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MINUTES Page 9 City of San Leandro City Council, San Leandro Redevelopment Agency, San Leandro Economic Development Agency, and San Leandro Hillside Geologic Hazard Abatement District Joint Meeting -July 19, 2004 Councihnember Santos commented on the State's efforts to make cItIes more responsible for meeting their housing goals. He asked if increasing the inc1usionary zoning requirement to 200~ would likely increase the number of units available to individuals with low-to-moderate inconles. Ms. Brown confirmed that it should. Councilmember Santos noted that the City is short of meeting its affordable housing goals. He commented that he spoke with a developer who confirmed that he could meet the 200~ inc1usionary zoning requirement if a higher density were allowed. Mr. J ermanis commented that some developers may be discouraged from building in San Leandro if too great a subsidy is required. He noted that the inclusionary zoning requirement within the Redevelopnlent areas is 15%. Mr. J ermanis suggested that the 150/0 requirement would be both reasonable and consistent with the requirement for the Redevelopment areas. Councilmember Santos expressed support for the 200/0 inclusionary zoning requirement and density bonus. Vice Mayor Badger commented that the development of new units will increase the delnand for City services. He stated that while he is not opposed to affordable housing, he is concenled about converting conlmercialland for residential use without the ability to provide services to the additional residents. Councilmember Stephens expressed support for the 150~ requirenlent. He noted that there is insufficient land in the Bay Area to support the demand for housing, and supply and demand laws regulate housing costs. Councilmember Stephens spoke in favor of having the right mix of housing in the community while recognizing the need to draw the line at some point. Councilmelnber Grant asked about the equity build-up on affordable units. Ms. Brown indicated that there is a resale agreement which requires the units to remain affordable for 55 years. The unit must be sold to another income-eligible household, so the seller will not receive a huge equity windfall. Councilmember Grant comnlented that she would like the City to have a strong affordable housing program with consistent requirements Citywide. She mentioned related programs that the Council has discussed in the past, such as housing for teachers and a preference given to San Leandro residents. Ms. Brown noted that the recent studies issued on inc1usionary zoning indicate that the nlost effective policies do not allow in-lieu fees and are not overly generous in allowing land dedications. Based on these studies, staff has atteInpted to craft the most effective policy possible. Councilmenlber Nardine asked if there are incentives or other considerations given for owners who make improvements or upgrades to an affordable unit. She noted that the owner of an affordable unit may not maintain or make improvements to the unit if there is no incentive to do so. Ms. Brown stated that the resale agreement allows the owners of a unit to increase the sale price for improvements they have made.