The two women look at a parking lot and see a place to house people. Pointing at the city-owned two-level lot on Pacific across from the Monterey Institute of International Studies, local housing activists Jane Haines and Patricia Bernardi envision one or two levels of apartments on top. City employees or restaurant workers could live within walking distance of work, public transportation, shopping and entertainment.

It''s one example of how their "62/38 Housing Plan," aimed at meeting the growing demand for affordable housing, would work.

"The city could develop partnerships" with nearby hotels or local businesses, says Haines, a Pacific Grove attorney.

"There are a number of areas the county or cities own," adds Carmel Valley activist Bernardi, listing Fort Ord along with parking lots and city-owned land in Salinas, Monterey and Pacific Grove.

"You have a location here," she continues, pointing to the lot across the street, "that if you were to build one or two stories above it, it would not change the landscape. And you would have parking but you probably wouldn''t need it because so many jobs are within walking distance."

The two women presented their plan to the County Planning Commission on Sept. 26. On Oct. 10, planning staff will return to the commission with a report.

The "62/38" refers to statistics in the county''s annual housing report showing that 62 percent of Monterey County households live on moderate or lower incomes, based on the county''s median income of $52,600. Instead of requiring developers to build only a small percentage of affordable homes--15 percent under the county''s current "inclusionary" ordinance--planning officials should approach development from the opposite direction, allowing developers to build market-rate homes only if they build the majority to be affordable to people who live and work in Monterey County, the activists say.

Haines and Bernardi argue the county shouldn''t approve new subdivisions unless at least 62 percent of the units are affordable to moderate- and low-income residents.

To encourage private developers, Haines and Bernardi suggest developers build apartments, townhouses and singe-family homes in a partnership with the cities or counties, trading land and low-interest loans for permanently affordable units. Or, Bernardi suggests, developers could receive incentives such as tax cuts or density bonuses, or even a streamlined building process.

"There are all these different approaches, and we didn''t lay out all the different cases," Bernardi says, "but you have a lot of city- or county-owned property that would work."

The important thing, Bernardi says, is to build affordable housing for all ages and to build it near existing infrastructure, water and transportation.

Gary Patton of LandWatch says his organization hasn''t taken an official position on Haines'' and Bernardi''s housing plan, but does support smart urban growth and housing.

"LandWatch is absolutely committed to making certain that as growth occurs, it should be well-planned, and that means, among other things, that it serve the existing local community and its economy--this is really the underlying thought on which [this] plan is built."

Haines'' and Bernardi''s proposal is an alternative to the county''s inclusionary housing ordinance. Since 1980, about 9,000 homes have been built in Monterey County--only 270 of them affordable to low-income or moderate-income residents.

Due in large part to activists'' criticisms of the housing ordinance, county officials are now revamping it, with one possible outcome being a higher inclusionary number.

"When you look at 15 percent inclusionary and you look at the need, it just doesn''t get you there," Bernardi says.

However, it''s doubtful that a new ordinance would set the affordable units percentage as high as Haines and Bernardi would like to see it.

At the Sept. 26 Planning Commission meeting, Commissioner Carol Lacy took the minority position that Haines and Bernardi''s plan is too extreme.

"When you talk to a developer about 62/38, once they stop laughing they start crying," she says. "I think that''s ridiculous. I think 25 percent [affordable] would be a better ratio for a private developer, provided we give them more incentives, a 10 percent density bonus for example, things like tax credits, putting those developments on the fast track--incentives we could give without costing the county money."

Lacy said she would support up to 50 percent affordable housing at Fort Ord. But even there, she says, 62 percent is too high. "If you want to effectively stop building in Monterey County, that''s a good way to do it," she says.

Planning Commissioner Sharon Parsons says she supports the idea, but still has questions about the implementation.

"The intention is excellent, which is to house our workforce, but I am concerned on how to make the plan permanently affordable. And the other thing is how to match the affordable unit to the person''s income level."

Such planning has been done, Bernardi says, pointing to the Osio project, a partnership between a private developer and the city of Monterey in which the city provided the land and a low-interest loan in exchange for rent-controlled apartments that will remain permanently affordable.

There''s also Carl Outzen''s project on Cannery Row, Bernardi says. The city gave him a break on parking requirements and a water allocation, and in return, Outzen dedicated all 21 of his new one-bedroom units to moderate- and low-income tenants, with preference given to employees working within a half-mile of the complex.

Toward the end of the marathon meeting on Sept. 26, commissioner Jose Sanchez repeated the commission''s support in theory to Haines and Bernardi''s plan. But he voiced concerns about the details.

"You want us to actually recreate the wheel here, and I think that scares a lot of us," he told Haines and Bernardi.

"Well, maybe [we''re] just taking the corners off a wheel that''s square," Bernardi replied.