Christine Cannizzo, Project Planner, presented the staff report. She provided the evolution of the study. Staff reported public meetings held with Planning Commission and Housing and Human Services Commission. There were also information meetings held with home developers and the community and the comments were incorporated in the staff report. Staff presented staff recommended revisions to the municipal code.

Comm. Satterlee asked staff how does the BMR program complement affordable housing programs in Sunnyvale. Ms. Ryan responded that there are a number of activities and programs that address housing and affordable housing. The BMR is most well-known and the city also receives federal, HOME and CDBG funds which are used for construction and housing rehabilitation. In addition, industrial development of certain size has a mitigation fee creating a housing fund to provide housing assistance including funding of development, rehabilitation and down payment assistance and other housing subsidies. Furthermore, there are other zoning related activities to provide affordable housing such as accessory living units, and also R-1.5 and R-1.7 zoning districts with a floor area ratio requirement restricting houses size thus keeping the price from being too high.

Comm. Swegles asked staff about increasing the required percentage of BMR requirements from 10% to 15% and lowering the exemption from nine to six units and he expressed his concerns with Attachment 2 using cities far away from Sunnyvale without salary consideration or median income. Ms. Ryan responded that the cities surveyed are those that have mandatory inclusionary housing requirements and the survey is intended to provide a range of programs and provisions of certain comparable communities including those outside the state. She added that not all cities in the vicinity have BMR requirements.

Comm. Swegles further asked if there are other communities that have similar requirements as being proposed. Ms. Ryan responded that the City of Cupertino requires 15%, Mountain View, which modeled Sunnyvale's BMR program, adopted 10%, City of Irvine, with similar housing inventory, has 15% and the City of Palo Alto and Menlo Park are at 10%.

Comm. Swegles asked staff what is the incentive in building a complex if the deed restriction is extended from 20 years to 55 and rental properties from 20 years to "in perpetuity." Annabel Yurutucu, Housing Officer, responded that it has no effect to the rental project since the financial analyses are typically based on 20 years, so it works "in perpetuity." Ms. Ryan added that the BMR requirements of 10% did not inordinately deter developers from developing in Sunnyvale.

Comm. Swegles expressed his concerns on the imposition of rent control as in 1983 and 1991 a rental control proposal was defeated. Annabel Yurutucu responded that historically, when increases are tied with median income, the BMR program could reaches the level or exceeds current market rents.

Comm. Swegles asked why Sunnyvale income structure was not used in the income comparison and noted that the income variance is high on some occupations. Ms. Yurutucu responded that staff used the income structure provided annually by HUD for San Jose metropolitan of which Sunnyvale is a part. The other data is from the 1990 census data as the 2000 census data for Sunnyvale is not quite complete.

Comm. Swegles expressed his concerns that two-income household may become ineligible to qualify for a BMR program even with one household member meeting the low-income eligibility criteria as proposed. Ms. Ryan commented that the BMR program requires total household income eligibility criteria and the criteria is not based on occupation or one member meeting the criteria.

Comm. Swegles expressed his concerns that mobile home parks are not considered in the affordable housing stock with the staff report noting that there is a dire need of affordable housing in Sunnyvale when in fact there is a large inventory of mobile homes. He stated that he conducted a quick survey and found that mobile homes price is far lower than what is being proposed in the price calculation for BMR units. Ms. Ryan responded in the mid 1980s, City Council acknowledged mobile home parks as permanent part of the housing stock and are included in the affordable housing inventory. She further noted that the BMR Program ordinance stated that if a new mobile home park is developed, it is not exempt from the dedication requirement, however, there are other parts of the ordinance about affordability levels making it potentially exempt from the dedication requirements.

Comm. Swegles asked staff if the down-payment assistance could be used to purchase mobile homes making it an attractive affordable housing. Ms. Ryan responded that applicants need to meet eligibility criteria and many types of housing qualification.

Chair Simons attempted to clarify Comm. Swegles’ concerns that existing mobile home parks should be included in the affordable housing stock since there are large numbers of mobile homes available. Ms. Ryan responded that the number of units lost is the same whether the mobile homes are included or not. Despite a rich inventory of mobile homes there are a lot of people waiting for affordable housing.

Comm. Swegles asked how interested parties were identified and how could a party be included in the list. Ms. Ryan responded that the list includes apartment complex managers, housing developers in the past five years, trade organizations, Chamber of Commerce and others who have asked to be included in the list.

