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Item 7b Staff Report PLANNING COMMISSION January 13, 1982 Page 3 If for sale projects are to be considered under any lower income housing exemption then several other factors should be evaluated. The H.U.D. percent of income limitation on monthly housing costs is 25%. That is to say that the total monthly housing costs for a lower income household are limited to the following figures: Number of Persons Number of Maximum Monthly* in Household Bedrooms Re quired Housing Payment 1 1 $354 2 1 & 2 406 3 2 458 4 2 & 3 508 5 3 & 4 541 6 4 572 7 4 & 5 604 8 5 635 *Payment is to include all housing related costs, e. g. house payment, association fees, insurance, taxes, utilities, etc. Down payment for such housing is another factor. Unless the down payment required in order to keep housing costs below the levels indicated above is substantially paid by someone other than the household, it is unrealistic to conceive of a lower income household being able to secure such. housing. Considering current interest rates the chances of structuring a project containing for sale units for households making less than 80% of the regional median income (and in many cases substantially less than that) on the private market are practically non-existent. Housing for these families will most probably be built through government subsidies and/or through the efforts of non-profit organizations. , Staff Recommendation: The. Staf£ recommends that a. sharp distinction be made between projects that are "affordable" in nature and those that are actually designed to meet the needs of lower income households. In summary then the staff recommends that a special allocation equivalent to at least 10% of the total housing units authorized for any given year should be set aside for lower income housing. Such housing may be sponsored b n person or organization and should have a minimum of 25% of its units ermanen 1 ~ ~ reserved for individuals and families qualifying for federal to come housing assistance as defined by H.U.D.-i.e., the household can make no more than 80% of the Bay Area median for that specific household size and spend no more than 25% of their gross income on housing costs (either through rental or purchase). Only households meeting these criteria should be exempted from the City's Growth Management Program through the lower income housing exemption procedure.