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▪ Affordable units will be rented based on the City's adopted preference system, which is included as an attachment to the agreement. As with the first bullet, the developer has expressed concern that this requirement may not be acceptable as part of the bond financing and as a result, the agreement contains provisions that an alternative system would be developed that met the needs of the City and the bond issuance. • Payment of the City's Lower Income Housing Fee is not required as the development will meet the goals of the City IZO. ▪ One of the Affordable 1-bedroom units, one Affordable 2-bedroom units and one Affordable 3-bedroom units will be fully accessible for the physically disabled. Unit design shall include amenities such as grab bars, modified case work and bathroom facilities and other amenities deem significant for disabled access. ▪ Specifies, through the Inclusionary Unit Credit Agreement discussed below, that in the event bond financing is not approved, an alternative affordability mix would be used to meet affordability requirements. The proposed affordability plan is consistent with the IZO and the Housing Site Development Standards, Design Guidelines and with the levels recently approved for the California Center development. The terms are as follows: Alternative Protect Unit Affordability W/O Bond Financing Unit Type 50% 80% 100% Total 1-Bedroom 5 3 5 13 50%* 2-Bedroom 0 3 6 9 35%* 3-Bedroom 0 2 2 4 15%* Total 5 8 13 26 15%** *Represents the percentage of the 26 affordable units **Represents the percentage of the project's total of 168 units Due to the developer's experience with this type of financing and the current status of the financing approval process, both parties are confident that the financing will be approved. However, this level of affordability would be in place in the event the financing is not approved. Inclusionary Unit Credit Agreement The Inclusionary Zoning Ordinance provides that a development may meet its affordable housing requirements in a number of ways including making provisions for affordable units to be provided off-site of the development itself. The rationale for this provision is that at times, it may be more practical, productive and/or financially feasible to provide for units at a different development. In response to the IZO's off site provision, in 2004 the City Council adopted Resolution 04-073 (Attachment 10) which outlines the terms for one type of off-site compliance involving one development "transferring" affordable units to another development. Similar to "cap and trade' practices used in the energy and air quality fields, this concept assumes that one development may be better positioned to have more than the required number of affordable units and that this excess could be made available to another development thus assuring that overall, all affordability requirements for both development are met. To finalize a transaction of this type, Resolution 04-073 provides Page 7 of 14