit of deficient square foot amount)
1 - 10% 100%
>10% to <20% 125%
>20% to <30% 150%
>30% Not allowed
Any portion of the amount calculated by the chart, may, at the city's discretion, be
used to reduce the selling price(s) of some or all of the permanently affordable units.
c. Reduce the selling price for the proposed units to target lower income households
than required.
-5-
148 Agenda Item 7A Page 49 of 69
3.4.4 Alternative Methods of Compliance to Substitute Unfinished Floor Area for Finished Floor
Area [9-13-3(d) & 9-13-5(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 square foot of required finished floor area up to
a maximum of 400 unfinished square feet per dwelling unit. The unfinished floor area shall be configured
to allow for simple conversion to finished, habitable space.
In evaluating the requests, the manager shall consider the following:
1. Whether roughed-in plumbing fixtures for areas intended to be bathrooms or utility
rooms are included in the unfinished area;
2. An adequate foundation and sound structural components;
3. Installation of adequate HVAC systems to support the finished and unfinished areas as if
all is habitable;
4. Weather-resistant roofs and;
5. The ability to provide adequate automobile parking for the unfinished space once
finished.
The request shall include the following information:
1. Identification of the units for which the substitution is requested;
2. A written description of the amount of substitution requested for each unit or unit type;
3. Scaled floor plans which clearly indicate the requested allowance for finished and
unfinished floor area; and
4. 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.
3.4.5 Alternative Methods of Compliance for Financial Alternatives and Timing When Cash-in-lieu
Contribution is Made [9-13-3]
Developers may request that the city manager allow alternative methods of compliance for the
provision of cash-in-lieu payments when the total cash-in-lieu contribution due exceeds one million
dollars. The maximum amount of cash-in-lieu that may be deferred or provided in an alternative method
-6-
149 Agenda Item 7A Page 50 of 69
shall not exceed fifty percent of the cash-in-lieu amount due for the development at the time of issuance of
the building permit. The full amount of the cash-in-lieu payment required including any escalators shall be
provided to the city prior to scheduling of final inspections for certificate of occupancy for the
development. In evaluating the request, the city manager shall consider whether the development can
provide acceptable surety that the cash-in-lieu can be collected with minimal risk to the city.
Any applicant approved for an alternative method of compliance for financial alternatives and
timing when a cash-in-lieu contribution is made shall enter into a written agreement with provisions
including but not limited to the following:
1. For multi-building projects, the cash-in-lieu amount will be allocated proportionally for
each building. The full amount of the portion allocated to a building shall be paid prior to
scheduling of final inspections pursuant to issuance of a certificate of occupancy for that
building;
2. Security acceptable to the city for the deferred amount;
3. On the date of the issuance of the building permit, an adjustment of 8% shall be applied.
This adjustment will be applied annually, thereafter.
4. There will be no prorating of the annual adjustment for partial years.
5. A clause which specifies when the deferred amount is due; and
6. Penalties for non-performance.
3.5 Rebuilt Dwelling Units [9-13-3(e)]
In the event that a development with four or fewer dwelling units is proposed for a site at which an
existing dwelling unit will be demolished, inclusionary housing requirements may be waived for the new
dwelling units if the developer applies for a building permit within one year of the date of the demolition
permit. This waiver expires if a building permit is not issued within four years of application. This waiver
shall not be issued in any of the following circumstances:
1. The dwelling unit to be demolished, at the time of demolition, is considered to be an unsafe
structure, a structure unfit for human occupancy, or a dangerous structure under the 1997
Uniform Code for the Abatement of Dangerous Buildings, Section 302 adopted by the city
by section 10-5-3, B.R.C., unless otherwise excepted by the Boulder Revised Code.
2. The development to be demolished contains five or more dwelling units and/or the
redevelopment contains five or more dwelling units.
-7-
150 Agenda Item 7A Page 51 of 69
In developments where the waiver applies, if the developer is meeting their inclusionary housing
requirement on the new development by making a cash-in-lieu contribution based on the square foot
calculation, the credit for the demolished unit shall be equal to the average square footage of the proposed
new dwelling units. When the developer is making a cash-in-lieu contribution based on the unit
calculation, the credit for one demolished unit shall be one unit.
