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RATIONALE <br />The City's zoning code requires nonresidential uses with residential <br />development in some zone districts and Planned Unit Development types. <br />These mixed -use requirements can be challenging to navigate given the <br />added complexity of financing, management, separating differing uses, and <br />the ongoing uncertainty for commercial demand in the post-Covid era. %' Housing Goals <br />Identifying new City policy tools to address this issue can help reduce <br />barriers for new residential development projects and deliver more needed <br />housing at a lower cost, while drawing in more residents that can help increase the viability for nearby <br />commercial development in the future. One such tool for the City to evaluate is a fee in lieu of any <br />required nonresidential square footage with residential development. <br />DESCRIPTION <br />EcoNorthwest conducted a financial analysis during the development of the Housing Plan to understand <br />the impacts of requiring onsite commercial space in residential projects. The analysis indicated that on - <br />site commercial requirements had a negative impact on overall development feasibility, reducing a <br />developer's land budget by up to 13%. In these cases, a developer would likely need to either find less <br />expensive land, raise tenant rents, or receive additional subsidy to make the development feasible. <br />However, the analysis found that requiring a $10 per square foot fee would have a much smaller impact <br />on feasibility than requiring onsite commercial space. The City could explore implementing this fee <br />option and utilize funds for any of the affordable housing initiatives outlined in this Housing Plan. <br />Action item 3.3 below also addresses this issue for the City to explore ground floor use and activation <br />standards that provide more flexibility to address this issue. <br />ACTION 2.4 BENEFITS SUMMARY <br />INCOME LEVEL <br />GEOGRAPHIC <br />HOUSING <br />ACTION TYPE <br />COST <br />SERVED <br />SCALE <br />PRODUCTION <br />POLICY <br />CHANGE/FINANCIAL <br />LOW-INCOME <br />CITYWIDE <br />SUPPORT <br />Louisville Housing Plan Part 4: Housing Strategies and Actions 39 <br />