§ 15.68.080. In-lieu housing production mitigation measures.

As an alternative to payment of all or part of the impact fee required under this Chapter, an applicant subject to the requirements of this Chapter may elect to produce affordable housing in lieu of the impact fee to mitigate the impacts of the development project. Any applicant electing this in-lieu option must demonstrate that it will construct or cause to be constructed new affordable housing units (of any tenure type) as determined by the following formula:

(number of gross square feet in development project devoted to office or warehouse/distribution uses minus 25,000 square feet) × .00004 = number of affordable housing units.

This unit production requirement shall be adjusted by the City Administrator as appropriate to account for any partial payment of impact fees to be made by the applicant.

In the event that an applicant chooses the in-lieu housing production option, the applicant must submit satisfactory evidence to the City Administrator of site control and issuance of a use permit for the project intended to produce the affordable housing units, prior to receipt of the building permit for the development project. The applicant must obtain a building permit for the affordable housing project prior to the issuance of the Certificate of Occupancy for the development project. The applicant must secure a Certificate of Occupancy for all affordable housing units no later than eighteen (18) months from the issuance of the Certificate of Occupancy for the development project.

An applicant who elects to comply with the requirements of this Chapter through the production of housing must submit to the City Administrator an affordable housing production proposal with sufficient information to enable the City Administrator to determine that the applicant will construct or cause to be constructed the required number of affordable housing units. The application must demonstrate to the City Administrator's satisfaction that it possesses the financial means, technical expertise and experience to commence and complete the construction of the affordable housing within the required time period.

Where the applicant intends to construct housing units through participation in a joint venture, partnership or similar arrangement, the applicant must certify to the city to the City Administrator's satisfaction that the applicant has made a binding commitment, enforceable by the applicant's joint venturers or partners, to contribute an amount of funds to the joint venture or partnership equivalent to or greater than the amount of the impact fee that would otherwise be imposed under Section 15.68.060 of this Chapter, less the portion of the housing requirements of this Chapter actually met through the payment of impact fees, and that such joint venture or partnership is legally obligated to use such funds to develop the affordable housing required by this Section. Any joint venturer or partner must meet the qualifications for an affordable housing developer as provided by regulations to be adopted by the City Administrator. No building permit may be approved for a development project subject to this paragraph until the applicant has paid in full or has posted an irrevocable letter of credit or other form of financial security acceptable to the City Administrator in the amount of the required monetary contribution. Additionally, the city may require a lien on the development project property in the amount of any unpaid monetary contribution to assure compliance with this Chapter.

The City Administrator may issue guidelines for the administration of the in-lieu housing production mitigation measures provisions of this Section. If the City Administrator approves an affordable housing production proposal, he or she shall issue a certificate so indicating. This certificate shall be recorded on title of the development project property as a covenant running with the land, and indicate that compliance with this Chapter is a binding obligation of the owner of the development project property, and the owner's assignees and successors in interest enforceable by the city.

In the event the application of this Section to an applicable development project creates an obligation to construct a fractional housing unit, that fraction shall be converted into an addition to the impact fee, or in the alternative, at the discretion of the City Administrator, an additional affordable housing unit.

In the event all affordable housing units required under the certification are not timely produced as required by this Section, the City Administrator may impose a charge on the applicant equal to one hundred fifty (150) percent of the impact fee which would have been otherwise due and owing under Section 15.68.060 of this Chapter, together with interest accrued from the date of the first building permit issuance for the development project, and shall so notify the applicant. If this charge is not paid by the applicant within sixty (60) calendar days of the expiration of the applicable time period, the city may record a special assessment lien against the development project property in the amount of any charge and interest owed, or in the alternative the city may revoke or suspend the Certificate of Occupancy for the development project use.

(Ord. No. 13365, § 7, 5-3-2016; Ord. 12442 § 2 (part), 2002)