HomeMy WebLinkAbout071525-08.2
ADMINISTRATIVE STAFF REPORT 8.2
TO: Mayor and Town Council July 15, 2025
SUBJECT: Ordinance No. 2025-02, approving Zoning Text Amendment ZTA25-0001
amending the Town’s Inclusionary Housing Ordinance
BACKGROUND
An Inclusionary Housing Ordinance requires new residential projects to set aside a
percentage of units as below market rate units (BMRs). The inclusionary requirement
varies based on housing density and project size. Inclusionary Housing Ordinances are
local government’s primary tool in promoting housing that benefits lower income
segments of the community.
State Law AB 1505 provides authority for local governments to adopt ordinances that
require the provision of affordable units as a condition of development. The law also
requires the provision of alternate means for compliance.
The Town’s Inclusionary Housing Ordinance was first adopted in 1994 and was last
updated in 2014. Since the initial adoption, Danville has approved over 50 residential
housing projects which included inclusionary housing requirements.
As part of the Town’s 2023-2031 Housing Element, Implementation Plan Program 6.1.c.
requires the Town to update the Ordinance to require the provision of housing units
affordable to lower income households and to provide for an alternative compliance
method through the payment of in-lieu participation fees.
The Planning Commission reviewed the ordinance and recommended the Town approve
the revised ordinance during their meeting on June 10, 2025.
DESCRIPTION
Following are the significant recommended revisions to the Ordinance:
Affordability Levels
The existing Ordinance requires that the BMR units associated with new development be
restricted to be affordable to moderate-income households (80%-120% of median
income).
ZTA25-0001 2 July 15, 2025
Inclusionary Housing Ordinance
For lower density developments which require that ten percent of the units be provided
as BMR units, the revised Ordinance would require five percent (5%) of the units to be
restricted to low-income households (50%-80% median income), and five percent of the
units be restricted to be affordable to moderate income households.
For larger, higher density development, the current Ordinance requires that fifteen
percent (15%) of the units be restricted to be affordable to moderate income households.
Recommended Ordinance revisions would require that five percent (5%) of the units be
restricted to be affordable to very low-income households (less than 50% of the median),
five percent (5%) to be affordable to low-income households, and five percent to be
affordable to moderate-income households.
In-Lieu Participation Fees
The existing Inclusionary Housing Ordinance contains provision for the payment of in-
lieu participation fees to the Town, rather than incorporating BMR units into a
development.
Recommended Ordinance revisions would clarify how this fee is determined, and that
the fee must be calculated based on the requirement to provide very low and low-income
housing in addition to moderate income units.
For Rent Market Rate Accessory Dwelling Units
The proposed Ordinance revisions include a minor revision to the option that allows the
incorporation of accessory dwelling units (ADUs) into twenty-five percent of the units in
the project. One modification would reduce the minimum size of ADUs from 500 square
feet to 400 square feet.
PUBLIC CONTACT
Public notice of the July 15, 2025, Town Council meeting was placed in a local newspaper
and posting of the meeting agenda serves as notice to the general public.
ZTA25-0001 3 July 15, 2025
Inclusionary Housing Ordinance
RECOMMENDATION
Adopt Ordinance No. 2025-02, approving Zoning Text Amendment ZTA25-0001
amending the Town’s Inclusionary Housing Ordinance, and return for second reading
on August 12, 2025.
Prepared by:
David Crompton
Chief of Planning
Reviewed by:
Diane J. Friedmann
Development Services Director
Attachment: Ordinance No. 2025-02
ORDINANCE NO. 2025-02
REPEALING EXISTING SECTION 32-73 OF THE DANVILLE MUNICIPAL CODE
AND ADDING A NEW CHAPTER 32-73 TO THE DANVILLE
MUNICIPAL CODE RELATED TO INCLUSIOARY HOUSING
The Danville Town Council does ordain as follows:
SECTION 1. REPEALING SECTION 32-73 OF THE DANVILLE MUNICIPAL CODE.
SECTION 2. ADDING A NEW SECTION 32-73 TO THE DANVILLE MUNICIPAL
CODE.
