9-9-8 INCENTIVIZED INCLUSIONARY HOUSING

A. Purpose and Authority: The purpose of this chapter is: 1. To support the 2022 Workforce Housing Plan’s recommendation to implement an inclusionary housing program within the Town; 2. To facilitate and encourage development that includes a range of housing opportunities through a variety of residential types, forms of ownership, home sale prices and rental rates; 3. To increase the number of owner-occupied or ‘for sale’ housing units for households with an income of one hundred twenty percent (120%) or less (i.e. less than eighty percent (80%) or one hundred percent (100%) for some projects) of Iron County’s Median Family Income; and 4. To increase the number of rental housing units for households with an income of sixty percent (60%) or less (i.e. less than thirty percent ( 30%) for some projects) of Iron County’s Median Family Income. 5. To provide for a range of workforce/affordable housing units to ensure the welfare and viability of the Town’s resort economy operations. (amd. ord. 24-014, 20-8-24) B. Applicability & Minimum Project Size; Incentivized Height and/or Density Opportunities Based Upon the Provision of Workforce Housing: 1. The following bonus density shall be allowed where the workforce housing provisions of this section are met. a. R1: Single-Family Residential – One (1) unit per one third (1/3) acre. b. R2: Medium Density Residential – Ten (10) units per acre. c. R3: Multi-Family Residential – Twenty five (25) units per acre. 2. On-site Option: a. Any new residential or commercial project may increase the allowed base density, or building height, on a site pursuant to the zoning classification bonus standards outlined in 9-9-8(B)(1) subject to the provision of deedrestricted workforce/affordable housing units on site with the following income restrictions: i. Rental Units: I. For subdivisions or condominium projects of ten (10) lots/units or more, two and a half percent (2.5%) of the total dwelling units for rent must be affordable to households earning thirty percent (30%) or less of Iron County’s Median Family Income based on housing size and determined by the US Department of Housing and Urban Development (HUD); or II. For subdivisions or condominium projects of ten (10) lots/units or more, five percent (5%) of the total dwelling units for rent must be affordable to households earning sixty percent (60%) or less of Iron County’s Median Family Income based on housing size and determined by the US Department of Housing and Urban Development (HUD); ii. Ownership or ‘For Sale’ Units: I. For subdivisions or condominium projects of ten (10) lots/units or more, five percent (5%) of the total dwelling units for sale must be affordable to households earning eighty percent (80%) or less of Iron County’s Family Income based on housing size and determined by the US Department of Housing and Urban Development (HUD); or II. For subdivisions or condominium projects of ten (10) lots/units or more, six and a quarter percent (6.25%) of the total dwelling units for sale must be affordable to households earning one hundred percent (100%) or less of Iron County’s Median Family Income based on housing size and determined by the US Department of Housing and Urban Development (HUD); or III. For subdivisions or condominium projects of ten (10) lots/units or more, seven and a half percent (7.5%) of the total dwelling units for sale must be affordable to households earning one hundred and twenty percent (120%) or less of Iron County’s Median Family Income based on housing size and determined by the US Department of Housing and Urban Development (HUD). b. For developments built by a single developer, all required workforce housing units must be constructed simultaneous to the market rate units. The final twenty percent (20%) of a project’s building permits for the market units will not be issued until the workforce housing units are completed. c. If the approved workforce housing units are part of a subdivision approval in which individual lots will be sold separately, the following provisions apply: i. All final subdivision plats shall include plat notes specifically identifying those lots that are dedicated for the construction of workforce housing units. These plat notes must include minimum/maximum size of unit requirements, household income requirements (e.g., thirty percent (30%), sixty percent (60%), eighty percent (80%), one hundred percent (100%), or one hundred twenty percent (120%) of Iron County’s median family income based on housing size and determined by the US Department of Housing and Urban Development (HUD), etc. ii. These lots will be required to have a deed-restriction recorded with the final subdivision plat that outlines the requirements and limitations associated with workforce housing. iii. The applicant shall provide a performance bond in the amount of the estimated construction costs for the workforce housing units. The Town Engineer or Town Manager will provide the construction cost estimate. iv. Whether the developer sells or donates these lots to a private or nonprofit organization or decides to build the units themselves, all workforce housing units must be completed and a Certificate of Occupancy (CO) issued within two (2) years of the recordation of the final subdivision plat. 3. Cash-In-Lieu Option a. Calculation of cash-in-lieu fee: A developer may make a cash payment to the Town in lieu of providing the required number of on-site workforce/affordable units. The cash-in-lieu fee shall