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A local government which adopts a requirement in its housing element that a housing <br /> development contain a fixed percentage of affordable housing units, shall permit a <br /> developer to satisfy all or a portion of that requirement by constructing rental housing at <br /> affordable monthly rents, as determined by the local government. <br /> Nothing in this section shall be construed to expand or contract the authority of a local <br /> government to adopt an ordinance, charter amendment, or policy requiring that any <br /> housing development contain a fixed percentage of affordable housing units. (emphasis <br /> added) <br /> This statute was not cited in either the City's or the amicus brief, but would appear to <br /> have no meaning at all if—as concluded in Palmer—rent control is only permitted pursuant to a <br /> agreement in exchange for money or incentives.39 Perhaps one way to reconcile the two statutes <br /> and the Court's holding is to classify the developer's ability to substitute rental units for <br /> ownership units as an incentive provided pursuant to density bonus law (see discussion below). <br /> III. Options for a Defensible Inclusionary Ordinance <br /> This section describes some initial ideas for creating a defensible inclusionary ordinance <br /> in the wake of Palmer and Patterson and discusses various associated issues. The discussion <br /> should be considered preliminary and subject to change. <br /> A. Don'ts. <br /> In light of Palmer and Patterson, some past inclusionary practices are no longer <br /> permitted: <br /> i9 This provision would also appear to provide ammunition to the argument that Costa Hawkins was never intended <br /> to apply to inclusionary ordinances, since the wording of this provision does not contain any acknowledgement that <br /> rent control provisions might apply to inclusionary ordinances. <br /> 15 <br /> 990051\I\720372.3 <br /> 8/7/2009 <br />