Comm. Swegles asked if all the interested parties support the 15% increase. Ms. Ryan responded no, indicating the letters in opposition to the increase.

Vice Chair Babcock asked clarification on Attachment 9 regarding the BMR eligibility requirement, how the criteria was established and why were they chosen based on their employer and not on the basis of vital occupational importance in the city such as emergency medical professions. Ms. Ryan responded that the criteria were chosen by City Council in June, 2001. However, applicants still have to meet income eligibility criteria. Ms. Yurutucu added that Council adopted a Resolution as part of the implementation process for housing program for employees and teachers.

Vice Chair Babcock asked clarification whether a secretary or clerk who works for a school district ranks higher than the public safety officer of the City of Sunnyvale. Ms. Yurutucu responded that the Resolution reflects only a listing of preferential categories and not ranking. Ms. Ryan added that if anyone falls in any of the listed criteria, one still has to meet the household income eligibility requirement.

Vice Chair Babcock commented that she prefers to have the requirements to be by professions that are vital to the community infrastructure and not based on employer alone.

Vice Chair Babcock asked staff how much thought was given to the potential impact of the increased in the BMR requirement and lower number of affected units to the development of housing as it appears to have a back lash effect for affordable housing. Ms. Ryan responded that staff conducted research in terms of projects built in the last several years and whether there would be a change in the number of units with the proposed percent increase of BMR requirements. She further stated that with the increased percentage, the city would not see a greater number of units proposed if the zoning is not sufficient to allow the number of units. She noted that Land Use and Transportation sub-element requires building at least 75% of the land to meet the density requirements.

Comm. Chu asked about Attachment 3 and the rent increase method and whether the rent for a new tenant would be based on the existing rent that was recently vacated or reset the rent to the current market rate. Ms. Yurutucu responded that the rent would follow be established annually after an audit. She gave the annual audit procedures practiced in recalculating BMR rents.

Comm. Chu asked staff that if after several years the rent increase has been capped at 5% what would be the affect on new renter, would the unit be considered as new or use the existing rental rate. Ms. Yurutucu responded that rental adjustment is based on the entire complex and not on an individual basis. She provided the mechanics on rent assessment process, audits of BMR units and tenants/applicants.

Comm. Chu asked staff how the new purchase price is set for BMR units for new buyers. Ms. Yurutucu responded by providing the mechanics of the price calculation and pricing factors including the original price, the CPI, the time the unit was purchased, the calculation of the any capital improvements or costs of sales incurred by the seller then a new BMR sales price is established.

Comm. Chu then confirmed that a person who is on the BMR eligibility list could potentially purchase a unit lower than what a new BMR sale price may actually cost since the property value may be rising faster than the CPI. Ms. Yurutucu responded that likely it could happen, however, not a dramatic difference. There are various cost factors that are considered such as CPI in a fixed point in time, income statistics and age of the property in the price calculation.

Chair Simons asked staff whether staff has addressed a situation where a person who works for a school district meeting the eligibility criteria and later changes school location. Ms. Ryan responded that this scenario has not been considered in depth when the council approved the eligibility criteria. Ms. Yurutucu added that there is additional refinement in the process that will be addressed administratively and will be presented to council.

Chair Simons asked staff about the construction level after the BMR programs were implemented in the cities surveyed. Ms. Ryan responded that surely there is an effect, and there are a lot of factors that need to be evaluated to achieve this data but the overall factor would be the price of the land.

Tom Quaglia, developer, commented that 70-100% is a very drastic change form the 80-130%. He stated that if the study was to move forward, he suggested leaving it the income requirement to 80-130% or maybe 80-120%. This range would help provide flexibility to for-sale builder relative to affordable housing programs.

Crisand Giles, Homebuilders, noted that two letters were provided to the Commission with proposals in the price-calculation and focused her presentation on the impacts of the different prices on housing developments and addressed Goal E of the Housing Element and Objective H of the Consolidated Plan. She provided examples of the income eligibility qualification. She commented on other ways to provide affordable housing, the income eligibility, the price points and in the 15% increase, she stated the amount of money could not be absorbed in the land cost as there is not enough land to sell it at a lower cost.

Comm. Chu commented that he understood the mechanics of the proposed calculation, however, his calculation revealed that the purchasing power and the ability to borrow is much higher than what was presented in the letter.

