Inclusionary housing can be an important tool that local jurisdictions use to create affordable housing in their communities without local subsidy. The City of Oceanside originally adopted its Inclusionary Housing Ordinance (“IHO”) in 1983 in an effort to meet the housing needs of its lower and moderate-income households.  As of February 2024, Chapter 14C of the Oceanside Municipal Code establishes housing requirements for low and moderate-income households in residential projects of ten (10) or more units to rent 15 percent of housing units at restricted rents that are affordable to low-income or sell 15 percent of the for-sale units at restricted prices to low or moderate-income levels. As an alternative, developers may pay an in-lieu fee of $20 a square foot. In effect, the Inclusionary Housing Ordinance brings the private sector of the economy into the business of providing for affordable housing.

• Inclusionary Housing Ordinance (Chapter 14C of the Oceanside Municipal Code)
• Inclusionary Housing Study by DRA, February 2022
• 2024 Amendments to Inclusionary Housing Ordinance (Feb 14,2024)

Density Bonus Law (found in California Government Code Sections 65915 – 65918  and Oceanside Zoning Ordinance Section 3032) provides developers with powerful tools to encourage the development of affordable and senior housing.  Developers are provided with an increase in project densities depending on the amount of affordable housing provided and a larger package of incentives intended to help make the development of affordable and senior housing economically feasible. Other tools include reduced parking requirements, incentives and concessions, and modifications and waivers of development standards.

Resources:

• State Density Bonus Law
• Oceanside Zoning Ordinance Section 3032
• Oceanside Density Bonus Guidelines
• State Income and Affordable Housing Costs Schedule
• Oceanside Utility Allowance Schedule
• County of San Diego Energy Efficiency Utility Allowance Schedule

The City of Oceanside is required by local and state regulations to set maximum incomes for eligibility to live in assisted and/or restricted affordable housing, and maximum rents and housing costs that may be charged to eligible residents, usually based on their incomes. In general, Oceanside follows the California Health and Safety Code in setting income and rent limits for most City-assisted or City-restricted affordable housing projects. These limits may differ from those published by other agencies.

The City’s published income and rent limits are provided here as a convenience to project owners and tenants. However, they are not intended to modify or override legal standards regarding occupancy and rents. If there is any conflict between the limits set forth here and the legal standards set forth in the regulatory agreement for a project, the standards of the regulatory agreement will apply.

QUALIFYING TENANTS

• Memo on Income and Rents Methodology
• State Income and Affordable Housing Costs Schedule
• Oceanside Income Determination Guidelines
• Tenant Income Certification (promulgated by CTCAC)

SETTING RENTS OR SALES PRICES

For affordable housing developed under state Density Bonus law or Chapter 14C of the Oceanside Municipal Code and where no federal assistance is provided, please utilize the following to determine maximum rents and mortgage costs:

• State Affordable Housing Costs Schedule (Rental and For-Sale)
• Calculating Affordable For-Sale Pricing (Excel)

Utility Allowance
Utility allowances must be deducted from the affordable housing cost (CA Health & Safety Code 50053(b)). Sponsors may use the utility allowances under the federal Section 8 program as published by the Oceanside Housing Authority, or sponsors may present documentation substantiating other figures, subject to review and approval of such documentation and its underlying methodology by the City. Any mandatory ongoing costs required by sponsors in connection with tenancy, such as renter’s insurance, shall be treated as utilities.

The Oceanside Housing Authority sets utility allowances for the Section 8 rental assistance program and for the City's affordable housing program. Rent limits for subsidized housing must be adjusted downward if the tenant pays utilities. Use these charts to determine the appropriate allowance, depending on which utilities are paid by tenants.

• Oceanside Housing Authority (OHA) Utility Allowance Schedule
• HA of the County of San Diego Energy Efficiency Utility Allowance Schedule
• HUD Form 52667 (fillable; Use OHA schedule to complete for individual projects)

Assisted and/or restricted affordable housing must remain in compliance with the terms of the loan or grant that was provided by the City/Housing Authority to fund development and the Regulatory Agreement that requires housing units to be occupied by and affordable to low and/or moderate-income households for a long period of time.  In addition to ensuring compliance with the affordability requirements, City staff ensures that the borrowers of City/Housing Authority funds adhere to the repayment terms under its loan documents.

Forms Notices and Templates

• State Income and Affordable Housing Costs Schedule
• HUD (Federal) Area Median Income (AMI) Limits
• Oceanside Income Determination Guidelines (rev 3/24)
• Calculating Affordable For-Sale Pricing (Excel)
• Oceanside Housing Authority (OHA) Utility Allowance Schedule
• HA of County of San Diego Energy Efficiency Utility Allowance Schedule
• HUD Form 52667 (fillable; use OHA Schedule to complete for individual projects)
• Rent Rolls - Sample

Bond Compliance Monitoring

A primary source of financing for affordable housing developments is multifamily housing revenue bonds. Issuers, such as the Oceanside Housing Authority, are required to monitor the bond regulatory agreement requirements to ensure that bond funds are spent appropriately, and to ensure that rents and occupancy meet the terms of the bond regulatory agreement, per Section 5220 of the CDLAC regulations.

Each year by March 1st, the Housing Authority is required to submit a certification to the California Debt Limit Allocation Committee (CDLAC) that all of its bond-funded developments are complying with the features originally identified in application to CDLAC and contained in Exhibit A to the CDLAC resolution. For the Authority to report, it must rely on information that property owners and their representatives send each year.