3.6 Covenant(s) Required [9-13-3 (f)]
When permanently affordable units are provided on or off site, a covenant to insure permanent
affordablity of the homes shall be signed by the owner of the property and recorded in the records of
Boulder County. All covenants run with the land as a permanent encumbrance on the property. Covenants
include but are not limited to an Interim Homeownership Covenant, a Permanently Affordable
Homeownership Covenant or a Permanantly Affordable Rental Covenant.
Definitions:
An Interim Homeownership Covenant is used when a development is to be subdivided or
condominiums created prior to sale of the housing to the homeowner and secures the owner's commitment
to produce affordable units including the following requirements:
1. How many, and which units will be deed restricted as permanently affordable;
2. The number of bedrooms, bathrooms, square footage of each unit; and
3. The initial maximum allowable sales price of the units.
The Interim Homeownership Covenant also commits the owner to follow:
1. The city's fair marketing procedures;
2. Buyer selection process;
3. Notification; and
4. Other program requirements.
The Interim Homeownership Covenant is replaced with a Permanently Affordable Covenant for each
affordable unit when the subdivision or declaration of condominium is finalized.
-8-
151 Agenda Item 7A Page 52 of 69
The Permanently Affordable Homeownership Covenant is signed by the owner of the property. The
owner may be the developer if the permanent covenant is to replace the Interim Homeownership Covenant,
or it may be the ultimate purchaser of the unit and recorded at the time the purchaser receives title to the
property.
The permanently affordable homeownership covenant commits the owner and all subsequent buyers to:
1. Sell only to an income-eligible purchaser;
2. Sell only at an affordable price as described in the covenant;
3. Follow the city's fair marketing procedures;
4. Grant the city a first option to buy the property;
5. Limit appreciation the seller may receive;
6. Follow the capital improvement credit policy of the city;
7. Agreements about excessive damage and home maintenance;
8. Rental restrictions; and
9. Owner occupancy requirements.
The Permanently Affordable Rental Covenant is signed by the owner of the property and commits
the owner as landlord to:
1. Control the rents charged and income requirements for the occupancy of the property;
2. Maintain annual leases which protect the rights of the tenant and landlord;
3. Adopt written tenant selection policies which are consistent with the fair housing marketing
guidelines established by the City Manager;
4. Assure the City's right to acquire the owner's interest in the event of foreclosure; and
5. Maintain the property in good, safe and habitable conditions.
3.8 Good Faith Marketing Required [9-13-3(g)]
Elements of a good faith marketing effort for homeownership units shall include the following:
• Hosting at least two open houses or showing the home to all interested buyers by
appointment;
• Listing all properties in the Multiple Listings Service (MLS) or placement of at least two
advertisements during separate weeks in a local newspaper of general circulation;
-9-
152 Agenda Item 7A Page 53 of 69
• Provision of information about each property to the City of Boulder, including square foot,
number of bedrooms, price and amenities, so that such information may be disseminated by
the City of Boulder; and
• Maintaining each unit on the open market for a period to be determined by the city manager
which shall not exceed two months.
The seller shall maintain a marketing log that shows the advertisements and other information that
were disseminated about the sale and keep a list of prospective buyers who have expressed interest in an
advertised permanently affordable unit. 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.
At the conclusion of the mandatory marketing period, if more than one income-certified buyer has
expressed an interest in purchasing the property, the City of Boulder Division of Housing shall utilize a fair
selection process to select among the prospective purchasers. Preference may be given including but not
limited to the following:
• A household that lives and works in the City of Boulder;
• A household that works in the City of Boulder;
• A household that lives in the City of Boulder;
• A household that has been income certified and placed on the City of Boulder's referral list for at
least one year; and,
• A household with dependents.
Income-certified buyers who have viewed a property and wish to be considered in the selection
process shall file an Intent to Purchase form referencing the property with the city no later than twenty-four
hours before the end of the mandatory marketing period.
Upon the expiration of the mandatory marketing period, if only one income-certified buyer has
filed an Intent to Purchase the property, the seller may enter into a contract with that buyer that meets the
affordable housing requirements of the city and the terms of the Covenant.
3.9 Maximum Sales Price for New Permanently Affordable Dwelling Units [9-13-3(i)]
To determine the maximum allowable sales price that may be charged for a new permanently
affordable homeownership unit, the following variables regarding unit size, unit configuration, household
size and Area.
