County of Los AngelesCHIEF ADMINISTRATIVE OFFICE

713 KENNETH HAHN HALL OF ADMINISTRATION. LOS ANGELES, CALIFORNIA 90012(213) 974-1101

http://cao.lacounty.gov

DAVID E. JANSSENChief Administrative Offcer

Board of SupervisorsGLORIA MOLINAFirst District

May 1 , 2007 YVONNE B. BURKESecond District

ZEV YAROSLAVSKYThird District

The Honorable Board of SupervisorsCounty of Los Angeles383 Kenneth Hahn Hall of Administration500 West Temple StreetLos Angeles, CA 90012

DON KNABEFourth District

MICHAEL D. ANTONOVICHFifth District

Dear Supervisors:

PUBLIC HEARING ON AFFORDABLE HOUSING POLICY OPTIONSTO IMPLEMENT THE MELLO ACT IN MARINA DEL REY

(FOURTH DISTRICT) (3-VOTES)

IT IS RECOMMENDED THAT YOUR BOARD, AFTER THE PUBLIC HEARING:

1. Consider the proposed range of affordable housing policy options that areconsistent with the Mello Act (California Government Code Sections 65590 and65590.1) for possible inclusion in the draft Marina del Rey Affordable HousingPolicy, which the Marina del Rey Affordable Housing Task Force hasrecommended for approval;

2. Approve in concept the recommended affordable housing policy parameters inorder to establish the parameters of the "project" for the purposes of completingthe review required by the California Environmental Quality Act (CEQA); and

. 3. Instruct the Chief Administrative Officer (CAO) to finalize the draft Marina del ReyAffordable Housing Policy, and prepare the appropriate environmentaldocumentation with comments and proposed revisions from interested parties andthe public for the Board's consideration within 90 days.

PURPOSE/JUSTIFICATION OF RECOMMENDED ACTION

On August 1, 2006, your Board considered the draft affordable housing policyprepared by the Marina Affordable Housing Task Force. At that time, your Boardinstructed the Task Force to conduct a community forum in Marina del Rey to collectpublic input on the draft policy and directed County Counsel to work with the TaskForce to devise an affordable housing policy options document to be considered priorto your Board voting on the final policy parameters.

"To Enrich Lives Through Effective And Caring Service"

The Honorable Board of SupervisorsMay 1 , 2007Page 2

Subsequently, your Board approved a methodology to allow for the use of Countyrent credits to finance the construction of both replacement and inclusionary housingunits required pursuant to the Mello Act. As a result, the policy has been revised toreflect this change (Attachment 1). In addition, we have prepared the attached MelloAct Policy Options Table (Attachment 2) which identifies the range of affordablehousing policy options for the Board to consider in evaluating and/or refining the draftMarina del Rey Affordable Housing Policy. The table also identifies where the draftPolicy provisions fit within the range of affordable housing policy options, andevaluates the consistency of the draft policy with Mello Act requirements.

The range of policy options also reflects the public input received by the Task Forceon the draft Policy, including public comments received at a community forumconvened by the Task Force at Burton Chace Park in Marina del Rey on the eveningof September 7, 2006.

IMPLEMENTATION OF COUNTYWIDE STRATEGIC PLAN GOALS

The draft Policy and the consideration of other affordable housing policy options

promotes the County's strategic planning goals of "service excellence" by developingclear and reasonable requirements, incentives, and standards to guide developers inmeeting the requirements of the Mello Act.

FISCAL IMPACT/FINANCING

The Department of Beaches and Harbors is currently negotiating lease extensions forParcel 10 (Neptune Marina), Parcel 64 (Villa Venetia) and Parcel 33/NR (MarinaBeach). The approval of policy parameters by your Board wil have an impact onCounty revenues from such leases. For instance, by applying the provisions of therecommended Policy to each of the projects mentioned above, a total of 48inclusionary housing units reserved for very low-income families and 39 replacementhousing units designated for moderate income families would be required to be builtonsite as part of the proposed developments. The total present value rent loss to theCounty under this scenario (assuming a 30 year affordable housing covenant) isestimated to be $29.8 milion compared to an all market rate transaction with noaffordable housing units on site.

The consideration of other affordable housing policy options by your Board may alsoresult in the selection of additional or alternative policy provisions that may furtherimpact County rents. The chart below illustrates the potential financial impact of thevarious policy options which may include replacement of existing units on a like-for-like basis, may extend the affordable housing covenant beyond 30 years through theterm of each lease, and/or use alternative methods in calculating the inclusionaryhousing obligation for each development project mentioned above.

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The Honorable Board of SupervisorsMay 1, 2007Page 3

Present Value Rent Loss Compared to an All Market Rate Transaction

30 Year Term of LeaseOptions Description Affordabilty Affordability

Covenant Covenant. 360 existing units to be demolished.

Proposed . 1,356 total new units to be constructed.Policy . 1,210 market rate units. $29.8 million N/A

. 59 density bonus units.

. 39 replacement units at moderate inèome.

. 48 inclusionary units at very low incomecalculated on 5 percent of the Net NewUnits (Le. 1,356 new units less (59 densitybonus units and 360 demolished units) x .05= 48 inclusionary units).

. 360 units to be demolished.

. 1,356 new units to be constructed.A . 1,210 market rate units. N/A $31.5 million

. 59 density bonus units.

. 39 replacement units at moderate income.

. 48 inclusionary units at very low incomecalculated on 5 percent of the Net NewUnits (Le. 1,356 new units less (59 densitybonus units and 360 demolished units) x .05= 48 inclusionarv units).

. 360 existing units to be demolished.

. 1,356 new units to be constructed.B . 1,210 market rate units. $48.2 millon $50.8 millon

. 59 density bonus units.

. 39 replacement units at moderate income.

. 96 inclusionary units at very low incomecalculated on 10 percent of the Net NewUnits (Le. 1,356 new units less (59 densitybonus units and 360 demolished units) x .10= 96 inclusionary units).

. 360 existing units to be demolished.

. 1,356 new units to be constructed.C . 1,210 market rate units. $39.0 milion $41.1 milion

. 59 density bonus units.

. 20 replacement units at moderate incomeand 19 replacement units at low incomebased on CDC tenant income survey.

. 63 inclusionary units at low incomecalculated on 5 percent of the AdjustedTotal Units (Le. 1,356 new units less 59density bonus units and 39 replacementunits) x .05 = 63 inclusionary units).

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The Honorable Board of SupervisorsMay 1, 2007Page 4

. 360 existing units to be demolished.

. 1,356 new units to be constructed.D . 1,210 market rate units. $67.0 million $70.6 millon

. 59 density bonus units.

. 20 replacement units at moderate incomeand 19 replacement units at low incomebased on CDC tenant income survey.

. 126 inclusionary units at low incomecalculated on 5 percent of the AdjustedTotal Units built (Le. 1,356 new units less(less 59 density bonus units and 39replacement units) x .10 = 126 inclusionaryunits).

. 360 existing units to be demolished.

. 1,356 new units to be constructed.E . 1,210 market rate units. $51.1 million $54.0 millon

. 59 density bonus units.

. 20 replacement units at moderate incomeand 19 replacement units at low incomebased on CDC income survey.

. 130 inclusionary units at low incomecalculated on 10 percent of the total Unitsbuilt less density bonus units (Le. 1,356 newunits less (59 density bonus units) x .10 =130 inclusionarv units).

The loss in revenue to the County has two components. The first component is thereduced ground rent due to the lower rents collected from tenants in affordable units.Since this is not dependent on negotiation it can be projected with some confidencegiven assumptions about inflation. The second component is the possible rent creditoffered to the lessees to compensate for the loss in value associated with providingthe affordable units on site. The calculation of this credit depends on a host ofdifferent financial assumptions and is the subject of extensive negotiations. Thenumbers shown here reflect the best judgment of the County's economic consultantsas to the specific impact of the affordable housing. They do not consider otherelements which the lessees represent warrant additional credit. Therefore, it isimportant to note that these figures may fluctuate depending on the County rentconcessions ultimately negotiated with the various developers on a case-by-casebasis.

The draft policy also includes fees that are intended to recover the full cost forservices provided in reviewing, evaluating and monitoring income eligibility andhousing cost limits.

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The Honorable Board of SupervisorsMay 1, 2007Page 5

FACTS AND PROVISIONS/LEGAL REQUIREMENTS

The Mello Act (California Government Code Sections 65590 and 65590.1) requiresthat each local government which jurisdiction is situated, in whole or in part, withinthe Coastal Zone has the responsibility to both provide for replacement housing unitswhen existing affordable housing is converted or demolished, and support thecreation of affordable housing units through new construction in a manner consistentwith the Act. Compliance is required for that portion of a jurisdiction that is locatedwithin the Coastal Zone. Marina del Rey is located within the Coastal Zone and,therefore, is subject to Mello Act requirements for affordable housing.

The Mello Act is intended to provide local jurisdictions with discretion in imposingaffordable housing requirements in the Coastal Zone because each situationpresents some unique facts and public policy considerations. The Mello Act must beimplemented in conjunction with various other State mandates, such as the CaliforniaCoastal Act, the California Environmental Quality Act (CEQA), State Density BonusLaw, and Statewide Housing Element Law. As a local government entity, the Countymust reconcile these often conflicting state mandates when approving housingdevelopments within the Coastal Zone on a project-by-project basis. The situation inthe Marina is complicated by the fact that the County is also the landowner and actsin a proprietary manner regarding leaseholds.

The Mello Act clearly states that ordinances or programs are not required toimplement the statute's provisions. However, an affordable housing policy createscertainty for the development community as to what requirements wil apply to futuredevelopment projects. The Mello Act acknowledges the need for certainty andpredictability by defining feasibility in terms of whether a project can be completed ina "successful" manner within a "reasonable" period of time. The Task Forceacknowledges that without a clear policy, housing production in Marina del Rey couldpotentially be impacted.

ENVIRONMENTAL DOCUMENTATION

Adoption of the revised affordable housing policy is a project for purposes of CEQA,because implementation of the policy may have an effect on the physicalenvironment. Based upon your Boards direction regarding inclusion of any policyoptions, the Task Force will then prepare the appropriate environmentaldocumentation for consideration by your Board prior to your Board's considerationand adoption of any revised affordable housing policy.

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The Honorable Board of SupervisorsMay 1, 2007Page 6

IMPACT ON CURRENT SERVICES (OR PROJECTS)

The consideration of affordable housing policy options will not directly impact Countyservices. However, the approval of policy parameters for inclusion in a final policyhas an effect on County leases that are under negotiation for project sites withinMarina del Rey.

DAVID E. JANSSChief Administrativ

DEJ:JSESHK:zu

Attachments (2)

c: Executive Officer, Board of Supervisors

Beaches and Harbors

Community Development CommissionCounty CounselRegional Planning

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Attachment 1

COUNTY OF LOS ANGELES - MARINA DEL REY

AFFORDABLE HOUSING POLICY

MAY 1, 2007

The purpose of the County of Los Angeles - Marina del Rey Affordable Housing Policy

described herein is to preserve existing affordable housing supplies (replacement units),

and support the creation of new affordable housing units (inclusionary units) incompliance with the Mello Act, while balancing the County's ability to generate revenues

from Marina ground leases for Countywide public benefit programs.

EXECUTIVE SUMMARY

The number of new affordable housing units to be constructed as part of any newdevelopment within County-owned Marina del Rey shall be 1) reasonably disbursedthroughout the project; 2) comparable in size and design to the market-rate units being

developed in the rental component of the new or converted project; and 3) include acovenant guaranteeing that the relevant affordable income and rent requirements foreach replacement and inclusionary affordable housing unit will be observed for at least

30 years.

