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Item 7b Staff Report PLANNING COMMISSION January 13, 1982 Page 2 With all this activity now flowing together compounded by an unprecedented amount of commercial and industrial development, as well as the demands of market rate homebuilders for access to building permits, there is a greater realization among all concerned that future sewage capacity is extremely limited. Because of this reason and because of the serious growing need for housing for all income groups the staff recommends a conservative approach in defining any lower income exemption under growth management based upon the following considerations. 1. The affordable housing competition is a viable concept that should be implemented immediately for the sake of fairness to those interested in building such projects and in order to get this type of housing inventory on the market as soon as possible. More than one such project can be chosen. 2. "Affordable" housing may not be low income housing. The two instances in which lower income RAP exemptions were granted were to "affordable" projects which promised 20% of each project's units to be set aside for lower income residents. In reality each set aside is to be temporary: one for five years and the other for eight years. After such time these units may revert to the market. 3. There is a real need for deeply subsidized low and moderate income housing and a currently developing opportunity to get such units built. The assurance of available sewer capacity for these units is essential. Any such project is likely to be mixed low/moderate/ "affordable," as well as having owned and rented units. The underlying subsidy for low and moderate income units included in such a project will be substantial. 4. The commitment of future sewage capacity should be closely monitored and guarded. The ability to meet existing and future community development goals, especially housing goals, is dependent upon adequate capacity and the flexibility reserved capacity provides. For the above reasons, the staff feels a lower income housing growth management exemption should be structured as follows: A special allocation equivalent to at least ten percent of the total housing units authorized for any given year should be set aside for subsidized lower income housing. Such housing may be sponsored by any person or organization and should have a minimum of 25% of its units permanently reserved for individuals and families qualifying for federal lower income housing assistance as defined by H.U.D. This definition provides that lower income households make no more than 80% of the area median income for a family of a specific size. The Bay Area median income for a family of four is $30,500. Thus a lower income family of four makes no more, and generally much less than $24,400.