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ATTACHMENT 3 <br /> THE CITY Of Housing Commission <br /> Agenda Report <br /> pLE AS4NTONo February 21 ,t2013 <br /> SUBJECT: Information Regarding History and Current Status of <br /> Lower Income Housing Fund <br /> STAFF RECOMMENDATION: This item is for the Commission's information only; no <br /> action is required. <br /> ATTACHMENTS: 1. Resolution No. 94-80 (Policies and Guidelines for Use of <br /> the Lower Income Housing Fund) <br /> Background <br /> At the January meeting, the Commission heard a presentation by representatives from Economic and <br /> Planning Systems (EPS) regarding the current update to the nexus study for the City's Lower Income <br /> Housing Fee (LIHF). The Commission requested an update regarding the fee (as well as the Lower <br /> Income Housing Fund) at the February meeting. The purpose of this agenda item is to provide the <br /> requested information. <br /> Discussion <br /> History of the Lower Income Housing Fee <br /> In 1978, the City first established a Lower-Income Housing Fee ("fee") of $400 per unit for new <br /> residential projects. Any unit that was affordable to a low income household (80% of the Area Median <br /> Income, or AMI) was exempt from payment of the fee, and if least 25% of the units in a project were <br /> affordable at low income levels, the entire project was exempt from the fee. <br /> The fee remained at $400 per unit until 1990, when the City made a major adjustment based on the <br /> results of a detailed nexus study. At that time, separate fee rates were established for single-family <br /> ($1,800 per unit) and multi-family ($600 per unit) residential projects. In addition, a new fee of $0.40 <br /> per sq. ft. was established for commercial / office / industrial (COI) development. In addition, the new <br /> fees incorporated an annual inflation factor based on the CPI. <br /> The residential fees were reexamined in 1999 in conjunction with an updated nexus study, resulting in <br /> an increase of approximately 30%. In May 2003, the nexus study was updated and both the residential <br /> and COI fees were increased substantially. The objective was to bring the fees closer to the actual <br /> estimated cost to create new affordable housing units and to achieve consistency with the City's <br /> Inclusionary Zoning Ordinance (IZO) that had been adopted in November 2000. <br /> Page - 1 - <br />