20.30.060 Standards.
The residential or mixed-use project shall conform with the requirements of this title, including, but not limited to, Chapters 20.16 (Residential Zones), 20.28 (Mixed-Use Zones), and 20.64 (Off-Street Parking and Loading) and all other applicable city, state, and federal building and housing codes, and the following:
A. Relation to Market Rate Units. In relation to the market rate unit, all inclusionary units shall be:
1. Reasonably dispersed throughout the residential or residential portion of a mixed-use project; and
2. Proportional, in number, bedroom size, and location, to the market rate units; and
3. Equal to the market rate units in terms of the appearance, base design, materials, and finished quality; and
4. Permitted the same access to project amenities and recreational facilities, as are the market rate units.
B. Timing of Construction. All inclusionary units shall be constructed and occupied concurrently with, or prior to, the construction and occupancy of the associated market rate units. If the city approves a phased project, the required inclusionary units may be constructed and occupied in proportion to the number of units in each phase of the residential development; provided, that the last inclusionary unit in the project shall be constructed before the last market rate unit.
C. Units for Sale. A unit for sale shall be subject to the following:
1. Time Limit for Inclusionary Restrictions. A unit for sale shall be restricted to the target income level group at the applicable affordable housing cost for a minimum of 45 years.
2. Certification of Purchaser. The developer and all subsequent owners of an inclusionary unit offered for sale shall certify, on a form provided by the city, the income of the purchaser.
3. Resale Price Control. In order to maintain the availability of inclusionary units required by this chapter, the resale price of an owner-occupied inclusionary unit shall be limited to the lesser of the fair market value of the unit as established by a licensed real estate agent based upon three comparable properties or the restricted resale price.
For these purposes, the restricted resale price shall be the greater of either the applicable affordable housing cost or an amount equal to the sum of:
a. The purchase price;
b. An amount equal to 10 percent of any increase in the applicable affordable housing cost since the previous sale of the unit;
c. The adjusted amount of any capital improvements for which a building permit has been issued by the city and a certification of occupancy or similar final certification has been filed, or other improvements which add assessed value to the unit;
d. Any applicable transaction fee charged by a licensed real estate professional;
e. If the occupant has allowed the unit to deteriorate due to deferred maintenance, the restricted resale price shall be discounted in an amount equal to the costs necessary to bring the unit into conformity with CMC Title 15, Buildings and Construction.
4. Inheritance of Inclusionary Units. The following requirements apply in the event of death that may occur prior to the expiration of the required affordability period:
a. Upon the death of one of the owners, title in the property may transfer to the surviving joint tenant, tenant in common, or community property holder, without respect to the income eligibility of the household.
b. Upon the death of a sole owner or all owners, and inheritance of the inclusionary unit by a nonincome-eligible inheritee, there will be a one-year compassion period between the time when the estate is settled and the time when the property must be sold to an income-eligible household. A noneligible inheritee may request and the council may waive this requirement on the basis of hardships specified by the council. Alternatively, the council may authorize their continued ownership with the unit rented at an affordable rate to an eligible household.
c. Upon the death of a sole owner, and there is no inheritee, upon legal advice provided by or at the behest of the city attorney, the city council will determine the process for assuring the unit is sold to an income qualifying household. The process can include but not be limited to public notices of unit availability and requirement for applications.
5. Forfeiture. If an inclusionary unit for sale is sold for an amount in excess of the resale price controls required by this section, the buyer and the seller shall be jointly and severally liable to the city for the entire purchase price of the unit. Recovered funds shall be deposited into the affordable housing trust fund. Notwithstanding the foregoing, it shall be within the discretion of the city manager, or designee, to allow the buyer and seller 180 days to cure any violation of the resale price controls.
6. Price of Affordable Ownership Units. The affordable ownership units will be affordable to households with incomes 80 percent or less of the area median income. The price of all affordable ownership housing units will be calculated based on payments to be made by the buyer that make up no more than 35 percent of the gross monthly target income level designated for a specific unit and shall include mortgage principal and interest, taxes, insurance, assessments, and homeowner fees, as applicable and adjusted for household size. Percentages allowed for the qualifying of the mortgage loan shall be determined by the lender or lenders involved with the income-qualified household.
D. Rental Units. A rental unit shall be subject to the following:
1. Time Limit. A rental unit shall remain restricted to the target income level group at the applicable affordable housing cost for 55 years.
2. Certification of Renters. The owner of any rental inclusionary unit(s) shall certify to the city manager, or designee, on a form provided by the city, the income of the tenant at the time of the initial rental and annually thereafter.
3. Forfeiture. Any lessor who leases an inclusionary unit in violation of this chapter shall be required to forfeit to the city all money so obtained. Recovered funds shall be deposited into the affordable housing trust fund.
4. Rent for Affordable Rental Units. The affordable rental units will be leased at an affordable rent to very low, low, and moderate-income households in accordance with CMC 20.30.040(E) (Inclusionary unit requirements – Rental Units). Affordable rents shall be determined annually on a city-wide basis by city staff based upon the area median income and utility allowances for Los Angeles County, as determined by the Federal Department of Housing and Urban Development, and the State Department of Housing and Community Development. If these agencies do not provide the information, the city of Cudahy will determine monthly rent amounts based on 30 percent of the targeted household’s gross monthly income.
