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create new affordable housing. Inclusionary housing ordinances <br />are tools used by cities to ensure that a certain percentage of new <br />housing developments are available at affordable levels. This <br />requirement can generally be met through the inclusion of such <br />units within the project itself, rehabilitation or construction of units <br />off site, or through the payment of an in-lieu fee. The units are <br />covenanted to ensure that they remain affordable over time. As of <br />2007 nearly one-third of California jurisdictions had adopted <br />inclusionary housing programs. At the time that the Housing <br />Element was drafted it was recommended that the feasibility of an <br />inclusionary housing ordinance should be studied and implemented <br />within the 2006-2014 framework. <br />H. On June 7, 2010, several months prior to the adoption of the <br />Housing Element, the City Council adopted the Transit Zoning <br />Code. As part of this action the City Council directed staff to begin <br />a process to draft an inclusionary housing ordinance for those <br />properties within the M1 and M2 Industrial Overlay Zones of the <br />Transit Zoning Code. This direction was given, in part, to address <br />the community's concerns about the provision of affordable housing <br />within re-zoned areas of the Transit Zoning Code, as well as to <br />implement the City's Housing Element and address State <br />Redevelopment Law. <br />State law requires that when new housing is constructed within <br />redevelopment project areas there must also be affordable housing <br />constructed that equals 15% of the total number of units <br />constructed within the project area (Health and Safety Code, <br />Section 33413). Due to the fact that significant areas within the <br />Transit Zoning Code formerly zoned as Industrial now have the <br />ability to convert to mixed-use residential development at the <br />property owners' discretion, the potential exists for a substantial <br />number of new units to be constructed within these Overlay Zone <br />areas. As the majority of these areas are located within <br />redevelopment project areas (Central City, Inter City, North Harbor, <br />Bristol and South Main) new residential development would trigger <br />the requirement for new affordable housing development pursuant <br />to state law. If this new development is not included within the <br />projects themselves, the Redevelopment Agency would be <br />responsible for funding and constructing such housing. The only <br />available funding source for this housing construction would be <br />affordable housing set-aside monies. Given the uncertainty of the <br />availability of these funds over the long term, the burden of the <br />funding of new affordable housing construction could fall to other <br />funding sources, such as the City's general fund. It is therefore <br />necessary to ensure that the 15% affordability requirement be <br />Ordinance No. NS-XXX <br />75B-27 Page 3 of 17