A new Section 32-73 of the Danville Municipal Code is hereby added to read as follows:
32-73 INCLUSIONARY HOUSING.
32-73.1 Title.
This section shall be entitled the Inclusionary Housing Ordinance.
32-73.2 Findings.
The Town Council of the Town of Danville finds that Danville is experiencing a housing
shortage for affordable housing. A goal of the Town is to achieve a balanced community
with housing available for households of a range of income levels. Increasingly,
households with very low, low and moderate incomes who work and/or live within the
Town are unable to locate housing at prices they can afford and are increasingly excluded
from living in the Town. The Town finds that the high cost of newly constructed housing
does not, to any appreciable extent, provide affordable housing, and that continued new
development which does not include nor contribute toward lower cost housing will serve
to further aggravate the current housing problems by reducing the supply of developable
land. The Town further finds that the housing shortage for affordable housing is
detrimental to the public health, safety and welfare, and further that it is a public purpose
of the Town, and a public policy of the State of California as mandated by the
requirements for a Housing Element of the Town's General Plan, to make available an
adequate supply of housing for persons of all economic segments of the community.
32-73.3 Purpose.
The purpose of this section is to enhance the public welfare and assure that new
residential developments with eight (8) or more dwelling units or lots contribute to the
attainment of the Town's housing goals by increasing the production of affordable
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housing, and additionally stimulating funds for development of affordable housing. The
regulations set forth in this chapter shall apply to all areas of the Town of Danville.
32-73.4 Definitions.
For the purposes of this section, certain words and phrases shall be interpreted as set
forth in this section, unless it is apparent from the context that a different meaning is
intended.
Accessory Dwelling Unit means an attached or detached conditioned residential unit,
which provides complete, independent living facilities for one or more persons,
consistent with the requirements established under Section. It includes permanent
provisions for living, sleeping, cooking, eating and sanitation on the same parcel as the
primary unit. The term “accessory dwelling unit” includes a granny unit, second
dwelling unit, guesthouse, in-law unit, casitas, efficiency unit (as defined in Health and
Safety Code section 17958.1), manufactured home (as defined in Health and Safety Code
section 18007), and similar accessory dwelling units, which provide complete
independent living facilities. (Gov’t. Code §65852.2 (i)(4).)
Affordable Housing Cost. The cost to rent or purchase a house as defined in Section 50052.5
of the Health and Safety Code. (Government Code Section 65915(d)(1).) Housing cost
means the monthly mortgage (including principal and interest), property taxes, and
homeowner association fees, where applicable, for ownership units; and the monthly rent
and an appropriate utility allowance for rental units.
Affordable unit, for rent. Affordable rent (including a reasonable utility allowance) shall
not exceed the following:
1. For very low-income households, the rental rate is not to exceed the product of
thirty percent (30%) times fifty percent (50%) of the area median-income adjusted
for family size appropriate for the unit. The actual rental rate shall be based on the
actual income of a prospective household within the income range;
2. For low-income households, the rental rate is not to exceed the product of thirty
percent (30%) times eighty percent (80%) of the area median-income adjusted for
family size appropriate for the unit. The actual rental rate shall be based on the
actual income of a prospective household within the income range;
3. For moderate-income households, the rental rate is not to exceed the product of
thirty percent (30%) times one hundred twenty percent (120%) of the area median-
income adjusted for family size appropriate for the unit. The actual rental rate shall
be based on the actual income of a prospective household within the income range.
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Affordable Unit, for sale. Affordable housing cost may not exceed the following:
1. For very low-income households, the mortgage cost is not to exceed the product
of thirty percent (30%) times fifty percent (50%) of the area median income
adjusted for family size appropriate for the unit. The actual sale price shall be
based on the actual income of a prospective household within the income range;
2. For low-income households , the mortgage cost is not to exceed the product of
thirty percent (30%) times eighty percent (80%) of the area median income
adjusted for family size appropriate for the unit. The actual rental rate shall be
based on the actual income of a prospective household within the income range;
3. For moderate-income households, the mortgage cost is not to exceed the product
of thirty percent (30%) times one hundred twenty percent (120%) of area median
income adjusted for family size appropriate for the unit. The actual rental rate shall
be based on the actual income of a prospective household within the income range.
