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(c) Project with Regulatory Agreement. A Residential Project for which a <br />Regulatory Agreement has been approved, provided that the Regulatory <br />Agreement is effective at the time the Residential Project would otherwise <br />be required to comply with the requirements of this Article, and there is no <br />uncured breach of the Regulatory Agreement before issuance of a <br />Certificate of Occupancy for the project. This may include a Residential <br />Project that has obtained a Density Bonus under Article XVI.I of the Santa <br />Ana Municipal Code. <br />Section 6. Section 41-1904 is added to Chapter 41 of the Santa Ana <br />Municipal Code to read in full as follows: <br />Sec. 41-1904. Alternatives <br />(a) On site units. The primary means of complying with the inclusionary <br />requirements of this Article shall be the provision of on-site Inclusionary <br />Units in accordance with Section 41-1901, above. A Developer may only <br />satisfy the requirements of this Article by means of an alternative to on-site <br />Inclusionary Units in accordance with the requirements and procedures of <br />this Section. <br />(b) Off-site units. Upon application by the Developer and at the discretion of the <br />City Council, the Developer may satisfy the Inclusionary Unit requirements <br />for the project, in whole or in part, by constructing a mix of affordable units or <br />substantially rehabilitating existing rental units. For purposes of providing <br />off-site units, substantially rehabilitating means rehabilitating a dwelling unit <br />that has substantial building and other code violations, and has been vacant <br />for at least 90 days, such that the unit is returned to the City's housing <br />supply as decent, safe and sanitary housing, and the cost of the work <br />exceeds twenty-five percent of the market value of the unit after <br />rehabilitation. The number of substantially rehabilitated units that will be <br />required under the off-site unit provision will be determined based on a <br />calculation of the affordability gap associated with on-site provision of the <br />units. This affordability gap will then be translated into the number of off-site <br />units that can be produced at a financial gap equal to the affordability gap <br />associated with on-site provision of the units. <br />(c) In-lieu fee. <br />(1) 20 or fewer units. In the case of a Residential Project containing <br />between 5 and 20 residential lots or residential units, the <br />Developer may elect to satisfy the Inclusionary Unit requirements for <br />the project, in whole or in part, by payment of a fee in lieu of <br />constructing some or all of the required units. <br />Ordinance No. NS-XXX <br />11 A-9 Page 9 of 17