The imminence of the meeting led to a recent examination of the town's affordable housing strategy, since the state requires that a city start spending its housing funds within three years of reaching a threshold amount.

Marty Woodworth, Los Gatos redevelopment manager, explained at the Sept. 16 Los Gatos Town Council study session that the town sets aside 20 percent of its redevelopment funds for housing. That amount to date, Woodworth said, is $2 million, with Los Gatos accumulating another $700,000 to $800,000 annually.

State law demands that cities start using those funds once they hit a certain base. "Basically, we have enough funds where the clock's starting to tick now," Woodworth said. That base, he added, is about $2 million, which means the town needs to spend any surplus beyond that number.

The next step is for the town to decide what it's going to do with that money. Los Gatos Director of Community Development Bud Lortz said the town needs to make a commitment to a project in the next three years, since many developments take
1¹/2 to two years to get through the town's planning process.

A staff report listed some potential sites for affordable housing developments, including the Los Gatos Mobile Home Park, the Riviera Terrace apartments just off Roberts Road, and 2.3 acres just north of Courtside Club.

With nine identified possible projects, "I think there's flexibility to meet the needs of the Los Gatos community," Woodworth said.

The state prefers that towns and cities create affordable housing rather than putting existing units into the town's below­market rate housing program, Lortz said.

The council faced several dilemmas that day, including the decision whether to focus on constructing affordable for-sale homes or build apartment units. Mayor Randy Attaway said he felt that below-market housing was more of a guarantee with apartments than with owner-occupied homes.

Councilman Joe Pirzynski pointed out, however, that too many rentals are not appropriate, since the town's General Plan restricts the amount of rental units to 30 to 35 percent of all housing.

Vice Mayor Sandy Decker was of the opinion that the town should concentrate on affordable for-sale homes, specifically in the town's redevelopment district, much of which is in the downtown area.

Lortz also asked the council if the town should focus on making below-market housing available for low-income households instead of catering to the moderate-income population, as it has in the past.

According to a staff report, moderate income is defined as "80 to 100 percent of the county's median income," while low income is less than 80 percent. Recent data indicates that the median income for a family of four is $96,000.

Councilman Steve Blanton, who has been on the council for a dozen years, said he remembered several units being dropped from the below-market program because there was a lack of families that met the income qualifications.

Another key issue was whether the town should focus on turning vacant properties on Oka Road into higher-density developments. Attaway suggested that staff look into doing so, but emphasized that high-density and low-income housing should be equally spread around the town. Attaway noted the perception that Parr Avenue is perceived as a "dumping ground" for affordable housing.

The General Plan Housing Element, which is the town's answer to the state's specific housing requirements for each municipality, is scheduled to be reviewed at a planning commission public hearing Oct. 23 before going to the town council Nov. 12.