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SR-6-F (31) - . ... tntrfrarj-4t (p 7 (0 U5 6F .. .. RM JM BM EA WPFiles\StaID-pt\StaITq:il\HR&A Rpt JUl 0 8 1991 Councll Meeting July 8, 1997 Santa Monica, California To Mayor and CIty Council From City Staff Subject Recommendation to Authorize the City Manager to Negotiate and Execute a Sole Source Contract With Hamilton, RabinOVitz, and Alschuler (HR&A) in an Amount Not to Exceed $98,740 for Preparation of Analyses Related to an Amended Inc1usionary Housing Ordmance INTRODUCTION TIns report recommends that the CIty Council authorize the City Manager to negotiate and execute a contract with Hamilton, RabInOVitz, and Alschuler (HR&A) on a sole source basis in an amount not to exceed $98,740 to prepare analyses related to modifications of the City's InclusIOnaty Housmg Ordinance which implements the requirements ofProposItlon R BACKGROUND The Draft Housmg Element (program Section 2 a) calls for studying modifications to the Inclusionary Housmg Program In addition to calling for an analysis of expansion of the m-lieu fee OptIOn, the program lays out a number of additional optlons to be considered Examples of these are zomng mcentives in exchange for construction of30% affordable units on site, the ability to satisfy the inc1usionary obligation by meetmg the reqUIrements of State density bonus law, and the abllity to satisfy the incIusIOnary obligation by complyIng With the reqUirements of tax exempt bond financing The study must mclude, but shall not be limited to, these issues 1 '" 6F - .. JUl 0 8 1997 . "' . DISCUSSION In order to comprehensively analyze the vanous Inc1usionary Housing Program modificatIons proposed in the Draft Housmg Element, financial modeling of prototypical resIdential developments IS necessary AddItionally, analysis of the effect of zoning requirements on the physical development of typical residential development projects will be necessary Similar analyses have already been prepared by HR&A as part of the Housing Element Update In particular, HR.&A has prepared the following related analyses an assessment of the City's current Inclusionary Housmg Program (specifically, Ordinance 1615) as a potential constraint on the development of housing, an assessment of residential rezoning actions as potential constraints on development, and, an analysis of the R2 zone district bwldable envelope In preparing these analyses, HR.&A created financial models to assess the feasibility of building on-site incluslOnary units under a variety of development scenarios Also as part of these analyses, HR&A explored the effects ofvanous zoning standards (such as allowable height, setbacks, and lot coverage) upon the feasibility of developmg all inclusionary urnts on site Because HR&A has already performed these analyses, the firm already has detailed knowledge of several key Issues required for the new analyses Not only is HR&A versed in the complex issues associated with the required studies, the firm has existing financial models which can be easily adapted to perform the new analyses Previously, Council has directed staff to prepare an amended Inclusionary Housing OrdInance whIch could be adopted contemporaneously with adoption of the Housing Element. In order to 2 . . meet this goal, work must begm as soon as possible Not only does HR&A have the experience and staff capacity to deliver the analyses on a timely basis, but has been previously involved with the development of similar financial modeling studies for Santa Moruca as well as other cities FINANCIAL/BUDGET ARY IMPACT Sufficient funds are available in account number 01-210-266-00000-5506-00000 CONCLUSION It is recommended that City Council authorize the City Manager to negotiate and execute a contract WIth HR&A In an amount not to exceed $98,740 for preparation of analyses related to a revised IncluslOnary Housing Ordmance Prepared by J eft'Mathieu, Director of Resource Management Bob Moncrief, Housmg Manager Ellen Alderman Comis, Senior Administrative Analyst 3