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• Is consistent with City Resolution 10 -390 adopted in 2010 that obligates the City to, in part, promote the construction of affordable three bedroom units for families and the goal of building affordable family and senior units in proportion to the need of each other. Represents a unique opportunity to obtain affordable housing units without financial contributions from the City Limitations/Concerns Loses the ability to acquire cash which could be used to support a family affordable housing rental project developed by a non - profit developer. Not discussed as part of the City's overall priority setting /budget process. Alternative 2 - Select the cash payment with $1,041,421 appropriated to the Lower Income Housing Fund for allowable uses and the remaining $3,458,579 placed in a separate fund for financial assistance for a specific future affordable housing project, most preferable one developed with a non - profit housing developer. Opportunities/Benefits • Is consistent with the IZO in that it allows for payment of the LIHF in lieu of providing BMR units. Is consistent with the following Housing Element Policies: Goal 6: Promote the production of housing affordable to extremely low -, low, and very-low income households by actively working with and creating incentives for non -profit housing developers. • Policy 26 (in part): Encourage non -profit and joint for -profit housing developments by offering incentives... including, fee waivers, contributions from the Lower Income Housing Fund, City assistance in obtaining financing... Assures the Lower Income Housing Fund retains a fund balance that allows the City to continue supporting a wide range of affordable housing programs /projects. (The current fund balance w/o the $10 million already appropriated for the Kottinger Gardens project is approximately $6.1 million.) Limitations /Concerns • The $3,458,579 placed in a separate fund would most likely be inadequate to fully fund a new affordable housing project. • The primary purpose of the IZO, and various Housing Element programs, is to obtain long term BMR units and this alternative does not accomplish that purpose. Page 6 of 9