-10-
153 Agenda Item 7A Page 54 of 69
Median Income (AMI) shall be used:
Minimum Floor Maximum Floor Household Minimum Minimum AMI
Area Area Size Bedrooms Bathrooms
701 Square Feet 800 Square Feet 1 1 1 HUD Low
Income Limit
901 Square Feet 1,000 Square Feet 2 2 1.5 HUD Low
Income Limit
1,001 Square Feet 1,100 Square Feet 3 3 1.75 HUD Low
Income Limit
1,301 Square Feet 1,400 Square Feet 5 4 1.75 HUD Low
Income Limit
The following methodology is used to determine the maximum allowable sales price for new
affordable homes in Boulder.
1. The income limit for Inclusionary Housing (IH) units is based on the US Department of Housing
and Urban Development (HUD) determination of low income limit plus 10% of AMI for the region
containing the City of Boulder. The maximum Inclusionary Housing sales price is based on a
household earning the HUD low income limit. This "window" between the income used to price
homes and the income limit increases the range of households financially able to purchase the
homes.
2. The sum total of all permanently affordable prices within a project may not exceed the sum of
prices derived strictly from the pricing sheet. Within a project, prices may be averaged to reflect
unit variables. However, no single permanently affordable unit may exceed a price that is
affordable to a household earning ten (10) percent more than the HUD Low Income Limit for the
city of Boulder.
3. The maximum sales price is calculated based on principal, interest, taxes, insurance, and
homeowner's association dues that do not exceed 28% of gross monthly household income. Taxes
and insurance are assumed to be a percentage of the affordable housing payment as determined
annually by the city manager.
4. The maximum sales price is based on a 30-year fixed-rate mortgage at prevailing interest rates. A
5% down payment is assumed.
5. Estimates of homeowner association dues are based on a survey of local HOAs.
6. Maximum sales prices are determined based on a fixed number of people per bedroom. The actual
number of persons in a household can vary.
-11-
154 Agenda Item 7A Page 55 of 69
7. The bolded sales price on the Inclusionary Housing pricing sheet is the base price for a unit with a
set number of bedrooms and bathrooms per the chart above and is the price required per chapter 9-
13. Adjustments to that price are made for variations in unit size and number of bathrooms.
8. Interest rates are calculated quarterly.
9. Prices for permanently affordable ownership dwelling units are finalized when a covenant is signed
for the affordable unit.
10. The Price Sheet and methodology for the Pricing Sheet will be reviewed and adjusted as needed by
the City Manager or designee.
11. The maximum allowable sales price for a permanently affordable unit may be adjusted when a
developer provides a one to two car garage. The garage must be a fully enclosed structure, a
minimum of 240 square feet, designed to house one or more automobiles, sold with the
permanently affordable unit, and with access controlled by the unit owner.
3.10 Sales Price Consideration for Rental Housing Units [9-13-3(i)]
If a rental housing unit is being sold to a Housing Authority or an approved Similar Agency the
maximum sales price will be determined by the City Manager. Criteria for the pricing will include but is
not limited to:
1. Unit type and size;
2. The income limit for the unit;
3. The maximum allowed rent for the income limit;
4. Pro forma vacancy rate
5. Reasonable operating costs of the unit;
6. A calculation of net income available for debt service on the unit;
7. An identification of replacement reserve annual funding
8. Prevailing terms for multifamily debt financing; and
9. Number of persons per bedroom
3.11 Approved Purchasers of Permanently Affordable Dwelling Units [9-13-3(j)]
Only those households which have completed the forms of the city to qualify as an eligible
purchaser and have a valid income certification acceptable by the City of Boulder may purchase a
permanently affordable unit. No purchaser shall be approved to purchase a permanently affordable unit if
-12-
155 Agenda Item 7A Page 56 of 69
the number of bedrooms in the permanently affordable unit exceeds the number of persons in the
purchaser's household by more than one unless otherwise approved by the city manager. The city manager
may create additional requirements for purchasers of permanently affordable units which further the goals
of inclusionary housing. An example of such requirements includes without limitation, employment
requirements.
3.12 Income Eligible Household [9-13-3(k)]
"Household" is defined in the same manner as in 24 CFR 92.2 of the United States Central Federal
Register or such similar requirement of the United States applicable to the city.
