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<br />8A <br />Page 5 <br /> <br />Typically, there are four methods used to achieve such policy goals: <br />a. On-site requirements <br />b. Off-site requirements <br />c. In-Lieu payment <br />d. Donation of land <br /> <br />In considering whether to adopt an inclusionary housing policy there are several <br />factors to evaluate, as described below. <br /> <br />Separate from Redevelopment Law Housing Requirements <br />Local inclusionary housing or BMR policies should be distinguished from the State <br />Redevelopment Law that is applicable to Redevelopment Areas within the city. <br />Redevelopment Housing Law has two major requirements: <br />a) 20% of the gross tax increment revenues in a redevelopment area must be <br />set aside and used to provide affordable housing units as prescribed in the <br />law. Redwood City has such a fund and is using it to increase affordable <br />units. <br />b) A Redevelopment Agency must ensure that at least 15% of the new housing <br />units built within the boundaries of the Redevelopment Area are affordable as <br />prescribed in the law. The 15% requirement applies to the whole <br />redevelopment area, not to any single project in that area. Redevelopment <br />law further states that 40% of the 15% required affordable units must be <br />affordable to very low-income residents, while the remaining 60% of the 15% <br />required affordable units may be affordable to low or moderate-income <br />residents. Assuming that 100 units of housing are produced in the <br />Redevelopment Area, a minimum of 6 units of housing must be produced <br />affordable to very low-income residents, while the remaining 9 units of the 15 <br />unit requirement must be affordable to low income or moderate-income <br />residents. Redwood City currently has accrued a surplus of affordable units <br />under that requirement. The surplus as of now is 149 units, of which 53 units <br />are "very low income". With the completion in 2007 of the Montgomery Villa <br />rental project at EI Camino Real and Vera Street, the surplus will be 207 <br />units, of which 110 will be for "very low income" occupants. <br /> <br />See Table Two on Page 7 for San Mateo County income limits for household <br />affordability qualifications. <br /> <br />Many inclusionary housing polices require the developer to provide the affordable <br />units at a designated below-market price without public subsidy and to absorb the <br />cost of doing so as a project cost. Depending on market conditions this additional <br />cost of the affordable units is borne by: <br />a) The developer as reduced profitability, and/or <br />b) By the landowner who sold the land to the developer as a reduction on the <br />price of the land. <br /> <br />Potentia/Impact on Housing Production <br />Like any increase in the cost of producing housing, an inclusionary housing policy <br />has the potential to increase the cost of housing and/or reduce the amount of <br /> <br />Page 3 of 7 <br />