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other affordable housing goals and programs in the community. The Lower Income Housing Fund is an important resource for the City to enable affordable housing projects such as Kottinger Gardens and support the inclusion of affordable family housing units in developments such as Anton Hacienda. The City uses its affordable housing funds to leverage other limited federal, state and local sources to help close the development funding gap for affordable housing projects. Option 2: Recommend an alternative fee proposal for the project which reflects a fee amount other than staffs recommendation. Two alternatives were discussed at the October meeting in reference to the fee recommendation proposed by staff. First, an alternative fee schedule included in the 2013 Nexus Study (Appendix D) which identified maximum fee levels in 1,000 s.f. increments was proposed. A financial comparison of the two schedules is shown in the table below. Financial Comparison of Fee Schedules Staff Recommended Fee Option 1 TL (Table 1) $910,442 Alternate Fee Option 2 TL (Appendix D) $948,013 Difference $37,571 The second alternative was to increase the in-lieu fee by a factor which reflects current 2016 housing market conditions. As discussed previously, Staff recommends that this consideration be applied in a consistent manner with the previous studies as part of the updated 2016 Nexus Study process. Revisions to the maximum affordable housing fee levels use a formula that relies on multiple pro forma models for different housing development types with current land costs, predevelopment and construction cost, financing cost and other City and agency fee variables. Furthermore, while housing cost increases since 2013 have increased the affordability gap for lower income households (which in turn would contribute to an increase in the maximum fee), EPS has not undertaken the feasibility analysis as the second step towards a fee scale recommendation. The future feasibility study will take into account other City fees which are being concurrently evaluated for adjustment to fully determine the comprehensive fee load on development. Therefore, updating any one or two factors within the 2013 methodology outside of the Nexus study process would not accurately reflect a consistent method which is the purpose of conducting a Nexus Study and feasibility analysis. If the HC wishes to recommend that costs be updated to reflect any fee increases at the time of building permit then Staff recommends the HC direct staff to set a minimum fee amount for the agreement with the ability to pay the fee in place if it is higher at the time of building permit application. Alternatively, the HC may recommend that the fee is adjusted by some other factor that the Housing Commission would advise. Option 3: Recommend a revision of the plans and inclusion of affordable units in the project. Page - 3 -