Bond Forms

• Directions for Bond Compliance Submissions
• Certificate of Delivery of Public Benefits & Ongoing Compliance Form
• Certification of Compliance I (2000-2016 Projects; Please cut and paste onto project sponsor letterhead)
• Certification of Compliance II QRRP (Please cut and paste onto project sponsor letterhead)
• IRS Form 8703
• Certificate of Completion QRRP Form
• CDLAC  Regulations

In compliance with State laws, any proposed housing development in which residential units are proposed for demolition and/or replacement, have been demolished within five years, or have been withdrawn from the rental or lease market pursuant to the Ellis Act (CA Govt Code 7060 and 7060.7)  is subject to affordable housing replacement obligations and applicable occupant protections. Therefore, as a condition of development, as required by State Housing Element law, Density Bonus law and the Housing Crisis Act of 2019, the proposed housing development project must demonstrate that the project:

• Creates at least as many residential units as demolished; 
• Creates as many restricted affordable units of equivalent size and of the same or lower income category as will be demolished.  In the absence of occupant income documentation, affordability will default to the percentage of extremely low, very low or low income renters in the jurisdiction as shown in the latest HUD Comprehensive Housing Affordability Strategy (CHAS) database.

• Provides all occupants the right to occupy their units until six months before the start of construction activities on the new project. If demolition of the unit does not proceed, then the occupant may return to the unit (CA Govt Code Section 66300 (d)(2)(C));
• If Protected Units are Occupied by Lower-Income Tenants
  • Provide lower-income occupants of any protected units a right of first refusal for a "comparable" unit in the development at affordable rent or affordable housing cost. (CA Govt Code Section 66300 (d)(2)(D)(i)); and,
  • Provide State relocation benefits at Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 to lower-income occupants of any protected units. (CA Govt Code Section 66300 (d)(2)(D)(ii)).

   

  Replacement units may be counted towards satisfaction of set-aside units for the purposes of meeting the State Density Bonus (California Govt Code Section 65915) or Oceanside City Code Chapter 14C requirements.

FORMS

• Coastal Zone Projects:  Mello Act Advisory Notice and Screening Checklist
• Demolition/Replacement Housing Information
• Replacement Housing Application

Local agencies (cities, counties, special districts, and certain other entities) must submit notices of availability of surplus land to State HCD for listing on the HCD website, and to notify interested developers and any local public entity in the jurisdiction where the land is located.

All cities and counties are required to inventory and report surplus and excess local public lands to include in a statewide inventory (AB 1255). This is reported as part of the Housing Element Annual Report (Table G) presented to the City Council and submitted to State HCD by April 1 of each year. The Housing Element also provides an inventory of all parcels, inclusive of its development capacity for housing.

State

• Surplus Lands Act Guidelines
• Developer Interest - Local Agency Surplus Land survey
• List of Notices Received (updated weekly)
• Notices of Available Locally-Owned Surplus Land Map
• Housing and Local Land Development Opportunities

Oceanside

• Housing Element Land Inventory
• Housing Element APR Table G

Potential conversion of affordable housing to market-rate housing is an ongoing concern. Assisted housing may convert to market rate as subsidy contracts or regulatory agreements expire. These at-risk units are home to seniors and families with lower incomes who cannot afford to pay market-rate rents and who could be displaced if the developments convert.

State Preservation Notice Law Requirements

Owners of specified assisted projects, including those receiving local funding and density bonuses, are required, unless exempted, to provide "notices of intent" to prepay a federally assisted mortgage, terminate mortgage insurance, or terminate rent subsidies or restrictions at three years, twelve and six months to all affected households, to affected public agencies, and to prospective tenants (California Government Code (GC) Section 65863.10 (b), (c) and (e)).

Notice of Opportunity to Submit an Offer to Purchase

An owner must provide a Notice of Opportunity to Submit an Offer to Purchase (NOSOP) prior to or concurrent with the 12-month notice. Additionally, if an owner is contemplating selling an assisted property within five years of expiration or eligibility for termination or prepayment, they must provide the NOSOP at least twelve months in advance unless the sale or disposition qualifies for exemption pursuant to Government Code section 65863.13.

Annual Owner Compliance Certification

Owners of multifamily residential developments that receive governmental assistance under programs defined in Government Code Section 65863.10(a)(3) must register their properties and complete an annual certification of compliance with Preservation Notice Law. All assisted housing developments with five or more units in which at least 5 percent of the units are subject to affordability restrictions or a rent or mortgage subsidy contract must be certified.

Contact

Contact the Division of Housing Policy Development at preservation@hcd.ca.gov for additional information.

Oceanside leverages its local funds to provide gap financing and the issuance of tax-exempt bonds to create and preserve affordable housing projects in the City. Developers may apply for funds through a Notice of Funding Availability (NOFA) issued by the City/OHA. Funding sources for affordable housing development investments vary and may include the following Local Financial Resources:

• Inclusionary Housing In-lieu Funds
• HOME Investment Partnership Program - The City of Oceanside is a Participating Jurisdiction (PJs) that receives funds annually to funding housing activities consistent with its Consolidated Plan.
• HOME-ARP to funding housing for homeless and at-risk of homelessnes. More information is available in Oceanside's HOME-ARP Allocation Plan.
• Low/Moderate-Income Housing Asset funds remaining from redevelopment.

On June 26, 2024, the City Council awarded three development proposals conditional financial assistance in its local financial resources, Project Based Vouchers (PBVs), and HUD VASH vouchers to create new affordable rental housing for lower-income households (up to 80% of the Area Median Income) in Oceanside.

Please visit this website periodically for future announcements of funding availability.