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  <br /> DRAFT City of San Leandro Annual Action Plan  <br />2013  <br />18 <br />OMB Control No: 2506‐0117 (exp. 07/31/2015)  <br />AP-75 Barriers to affordable housing <br /> <br />Introduction <br /> <br />The City continues to face the following barriers to affordable housing: funding, land <br />costs, and construction costs. <br /> <br />Actions it planned to remove or ameliorate the negative effects of public policies <br />that serve as barriers to affordable housing such as land use controls, tax <br />policies affecting land, zoning ordinances, building codes, fees and charges, <br />growth limitations, and policies affecting the return on residential investment <br /> <br />Funding <br />The lack of available funds for affordable housing activities continues to be a problem <br />for the City. The problem is further exacerbated with the drastic, significant reduction in <br />federal HOME funds and the elimination of redevelopment in California by the State. <br /> <br />Land Costs <br />New construction and acquisition/rehabilitation of housing is severely impacted by the <br />high cost of land in the Bay Area. The viability and feasibility of future City-assisted <br />affordable housing developments may depend on the reasonableness of the land <br />acquisition costs. The City will conduct financial feasibility analyses on a project-by- <br />project basis to ensure it is not over-subsidizing affordable housing developers for any <br />land purchase. Also, the City will continue to work with owners of existing rental units to <br />provide financing in exchange for affordability covenants. Furthermore, the high cost of <br />buying a home in the Bay Area continues to make it difficult for first-time homebuyers to <br />become homeowners. With the elimination of the City’s Redevelopment Agency, the <br />City consequently has eliminated its First-Time Homebuyer Program down payment <br />assistance loan program for low- and moderate-income first-time homebuyers. <br /> <br />Construction Costs <br />In addition to high land costs, the rising cost of construction can also negatively affect <br />the development of affordable housing construction and rehabilitation. In addition to <br />undertaking financial feasibility analyses on a project-by-project basis to ensure that the <br />City is not over-subsidizing development costs for affordable housing developers, the <br />City will continue to work with them as well through design, planning, and financing <br />review and recommendations to reduce increased construction costs. <br /> <br />Discussion <br /> <br />The City approved an Inclusionary Zoning Ordinance in December 2004 that required <br />developers to set aside 15% of their new ownership or rental housing units for low- and <br />moderate-income households. The City will continue to monitor the progress of its <br />inclusionary zoning requirement and assess, if necessary, how it can be improved <br />through coordination with developer and other public input.