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Zoning Ordinance Amendment No. 2020-03 August 3, 2020 Page 2 providing inclusionary housing units either on or off -site. A provision of the ordinance was a requirement to revisit the HOO in three years to determine its effectiveness. Project Analysis In December 2018, the City Council received and filed a report on the effectiveness of the Housing Opportunity Ordinance that was adopted in 2015. In July 2019, the Council formed an Ad Hoc Committee to review the Ordinance as was required by the 2015 ordinance. The Ad Hoc Committee included Mayor Pro Tem Villegas, Councilmember Iglesias, and Councilmember Solorio. In May 2020, the Ad Hoc Committee was revised to include new members and continued the review efforts of the previous committee. The sections below provide a summary of the recommendations by the Ad Hoc Committee. Proposed Amendments: Definitions - This proposal consists of modifying certain definitions and the addition of new definitions. Definitions pertaining to "Affordable housing cost' and "Low income households" were modified to identify the type of households that qualify for these income levels. Further, a definition for "Moderate Income Households" is proposed to identify the parameters of this income level, a definition for "Entitled Residential Project' is proposed to identify when a project is entitled, a "General Plan" definition is proposed as is a definition for "Moderate income units." ■ Applicability of Ordinance — This section is proposed to be amended to only apply to those projects with 20 or more units in size and that are requesting an increase in the density permitted by the General Plan. The current ordinance applies to projects consisting of five or more units, projects requesting a zone change or a general plan amendment, and are within an overlay zone. It also reduces the percentage of for -sale units that need to be available for moderate income households from the current 15 percent to 10 percent of the total number of units in an effort to incentivize the construction of for -sale units. ■ Exempt Projects — Revises language to be consistent with a change made in 2015 to the Adaptive Reuse Ordinance by clarifying that an adaptive reuse project is not subject to the Housing Opportunity Ordinance. In -Lieu Fee Option — This section is proposed to be revised to reduce the in -lieu fee from $15 per habitable square foot to five dollars per habitable square foot. It also states that the in -lieu fee option does not apply to projects with less than 20 units. In addition, this section is proposed to be modified to clarify that, for phased projects, the total inclusionary fee will be paid as each phase of construction obtains a building permit. This section also provides an incentive for an "Entitled Residential Project' to obtain building permits during the current economic climate. An Entitled Residential Project that consists of 20 or more units will be allowed to pay a reduced fee of $10 per square foot of habitable area as compared to the current rate of $15 per habitable square foot. This 75B-46