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Projects Approved or in the pipeline should build affordable housing units on site or <br />pay an in -lieu fee commensurate with the actual costs of building affordable homes. <br />The proposed fee of $5 a square foot is only a fraction of the true cost of development of <br />affordable housing and will impose a significant burden on the City to find additional <br />resources to develop the housing. The Commission has done some preliminary <br />calculations on the $5 per square foot calculation proposed vs. a fee that gets closer to the <br />gap financing and actual costs. <br />Under the proposal City stands to create no new affordable housing units on pipeline <br />projects (around 2,700 units) propose on housing opportunity sites. In addition, under <br />proposed fee calculation of $5 square foot the City would fail to capture the appropriate <br />funding to build the affordable housing units elsewhere. In fact, just on the pipeline <br />projects.the city would lose over $20 million dollars in revenue from this inaccurate in - <br />lieu fee. <br />4. Increase the proposed in -lieu fee from $5 per square foot to be commensurate with <br />the actual costs of building affordable homes. <br />The Commission would recommend that the in lieu fee be reflective of the true cost of <br />developing the affordable housing units of site or allowing the City to leverage additional <br />housing tax credits or housing finance to create the units. A Commission's experience is <br />that the true in -lieu fee ranges from the low end of $15,000 (as gap financing) to <br />$50,000 per unit (actual cost). Calculation should be on a per unit basis to simplify <br />calculation. One fee should apply to all developments (render 20 units or more). <br />5, Restrict Moderate Affordable Housing for Sale to 80% Area Median Income (AMI) <br />(Family income around $75,000). <br />In Santa Ana Moderate Income in for sale unit range from 80% AMI to 120% AMI. A <br />for sale home at 120% AMI is virtually at market value for a home in Santa Ana. <br />6. Evaluation of the HOO should be on an annual basis. <br />7. Apply SS 1818 incentives only to development that build affordable units on-site. <br />The Commission looks forward to working with the City to implement an effective Housing <br />Opportunities Ordinance that will provide affordable home opportunities for all working families <br />in the City. <br />Sincerely, <br />Cesar Covarrubias <br />Executive Director <br />