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EXHIBIT 1 The city uses the following income categories for determining affordable rents and prices: very low-income households earn up to 50% of AMI, low-income households earn between 50% and 80% of AMI, and moderate -income households cam between 80% and 120% of AMI. Alternatives: A developer may use any combination of alternatives to satisfy the inclusionary requirements, A developer can elect to provide affordable units off -site. This can be done through construction of new affordable units; acquiring and rehabilitating existing market rate units to affordable units; transfer of affordable housing credits from another developer; and through special needs housing projects or programs such as shelters and transitional housing. In -Lieu Fee; The in -lieu fee is currently set at $124,220 per unit and is multiplied by number of affordable housing units required. It applies to both moderate and low-income households for either rental or for -sale units, The fee is based upon the affordability gap of what low and moderate - income households can afford to pay for a home and the median sales price of a home in Chula Vista. Exemptions: To avoid increasing low-income housing concentrations, the program exempts designated census tracts called "Area of Low/Moderate Income Concentration" in which the median income is below the citywide median income and it also falls within the Low to Moderate Income Boundary as defined by the federal government. Anecdotally, City of Chula Vista staff indicated that they have seen more market -rate development in those areas, which would have the effect of diluting the concentration of affordable housing. Incentives: The policy encourages production of affordable housing for very low and low-income households over housing targeting moderate income households by reducing the required affordable housing requirement. For example, low-income units count for a L5 unit credit when it is provided in place of a moderate -income unit. Therefore, for every additional low-income unit provided more than the requirement, the obligation to provide moderate-incomo reduces by 1.5 units each. Similarly, if very low-income units are provided, each one counts as a 2.0 unit credit in place of a moderate -income unit. Impact: No recent data was available at the time of this report that reflects how many affordable units or fees have been collected because of this policy. However, the Housing Element of the eity's General Plan adopted in 2013 stated that during the 2005-2010 reporting period, the city constructed or entered into inclusionary agreements for the addition of 334 low-income and 183 moderate income housing units in the city.16 Impacts of AB 1505 Because AB 1505 became operative in January 2018, little is known about how cities have reacted or intend to react in response. The bill would allow cities to implement inclusionary zoning policies for rental units that are based in prescribed project -percentages of affordable units, as opposed to the common fee -based structure. The policies included in this review currently have requirements for rental units but are structured in a way that they are in compliances with Costa -Hawkins. Through conversations with jurisdictions in this report, many cities have recently amended their 16 City of Chula Vista, Housing Element of the General Plan, 2013 htU:Rwww.chulavistaca.povthometshowdocument?i d=5503. 11 65B-22