PC Reso 2024-10CITY OF CUPERTINO
10300 Torre Avenue
Cupertino, California 95014
RESOLUTION NO.2024-10
A RESOLUTION OF THE PLANNING COMMISSION
OF THE CITY OF CUPERTINO RECOMMENDING APPROVAL OF
PROPOSED SPECIFIC PLAN AMENDMENTS AND THE BELOW MARKET
RATE HOUSING MITIGATION MANUAL ALLOWING FOR CONSISTENCY
WITH THE 6TH CYCLE HOUSING ELEMENT AND MINOR EDITS FOR
CLARITY
The Planning Commission recommends approval of the Specific Plan Amendments and
Amendments to the Below Market Rate Housing Mitigation Manual to the City of
Cupertino Municipal Code with the findings reflected in the Draft Resolution attached
hereto as Exhibits SPA-1 and CP-1.
PASSED AND ADOPTED this 11th day of June 2024, at a Regular Meeting of the Planning
Commission of the City of Cupertino by the following roll call vote:
AYES: Lindskog, Madhdhipatla, Mistry, Scharf
NOES:
None
ABSTAIN:
None
ABSENT:
Fung
ATTEST:
w C"
Piu Ghosh
Planning Manager
Planning Commission
RESOLUTION NO.
A RESOLUTION OF THE CUPERTINO CITY COUNCIL
APPROVING AMENDMENTS TO THE HEART OF THE CITY SPECIFIC PLAN
AND THE BELOW MARKET RATE HOUSING MITIGATION MANUAL
TO ALLOW IMPLEMENTATION OF THE HOUSING ELEMENT
AND MEET THE REQUIREMENTS OF STATE LAW
SECTION I: PROTECT DESCRIPTION
Application No: SPA-2023-001, CP-2024-002
Applicant: City of Cupertino
Location: Citywide/Various locations
SECTION II: RECITALS
WHEREAS, state law requires the City to prepare and adopt an updated Housing
Element every eight years to accommodate its fair share of housing and identify housing
needs, resources and opportunities;
WHEREAS, the City Council adopted the draft Housing Element on May 14, 2024; and
WHEREAS, the City entered into a Stipulated Judgment dated January 8, 2024 pursuant
to a lawsuit related to adoption of the Housing Element which included requirements for
coming into compliance with state housing element law and exempted the City from the
California Environmental Quality Act ("CEQA") pursuant to Government Code section
65759; and
WHEREAS, pursuant to Government Code 65759, the Heart of the City Specific Plan
Amendments, which are related to the rezoning for Priority Housing Sites, to adopt the
Housing Element and associated amendments to the General Plan zoning are fully
described and analyzed in the Environmental Assessment, which is incorporated into the
General Plan as Appendix G; and
WHEREAS, the Housing Element contains strategies for achieving these goals and
policies, including implementation of the City's Residential Housing Mitigation Program
described in Strategy HE 2.3.3, which requires projects with five or more new units to
provide units and projects with four or fewer new units to pay an in -lieu of BMR unit fee;
and
WHEREAS, Cupertino Municipal Code Section 19.172.030 authorizes the City Council to
adopt rules and regulations for the purposes of carrying out the administration of the
Residential Housing Mitigation Program; and
WHEREAS, the City Council has implemented Section 19.172.030 through the adoption
of the City's BMR Housing Mitigation Program Procedural Manual, which was last
amended on May 19, 2020; and
WHEREAS, the City Council desires to amend the BMR Housing Mitigation Program
Procedural Manual to conform the BMR Housing Mitigation Manual with the adopted
2023-2031 Housing Element;
WHEREAS, on June 11, 2024, the Planning Commission recommended on a X-X vote that
the City Council adopt the Specific Plan Amendment (SPA-2023-001) and Below Market
Rate Housing Mitigation Manual (CP-2024-002) in substantially similar form to the
Resolution presented (Resolution No. 2024-XXX); and
WHEREAS, all necessary public notices having been given as required by the City of
Cupertino Municipal Code and the Government Code, on July X, 2024, the City Council
held a public hearing to consider the Specific Plan Amendment and the Below Market
Rate Housing Mitigation Manual; and
WHEREAS, the City Council of the City of Cupertino is the decision -making body for
this Resolution.