"Income" will be defined in the same manner as it is in 24 CFR 5.609 United States Central Federal
Register or such similar requirement of the United States applicable to the city.
A household seeking to be eligible to purchase a permanently affordable unit shall submit to the
city manager a completed Income Certification Application, Recertification Application, or valid Income
Certification with required attachments, within six months 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. [9-13-8]
Affordability and income eligibility for home buyers are defined in terms of the Area Median
Income (AMI).
3.13 Documentation Required to Verify Income of Prospective Renters or Purchasers of
Permanently Affordable Dm,elling Units [9-13-3(k)]
Prospective renters and purchasers of permanently affordable units from housing authorities or
other similar agencies, shall be required to submit the following documents in order to verify that the
prospective purchaser's or renter's income and assets qualify them to purchase or rent a particular
permanently affordable unit:
1. A letter from the employer on letterhead indicating annual gross wage, start of employment, pay
schedule, expected wage increases and any overtime, bonuses, tips or commissions or a completed
employer verification form;
2. The most recent pay stubs for each wage-earner in the household for the past month. If wages
varied, pay stubs for the most recent three months;
-13-
156 Agenda Item 7A Page 57 of 69
3. If self-employed, a year-to-date profit-loss statement plus the last three years of completed federal
income tax forms and corresponding 1099 forms;
4. Verification of all benefit payments;
5. Verification of all other sources of income (Social Security, pension, etc.);
6. Complete copies of the two W-2s and attached schedules;
7. Bank verification form documenting the six-month average balance of all checking accounts or six
months of all checking account statements;
8. Bank verification of all savings accounts, including interest rates;
9. A current statement from each asset indicating the current balance and interest rate or annual
dividend earned;
10. If divorced with minor children, a copy of the divorce decree indicating division of marital assets,
the custody arrangements and child support or maintenance payments;
11. Purchasers of permanently affordable units shall submit a copy of a prequalifi cation 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; and
12. Any other documentation requested by the city manager to assist in ascertaining the income or
assets of a prospective renter or purchaser.
All required documentation submitted to verify household income and assets shall be kept
confidential and is not subject to public disclosure. The documentation shall be submitted to the city
manager, or by written agreement from the city manager, a designated property owner.
3.14 Determination of Assets for Qualified Households [9-13-3(l)]
Qualified one-person households may not have more than $55,000 in liquid assets. For households
over one person, $15,000 is added to the asset limit for each additional household member. The city
manager may adjust the one person household and additional household member limits and will determine
annually the asset limits for middle income, recently divorced and retired households. The city manager
will determine a certain amount of retirement assets, depending on the ages of the household members, to
be exempt from the asset limit.
-14-
157 Agenda Item 7A Page 58 of 69
3.15 Determination of Income Derived from Assets for Qualified Households [9-13-3(1)]
An asset is a cash or non-cash item that can be converted to cash based on the HUD Low Income
Limit published annually by the U.S. Department of Housing and Urban Development. Annual income
generated from assets or income which is imputed to assets shall be included as part of a household's
annual income for purposes 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 multiplying the value of the assets by the HUD passbook rate as reported to the city
manager by CHFA (Colorado Housing Finance Authority). 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.
Any asset disposed of for less than fair market value during two years preceding the income
certification shall be considered as if the household still owned that asset.
4.0 On-Site Inclusionary Housing Requirement
4.1 Rounding Rule to Determine On-site Requirement for Fractions of a Unit [9-13-4]
To determine the number of affordable units required to be provided on-site, standard rounding will
apply. Any portion of an on-site unit less than 0.5 will be rounded down while any portion 0.5 or more will
be rounded up.
4.2 Required Documents to Determine On-Site Affordable Units [9-13-4]
Before the city manager accepts a dwelling unit as a permanently affordable unit, an applicant shall
submit such documents as may be required by city manager to determine the appropriate size, location,
construction requirements and finish elements of the proposed permanently affordable unit. A list of the
required documents will be published in the Inclusionary Housing Summary and Process for Developers
and updated as needed.
5.0 Development Requirements
5.1 Acceptance of a Bedroom [9-13-5(b)]
The minimum size for a bedroom is 81 sq. ft.
