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Ms. Acosta said staff was very worded about reducing the homeowners' fees and how that would be accepted in the development. They have tried to bring lower income units into the development without making an obvious difference. She was concerned there would be anger on the part of some of the neighbors if they found out they were subsidizing those units. Mr. Pico indicated there is $11 million in the affordable housing fund and suggested that $150,000 be allocated from that fund to buy down the price of the five units so they can be sold at $130,000 each. Ms. Michelotti inquired if that could be done on a shared equity basis. Mr. Bocian said the city can provide a second mortgage with no interest or payment for five years. At the end of five years, the owner's income would be reviewed to see if a repayment program could be commenced. The buyers would still have to qualify for a bank loan, but the silent mortgage would not be included, so significant number of people should qualify. It was moved by Mayor Tarver that the homeowners' dues not be reduced, but that the five units be sold at $150,000 each. He also wanted to pursue Mr. Pieo's idea of taking money from the affordable housing fund which could reduce the units further to $120,000. Ms. Dennis asked if that would make the units affordable to very low income families. Mr. Bocian said it could. The concern is about what is actually being offered. If Council is offering a $300,000 home for $120,000, it creates expectations about the program and questions about the product, and the City's ability to continue to provide that product. He agreed steps need to be take to reduce the price of the units. The draft agreement sets a maximum of $180,000; the key is that someone at 80% of the median income, who is considered low income, has to be able to qualify for these units. If Council has to provide a second mortgage or other mechanism, staff would come back to Council with a program. Mayor Tarver wanted to provide at least one very low income house in every Pleasanton development and thought there was a chance to provide five in this project. Ms. Michelotti said this discussion took place at the time Council approved this development plan. She thought that if a change was to be made in the prior approval, there ought to be public input. Craig Chumpion, representing SummerHill Homes, indicated that at the PUD approval, the five units were reduced from 100% of median income to 80% of median income. His company has been proceeding on that basis. The five units represent 13.9% Pleasanton City Council 16 Minutes 04/18/00