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built, from being restricted by growth management. She asked whether HCD's preference is the construction of units versus a financial contribution. Mr. Dolan said HCD expressed no preference. Councilmember Pentin asked what HCD's position is on restricting those contributions to the Lower Income Housing Fund versus distribution into other funds to be used for other purposes, which is the issue he has with the Auf Der Mauer project. Mr. Dolan said HCD has not expressed an opinion on that either, though it is not at all uncommon for other communities to offer the same type of choices to developers. Mr. Fialho explained that HCD is more interested in ensuring that the funds are being effectively utilized to generate affordability in the community. While, as Mr. Dolan explained, that is not part of this analysis, if there were such test then HCD would look to ensure that the city used the funds for the intended purpose rather than simply stockpiling the money. Mayor Thome requested confirmation that the use of those founds for special needs or senior housing would not satisfy affordable housing requirements. Mr. Dolan clarified that any housing presented to the market as affordable within the guidelines of the rent would qualify, regardless of the user. However, the city could be subject to scrutiny if the housing needs assessment identified a large need for affordable housing families and all of the money were spent to address senior and special needs housing. Mayor Thome asked staff to discuss second unit restrictions. Mr. Dolan reviewed the relatively minor proposed change, which simply changes the date by which the city commits to addressing the matter. The program proposed by the Housing Commission essentially identifies the need to explore opportunities to increase the number of second units. While they are currently allowed, as required by law, it is not uncommon for a community's eagerness to protect existing neighborhoods to create restrictions that do not necessarily facilitate their development. The Commission therefore requested that the city reexamine its regulations to see what can be done to encourage the construction of second units. Councilmember Narum asked whether there was any discussion on how the drought might relate to or limit the development contemplated within the Housing Element. Mr. Dolan explained that the provision of infrastructure is discussed in the Housing Element. The draft submitted to HCD stated that the city can provide sufficient water and sewer infrastructure to meet the city's needs. At the request of HCD, this was expanded to state specifically that this need could be met within the timeframe of the eight year planning cycle. Councilmember Narum questioned this in light of the mandatory water conservation. Mr. Dolan acknowledged that it seems incongruous but reminded her that Zone 7 maintains the position that it can meet the demands of what has been planned. Therefore until Zone 7 decides that a moratorium is required, the city is required to meet its residential zoning obligations. Councilmember Narum noted that by providing the zoning, these property owners could submit a development application tomorrow. Mr. Dolan agreed but explained that the actual building application would be quite a ways out, at which point circumstances will have hopefully changed. City Council Minutes Page 4 of 6 January 6,2015