The number of replacement units to be constructed shall be determined on a case-by-case basis via an income survey to be completed by the Community Development

Commission. The replacement units identified as part of the income survey may be setaside for moderate, low, or very low income families.

The inclusionary housing obligation shall be calculated on the net new incremental units

to be constructed as part of the project with a goal of either 5% of such newlyconstructed units being set aside for very low income families, or 10% of the newlyconstructed units being set aside for low income families based upon an analysis ofeach project's feasibility.

Determining feasibility of on-site affordable housing for a project must be undertaken ona case-by-case basis. If on-site affordable housing initially appears infeasible, thepotential use of density bonuses and other incentives and potential economic aid, suchas tax credits and/or below market bond financing or grants should be considered as ameans of making on-site affordable housing feasible. County rent adjustments tocomply with the affordable housing requirement may be available and are subject tonegotiation on a case-by-case basis.

If it is determined by the Regional Planning Commission after careful consideration of ajoint recommendation by the Department of Regional Planning, the Community

Marina del Rey Affordable Housing Policy

June 22, 2006

Page 2

Development Commission and the Department of Beaches and Harbors that providingthe inclusionary units on-site causes the project to be infeasible by virtue of the applicantbeing unable to successfully complete the project within a reasonable period of time,taking into account economic, environmental, social and technical factors, thenconstruction of such affordable units may be permitted off-site in the following priorityorder:

1. In the Coastal Zone within unincorporated territory of Los Angeles

County;

2. Within three miles of the Coastal Zone in the unincorporated territory of

Los Angeles County;

3. In the Coastal Zone within incorporated territory of Los Angeles County;

or

4. Within three miles of the Coastal Zone in incorporated territory of Los

Angeles County.

Replacement units must be provided on-site or within the Coastal Zone where feasible,and if infeasible on-site or within the Coastal Zone, then within three miles of the CoastalZone with priority given to the unincorporated areas.

The obligation to construct or rehabilitate affordable replacement and/or inclusionary

housing units off-site will be the sole responsibility of the applicant. The off-siteaffordable housing units must be completed and available for occupancy prior to theissuance of the Certificate of Occupancy for the new market rate development, but in no

event later than three years from the issuance of a building permit for the new

development project.

No in-lieu fee program will be available to comply with either the replacement orinclusionary housing obligations.

MELLO ACT REQUIREMENTS

The Mello Act applies to the demolition, conversion and construction of housing within

the California Coastal Zone, and is intended to preserve affordable housing for low and

moderate income persons and families. The basic requirements imposed by the MelloAct are:

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ReplacementHousing:

Converted or demolished residential units that are occupied by

very low, low or moderate income persons or families must bereplaced.

Inclusionary

Housing:

New residential projects must provide inclusionary housing units

affordable to very-low, low or moderate income persons orfamilies, where feasible.

Conversion to Non-

Residential Uses:The County can only approve the demolition or conversion ofresidential structures for the subsequent development ofcommercial uses that are not coastal dependent, if it first findsthat a residential use is no longer feasible at that location.

The following sections of this policy identify the County's methodology for fulfilling thereplacement and inclusionary housing obligations imposed by the Mello Act.

REPLACEMENT HOUSING

Obligations

The Mello Act requires any residential unit occupied by a low or moderate incomeperson or family to be replaced. Therefore, applicants for discretionary and non-

discretionary permits involving the demolition, conversion or construction of housingwithin Marina del Rey will be required to assist the Los Angeles County CommunityDevelopment Commission (CDC) and/or its affordable housing consultant to completethe following activities:

1. Send a notice to all current occupants that includes:

a. A description of the proposed demolition or conversion plan;

b. An explanation of the Mello Act provisions and compliance review

process;

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c. Contact information for a County staff member who can provide additional

information to the residents; and

d. An income survey to be completed by each family and individualoccupant to determine the applicant's replacement housing obligation for

Mello Act Compliance (see Exhibit I: Financial Information Form andIncome Survey). (Note: Income information obtained from individualoccupants specifically named on the lease, and their familymembers/domestic partner will be used exclusively to determinereplacement housing eligibility. Financial information obtained fromresident(s) subleasing directly from the legal occupant, but not named on

the original lease/rental agreement (Le. non-family roommates), wil notbe considered in determining the applicant's replacement housing

obligation for purposes of Mello Act compliance).

2. Identify the characteristics of each unit in the project as follows:

a. Units occupied by resident management employees will not be

considered in determining the applicant's replacement housing obligation

for purposes of Mello Act compliance (with a limit of one managementunit per seventy-five residential units).

b. Students that are claimed as a dependent on their parent's federal

income tax return or whose parent(s) are guarantors on the rental/leaseagreement must include parental household income information on thetenant income survey to determine affordable housing eligibility of theirunit for the purposes of Mello Act compliance.

c. Any vacant unit identified at the commencement of term sheet

negotiations with the Department of Beaches and Harbors (DBH) isdeemed to be a market rate unit.

d. For units that were occupied by tenants that have been evicted within one

year prior to the commencement of term sheet negotiations with DBH, the

applicant must demonstrate that the tenant was evicted for cause ratherthan to avoid the Mello Act replacement housing obligations. If it is

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Marina del Rey Affordable Housing Policy

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determined that the tenant was evicted to avoid the obligations, the unit

shall be deemed occupied by a low or moderate income person or family.

e. Affordable housing eligibility for units with tenants that return an incomesurvey but decline to state any financial information and for tenants that

do not respond to the income survey will be determined using tenantincome information no more than two years old contained in theapplicant's files; or in the absence of such income information, using theaverage of the previous year's monthly rent compared to the averageaffordable monthly rental rates for the same year as noted below:

i. If the average monthly rent for the unit is less than or equal to the

average monthly affordable rent for a very-low income household,the unit will be considered to be occupied by a very-low incomeperson or family.

ii. If the average monthly rent for the unit is less than or equal to the

average monthly affordable rent for a low income household, theunit will be considered to be occupied by a low income person orfamily.

iii. If the average monthly rent for the unit is less than or equal to the

average monthly affordable rent for a moderate income

household, the unit will be considered to be occupied by amoderate income person or family.

iv. If the average monthly rent for the unit is greater than the average

monthly affordable rent for a moderate income household, the unitwill be deemed to be a market-rate unit.

f. Unmarried and unrelated tenants who wish to be treated as separate

individuals rather than as a household must declare under penalty ofperjury the following:

i. They are not registered domestic partners;

ii. Neither party claims employment benefits received by the other

party (i.e. health insurance, etc.);

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Marina del Rey Affordable Housing Policy

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iii. They do not share a bank account; and

iv. They do not own real property together.

3. The COC shall submit to the Regional Planning Commission the followinginformation for each project involving the demolition, conversion or constructionof housing within Marina del Rey:

a. Confirmation of household income level of the persons or families in

accordance with California Health and Safety Code standards.

b. Identification of the number of bedrooms in the unit eligible for

replacement pursuant to the Mello Act. When an occupant is determinedto be of low or moderate income, but other occupants within the sameunit are above-moderate income, the replacement obligation is limited to

one bedroom.

Methods of Compliance

4. The applicant is required to rèplaceeach unit that is determined to be occupied

by low or moderate income persons or families on a one-for-one basis (pernumber of bedrooms). The replacement units must adhere to the followingrequirements:

a. The replacement unit must be of comparable size and design to the

market-rate units being developed in the rental component of the new or

converted project.

b. The applicant shall record a covenant guaranteeing that the relevantaffordable income and rent requirements for each replacement unit will be

observed for at least 30 years from the issuance of the Certificate ofOccupancy.

c. The replacement housing obligation may be satisfied, in whole or in part,by an affordable housing set aside required as a condition of receiving a

density bonus, and shall not be imposed in addition to any such set aside,except to the extent the density bonus set aside does not fully satisfy

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replacement and/or inclusionary housing obligations required under the

Mello Act.

5. Replacement units may be set aside as very low, low or moderate income rentalunits based on comparison of the monthly rent at the commencement of termsheet negotiations for the unit to be demolished or converted to the affordablehousing rental rates published annually by the COCo

6. Applicants must provide the identified replacement housing units on-site or

elsewhere within the Coastal Zone unless the applicant can demonstrate thatsuch placement is not feasible.

a. The project feasibility analysis must include:

i. An evaluation of the impacts created by incentives available to the

applicant such as density bonuses; development standards relief;and available state and local assistance programs. (Note: Countyrent concessions will. not be made available to the applicant tocomply with the applicant's replacement housing obligationpursuant to the Mello Act).

ii. An estimate of the developer's return that would be generated by

the project. This return wil be compared to a feasibility factorequal to the average capitalization rate for apartment sales in LosAngeles County, as published in the California Real EstateJournal, plus an amount not to exceed 200 basis points.

iii. An evaluation of whether or not the project can be successfully

completed within a reasonable period of time, taking into accounteconomic, environmental, social and technical factors.

b. If on-site or Coastal Zone replacement is determined to be infeasible, the

units shall be provided at an off-site location in the following priority order:

i. Within three miles of the Coastal Zone in the unincorporated

territory of Los Angeles County; or

ii. Within three miles of the Coastal Zone in the incorporated territory

of Los Angeles County.

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c. Off-site units can be new construction or the substantial rehabilitation of

existing units. The obligation to construct or rehabilitate affordable

replacement housing units off-site will be the sole responsibility of theapplicant.

d. No in-lieu fee program will be available to comply with the replacement

housing obligations.

INCLUSIONARY HOUSING

The Mello Act requires new residential development to provide affordable housing unitswhere feasible (inclusionary units). The County will require applicants to meet thefollowing standards:

7. The inclusionary housing obligation will be imposed separately from anyreplacement housing obligations being applied to the project.

8. The inclusionary units must be reasonably dispersed throughout the rental unitcomponent of the project, and the unit sizes and design must be comparable tomarket rate rental units included in the project.

9. The on-site inclusionary housing obligation will be calculated based upon the net

incremental new units (fractional units under 0.5 are to be rounded down) to beconstructed or converted in the following manner:

a. The applicant must set aside a percentage of the new units as affordable

units, subject to an analysis of the project's feasibility on a case-by-case

basis. The County's goal is to have each applicant set aside either 5% of

the units for very-low income households, or 10% of the units for lowincome households.

b. If the applicant requests and is eligible for a density bonus, the

inclusionary unit requirement will be calculated off the pre-bonus number

of units.

c. The inclusionary housing obligation may be satisfied, in whole or in part,by an affordable housing set aside required as a condition of receiving a

density bonus, and shall not be imposed in addition to any such set aside,

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Marina del Rey Affordable Housing Policy

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except to the extent the density bonus set aside does not fully satisfy the

replacement and/or inclusionary housing obligations required under theMello Act.

10. The applicant must provide a project feasibility analysis in support of its proposedinclusionary housing obligation.

a. The project feasibility analysis must include:

i. An evaluation of the impacts created by incentives available to the

applicant such as density bonuses; development standards relief;and available state and local assistance programs. (Note: Countyrent adjustments to comply with the inclusionary housing

requirement are subject to negotiation on a case-by-case basis).

ii. An estimate of the developer's return that would be generated by

the project. This return wil be compared to a feasibility factorequal to the capitalization rate for apartment sales in Los AngelesCounty, as published in the California Real Estate Journal, plus anamount not 'to exceed 200 basis points.

iii. An evaluation of whether or not the project can be successfully

completed within a reasonable period of time, taking into accounteconomic, environmental, social and technical factors.

b. If on-site development of the inclusionary housing units is determined to

be infeasible based upon the project feasibility analysis, the units must be

provided at an off-site location in the following priority order:

i. In the Coastal Zone within the unincorporated territory of Los

Angeles County;

ii. Within three miles of the Coastal Zone in the unincorporated

territory of Los Angeles County;

iii. In the Coastal Zone within the incorporated territory of Los

Angeles County; or

iv. Within three miles of the Coastal Zone in the incorporated territory

of Los Angeles County.

