75B - PH - ZONING ORDN AMENDMENT

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Zoning Ordinance Amendment No. 2011-01 September 26, 2011 Page 4 areas to create the opportunity for new housing creation. The outcome of the Harbor Boulevard Corridor Study will also result in the adoption of new zoning that will allow for the construction of housing on property that currently has commercial zoning. Similar to the Transit Zoning Code Industrial Overlay Zones, the Harbor Boulevard corridor identified in the Housing Element is located within a redevelopment project area, North Harbor. The production of new housing in this area would also trigger the 15 percent affordable housing redevelopment requirement. With this in mind, as well as looking to the future, staff recommended that the Housing Opportunity Ordinance be developed on a city-wide basis. The draft ordinance was developed with the input of a variety of stakeholders and interest groups. The draft ordinance, entitled the Housing Opportunity Ordinance, was presented to the City Council during a study session held on January 18, 2011. At that meeting the City Council directed staff to complete the draft document and begin the public hearing adoption process. Proiect Analysis The City of Santa Ana has a wide array of programs that have created affordable housing opportunities throughout the City. These programs include rental assistance, housing rehabilitation and partnerships with developers to create new affordable housing. However, the City has never had a requirement that new market rate housing development contain an affordable component. In past practices, some development projects have been required to pay certain fees to be used toward the provision of affordable housing. These fees, typically referred to as "affordable housing in-lieu fees," were negotiated through development agreements. The absence of an ordinance, such as the one proposed, created uncertainty for both developers and staff with the result that the terms of the development agreement and the establishment of the in- lieu fee were often still being negotiated well into the development review, and even discretionary adoption, process. Further, these fees varied from project to project and were not applied on a consistent basis. The Housing Opportunity Ordinance will provide clear standards as to the City's affordable housing requirements, thereby providing certainty to developers and allowing for the inclusion of the requirement into the initial pro forma and design of the project. The adoption of the ordinance will also ensure that the affordable housing obligation is applied in a consistent and equitable manner. The proposed ordinance applies to proposals for five or more housing units and makes a distinction between those developments going ahead under the "as-of-right" zoning provisions, and those needing a discretionary zoning or general plan amendment. The ordinance will only apply to those developments requesting a zoning amendment from a non-residential to a residential zone (including City-initiated re-zones), an increase in density, a conversion to the residential provision of an overlay zone, or conversion of apartments to condominiums. The rationale behind this approach is that these developments are receiving additional, and often considerable, economic windfall through the development approval process, and the public should recover some part of that benefit and most certainly the public should not be penalized to provide affordable housing when the requirement is caused by a developer's windfall. 75B-6