REPORT TO PLANNING COMMISSION
SUBJECT
Title
Recommendation to City Council to Introduce an Ordinance Amending Chapter 19.67 (Below Market Rate Ownership Housing) of the Sunnyvale Municipal Code to Modify the Inclusionary Housing Program.
Report
BACKGROUND
In 1980, Sunnyvale adopted the first Affordable Housing requirements, also known as the Below Market Rate (BMR) Program. The original program required 10% of the dwelling units to be affordable and distributed throughout a new development; this type of program is also called inclusionary zoning. Over time, several minor amendments to the BMR program were approved by City Council. Major changes were made in 2003 and 2012.
In 2003, after a comprehensive review of the BMR program, the Sunnyvale Municipal Code (SMC) was modified to increase the percent of units required to be dedicated as affordable from 10% to 15% for rental developments and to 12.5% for ownership developments (RTC No. 02-392 and RTC No. 03-031). The length of time for units to remain as Below Market Rate units was increased from 20 years to 30 years for ownership units and from 20 years to 55 years for rental units. Other modifications were also adopted.
In 2009, a court decision (commonly referred to as the Palmer decision) invalidated mandatory inclusionary affordable rental units due to conflicts with other state laws governing rent.
In April 2012, an affordable housing Nexus Study was completed for Sunnyvale which analyzed the nexus between new residential development and the demand for affordable housing created by the new development. On July 31, 2012, City Council introduced an ordinance to amend SMC Title 19 (Zoning Code) related to the BMR Programs and created SMC Chapters 19.67 and 19.69 (RTC No. 12-182). This amendment removed the requirement for new rental developments to dedicate affordable units. SMC Chapter 19.67 contains the provisions for the current BMR Ownership Program while SMC Chapter 19.69 provides the requirements ...
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