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Marina del Rey Affordable Housing Policy

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c. The off-site inclusionary units can be new construction or substantialrehabilitation. The obligation to construct or rehabiltate affordable

housing inclusionary units off-site will be the sole responsibility of theapplicant.

d. No in-lieu fee program will be available to comply with the inclusionaryhousing obligations.

11 . The affordable income and rent requirements will be determined as follows:

a. The income standards for very-low and low income households wil be

based on California Health and Safety Code standards.

b. The affordable housing costs will be published by COC on an annual

basis (See Exhibit II: Income and Rent Limits - 2006).

CONVERSION TO NON-RESIDENTIAL USES

In accordance with Mello Act requirements, the County will evaluate proposals todemolish or convert residential structures for the subsequent development ofcommercial uses that are not coastal dependent. No project will be approved unless the

County determines that a residential use is no longer feasible at the proposed location.

ADDITIONAL PROVISIONS

12. The tenant survey must be approved by the CDC during lease negotiations forCounty owned properties. If more than one year passes after approval of theoriginal tenant survey, the survey must be updated and resubmitted as part of theCounty's Regional Planning application process for a Coastal Development

Permit. The replacement housing obligation wil be set at the higher result of thetwo surveys.

13. The applicant must submit an Affordable Housing Plan to the County; no Building

Permits wil be issued for the project until the County approves the Plan.

14. The applicant shall record a covenant guaranteeing that the relevant affordableincome and rent requirements for each replacement and inclusionary unit wil beobserved for at least 30 years from the issuance of the Certificate of Occupancy.

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The applicant will be required to comply with the County's monitoring

requirements annually throughout the covenant term.

15. If replacement and/or inclusionary units are provided off-site, the off-siteaffordable housing units must be completed and available for occupancy prior tothe issuance of the Certificate of Occupancy for the new market ratedevelopment, but in no event later than three years from the issuance of abuilding permit for the new development project. The Certificate of Occupancyfor the new market rate development project will be withheld until the off-siteaffordable housing units are ready for occupancy.

16. Ownership Units

a. If an applicant is proposing to develop a project that includes rental and

ownership units, the replacement and inclusionary units may all beprovided in the rental component;

b. If an applicant is proposing to develop a 100% ownership unit project, the

applicant may provide rental units on-site to fulfill the replacement andinclusionary obligations,

17. The CDC will levy the following fees:

a. The costs associated with engaging a consultant to undertake the tenant

survey and evaluation will be funded by the applicant.

b. The costs associated with completing or auditing the project feasibilityanalysis wil be funded by the applicant.

c. An annual fee of $.125 per affordable unit will be charged to defray theongoing compliance inspection and reporting costs associated with thereplacement and inclusionary units. This fee wil be adjusted annually in

accord with changes in the Consumer Price Index (CPI).

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Exhibit ICOASTAL HOUSING PROGRAM TENANT QUESTIONNAIRE

As you likely are aware, the ownership of has applied to the County of Los Angeles for approval of a

Coastal Development Permit (CDP) to authorize the redevelopment of the apartments. The ownershipof proposes to demolish the existing _ apartment units and to construct a new apartment project onthe site containing rental units. In 1981, the California Legislature adopted Senate Bil 626, which requires that the

demolition of existing dwellng units in the Coastal Zone occupied by persons or families of low or moderate incomeshall require the replacement of those dwellng units with units affordable to persons of low or moderate income. Thereplacement units, if required, wil be generally available to the public, rather than to specific individuals.

To determine the number of units that must be replaced, the County of Los Angeles needs income information from thecurrent tenants of . The County must receive income information separately from each family (related

persons) and each unrelated adult living in your apartment. Please assist us by providing the information requested below

and, if it is applicable, also complete the enclosed Financial Information form.

All financial information that you provide wil remain confidentiaL.

questionnaires and forms for unrelated individuals, please contactadvance for your cooperation.

If you have any questions, or need additionalat . Thank you in

Number of occupants living in your apartent unit:

Please circle the income category that comes closest to the combined gross annual income from all sources of all familymembers (all relaed persons living in your apa11ent unit) based on family size without going over.

2 .( 44 350 .( '53 900 ? $53 9003 .( $49 900 .( $60 700 ? 60 7004 .( $55 540 .( $67 400 ? $67 4005 -c 59 900 .( 72 800 ? $72 8006 .( $64 300 -c $78 200 ? $78 200

Source: 200 State income limits published by the California Department of Housing & Community Development

OR check the following: DECLINE TO STATE 0

If you answered that your combined family income from all sources (including wages, salary, tips, interest and investmentincome, proceeds from the sale of a home or other real estate transaction, social security, pension, governmental orspousal support and child support) is LESS than the amounts in the table, please complete the attached FinancialInformation form.

If you answered that your income is GREATER than the amount in the table, or you Declied to State your income, donot complete the attached Financial Information form, but please do sign and date this questionnaire below.

I declare under penalty of perjury, under the laws of the State of California, that the foregoing is true and correct.

Signature: Date:

Print Name: Street Address: Apt. #

Tenant Financial Information Page 1 of 4

Exhibit I

TENANT FINANCIAL INFORMATION SURVEY

If you indicated on the previous page that your annual income is less than the dollar amount shownfor your family size category, please complete the financial information requested below. Pleaseindicate all sources and amounts of income for each family member who receives an income (of anykind). Please return this form with the attached questionnaire in the enclosed envelope. One

Financial Information form should be completed for each family living in your apartment. Each unrelatedadult living in your apartment should complete a separate Financial Information form.

Project Address: Number of Bedrooms:

Your Name:

Home Phone #: ( ) Work Phone #: ( )Date of Birth:

Persons Living in Apartment Unit:

Name of Person Relationship to You Age Employed

Yes/No

Yes/No

Y es/N 0

Y es/N 0

Your Marital Status: Married Unmarried

If you indicated that you are unmarried, please answer the following questions:

Are you and any of the persons listed above registered with the State of California as domestic partners?

Do you receive employment benefits from any of the persons listed above (i.e. health insurance, etc.)?YES NO

Do you share a bank account with any of the persons listed above? YES NO

Do you own property with any of the persons listed above together? YES NO

Tenant Financial Information Page 2 of 4

Exhibit I

Source(s), Amount of Household Income (Gross):

(Y ourseH) (Other Household / Family Members)

Employment $ mo. $ mo. $ mo.Pension/Retirement $ mo. $ mo. $ mo.Social Security $ mo. $ mo. $ mo.SSI $ mo. $ mo. $ mo.Welfare $ mo. $ mo. $ mo.D nemployment $ mo. $ mo. $ mo.Armed Forces Pay $ mo. $ mo. $ mo.Veteran's Benefit $ mo. $ mo. $ mo.Disability $ mo. $ mo. $ mo.Child Support $ mo. $ mo. $ mo.Spousal Support $ mo. $ mo. $ mo.

(Income from Interest, dividends, etc.)$ mo. $ mo. $ mo.

Other $ mo. $ mo. $ mo.

The value of your assets, except for necessary items such as automobiles and furniture, areconsidered in determining your income. Therefore, please provide below the total dollar valueof the various types of assets listed below that you own and the interest rate or rate of return.

Total Amount InterestRate/Dividends

Do you have a checking account?Do you have a savings account?Do you own stocks or bonds?Do you own real propert?

Estimated Property ValueTotal Loan AmountsEstimated Equity

YESYESYESYES

NO $NO $NO $NO

$

$

$

Do you receive any rental assistance from a relative or other source? YES NO Amount $

Are you a full-time student, 18 years of age or older? YES NO

If you answered yes to the above question, please answer the following:

Do your parents serve as guarantors on your rental or lease agreement? YES NO

Did your parents declare you as a dependent on their Federal Income Tax Return for this year? YES N(

(Please answer the following question only if you answered YES to being a dependent ofparents.)

Tenant Financial Information Page 3 of 4

Exhibit I

If your parents intend to declare you as a dependent on their Federal Income Tax Return for thisyear, please indicate below: (1) the number of persons in your family, and (2) the combined grossannual income of your parents and you.

Family Size: Combined Gross Annual Income:

I declare under penalty of perjury, under the laws of the State of California, that theforegoing is tre and correct.

Signature Date

Thank you for your cooperation in completing this form.

Tenant Financial Information Page 4 of 4

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ITY

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SS

PR

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EC

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YR

EQ

UIR

ES

IT F

OR

PR

OJE

CT

S B

EFO

RE

1-1

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(1)*

Inc

ome

limits

and

ren

ts f

or 'u

nass

iste

d" d

evel

opm

ents

with

den

sity

bon

uses

. Inc

ome

limits

are

als

o to

be

used

whe

n in

com

e-qu

alif

ied

buye

rs a

re a

ssis

ted

with

tax

incr

emen

t fun

ds o

nly

(2)

The

num

bers

sho

wn

are

not p

ublis

hed

by H

UD

and

are

ext

rapo

latio

ns fr

om th

e in

com

e pu

blis

hed

by H

UD

for

50%

of m

edia

n in

com

e.

ME

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPo

licy

Opt

ions

1C

omm

ents

Det

erm

inat

ion

The

rep

lace

men

t dw

elln

g un

its s

hall

be lo

cate

d on

the

The

pro

ject

fea

sibi

lty a

naly

sis

mus

tD

1. D

eter

min

e fe

asib

ilty

on a

cas

e-by

-T

he a

dvan

tage

of d

eter

min

ing

the

feas

ibilt

y of

pro

vidi

ng r

epla

cem

ent a

nd in

clus

iona

ry

of fe

asib

ilty

site

of t

he c

onve

rted

or

dem

olis

hed

stru

ctur

e or

incl

ude:

units

on

a ca

se-b

y-ca

se b

asis

is th

at it

con

side

rs th

e un

ique

ness

of s

ites

and

mar

ket

else

whe

re w

ithin

the

coas

tal z

one

iffe

asib

le...

.!n

the

case

bas

is.

cond

ition

s ov

er ti

me.

How

ever

, the

dis

adva

ntag

e is

that

it d

oes

not p

rovi

de c

ertin

ty, a

ndev

ent t

hat a

n ex

istin

g re

side

ntia

l dw

elln

g un

it is

An

eval

uatio

n of

impa

cts

crea

ted

byD

2. C

ondu

ct a

n up

fron

t tec

hnic

al s

tudy

toth

e de

liber

atio

ns o

ver

feas

ibilt

y co

uld

be s

ubje

ct to

del

ays

in th

e en

title

men

t pro

cess

.

occu

pied

by

mor

e th

an o

ne p

erso

n or

fam

ily, t

hein

cent

ives

ava

ilabl

e to

the

appl

ican

t suc

hpr

ovis

ions

of t

his

subd

ivis

ion

shal

l app

ly if

at l

east

one

as d

ensi

ty b

onus

es; d

evel

opm

ent

determine requirements.

The

adv

anta

ge o

f com

plet

ing

an u

pfro

nt te

chni

cal f

easi

bilty

stu

dy is

that

it p

rovi

des

clar

ity

such

per

son

or fa

mily

, exc

ludi

ng a

ny d

epen

dent

sst

anda

rds

relie

f: an

d av

aila

ble

stat

e an

din

how

fea

sibi

lty is

det

erm

ined

. The

dis

adva

ntag

e is

that

it m

ay b

e m

ore

appr

opri

ate

toth

ereo

f, is

of l

ow o

r m

oder

ate

inco

me.