be calculated pursuant to the table below by multiplying the number of required workforce/affordable units by the applicable prescribed fee: On-Site Workforce/Affordable Unit Tenure Type For Sale Per Unit Fee $350,000 Rental $200,000 *Note: Applicants may use the lowest percentage of units applicable as outlined in Section B.2 for calculating the cash-in-lieu amount. b. Remittance and collection of payment: Cash-in-lieu fees shall be collected in conjunction with the administration of the Town’s system for planning and building review. All cash-in-lieu fees shall be paid in full prior to the recordation of the final subdivision plat. In the event that a project is phased, the cash-inlieu fees may be paid with each applicable phase. c. Deposit and use of fees: All cash-in-lieu fees collected pursuant to this section shall be remitted to the housing development fund or a similar fund maintained by the Town. These funds shall be used exclusively to support the preservation or development of workforce/affordable housing for the administration and compliance of housing programs. 4. Land Donation Option: a. A developer may dedicate land to the Town as a third option to satisfy their workforce housing units. The dedication of land shall be subject to the following requirements: On-Site Workforce/Affordable Unit Tenure Type For Sale Per Unit Land Dedication Dedication of land (or lots) that appraise at $350,000 or more at time of dedication. Rental Dedication of land (or lots) that appraise at $200,000 or more at time of dedication. *Note: Applicants may use the lowest percentage of units applicable as outlined in Section B.2a for calculating the land dedication. b. All land required for dedication to the Town must be deeded to the Town prior to or at the time of the recordation of the final subdivision or condominium plat. c. All land dedicated to the Town must be determined suitable for development by the Town’s Planning and Zoning Department. Suitability shall be determined by an assessment of location and accessibility, marketability, slope, soil typology, additional environmental constraints, etc. 5. Proportional Application. Any development proposing a mixture of ownership or ‘for sale’ dwelling units and ‘rental’ dwelling units shall have an obligation to satisfy the requirements of sections (1), (2), and (3) above based on the proportion of each use type to the overall development. This applies to on-site units as well as the cash-inlieu and land donation options. 6. Rounding or Fractional Units. When calculating the number of on-site workforce/affordable units required pursuant to section (1) above, rounding shall be applied as outline in the following example: a. Example: A new twenty five (25)-unit rental residential development is proposed. Application of a five percent (5%) inclusionary requirement for rental units results in a requirement for one and one quarter (1.25) deed-restricted workforce/affordable rental units. The proposed workforce/affordable housing plan shall (1) provide one (1) deed-restrict workforce/affordable rental unit onsite and pay an additional cash-in-lieu fee for one quarter (0.25) units (see calculation below) or (2) provide two (2) deed-restricted workforce/affordable rental units on-site with no additional cash-in-lieu fee. Fractional Unit Calculation: Twenty five (25) units with a five percent (5%) inclusionary requirement = 1.25 required workforce/affordable units. One (1) deed-restrict workforce/affordable rental unit shall be constructed on-site or a fee of two hundred thousand dollars ($200,000) paid. The remaining one quarter (0.25) unit requirement shall be met with the construction of one (1) workforce/affordable unit or a payment of fifty thousand dollars ($50,000) (0.25x$200,000). C. Standards for Income-Restricted Units 1. Design. Restricted units shall be comparable in design, and appearance to the market-rate units in the residential development and shall comply with all size requirements and other design standards of this title including, but not limited to, building code requirements, parking standards, landscaping, etc. These requirements shall apply equally to all dwelling units, market units and workforce/affordable units alike. a. Minimum Square Footage Standards: In order to assure livability, the standard net livable square footage for workforce/affordable units shall be as follows: UNIT TYPE MINIMUM SQUARE FOOTAGE Micro Unit/Studio 400 sq. ft. 1 Bedroom 600 sq. ft. 2 Bedroom 800 sq. ft. 3 Bedroom 1,200 sq. ft. 4 Bedroom 1,400 sq. ft. *Note: No development shall have more than ten percent (10%) of all workforce/affordable units designated as ‘Micro Unit/Studio’ units unless specifically approved by the Land Use Authority. All units must be used as the homeowner’s/renter’s primary residence and comply with all aspects of this title and the adopted building code. (amd. ord. 24-014, 10-8-24) 2. Type. Residential developments that include more than one (1) type of residential unit shall provide income-restricted units in rough proportion to the types and various designs of market-rate residential units constructed. For example, in developments with a mixture of two-bedroom and three-bedroom residential units, the income-restricted units shall be comprised of each residential unit type in the same proportion and living area as the market-rate units. The applicant may request an exception from this requirement for review and approval by the Land Use Authority. 