SECTION III: RESOLUTIONS
NOW, THEREFORE, BE IT RESOLVED:
After careful consideration of the maps, facts, exhibits, testimony and other evidence
submitted in this matter, and based on the preceding findings, the City Council hereby:
1. Finds that the foregoing recitals are true and correct; and
2. Adopts amendments to the Heart of the City Specific Plan text and figures as shown
in Exhibit SPA-1, which is incorporated herein by reference as part of this resolution;
3. Authorizes staff to make non -substantive and/or grammatical changes to figures
and/or text for purposes of internal consistency prior to publication of the Specific
Plan.
NOW, THEREFORE, BE IT FURTHER RESOLVED:
The foregoing recitals are true and correct and are included herein by reference as findings.
PASSED AND ADOPTED this _th day of July 2024, at a Regular Meeting of the City
Council of the City of Cupertino, State of California, by the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
SIGNED:
Shiela Mohan, Mayor
Date
City of Cupertino
ATTEST:
Kirsten Squarcia
Date
City Clerk
Exhibit SPA-1
DE ;jELOPMENT STANDARDS AND DESIGN GUIDELINES
Area and Special Centers Map
This Heart of the City Area and Special Centers Map (Figure 1) defines the boundaries of the
Heart of the City Specific Plan area and the Special Centers within these boundaries. This map
also identifies the primary and supporting land uses for each Special Center in accordance with
the Cupertino General Plan, and a variety of land use opportunities of well planned and designed
commercial, office and residential development, enhanced activity nodes, and safe and efficient
circulation and access for all modes of transportation between activity centers that help focus and
support activity in the centers. The Heart of the City Area and Special Centers Zoning Map
(Figure 2) identifies the Zoning for each parcel within these boundaries. The applicable
standards for these parcels are identified in the Development Standards and Design
Guidelines Chapter later in this document. Note: Update Fi�is located at the end of the
text edits indicated here.
Development Standards
1.01.020 Land Use and Zoning - Permitted and Conditional Uses
The zoning and land uses for properties shall comply with the land use and zoning maps in
Figures 1 and 2 as follows: Note: Update Figure 2 is located at the end of the text edits indicated
here.
B. Residential — Residential density shall be per the General Plan Figure LU-2, Land Use, and
zoning maps. In mixed residential and commercial developments, the preferred location for
residential units shall be behind primary street fronting retail/commercial uses or above the
ground level on multistory buildings. The amount of building space devoted to retail/commercial
uses shall be such that the retail/commercial uses shall have a viable and substantial retail
component.
1.01.030 Building Height, Setbacks and Orientation
Properties zoned multiple -family residential (R-3 or R-4), or any combination zoning with TH
zoning shall comply with the height, setback, and orientation development standards
established by the Municipal Code. Where the Municipal Code is silent or refers to the Specific
Plan on development or design standards, the Heart of the City standards will apply.
Development regulations for all other properties will be as follows:
A. Height-...
1.01.040 Site Development and Parking
Properties zoned multiple -family residential (R-3 or R-4), or any combination zoning with TH
zoning shall comply with the site development and parking standards established by the
Municipal Code. Where the Municipal Code is silent or refers to the Specific Plan on
Exhibit SPA-1
development or design standards, the Heart of the City standards will apply. Development
regulations for all other properties will be as follows:
A. Access...
Design Guidelines
2.01.010 Description
Properties zoned multiple -family residential (R-3 or R-4), or any combination zoning with TH
zoning, thereof shall comply with the design standards established by the Municipal Code or
any other objective design standards adopted, whether by Council resolution or otherwise.
Where the Municipal Code is silent on or refers to the Specific Plan on design, the Heart of the
City standards will apply. Design guidelines for all other properties will be as follows:
A. Building Increment-...
APPENDIX B - General Plan Policies Related to the Heart of the
City Plan Area
The Community Vision 2040 policies and strategies under Goals LU-13 through LU-18 apply to
the Heart of the City Specific Plan Area and subareas.
