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Government Code Section 65589.8 (which allows the developer to provide rentals as <br /> inclusionary units). <br /> Limited Discretion to Avoid Nollan/Dolan. The deferential "reasonable relationship" test <br /> for impact fees and other exactions applies only to `legislatively mandated, formulaic mitigation <br /> fees" and not to ad hoc individualized exactions, which are subject to Nollan/Dolan scrutiny. 42 <br /> Consequently, an ordinance that has alternatives (such as dedication of land and off-site <br /> construction) needs to define them precisely so that the requirements are, in fact, "formulaic." <br /> There has been a tendency regarding inclusionary ordinances to provide more and more options <br /> with more and more "flexibility." At some point this will transform the inclusionary <br /> requirements into ad hoc exactions, which will make them more vulnerable to attack and transfer <br /> the burden of proof to the City. <br /> Compliance with the Mitigation Fee Act. There have been repeated claims (beginning <br /> with Napa) that the imposition of in lieu fees or even inclusionary requirements must comply <br /> with the Mitigation Fee Act ("MFA").43 Alan Seltzer reviews these claims in detail in his <br /> companion paper. <br /> If cities adopt any part of their inclusionary requirements as exactions or impact fees, <br /> they may want to follow MFA procedures to protect against a future challenge, even if not <br /> acknowledging that the fees are subject to the Act. A difficulty in complying completely with the <br /> MFA is the need to identify precisely the "public facilities" that the fee is to pay for. Affordable <br /> housing projects funded with impact or in lieu fees are typically proposed by private parties on <br /> an ad hoc basis, rather than— as in the case of other public facilities — being built by the public <br /> 42 See San Remo at 670-71. <br /> 43 Government Code Section 66000 et seq. <br /> 20 <br /> 990051A1A720372.3 <br /> 8/7/2009 <br />