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Table 3 – Production of Affordable Housing based on Project Size <br />Pending Projects Total Units Affordable Units <br />Required (20%) <br />Five projects of 20 <br />units or more <br />1,292 232 <br />Three projects of <br />less than 19 units <br />39 4 <br /> <br /> <br />It is possible that the cost of providing affordable units would be an incentive to reduce <br />the total number of units to avoid the 10-unit threshold, further reducing the number of <br />affordable units. Alternatively, instead of reducing the total number of units, the <br />developer could request concessions from development standards to make the smaller <br />project financially feasible. <br /> <br />For these reasons, staff and the Planning Commission are recommending that the <br />inclusionary requirement apply to projects with 20 units or more and that projects <br />between 5-19 units would pay an affordable housing impact fee, resulting in funds that <br />will be used towards affordable housing programs. However, as an alternative the City <br />Council may consider an alternative threshold, such as 10 units or more. Under the <br />proposed ordinance, projects between 5-19 units could instead provide affordable units <br />on-site or an alternative mitigation program could be proposed. <br /> <br />STAFF RECOMMENDATION: Minimum of 20 units for individual residential <br />projects. Projects of 5-19 units will continue to pay the housing impact fee. <br /> <br />How does the state density bonus law relate to inclusionary requirements? <br />The state density bonus law increases the economic feasibility of affordable unit <br />construction. The additional market-rate units and concessions from development <br />standards help to off-set the developer costs of providing affordable housing units. <br />Affordability levels within the inclusionary ordinance could align with the requirements of <br />the state density bonus law in order to incentivize production of affordable housing. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />7.A. - Page 9