To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Density Bonus and Inclusionary Housing Developer Agreement for Walnut Estates, Walnut Creek
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Conservation and Development Director, or designee, to execute a Density Bonus and Inclusionary Housing Developer Agreement, requiring the construction and sales of one moderate-income unit within the Walnut Estates Subdivision project, County File #CDSD21-09581, a 10-lot subdivision located at 3180 Walnut Boulevard in unincorporated Walnut Creek (APN: 180-240-002).
FISCAL IMPACT:
There is no cost to the County for entering into the Agreement. The applicant is responsible for the payment of all fees associated with this development.
BACKGROUND:
The Walnut Estates Subdivision project, County File #CDSD21-09581, a residential single-family 10-lot subdivision in unincorporated Walnut Creek was approved by the Board of Supervisors on February 27, 2024. The approved project was subject to the County’s Inclusionary Housing Ordinance, and the developer proposed a housing development pursuant to Government Code Section 65915, more commonly known as the State’s Density Bonus Law (Density Bonus Law). Utilizing the Density Bonus Law, the developer will build one moderate-income (120% area median income) unit to meet the Density Bonus Law requirement for this property to receive a density bonus. A density bonus is required because the County’s General Plan and Zoning Ordinance permits the construction of a maximum of nine residential lots on the property, and the developer requested that the housing development be permitted to exceed the maximum allowable density with 10 residential lots.
The developer was also granted a concession to allow the developer to use gross acreage when calculating the maximum base density on the property and provided waivers of certain development standards pursuant to Density Bonus Law. In addition to the approval of the density bonus and related concessions and waivers allowed under Density Bonus Law, the approval of the project included payment of an in-lieu fee for a partial unit pursuant to the County’s Inclusionary Housing Ordinance.
A Density Bonus/Inclusionary Housing Developer Agreement (Agreement) is required by the County’s Density Bonus Implementation Ordinance and the County’s Inclusionary Housing Ordinance to enforce the project’s affordable housing obligations. Staff has prepared the attached Agreement between the County and TH Walnut Estates LLC, the current property owners/developer. If the property is sold to another developer, the Agreement will run with the land, and the new developer will be subject to the Agreement’s obligations.
The Agreement requires the developer to construct and sell one moderate-income affordable unit in the housing development to meet the requirements of the Inclusionary Housing Ordinance and Density Bonus Law. The affordable home must be constructed on the same schedule as the market-rate homes and be of the same exterior appearance, with the same average number of bedrooms as the market-rate homes. The approved inclusionary housing plan and density bonus proposal identifies Lot 4, as shown in Exhibit B of the attached Agreement, where the moderate-income unit is to be constructed. County staff will monitor the sale of the affordable unit to ensure compliance with the affordability restrictions. The property has a deed restriction for 45 years and must be sold to a qualified moderate-income household for that term. At any time during the 45-year term of the Agreement, any subsequent resale of the affordable unit to a non-income qualified would require the County to receive a proportionate share of the increase in value of the unit, which will be revenue for future affordable housing investments.
CONSEQUENCE OF NEGATIVE ACTION:
The Walnut Estates Subdivision project was approved with conditions for the developer to enter into a Density Bonus and Inclusionary Housing Developer Agreement pursuant to the County Density Bonus Ordinance, County Inclusionary Housing Ordinances, and State Density Bonus law. The consequences of negative action would delay the development of the project, as an executed agreement is required prior to the recordation of the Final Map or issuance of building permits, whichever occurs first.