CC 05-01-2018 Exhibit Item No. 3 Below Market Rate (BMR) Housing Program PresentationBELOW MARKET RATE (BMR)
HOUSING PROGRAM
City of Cupertino -City Council Study Session
May 1, 2018
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, California 94612
(510) 836-6336
goldfarb lipman attorneysCC 05-01-2018
Item No. 3
OVERVIEW
I.Regulatory Framework
II.Existing BMR Housing Program
III.Potential Modification Process
IV.Other Housing Tools
REGULATORY FRAMEWORK
CBIA v. San José (2015)
Upheld inclusionary requirements
No nexus study required
Requirements must be reasonably related to the
public health, safety, and welfare
Requirements must not be “confiscatory”
REGULATORY FRAMEWORK
AB 1505 (2017)
Supersedes the California Court of Appeal’s 2009
decision in Palmer/Sixth Street Properties LP v. City of
Los Angeles
Permits inclusionary requirements applied to new rental
housing projects, provided that:
Requirements must be imposed in the zoning ordinance
If more than 15% of total units are required for low income
households, HCD could require a feasibility study
Alternatives to on-site compliance must be offered
REGULATORY FRAMEWORK
HCD 2017 Household Income Limits for Santa Clara County
Income Category Approximate Percent of Area
Median Income*
Income Limit for 4-Person
Household
Extremely Low Up to 30%$35,800
Very Low Up to 50%$59,700
Low Up to 80%$84,900
Median Up to 100%$113,300
Moderate Up to 120%$135,950
*HCD makes various adjustments to very-low and low -income limits, which do not precisely equal 50% and 80% of the median.
EXISTING BMR HOUSING PROGRAM
•For Sale: 15% BMR
•Rental: 15% BMR for
low/very low income
households
Housing Element
Strategy HE-2.3.2
•Implements Housing Element
Requirements
•Authorizes rules and regulations
•Includes alternative compliance
options
BMR Ordinance
CMC Chapter 19.72
•Defines specific requirements applied to
individual projectsHousing
Mitigation
Manual
EXISTING BMR HOUSING PROGRAM
New
Residential
Development
with 7 or
More Units
Rental Units
Low Income Units Very Low Income Units
40%60%
15% of total units reserved for BMR
Program
Ownership Units
Median Income Units Moderate Income Units
50%50%
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EXISTING BMR HOUSING PROGRAM
Alternative Means of Compliance can be Requested
Purchase off-site units to be dedicated and/or
rehabilitated as BMR units
Develop off-site BMR units
Donate land for the development of BMR units
Provide on-site rental BMR housing (Ownership project only)
Housing Mitigation Fee (Projects with 6 or fewer units only)
POTENTIAL MODIFICATION PROCESS
City Council can amend BMR Ordinance and/or
Housing Mitigation Manual
Housing Element change would require HCD approval
Any changes must be consistent with the Housing
Element
For Sale: 15% BMR
Rental: 15% BMR for low/very low income households
HCD can require economic feasibility study for any
changes requiring more than 15% of rental units be
affordable at 80% AMI or less
OTHER HOUSING TOOLS
Maximizing production of
lower income units can
help with SB 166 and
SB 35 targets
County Measure A
Funds
City’s BMR Affordable
Housing Fund
HOME and CDBG
programs
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BELOW MARKET RATE (BMR)
HOUSING PROGRAM
City of Cupertino -City Council Study Session
May 1, 2018
Goldfarb & Lipman LLP
1300 Clay Street, 11th Floor
Oakland, California 94612
(510) 836-6336
goldfarb lipman attorneysCC 05-01-2018
Item No. 3