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The City of Encinitas is dedicated to creating and maintaining safe, clean and affordable housing for all residents. The City achieves this in part through Inclusionary Housing. The Inclusionary Housing Program requires new residential projects of seven units or more to provide either 15 percent of the dwelling units made available at affordable sales price to low-income households or 10 percent of the dwelling units in the residential development made available at affordable sales price to very low-income households include 20 percent affordable housing.

 

The City offers alternative compliance options that are outlined in Section 30.41.080 of the Zoning Code such as an in-lieu fee and off-site compliance. The applicability, requirements, and exemptions can be found in Chapter 30.41 Affordable Housing. The City annually adjusts the incomes, rents and sales prices for inclusionary units as they are updated by the State Department of Housing and Community Development.

 

In addition, State Density Bonus Law requires a local jurisdiction to grant an increase in density, if requested by a developer, for providing affordable housing as part of a housing development project. The State Density Bonus Law requires the affordable unit(s) to be constructed on the site of the development approval. State Law also requires applicable City ordinances to provide the option for the required onsite affordable unit to be sold or rented. This allows three options for the developer:

 

  1. The developer may choose to sell the unit to a low-income buyer.
  2. The developer may choose to manage and rent the unit as affordable to a qualified low-income renter.
  3. The developer may choose to sell the unit to a non-qualified buyer who will manage and rent the unit as affordable to a qualified low-income renter.

In all options, the City approves the rent and sales price, and ensures that the affordable restrictions are properly recorded and are attached to the unit. The City also performs compliance monitoring annually of each deed restricted property in the City’s housing portfolio. City staff has worked closely with City legal counsel over the years to ensure that the agreement requirements comply with State Law and City codes. 

In the case of the Desert Rose project, the Developer chose to sell the unit to a non-income qualified buyer (option 3 above). The City’s only role in approving the sale of the Desert Rose unit, under existing State law, was to verify the sales price met the restrictions of the unit and the proposed rental amount met the requirements of the State mandated low-income requirements. It should be noted that the non-income qualified buyer already owns and manages two affordable units in the City and has consistently been in good standing with the City’s compliance monitoring.