8
r
i
u
01
. ikz
71
- i
� 1 I--
J 1
t ;
� = 1
�f I
I
1 I �5
O ' �
.—L
u -
I - '
= n ^ s .r a•wY.. ...
e+
d
Figure 2: Heart of the City Area and Special Centers Zoning Map
CITY OF CUPERTINO - HEART OF THE CITY SPECIFIC PLAN
Below Market Rate (BMR) Housing Mitigation Program
Procedural Manual
i
Amended and Adopted by City Council
July 2, 2024
Resolution No. 24-XXXX
CITY OF CUPERTINO HOUSING DIVISION
DEPARTMENT OF COMMUNITY DEVELOPMENT
10300 TORRE AVENUE
CUPERTINO, CA 95014
VOICE: (408)777-3251
FAX: (408)777-3330
Table of Contents
1 Introduction........................................................................................................................................1
2 Housing Mitigation Program...........................................................................................................2
2.1 Applicability.................................................................................................................................2
2.2 Affordable Housing Mitigation Fee..............................................................................................2
2.2.1 Payment........................................................................................................................................
2
2.2.2 Permitted Use of Fees...........................................................................................................3
2.3 Affordable Housing Units............................................................................................................3
2.3.1 Minimum Affordability of Residential Units.......................................................................3
2.3.2 Fractional Units...................................................................................................................4
2.3.3 Affordable Housing Plan......................................................................................................5
2.3.4 BMR Unit Design Requirements............................................................................................
5
2.3.5 Initial Maximum Sales Prices and Rents of BMR Units.....................................................5
2.3.6 Terms of Affordability..........................................................................................................7
2.3.7 Agreement between Developer and City..............................................................................7
3 Mitigation Requirements of Non -Residential Developments......................................................9
3.1 Requirements................................................................................................................................9
3.2 Non -Residential Fee Calculations................................................................................................9
4 Mitigation Requirements of Ownership Residential Developments.......................................10
4.1 Requirements.............................................................................................................................10
4.2 BMR Requirements for Developments with One (1) to )Four 4 Units .........................10
4.3 BMR Requirements for Developments with Seven W4Five L51 or more Units ..........................10
5 Mitigation Requirements of Rental Residential Developments................................................11
5.1 Requirements.............................................................................................................................11
5.2 Residential Rental Impact Fee Calculations..............................................................................11
6 Mitigation Requirements for Mixed -Use Projects......................................................................12
6.1 Requirements.............................................................................................................................12
6.2 Mixed -Use Mitigation Fee Calculations....................................................................................12
7 Alternatives to BMR Requirements..............................................................................................13
7.1 Options for Alternatives............................................................................................................13
7.2 Housing Plan for Alternative BMR Requirements...................................................................13
8 City Incentives................................................................................................................................15
8.1 Density Bonus...........................................................................................................................15
8.2 Financial Assistance..................................................................................................................15
8.3 Fee Waivers...............................................................................................................................15
8.4 Priority Processing....................................................................................................................15
8.5 City Certification of Buyer and Tenant Eligibility....................................................................15
[Page intentionally left blank]
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
1. Introduction
In accordance with the City of Cupertino's Housing Element, all new residential and/or non-
residential developments are required to help mitigate project -related impacts on affordable
housing needs.
As required by Section 19.172.030 of the Cupertino Municipal Code, this manual establishes
procedures for implementing the affordable housing mitigation provisions of the City's Below
Market Rate (BMR) Housing Mitigation Program.
A separate manual, the "Policy and Procedures Manual for Administering Deed Restricted
Affordable Housing Units" establishes the procedures for the on -going administration of the
inventory of BMR units created by the City's Residential Housing Mitigation Program. The City
or its agent will administer the programs.
-1-
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
1 Housing Mitigation Program
1.1 Applicability
A. The Non-residential and Residential Housing Mitigation Programs are applicable to all
non-residential and/or residential projects that result in an increase of gross floor area
(for fee -based program) and/or the number of net new units in a development (for
unit -based program) with the following exemptions:
1. New gross floor area that is replacing demolished or destroyed gross floor area;
2. Existing space that is being rehabilitated, but not enlarged;
3. Governmental buildings;
4. Institutional buildings;
5. Demolition and rebuild of or additions to existing single family homes;
6. Accessory dwelling units and
7. Parking garages (this exemption does not apply to commercial paid -parking garages).
The program has two components; a fee -based program for certain types of development
and a unit -based program for other types of development.
1.2 Affordable Housing Mitigation Fee
A. Non-residential and residential affordable housing mitigation fee amounts are set by the City
Council for developments as outlined in Chapters 3.4 and 5.
B. The Affordable Housing Mitigation Fee may not exceed the cost of mitigating the impact of
the type of development on the need for affordable housing as supported by nexus studies
that may be commissioned from time to time by the City Council.
