The City offers the following programs and incentives to encourage and promote affordable housing developments. Moreover, during the preparation of the past Housing Element (2014-2021), the City identified housing opportunity sites, some of which are potentially suitable for affordable housing projects based on size of allowable density, and proximity to transit. The location of the sites are represented on a map that shows each parcel along with its APN and land use information.
- Density Bonus Program
- Development Incentives
- Deferred Impact Fees
- Various Funding Sources for Affordable Housing Projects
1. Density Bonus Program
The City has a Density Bonus Ordinance that is similar to the State Density Bonus Law of the California Government Code. The State Density Bonus Law takes precedence when the City’s Density Bonus Ordinance is silent or where the City Code is lagging behind changes in State Law. This ordinance applies to proposed housing projects of five or more dwelling units. The density bonus amount depends on what percent of the housing units are targeted for very low or low income families, and ranges from 5% to 25%. Eligible projects are affordable housing, transitional housing, student housing, condominium conversions, transit-adjacent housing, and senior housing.
After the City and the developer reach consensus on density bonus terms and conditions, the City and the developer enter into a Density Bonus Agreement. This agreement specifies number of affordable units, income levels, affordability period, and maximum rent or sale price. To learn more about the details of the Density Bonus Ordinance (Orange Municipal Code Section 17.15), check out the following link. https://library.municode.com/ca/orange/codes/code_of_ordinances?nodeId=TIT17ZO_CH17.15DEBO.
Housing developers applying for a Density Bonus housing project must submit a Land Use Project Application at https://www.cityoforange.org/DocumentCenter/View/184/Land-Use-Project-Application-PDF.
Please contact Chad Ortlieb, Senior Planner at cortlieb@cityoforange.org to schedule an appointment for any questions regarding the City’s Density Bonus Program.
2. Development Incentives
The City offers one to three concessions and/or waivers as an incentive for housing projects that receive a density bonus. This includes reduction in development standards such as setbacks, minimum unit square footage, parking standards, or landscape standards. It is important that these waivers and reductions meet the minimum building standards of the California Building Standards. Concessions and incentives must result in decreased development costs. To learn more about the concessions and waivers, refer to https://library.municode.com/ca/orange/codes/code_of_ordinances?nodeId=TIT17ZO_CH17.15DEBO_17.15.050COINAIREEDPAST.
3. Deferred Impact Fees
The City will consider deferring impact fees to coincide with occupancy permits for affordable housing projects. This will help reduce the upfront project cost as well as residual payments made to the City during the initial years after the housing construction is completed. Any developer seeking deferred impact fees needs to meet with the City and negotiate the terms through a development agreement.
4. Various Funding Sources for Affordable Housing Projects
The City annually receives federal HOME and CDBG funds from the U.S. Department of Housing and Urban Development. Both HOME and CDBG funds can be used for the construction or rehabilitation of affordable housing projects. CDBG funds may be used for land acquisition only or improvements of common areas. HOME funds are available for construction or rehabilitation projects of affordable housing units. In addition to federal funds, the City may have redevelopment set aside funds that could be allocated for affordable housing projects.