-15-
158 Agenda Item 7A Page 59 of 69
5.2 Size of Permanently Affordable Units [9-13-5(c)]
The city manager may accept permanently affordable dwelling units larger than 1,200 square feet if
they are voluntarily offered by the developer.
Dwelling unit measurements for on or off site permanently affordable dwelling units are calculated
using the definition of "Floor Area" Chapter 9-16-1 (c) "Definitions" B.R.C.
5.3 Home Ownership Associations [9-13-5(g)]
Common Interest Ownership Communities: A) In order to preserve the affordability of the
permanently affordable units for persons of low or moderate income, the Owner acting as the Declarant of
a common interest community created under the Colorado Common Interest Ownership Act, C.R.S. §38-
33.3-101 et. seq. ("CCIOA") shall, for assessment purposes only, create appropriate unit type
classifications for assessments for common and special expenses. The declaration of the common interest
community shall contain the formula for determining the assessments for the permanently affordable units,
which shall be subject to review and approval by the city manager prior to recording the declaration. It is
anticipated that the formula will be based on the size of the units or a fraction or percentage of the rate of
assessment for the expenses of the community for units that are not permanently affordable units; B) In
accordance with C.R.S. §38-33.3-205(1)(1) of CCIOA, those portions of the declaration, and all other
constituent documents of the common interest community as applicable, necessary to accomplish the
restrictions and classifications for assessments and to state the restrictions necessary for the permanently
affordable units, including without limitation buyer income certification, marketing to and selection of
eligible buyers, sale price limitations, owner occupancy and rental limitations, shall be subject to approval
by the city manager prior to the earlier of the sale of any unit or the issuance of a certificate of occupancy
for the building in which such permanently affordable unit is located and may not at any time be amended
without the approval of the city manager, provided that all such provisions shall be consistent with the
requirements of the CCIOA.
5.4 Required Agreements [9-13-5(g)]
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 Housing requirements of Chapter 9-13, B.R.C. 1981, by signing a
Determination of Inclusionary Housing Compliance Form, before any such approval, permit, certificate of
-16-
159 Agenda Item 7A Page 60 of 69
occupancy, allocation or exemption is issued. A preliminary Determination of Inclusionary Housing
Compliance is required to be submitted as part of any application for Site or Use Review.
5.5 Document, Agreement and Time Requirements [9-13-5(g)]
The following table includes required timelines for submitting Determination of Compliance and
related forms.
Form or Action By-right projects 1-4 housing By-right projects 5 or Projects requiring land use
units more housing units approval
Preliminary Determination not applicable not applicable Submit with land use application
of Inclusionaiy Housing
Compliance
Determination of Prior to building permit Prior to building permit Prior to approval of the
Inclusionary Housing subnuttal* * submittal** development agreement* *
Compliance Form (DOC) Not applicable for development of
A.K.A.: the "Affordable one single family home making a
Housing Agreement" CIL contribution
Amendment to the Prior to building permit issuance** Prior to building permit Prior to building permit issuance
Determination of Not applicable for development of issuance
Inclusionaiy Housing one single family home making a
Compliance Agreement* CIL contribution
Restrictive Covenants; After the DOC is signed, prior to After the DOC is signed, After the DOC is signed, prior to
recorded with the County building permit issuance prior to building permit building permit issuance
Clerk issuance
Cash-in-lieu Payment; No later than building pemut No later than building No later than building permit
added to the building permit issuance permit issuance issuance
amounts due upon issuance.
Amount determined when the
payment is made
Request for Alternative Submitted and approved or denied Submitted and approved Submitted and approved or
Methods of Compliance* prior to signing the DOC and prior or denied prior to signing denied prior to signing the DOC
to building permit issuance** the DOC and prior to and prior to development
building permit agreement approval**
submittal**
*not required; submitted on an as needed basis.
**to avoid delays, it is recommended that the developer meet with a housing planner as soon as possible before submitting for a
building permit. It typically takes 2 -4 wks to finalize all required documents.