C. The fee shall be adjusted annually using the Consumer Price Index (all items index for the
San Francisco Bay Area).
D. The City will publish the most recently adopted housing mitigation fees annually in the fee
schedule.
1.2.1 Payment
A. Fees shall be based on the fee schedule in effect on the date that the construction
permit is issued by the City and shall be due and payable on the date of issuance
of construction permits, unless otherwise required by state law.
B. In the event that the applicant is allowed to defer payment of fees and is issued
construction permits, the fees shall be due and payable according to the fee
schedule in effect on the date of fee payment, prior to first occupancy of the
project, unless a negotiated Development Agreement allows otherwise.
-2-
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
C. All fees shall be deposited into the City's Below Market Rate (BMR) Affordable
Housing Fund (AHF).
1.2.2 Permitted Use of Fees
A. Affordable housing mitigation fees deposited into the BMR AHF shall only be
used for the provision of affordable housing in Cupertino.
B. The options for use of the fee revenue include, but are not limited to the following:
1. BMR Program Administration
2. Land Acquisition
3. New Construction
4. Acquisition and/or rehabilitation of buildings for permanent affordability
5. Preserving "at -risk" BMR Units
6. Substantial Rehabilitation
7. Rental Operating Subsidies
8. Down Payment Assistance
9. Direct gap financing
10. Fair Housing
C. A portion of the BMR AHF will be targeted to benefit the following groups, to the
extent that these target populations are found, to be consistent with the needs
identified in the nexus study:
1. Extremely low-income households and
2. Persons with special needs (such as the elderly, victims of domestic violence,
and the disabled, including persons with developmental disabilities).
1.3 Affordable Housing Units
Affordable housing unit requirements are set by the City Council.
1.3.1 Minimum Affordability of Residential Units
A. When a development provides Ownership Below -Market -Rate (BMR) units, the
affordability requirements for units shall be as follows:
1. Fifty percent (50%) of BMR units as median -income and fifty percent (50%)
as moderate -income.
2. If a single BMR unit is provided, it shall be designated for median income.
B. When a development proposes to provide on -site Rental BMR units, the
affordability requirements for units shall be as follows:
-3-
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
1. Sixty percent (60%) of BMR units as very low-income and forty percent (40%)
as low-income.
2. If a single BMR unit is provided, it shall be designated for very -low income.
C. When the calculations in A or B (above) result in an odd number, the "extra unit"
shall benefit the median -income group for Ownership BMR units and the very
low-income group for on -site Rental BMR units.
Affordability of Units — Example
Ownershi BMR Units
Rental BMR Units*
# of BMR Units
Required*
# of Median
Income Units
# of Moderate
Income Units
# of Very -Low
Income Units
# of Low Income
Units
1
1
0
1
0
4
2
2
2
2
9
5 **
4
5
4***
* See Chapter 7 for BMR rental units.
** See Section 2.3.1 for extra unit
*** See Section 2.3.2 for fractional units
1.3.2 Fractional Units
A. When computations for the number of required BMR units result in fractional
units, the developer's obligations shall be as follows:
1. 0.00 - 0.49 of a unit: Pay an in -lieu fee for the fractional unit in compliance
with Section 2.2.1.
2. 0.50 - 0.99 of a unit: Round up and provide one additional BMR unit.
B. Determination of the in -lieu fee for fractional units:
1. Determine the total Housing Mitigation Fee for the entire project (as though
impact fees will be paid rather than on -site units provided.) The Housing
Mitigation Fee for the project is calculated by multiplying the gross floor area
of the project by the applicable affordable housing mitigation fee based on the
fee schedule in effect.
2. Determine the Housing Mitigation Fee per affordable unit by dividing the
total Housing Mitigation Fee as calculated in B1 (see above) by the total
number of required affordable units (even if fractional).
3. Determine the in -lieu fee owed for the fractional unit by multiplying the
Housing Mitigation Fee per affordable unit as calculated in B3 (see above) by
the fractional amount.
-4-
BMR HOUSING MMGATION PROGRAM
PROCEDURALMANUAL
Example
Residential project: 42 units, BMR requirement = 8.4 units
Gross Floor Area/home = 3,000 sq. ft. (excluding exemptions)
On -site requirement = 8 BMR units, In -lieu fee requirement = 0.4 unit
Affordable housing mitigation fee = $201sq. ft (assumed)
In -lieu fee calculated as follows:
Step 1: Total Housing Mitigation Fee = 42 units x 3,000 sq. ft. x $201sq. ft. = $2,520,000.