Applicant means any person, firm, partnership, association, joint venture, corporation, or
any entity or combination of entities which seeks Town real property development
permits and approvals.
Approval means approval by the Town of a discretionary permit such as a tentative map,
planned development or use permit for a residential development project.
Area Median Income. The area median-income for Contra Costa County pursuant to
California Health & Safety Code Section 50093(c).
Below Market Rate or BMR means residential units sold or rented at rates affordable to
very low, low or moderate income households.
Danville Employee means any head of household, or in the case of married couples either
spouse, who has worked within the Town limits continually for at least one (1) year in
the year immediately preceding the occupancy of an affordable unit.
Danville Resident means any person who has lived within the Town limits of Danville for
at least one (1) year in the year immediately preceding the occupancy of an affordable
unit.
Developer means the same as "applicant" (see above definition).
Household Income Levels includes:
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1. `Low-income household. A household whose income is between fifty percent
(50%) and eight percent (80%) of the median household income for Contra Costa
County, as published and periodically updated by the State Department of
Housing and Community Development pursuant to Health and Safety Code
Section 50093(c).
2. Moderate-income household. A household with an annual income between eighty
percent (80%) of the area median family income and one hundred twenty percent
(120%) of area median income limits applicable to Contra Costa County, as
published and periodically updated by the State Department of Housing and
Community Development pursuant to Section 50093(c) of the California Health
and Safety Code.
3. Very low-income household. A household whose income does not exceed fifty
percent (50%) of the median income limits applicable to Contra Costa County, as
published and periodically updated by the State Department of Housing and
Community Development pursuant to California Health and Safety Code Section
50093(c).
Incentive means a benefit offered by the Town to facilitate construction of residential
developments which include BMR units. Among others, benefits may include fee waivers
or reductions for BMR units, and flexibility and/or relaxation of development
regulations.
In Lieu Participation Fee means a fee paid to the Town by an applicant for a residential
development in the Town in lieu of providing the inclusionary affordable units required
by this section. (see subsection 32-73.8)
Project Owner means any person, firm, partnership, association, joint venture,
corporation, or any entity or combination of entities which holds fee title to the land on
which the project is located.
Residential Development means and includes developments of eight (8) or more units or
lots for, without limitation, detached single family dwellings, multiple dwelling
structures, groups of dwellings, condominium conversions, cooperative developments
and land subdivisions intended to be sold or rented to the general public.
Town means the Town of Danville or its designee, or any entity with which the Town
contracts with to administer this section.
Unit Type means dwelling units with similar floor area and number of bedrooms.
32-73.5 Applicability.
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Each residential development of eight (8) or more housing units is subject to this Section
32-73. A project developed consistent with the regulations of the Density Bonus
Ordinance Municipal Code Section 32-74 shall be considered to have satisfied all
requirements contained in this section. A project developed consistent with the California
State Density Bonus Law (Government Code Section 65915) shall be considered to have
satisfied all requirements contained in this section.
32-73.6 Scope and Affordability Levels.
Every approval for residential development shall assure provision of one (1) or more
BMR units according to the following regulations:
a. Residential development with resultant densities less than or equal to seven (7) units
per acre shall provide a number of BMR units equal to ten percent (10%) of the number
of market rate units in the project. Of the 10%, half of the units shall be made available
to qualifying low-income households, and the other half shall be made available to
qualifying moderate income households.
b. Residential developments with resultant densities of eight (8) or more units per acre:
1. Residential developments with twenty (20) or fewer units shall provide a number
of BMR units equal to ten percent (10%) of the number of market rate units in the
project. Of the 10%, half of the units shall be made available to qualifying low-
income households, and the other half shall be made available to qualifying
moderate income households.