...lo

cal a

ssis

tanc

e pr

ogra

ms.

...de

term

ine

feas

ibili

ty, a

ccor

ding

to th

e ci

rcum

stan

ces

of th

e pr

ojec

t, in

clud

ing

mar

ket

cond

ition

s at

the

time

in w

hich

the

proj

ect i

s pr

opos

ed. I

n ad

ditio

n, th

e up

fron

t tec

hnic

al

Gov

ernm

ent C

ode

6559

0 (b

)A

n es

timat

e of

the

deve

lope

r's r

etur

n th

atst

udy

wil

may

be

expe

nsiv

e an

d tim

e-co

nsum

ing

to p

rodu

ce. A

s th

ere

are

only

four

would be generated by the project..

hous

ing

deve

lopm

ents

com

ing

forw

ard

for

entit

lem

ents

in th

e re

mai

nder

of s

econ

d

New

hou

sing

dev

elop

men

ts c

onst

ruct

ed w

ithin

the

gene

ratio

n M

arin

a re

deve

lopm

ent,

ther

e ar

e co

ncer

ns th

at a

tech

nica

l fea

sibi

lity

stud

y

coas

tal z

one

shal

l, w

here

feas

ible

, pro

vide

hou

sing

An

eval

uatio

n of

whe

ther

or

not t

he p

roje

ctw

ould

not

be

wor

thw

hile

.

units

for

pers

ons

and

fam

ilies

of l

ow o

r m

oder

ate

can

be s

ucce

ssfu

lly c

ompl

eted

with

in a

ineo

me.

..re

ason

able

per

iod

of ti

me,

taki

ng in

toac

coun

t eco

nom

ic, e

nviro

nmen

tal,

soci

alG

over

nmen

t Cod

e 65

590

(d)

and

tech

nica

l fac

tors

.

Any

det

erm

inat

ion

of th

e "f

easi

bilit

y" o

f an

actio

nD

raft

Pol

icy

Pag

es 7

,9re

quire

d to

be

take

n by

this

sec

tion

shal

l be

revi

ewab

lepu

rsua

nt to

the

prov

isio

ns o

f Sec

tion

1094

.5 o

f the

Cod

e of

Civ

il P

roce

dure

.

Gov

ernm

ent C

ode

6559

0(e)

"Fea

sibl

e" m

eans

cap

able

of b

eing

acc

ompl

ishe

d in

asu

cces

sful

man

ner

with

in a

rea

sona

ble

perio

d of

tim

e,ta

king

into

acc

ount

eco

nom

ic, e

nviro

nmen

tal,

soci

al,

and

tech

nica

l fac

tors

.

Gov

emm

ent C

ode

6559

0(0)

(3)

Det

erm

inat

ion

ofN

ew h

ousi

ng d

evel

opm

ents

con

stru

cted

with

in th

eT

he a

pplic

ant m

ust s

et a

side

aD

1. O

n a

case

-by-

case

bas

is,

The

adv

anta

ge o

f a c

ase-

by-c

ase

dete

rmin

atio

n is

the

flexi

bilty

to c

onsi

der

the

uniq

uene

ss

incl

usio

nary

coas

tal z

one

shal

l, w

here

feas

ible

, pro

vide

hou

sing

perc

enta

ge o

f the

new

uni

ts a

s af

ford

able

of s

ites

and

mar

ket c

ondi

tions

ove

r tim

e.

units

for

pers

ons

and

fam

ilies

of l

ow o

r m

oder

ate

units

, sub

ject

to a

n an

alys

is o

f the

dete

rmin

e th

e fe

asib

le n

umbe

r of

hous

ing

units

inco

me.

..pr

ojec

t's fe

asib

ility

on

a ca

se-b

y-ca

sein

clus

iona

ry h

ousi

ng u

nits

that

the

Set

ting

perc

enta

ge g

oals

for

incl

usio

nary

uni

ts in

form

s le

ssee

s of

the

Cou

nty'

s af

ford

able

basi

s. T

he C

ount

y's

goal

is to

hav

e ea

chap

plic

ant m

ust p

rovi

de, w

ithho

usin

g ex

pect

atio

ns, w

ith s

ome

flexi

bilit

y fo

r un

ique

circ

umst

ance

s an

d ch

angi

ng m

arke

t

Gov

ernm

ent C

ode

6559

0 (d

)ap

plic

ant s

et-a

side

eith

er 5

% o

f the

uni

tspe

rcen

tage

goa

ls o

f 5%

ver

y lo

wco

nditi

ons.

The

dra

ft po

licy

goal

s ha

ve b

een

set b

ased

on

the

qual

ifyin

g th

resh

olds

set

by

for

very

-low

inco

me

hous

ehol

ds, o

r 10

%in

com

e ho

useh

olds

or

10%

low

Sta

te D

ensi

ty B

onus

Law

, whi

ch o

ffers

20%

den

sity

bon

uses

for

setti

ng a

side

eith

er 5

%of

the

units

for

low

inco

me

hous

ehol

ds.

inco

me

hous

ehol

ds.

very

low

inco

me

or 1

0% lo

wer

inco

me

units

with

in a

pro

ject

.

...T

he a

dvan

tage

of c

ondu

ctin

g an

upf

ront

tech

nica

l fea

sibi

lity

stud

y is

that

it p

rovi

des

aD

raft

Pol

icy

Pag

e 8

D 2. Provide alternative inclusionary

soun

d, te

chni

cal b

asis

for

impo

sing

app

ropr

iate

and

feas

ible

incl

usio

nary

hou

sing

requ

irem

ents

, as

wel

l as

cert

inty

to le

ssee

s. H

owev

er, c

ondu

ctin

g a

tech

nica

l fea

sibi

ltyoe

rcen

taoe

ooa

ls, s

uch

as:

stud

v m

av b

e ex

oens

ive

and

time-

cons

umin

o, a

nd le

ssee

s w

ould

stil

be

Der

mitt

ed to

1 A

l opt

ions

in b

old

are

prop

osed

in th

e cu

rent

dra

ft p

olic

y.1

ME

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPo

licy

Opt

ions

1C

omm

ents

Det

erm

inat

ion

ofo 10% very low income households

chal

leng

e th

e in

clus

iona

ry h

ousi

ng r

equi

rem

ents

bas

ed u

pon

feas

ibilt

y on

a c

ase-

by-c

ase

incl

usio

nary

basi

s. A

s it

is a

ntic

ipat

ed th

at th

ere

are

only

four

hou

sing

dev

elop

men

ts c

omin

g fo

rwar

dfo

r en

title

men

ts in

the

rem

aind

er o

f sec

ond

gene

ratio

n M

arin

a re

deve

lopm

ent,

ther

e ar

e

hous

ing

units

o 20% low income households

conc

erns

that

a te

chni

cal f

easi

bilit

y st

udy

wou

ld n

ot b

e w

orth

whi

le.

(con

tinue

d)o _ % very low, low or moderate

Inco

me

o 3. Conduct a technical feasibilty study

upfr

ont t

o de

term

ine

the

appr

opria

tepe

rcen

tage

req

uire

men

t for

the

incl

usio

nary

housing obligation.

Det

erm

inat

ion

New

hou

sing

dev

eiop

men

ts c

onst

ruct

ed w

ithin

the

The

incl

usio

nary

hou

sing

obl

igat

ion

will

be

o 1. Calculate the inclusionary housing

The

exc

lusi

on o

f exi

stin

g un

its, p

rior

to d

emol

ition

or

conv

ersi

on, f

rom

the

calc

ulat

ion

of

ofco

asta

l zon

e sh

all,

whe

re fe

asib

le, p

rovi

de h

ousi

ngim

pose

d se

para

tely

from

any

rep

lace

men

tin

clus

iona

ry u

nits

follo

ws

the

stru

ctur

e of

the

Mel

lo A

ct, w

hich

trea

ts th

e re

plac

emen

t of

units

for

pers

ons

and

fam

ilies

of l

ow o

r m

oder

ate

hous

ing

oblig

atio

ns b

eing

app

lied

to th

eun

its b

ased

upo

n th

e ne

taf

ford

able

hou

sing

uni

ts s

epar

atei

y fr

om th

e in

clus

ion

of a

fford

able

hou

sing

uni

ts in

new

incl

usio

nary

inco

me.

..pr

ojec

t.in

crem

enta

l new

uni

ts.

deve

iopm

ent.

hous

ing

...o 2. Provide alternative calculation

Gov

ernm

ent C

ode

6559

0 (d

)T

he o

n-sr

re in

cius

iona

ry h

ousi

ngC

onsi

dera

tion

of a

ltern

ativ

e ca

lcul

atio

n m

etho

ds w

il re

sult

in a

n in

crea

sed

num

ber

ofun

its-

oblig

atio

n w

il be

cal

cula

ted

base

d up

onmethod, such as:

affo

rdab

le u

nits

.H

owev

er, a

ltern

ativ

e ca

lcul

atio

n m

etho

ds th

at in

crea

se th

e nu

mbe

r of

Cal

cula

tion

the

net i

ncre

men

tal n

ew u

nits

(fr

actio

nal

o Exclude only required affordable

incl

usio

nary

uni

ts w

il al

so r

esul

t in

high

er c

osts

to le

ssee

s an

d th

e C

ount

y, a

nd m

ay

units

und

er 0

.5 a

re to

be

roun

ded

dow

n)In

crea

se th

e lik

elih

ood

of o

n-si

te in

feas

ibilt

y an

d m

ay e

ncou

rage

less

ees

to s

eek

off-

site

to b

e co

nstr

ucte

d or

con

vert

ed in

the

repl

acem

ent u

nits

from

plac

emen

t ins

tead

.fo

llow

ing

man

ner.

...in

clus

iona

ryob

ligat

ion.

Dra

ft P

olic

y P

age

8o Require inclusionary obligation

and

cred

it qu

alify

ing

affo

rdab

lere

plac

emen

t uni

ts to

war

d m

eetin

gan

over

all p

erce

ntag

e go

al th

at is

calc

ulat

ed o

ver

the

tota

l nro

iect

.

Det

erm

inat

ion

ofT

he c

onve

rsio

n or

dem

oliti

on o

f exi

stin

g re

side

ntia

lR

epla

cem

ent u

nits

mus

t be

set a

side

as

o 1. Units occupied by low-or-moderate

Com

plia

nce

with

the

repl

acem

ent u

nit r

equi

rem

ents

of t

he M

ello

Act

wil

resu

lt in

the

repl

acem

ent

dwel

lng

units

occ

upie

d by

per

sons

and

fam

ilies

of l

owve

ry lo

w, l

ow o

r m

oder

ate

inco

me

rent

alre

plac

emen

t of m

arke

t rat

e un

its w

ith in

com

e-re

stric

ted

units

bec

ause

the

dete

rmin

atio

n of

or m

oder

ate

inco

me.

..sha

ll no

t be

auth

oriz

ed u

nles

sun

its b

ased

on

com

paris

on o

f the

mon

thly

inco

me

pers

ons

or f

amile

sre

plac

emen

t is

base

d up

on in

com

e of

the

occu

pant

s, n

ot o

n th

e re

nt c

harg

ed to

thos

e

housing units-

prov

isio

n ha

s be

en m

ade

for

the

repl

acem

ent o

f tho

sere

nt a

t the

com

men

cem

ent o

f ter

m s

heet

repl

aced

with

uni

ts s

et a

side

for

occu

pant

s. W

hile

the

draf

t pol

icy

requ

ires

the

desi

gnat

ion

of r

epla

cem

ent u

nrrs

bas

ed o

n

Inco

me

dwel

ling

units

with

uni

ts fo

r pe

rson

s an

d fa

mili

es o

f low

nego

tiatio

ns fo

r th

e un

it to

be

dem

olis

hed

low

-or-

mod

erat

e in

com

e pe

rson

s or

inco

me

of o

ccup

ants

as

requ

ired

by th

e M

ello

Act

, it p

erm

its th

e de

sign

atio

n of

inco

me

targ

etin

gor

mod

erat

e in

com

e. ..