3. For sale or rent. Income-restricted units shall be for sale or for rent in the same proportion as the market-rate units. For example, if fifty percent (50%) of the units in the residential development are for sale, then at least fifty percent (50%) of the income-restricted units shall be for sale unless otherwise approved by the Land Use Authority. 4. Location. Income-restricted units shall be located on the site on which the residential development is proposed and shall have access to amenities equal to that of the owners and renters of the market-rate units, including without limitation: parks, outdoor play areas, pools, exercise facilities, and similar on-site amenities. 5. Timing. Income-restricted units shall be ready for occupancy no later than the date of the initial Certificate of Occupancy for any of the market-rate units in the project. If the market-rate units are to be constructed in phases, then the income-restricted units may be constructed in phases, in proportion to the phasing of the market-rate units. 6. Residency or Employment Requirements: For sale income-restricted units shall be limited to: a. A full-time (aggregate of thirty (30) hours of employment per week) employee of an entity or entities located within Iron County for a minimum of one (1) year (preference is given for a person employed within the Town); or b. An owner of a business or entity with a primary place of business within Iron County for a minimum of one (1) year (preference is given for a business that is located within the Town); or c. A full-time (aggregate of thirty (30) hours of employment per week) worker who is self-employed or works out of their home and can provide proof that a minimum of seventy five percent (75%) of their clients are based within Iron County for a minimum of one (1) year (preference is given for clients located within the Town). d. Remote workers will only be considered if the applicant has been a local, Iron County resident for a minimum of two (2) years prior to application (preference is given for a person that currently lives within the Town). (amd. ord. 24-014, 10-8-24) D. Income Standards for All Workforce/Affordable Housing Units 1. All units must remain affordable for a period not less than thirty (30) years from the initial issuance of Certificate of Occupancy. At that time, the Town Council shall determine whether to extend the inclusionary housing program and associated deed restrictions. 2. A deed restriction will be recorded on the property that stipulates the income requirements and term requirements for the units provided. 3. Household income shall be defined as the combined income of all individuals, excluding dependents, who are or will be occupying the unit regardless of legal status. 4. For ownership or ‘for sale’ units: qualified households cannot earn more than onehundred and twenty percent (120%) of Iron County’s median family income based on housing size and determined by the US Department of Housing and Urban Development (HUD); 5. For rental units: qualified households cannot earn more than thirty percent (30%) or sixty percent (60%) of Iron County’s median family income based on housing size and determined by the US Department of Housing and Urban Development (HUD). 6. The Town Council will adopt income requirements by resolution as frequently as necessary and the requirements will be maintained by the Planning and Building Department. 7. In addition to income, the following standards will apply: a. Net Assets/Net Worth Standard: i. The combined net worth of the persons eighteen years of age and older in the Household shall not exceed four (4) times the AMI for the household size. Assets include business assets, real estate, stocks, bonds, trust funds, cash, and retirement accounts. ii. A one-time gift of up to thirty percent (30%) of the purchase price used for the purchase of a for sale unit may be considered in net assets, and not as income, for the purposes of initial qualification. iii. Disposition of assets: Any member of a household who has assigned, conveyed, transferred, or otherwise disposed of property or other assets within the last two (2) years without fair consideration in order to meet the net asset limitation or property ownership limitation shall be ineligible. 8. The Town’s Planning and Building Department will serve as the entity to review and qualify household for the workforce/affordable units. 9. A list of qualified households shall be kept by the Town in order of approved application. (amd. ord. 24-014, 10-8-24) E. Calculation of Sale Price 1. The initial sales price for a workforce/affordable ownership unit in any development shall average a price affordable to a household earning eighty percent (80%) or one hundred percent (100%) or one hundred and twenty percent (120%) of Iron County’s median family income based on housing size and determined by the US Department of Housing and Urban Development (HUD), depending on the proposed unit and AMI configuration the developer proposes to include in the development (see Section B.2.a), The target household income sale price shall be calculated according to the following guidelines: a. Mortgage payment for the owner-occupied unit, including principal and interest and homeowners association (HOA) operating dues shall not exceed thirty percent (30%) of the target household income (gross). b. The assumptions used to calculate the sales price shall be: i. a five percent (5%) down payment; ii. a thirty (30) year term; and iii. an interest rate equal to the prevailing interest rates as defined by