5. Publication of Availability of Units. Whenever an inclusionary unit becomes available, the owner shall publish notices of the availability of the inclusionary unit in newspapers circulated widely in the city, including newspapers that reach minority communities. The notice should briefly explain what inclusionary housing is, state the applicable income requirements, indicate where applications are available, state when the application period opens and closes, and provide a telephone number for questions. Applications may require the name, address, and telephone number of the applicant; the number of persons to occupy the household; and any other information relevant to determine whether the applicant is eligible to occupy an inclusionary unit. The owner shall submit proof of publication to the director. All communication and correspondence shall be provided in both English and Spanish, including but not limited to publications, notices, and applications.
6. Notification to City. Whenever an inclusionary unit becomes available, the owner shall provide written notification within three business days of such availability to the director.
7. Subsequent Rental to Income-Eligible Tenant. The owner of rental inclusionary units shall apply the same rental terms and conditions to tenants of inclusionary units as are applied to all other tenants, except as otherwise required to comply with this chapter (i.e., rent levels, occupancy restrictions, and income requirements) and/or government subsidy programs. Discrimination based on subsidies received by the prospective tenant is prohibited.
8. Changes in Tenant Income. If after moving into an inclusionary unit the tenant’s income eventually exceeds the income limit for that unit, the tenant may remain in the unit (the “original unit”) as long as his/her income does not exceed 140 percent of the income limit for the original unit. Once the tenant’s income exceeds 140 percent of the income limit for the original unit, the following shall apply:
a. If the tenant’s income does not exceed the income limits of other inclusionary units in the residential development, the owner may, at the owner’s option, allow the tenant to remain in the original unit at the tenant’s new applicable affordable housing cost, as long as the next vacant unit is redesignated for the same lower-income category applicable to the original unit. If the owner does not want to redesignate the next vacant unit, the tenant shall be given one year’s notice to vacate the unit. If during the year, an inclusionary unit becomes available and the tenant meets the income eligibility for that unit, the owner shall provide the tenant with the opportunity to submit an application for that unit.
b. If there are no units designated for a higher income category within the residential development that may be substituted for the original unit, the tenant shall be given one year’s notice to vacate the unit. If within that year, another unit in the residential development is vacated, the owner may, at the owner’s option, allow the tenant to remain in the original unit and raise the tenant’s rent to market rate and designate the newly vacated unit for the original unit at the applicable affordable housing cost. The newly vacated unit must be comparable in size (i.e., number of bedrooms, bathrooms, square footage, etc.) and location (i.e., same floor, same view, etc.) as the original unit.
E. Documentation. The city manager, or designee, may require the execution and recording of whatever documents are necessary or helpful to ensure enforcement of this section, including but not limited to: promissory notes, deeds of trust, resale restrictions, rights of first refusal, options to purchase, and/or other documents, which shall be recorded against all inclusionary units.
F. General Prohibitions. The following general provisions shall be applicable for inclusionary units:
1. No person shall sell or rent an inclusionary unit at a price or rent in excess of the applicable affordable housing cost placed on the unit in accordance with this chapter.
2. No person shall sell or rent an inclusionary unit to a person or persons that do not meet the income restrictions placed on the unit in accordance with this chapter.
3. No person shall provide false or materially incomplete information to the city or to a seller or lessor of an inclusionary unit to obtain occupancy of housing for which that person is not eligible.
G. Principal Residency Requirement. The following shall apply to occupancy of an inclusionary unit:
1. The owner or lessee of an inclusionary unit shall reside in the unit, and the unit shall be the owner or lessees’ principal personal residence, and shall be occupied by the owner or lessee, unless actively serving in the United States military.
2. Notwithstanding the above requirement, an owner or lessee may live elsewhere for a period of up to six months every five years on account of hardships; including, but not limited to, medical reasons, the need to assist family member(s) in crisis or medical need, and relocation for employment reasons.
3. No owner or lessee of an inclusionary unit shall lease or sublease, as applicable, an inclusionary unit without the prior permission of the city manager, or designee.
4. Any person who purchases a designated ownership affordable unit pursuant to this chapter shall occupy that unit as his or her principal personal residence for as long as he or she owns the affordable unit. Such occupancy shall commence within six months following completion of the purchase, and be in accordance with other provisions of this section.
H. Buyer/Tenant Selection and Screening. Buyer/tenant selection and screening shall be carried out by the developer, owner, city, or by the designated responsible party, at the sole expense of the developer. Included in the affordable housing plan submitted by the developer, shall be a proposed marketing plan with an estimated timeline of events, which must be approved by the city.
The city of Cudahy will monitor the buyer/tenant selection and screening process through required monthly reports, and through the ability to review any and all files regarding the process at any time that city staff requests to do so. The city of Cudahy will possess the ability to halt any sale, break any lease, or break any rental agreement of an affordable unit at its discretion, for reasons to include, but not restricted to, the following: if the buyer/tenant selection and screening process was not strictly adhered to, or if the buying/lease/rental household is found not to meet the income qualifications. (Ord. 720 § 9 (Att. 2), 2022).