.The

rep

lace

men

t dw

ellin

g un

itsor

con

vert

ed to

the

affo

rdab

le h

ousi

ngfa

mile

s ba

sed

upon

com

pari

son

ofle

vel r

estr

ictio

n fo

r th

e re

plac

emen

t uni

t bas

ed u

pon

the

rent

cha

rged

for

the

unit

to b

e

shal

l be

loca

ted

on th

e si

te o

f the

con

vert

ed o

rre

ntal

rat

es p

ublis

hed

annu

ally

by

the

mon

thly

ren

t.re

plac

ed. T

he a

dvan

tage

of t

he r

ent c

ompa

rison

is th

at it

allo

ws

for

flexi

bilty

in p

rovi

ding

dem

olis

hed

stru

ctur

e or

els

ewhe

re w

ithin

the

coas

tal

CD

C.

o 2. Like-for-Like Replacement: Units

repl

acem

ent u

nits

for

a ra

nge

of lo

w a

nd m

oder

ate

inco

me

indi

vidu

als

and

fam

ilies

, whi

le

zone

if fe

asib

le...

.!n th

e ev

entlh

at a

n ex

istin

g...

pote

ntia

lly a

mel

iora

ting

som

e of

the

finan

cial

effe

cts

of c

onve

rtin

g m

arke

t rat

e un

its to

resi

dent

ial d

wel

lng

unit

is o

ccup

ied

by m

ore

than

one

occu

pied

by

very

low

inco

me

affo

rdab

le u

nits

. The

dis

adva

ntag

e, h

owev

er, i

s th

at le

ssee

s w

il m

ost l

ikel

y op

t for

Der

son

or f

amily

, the

oro

visi

ons

of th

is s

ubdi

visi

on s

hall

...ho

useh

olds

ren

lace

d bv

uni

ts s

et-

mod

erat

e in

com

e re

stric

ted

units

.

2

VlE

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPo

licy

Opt

ions

1C

omm

ents

Det

erm

inat

ion

ofap

ply

if at

leas

t one

suc

h pe

rson

or

fam

ily, e

xclu

ding

asid

e fo

r ve

ry lo

w in

com

e ho

useh

olds

repl

acem

ent

any

depe

nden

ts th

ereo

f, is

of l

ow o

r m

oder

ate

Dra

ft P

olic

y P

age

7(3

0% A

MI-

50%

AM

I); u

n~s

occu

pied

The

adv

anta

ge o

f Iik

e-fo

r-lik

e re

plac

emen

t is

that

it w

ill p

rovi

de a

fford

able

uni

ts th

at

inco

me.

. ..

by lo

wer

inco

me

hous

ehol

ds r

epla

ced

corr

espo

nd w

ith th

e in

com

e le

vels

of t

he in

divi

dual

s an

d fa

mile

s w

ho a

re d

ispl

aced

.

housing units-

by u

nits

set

-asi

de fo

r lo

wer

inco

me

How

ever

, the

dis

adva

ntag

e of

Iike

-for

-Iik

e is

that

it is

not

as

flexi

ble,

and

can

res

ult i

n

Inco

me

Gov

ernm

ent C

ode

6559

0 (b

)ho

useh

olds

(50

%A

MI-

80%

AM

I): u

nits

addi

tiona

l cos

ts.

targ

etin

goc

cupi

ed m

oder

ate

inco

me

hous

ehol

ds r

epla

ced

by u

nits

set

-

(con

tinue

d)as

ide

for

mod

erat

e in

com

e ho

useh

olds

(80%

AM

I-12

0%A

MI)

.

o 3. Flexible Like-for-Like Replacement:

Mod

erat

e in

com

e un

its m

ay n

otre

plac

eio

wer

or

very

low

inco

me

units

, but

low

er o

rve

ry lo

w in

com

e un

its m

ay b

e re

plac

edby

eith

er lo

wer

or

very

low

inco

me

units

.

! Det

erm

inat

ion

ofT

he c

onve

rsio

n or

dem

oliti

on o

f exi

stin

g re

side

ntia

lT

he a

pplic

ant i

s re

quire

d to

rep

lace

eac

ho 1. One-for-One bedroom

The

adv

anta

ge o

f one

-for

-one

bed

room

rep

lace

men

t is

that

it c

orre

spon

ds m

ore

accu

rate

ly

dwel

ling

units

occ

upie

d by

per

sons

and

fam

ilies

of l

owun

it th

at is

det

erm

ined

to b

e oc

cupi

ed b

yw

ith r

epla

cem

ent o

f the

uni

t acc

ordi

ng to

the

affo

rdab

le h

ouse

hold

. How

ever

, the

repl

acem

ent

or m

oder

ate

inco

me.

..sha

ll no

t be

auth

oriz

ed u

nles

slo

w o

r m

oder

ate

pers

ons

or fa

mile

s on

are

plac

emen

t.di

sadv

anta

ge is

that

it d

oes

not n

eces

saril

y re

plac

e th

e un

it th

at w

as o

ccup

ied

by a

t lea

st

housing units-

prov

isio

n ha

s be

en m

ade

for

the

repl

acem

ent o

f tho

seon

e-fo

r-O 2. One-for-One unit replacement.

one

pers

on o

r fa

mily

of l

ow o

r m

oder

ate

inco

me.

Num

ber

ofdw

elln

g un

its w

ith u

nits

for

pers

ons

and

fam

iles

of lo

won

e ba

sis

(per

num

ber

of b

edro

oms)

....

bedr

oom

sor

mod

erat

e in

com

e. ..

. The

rep

lace

men

t dw

ellin

g un

its...

shal

l be

loca

ted

on th

e si

te o

f the

con

vert

ed o

rde

mol

ishe

d st

ruct

ure

or e

lsew

here

with

in th

e co

asta

lA

pplic

ants

mus

t pro

vide

the

iden

tifie

dzo

ne if

fea

sibl

e....

!n th

e ev

ent t

hat a

n ex

istin

gre

plac

emen

t hou

sing

uni

ts o

n-si

te o

rre

side

ntia

l dw

ellin

g un

it is

occ

upie

d by

mor

e th

an o

neel

sew

here

with

in th

e C

oast

al Z

one

unle

sspe

rson

or

fam

ily, t

he p

rovi

sion

s of

this

sub

divi

sion

sha

llth

e ap

plic

ant c

an d

emon

stra

te th

at s

uch

appl

y if

at le

ast o

ne s

uch

pers

on o

r fa

mily

, exc

ludi

ngpl

acem

ent i

s no

t fea

sibl

e.an

y de

pend

ents

ther

eof,

is o

f low

or

mod

erat

e...

inco

me.

...D

raft

Pol

icy

Pag

es 6

,7G

over

nmen

t Cod

e 65

590

(b)

Det

erm

inat

ion

Not

spe

cifie

d....

o 1. Exclude units occupied by resident

Res

iden

t man

agem

ent e

mpl

oyee

uni

ts w

ere

excl

uded

in th

e dr

aft p

olic

y be

caus

e th

ey a

re

of r

epla

cem

ent

Uni

ts o

ccup

ied

by r

esid

ent m

anag

emen

tno

t ten

ants

, the

y ar

e em

ploy

ees.

The

adv

anta

ge o

f exc

ludi

ng u

nits

occ

upie

d by

res

iden

tem

ploy

ees

will

not

be

cons

ider

ed in

man

agem

ent e

mpl

oyee

s fr

omm

anag

emen

t em

ploy

ees

is th

at it

doe

s no

t bur

den

less

ees

with

rep

laci

ng th

eir

housing units-

dete

rmin

ing

the

appl

ican

t's r

epla

cem

ent

repl

acem

ent h

ousi

ng o

blig

atio

nm

anag

emen

t uni

ts w

ith a

fford

able

uni

ts w

hich

may

not

then

be

usea

ble

by la

ter

resi

dent

Exc

eptio

ns f

orho

usin

g ob

ligat

ion

for

purp

oses

of M

ello

with

a li

mit

of o

ne fo

r ea

ch 7

5 un

its.

man

agem

ent e

mpl

oyee

s w

ho a

re n

ot in

com

e-qu

alifi

ed, t

hus

requ

iring

a fu

rthe

r re

duct

ion

ofA

ct c

ompl

ianc

e (w

ith a

lim

it of

one

mar

ket r

ate

units

to h

ouse

thos

e em

ploy

ees.

The

dis

adva

ntag

e, h

owev

er, i

s th

at a

resi

dent

man

agem

ent u

nit p

er s

even

ty-f

ive

o 2. Include units occupied by resident

resi

dent

man

agem

ent e

mpl

oyee

occ

upyi

ng th

e un

it m

ay fi

t the

inco

me

leve

l tha

t req

uire

s

man

agem

ent

resi

dent

ial u

nits

).m

anag

emen

t em

ploy

ees

who

mee

tre

plac

emen

t, ev

en if

the

resi

dent

man

agem

ent e

mpl

oyee

is te

chni

cally

con

side

red

an

empl

oyee

s...

inco

me

requ

irem

ents

.em

ploy

ee a

nd n

ot a

tena

nt.

Dra

ft P

olic

y P

age

4

3

ME

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPo

licy

Opt

ions

1C

omm

ents

Det

erm

inat

ion

Not

spe

cifie

d.S

tude

nts

that

are

cla

imed

as

a de

pend

ent

D 1

. Con

side

r in

com

e of

par

ents

whe

reC

onsi

derin

g pa

rent

al in

com

e w

il pr

ovid

e a

mor

e ac

cura

te a

ccou

ntin

g of

the

inco

me

of r

epla

cem

ent

on th

eir

pare

nt's

fede

rai t

ax r

etum

or

elig

ibilt

y of

stu

dent

s in

ord

er to

avo

id o

vers

tatin

g th

e nu

mbe

r of

rep

lace

men

t uni

ts.

who

se p

aren

t(s)

are

gua

rant

ors

on th

estudents are claimed as

How

ever

, the

dis

adva

ntag

e is

that

the

proc

ess

to v

erify

and

mon

itor

stud

ent s

tatu

s

housing units-

rent

al/le

ase

agre

emen

t mus

t inc

lude

depe

nden

ts o

r w

here

ren

t is

requ

ires

addi

tiona

l res

ourc

es fr

om th

e C

ount

y.

Exc

eptio

ns fo

rpa

rent

al h

ouse

hold

inco

me

info

rmat

ion

ongu

aran

teed

by

pare

nts.

stud

ents

the

tena

nt in

com

e su

rvey

to d

eter

min

eD

2. C

onsi

der

inco

me

of s

tude

nts

only

.af

ford

able

hou

sing

elig

ibili

ty o

f the

ir un

itfo

r th

e pu

rpos

es o

f Mel

lo A

ct c

ompl

ianc

e.

Dra

ft P

olie

v P

aae

4

Det

erm

inat

ion

Not

spe

cifi

ed.

(....

