CC MIN 03152022 - Laserfiche WebLink

In response to Councilmember Arkin, Director Clark clarified a discussion of whether or not to have these fees is part of the IZO discussion because the IZO allows for in-lieu fees. She clarified this portion of the item is about establishing the level of the fee and stating how it is expected to be used. Councilmember Balch clarified his substitute motion does not preclude having a discussion of LIHF uses in the future and simply applies to the Housing Element. He advised the City should not raise the issue with the State at this juncture. Councilmember Narum noted the City Council gets to vote on every expenditure from the LIHF. In response to Councilmember Testa, Interim City Manager Dolan stated if the concept of a future discussion is included in the Housing Element it could create an expectation on HCD's behalf to expect certain outcomes. Director Clark advised the City has to report annually on its progress and suggested it would be better to leave this area less formal. Mayor Brown stated the City has been very supportive of homeownership. SUBSTITUTE MOTION: It was m/s by Balch/Narum to approve the staff and Planning Commission's recommendations for the Low-Income Housing Fund. Motion passed by the following vote: Ayes: Councilmembers Arkin, Balch, Narum, Mayor Brown Noes: Councilmember Testa Absent: None Senior Planner Bonn reviewed the recommendations from staff, the Planning Commission, and the Housing Commission relative to the IZO. In response to Councilmember Balch, Interim City Manager Dolan stated whether 15% or 20% is better for inclusionary housing depends on whether or not the City intends to receive LIHF fees on for-sale units. He stated he would not expect a for-sale project to be built with 20% inclusionary housing. He endorsed the 15% threshold for for-sale developments if the goal is to get all of the units built or 20% if the City Council is willing to accept the in-lieu fee. In response to Mayor Brown, Interim City Manager Dolan confirmed developers can make affordable by-design units within a development as part of its affordable housing requirement. He advised this is negotiated in the housing agreement but the City has historically emphasized lower income levels. He clarified the City would not let ADUs count towards an inclusionary housing requirement unless they were rent-restricted. Councilmember Narum called for a policy where the IZO is at 20% for both with language allowing flexibility based upon the affordability split. She advised building to lower income levels would allow for a lower overall percentage. In response to Mayor Brown, Councilmember Narum confirmed this would lead to a no net loss situation but noted how hard it has been for the City to build very low income and low-income housing units. Councilmember Narum moved to approve staff's recommendation with a consistent 20% for both for- sale and rental developments. Councilmember Balch seconded the motion. Councilmember Arkin stated the in-lieu fees have been what is getting the City in affordable housing trouble and called for something stronger than the current process. She expressed support for the Planning Commission recommendation and requested a friendly amendment. City Council Minutes Page 13 of 22 March 15,2022