Ivory Elves and Half-Elves <3.5>

[Djinn_in_Tonic]

or a static -1 to Reflex Saves and Initiative. I don't feel penalizing their AC

Alright. Little lesson here from a fairly experienced homebrewer. I'd recommend taking it to heart.

Stacking penalties to compensate for strength is not a valid method of balancing.

All it does is further min-max the thing: it becomes more and more useless to anyone not playing towards its strengths, and is still very potent in the areas it's strong in. That's not good balance: it's unnecessarily complicated, gimps you in some areas, and overpowers you in others. Steer clear of that whenever possible.