Fin

anci

al in

form

atio

n ob

tain

ed fr

omD

1. E

xclu

de s

ub-l

esse

es a

nd s

ub-

The

adv

anta

ge o

f exc

ludi

ng s

ub-le

ssee

s an

d su

b-te

nant

s is

that

it s

impl

iies

the

inco

me

of r

epla

cem

ent

resi

dent

(s)

subi

easi

ng d

irect

ly fr

om th

esu

rvey

pro

cess

, and

add

ress

es r

epla

cem

ent u

nit o

blig

atio

ns o

nly

for

thos

e w

ho h

ave

ale

gal o

ccup

ant,

but n

ot n

amed

on

the

tena

nts

who

are

not

lega

lco

ntra

ctua

l rig

ht to

occ

upy

the

unit.

How

ever

, the

dis

adva

ntag

e is

that

the

inco

mes

housing units-

orig

inal

leas

e/re

ntal

agr

eem

ent (

i.e.,

non-

occupants in determining

the

asso

ciat

ed w

ith th

e in

divi

dual

s na

med

on

the

leas

e m

ay n

ot n

eces

saril

y re

flect

the

true

Exc

eptio

ns fo

rfa

mily

roo

mm

ates

), w

ill n

ot b

e co

nsid

ered

repl

acem

ent h

ousi

ng o

blig

atio

n.in

com

e st

atus

of t

he o

ccup

ants

livi

ng in

the

unit.

sub-

less

ees

in d

eter

min

ing

the

appl

ican

t's r

epla

cem

ent

D 2. Include information on sub-lessees or

hous

ing

oblig

atio

n fo

r th

e pu

rpos

es o

f the

Mel

lo A

ct).

sub-

tena

nts

in d

eter

min

ing

the

Dra

ft P

o/le

v P

age

4re

olac

emen

t hou

sino

obl

ioat

ion.

Det

erm

inat

ion

In th

e ev

ent t

hat a

n ex

istin

g re

side

ntia

l dw

ellin

g un

it is

Unm

arrie

d an

d un

rela

ted

tena

nts

who

D 1. Allow unmarried and unrelated

The

dra

ft po

licy

trea

ts o

ccup

ants

of a

uni

t as

a ho

useh

old

for

the

purp

ose

of d

eter

min

ing

of r

epla

cem

ent

occu

pied

by

mor

e th

an o

ne p

erso

n or

fam

ily, t

hew

ish

to b

e tr

eate

d as

sep

arat

e in

divi

dual

sre

plac

emen

t uni

ts, u

nles

s th

ey a

ffirm

ativ

ely

decl

are

that

they

mee

t the

req

uire

men

ts fo

r

prov

isio

ns o

f thi

s su

bdiv

isio

n sh

all a

pply

if a

t lea

st o

nera

ther

than

as

a ho

useh

old

mus

t dec

lare

tena

nts

to b

e tr

eate

d as

sep

arat

ebe

ing

trea

ted

as in

divi

dual

s. T

he a

dvan

tage

of t

his

requ

irem

ent i

s th

at it

avo

ids

havi

ng to

housing units-

such

per

son

or fa

mily

, exc

ludi

ng a

ny d

epen

dent

sun

der

pena

ity o

f per

jury

the

follo

win

g:in

divi

dual

s.de

sign

ate

a re

plac

emen

t uni

t for

a p

erso

n w

ho m

eets

the

inco

me

requ

irem

ents

as

an

Roo

mm

ates

ther

eof,

is o

f low

or

mod

erat

e in

com

e....

D 2

. Tre

at r

elat

ed, f

inan

cial

ly n

on-

indi

vidu

ai, b

ut is

bei

ng s

uppo

rted

fina

ncia

lly b

y an

othe

r oc

cupa

nt, w

ho is

not

thei

r sp

ouse

The

y ar

e no

t reg

iste

red

part

ners

;or

blo

od r

elat

ive,

and

who

doe

s no

t mee

t the

inco

me

requ

irem

ents

. The

req

uire

men

t als

o

Gov

ernm

ent C

ode

6559

0 (b

)de

pend

ent i

ndiv

idua

ls in

depe

nden

tly.

allo

ws

pers

ons

in n

on-t

radi

tiona

l rel

atio

nshi

ps to

be

trea

ted

as h

ouse

hold

s if

they

so

wis

h,N

eith

er p

arty

cla

ims

empl

oym

ent b

enef

itsw

ithou

t hav

ing

to m

ake

an a

ffirm

ativ

e de

clar

atio

n re

gard

ing

the

stat

us o

f the

ir re

latio

nshi

pre

ceiv

ed b

y th

e ot

her

part

(i.e

. hea

lthw

ith th

e ot

her

occu

pant

s.H

owev

er, t

he d

isad

vant

age

is th

at in

a fe

w in

stan

ces,

it m

ay

insu

ranc

e, e

tc.)

:ex

clud

e ce

rtai

n pe

rson

s fr

om c

onsi

dera

tion

as in

divi

dual

s (i.

e., f

inan

cial

ly in

depe

nden

tsi

blin

gs li

ving

toge

ther

).

The

y do

not

sha

re a

ban

k ac

coun

tto

geth

er: a

nd

The

y do

not

ow

n re

al p

rope

rty

toge

ther

.

Dra

ft P

olic

v P

aaes

5,6

Det

erm

inat

ion

ofN

ot s

peci

fied.

Affo

rdab

le h

ousi

ng e

ligib

ility

for

units

with

D 1

. Add

ition

al s

teps

of

inqu

iry,

suc

hT

he a

dvan

tage

of a

ddin

g ad

ditio

nal s

teps

of i

nqui

ry is

that

it p

rovi

des

due

dilg

ence

to

repl

acem

ent

tena

nts

that

do

not r

espo

nd to

the

inco

me

colle

ct th

e in

com

e in

form

atio

n ne

cess

ary

to d

eter

min

e th

e nu

mbe

r of

rep

lace

men

t uni

ts.

surv

ey w

il be

det

erm

ined

usi

ng te

nant

as u

sing

ren

ts, e

tc. t

o ex

erci

se d

ueT

he d

isad

vant

age

is th

at u

sing

ren

t as

a pr

oxy

to d

eter

min

e in

com

e, in

par

ticul

ar, h

as th

e

housing units-

inco

me

info

rmat

ion

no m

ore

than

two

dilg

ence

. Whe

n th

e te

nant

doe

spo

tent

ial t

o be

inac

cura

te, a

s an

indi

vidu

al o

r fa

mily

of l

ow o

r m

oder

ate

inco

me

coul

d be

Whe

n in

com

eye

ars

old

cont

aine

d in

the

appl

ican

t's fi

les:

not r

espo

nd to

the

surv

ey a

ndpa

ying

mar

ket r

ate

rent

.

info

rmat

ion

isor

in th

e ab

senc

e of

suc

h in

com

ein

com

e in

form

atio

n is

not

ava

ilabl

e,in

form

atio

n, u

sing

the

aver

age

of th

ede

em u

nit m

arke

t-ra

te.

The

adv

anta

ge o

f dee

min

g a

unit

occu

pied

by

low

or

mod

erat

e in

com

e pe

rson

s or

fam

iles

not a

vaila

ble

prev

ious

yea

r's m

onth

ly r

ent c

ompa

red

toD

2. A

ddtti

onal

ste

ps o

f in

quir

y, s

uch

asas

a r

epla

cem

ent u

ntt,

whe

n th

e in

com

e in

form

atio

n is

not

ava

ilabl

e, is

that

it p

rovi

des

anth

e av

eraa

e af

ford

able

mon

thlv

ren

tal

ince

ntiv

e to

the

less

ees

to o

rovi

de th

e in

form

atio

n re

aues

ts a

nd e

nsur

es th

at u

nits

will

be

4

'vE

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPo

licy

Opt

ions

1C

omm

ents

rate

s fo

r th

e sa

me

year

as

note

d be

low

:us

ing

rent

s, e

tc. t

o ex

erci

se d

uere

plac

ed r

egar

dles

s of

whe

ther

or

not t

he in

form

atio

n is

pro

vide

d. H

owev

er, t

hedi

lgen

ce. W

hen

the

tena

nt d

oes

not

disa

dvan

tage

of d

eem

ing

a un

it af

ford

able

is th

at it

pla

ces

a bu

rden

on

the

less

ee to

If th

e av

erag

e m

onth

ly r

ent f

or th

e un

it is

resp

ond

to th

e su

rvey

and

the

inco

me

prov

ide

addi

tiona

l affo

rdab

le u

nits

that

may

not

acc

urat

ely

refle

ct th

e nu

mbe

r of

low

and

less

than

or

equa

l to

the

aver

age

mon

thly

info

rmat

ion

is n

ot a

vaila

ble,

dee

m th

em

oder

ate

inco

me

hous

ehol

ds o

ccup

ying

uni

ts.

affo

rdab

le r

ent f

or a

ver

y-lo

w in

com

eun

it oc

cupi

ed b

y lo

w o

r m

oder

ate

hous

ehol

d, th

e un

it w

il be

con

side

red

toin

com

e pe

rson

s or

fam

iles.

be o

ccup

ied

by a

ver

y-lo

w in

com

e pe

rson

or

fam

ily.

If th

e av

erag

e m

onth

ly r

ent f

or th

e un

it is

less

than

or

equa

l to

the

aver

age

mon

thly

affo

rdab

le r

ent f

or a

low

inco

me

hous

ehol

d, th

e un

it w

il be

con

side

red

tobe

occ

upie

d by

a lo

w in

com

e pe

rson

or

fam

ily.

If th

e av

erag

e m

onth

ly r

ent f

or th

e un

it is

less

than

or

equa

l to

the

aver

age

mon

thly

affo

rdab

le r

ent f

or a

mod

erat

e in

com

eho

useh

old,

the

unit

wil

be c

onsi

dere

d to

be occupied by a

mod

erat

e in

com

epe

rson

or

fam

ily.

If th

e av

erag

e m

onth

ly r

ent f

or th

e un

it is

grea

ter

than

the

aver

age

mon

thly

affo

rdab

le r

ent f

or a

mod

erat

e in

com

eho

useh

old,

the

unit

will

be

deem

ed a

mar

ket-

rate

uni

t.

Dra

ft P

olic

v P

aae

5

Off

-site

(RE

PLA

CE

ME

NT

UN

ITS

)(R

EP

LAC

EM

EN

T U

NIT

S)

D 1

. Whe

n pe

rmitt

ed b

y th

e M

ello

Act

,T

he a

dvan

tage

of a

llow

ing

the

prov

isio

n of

off-

site

affo

rdab

le u

nits

with

in o

ther

repl

acem

ent

juris

dict

ions

, whe

n in

feas

ible

to d

o so

with

in th

e un

inco

rpor

ated

are

a, is

that

it c

reat

es...

.Rep

lace

men

t dw

ellin

g un

its s

hall

be lo

cate

d w

ithin

If on

-site

or

Coa

stal

Zon

e re

plac

emen

t is

allo

w fo

r th

e pr

ovis

ion

of o

ff-si

tead

ditio

nal o

ppor

tuni

ties

to p

rovi

de a

fford

able

hou

sing

. Vac

ant i

and

and

site

s of

suf

ficie

nt

and

the

sam

e ci

ty o

r co

unty

as

the

dwel

ling

units

pro

pose

dde

term

ined

to b

e in

feas

ible

, the

uni

ts s

hall

repl

acem

ent o

r in

clus

iona

ry u

nits

size

with

zon

ing

and

gene

ral p

lan

land

use

pol

icy

desi

gnat

ions

that

are

sui

tabl

e fo

r th

e

incl

usio

nary

to b

e co

nver

ted

or d

emol

ishe

d....

if lo

catio

n on

the

site

be p

rovi

ded

at a

n of

f-si

te lo

catio

n in

the

with

in th

e C

oast

al Z

one

or w

ithin

deve

lopm

ent o

f af

ford

able

hou

sing

-whi

ch is

gen

eral

ly m

ediu

m to

hig

h de

nsity

-with

in th

e

hous

ing

units

or e

lsew

here

with

in th

e co

asta

l zon

e is

not

feas

ible

,fo

llow

ing

prio

rity

orde

r:th

ree

mile

s of

the

Coa

stal

Zon

e in

unin

corp

orat

ed c

omm

uniti

es o

f the

coa

stal

zon

e (M

arin

a de

l Rey

, Cat

alin

a Is

land

, San

tath

ey s

hall

be lo

cate

d w

ithin

thre

e m

iles

of th

e co

asta

lei

ther

the

unin

corp

orat

ed o

rM

onic

a M

ount

ains

) ar

e sc

arce

. How

ever

, one

dis

adva

ntag

e is

that

it m

ay b

e di

fficu

lt to

zone

....