5.6 Livability Standards [9-13-5(g)]
To ensure the safety and habitability of homes, units must meet the "Livability Standards for
Permanently Affordable Housing" published by the City. Developers of permanently affordable dwelling
units are required to submit documentation for each affordable unit to show compliance with the
-17-
160 Agenda Item 7A Page 61 of 69
requirements. Units which do not meet the Livability Standards will not be accepted until the standards are
met. If the city determines that a modification for any deficiencies is not feasible, these permanently
affordable units may have a reduction of the maximum allowable sales price for the deficiency, or may be
assessed a monetary penalty to be paid prior to receiving a certificate of occupancy for the building, or the
City may reject the units and require payment of the cash-in-lieu amount.
6.0 Developments Containing a Single Dwelling Unit
6.1 Alternative Options for Certain Single Dwelling Units [9-13-6]
Single lot owners who wish to avail themselves of the alternative methods of complying with the
Inclusionary Housing requirements of Subsection 9-13-5(b), B.R.C. 1981, shall submit a request in writing
which indicates the requested option 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.
Lot owners who wish to designate their home as a Permanently Affordable Unit sign and record a
Permanently Affordable Homeownership Covenant running to the benefit of the city and against the land
upon which the single dwelling unit is to be constructed.
7.0 Homeownership Requirements
7.1 Residency and Owner Occupancy Requirement [9-13-7]
Owners of permanently affordable units are required to occupy those units as their primary
residence. Owner occupancy means occupying the unit ten months of each calendar year.
7.2 Rental Restrictions for Permanently Affordable Ownership Dwelling Units [9-13-7(b)]
The property owner of a permanently affordable ownership unit 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 imitation, the following:
1. The homeowner's name, contact telephone number and mailing address during the rental
period;
2. The address of the permanently affordable unit;
3. The anticipated date the unit will be rented or leased and the duration of the lease;
-18-
161 Agenda Item 7A Page 62 of 69
4. The prospective tenant's name;
5. A copy of the lease or rental agreement to be used; and
6. 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.
7.3 Maximum Allowable Resale Prices [9-13-7(c)]
The maximum allowable resale price shall be calculated on an individual basis 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:
1. An adjustment based on the value, as determined by the city manager, of eligible capital
improvements installed by the seller that were approved in advance by the city manager. A list
of eligible capital improvements shall be published and maintained by the city manager.
2. An annual adjustment based upon the lesser of the change in the Consumer Price Index, all
Urban Areas (CPI-U) for Boulder or the AMI for Boulder up to a maximum fixed percentage
change as stated in the covenant for the specific permanently affordable unit. The city manager
may establish an annual minimum amount for this adjustment.
3. A shared appreciation factor as stated in a community land trust lease for a specific permanently
affordable unit.
The base price may be decreased by imposition of an excessive damage charge if the unit has not
been reasonably maintained. 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.
7.4 Documentation Required to Approve Purchasers on Resale of Permanently Affordable
Dwelling Units [9-13-7(c)(1)]
Prior to purchasing a permanently affordable unit, a prospective buyer shall be required to submit a
completed Income Certification Application or valid Income Certification with required attachments in
order to verify that the prospective purchaser's income qualifies them to purchase a particular permanently
affordable unit.
-19-
162 Agenda Item 7A Page 63 of 69
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.
8.0 Affordable Housing Requirements for Rental Developments
8.1 Maximum Allowable Rents [9-13-8(b)]
The City of Boulder shall publish annually the maximum allowable rents for required permanently
affordable dwelling units sold or otherwise transferred or ultimately owned entirely or in part by a housing
authority or similar agency as permanently affordable rental units.
9.0 Off-Site Inclusionary Housing Options
9.1 Off-Site Option Timing Requirements [9-13-9]
An agreement and covenants must be signed for provision of any off-site dedicated existing or
newly built affordable units or a deed signed granting land to the City prior to application for a building
permit by the sending site (development that generated the need for the off-site units). Cash-in-lieu
contributions must be completed prior to issuance of the building permit.
9.2 Cash-in-lieu Adjustment [9-13-9]
Cash-in-lieu amounts are adjusted annually on the first business day of July. Cash in lieu amounts
are determined at the time payment is made to the city.
9.3 Total Affordable Unit and Floor Area Requirements for Off Site Receiving Sites
Sites where off-site permanently affordable units may be provided are referred to as receiving sites.
Receiving sites are subject to the following Inclusionary Housing requirements:
1. Number of affordable units - the total number of affordable units provided must equal 20% of
all units built on both sites. If the development only provides housing as a receiving site and no
additional market rate units, this equates to 25% of the units on the sending site.
