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i f i 14 "Neighborhood Resident"shall mean any person who has a primary residence in a certain Neighborhood at the time he or she applies for a unit or assistance. MOHCD shall establish a process for a person to verify statu as a "Neighborhood Resident" for a particular Neighborhood, which, at a minimum, shall require a person to show: (a)that he or she is listed on the lease for a unit in that Neighborhood; or (b)other evidence sufficient to establish, in MOHCD's reasonable discretion,that the person resides in a unit in that Neighborhood. Sec. 47.3 Application of Preference: (c)Third,to a Neighborhood Resident, who meets all of the qualifications for the unit or assistance. Preference under this subsection (c)shall be given: (1)for units located in the same Neighborhood as the person resides; (2) only for any new residential development in that Neighborhood going through the initial occupancy or sale process, and only to 40%of the units in such development. Disparate Impact Analysis Used to address Fair Housing Act:Two types of statistical analysis were used by the San Francisco mayor's office of housing to show that a neighborhood preference policy would not have a disparate impact on protected groups.These two types of analysis include 1) a z test and 2)a 4/5 test. In a letter to California Department of Housing and Community Development San Francisco City Attorney Keith I. Nagayama states that San Francisco's Neighborhood Preference does not violate FHA: "MOHCD has performed a statistical analysis to determine whether the Neighborhood Preference will result in a significant disparate impact on any particular racial group based on two common statistical methods used by courts: (1) the "four-fifths" rules (Langlois v. Abington Housing Authority (D.Mass. 2002) 234 F.Supp.2d 33.) and (2) the standard deviation analysis or the "z-test" (Castenoda v. Partida, 430 U.S. 482 (1977).). According to MOHCD, the results of both analyses show that the Neighborhood Preference has not resulted in a significant disproportionate disparate impact on any particular racial group." Conclusion: Local area preference can be enacted but needs to address Fair Housing Act concerns with a disparate impact analysis similar to the one used in San Francisco to avoid legal challenges. Third Distinction: Durational residency requirements which require that a resident has lived in a jurisdiction or area for a certain number of years. For example,the requirement that a resident live in Hawaii for one year before being eligible for in-state college tuition rates.A durational residency requirement has only been used with for-sale housing and not with rental housing,as rental housing would be very unlikely to withstand a legal challenge,due to rental housing being considered a "non- portable"benefit, unlike for-sale housing which is a more"portable" benefit. See further discussion below. Example: San Diego two-year requirement. As part of their inclusionary zoning program,the San Diego Housing Commission offers below-market for-sale homes to people up to 120 percent of area median income. Initially their program did not have a residency requirement,which prompted a significant number of applications from out-of-state residents.Since this was not the intended purpose of the 146