With

in th

ree

mile

s of

the

Coa

stal

Zon

e in

inco

rpor

ated

are

as o

f Los

Ang

eles

mon

itor

and

enfo

rce

affo

rdab

le u

nits

loca

ted

with

in o

ther

juris

dict

ions

. In

case

s w

here

the

the

unin

corp

orat

ed te

rrito

ry o

f Los

Cou

nty,

with

pri

ority

giv

en to

the

off-

site

uni

ts a

re p

rovi

ded

with

in th

e C

oast

al Z

one,

the

proj

ect w

ould

be

subj

ect t

o an

othe

r

Gov

ernm

ent C

ode

6559

0 (b

)A

ngel

es C

ount

y: o

run

inco

rpor

ated

are

as.

juris

dict

ion'

s M

ello

Act

req

uire

men

ts, w

hich

rai

ses

the

conc

ern

over

dou

ble-

coun

ting

whe

n

D 2

. Whe

n pe

rmitt

ed b

y th

e M

ello

Act

,m

eetin

g se

para

te r

equi

rem

ents

. Fur

ther

mor

e, a

noth

er d

isad

vant

age

is th

at th

e pr

ovis

ion

¡IN

CL

USI

ON

AR

Y U

NIT

SlW

ithin

thre

e m

iles

of th

e C

oast

al Z

one

inof

off-

site

uni

ts w

ithin

ano

ther

juris

dict

ion

wou

ld n

ot c

ount

the

units

tow

ard

mee

ting

the

I

the

inco

rpor

ated

terr

itory

of L

os A

ngel

esre

quire

the

prov

isio

n of

off-

site

goal

s of

the

Cou

nty'

s H

ousi

ng E

lem

ent.

....W

here

it is

not

feas

ible

to p

rovi

de th

ese

hous

ing

Cou

nty.

repl

acem

ent o

r in

clus

iona

ry u

nits

units

in a

pro

pose

d ne

w h

ousi

ng d

evel

opm

ent,

the

with

in th

e C

oast

al Z

one

or w

ithin

loca

l gov

ernm

ent s

hall

requ

ire th

e de

velo

per

to p

rovi

deO

ff-si

te u

nits

can

be

new

con

stru

ctio

n or

thre

e m

iles

of th

e C

oast

al Z

one

insu

ch h

ousi

no, i

f fea

sibl

e to

do

so, a

t ano

ther

loca

tion

the

subs

tant

ial r

ehab

ilita

tion

of e

xist

inq

the

unin

coro

orat

ed a

reas

onl

v.5

ME

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPO

licy

Opt

ions

1C

omm

ents

with

in th

e sa

me

city

or

coun

ty, e

ither

with

in th

e co

asta

lun

its. T

he o

blig

atio

n to

con

stru

ct o

rzo

ne o

r w

ithin

thre

e m

iles

ther

eof.

reha

bilta

te a

fford

able

rep

lace

men

tho

usin

g un

its o

ff-si

te w

il be

the

sole

Gov

ernm

ent C

ode

6559

0 (d

)re

spon

sibi

lty o

f th

e ap

plic

ant.

Dra

ft P

olic

y P

ages

7, 8

(IN

CL

USI

ON

AR

Y U

NIT

S)

If on

-site

dev

elop

men

t of t

he in

clus

iona

ryho

usin

g un

its is

det

erm

ined

to b

ein

feas

ible

bas

ed u

pon

the

proj

ect

feas

ibilt

y an

alys

is, t

he u

nits

mus

t be

prov

ided

at a

n of

f-si

te lo

catio

n in

the

follo

win

g pr

iori

ty o

rder

:

In th

e C

oast

al Z

one

with

in th

eun

inco

rpor

ated

terr

itory

of L

os A

ngel

esC

ount

y:

With

in th

ree

mile

s of

the

Coa

stal

Zon

e in

the

unin

corp

orat

ed te

rrito

ry o

f Los

Angeles County;

In th

e C

oast

al Z

one

with

in th

ein

corp

orat

ed te

rrito

ry o

f Los

Ang

eles

Cou

nty;

or

With

in th

ree

mile

s of

the

Coa

stal

Zon

e in

Off

-site

the

inco

rpor

ated

terr

itory

of L

As

Cou

nty.

repl

acem

ent

The

off-

site

incl

usio

nary

uni

ts c

an b

e ne

wan

dco

nstr

uctio

n or

sub

stan

tial r

ehab

ilita

tion,

incl

usio

nary

The

obl

igat

ion

to c

onst

ruct

or

reha

biltt

ate

hous

ing

units

affo

rdab

le h

ousi

ng in

clus

iona

ry u

nits

off-

(con

tinue

d)si

te w

il be

the

sole

res

pons

ibilt

y of

the

appl

ican

t.

Dra

ft P

olic

y P

ages

9, 1

0

Ter

m o

fN

ot s

peci

fied,

(RE

PLA

CE

ME

NT

UN

ITS

jo 1. At least 30 years, to be consistent

The

adv

anta

ge o

f hav

ing

a lo

ng d

urat

ion

of a

fford

abilt

y is

to m

axm

ize

the

effe

ctiv

enes

s of

affo

rdab

ilty

setti

ng a

side

uni

ts fo

r lo

w o

r m

oder

ate

inco

me

hous

ehol

ds. H

owev

er, t

he lo

nger

the

The

app

lican

t sha

ll re

cord

a c

oven

ant

with

the

dura

tion

of a

fford

abili

tydu

ratio

n of

affo

rdab

ilty

for

repl

acem

ent a

nd in

clus

iona

ry u

nits

, will

incr

ease

the

likel

ihoo

dou

aran

teei

no th

at th

e re

leva

nt a

fford

able

reau

ired

for

dens

ilv b

onus

es a

ndof

fina

ncia

l inf

easi

biltY

and

incr

ease

the

loss

of C

ount

vrev

enue

from

the

oro'

ect.

6

ME

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPo

licy

Opt

ions

1C

omm

ents

inco

me

and

rent

req

uire

men

ts fo

r ea

chot

her

conv

entio

nal f

inan

cing

.re

plac

emen

t uni

t wil

be o

bser

ved

for

ato

2. A

t lea

st 5

5 ye

ars,

to b

e co

nsis

tent

leas

t 30

year

s fr

om th

e is

suan

ce o

f the

Cer

tific

ate

of O

ccup

ancy

.w

ith a

fford

abilt

y te

rms

for

maj

oraf

ford

able

hou

sing

fund

ing

sour

ces,

Dra

ft P

olic

y P

age

6in

clud

ing

Low

Inco

me

Hou

sing

Tax

Cre

dits

and

HO

ME

fund

s.

(RE

PLA

CE

ME

NT

AN

D IN

CLU

SIO

NA

RY

o 3. For the duration of each County lease.

UN

ITSj

The

app

lican

t sha

ll re

cord

a c

oven

ant

o 4. Less than 30 years.

guar

ante

eing

that

the

rele

vant

affo

rdab

leo 5. In perpetuity.

inco

me

and

rent

req

uire

men

ts f

or e

ach

repl

acem

ent a

nd in

cius

iona

ry u

nit w

ill b

eob

serv

ed fo

r at

leas

t 30

year

s fr

om th

eis

suan

ce o

f the

Cer

tific

ate

of O

ccup

ancy

.

Dra

ft P

o(;c

v P

aae

10

Hou

sing

tenu

reN

ot s

peci

fied

.O

wne

rshi

p U

nits

o 1. Allow replacement and

The

adv

anta

ge o

f allo

win

g fle

xibi

lity

in h

ousi

ng te

nure

is th

at it

may

impr

ove

proj

ect

feas

ibilt

y an

d m

axim

ize

the

num

ber

of a

fford

abie

uni

ts p

rovi

ded.

The

dis

adva

ntag

e is

that

If an

app

lican

t is

prop

osin

g to

dev

elop

ain

clus

iona

ry h

ousi

ng u

nits

the

this

flex

ibilt

y m

ay a

llow

an

"acc

ess"

or

fair

hous

ing

prob

iem

to b

e cr

eate

d w

hen

a bl

end

ofpr

ojec

t tha

t inc

lude

s re

ntal

and

ow

ners

hip

flex

ibilt

y to

be

offe

red

as f

or r

ent o

rte

nure

type

s ar

e al

low

ed w

ithin

the

over

all d

evel

opm

ent.

As

Mar

ina

del R

ey is

alm

ost

units

, the

rep

lace

men

t and

incl

usio

nary

for

sale

.ex

clus

ivel

y a

rent

al m

arke

t, ho

wev

er, t

he a

pplic

atio

n of

this

pro

visi

on w

ill b

e th

e ex

cept

ion,

units

may

all

be p

rovi

ded

in th

e re

ntal

o 2. Require the housing tenure for

not t

he r

ule.

com

pone

nt;

repl

acem

ent h

ousi

ng u

nits

to b

eIf

an a

pplic

ant i

s pr

opos

ing

to d

evel

op a

com

para

ble

to th

e ho

usin

g te

nure

of

100%

ow

ners

hip

unit

proj

ect,

the

appl

ican

tth

e un

it fo

r w

hich

the

repl

acem

ent u

nit

may

pro

vide

ren

tal u

nits

on-

site

to fu

lfil

dete

rmin

atio

n is

mad

e.th

e re

plac

emen

t and

incl

usio

nary

o 3. Require onsite replacement and

Hou

sing

tenu

reob

ligat

ions

.in

clus

iona

ry h

ousi

ng u

nits

of

(Con

tinue

d)D

raft

Pol

icy

Page

11

com

para

ble

hous

ing

tenu

re to

mar

ket-

rate

uni

ts.

Loc

al(I

NC

LU

SIO

NA

RY

UN

ITS)

(RE

PLA

CE

ME

NT

UN

ITS

)o 1. Provide incentives and

The advantage of providing additional loca

l inc

entiv

es fo

r th

e pr

ovis

ion

of r

epla

cem

ent

ince

ntiv

es!

units

as

wel

l as

incl

usio

nary

uni

ts, b

ased

on

avai

labi

lity,

is th

at it

can

hel

p co

ntrib

ute

to

.... I

n or

der

to a

ssis

t in

prov

idin

g ne

w h

ousi

ng u

nits

,T

he p

roje

ct fe

asib

ility

ana

lysi

s m

ust

conc

essi

onsf

or in

clus

iona

rym

akin

g th

e af

ford

able

uni

ts fe

asib

le. H

owev

er, t

he d

isad

vant

ages

are

that

it in

volv

es a

conc

essi

ons

each

loca

l gov

ernm

ent s

hall

offe

r de

nsity

bon

uses

or

incl

ude:

hous

ing

units

, onl

y, o

n a

case

-by-

sign

ifica

nt fi

nanc

ial c

omm

itmen

t fro

m th

e C

ount

y an

d th

at th

ere

is a

n op

port

unity

cos

t to

othe

r in

cent

ives

, inc

ludi

ng, b

ut n

ot li

mite

d to

,ca

se b

asis

.th

e fu

nds

that

cou

ld b

e us

ed fo

r ot

her

publ

ic p

urpo

ses,

incl

udin

g th

e pr

ovis

ion

of a

fford

able

mod

ifica

tion

of z

onin

g an

d su

bdiv

isio

n re

quire

men

ts,

An

eval

uatio

n of

impa

cts

crea

ted

byo 2. Provide incentives and concessions

housing elsewhere.

acce

lera

ted

proc

essi

ng o

f req

uire

d ap

plic

atio

ns, a

ndin

cent

ives

ava

ilabl

e to

the

appl

ican

t suc

hth

e w

aive

r of

app

ropr

iate

fees

.as

den

sity

bon

uses

; dev

elop

men

tfo

r in

clus

iona

ry a

nd r

epla

cem

ent

The

adv

anta

ge o

f spe

cify

ing

the

ince

ntiv

es a

nd c

once

ssio

ns th

at th

e C

ount

y is

will

ing

tost

anda

rds

relie

f; an

d av

aila

ble

stat

e an

dho

usin

g un

its, o

n a

case

-by-

case

give

is th

at it

pro

vide

s ce

rtin

ty to

the

less

ees.