2. Floor area of the Affordable units - the size of the affordable units shall be the greater of no less
than 80% of the average size of the units on the sending site or 80% of the average size of the
units on the sending site plus any market units provided on the receiving site.
-20-
163 Agenda Item 7A Page 64 of 69
9.4 Requirements for Dedicating Existing Off-Site Dwelling Units as Permanently Affordable [9-
13-9(b)]
Acceptance of any off-site unit in place of strict application of Chapter 9-13 shall be at the sole
discretion of the City based on individual property characteristics.
1. Prior to issuance of a building permit for the development that created the off-site requirement:
a. The Developer shall sign a Determination of Inclusionary Housing Compliance form
indicating that the inclusionary requirement will be met through the dedication of existing
off-site dwelling unit(s);
b. The Developer shall enter into and sign a Provision of an Off-site Permanently Affordable
Unit (Acquisition of an Existing Unit) Agreement; and
c. The Developer shall provide the City a Letter of Credit to secure the affordable housing
requirement until such time as the off-site unit is deemed acceptable for the affordable
housing program.
2. The Provision of an Off-site Permanently Affordable Unit (Acquisition of an Existing Unit)
Agreement - This Agreement may include but is not limited to the following:
a. The process and requirements for identifying the unit and for city approval of the unit;
b. The total number of required affordable units;
c. Unit type i.e. detached, town home, attached multifamily etc.;
d. Size of the unit including finished and unfinished square feet;
e. Amount of square footage and type of use allowed in below grade space;
f. Number of bedrooms and bathrooms;
g. Size of garage or location and number of parking spaces where applicable;
h. Amount of required storage space;
i. A reasonably standard floor plan and layout;
j. Maximum allowable homeowners association dues;
k. General location requirements of the affordable unit;
1. Condition of structural, electrical, mechanical and other home elements;
in. Condition of siding, roofing, flooring and bath and kitchen fixtures, appliances and cabinets
n. Requirement and process for completion of any required rehabilitation and maintenance;
o. Allocation of costs of the sale;
p. Process and requirements for marketing and completing the sale; and
-21-
164 Agenda Item 7A Page 65 of 69
q. Maximum allowable sales price.
3. Number of Proposed Off-site Units for Evaluation - Units proposed to be provided off-site are
evaluated by the city to determine if they meet the standard of "functionally equivalent" to those
units that would have been provided on-site. They are also evaluated per the standards and
requirements in the off-site agreement. If one to eight off-site affordable units are required, the
Developer shall provide the City with a minimum of two proposed units for each required unit to
evaluate.
4. Acceptance of Proposed Off-site Units - Once an off-site unit is deemed acceptable to the City, the
City will issue a Letter of Acceptance for Proposed Off-site Affordable Unit.
5. Required Rehabilitation or Maintenance of Proposed Property - If rehabilitation or maintenance is
required for the off-site unit to be accepted by the City, the City will issue a Letter of Required
Rehabilitation or Maintenance for Off-site Affordable Property. No certificate of occupancy will be
issued for the development that created the off-site requirement until all required rehabilitation and
maintenance is completed by the Developer and the unit is deemed acceptable by the City.
6. Restrictive Covenant - An affordable housing restrictive Covenant shall be signed by the Developer
within four weeks of receipt of the Letter of Acceptance for Proposed Off-site Affordable Property.
No certificate of occupancy will be issued for the development that created the off-site requirement
until an affordable covenant is signed for the required off-site unit.
7. Livability Standards - The city manager may require that off-site affordable unit(s) be improved at
the developer's expense to meet the Livability Standards described in Section 5.6 herein.
8. Security Requirements - To secure the affordable housing requirement for newly built off-site
affordable units a letter of credit for the full amount of cash-in-lieu plus one year annual adjustment
of 8% will be required. If the Letter of Credit is cashed, the principal plus adjustment will be
required for the first year, plus an additional adjustment thereafter for any portion of subsequent
years the Letter of Credit is in place. The Letter of Credit will be released upon issuance of the
certificate of occupancy for the off-site unit(s). No certificate of occupancy will be issued for the
development that created the off-site requirement until an affordable covenant is signed for the
required off-site unit or the letter of credit is cashed.
