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Section 8. Section 41-1904 of Chapter 41 of the Santa Ana Municipal Code is hereby amended to read in its entirety as follows: Sec. 41-1904. - Options to satisfy inclusionary requirements. (a) On -site units. The primary means of complying with the inclusionary requirements of this article shall be the provision of on -site inclusionary units in accordance with section 41-1902 above. A developer may only satisfy the requirements of this article by means of an alternative to on -site inclusionary units in accordance with the requirements and procedures of this section. (b) Off -site units. 1. New units. The developer may satisfy the inclusionary unit requirements for the project, in whole or in part by constructing the required new inclusionary housing at a different location within the city borders at the ratio of one square foot of habitable inclusionary unit space for each required habitable square foot. While the total habitable square footage area of the required new inclusionary units must be the same as the sum -total of the number of habitable square feet for the project as directed by this ordinance, the number of units and bedrooms associated with the off -site units may be approved by the review authority of the city, consistent with the type of affordable housing needed at the time of project review. 2. Rehabilitated units outside a designated target area. The developer may satisfy the inclusionary unit requirements for the project, in whole or in part by substantially rehabilitating existing housing units elsewhere within the borders of the city at a rate of one and one-half (1'/z) habitable square feet per each required habitable square foot of inclusionary units. 3. Rehabilitated units within a designated target area. Upon application, the developer may satisfy the inclusionary unit requirements for the project, in whole or in part by substantially rehabilitating existing housing units elsewhere within the borders of the city at a rate of one habitable square foot per each required habitable square foot of affordable inclusionary units. (c) In -lieu fee. (1) Five (5) or more units. For a residential project comprised of five (5) or more residential lots or residential units, the developer may elect to satisfy the inclusionary unit requirements for the project, in whole or in part, by payment of a fee in - lieu of constructing some or all of the required units. The total amount of the fee allowed by this section shall be calculated using the In -Lieu Fee Schedule as shown below in section 41-1904(c)(1)(i) multiplied by the sum total of the number of habitable square feet within the entire project, as measured from the exterior walls of the residential units. Ordinance No. NS-XXX Page 7 of 14 City Council 1-7 7/26/2021