The

dis

adva

ntag

e, h

owev

er, i

s th

at e

ach

Gov

ernm

ent C

ode

6559

0 (d

)lo

cal a

ssis

tanc

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ogra

ms.

(N

ote:

Cou

nty

basi

s.de

velo

pmen

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uniq

ue a

nd s

ubje

ct to

cha

ngin

g m

arke

t con

ditio

ns w

hich

req

uire

flex

ibilt

yre

nt c

once

ssio

ns w

il no

t be

mad

ein

neg

otia

tions

to e

nsur

e th

at a

fford

able

hou

sing

req

uire

men

ts a

re b

alan

ced

with

Cou

nty

avai

labl

e to

the

annl

ican

t to

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plv

with

reve

nue

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7

ME

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPo

licy

Opt

ions

1C

omm

ents

the

appl

ican

t's r

epla

cem

ent h

ousi

ngo

3. P

rovi

de a

list

of s

peci

fic in

cent

ives

oblig

atio

n pu

rsua

nt to

the

Mel

lo A

ct).

...an

d co

nces

sion

s fo

r in

clus

iona

ry u

nits

Dra

ft P

olic

y P

age

7on

ly.

¡IN

CL

USI

ON

AR

Y U

NIT

S)o

4. P

rovi

de a

list

of s

peci

fic in

cent

ives

and

conc

essi

ons

for

repl

acem

ent a

ndT

he p

roje

ct f

easi

bilty

ana

lysi

s m

ust

incl

usio

nary

hou

sing

uni

ts.

incl

ude:

An

eval

uatio

n of

impa

ct c

reat

ed b

yin

cent

ives

ava

ilabl

e to

the

appl

ican

t suc

has

den

sity

bon

uses

; dev

elop

men

tst

anda

rds

relie

f; an

d av

aila

ble

stat

e an

dlo

cal a

ssis

tanc

e pr

ogra

ms.

(N

ote:

Cou

nty

rent

adj

ustm

ents

to c

ompl

y w

ith th

ein

clus

iona

ry h

ousi

ng r

equi

rem

ent a

resu

bjec

t to

nego

tiatio

n on

a c

ase-

by-c

ase

basi

s.).

...

Dra

ft P

olic

v P

ane

9

In-li

eu fe

e(R

EP

LAC

EM

EN

T U

NIT

S)

(RE

PLA

CE

ME

NT

UN

ITS

)o 1. No in-lieu fee for replacement or

The

adv

anta

ge o

f hav

ing

an in

-lieu

fee

prog

ram

is th

at it

wou

ld a

llow

the

Cou

nty

to c

aptu

re...

The

req

uire

men

ts o

f thi

s su

bdiv

isio

n fo

r re

plac

emen

tfunds for affordable

hous

ing

whe

n pr

ovid

ing

the

units

is d

eter

min

ed to

be

infe

asib

le.

dwel

ling

units

sha

ll no

t app

ly to

the

follo

win

g ty

pes

ofN

o in

-lieu

fee

prog

ram

will

be

avai

labi

e to

incl

usio

nary

hou

sing

uni

ts.

Req

uirin

g in

-lieu

fees

is a

met

hod

for

obta

inin

g fu

ndin

g fo

r th

e C

ount

y to

pro

vide

affo

rdab

le

conv

ersi

on o

r de

mol

ition

unl

ess

the

loca

l gov

ernm

ent

com

ply

with

the

repl

acem

ent h

ousi

ngo 2. Complete a study to determine and

units

whe

n th

e ie

ssee

wou

ld o

ther

wis

e be

rel

ieve

d of

that

res

pons

ibiii

ty b

ecau

se it

is

dete

rmin

es th

at r

epla

cem

ent o

f all

or a

ny p

ortio

n of

the

oblig

atio

ns.

infe

asib

le. H

owev

er, t

he d

isad

vant

age

is th

at th

e C

ount

y w

ould

hav

e to

con

duct

aco

nver

ted

or d

emol

ishe

d dw

elin

g un

its is

feas

ible

, in

set a

n in

-lieu

fee

for

inci

usio

nary

tech

nica

l stu

dy in

ord

er to

det

erm

ine

the

appr

opria

te in

-lieu

fee,

whi

ch c

ould

be

cost

ly a

nd

whi

ch e

vent

rep

lace

men

t dw

elin

g un

its s

hall

beD

raft

Pol

icy

Pag

e 8

housing units.

time-

cons

umin

g.re

quir

ed:

o 3. Complete a study to determine and

...A

lthou

gh th

e M

ello

Act

spe

cifie

s th

e pa

ram

eter

s of

in-li

eu fe

e pr

ogra

ms

for

repl

acem

ents

The

con

vers

ion

or d

emoi

ition

of a

res

iden

tial s

truc

ture

¡IN

CL

USI

ON

AR

Y U

NIT

S)se

t an

in-li

eu fe

e fo

r re

plac

emen

tun

its, a

n in

-lieu

fee

prog

ram

for

incl

usio

nary

uni

ts w

ouid

be

sim

ilar

in th

at it

cou

ld o

nly

loca

ted

with

in th

e ju

risdi

ctio

n of

a lo

cal g

over

nmen

thousing units.

appl

y w

hen

prov

idin

g af

ford

able

uni

ts w

ithin

thre

e m

iles

of th

e C

oast

al Z

one

is in

feas

ible

.

whi

ch h

as e

stab

lishe

d a

proc

edur

e un

der

whi

ch a

nN

o in

-lieu

fee

prog

ram

wil

be a

vaila

ble

toT

he a

dvan

tage

of h

avin

g an

in-li

eu fe

e pr

ogra

m fo

r bo

th r

epla

cem

ent u

nits

and

applicant for conversion or demolition will pay

an in-

com

ply

with

the

incl

usio

nary

hou

sing

incl

usio

nary

uni

ts is

that

it p

rovi

des

mor

e fu

nds

for

affo

rdab

le h

ousi

ng. T

he d

isad

vant

age,

lieu

fee

into

a p

rogr

am, t

he v

ario

us p

rovi

sion

s of

whi

ch,

oblig

atio

ns.

how

ever

, is

that

an

in-li

eu fe

e pr

ogra

m s

hifts

the

resp

onsi

bilit

y fo

r co

nstr

uctin

g th

e un

its to

in a

ggre

gate

, will

res

ult i

n th

e re

piac

emen

t of t

heth

e C

ount

y, a

nd g

iven

the

smal

l num

ber

of p

roje

cts

com

ing

forw

ard

for

entit

lem

ents

in th

enu

mbe

r of

dw

ellin

g un

its w

hich

wou

ld o

ther

wis

e ha

veD

raft

Pol

icy

Pag

e 10

rem

aind

er o

f sec

ond

gene

ratio

n M

arin

a re

deve

lopm

ent,

suffi

cien

t in-

lieu

fees

may

not

be

been

req

uire

d....

gene

rate

d fo

r a

viab

le a

fford

able

hou

sing

pro

ject

.

Gov

ernm

ent C

ode

6559

0 (b

)(4)

8

ME

LLO

AC

T P

OLI

CY

OP

TIO

NS

Attachment 2

Issu

eM

ello

Act

Rec

omm

ende

d P

olic

yPo

licy

Opt

ions

1C

omm

ents

Rig

ht o

f fi

rst

Not

spe

cifie

d.N

one.

The

adv

anta

ge o

f offe

ring

the

right

of f

irst r

efus

al is

to g

ive

indi

vidu

als

and

fam

iles

of lo

w

refu

sal

o 1.

No

prov

isio

n fo

r rig

ht o

f firs

tor

mod

erat

e in

com

e w

ho a

re d

ispl

aced

by

dem

oliti

on o

r co

nver

sion

the

oppo

rtun

ity to

refu

saL

.re

turn

to a

n af

ford

able

rep

lace

men

t uni

t. T

he d

isad

vant

age

is th

at it

wou

ld b

e di

fficu

lt to

o 2.

Ofe

r rig

ht o

f firs

t ref

usal

to th

e la

stm

onito

r an

d en

forc

e.

inco

me

elig

ible

per

son

or fa

mily

who

last

occ

upie

d a

dem

olis

hed

orco

nver

ted

affo

rdab

le r

esid

entia

l uni

tup

on a

nd a

vaila

bilty

, and

upo

nve

riic

atio

n of

inco

me

elig

ibili

t, on

afir

st c

ome,

firs

t bas

is.

Ren

tal

Not

spe

cifie

d.N

one.

The

dis

adva

ntag

e of

pur

suin

g th

e re

ntal

hou

sing

exe

mpt

ion

is th

at tt

req

uire

s a

tech

nica

l

exem

ptio

no

1. N

o ex

empt

ions

for

rent

al p

roje

cts.

stud

y th

at w

ould

be

expe

nsiv

e an

d tim

e-co

nsum

ing

to p

rodu

ce, a

nd th

e ex

empt

ion,

ifw

arra

nted

, cou

ld r

esul

t in

subs

tant

ially

few

er a

fford

able

uni

ts th

an if

ther

e w

as n

oo 2. Conduct an upfront technical

exem

ptio

n.fe

asib

ility

stu

dy to

det

erm

ine

if re

ntal

deve

lopm

ents

are

infe

asib

le, a

ndth

eref

ore

exem

pt fr

om M

ello

Act

prov

isio

ns.

Rel

ocat

ion

Not

spe

cifie

d.N

one.

o 1. No provision of relocation

The

adv

anta

ge o

f offe

ring

relo

catio

n as

sist

ance

is th

at it

pro

vide

s pe

rson

s or

fam

ilies

of

assi

stan

celo

w or

mod

erat

e in

com

e, w

ho a

re d

ispl

aced

as

a re

sult

of d

emol

iion

or c

onve

rsio

n, w

ithas

sist

ance

(be

caus

e it

is n

otas

sist

ance

to fi

nd a

nd s

ecur

e ho

usin

g el

sew

here

. The

dis

adva

ntag

e, h

owev

er, i

s th

at it

requ

ired

by th

e M

ello

Act

or

othe

rw

ouid

req

uire

a s

igni

fican

t fin

anci

al c

omm

itmen

t fro

m th

e C

ount

y or

its

less

ees

and

wou

ldst

atut

e).

be d

iffic

ult t

o ad

min

iste

r.

o 2. Provide relocation assistance under

term

s to

be

dete

nnin

ed b

y th

e C

ount

yan

d ad

min

iste

red

by th

e C

ount

y C

DC

.

9