AgdaPkt 2018-05-21 Joint SA PFA - Laserfiche WebLink

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Ownership 15% Moderate Income 15% Moderate Income Both options establish expectations for the developer and are feasible. However, there are different tradeoffs. The Choice of Affordability option allows developers to pick a level of income and number of units (and associated density bonus incentives) that make sense for their project. However, this reduces the City’s ability to obtain a preferred level of affordability in each project in order to address the needs at any given time. The City’s Strategic Initiative on Housing promotes housing at all income levels, and the Mix of Incomes option better addresses that concern. Additional language would permit applicants to request an alternative at an equal or greater value to the requirement, providing needed flexibility. STAFF RECOMMENDATION: “Mix of Incomes” option requiring affordability for a variety of levels within each project. Staff also suggests a provision allowing developers to propose alternative percentages and levels of affordability as part of their housing plan as long as the financial value meets or exceeds the value of the requirement. What is the minimum project size needed for on-site affordable units? Generating the maximum number of affordable units helps to meet RHNA goals. Project size thresholds in nearby cities vary, but generally average around a minimum size of 10 units. However, setting the threshold to 10 units may create drawbacks. Requiring onsite affordable units will allow developers to request concessions, which could create more variability in the building envelope for new development, a concern in existing neighborhoods. Producing deed-restricted affordable housing results in a certain amount of administrative costs. Administration means ensuring that the units are rented or sold to qualified residents and that appropriate documentation is maintained. Historically, this has been challenging for property managers of market-rate projects, resulting in out-of- compliance units and adding a significant administrative burden for the City. Balancing the goals of providing units while maximizing efficiency is critical. Generally, affordable unit programs such as an inclusionary requirement have the most beneficial impact with larger residential projects. The larger residential developments result in more affordable units, simplifying the administrative process. In order to assess the production of affordable units between projects, staff looked at the total number of units for eight pending projects. As the table below shows, with a 20% affordable unit requirement, five large products would have produced 232 affordable units, while three small projects produce only four affordable units. 7.A. - Page 8