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Mr. Fialho explained that the project was originally approved prior to adoption of the IZO which calls for perpetuity clauses being adopted. In addition, the IZO has a minimum threshold of 15 units and the applicant is only proposing 12 additional units for the project. Vice -Mayor Cook Kallio asked if the site contains any available space for units in addition to the 12 currently proposed. Mr. Dolan said that it may be possible to add a few additional units in various nooks but that the 12 proposed seem to fit nicely into the current project and still allow for similar spacing between structures and ample parking. Vice -Mayor Cook Kallio acknowledged the difficulties with providing affordable housing but expressed concern that the applicant may be deliberately proposing fewer units in an effort to subvert the IZO. She stated it is the Council's responsibility to ensure the City has a reliable stock of affordable housing units available in the future. In response to Vice Mayor Cook Kallio, Mr. Bocian noted that rental market rate values have just been adjusted but fall somewhere in the range of $1050 per month for a one bedroom unit. Councilmember McGovern asked if staff had any ideas on how the Housing Commission could use the Low Income Housing Fund to work with the developer on encouraging the perpetuity of the low income units. Mr. Fialho said it would be an appropriate use of those funds to help subsidize the cost of construction and explained that funds have been used in the past to pay impact fees, which has helped to increase affordability, in general. Mayor Hosterman questioned how this relates to the rule against perpetuities. City Attorney Roush said in this particular situation the City cannot require that units be held out for the life of the project to be made available to people with certain income thresholds. Because this cannot be required, staff has negotiated to have those units held for a 30 -year period. He said that the Council does have the option to explore the use of the Affordable Housing Fund to extend that but he urged it to consider that application in the broad picture. Mayor Hosterman questioned what the life of the project would be, and Mr. Roush explained that it is indeterminate at this time or until a project is redeveloped. Councilmember Sullivan questioned if the IZO contains any discussion on the expansion of existing projects. Mr. Bocian said aside from falling below the 15 -unit threshold, one of the issues with this project is that of a lack of clarity in the IZO and its application to existing projects. He suggested that if the Council anticipates seeing more of these applications in the future, it direct staff to clarify the language of the IZO. Councilmember Sullivan said this project seems to subvert the intent of the IZO and asked if the reopening of the PUD allows the Council to impose additional conditions. Mr. Roush confirmed, so long as those conditions are reasonably related to the scope of the project. Councilmember Sullivan said the nexus appears to be there and asked if the Council has the same ability as staff to negotiate the agreement's terms. Mr. Roush said the Council has the discretion to turn the project down and therefore has certain abilities to negotiate. Councilmember Sullivan clarified that he does not oppose Councilmember McGovern's suggestion but wants the Council to be fully aware of its options. He acknowledged that the developer is operating a business but said there should still be some margin for further negotiation. He stressed City Council Minutes Page 5 of 13 May 19, 2009