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Smaller Units/Missing Middle Housing One of the key concepts of affordability by design is the unit size, as this lowers the cost of a unit (whether for rent or for sale), making it more affordable. The City Council could consider additional policies in the Housing Element to encourage smaller units, particularly in multifamily projects. For example, a policy that called for a unit size mix, with a certain proportion of units required to be less than a certain square footage and/or have fewer bedrooms.5 At the February 9 meeting, the Planning Commission also expressed interest in having scaled impact fees for different sized units. Adjusting fees to be based on unit size, could encourage more production of smaller units, since there could be considerable cost savings to a developer in building a smaller versus a larger unit, depending on the cost differential. As noted, "missing middle" housing types tend to produce more compact and affordable units, and there may be some benefit to encouraging some alternative, innovative housing types that may not be feasible or permissible to build today under current zoning standards. Attachment 5 to this report provides some examples of different types of "missing middle" housing, such as townhomes, courtyard -style developments, and duplexes/triplexes. As mentioned, the City already has an ADU Ordinance and an ordinance for SB9, including Objective Design Standards (ODS) for both types of units.6 Identified in the Recommendations section of this report, related to the ADU Ordinance, is a suggestion to streamline ADU development, in recognition that ADUs can be a beneficial form of affordable and "missing middle" housing. There are also areas of the city, aside from the larger Housing Element sites, where additional infill housing could occur. To ensure compatibility with existing neighborhoods, staff is working with a professional services team to develop ODS for existing, smaller infill sites. In addition to these sites, however, there could also be additional opportunities for integrating alternative types of housing. This would be a focused approach in identifying specific areas of the city that could benefit from infill and where smaller, multifamily development could be integrated into the neighborhood. Some modifications may be needed to City zoning standards to accommodate such units; for example — smaller minimum lot sizes or dimensions, flexibility in how parking or on-site circulation is accommodated, or adjustments to setbacks. The potential pros and cons of such adjustments would need to be studied and analyzed to ensure projects would fit well into existing neighborhoods, and not create unintended impacts. Any changes to the municipal code as a result of Housing Element policy would be drafted with input from 5 While this is a feasible strategy, it is cautioned that Housing Element Guidance, as well as the Settlement Agreement associated with the 4th Cycle Housing Element, required the City to have proactive policies to encourage production of affordable family housing units (i.e., units with three bedrooms). The City will likely need to maintain a balanced approach, and continue to allow for and encourage the production of larger affordable units, as well as smaller units. 6 The City Council has requested a discussion of affordability restrictions for SB 9 units; this item is expected to be brought to the Council this spring. Page 11 of 16