Comm. Satterlee asked the speaker whether her main concern is the house price only or whether she has other concerns. Ms. Giles responded that the whole process needs to be revisited in much more detail. She stated that it appears that there was no thought put in the housing price calculation method, noting it would not provide affordable housing target to low-income households. If she were to choose, her main concern is the income level eligibility but the 15% increase has a significant affect on the housing development.

Comm. Moylan asked Ms. Giles if she has a specific recommendation as opposed to revisiting the study. Ms. Giles responded that to look at 10% at 100% -110% of median income to be comparable to developments around the area, the land value specific to Sunnyvale.

Steve Tao, property owner, stated that he has a project that is currently in the process and asked the Commission whether 1) there is going to be a transition period of 12 months to receive grandfathering of the existing code 2) asked to explore some other means to accomplish the fee without hard set rules to allow flexibility and to work with parameters. He added that City Council approved the Future Site 7 encouraging housing development which has a potential for 160 units looking with about 16-24 BMR units, the proposed study would have significant financial impact to the project.

Comm. Swegles asked Mr. Tao if he has done projections factoring the BMR requirements. Mr. Tao responded that the development is for-sale housing and added that there are members in the public that could address those questions.

Bob Hines, Tri-County Apartment Association, stated the Commission received a letter from the association with concerns and proposals to the study. He added that the association supports and applauds the city’s effort in providing affordable housing. He expressed concerns about the potential detrimental impact in the construction of multi-family rental housing as proposed. He added that the study is a good start with a survey, however, there needs to determine the actual and economic impacts to the housing developments. Irvine would not be an ideal city to compare with, as the land price is widely different and that city’s economy is not comparable to Sunnyvale. He stated that land price has not adjusted as projected. He recommended revisiting this study and applying some of their proposal on how this plan would be economically feasible.

Comm. Swegles asked Mr. Hines what kind of rents would be incurred by an average renter factoring the BMR units. Mr. Hines responded that the cost would be priced out including the BMR units and the cost would be higher rent to the other units making it economically hard for middle income renters.

Comm. Swegles further asked Mr. Hines that the extension of 20 years to "in perpetuity" is also an influencing factor to the cost. Mr. Hines responded that the impact would be that it would become onerous to build in Sunnyvale therefore, developers would invest in other cities.

Chair Simons asked Mr. Hines asked whether his concerns of increasing BMR units would also apply to for sale properties. Mr. Hines deferred the question to HDA and recommended that there are other ways to increase BMR units to keep it at 10% and offer incentives or enticements to developers such as reducing parking requirements, minimizing open space requirements or reducing fees and look at the cost factors.

Chris Block, Charities Housing Development Corporation, addressed the statements on the cost impacts of BMR units. He stated that the issue is whether the burden avoids an inverse impact to the overall development. He explained that if the rent is increased for non-BMR units it would make it difficult to rent if it was above the market rate and then there would be increased vacancy. Increasing from 10% to 15% would address the ever-increasing affordable housing need. Since the 10% inclusionary housing requirement works successfully, it is wise to increase the requirement to 15% inclusionary housing requirements in order to maximize an effective program. He added if there is a problem, then it could be revisited and adjusted as needed.

Chair Simons asked Mr. Block's opinion that given the current economic downturn, is increasing the inclusionary housing requirement right. Mr. Block responded that during a policy making decision, one must be sensitive to the economic condition. If the market condition is right, then developers develop and if not, developers wait until the economy is right. The 10% to 15% is not a significant change to make a detrimental affect on determining whether the market is right or not.

Comm. Swegles asked Mr. Block his opinion on the extension of 20 years to "in perpetuity" proposal with no recovery on the unit. Mr. Block responded that if financial analysis is prepared longer than 20 years and the penalty is absorbed up front, there would be not much difference between 20 years from "in-perpetuity."

Comm. Lee asked Mr. Block his opinion which is more important changing the BMR benefits from 80% to 130% of median income vs the 10% to 15% of units. Mr. Block responded that he is a multi-family developer and would be unable to respond if the question is more for homeownership market.

Jeannette Stone, Greenbelt Alliance, on behalf of Greenbelt Alliance, she commended the City for strengthening the BMR program. She supported the staff recommendation. She said staff conducted a thorough research providing positive and reasonable refinements. She supported the increased percentage from 10-15%, extending the deed restrictions period for both rental and ownership, and reducing the target income levels. She stated that the problem is not the income level but rather the calculation method used in determining the affordable housing price. She suggested that maybe use a different method in determining the sales price. She provided an overview of Greenbelt Alliance, and that they work with in-fill developers to encourage compact and affordable housing development and have endorsed 85 projects over a ten-year period. She stated the in-fill developers commented that the problem is not with inclusionary housing requirement but rather when there is no predictability in the approval process as it makes it difficult to figure the cost in any reasonable way. It helps if there is an incentive and predictability, then whether it is 10% or 15% is not as important.

