CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 2 of 5 rental housing. This is a recommendation based on practical considerations, driven by the nature of available outside funding, and the types of projects that are going to be feasible; it is also a staff policy recommendation based on the much greater number and types of households that could benefit from this important investment of local funds. The input from this workshop will inform a broader discussion of policy priorities around the City's overall affordable housing strategy, which will be presented to the City Council in the future and will include use of the City's Lower Income Housing Fund as well as consideration of other programs or future partnership opportunities, such as those to support ownership housing. DISCUSSION As staff has detailed in the background memorandum, the City has directly and indirectly supported the development of affordable rental housing in various ways over recent decades. However, past support for the production of the city's affordable housing stock has generally occurred in one of three different ways: 1. Units constructed before the adoption of the City's Inclusionary Zoning Ordinance (IZO) in 2000, which were primarily achieved through negotiated agreements as part of large- scale residential developments. 2. Units provided under the requirement of the IZO as inclusionary units within market-rate projects. 3. Partnerships with non-profit affordable housing developers (sometimes in conjunction with the first two strategies) to construct affordable rental housing developments largely funded with federal and state Low-Income Housing Tax Credits (LIHTC) financing. Most recently, significant increments of City resources have been deployed to three projects: The 131-unit Kottinger Gardens Phase 1 senior housing development, which was supported by an $11.17 million loan from the LIHF and a $450,000 HOME loan and a City ground lease; the 54-unit Kottinger Gardens Phase 2, which was supported also by a City ground lease and a $2.86 million loan from the LIHF and an allocation of $4.6 million in County Measure A1 funding; and the 31-unit Sunflower Hill at Irby Ranch development, to which the City contributed resources in the form of a ground lease of a developer-donated site, a $2.25 million loan and $1.25 million grant from the LIHF, and an allocation of $7.19 million in County Measure A1 funding. City Council Discussion Questions Since several years have elapsed since those projects were built, and with affordable housing needs a significant ongoing local concern, the City Council recently directed staff to evaluate the feasibility of the City initiating and potentially providing more substantial resources toward the development of an affordable housing project. As staff considers how to formulate an affordable housing program focused on City support or funding for one or more specific projects, staff is requesting City Council review and provide policy direction on the following discussion questions: 1) What is the preferred target population(s) to be served? A key consideration for City-sponsored affordable rental housing development is the target population the housing would serve. As outlined in the background memorandum, the largest allocations of City resources on housing production have been somewhat unevenly focused, with a greater emphasis on senior housing, and housing for the developmentally disabled Page 62 of 90