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entity pursuant to an adopted capital improvements plan. This difference may help convince a court that affordable housing is not a "public facility" and hence is not subject to the MFA (even if it is ultimately defined as an exaction). However, following the MFA procedures in adorning an ordinance may at least protect the adoption against a facial challenge (as was the case in Santa Monica).44 Takings and Price Control Issues. Clearly an impact fee and inclusionary requirement cannot be so confiscatory as to deprive an owner of "all economically beneficial use" of the property. The issue is whether, as price controls, they must also give owners a reasonable rate of return. From a practical viewpoint, the requirement of the Department of Housing and Community Development ("HCD") that cities demonstrate their inclusionary ordinances do not pose a "constraint" on housing has resulted in communities' preparing economic studies to show that housing development remains feasible even after adoption of an inclusionary ordinance. Some of these studies have been based on a rate of return analysis. For instance, one study we reviewed looked at whether an inclusionary requirement would provide developers with a 12 percent profit on cost, based on data from the National Association of Homebuilders. Communities may want to include a rate of return analysis in their economic feasibility studies to protect against future claims based on the characterization of inclusionary requirements as price controls. Relation to Density Bonus Law. If Palmer remains good law, rental affordable units can be required only if the project receives either money or "any other forms of assistance specified " Although a contrary argument may be made that, if the city follows MFA procedures, applicants may claim that the city has conceded the applicability of the MFA. 21 990051A1A720372.3 8/7/2009