1. Accessory Dwelling Units: Maximum Unit Size and Residential Impact Fee
City Council March 12, 2018

2. City Council: Background
On December 11, 2017, City Council approved a series of proposed amendments to the Accessory Dwelling Unit Ordinance
Council directed staff to include in the ordinance a maximum unit size for Newly Constructed Accessory Dwelling Units of 1,200 square feet for properties at a to- be-determined minimum lot size threshold

3. City Council: Background
City Council discussed, but did not approve the staff recommendation to reduce the Residential Impact Fee for new ADUs
Concerns regarding the potential for ADUs to be market rate units and not fulfill the goal of providing more affordable housing in the City
Decided to provide for a reduction of the Residential Impact Fee for ADUs only if the applicant enters into an affordability covenant
Directed staff to examine lessening the term of an affordability covenant for ADUs

4. City Council: Background
On February 5, 2018, the City Council received staff recommendations for maximum unit size and affordability covenants for ADUs
City Council voted to continue the discussion to a later meeting date
Directed staff to elaborate on the legalities of the Residential Impact Fee as applied to ADUs

5. Newly Constructed ADUs: Maximum Unit Size
Original Recommendation:
800 square feet or 50% of existing living space, whichever is less
Revised Recommendation:
Properties between 7,200 square feet and less than 10,000 square feet
800 square feet or 50% of the existing living space, whichever is less
Properties greater than or equal to 10,000 SF
1,200 square feet or 50% of the existing living space, whichever is less

6. Residential Impact Fee
Per State law, municipalities are not prohibited from charging development impact fees and land use application fees
Limitations on fees for utility connection or capacity fees, including water and sewer service

7. Residential Impact Fee
Provide reduction of the Residential Impact Fee for affordable ADUs
If new unit is restricted affordable
$957.30
Adjusted per Consumer Price Index
Same fee charged for other covenanted affordable units
Term: 7 years

8. Development Impact Fees Affordability Agreement Options
Affordability Covenant
Require a homeowner to set rent for ADU at level affordable to households with an income up to 120% of the Area Median Income
Term: 7 years
After 7 years, the covenant would expire and there would be no limitation as to whom the ADU could be rented to
Can make selling and/or refinancing a home more difficult
Homeowner may not have the knowledge, resources, and time to verify the income levels of potential tenants

9. Development Impact Fees Affordability Agreement Options
Landlord Agreement
Two Options
Commit the ADU to be rented out exclusively to the City’s rental assistance clients (includes Section 8 eligible renters)
Commit the ADU to be rented out to “family members” (as defined by the City’s Tenant Protection Ordinance) at no more than the 50% AMI Inclusionary Housing Rent rate
Term: 7 years
After 7 years, the agreement would expire and there would be no limitation as to whom the ADU could be rented to

10. Development Impact Fees Affordability Agreement Options
Landlord Agreement
No legal encumbrances on the property that could limit a homeowners future financial options
Homeowner would not have to verify the income level of each prospective renter, as the City would already have a list of pre-qualified tenants
For both Landlord Agreement options, if homeowner decides to end the agreement before the set term of 7 years, they will be responsible for paying the full Residential Impact Fee to the City
Same as ending covenant before 7 years.

11. Development Impact Fees Affordability Agreement Options
Affordability Option
Term
(Years)
Income Limit
Rent Limit
Affordability Covenant 7
Up to 120% of AMI
Up to 30% of 120% of AMI (2017: $1,994)
Landlord Agreement 1:
Pre-Qualified Rental Assistance Clients
Per City’s Pre-Qualified Rental Assistance List
Landlord Agreement 2: Family Members --
Up to 50% AMI Inclusionary Unit Rent Limit
(Studio: $566)
(One-Bedroom: $648)
2017 Los Angeles County AMI: $64,800 per CA State Department of Housing and Community Development (4-person household)

12. Inclusionary Housing Regulations
Residential Impact Fee ordinance (PMC Chapter 4.17), residences rented or sold to persons of low or moderate income pursuant to inclusionary housing regulations pay reduced fee
Recommend amendment to inclusionary housing regulations to implement landlord agreement guidelines and provide for reduced fee

13. Certification & Compliance Monitoring
Housing Dept. approves tenant household income and rent charged by landlord
Landlord submit annual report and certification to Housing Dept. The report contains household size, income, and rent for each affordable unit.
Housing Dept. reviews the annual report
Housing Dept. advises landlord of any non- compliance issues and requires corrective measures
Ongoing, non-corrected issues may be referred to City Attorney for enforcement

14. Recommendation
Acknowledge the proposed Zoning Code Amendments are exempt from environmental review
Acknowledge that the proposed changes to covenants for affordable ADUs and the new landlord agreement is not a “project” and therefore not subject to environmental review
Approve the proposed Zoning Code Amendments to regulate maximum allowable size of Newly Constructed ADUs
Approve the proposed changes to the Inclusionary Housing Regulations
Direct the City Attorney to return within 30 days:
An ordinance amending the Pasadena Municipal Code
Amended Inclusionary Housing Regulations

15. Accessory Dwelling Units: Maximum Unit Size and Residential Impact Fee
City Council March 12, 2018

16. Moderate-Income Household (120% of AMI) Income Limits
Estimated Household Size
Adjusted Median Income per Household Size
120% of AMI
(Moderate-Income) 1
$45,350
$54,450 2
$51,850
$62,200 3
$58,300
$70,000 4
$64,800
$77,750 5
$83,950
Source: CA State Department of Housing and Community Development

17. Inclusionary Unit Rent Limits 50% AMI
Bedroom Size
Estimated Household Size
Adjusted Median Income per Household Size
Rent Limits (50% AMI)*
Studio 1
$45,350
$566
1-bedroom 2
$51,850
$648
2-bedroom 3
$58,300
$728
3-bedroom 4
$64,800
$810
4-bedroom 5
$70,000
$875
*Based on 2017 LA County Area Median Income (4-person household: $64,800) adjusted for household size appropriate to the unit per CA State Department of Housing and Community Development
Example:
($45,350/2)= $22,675/12 =$1,890 x 0.30= $566

18. Section 8 Rental Assistance Program Payment Standards
Bedroom Size
Northwest/East/Linda Vista/Southwest
Fair Market Rent*
Studio
$1,174
$1,067
1-bedroom
$1,412
$1,284
2-bedroom
$1,663
3-bedroom
$2,231
4-bedroom
$2,467
5-bedroom
$2,837
*Effective October 1, 2017

19. Definition of “Family Member”
“Family member” means the Landlord’s spouse, grandparents, grandchildren, brother, sister, father-in-law, mother-in-law, daughter-in-law, son- in-law, children, or parents (City of Pasadena Tenant Protection Ordinance)