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the City should identify only actions and programs for which meaningful progress can be made during the eight-year Housing Element period. Lower -Income Housing Fee (LIHF) The City has a number of existing programs to support and facilitate the production of affordable housing. The most significant among those are two related programs: the LIHF, as outlined below, which by ordinance allows the City to assess fees on new (market -rate) residential and commercial development to offset the demand such projects generate for new affordable housing; and the Inclusionary Zoning Ordinance, or IZO, addressed in the next section of this report, which requires new market -rate housing projects to provide a proportion of affordable housing units or provide alternative mitigation such as payment of an in -lieu fee. Amount of LIHF The City adopted the most recent LIHF in 2018 after completing a Nexus Study.2 In Pleasanton, the LIHF is applied to new residential development on a per unit basis (with some limited differentiation based on unit size); and on various types of commercial development on a per -square foot basis. The Nexus Study prepared for the LIHF established a maximum value that should be charged to new development. At the time of its adoption, and based on a comparison of those rates, with the amounts charged by neighboring Tri -Valley jurisdictions, the City Council made a policy decision to establish fee levels below the recommended maximums, in order to ensure that Pleasanton remained competitive for new development and investment. The difference between the recommended maximums that could be charged, and the actual fee rates are summarized in Table 1, below. 2 Lower-income housing fees are not subject to the provisions of AB 1600 (the Mitigation Fee Act) and therefore do not legally require a nexus study. (California Building Industry Association v. City of San Jose (2015) 61 Cal.41' 435; 616 Croft Ave., LLC v. City of West Hollywood (2016) 3 Cal.App.51h 621. However, the Nexus Study was prepared to assist the City in determining the appropriate amount of the fee. Page 3 of 16