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In view of Palmer, but consistent with the overall intent of obtaining new rent restricted units for affordable households, staff approached negotiations with the California Center development with the understanding that it would obtain the maximum level of affordability based on mutual agreement between the parties. The end result of this effort was two affordable housing options; both of which fall short of the level of affordability that has been included in developments since the IZO was adopted in 2001. Nevertheless, the options do meet basic IZO features such as the requirement that affordable units will be of equal quality and dispersed throughout the development, the acceptance of Section 8 vouchers, the inclusion of some units reserved for the disabled, application of the City's preference system, etc. When these options were presented to the Housing Commission, it expressed concern regarding inconsistencies with the IZO, the Housing Element and the lack of policy direction regarding expectations for affordable housing in view of the current legal environment. This concern was also expressed by the Planning Commission which took action recommending the City Council review the IZO related policies in an attempt to develop consistencies between expectations, Palmer and Housing Element programs and policies. In view of this situation, staff is requesting the City Council hold a joint meeting with the Housing Commission on May 1, 2013, for the purpose of identifying policies and expectations that could be incorporated into an amended IZO that would be in place to guide affordable housing negotiations with upcoming developments, including St. Anton and Auf der Maur. Assuming the Council holds the workshop, staff anticipates that potential IZO changes would be reviewed by the Housing Commission at its meeting of May 16 when it would also review the affordable housing proposal from the St. Anton development. An introduction of an amended ordinance could be presented to the City Council at its June 4 meeting. As such, the workshop would not result in a significant delay in development review. If the Council determines that it can provide direction regarding its affordable housing goals and policies absent the work shop, staff requests it provide that direction at the April 16 meeting. Submitted by: Approv d by: L/ Steve Bocian Nelson Fialho Assistant City Manager City Manager Page 4 of 4