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laundry facilities and storage space. Ideally, that part of the market would be flooded with excess supply, lowering entry level housing costs. In the single family category, requiring at least 50% of new single family and duplex construction to be units be 1500 s.f. or less, and maybe 80% of new single family construction to be units 2500 sf or less (Pleasanton Valley size, but with smaller lots) could restore Pleasanton as a great affordable place for families with children. The market as modified by the political process, left alone, produces 3000 sf to 5000 sf units, which does very little to increase housing affordability or meet housing needs. 4. Limit Inclusionary Rent Controls to Very Low Income Units. The RHNA emphasis on subsidizing people who make 80% up to 120% of the AMI (Area Median Income) is silly, because the resources do not exist to subsidize half the population. With limited subsidies, the subsidies should be focused on low income families (50% or less of AMI). A 5% Inclusionary rent control requirement would represent only a 2.16% rent burden on new market rate apartments (Exhibit B-2 at Bates p. 4). That equates to an affordable housing fee of about $13,886 per unit. Fn 4. That should be sustainable in conjunction with a substantially increasing supply of small units - especially if that brings down the rent level for 1 bedroom 650 sf units —which would lower the required subsidy, eventually to near zero. The "affordable housing fee" for small projects and all single family should be no more than $13,866 per unit (proportional to reduced rent control percentage). As with the 345 unit project studied, those in lieu fees can be matched and leveraged with the increasing grants and tax benefits available for affordable housing projects for greater impact- creating positive leverage rather than negative leverage. There are numerous non-profit housing groups which organize and produce quality projects, and those projects stay nice under professional non-profit management. I doubt State HCD could force us to do rent controls if we went with zero rent control inclusionary, but why twist the tigers tail? If State HCD likes inclusionary rent controls as proof of affordable housing commitment, then 5% would check that box in the certification check list. 5. Summary of Example Unit Size Inclusionary Policy: For projects zoned 30 units/acre: 5% -Inclusionary rent controlled to families making 50% of AMI, or less. 25% -At least 25% of new units have to be 650 sf or less. 50% -At least 50% of new units have to be 900 sf or less (including the 25%). For projects zoned single family, and lower density PUD: 50% -At least 50% of new units have to be 1500 sf or less. 80% -At least 80% of new units have to be 2500 sf or less. Fn 5. 11