Step 2: Impact fee per affordable unit = $2,520,000 = 8.4 BMR units = $300,000 per BMR unit.
Step 3: In -lieu fractional impact fee = $300,000 x 0.4 = $120,000.
Note: Thefee calculation and estimates above are examples only and may not reflect actualfees.
1.3.3 Affordable Housing Plan
A. For projects that propose BMR units, the applicant shall submit an "Affordable
Housing Plan," describing how a development project will comply with the
City's BMR requirements, with the application for the first approval of the project.
B. The plan shall identify the BMR units or parcels in the development.
C. If alternatives are proposed in compliance with Chapter 7, the plan shall identify
how the proposal is equivalent to the BMR requirements of Chapter 4.
D. An applicant may submit a request for a waiver or modification of the City's BMR
requirements concurrently with the application for the first approval of the project,
based upon a showing that applying the requirements would result in an
unconstitutional taking of property or would result in any other unconstitutional
result. The request must set forth in detail the factual and legal basis for the claim.
The request for the waiver or modification will be processed concurrently with the
affordable housing plan and all other permits required for the project.
E. The decision -making body with authority to approve the project shall review and
may approve, conditionally approve, or deny the Affordable Housing Plan.
However, the City Council shall review and may approve, conditionally approve,
or deny an Affordable Housing Plan that proposes alternatives to the BMR
requirements of Chapter 3, 4, and/or 5 or that requests a waiver or modification of
the BMR requirements. The waiver or modification may be approved only to the
extent necessary to avoid an unconstitutional result, based on the City Attorney's
legal advice, after adoption of written findings based on legal analysis and
substantial evidence. If a waiver or modification is granted, any change in the
project will invalidate the waiver or modification, and a new application will be
required for a waiver or modification.
-5-
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
1.3.4 BMR Unit Design Requirements
A. BMR units shall be comparable to market rate units in terms of unit type, number
of bedrooms per unit, quality of exterior appearance and overall quality of
construction.
B. BMR unit size should be generally representative of the unit sizes within the
market -rate portion of residential project.
C. Interior features and finishes in affordable units shall be durable, of good quality
and consistent with contemporary standards for new housing.
D. The BMR units shall be dispersed throughout the residential project.
1.3.5 Initial Maximum Sales Prices and Rents of BMR Units
A. For Sale BMR Units
The maximum initial sales prices of BMR units will be determined by the City, or
its agent, based on the maximum affordable housing cost provisions of Section
50052.5 of the California Health and Safety Code and the most recent published
State Department of Housing and Community Development (HCD) income limits,
as follows:
1. Determine the annual median income, based on HCD income tables for Santa
Clara County, for a household size that is one person more than the number
of bedrooms in the BMR unit.
2. Multiply the median income by the following:
a. 110% for a BMR moderate income unit; and
b. 90% for a BMR median income unit.
3. Obtain the maximum annual housing allowance by multiplying the annual
income from Step 2 above by 0.35 (moderate -income) or 0.30 (median- income).
4. Obtain the maximum monthly housing allowance by dividing the annual
housing allowance by 12.
5. Determine the maximum mortgage that can be financed:
a. The City's BMR ownership program requires a minimum borrower down
payment of 5%; therefore, the first mortgage loan amount will be calculated
at a 95% loan -to -value (LTV) ratio. In order to determine the primary
mortgage interest rate at least two City BMR approved lenders will be
contacted for a 30 year fully amortized fixed-rate primary home mortgage
interest rate quote based on specific BMR sales price scenarios. Either use
the average of the BMR lender interest rate quotes or 0.5% higher interest
rate than interest rate quotes.
-6-
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
b. Determine the maximum home mortgage that can be financed based on
the principal and interest (P&I) mortgage payment as determined by the
interest rate in Step 5a. The total monthly housing expense shall include
the P&I mortgage payment, property taxes, mortgage insurance (if
applicable), homeowner's insurance, and homeowner's association (HOA)
fees.
c. Determine the maximum initial BMR unit sales price by adding up the total
monthly housing expense as described in Step 5b. The proposed total
monthly housing expenses cannot exceed the maximum monthly housing
allowance as described in step 4.