2. Residential developments containing twenty-one (21) or more units shall provide
a number of BMR units equal to fifteen percent (15%) of the number of market rate
units in the project. Of the 15%, at least one-third of the units shall be made
available to qualifying very low-income households, another one-third shall be
made available to qualifying low-income households, and the final one-third shall
be made available to qualifying moderate income households.
c. At the discretion of the Town Council, affordable units required pursuant to this
section may be provided at a location within the Town other than the residential
development which creates the requirement for the affordable units.
d. Fractional Units. When the application of the percentages specified above results in a
number that includes a fraction, the fraction shall be rounded up to the next whole
number if the fraction is seven-tenths (0.7) or more. If the result includes a fraction
below seven-tenths (0.7), the developer shall have the option of rounding up to the
next whole number and providing the inclusionary unit on site or paying a fee in lieu
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of providing an additional inclusionary unit. The in-lieu fee shall be calculated in
accordance with Section 32-73.8.
32-73.7 Incentives.
An applicant may request a modification of the following standards where such waiver
or modification is necessary to make the provision of BMR units economically feasible.
The request shall be accompanied by information sufficient to demonstrate that the
incentive is necessary to make the affordable units economically feasible:
a. A reduction in site development standards and modification of Zoning Code
requirements including, but not limited to, a reduction in setback, square footage,
minimum lot size, minimum lot dimensions, street section, sidewalks, open space,
landscaping or number of required parking spaces.
b. Relaxation of development standards for new subdivisions incorporating BMR
accessory dwelling units into a single-family development, including, but not limited
to modifications in unit setback requirements, number of bedrooms, parking
requirements or other regulations contained in the Town's accessory dwelling unit
ordinance, as may be amended from time to time.
c. Other regulatory incentives or concessions proposed by the applicant or the Town
which result in identifiable cost reductions applicable to the BMR units within a
residential development. Where the applicant requests one or more of the above listed
incentives, a preliminary project financial report shall be submitted (pro forma) along
with the application for the project in order to evaluate the financial need for the
requested incentive(s). At the cost of applicant, the Town may retain a consultant to
review the financial report. If the applicant is a nonprofit organization, the Town may
elect to pay the cost of the consultant upon approval by the Town Council.
32-73.8 In-Lieu Participation Fees.
An applicant, upon approval of the Town Council, may contribute fees in-lieu of
providing inclusionary affordable units. Such fees shall be known as "in-lieu participation
fees."
a. The in-lieu fee shall be calculated based on the subsidy differential between what a
very low, low, or moderate income household can afford to pay for housing, on a per
square foot basis, and the estimated total cost of a new non-BMR unit, on a per square
foot basis. The in-lieu fee shall be calculated on a project-by-project basis subject to
review and approval by the Chief of Planning.
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b. The estimated cost of construction may include the estimated construction costs, the
cost of land, financing costs, consultant costs, and other demonstrated direct costs.
c. The square footage used to calculate the in-lieu fee shall be equal to the average unit
size of all the non-BMR units in the development.
d. The in-lieu fee for the entire residential development shall be due prior to occupancy
of the first unit.
32-73.9 Application Process.
The decision-making body for a formal application meeting the requirements of this
section shall be the Planning Commission and/or Town Council, whichever is authorized
to approve the associated discretionary permit.
32-73.10 General Requirements.
a. All BMR units shall be sold or rented as affordable units for occupancy only by
very low, low or moderate income households.
b. The term of affordability is twenty (20) years.
c. All fractions of units or lots equal to or greater than .7 of a unit shall be rounded
up to the nearest whole unit.
d. Households with eligible Danville residents shall be given first preference for BMR
units; second preference shall be given to households with eligible Danville
employees; third preference shall be given to all other eligible households.
e. Requirements for BMR units shall be established as conditions of approval for the
residential development. Compliance with the regulations of this section shall be
evidenced by an affordable housing agreement between the applicant and the
Town Manager completed and recorded on the deed to each affected and shall run
with the land.
1. The affordable housing agreement shall indicate the intended household type
(i.e., for-sale or rental occupancies), number of BMR units; standards for
maximum qualifying household incomes; standards for maximum sales prices
or rental rates; party/process responsible for certifying tenant incomes;
construction scheduling; how vacancies will be marketed and filled;
restrictions and enforcement mechanisms binding on property upon sale or
transfer; maintenance provisions; and any other information as required by the
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Town to comply with the conditions of approval for the residential
development.