9. Independent Inspection - 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 city may
require the developer or property owner to hire, at his or her own expense, an inspector approved
-22-
165 Agenda Item 7A Page 66 of 69
by the city to inspect 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. At a minimum, 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 housing requirement.
9.5 Requirements for Dedicating Newly Constructed Off-Site Dwelling Units as Permanently
Affordable [9-13-9(b)]
Acceptance of any off-site unit in place of strict application of the Chapter 9-13 shall be at the sole
discretion of the city based on individual property characteristics.
1. Prior to issuance of a building permit for the development that created the off-site requirement:
a. The Developer shall have signed a Determination of Inclusionary Housing Compliance
form indicating that the inclusionary requirement would be met through the dedication of a
newly built off-site dwelling unit(s);
b. The developer shall enter into and sign a Provision of an Off-site Permanently Affordable
Unit (Newly Built Unit) Agreement; and
c. The Developer shall provide the City a Letter of Credit to secure the affordable housing
requirement until such time as the off-site unit is completed and deemed acceptable for the
affordable housing program.
2. The Provision of an Off-site Permanently Affordable Unit (Newly Built Unit) Agreement - This
Agreement may include but is not limited to the following:
a. Location of the site and number of off-site affordable units including those affordable units
required from the receiving site.
b. Unit type i.e. detached, town home, attached multifamily etc.;
c. Size of the unit including finished and unfinished square footage;
d. Amount of square footage and type of use allowed in below grade space;
e. Number of bedrooms and bathrooms;
a. Size of garage or location and number of parking spaces where applicable;
f. Amount of required storage space;
- 23 -
166 Agenda Item 7A Page 67 of 69
g. A reasonably standard floor plan and layout;
h. The initial homeowner's association (HOA) documents, budget and HOA management
plan;
i. City approval of proposed structural, electrical, mechanical and other system elements;
j. City approval of building materials: roofing, siding, furnace, landscaping; heating and
cooling systems, flooring and bath and kitchen fixtures, appliances and cabinets;
k. Penalties for non-performance in completing the permanently affordable units;
1. Inspections during the construction process;
m. Administrative fees;
n. Process and requirements for marketing and completing the sale; and
o. Maximum allowable sales price or rent as appropriate.
3. When off-site units are allowed to be provided in developments with more than 20% affordable
owners additional requirements may be included in the Off-site Permanently Affordable Unit
Agreement as determined by the city manager. Such requirements may include but are not limited
to the following:
a. The city housing division shall review and approve the site plan. Factors that may be taken
into account include: overall layout of the buildings, parking and open spaces, landscaping,
location of affordable units within the development, presence of excessive noise or other
nuisance conditions.
b. The Owner will provide, at its expense, city-approved HOA training to the buyers of the
Off-Site Units within one month of closing on the final unit. The HOA budget and
management plan shall be based on a reserve study to determine reasonable and accurate
reserve levels and shall provide for the use of a professional management company.
c. The amount and location of parking spaces and or garages where applicable.
4. Acceptance of a Proposed Property - Once a proposed site is deemed acceptable to the City, the
City will issue a Letter of Acceptance for Proposed Off-site Affordable Site.
5. Restrictive Covenant - An affordable housing restrictive Covenant shall be signed by the Developer
within four weeks of receipt of the Letter of Acceptance for Proposed Off-site Affordable Property.
No certificate of occupancy will be issued for the development that created the off-site requirement
or for the development where the off-site units are located until an affordable covenant is signed for
the required off-site unit(s).
-24-
167 Agenda Item 7A Page 68 of 69
6. Livability Standards - The city manager may require that off-site affordable unit(s) meet the
Livability Standards described in Section 5.6 herein.
7. Security Requirements - To secure the affordable housing requirement for newly built off-site
affordable units a letter of credit for the full amount of cash-in-lieu plus one year annual adjustment
of 8% will be required. If the Letter of Credit is cashed, the principal plus adjustment will be
required for the first year, thereafter for any portion of subsequent years the Letter of Credit is in
place. The Letter of Credit will be released upon issuance of the certificate of occupancy for the
off-site unit(s). No certificate of occupancy will be issued for the development that created the off-
site requirement until an affordable covenant is signed for the required off-site unit or the letter of
credit is cashed.
-25-
168 Agenda Item 7A Page 69 of 69