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Affordable Housing Agreement Based of the City Council's direction from its joint workshop with the Housing Commission, staff's negotiation with the applicant included various ways of meeting the intent of the Inclusionary Zoning Ordinance (IZO) with the goal of maxirr izing the number of onsite affordable units. As an outcome of the negotiations, staff and the applicant have agreed to the terms of an Affordable Housing Agreement (AHA), which include rent restrictions on 32 apartment units and the payment of fees on all 97 ownership units. In determining the most appropriate way for this development to meet its overall affordability requirement, staff focused on maximizing the project's abi ity to provide low and very low income apartment units. This was also the applicant's focus. As a result, while the City currently maintains a number of affordable ownership units, both parties looked primarily to affordable rental units as these provide the best — in reality, the only — option for achieving units for very low and low income households. Further, over the past few years, staff has not focused on increasing the City's inventory of affordable ownership housing due administrative issues, limited benefit when compared to rectal units, and the fact that doing so would most likely result in fewer affordable rental units As with other larger developments, staff has indicated a willingness to provide financial support to a development if this results in a meaningful increase in project affordability. As a result, staff and the applicant agreed that allowing a reduction in tie Lower Income Housing Fee (LIHF) for the ownership homes in exchange for an increase in the level of affordability for the rental units would be beneficial to both parties. Hence, the AHA provides that the LIHF for the 97 ownership units will be $5,356 per unit for a total of $519,532. (The current LIHF fee for single family homes in excess of 1,500 square feet is $10,713 per unit.) The level of affordability for the rental units is as follows: Table 2: Number and Type of Affordable Units Unit Type Very Low Income Low Income Total (Bedrooms) 50% AMI (60%AMI) One Bedroom 9 9 18 56% Apartments Two Bedroom 6 7 13 41 Apartments Three Bedroom 1 0 1 3% Apartments Total Units 16 16 32 100% Regarding compliance with the Inclusionary Zoning Ordinance's (IZO), staff has determined that the combination of 32 units, rent-restricted at low anc very low income levels, and the payment of the LIHF results in the development meeting the IZO. In addition, the AHA includes the City's standard terms including perpetuity, City preference criteria, acceptance of Section 8 vouchers, three fully accessible units consistent with the City Councils recently adopted language detailing the types of features and rental requirements, and the quality of materials used in the affordable units. Page 15 of 19