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waiver as a financial contribution to the project. The loss of development fee revenue will be reimbursed from the Lower Income Housing Fund and as such, there will be no reduction in development impact fee revenue to the City. To memorialize project affordability, staff is recommending two agreements. The first is the City's Affordable Housing Agreement which has been amended from its standard form to meet the needs of the bond financing and the second is an Inclusionary Unit Agreement which sets forth the terms for the use of Inclusionary Unit Credits. A summary of the documents is detailed below. The Housing Commission reviewed the affordability proposal as outlined in this report at its May 2, 2013 meeting and approved it unanimously. However, because its agenda material was prepared prior to finalizing all project deal points with St. Anton Partners, it did not include the recommended Affordable Housing or the Inclusionary Unit agreements. However, the overall terms of the agreements were discussed and approved by the Commission. Affordable Housing Agreement Similar to other multi-family developments, this project will enter into an affordable housing agreement memorializing basic affordability elements including levels of affordability and unit counts which is recommended to be as follows: Project Unit Affordability Unit Type 50% 80% 100% Total 1-Bedroom 13 0 0 13 38%* 2-Bedroom 18 0 0 18 51%* 3-Bedroom 4 0 0 4 11%* Total 35 0 0 35 21%** *Represents the percentage of the 35 affordable units **Represents the percentage of the project's total of 168 units The above level of affordability exceeds the Inclusionary Zoning Ordinance requirement that 15% of the units be affordable to households at the very low and low income categories and meets the Housing Site Development Standards and Design Guidelines requirement that the bedroom mix of affordable units be comprised of 10% three bedroom units and 35% two bedroom units. In addition to the unit affordability, the agreement includes the following: • Requires the agreement to be recorded with the land and that 35 units remain affordable for perpetuity. However, the developer has expressed concern that the bond financing may not permit the perpetuity term and as such, the agreement includes a fall back provision of 55 years. Staff has encountered this issue with previous bond and tax credit projects and has prevailed with the inclusion of the perpetuity clause and as such, it anticipates it will also be acceptable for this project. • Requires the development to accept Section 8 housing vouchers from eligible qualified applicants. Page 6 of 14