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The IZO, while relatively recently adopted into the PMC respective to other sections, has nonetheless been in place for over 20 years. Policies in the Housing Element could indicate future review or refinement of existing policies or suggest areas of refinement. The following topic areas have been raised for consideration - Enacting an overall increase in the percentage of affordable units fora project required by the IZO, to be greater than the current maximum of 20 percent. Based on review of other IZO programs across the region, the State and the nation, Pleasanton's current 15-20 percent range is very consistent, and in fact, on the higher end, of many cities' inclusionary percentage. Because building below -market -rate units requires significant subsidy, an overly aggressive inclusionary rate could become a constraint to overall housing production, have unintended consequences of making most housing projects infeasible, and potentially drive up the cost of the market rate units. Attachment 2 to this. report provides a summary of the IZO requirements for Livermore, Dublin, San Ramon, and Danville; Attachment 3 is a comparison by Fannie Mae of inclusionary housing nationwide, and Attachment 4 is a report by the Local Government Commission identifying best practices for IZOs, all of which suggest that Pleasanton's current inclusionary rate appears appropriate. Adiusting inclusionary rates for multi -family versus single family projects. Compared to significantly increasing the percentage of affordability required for residential projects, a more modest, but nonetheless beneficial, approach could be to align the percentage of affordable units required between multifamily and single-family development to both be set at 20 percent. It has also been suggested that the inclusionary percentages be "flipped" — such that the higher, 20 percent requirement be tied to multi -family developments, and the lower, 15 percent requirement to single-family projects. This latter change would make sense, given several factors that include: 1) the relatively lower per-unit cost to construct a typical multifamily unit, providing less cost burden and risk of escalation of costs/prices for the project's market -rate units; 2) the larger number of units in a typical multifamily project that will result in a larger yield of affordable units; 3) the greater inherent affordability of rental versus for -sale housing; and 4) the fact that rental housing units typically benefits more individual households over time, as occupancy of such units tends to turn over more quickly. In the City's experience, single-family residential projects are more challenged to provide the high proportion of inclusionary units and have almost all sought (and achieved) alternative means of compliance such as payment of fees, dedication of land, or other approaches allowable under the IZO. In discussion on this topic, some Commission members suggested eliminating the ability to pay in -lieu fees or adjusting the amount of in -lieu fees to make it a less attractive "default" option for developers. With respect to retaining payment of in -lieu fees as an option, staff noted that payment of fees is sometimes the preferred or most feasible option for a project (depending on its location and characteristics), so retaining Page 7 of 16