the federal government (Federal Reserve Bank of St. Louis) at the time of the offer. (amd. ord. 24-014, 10-8-24) F. Calculation of Rental Rates 1. In general, rental rates for a workforce/affordable unit in any development shall be affordable to a household earning either thirty percent (30%) or sixty percent (60%) of Iron County’s median family income based on housing size and determined by the US Department of Housing and Urban Development (HUD), depending on the project type submitted for review. Affordability standards are based on maximum rental rates which are targeted at thirty percent (30%) of the household’s income. Maximum rental rates shall be calculated as follows: a. Maximum rental rates shall include the cost of utilities and homeowners association (HOA) fees, if applicable. The landlord/owner shall submit a lease which includes the proposed monthly rental rate along with proof of utility costs to the Planning and Zoning Department, or designee. Town Staff will evaluate the lease and either approve or deny the rental rate proposed based on the standards established herein. b. Rental rates shall apply whether the units are provided furnished or unfurnished. c. The owner of any designed workforce/affordable housing rental units, at their cost and expense, must keep and maintain the interior and exterior of the total structure (including all residential units therein) and the adjacent open areas in a safe and clean condition and in a state of good order and repair. (amd. ord. 24-014, 10-8-24) G. Deed Restriction Standards for Workforce/Affordable Units – Owner-Occupied Units and Rental Units: 1. Owner Occupied Units: All owner-occupied workforce/affordable units will have the following requirements clearly outlined in the deed restriction recorded for the property: a. The method of calculation of the allowed Maximum Resale Price (‘MRP’) shall include: i. An increase in price of three percent (3%) per year from the date of purchase to the date of owner’s notice of intent to sell (compounded annually and prorated at the rate of one quarter percent (.25%) per each whole month of any part of a year). I. Any proposed improvements or renovations to the units, internal or external, must be approved by the Town’s Planning and Zoning Department, or designee, prior to the commencement of any work. The base value of the unit (at time of purchase by the new owner) may not increase more than ten percent (10%) as a result of these approved eligible improvements. For example, if the base value of a unit is two hundred thousand dollars ($200,000), and an owner is approved to make improvements valued at twenty five thousand dollars ($25,000), the maximum value of the workforce/affordable unit will be capped at two hundred twenty thousand dollars ($220,000) ($200,000 * 0.10). The outstanding five thousand dollars ($5,000) for improvements will not be counted in the MRP. ii. The notice of intent to sell must be made to the Town’s Planning and Building Department, or designee, in writing delivered via mail (e.g. USPS) or by email. The notice of intent shall allow the Town Staff no less than sixty (60) days to determine whether to exercise the right-of-first-refusal or to coordinate a private transaction. iii. The Town shall either purchase the unit per a right-of-first refusal clause included in the deed restriction or coordinate with the owner of the workforce/affordable unit to sell the unit to the qualified household at the top of the Town’s qualified households list. b. All owner-occupied units must be occupied by the qualified household that purchased the unit as the/their primary residence (minimum of twelve (12) months occupancy per year). c. No nightly rentals are permitted within any workforce/affordable housing unit. (amd. ord. 24-014, 10-8-24) 2. Rental Units: All rental workforce/affordable units will have the following requirements clearly outlined in the deed restriction recorded for the property: a. All rental units must be occupied by the qualified household that rented the unit as the/their primary residence (minimum of twelve (12) months occupancy per year unless the Land Use Authority approves a project with part-time workforce housing units such as, but not limited to, single-room occupancy units, etc.). i. The applicant may request an exception from this requirement (e.g., a request for seasonal workforce housing, etc.) for review and approval by the Land Use Authority. b. No subleases are allowed without the written approval of the Town’s Planning and Building Department, or designee. c. No nightly rentals are permitted within any workforce/affordable housing unit. d. The landlord/owner may not increase the monthly rental rates for the workforce/affordable units more than two percent (2%) annually. (amd. ord. 24-014, 10-8-24) H. Violation and Penalty 1. It is unlawful to operate a restricted unit in violation of this chapter, and violations shall be punishable as set forth in the Town Code. Each day of violation shall be deemed as a separate offense. 2. In addition to the remedies provided by this code, the Town shall have any and all remedies provided by law and in equity for a violation of a deed restriction, including without limitation: (i) damages; (ii) specific performance; and (iii) injunctions, including without limitation an injunction requiring eviction of the occupant(s) and an injunction to prohibit the occupancy of the deed-restricted unit in violation of the deed restriction. (ord. 23-007, 8-8-2023, amd. ord. 24-014, 10-8-24)