Chair Simons asked Ms. Stone to give examples of cities where Greenbelt has endorsed projects and whether some are in Sunnyvale. Ms. Stone responded that they have endorsed the Cherry Orchard and there are about 30-35 sites in the bay area. She added Greenbelt Alliance has good breadth of experience in the Bay Area.

Chair Simons commented that the City of Sunnyvale has a process that provides the predictability factor. Ms. Stone agreed that the City has a process that is easy to work with; developments will happen whether or not the percentage is increased from 10% to 15%.

Comm. Lee asked the speaker if she has suggestions that could be added to what the City is already doing to address the predictability factor developers are looking for since she stated that 10% to 15% increase does not have much impact. Ms. Stone responded that the cost is so much related to the length of time in obtaining approvals and that so many cities have so many requirements leaving no room for negotiations. Sunnyvale, however, has a streamlined process which is a positive factor to developers and the requirements are spelled out making it easy to work with. She suggested considering other incentives, as suggested earlier, such as parking relief.

Doug Shoemaker, Non-profit Housing Association of Northern California, noted that they are just wrapping up inclusionary housing programs statewide. He stated that Sunnyvale is at the leading edge in affordable housing programs and will continue to be one and what is being proposed is the mainstream of the BMR program. There are a lot cities that follow Sunnyvale’s lead. He reported that the survey indicate 44% of cities surveyed have a 15% BMR requirement and others are at 20% or more. The proposal is not a detriment to the developers. He cited cities such as Davis requiring 25-30% for every single development and Carlsbad with a requirement of 15% and market rate housing continues to grow. The proposal would create an ideal affordable housing mainstream program. He also addressed that the 55 years and "in perpetuity" is within the mainstream.

Chair Simons commented that Davis and Carlsbad are not comparable cities to Sunnyvale. Mr. Shoemaker responded that there are other cities in the bay area that are comparable to Sunnyvale and will be provided to staff. He added that the cities with inclusionary housing requirement have started increasing the number of units to 15%.

Chair Simons asked the speakers his opinion on the extension to "in-perpetuity." Mr. Shoemaker responded that it is incredibly important to extend the BMR to "in-perpetuity" as some cities have lost affordable housing stock because they did not have long enough affordability terms.

Comm. Swegles asked Mr. Shoemaker if they have considered mobile home parks as affordable housing. Mr. Shoemaker responded that the survey focused more on what the government is doing in addressing the BMR program. He added that Sunnyvale has a significant stock of housing which includes mobile homes, but the need for BMR units would still continue.

Chair Simons asked Mr. Shoemaker if there were any concerns from other cities that units remaining as BMR would get run down. Mr. Shoemaker responded that developers would not allow their units to run down to maintain all the property to continue being able to rent all units.

Mike Klein, Director of Legislative Committee of the Chamber of Commerce and Sunnyvale resident, commented that housing is a problem and affordable housing is an issue in Sunnyvale. He stated that the Chamber respected staff efforts in addressing this issue. The problem is the land and there is no more land to be developed in Sunnyvale. The proposed increase would impact developers and could potentially drive developers away and lose some BMR housing rather than encouraging them to continue to invest and develop in Sunnyvale. He suggested looking at other inventive ways such as where housing can be built. The cities surveyed have land to be developed and Sunnyvale has none. The six to 12 unit projects would be the type of developments going to happen in Sunnyvale and not 100 units.

Comm. Moylan commented that both the increase in the percent requirement and the decrease in the number units are related and whether he agrees with this proposal. Mr. Klein responded that both issues are concerns both impacting the housing rental and ownership. The developers would have to re-evaluate how things are going to be developed in Sunnyvale and the Chamber would not want the developers to leave and come back after five years or ten years to reconsider.

Chair Simons asked Mr. Klein what is the Chamber’s position on extending the requirement from 20 years to "in perpetuity." Mr. Klein responded that the Chamber has no position but personally he commented that there is going to be an additional cost spread to the total sale price.

