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that flexibility is beneficial, with the City retaining discretion to approve (or disapprove) such proposals. Other opportunities for modifying the IZO that were analyzed by staff and discussed by the Commissions include: • Identify percentage split between income levels, instead of leaving the percentage to discretion in the Affordable Housing Agreement. This would provide an objective and predictable requirement for the affordability levels. • Instead of requiring a percentage of the total number of units in projects to be affordable, modify the requirement to require a certain number of units per square feet of development. Staff notes that this is not a common approach and would likely need further review before implementation. • Allow for a sliding scale or otherwise modify the percentage affordable required such that if a project proposes more units at a lower affordability level, a lesser percentage of overall units is required (i.e. provide deeper affordability across fewer units). Housing Density Bonus Programs Modifications to PIVIC Chapter 17.38 The existing PMC Chapter 17.38, outlining density bonus provisions, was added to the municipal code in 2013 as implementation of the 2012 Housing Element. Since then, state law related to the state density bonus has been modified significantly, and the City's ordinance is no longer in alignment with state law. Accordingly, staff recommends that a policy in the Housing Element indicate that the municipal code be updated to mirror current state law. Consider Adoption of an Affordable Housing Overlay Zone/Locally-Tailored Density Bonus Program An option that could be considered for further investigation or study, related to density bonus, is the concept of an Affordable Housing Overlay Zones (AHOZ). This model typically prescribes, either citywide or within certain areas, that a project may be eligible for additional density based on providing a requisite number of affordable housing units. Generally speaking, this type of overlay is focused on achieving high proportion of affordable housing units, up to 100 percent affordable, in exchange for more generous allocations of density, and potentially other specific concessions such as relaxation of height limits, FAR, or setbacks. One example that has come to national attention in recent years, is the AHOZ adopted by the City of Cambridge, Massachusetts, in 2020. Cambridge's AHOZ is applied city- wide and provides significant development incentives to 100% affordable housing projects, along with design guidance, a review process, and parameters for approval. Several cities in California have also used an AHOZ approach to incentive affordable housing within specific geographic areas including Menlo Park, Brisbane, Capitola, Los Gatos, and Buellton, with many of these cities using this approach to encourage units in their downtown areas. Page 8 of 16