2. The affordable housing agreement shall include a provision which allows the
Town to assign its authority to regulate and enforce the agreement to the
Contra Costa County Housing Authority, a nonprofit housing agency or other
similar entity.
3. Proof of recordation of the affordable housing agreement on the deed of each
BMR unit in a residential development shall be deemed a condition precedent
to occupancy.
4. The provisions of this section shall not apply to transfers by gift, device or
inheritance to the property owner's spouse or children; transfers of title to a
spouse as part of a divorce or dissolution proceeding; acquisition of title
interest therein in conjunction with marriage provided, however, that the deed
restrictions shall continue to run with the title to said property following such
transfers.
f. BMR units in a residential development and phases of a residential development
shall be constructed concurrently with or prior to the construction of non-BMR
units.
g. BMR units shall be provided as follows:
1. If the BMR units are built within the project, they are not required to be evenly
dispersed throughout the development.
2. BMR units are not required to represent the predominant unit type in the project
(e.g., locating affordable attached duet units on corner lots in a primarily single
family development or including affordable secondary units into a primarily
single family development). However, BMR unit sizes shall not be less than
twenty percent (20%) below the average non-BMR units.
3. The exterior design and character of the BMR units shall be substantially
consistent with that of the non-BMR units in the residential development.
4. There may be a reduction of interior amenities provided within the BMR units as
may be necessary to retain project affordability.
h. For-sale BMR units shall not be rented unless specifically authorized by the Town.
Said authorization shall be formalized by way of execution of an amended affordable
housing agreement.
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i. The Town may contract with the Contra Costa County Housing Authority, or other
similar entity, to administer the sale, rental and/or in lieu participation fee provisions
of this section.
j. The Town Manager may establish administrative guidelines for administration of the
provisions of this section.
32-73.11 Fee Waivers and Priority Processing.
a. To increase the feasibility of providing affordable units, the Town Council, by
resolution, may waive or reduce certain Town fees applicable to the affordable units
or the residential development for which they are a part.
b. A project which provides inclusionary units shall be entitled to priority processing by
the Town.
32-73.12 Violation - Penalty.
It is unlawful for any person, firm, corporation, partnership or other entity to violate any
provision or to fail to comply with any of the requirements of this section. A violation of
any of the provisions or failing to comply with any of the requirements of this section
shall constitute a misdemeanor; except that, notwithstanding any other provisions of this
Code, any such violation constituting a misdemeanor under this section may, at the
discretion of the enforcing authority, be charged and prosecuted as an infraction.
32-73.13 Enforcement.
a. The Town Manager is hereby designated the enforcing authority of this section.
b. The provisions of this section shall apply to all agents, successors and assigns of an
applicant proposing a residential development governed by this section. No building
permit or occupancy permit shall be issued, nor any development approval be
granted, which does not meet the requirements of this section.
c. In the event that it is determined that a BMR unit is being occupied as a rental unit
and that rents in excess of those allowed by operation of this section have been
charged, the Town may take the appropriate legal actions or proceedings to recover,
and the project owner shall be obligated to pay to the tenant (or to the Town in the
event the tenant cannot be located), any excess rental charges.
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d. The Town may institute any appropriate legal actions or proceedings necessary to
ensure compliance herewith, including but not limited to actions to revoke, deny or
suspend any permit or development approval.
32-73.14 Appeals.
Any person aggrieved by any action involving denial, suspension or revocation of an
occupancy or other permit, or denial, suspension or revocation of any development
approval, may appeal such action or determination in the manner provided for appeal of
use permits, by subsection 32-4.7 of the Danville Municipal Code. The developer may
appeal for a reduction, adjustment, or waiver of obligations if he or she establishes the
absence of a reasonable relationship or nexus between the impact of the development and
the inclusionary housing requirement.
32-73.15 For-Rent Below Market Rate Accessory Dwelling Units.