Chair Simons further asked Mr. Klein what is the Chamber's position on lowering the income level from 80 - 130% to 100% to 70% - 100%. Mr. Klein responded that the Chamber has no position on this issue.

Robert Martin, Grubb and Ellis, currently involved with three for-sale projects in Sunnyvale under the existing ordinance. He stated that there is not enough land in Sunnyvale. The land becomes more valuable as residential compared to industrial use and the proposed change would create a lack of housing development due to lack of incentive to sell the property for residential use. The land value will fall commensurate with the new ordinance creating a slim profit margin becoming unworthy of the risk. This ordinance would have a dramatic negative affect on future development.

Comm. Swegles asked Mr. Martin if he has any idea on the cost of land in Irvine and Davis. Mr. Martin responded that in this County the land cost is ten-fold higher, approximately $54 to $56 a square foot, and in Davis it would be approximately $10/square foot and they have more land to develop. In Sunnyvale, you could only build 18 units an acre for medium density.

Chair Simons asked Mr. Martin his comments on the proposed reduction of the income level. Mr. Martin responded that under the proposed ordinance factoring all costs, the units would sell at a loss.

Dan Carroll, developer, stated that it is currently a slow economy making it difficult to build detached or attached housing in addition to the increased construction litigation and public opposition. Adding this increased BMR requirement, would be even more onerous and difficult. He stated that he supports the BMR efforts but this proposal does not address these issues.

Comm. Satterlee asked Mr. Carroll if he was aware that Gov. Davis just signed the construction litigation relief bill, which could have positive effects on developers. Mr. Carroll responded that it would have some positive impacts but there would continue to be some impacts that need to included in the project budget and financial feasibility.

Comm. Swegles asked Mr. Carroll how much would the extension from 20 to "in-perpetuity" affect the non-BMR units. Mr. Carroll responded that the increase would be an added factor making it a difficult for-sale housing development but would not affect rental housing.

Chair Simons asked Mr. Martin about any inhibition developing in Sunnyvale. Mr. Carroll responded that he has not done business in Sunnyvale in a long time, however, the city has a good reputation for doing business with. He added that dependability in determining the BMR requirement is included in the financial analysis.

Paul Werner, resident, asked the Commission whether the eligibility qualification to purchase BMR units requires US citizenship. He also asked the Commission to consider extremely low-income levels. He also urged the Commission not to yield on the parking requirements.

Chair Simons asked staff to clarify the eligibility qualifications and point system. Ms. Yurutucu responded that US citizenship is not a requirement in any type of affordable housing program. She acknowledged the desire to provide housing to very low income, however, it would be extremely difficult for very low-income to qualify for a mortgage or any conventional loan.

Comm. Chu withdrew his second. Comm. Lee seconded.

Vice Chair Babcock commented that she understands both sides of the issue but given the economic condition it is not the time to increase the BMR requirements driving developers away from Sunnyvale and that there are other ways to handle the issue. She stated that Sunnyvale is ahead in addressing affording housing with additional programs such as housing mitigation fund and the affordable housing fund to provide housing to low income levels.

Comm. Satterlee asked the maker to clarify the motion and whether the motion included Alternatives 2h and 2i as recommended by staff. Vice Chair Babcock responded yes.

Comm. Satterlee did not support the motion. She stated that based on public testimonies to percent of units should increase but the study requires modification to the purchase price of for-sale units. She hoped that the motion fails.

Comm. Swegles did not support the motion due to the inclusion of some of the alternatives recommended by staff.

Comm. Moylan did not support the motion and stated that he likes the motion with the exception of the 10% and below 10 unit exemption. Based on public testimony he wsa sufficiently convinced that most important variable to the development industry is the sales price. He felt the 15% and the seven units are appropriate. He added that should the motion fail, he would prefer to keep staff recommendation as written.

Comm. Chu liked what Vice Chair Babcock said and also agreed with Comm. Moylan that the BMR percentage requirement should be increased but he wanted to keep the number of exempt units at below ten. He did not support the motion due to the inclusion of Alternative 2a. He offered a friendly amendment to adjust the sale price. He believes that the property should not be sold to new owners at a below market price and the rent increase makes sense but he believed that when the a tenant vacates a unit, the rental rate should be re-established based on the existing affordable index and if there is a decrease in rental rate a maximum reduction should be given to the tenant.

