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2 of 11 BACKGROUND In early 2024, City staff, with professional services firm Economic and Planning Systems (EPS), began work to update the City’s Development Impact Fees and Affordable Housing Fees and to update the Inclusionary Zoning Ordinance (IZO). The impact fee study/update and process to amend the IZO are being undertaken concurrently because there is a relationship between components of the IZO, particularly the inclusionary rate (proportion of affordable units that must be included as a component of market-rate residential projects) and required affordability levels of those units, and the amount of the affordable housing fee. Strategic Plan and Housing Element Alignment Completion of these updates is consistent with the ONE Pleasanton Strategic Plan and with the 6th Cycle Housing Element: ONE Pleasanton Strategic Plan. Goal A – Funding Our Future: Strategy 7: Conduct an analysis and update development fees to keep pace with new development costs. Housing Element Program 2.1: Continue to implement the Inclusionary Zoning Ordinance and actively pursue strategies to improve its effectiveness in producing affordable housing units in conjunction with new development. The following actions will be undertaken by the City: 1. Study the following amendments to the Inclusionary Zoning Ordinance and adopt such amendments provided they are not found to be an undue constraint on the production of housing: • An increase to the proportion of inclusionary units required in multi -family projects to be up to 20 percent, rather than the current 15 percent requirement. • Identification of a target mix of affordable units (including proportions of very low-, low- and moderate-income units), with the potential for an alternative mix of affordability to be proposed and approved if it would better meet other housing policy objectives to do so. For example, if the project provided deeper affordability, and/or resulted in the production of units suitable for special needs groups such as seniors or persons with mental or physical disabilities. Target affordability mix and unit size standards, including a required proportion of larger (three or more bedroom) lower-income units, may be implemented through Objective Design Standards (Program 4.2) or the amended Inclusionary Zoning Ordinance. Housing Element Program 2.2: Require new commercial development to pay the Lower-Income Housing Fee established by City Ordinance and adopted by the City, or to otherwise mitigate demand for new employee housing as allowed by the Pleasanton Municipal Code (e.g., through construction of units or dedication of land). Regularly evaluate the amount of these fees to ensure that they: (1) remain commensurate with the needs generated by the development; (2) are established at a level proportionate with the actual cost to provide new housing; and (3) are in conformance with State law while ensuring that Pleasanton remains locally and regionally competitive in attracting new commercial investment.