Notwithstanding the provisions of any other section contained within this chapter, and
if it is determined to be appropriate by the Danville Town Council, the applicant may
fulfill a development's inclusionary housing requirements with the development of
accessory dwelling units as set forth in this section.
a. Applicability. The provisions of this section shall apply to all new residential
developments with eight (8) or more dwelling units.
b. Scope. If the Town Council determines that development of for-rent Below Market
Rate (BMR) accessory dwelling units would be appropriate for a project, the minimum
number of for-rent BMR accessory dwelling units supplied in a project shall be
equivalent to twenty-five percent (25%) of the number of market rate units established
in the project.
c. Affordable Housing Agreement. An affordable housing agreement, as generally
provided for in subsection 32-73.10g, shall be recorded as a deed restriction on the
property which incorporates a for-rent BMR second unit.
d. Qualifying Households: Maximum Income of Renters. The for-rent BMR second unit
shall not be rented to low income households, as defined.
e. Restriction on Rental Rate. The rental rate shall not exceed what is affordable to a low
income household, adjusted for household size. The Town shall advise the owner of
annual changes in the allowable rental rate (and shall provide a schedule for utility
allowance adjusted for household size).
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f. Design Parameters. The for-rent BMR accessory dwelling units shall be designed such
that the physical layout of the unit and its interrelationship with the primary unit
ensures its availability as a self-contained viable accessory dwelling unit.
1. Architectural and Physical Design. For-rent BMR accessory dwelling units shall be
architecturally compatible with main residential unit in roof pitch, scale, colors,
materials, trim, windows, as well as other exterior physical features. Development
standards shall be as established within the Town’s Accessory Dwelling Unit
Ordinance Section 32-76.
2. Relationship to Main Residence.
(a) The accessory dwelling unit may be detached or attached to the main
residence;
(b) If detached second units are proposed, each second unit shall be designed to
provide privacy for the main residential unit (i.e., minimum number of
windows facing the main unit, relative location of entry areas, etc.);
(c) The accessory dwelling unit shall have a separate entrance from the primary
residence;
(d) There shall be no direct access from main residence to the accessory dwelling
unit;
(e) The accessory dwelling unit shall have a separate mailing address to allow
independent contact with the unit's occupants; and
(f) Any proposed modifications to the accessory dwelling unit must secure prior
review and approval by the Chief of Planning.
(g) The accessory dwelling unit shall be a minimum of four hundred (400) square
feet in size.
(h) Deviation from the above-cited dimensional criteria may be considered by the
Town Council on a project-by-project basis.
SECTION 3. CODIFICATION. Section 2 of this Ordinance shall be codified in the
Danville Municipal Code.
SECTION 4. SEVERABILITY. If any section, subsection, sentence, clause, or phrase of
this Ordinance is for any reason held to be invalid, such decision shall not affect the
validity of the remaining portions of the Ordinance. The Danville Town Council hereby
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declares that they would have adopted the Ordinance, and each section, subsection,
sentence, clause, or phrase thereof, irrespective of the fact that one or more sections,
subsections, sentences, clauses, or phrases were declared invalid.
SECTION 5. PUBLICATION AND EFFECTIVE DATE. The City Clerk shall have a
summary of this Ordinance published twice in a newspaper of general circulation, once
within five (5) days before its adoption and once within 15 (fifteen) days after adoption.
This Ordinance shall become effective 30 days after adoption.
The foregoing Ordinance was introduced on July 15, 2025, and approved and adopted by
the Danville Town Council at a regular meeting on August 12, 2025, by the following
vote:
AYES:
NOES:
ABSTAINED:
ABSENT:
MAYOR
APPROVED AS TO FORM: ATTEST:
CITY ATTORNEY CITY CLERK
CLERK’S CERTIFICATE
I, Marie Sunseri, City Clerk of the Town of Danville, hereby certify that the foregoing is
a true and accurate copy of Ordinance No. 2025-02 of said Town and that said ordinance
was published according to law.
Dated: ______________________________ _______________________________
City Clerk of the Town of Danville
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