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It was moved by Ms. Hosterman, seconded by Mr. Brozoaky, to adopt Resolution No. 04-072, approving the Downtown Design Guidelines as recommended by the Planning Commission, and to thank all Design and Beautification Subcommittee, as well as Jerry Iserson. The roll call vote was as follows: AYES: Councilmembers - Ayela, Brozosky, Campbell, and Nosterman NOES: None ABSENT: Mayor Pico ABSTAIN: None Item 6f Recommendations reqsrdinq quidelinee for the use of Inclusionary Unit Credits provided in the City Inclusionary Zonin;I Ordinance (IZO). (SR 04:244) Steven Bocian presented the staff report. Ms. Ayala declared the public hearing open. Peter MacDonald, 400 Main Street, Suite 210, said in October 2000, when Council adopted inclusionary rent controls, he said the cost of that would come back as part of the cost of housing. In the last four years, there has been no increase in the number of jobs, yet the price of housing is up 60%. He referred to a study that implied that the impact of Inclusionary rent controls is to destroy housing supply, increases the cost of housing, and causes a dysfunctional housing market. The proposed guidelines seem to apply to people who overproduce affordable units as if they were a threat to public health and safety. Instead of giving incentives to them, Council proposes more criteria and economic uncertainty. He believed rent controls do not work and preferred that the General Plan process include the concept of reviewing plans that are affordable by design. Instead of placing price controls for people who make 120% of the median income (60% of the people make more than that), why not consider a house 1,500 sq. ft. or less as a moderately priced unit. For Iow-income households, produce units that are 900 sq. ft. or less. Save the inclusionary rent controls or subsidies for people who make less than 50% of the median income. That is where he believed the subsidies needed to be focused. People need to look at the big picture. There were no other speakers and the public hearing was closed. Ms. Ayala said she had voted in favor of the inclusionary ordinance and she felt if the current proposal were adopted, the City would never get back to the original concept of the ordinance. She said the ordinance has not worked as she expected and acknowledged the cost of the units was included in the price of the new homes in that development. She was very supportive of the concept of affordable by design. She liked the limit of square footage rather than dollar amounts and having lotteries for the sale of the units. She believed that approving the credits concept would take away any chance of changing the inclusionary zoning by going through the General Plan process first. Mr. Bocian did not believe that chance would be lost. Council directed staff to review affordable by design concepts and to bring that back to Council during the General Plan process. That is still staff's intention. The issue before Council is that the current ordinance Pleasanton City Council 16 09/21/04 Minutes