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Housing Ad Hoc Committee Progress Report and Recommendations <br />July 6, 2021 <br />Page 2 <br />1 <br />8 <br />7 <br />8 <br />As part of their review of the HOO, the Ad Hoc Committee requested to review the in-lieu <br />fee analysis by Keyser Marston Associates (KMA) completed in May 2020 and requested <br />for the study to be updated with current information. The updated study is attached as <br />Exhibit 1. Specifically, KMA has been engaged to prepare an analysis to estimate the in- <br />lieu fee amounts that can be charged for rental residential and ownership housing <br />developments on a financially feasible basis. The results of KMA’s analysis can be <br />summarized as follows: <br /> <br />Supportable In-Lieu Fee: Housing Opportunity Ordinance Update <br />Rental Residential Development $17.10 to $17.80/Sq. Ft. of Leasable Area <br />Ownership Housing Development $13.00/Sq. Ft. of Saleable Area <br />Additionally, the Committee requested for available data and statistics relating to housing <br />and housing affordability in the City. Staff engaged a third party housing consultant, MDG <br />Associates, Inc. (MDG), for assistance with collecting and presenting the data. The <br />information collected by MDG is attached as Exhibit 2. General findings from MDG’s data <br />shows that: 1) relative to the total housing supply, there is a small amount of affordable <br />housing units (subsidized housing); 2) there is a gap between increasing rents and <br />wages; and 3) zip code 92705 is the most expensive and 92701 is the most affordable <br />based on the current rental rates, with affordability data provided for all zip codes based <br />on unit bedroom size. <br />Following their review of the information, the Ad Hoc Committee discussed three options <br />to amend the HOO. The three options involved a review of: 1) the project threshold/size <br />of a project that would require compliance with the HOO; 2) the trigger for when a project <br />would be required to comply with the HOO; 3) the set-aside requirements for units for <br />sale and for rent; 4) the options to satisfy the HOO requirements; and 5) additional <br />enhancements to achieve the purpose of the HOO. The Committee provided direction for <br />staff to draft their recommended changes to the HOO for further discussion by the full City <br />Council. Following this deliberative process, the Housing Ad Hoc Committee provided <br />direction to draft amendments to the HOO as described and analyzed in Table 1: <br />Summary of Amendments below. The draft HOO is attached as Exhibit 3 in redline format <br />with the amendments discussed below.