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Honorable Pete Hoffmann Chair and Presiding Officer and Members of the County Council COUNTY COUNCIL Page 3 Mazch 8, 2007 area for most industrial uses, which covers employee and customer parking, and one space for 1000 square feet for warehouses with no retail traffic, so the assessment of one employee per 1000 square feet of gross floor area will be on the low side for most uses. There is a provision that the housing administrator, after consultation with the planning director, could reduce the number of employees based on the actual use of the site, provided that the requirement would have to be re-assessed if the use changed. This would accommodate businesses that have low employee requirements. Now, this affordable housing assessment would apply to all businesses within the rezoned area, even if the individual business did not employ 100 persons. Third, the developer of the industrial subdivision is given the option of taking care of the affordable housing requirement, and avoid passing this on to the future lot owners, by satisfying the requirement at final subdivision approval. In this case, the number of credits the developer must earn will be based on ten employees per acre, and reduced by 50% to account for the fact that the developer is taking Gaze of the requirement in advance of the actual needs, and also because, as explained in the next paragraph, not all of the businesses within the project will have to provide affordable housing. The council should note that not all businesses within an ML, MG, or MCX zone will have an affordable housing requirement. There is some overlap in the uses that can be done in commercial zones with these industrial zones. As in the current law, this draft would exempt the uses that can also be done in CG zones and "home improvement centers" from the affordable housing requirement. There is an additional change that I would suggest if the council broadens the affordable housing requirement on industrial enterprises. It is much more difficult for an industrial project to provide affordable housing than a residential or resort project because they cannot provide the housing onsite within the project. Residential uses are not allowed in ML, MG, or MCX zones. The individual business that ultimately has to fulfill the requirement maybe something like a tractor repair shop or a beer distributorship. Unlike a residential or resort developer, they are not in the business of building units that people can live in. As a practical matter, the only way for the business to satisfy the requirement may be by paying the in-lieu fee. As currently formulated, the in-lieu fee can be very high for districts where the median house price is high. Based on the 2006 median home price, the in-lieu fee in North Kona,