B. Rental BMR Units
1. The maximum initial rents for BMR units are set at a level affordable to low and
very low-income households. The maximum initial rents for BMR units shall be
determined based on:
a. Maximum housing allowance of 30% of gross income for a household size of
one person more than the number of bedrooms in the rental BMR unit, and
b. For low income units, assume household income at 60% of median- income,
and for very low-income units, assume household income at 50% of median -
income.
2. The maximum rents for BMR units and maximum household income limits are
revised annually following the annual publication of HCD income limits for Santa
Clara County.
3. 'Rent" includes monthly rent paid to the property owner, utilities, and all fees for
parking and other housing services. A reasonable utility allowance, as determined
by the tables published annually by the Santa Clara County Housing Authority,
shall be deducted from the maximum monthly rents for those utilities paid by the
tenant.
4. Where affordable housing units are developed with other state or federal housing
program assistance, the rental price requirements of the state or federal housing
program will supersede the price limitations of these Guidelines where they are
more stringent.
1.3.6 Terms of Affordability
Affordable housing is subject to recorded covenants that require the units be
occupied at prices/rents that are affordable to Low to Moderate -income households
for a period of not less than 99 years from the date of first occupancy of the unit.
These deed restrictions shall run with the land and will remain in effect for
subsequent buyers and owners.
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
1.3.7 Agreement between Developer and City
A. Prior to recordation of a final or parcel map or issuance of any building permit,
whichever is earlier, an affordable housing agreement shall be recorded against
the property. The affordable housing agreement shall include, but not be limited
to, the following:
1. Total number of BMR units, type, location, square footage and number of
bedrooms, and construction scheduling of market -rate and BMR units;
2. Provisions to ensure concurrent construction and completion of BMR and
market -rate units;
3. Affordability levels for each BMR unit;
4. Provisions for income certification and screening of potential occupants of
BMR units;
5. Resale control mechanisms;
6. Financing of ongoing administrative and monitoring costs (City and private);
7. If applicable, a relocation plan for tenants of rental BMR units upon sale of
units or redevelopment of site; and
8. Other reasonably required provisions to implement the Affordable Housing
Plan.
B. Agreements for projects that provide alternatives to BMR requirements shall
additionally contain provisions to ensure that the alternative requirements are
completed prior to occupancy of the market rate development.
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
2 Mitigation Requirements of Non -Residential Developments
3.1 Requirements
A. All non-residential projects that result in a net increase in gross floor area shall be
required to pay the Affordable Housing Mitigation Fee in compliance with Section 2.2 of
this manual.
B. Projects may propose alternatives to the BMR requirement in A (see above) in compliance
with Chapter 7 of this manual.
3.2 Non -Residential Fee Calculations
Non-residential affordable housing mitigation fees shall be calculated by multiplying the
increase in gross square footage (SF) by the applicable non-residential affordable housing
mitigation fee.
Example Calculation of Non -Residential Affordable Housing Mitigation Fee
Scenario
Applicable SF
Fee Amount per SF of
Total Fee
Gross Floor Area t
Demolish and rebuild retail project:
Existing Gross sq. ft.=10,000 sq. ft.;
5,000 sq. ft.
$10.001sq. ft.
$50,000
Nezo Gross sq. ft. =15,000 sq. t.
New construction:
Commercial office = 50,000 sq. ft.;
Police substation =1,500 sq.
50,000 sq. ft.
$20.001sq. ft.
$1,000,000
Parking garage = 48,000 sq. ft. *
Note: * Exempt
t The fee amounts above are examples only and may not reflect actual fee amounts.
BMRHOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
3 Mitigation Requirements of Ownership Residential Developments
3.1 Requirements
A. An ownership residential development is any residential development that includes the
approval of a subdivision map and creates one or more units that may be sold
individually. It also includes a condominium conversion.
B. All ownership projects that result in the net increase in units shall be required to
provide BMR mitigations in compliance with Section 4.2 and 4.3.
C. Projects that propose alternatives to the BMR requirement in A (see above) shall do so
in compliance with Chapter 7 of this manual.
3.2 BMR Requirements for Developments with One (1) to £tom (6)Four 4 Units
New ownership projects adding one to 4*-four units may either pay the Affordable Housing
Mitigation Fee in compliance with Section 2.2 or provide one BMR unit in compliance with
Section 2.3.
