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Housing Opportunity Ordinance September 7, 2021 Page 7 Blending the above information collectively, it is reasonable to conservatively estimate that the financial impact of a STW requirement on a residential project opting to pay the in -lieu fee would be approximately 15% or higher of the hard construction costs. Table 2 below shows the estimated total increase to a project's hard construction costs when combining a STW requirement with the HOO in -lieu fee at $5 and $15 per square foot. On July 6, 2021, City Council received a progress report from the Housing Ad Hoc Committee and discussed the Committee's recommended amendments to the Housing Opportunity Ordinance. On July 26, 2021, City Council conducted a work study session to receive input from the community and stakeholders. Following the work study session, City Council provided direction to staff regarding proposed amendments to the Housing Opportunity Ordinance (HOO). Following this direction, staff have summarized and incorporated City Council's policy amendments to the HOO. The summary of proposed amendments to the HOO are provided below followed by an analysis and options for implementing a sliding scale in - lieu fee structure when coupled with the requirement to use a skilled and trained workforce. Summary of City Council Policy Direction Regarding the Housing Opportunity Ordinance Three members of the City Council are generally supportive of maintaining the existing HOO regulations and policies. Among their points of discussion, the three members share consensus that they would like to see staff develop a reasonable sliding scale incentivizing the employment of a skilled and trained workforce (STW) by a developer opting for the in -lieu fee payment option. Balancing this policy direction, the remaining majority of the City Council was supportive of the Housing Ad Hoc Committee recommendations to amend the HOO. Staff identified consensus by the majority members to further evaluate the following policies: • Require a mandatory skilled and trained workforce to create a living wage for projects that trigger the HOO or that receive funding from the inclusionary housing fund. • Develop a sliding scale for the in -lieu fee for projects that incorporate a skilled and trained workforce. • Incorporate local hire requirements. • Prioritize production of housing for large families. • Prioritize down payment assistance. • Add rental protections for tenants. • Address displacement and protection. Table 1 below is a summary and description of the draft amendments to the HOO which incorporates the recommendations of the Housing Ad Hoc Committee as well as the policy direction received from the City Council on July 6t" and July 26t". The draft HOO City Council 35 — 7 9/7/2021