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3. Shift attention from inclusionary units to maximizing affordable housing fee payments/revenue to purchase or construct unit affordability. As indicated, the LIHF nexus study that is underway (and scheduled for completion in August/September) will identify a supportable fee that is closer to offsetting the impact (i.e., based on mitigating the impact) of not providing affordable units and attempt to create a legally sustainable nexus and as such, it should provide revenue that could be leveraged to acquire affordable units. For this option to be effective, the City Council would need to set the fee at an amount that is at or closer to the amount that will be recommended in the study rather than retaining the modest fees currently in place. Also, once the fees are paid, the City would need to identify opportunities to acquire property for developing a City driven project, partner with a developer that is willing to include inclusionary units in its development or provide a developer with financial incentives for enhancing project affordability. One issue with the latter option is that developers have recently been hesitant to accept financial contributions from the City since it may trigger State prevailing wage requirements. As such, the City's best effort would most likely be to pursue its own development, such as Ridge View Commons and the Promenade that involve partnering with a non-profit. developer. This option also would allow the City to pursue the IZO's alternative approaches, such as land acquisition, off site housing, etc. While a number of cities have moved to this option as a way of complying with Palmer, the sustainability of the fee is largely dependent of the quality of the LIHF nexus study and its overall acceptance in the development community. As such, fees are often approved well below the amount recommended in the nexus study which raises concern that the fee revenue will be adequate to develop any significant amount of affordable housing. 4. This Option involves establishing a new zoning designation for Nonprofit High Density Residential, Mixed Income (NHDRMI) requiring that all properties the City identified for high density residential development (30+units/acre) receive a NHDRMI zoning designation. Zoning requirements include the property owner designating a nonprofit provider that would control the site and develop at least 40% of the residential units. The nonprofit would also select the for profit developer that would develop the remainder of the site's units. As outlined in the Citizens for a Caring Community correspondence dated April 8, 2013, (Attachment 4), which has recommended this option, it would focus on creating mixed income neighborhoods rather than mixed income households within buildings. Further, because there would most likely be a separation of buildings designating affordable and market, it could better qualify for tax credits and other funding options. In essence, it allows the market developer to focus on its expertise that is providing market rate housing, while allowing the nonprofit to focus on its expertise, which is providing affordable housing. Citizens for a Caring Community is careful to point out that this option would not necessarily lead to 100% affordable buildings, which has been a concern of the City Council, but could have some mixture of incomes in the nonprofit Page 6 of 9