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Luckily for Pleasanton, State law provides "Nothing in (the housing element article] shall require a city . . . to [e]xpend local revenues for the construction of housing, housing subsidies, or land acquisition" Govt. Code Sec. 65589(a). So, cities are free to shuck the cost of those inclusionary subsidies off on the consumers of new housing. Thus it is that under pressure from State HCD, most California cities in the last decade have adopted inclusionary zoning requirements. It should be noted that there is no formal requirement in the State Housing Statutes or regulations requiring the adoption of inclusionary rent controls. Some cities have rejected imposing inclusionary rent controls on new construction. Prior to the year 2000, State HCD opposed adoption of inclusionary rent controls, as when responding to Pleasanton's proposed inclusionary rent control ordinance in the year 2000: 'W'e do not support the City's adoption of inclusionary requirements and are very concerned that existing in-lieu fee and proposed land dedication requirements will add to the cost of housing for all levels. These additional costs could constrain the development of the market rate units upon which the inclusionary units depend". Why Cities Go Along For an exclusionary city, inclusionary rent controls are a triple winner: -First, the serious cost burden of providing inclusionary units shrinks the feasibility of new market rate housing projects, which substantially reduces the supply of new market rate units and puts upward pressure on housing prices. -Second, increase in the housing price level increases the home equity of every home voter, dollar for dollar. -Third, "We adopted inclusionary zoning requirements" is the safe and acceptable answer to State HCD and the public to prove a city is "working" to provide affordable housing. Calculating the Cost Burden of Inclusionary Rent Controls To understand the cost impacts of inclusionary rent control requirements on new housing construction, in January of 2021, I took actual rents from a three year old 345 unit apartment project in Pleasanton. Then the rent levels allowed for "deed restricted" units under the applicable Alameda County Guidelines were deducted from market rate rents to determine rent subsidy totals for that apartment project. We ran this scenario under 5%, 10%, 15%, 20%, and 25% inclusionary rent control requirements. Exhibit B. Real Cost of Inclusionary Rent Controls. 4