19.28.040 Inclusionary requirements.

(A) Required Number and Type of Inclusionary Units.

(1) Ownership projects subject to the provisions of this chapter shall provide a number of inclusionary units equal to at least ten percent of applicable project units (per this chapter) at prices or rents affordable to lower-income households, unless one of the alternative actions set forth in this chapter is approved. Such inclusionary units may be either ownership units or rental units.

(2) Rental projects subject to the provisions of this chapter shall provide a number of inclusionary units equal to at least five percent of applicable project units (per this chapter) at prices or rents affordable to very low-income households, five percent affordable to low-income households, and five percent to moderate income households unless one of the alternative actions set forth in this chapter is approved. The inclusionary units shall be rental units.

(3) In determining the number of inclusionary units to be provided, any decimal fraction of 0.3 or more shall be rounded up to the nearest whole number, and any decimal fraction of less than 0.3 shall be rounded down to the nearest whole number.

(4) Where an even number of inclusionary units are required of a rental housing project, a larger number of units affordable to very low-income households shall be provided (e.g., if the inclusionary requirement equals four units, two shall be affordable to very low-income households and one shall be affordable to a lower-income household and one shall be affordable to a moderate income household). If only one inclusionary unit is required, such unit must be affordable to a very low-income household.

(B) Development Standards for Target Units.

(1) Inclusionary units should be constructed concurrently with market rate units unless both the city and the developer/applicant agree within the housing agreement to an alternative schedule for development.

(2) Inclusionary units shall be evenly distributed throughout the project, except that the decision-making body may waive this requirement if it finds that such distribution is infeasible for one or more of the following reasons:

(a) Significant topographic or other constraints exist rendering such distribution infeasible.

(b) Substantially improved site design will result from such waiver.

(c) Substantially improved building design and an improved unit amenity level will result from such waiver.

(d) Significant economic hardships will result from such distribution that does not apply to other projects in the city.

(e) Significant economic hardships will result from such distribution for the developer of the inclusionary units receiving financial assistance from federal, state, or local governmental agencies if such waiver is not granted.

(3) Where feasible, the number of bedrooms of the inclusionary units should be equivalent to the bedroom mix of the market rate units of the housing development; except that the developer may include a higher proportion of inclusionary units with more bedrooms.

(4) The design and appearance of the inclusionary units shall be compatible with the design of the total housing development.

(5) The applicant may reduce the size or interior amenities of the inclusionary units as long as there are not significant differences between inclusionary and market rate units visible from the exterior of the dwelling units and the size and design of the dwelling units are reasonably consistent with the market rate units in the project, provided that all dwelling units conform to the requirements of the applicable building and housing codes.

(6) Inclusionary units shall comply with all applicable development standards, except those which may be modified as provided by this chapter.

(C) Continued Affordability of Ownership Units. Inclusionary units shall remain restricted and affordable to the targeted household(s) for a period of at least fifty-five years, or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. Covenants evidencing these restrictions shall be recorded against the property.

(D) Continued Affordability of Rental Units. Inclusionary units shall remain restricted and affordable to the targeted household(s) for a period of at least fifty-five years, or a longer period of time if required by the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy program. Covenants evidencing these restrictions shall be recorded against the property.

(E) Determination of Affordable Rents and Sales Prices. In determining the maximum affordable rent or affordable sales price of inclusionary units, the following household and unit size assumptions shall be used, unless the project is subject to different assumptions imposed by other governmental regulations:

(F) Housing Agreement. A housing agreement consistent with this chapter shall be made a condition of the discretionary planning permits (e.g., tract maps, parcel maps, site plans, planned development or conditional use permits) for a project that provides inclusionary units.

(G) In the event a project exceeds the total number of inclusionary units required in this chapter, the project owner may request inclusionary unit credits that may be used to meet the inclusionary unit requirements of another project, subject to the approval of the city manager. Inclusionary unit credits are issued to and become the possession of the project owner and may only be transferred to another project owner subject to the approval of the city council. The number of inclusionary unit credits awarded for any project is subject to the approval of the city council.