Affordable housing units are most commonly created by a Second Residential Dwelling or as
part of a proposed housing project, where one or more units are deed-restricted to a particular
income level in exchange for a density bonus and/or development incentives.
Affordable Housing Rates
Household income limits, maximum rental rates, and maximum sales prices are based on the
median income of the county and are calculated periodically by the County of San Luis Obispo’s
Planning and Building Department
Deed-restricted units may be occupied by households that qualify for the specified income
level (very-low, low, or moderate). The monthly rental rate, including costs for utilities, may
not exceed the amount listed on the Affordable Housing Rate Chart
. The City annually verifies
that the household remains income-qualified and the rental rate does not exceed the allowable rate.
For a for-sale unit, the household must meet the income restriction at the time of the sale, and
the sales price cannot exceed the maximum listed on the Affordable Housing Rate Chart
The City annually verifies that the purchasing household occupies the unit.
Second Residential Dwellings
A Second Residential Dwelling is a second permanent dwelling that is accessory to a primary
dwelling unit on the same site. A second residential dwelling provides complete, independent
living facilities for one or more persons, including permanent provisions for living, sleeping, eating,
cooking, sanitation, and parking, and can either be attached or detached from the main residence.
Second Residential Dwellings may be permitted in any residential zoning district, subject to
approval by the Community Development Department through the Building Permit plan review
At the time the construction plans are submitted for a Building Permit, the owner must
identify if either the main dwelling or the Second Residential Dwelling is intended for owner
occupancy. If the owner intends to rent both units, a rental rate restriction shall be placed on
either the main unit or the second unit. The restricted rental rate shall not exceed the
“Lower Income” range as established by the U.S. Department of Housing and Urban
Development (HUD) for San Luis Obispo County and shall be in place for a period of 30 years.
Keep in mind that the restriction may be lifted subject to an agreement between the property
owner and the City if one of the units becomes owner occupied.
In addition to rent restrictions, Second Residential Dwellings have a restriction on their size
and parking requirements. The second unit can either be attached to the existing dwelling or
detached from the existing dwelling. The floor area of an attached unit shall not exceed 30%
of the living area of the main unit and the total living area of floor space for a detached unit
shall not exceed 1,000 square feet. A maximum of two parking spaces is allowed for Second
Residential Dwellings, with a minimum of one parking space per bedroom. This is in addition to
the required two-car garage for the main single family dwelling unit.
The Building Permit Fees are based on the size of the unit and Second Residential Dwellings
must also pay Development Impact Fees as well as School Fees. Second Residential Dwellings
are also subject to installation of fire sprinklers.
Other than exceptions discussed below, all projects must meet the development standards
for the type of project and the zone in which it is located. The project must also receive
discretionary approval from the Planning Commission and, in some cases, the City Council
before building permits can be issued.
Development Incentives for Affordable Housing Projects
Projects with five or more units
Projects with at least five residential units that also include at least one affordable residential
unit are qualified to apply the State’s affordable housing regulations, which can be found in
the California State Government Code Section 65915. Depending on the level and percentage
of units that are affordable, projects are eligible to receive up to three development incentives.
Projects may also apply parking requirements as dictated by this section instead of city
Projects with four or less units
Projects with less than five residential units that also include at least one affordable residential
unit cannot use the state’s regulations. However, recognizing that most lots in the City are not
sufficient in size to accommodate five or more units, the City has adopted the following
development incentives for projects with less than five units:
1. One or more units for Moderate Income. One incentive may be requested from the following:
a. Reduce minimum outdoor and/or private usable open space requirements in total square feet.
(Up to 20 percent reduction).
b. Reduced minimum outdoor and/or private usable open space requirements in dimension.
(Up to 20 percent reduction).
2. One or more units for Low Income. Two incentives may be requested from the following:
a. Any incentive listed under the "Moderate Income" section above.
b. Increased maximum lot coverage. (Up to percentage permitted in the applicable zone).
c. Increased in the allowable first to second floor square footage ratio from 80 to 100 percent.
d. Allowance for required guest parking requirement to be located in tandem to the garage or
in a required setback.
3. One or more units for Very Low Income. Three incentives may be requested from the following:
a. Any incentive listed under “moderate income” and “low income” sections above.
b. Reduce minimum building setbacks from property lines and building separation
requirements that exceed minimum building code and fire code standards.
c. Reduce minimum lot sizes and/or dimensions.
In addition, affordable housing projects of any size may request a reduction in the amount of
certain development fees. For example, developments are required to place the existing main
utility lines underground or pay an in-lieu fee, pursuant to the Interim Undergrounding Policy
adopted by the City Council on June 4, 2007. However, affordable housing projects may request
a reduction in the amount of in-lieu fees to be paid. This may be approved by the Community
Development Director. The reduction is the percentage that the project is determined to be
affordable. For example, if a four unit project includes one affordable housing unit, the total
amount of the in-lieu fees is reduced by one-fourth, or 25%.
Funding for Affordable Residential Projects
CDBG and HOME Funds
The City of Grover Beach is a non-entitlement community, eligible to competitively apply for
U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant
(CDBG) and Home Investment Partnerships Program (HOME) funds administered by the State of
California. The City’s Community Development Department manages these programs, which aim
at providing services, housing, and facilities for the very-low, low- and moderate-income
persons/households of our community.