Example Calculation of Ownership Affordable Housing Mitigation Fee (1-6 units)
Applicable
Fee Amount per SF of
Scenario
SF
Gross Floor Area t
Total Fee
New single family home or townhome:
Gross sq. ft. = 3,025 sq. ft.;
2,600 sq. ft.
$20.001sq. ft.
$52,000
Gara e = 425 sq. ft. *
New 54 unit multifamily ownership development:
Gross sq. ft.=10,000 sq. ft;
6,000 sq. ft.
$20.001sq. ft.
$120,000
Gara e = 4,000 s . . *
Note: *Exempt,
t The fee amounts above are examples only and may not reflect actual fee amounts.
3.3 BMR Requirements for Developments with S 4Five 5 or more Units
New ownership projects with seven five or more units or lots shall provide at least 20% of
the units or lots as BMR ownership units or lots per Section 2.3.
Example Calculation of Ownership Affordable Housing Mitigation Fee (7+units)
Scenario
BMRrequirement
BMR
Fees
units
New 24-unit ownership townhome project
24 x 20% = 4.8 units
5 units*
N/A
New46-unit condominium development
46 x 20% = 9.2 units
9 units
Pay fee for 0.2 unit
per Section 2.3.2
Note: *Additional unit if over 0.49 per Section 2.3.2;
t The fee amounts above are examples only and may not reflect actual fee amounts.
-10-
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
4 Mitigation Requirements of Rental Residential Developments
4.1 Requirements
A. A rental residential development is any residential development that creates new
dwelling units that cannot be sold individually.
B. All rental projects that result in the net increase in units shall be required to provide
BMR mitigations in compliance with Section 5.2 and 5.3.
C. Projects that propose alternatives to the BMR requirement in A (see above) shall do so
in compliance with Chapter 7 of this manual.
4.2 BMR Requirements for Developments with One (1) to )Four 4 Units
New rental projects adding one to 4—four units may either pay the Affordable Housing
Mitigation Fee in compliance with Section 2.2 or provide one BMR unit in compliance
with Section 2.3.
Example Calculation of Residential Affordable Housing Impact Fee (Rental Projects)
Scenario
Fee Amount per SF of
Total Fee
Gross Floor Area f
New 5-4unit multifamily rental development:
$20.00/sq. ft.
$100,000
Gross livable sq. ft. = 5,000 sq. ft;
Note: t The fee amounts above are examples only and may not reflect actual fee amounts
4.3 BMR Requirements for Developments with Seven (74Eive 50 or more Units
New rental projects with seven five or more units shall provide at least 15% of the units
or lots as BMR ownership units or lots per Section 2.3.
Example Calculation of Rental Affordable Housing Mitigation Fee (7+units)
BMR
Scenario
BMRrequirement
Fees
units
New 25-unit rental project
25 x 15%=3.75 units
4 units*
NA
Pay fee for 0.25 unit
New 45-unit rental project
45 x 15% = 8.25 units
8 units
per Section 2.3.2
Note: *Additional unit if over 0.49 per Section 2.3.2;
t The fee amounts above are examples only and may not reflect actual fee amounts.
-11
BMRHOUSING MPITGATION PROGRAM
PROCEDURALMANUAL
5 Mitigation Requirements for Mixed -Use Projects
5.1 Requirements
A. All new and redeveloped mixed -use developments shall comply with requirements in:
1. Chapter 3 for non-residential components; and/or
2. Chapter 4 for residential ownership components; and/or
3. Chapter 5 for residential rental components.
B. Projects that propose alternatives to the BMR requirements in A (see above) shall do so
in compliance with Chapter 7 of this manual.
5.2 Mixed -Use Mitigation Fee Calculations
Example Calculation of Residential Affordable Housing Mitigation Fee
Scenario
Applicable SF
Fee Amount per SF of Gross
Total
Floor Area f
Mitigation
New mixed -use project.
Res. condos (2 units) = 3,000 sq. ft.;
Res. = 3,000 sq. ft.
Office = 5,000 sq. ft.;
Off: = 5,000 sq. ft.
Residential Ownership fee =
$160,000
Parking Garage = 850 sq. ft. *
$20.00/sq. ft.
Residential Rental fee=
New mixed -use project:
25.00/sa. ft.
Res. Apartments (4 units) = 3,200 sq. ft.:
Res. = 3.200 sq. ft.
115 000
Retail = 3,500 sa. ft.
