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75 Mr. Brandes commented that it would be good to include both low- and moderate-income housing because it would allow future Councils to have the flexibility to spend those funds as appropriate. He used the Senior Citizen Housing as an example of how a project which started as a low-income and market-rate project resulted in something different. With respect to the fee issue, he stated that an existing High Density Residential project should not be treated any differently from a project that required a change in use. He proposed that all uncertainty regarding the fee be removed and an amount or in-lieu contribution be established. Regarding the fee escalator, he indicated that it is important to understand the different indices within the economy and what factors go into the CPI. He pointed out that the indices referred to by Mr. Owens are more consistent and equitable because they apply to housing and do not consider other variables. He agreed with the concept of providing the opportunity of transferring credit since it would allow and promote more affordable housing units. Mr. Butler expressed concern about how the fee credit for actual units built would be handled. He stated that he would like to set the value at a level that would make it attractive but internally consistent so that developers have a choice of one or the other. Ms. Mohr commented that she agreed with staff's justification for a $5,000 credit fee but that she was opposed to credit transfers in the same way that growth management permits are not transferred or traded. She stated that the most consistent basis for the fee escalator which would allow some long range planning would be the CPI. With respect to Wells Fargo Bank's proposal, she suggested that the Bank could make it possible for low-income housing to happen through a financing discount on a City project in lieu of providing housing, thereby getting a reduction in the cost of funds. She indicated her support for allowing the Council some flexibility wherever appropriate, since the scope of low-income housing is so broad, and every project would have some variables and unique circumstances that Council would need to address individually to attain what is best for the community. Mr. Tarver stated that this was a good program that has been needed for a long time. He added that the CPI would be a better index in terms of what money can do for the fund. He suggested that the incentives be open-ended and that the General Plan be as flexible because the process could result in some good projects. He indicated that he was in favor of transfer credits, financing discounts and whatever would help in building low-income housing. Mr. Mercer indicated his support for the CPI and the $5,000 per unit fee credit. He added that he would be willing to credit the Bren Company's $100,000 affordable housing fee towards the low- 10-16-90 - 19 -