Comm. Chu agreed with Vice Chair Babcock on her comments to the list of priorities to professions that are critical to city infrastructure such as teaching, child care providers and public safety. He further added a friendly amendment to increase the percentage to 15%. The maker accepted the friendly amendments to Alternatives 2h and 2i but not the second. (Comm. Lee)

Comm. Satterlee asked staff how did the for-sale calculation come about using the 1.78 and whether other jurisdictions use the same factor. Staff responded that the factor is used historically by several jurisdictions as a multiplier in the price calculation method but others have their own multiplier.

Comm. Satterlee commented that this factor does not relate to the purchasing power of low-income level of one or two income household. Ms. Yurutucu responded that the number is an average number of people who are employed. She added that there are factors included in the for-sale price and stated scenarios in the price calculation.

Comm. Satterlee asked whether the price calculation incorporates the buying power of the person and the range is determined based on the multiplier which also captures the other factors. Staff said yes.

Comm. Satterlee asked the maker if the motion clearly states that the for-sale calculation remains as staff recommended and also the friendly amendment from Comm. Chu. Comm. Chu responded that the resale price should be calculated at the then market index rate at the time of sale so the resale price would not be at the below market rate. He further added that the proposed formula would create a differential and that proceeds should be added to the housing affordable fund.

Comm. Satterlee asked staff if this is legally acceptable. Staff responded that this an equity participation agreement with a different structure, which is not included with the existing code. Currently, there is resale restriction to subsequent buyer but the City is not receiving a portion of the appreciation. BMR Ordinance does not require the city to participate in the purchase to the buyer and it would be difficult to participate in the equity sale.

Comm. Satterlee asked staff if there are other activities in the city that create incentives for ITR zones to move from industrial to residential. Ms. Ryan responded that a study on an ITR area was recently completed, which created a general plan category from R-3 to R-4, which, allows consideration to rezone at a higher density but also retained the ITR designation. She noted that there are no other incentive programs for redeveloping other than the market. She added that other incentives for density bonus require evaluation.

Comm. Satterlee suggested considering another calculation method for for-sale units and the resale value and stated that she is not comfortable with the motion as it would not achieve the right balance. She commented that it would be helpful to clarify what is the goal such as the target is housing cost at 30% of income. She added that with this modification, she could accept the motion with the 12.5% BMR requirement.

Staff clarified that the intent of using the 1.78 multiplier for the for-sale price is not to dramatically change what is historically practiced in the BMR program. She added that the 70% to 100% of median income is due to the table of occupations attached in the staff report. Comm. Satterlee stated that she concurred with the staff recommendation of 70% to 100% but had concerns with the 1.78 multiplier. Ms. Yurutucu stated that a range is being determined creating a large number for qualifying applicants for mortgage eligibility by using the multiplier. Comm. Satterlee responded that it is one of the reasons that she proposed to look at the calculation in depth for an acceptable formula in achieving the goal.

Comm. Lee commented that Comm. Satterlee’s proposal seems reasonable. The goal is to balance the needs for affordable housing and the developers' needs. With the economic downturn, it is only prudent to consider the various constraints, increasing cost of development or the ability to make money on rental properties. He was reluctant to support the 15% but considered the compromise. He stated that he is a proponent of BMR and agreed with Comm. Satterlee with the sale price and rental of BMR units to spend more time in identifying the right formula in achieving the goals. He concluded that the study is moving in the right direction.

Comm. Swegles commented that he has difficulty supporting rent control. He noted that based on public testimony that the basic cost in housing development is high and with the additional BMR requirement, the developers would lose money even before the development starts. The other issue is the extension of deed restrictions as another factor making investments unprofitable. He noted that there are too many areas of disagreement and would prefer to continue the study and continue the dialogue with interested parties.

Comm. Moylan reminded the Commission that based on the public testimony by the Chamber of Commerce pointing out that most developments that is going to happen in the city would be fewer than 10 units, then the discussions to make the 10 units as the point for BMR requirements, the arguments and discussions is for naught. He would rather have an ordinance that would achieve BMR units. He supported the 15% increase to produce the BMR units but has concerns with the Alternatives 2a and 2b. He did not support the motion unless 2b is modified.

Comm. Chu thanked the public for staying and agreed with Comm. Moylan's concerns on the increased percentage to 15% however, he could accept the 12.5% compromise.

Chair Simons supported the motion and preferred to keep it at 10 units in this economic time and potentially review the program in the future when better data is available.

Ms. Ryan stated that the study will be considered by the Housing and Human Services Commission on Wednesday, September 25 and by City Council on Tuesday, October 8, 2002.

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