There are two main agreements the Applicant must execute with the Department of Planning and Zoning (P&Z) relating to MPDUs. The first is the Agreement to Build Moderately Priced Dwelling Units (20.30.040 Application and inclusionary housing plan) which is required before building permits may be obtained. The second is an Offering Agreement (PDF), 20.30.050 Compliance, which is submitted to Planning and Zoning once the Applicant is ready to make the MPDUs available for sale or rent to eligible MPDU certificate holders.
The Agreement to Build MPDUs
Once the MPDU requirement has been set as part of the development review and approval process, the applicant must execute an Agreement to Build Moderately Priced Dwelling Units with Planning and Zoning. This agreement must be executed before building permits will be issued by the Department of Neighborhood and Environmental Programs (DNEP).
Along with the standard form document, the Agreement to Build must include:
- A listing of the individual addresses of the MPDUs and the market rate units;
- An unexecuted copy of the standard MPDU restrictive covenants (either for sale or rental, depending on the development)
- A copy of the final approved site plan with the MPDUs clearly highlighted
Assuming the applicant submits a complete and acceptable Agreement, Planning and Zoning will make every effort to return the executed document within 7 to 14 days so that the Applicant may obtain building permits.
The Agreement to Build is the document that enforces the development requirements of 20.30.040 of Chapter 20 Moderately Priced Dwelling Units. Among other things, this agreement must require that:
- A specific number of MPDUs must be constructed on an approved time schedule
- In single-family dwelling unit subdivisions, each MPDU must have two or more bedrooms
- In multi-family dwelling units subdivisions, the number of efficiency and one-bedroom MPDUs each must not exceed the ratio that market-rate efficiency and one-bedroom units respectively bear to the total number of market-rate units in the subdivision
Additionally, the Agreement requires that the construction phasing requirements for building MPDUs comply with the law so that:
- MPDUs are built along with or before other dwelling units
- No or few market rate dwellings are built before any MPDUs are built
- the pace of MPDU production reasonably coincides with the construction of market rate units
- The last building built must not contain only MPDUs
Please refer to Chapter 20 to review the full requirements of the law.
Amendments to the Agreement to Build
If at any time the MPDU requirement for a development changes (due to a site plan amendment, for example), or if the construction schedule contained in the agreement changes, the Applicant must notify Planning and Zoning and request an amendment to the agreement to build to reflect the changes. Failure to do so may result in sanctions ranging from "stop permitting" orders to civil fines.
MPDU Offering Agreements
At the time the MPDUs are ready to be offered for sale or rent to eligible MPDU certificate holders, the Applicant must submit an Offering Agreement to Planning and Zoning for its review and approval. In "for sale" developments, the Offering Agreement may be submitted no more than 365 days from the expected delivery date of the MPDUs. Larger developments, or developments that are built out over a greater length of time, may require more than one Offering Agreement to make all the required MPDUs available to certificate holders. Planning and Zoning staff will work with the Applicant to schedule multiple offerings in the most efficient manner.
For rental developments, the Offering Agreement may be submitted up to 120 days from the date the rental units will be available for use and occupancy by qualified tenants. In the case of staggered unit delivery over a longer period, more than one offering agreement may be required.
At a minimum, the Offering Agreement must contain:
- The applicable standard form Offering Agreement (either for sales units or rental units) with the number of units indicated
- The lot/block, street addresses, and tax account numbers of the MPDUs
- A recorded subdivision plat, a copy of the approved preliminary plan and/or site development plan designating the location of the MPDUs
- An executed copy of the applicable covenants (PDF) (in recordable form)
- A copy of the floor plans for of each unit type
- Completed price calculation worksheets for each unit type (for sales units), or approved rent schedule by unit type (for rental units)
If, towards the end of the 90-day priority market period, it appears MPDUs will remain after all the names provided by Planning and Zoning have been exhausted, the applicant must contact Planing and Zoning to discuss next steps.