Retail = 3.500 sa. ft.
Parkin Gara e = 0 sq. ft.
Residential Rental BMR Units
=15%
New mixed -use project:
Res. rental (120 units)=110,000 s .
sq.ft.;
Res. l 0 units.
18 units
Retail space = 50,000 sq. ft.;
Retail = 50,000 sq.
q
Residential Ownership BMR
plus
Hotel (160 rooms) = 50,000 sq. ft.;
ft.
units=20%
$1,000,000
Parking Garage=150,000 sq. ft.*
Hotel = 50,000 sq. ft.
WHI
Side cti�tl few
New mixed -use project:
Res. Condos (120 units)=110,000 sq. ft.;
Res. =120 units
Office fee = $20.00/sq. ft.
24 units
Retail space=10,000 sq. ft.;
Retail=10,000 sq. ft.
Retail & Hotel fee = $10/sq. ft.
plus
Office = 25,000 sq. ft.;
Office = 25,000 sq. ft.
$600,000
Parking Garage = 60,000 sq. ft. *
Note: *Exempt
t The fee amounts above are examples only and may not reflect actual fee amounts.
-12-
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
6 Alternatives to BMR Requirements
The Council may, at its discretion, approve other alternatives to Chapters 3, 4, 5 and 6. The
alternatives proposed shall be equivalent to the applicable BMR requirements for the project.
6.1 Options for Alternatives
A. Options for Alternatives to BMR Requirements may include, but are not limited to the
following:
1. On -site BMR rental units where ownership units or a fee is required.
2. Purchase of off -site units to be dedicated and/or rehabilitated as for -sale or rental BMR
units per Section 2.3.
3. Development of off -site units to be dedicated as for -sale or rental BMR units per
Section 2.3.
4. Land for development of affordable housing.
B. The Council may approve, conditionally approve, or deny a proposal to provide
alternatives to BMR requirements.
6.2 Housing Plan for Alternative BMR Requirements
A. If alternatives to BMR requirements are proposed, an Affordable Housing Plan shall, in
addition to the requirements of Section 2.3.3:
1. Demonstrate equivalency of the alternative to BMR requirements
2. Rental BMR units shall be affordable as shown in Section 2.3.1.
3. If off -site development of BMR units is proposed:
a. Identify the proposed site and demonstrate site control;
b. Identify the developer for the proposed off -site BMR project;
c. If not appropriately zoned, demonstrate compatibility of the proposed project with
adjacent uses;
d. Provide a financial pro forma identifying all financing sources to fully fund an
affordable project; and
e. Provide a plan for completion of the off -site BMR development, prior to
approval of the market -rate project. The Affordable Housing Plan shall
additionally include, but not be limited to, the following items prior to any
parcel or final map or issuance of building permits for the market -rate project,
whichever is earlier:
i. Transfer of property to BMR developer;
-13
BMRHOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
ii. Recordation of a city -approved deed restriction against the property;
iii. Discretionary approvals from the City for the proposed BNM development;
iv. Committed financing for the project in an escrow account or an account
approved by the City with joint signatory authority with the City and firm
commitments from lenders or other sources of financing for the project; and
v. A contingency plan, including a schedule o f timing and agreement to
provide the required on -site BMR mitigation, in the event the off -site BNIlZ
units are not completed prior to completion of the market rate development.
B. The City may retain a consultant, at the developer's expense, to review the reasonableness
of the proposal and the submitted pro -forma.
-14-
BMR HOUSING MITIGATION PROGRAM
PROCEDURALMANUAL
7 City Incentives
7.1 Density Bonus
To maximize housing opportunity and partially assist the developer by reducing or
eliminating the development cost for the affordable units, a density bonus consistent with
Chapter 19.56 of the Cupertino Municipal Code, Density Bonus, will be permitted.
7.2 Financial Assistance
If the project qualifies, the City may choose to utilize BMR AHF monies to create a
greater percentage of affordable units at greater affordability than otherwise required (very
low and low income in for -sale developments; extremely low and very low in rental
developments).
7.3 Fee Waivers
The City may consider waiving park dedication and construction tax fees for affordable units.
7.4 Priority Processing
The City shall, wherever possible, consider expediting the processing of developments with
affordable units.
7.5 City Certification of Buyer and Tenant Eligibility
The City or its agent shall certify the eligibility of all proposed buyers and renters of BMR
units.
-15