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HomeMy WebLinkAbout2007/10/17 - Agenda Packet - Special 3 pm~ r -_-J ~' '- i ~ AGENDA CITY COUNCIL AND REDEVELOPMENT AGENCY SPECIAL MEETING Wednesday, October 17, 2007 ~ 3 00 p m Rancho Cucamonga Clty Hall ~ Tri Communities Room 10500 Clvlc Center Drive ~ Rancho Cucamonga, CA 91730-3801 A. CALL TO ORDER 1 Pledge of Allegiance 2 Roll Call. Mayor/Chairman Kurth Mayor Pro TemNice Chairman Williams Councilmembers/Agencymembers Gutierrez, Michael and Spagnolo B. COMMUNICATIONS FROM THE PUBLIC This is the time and place for the general public to address the City Council and Redevelopment Agency on any item listed or not listed on the agenda State law prohibits the Councd and Agency from addressing any issue not previously included on the Agenda The Councl and Agency may receive testimony and set the matter for a subsequent meeting Comments are to be limited to five minutes per individual or less, as deemed necessary by the Chair, depending upon the number of individuals desiring to speak All communications are to be addressed directly to the Councd and Agency, not lothe members of the audience This is a professional business meeting and courtesy and decorum are expected Please refrain from any debate between audience and speaker, making loud noises, or engaging in any activity which might be disruptive to the decorum of the meeting The public communications period will not exceed one hour prior to the commencement of the business portion of the agenda During this one hour period, all those who wish to speak on a topic contained m the business portion of the agenda will be given pnonty, and no further speaker cards for these business items (with the exception of public hearing hems) will be accepted once the business portion of the agenda commences Any other public communications which have not concluded during this one hour period may resume after the regular business portion of the agenda has been completed C. ITEMS OF DISCUSSION WORKFORCE HOUSING MARKETING STRATEGY -page 1 CONSIDERATION OF THE HOUSING SUBCOMMITTEE'S RECOMMENDATIONS REGARDING A PROPOSED INCLUSIONARY WORKFORCE HOUSING ORDINANCE - page 10 D. ADJOURNMENT I, Debra J Adams, Clty Clerk of the Clty of Rancho Cucamonga, hereby certify that a true, accurate copy of the foregoing agenda was posted on October 11, 2007, per Government Code 54954 2 at 10500 Civic Center Drive, Rancho Cucamonga, Caltfornla P1 T HiFX E ~~ C I T Y O F ?.I~Yt'~wLLa~n l~C~~i z.,drwm' n~a ,'L'.,.. „„,.,,i,a ~ ,~..n6i& u„Cblw,r R: ~_,.,.Vw Y...w $v' xle( sL RANChO CLCANONGA Staff Report DATE October 17. 2007 TO Mayor and Members of the City Council Chairman and Members of the Redevelopment Agency Board Jack Lam, AICP, City Manager FROM Linda Daniels, Redevelopment Director C~ BY Tranda Drumwright, Housing Programs Manager SUBJECT. Workforce Housing Marketing Strategy 1:7xdi7Jd~~il~.1/_~IC~7-1 It is recommended that the City Council review and approve the Workforce Housing Marketing Strategy outlined in this report and that the Redevelopment Board approve an appropriation of $10,000 to be transferred into account number 2622801-5300 for the production of a workforce housing video and related marketing material BACKGROUND The Rancho Cucamonga Redevelopment Agency has responded to the need for workforce housing by creating positive partnerships with a number of non-profit housing development organizations such as National Commurnty Renaissance, Northtown Housing Development Corporation, Habitat for Humanity, Neighborhood Housing Services, LINC Housing Development Corporation, and Orange Housing Development Corporation Through these partnerships a total of 1,157 workforce housing units have been created for individuals and families living and working m the City of Rancho Cucamonga The City and Agency has spent a great deal of resources on the preservation and development of workforce housing As more companies relocate to the City, the need for workforce housing will increase Also, as the cost of housing continues to increase additional workforce housing units will be needed for many kinds of P2 Page 2 October 17, 2007 increase additional workforce housing units will be needed for many kinds of employees such as service industry workers, healthcare professionals, entry level teachers and public safety personnel More time and resources are needed to better inform the public about the need, and the types of businesses and employees that will benefit from workforce housing As a way of improving the public's understanding and acceptance of workforce housing, staff has prepared the following marketing strategy Workforce Housing Marketing Strategy One key to a successful marketing campaign is "repetition" The more often the public sees the faces of indiwduals and families benefiting from workforce housing and learns their stories, the more aware they become of the issue Highlighted below are a number of media venues that staff recommends implementing to increase the public's awareness on the value of workforce housing Testimonials from individuals living and/or working in the City would be incorporated into the marketing materials Newspaper Articles/Human Interest Stories- The first series of human interest stones proposed would center on the shortage of workforce housing in general for diverse fob seekers such as teachers, healthcare workers, public safety personnel, etc A second serves of human interest stories would highlight individuals and families who have achieved economic stability because they were able to rent or purchase a safe place to live News stones centered on the City's First-Time Homebuyers Program would be used to illustrate how owning a home can positively influence an indiwdual or family's finanaal growth Staffs goal is to work closely with the local newspapers so that stories such as the ones mentioned above would be published periodically Attached are several "sample themes" (Attachment A) that staff prepared that could be developed into articles with testimonials from local individuals, families, and business owners in Rancho Cucamonga Additional, articles on programs like the Multi-Crime Free Unit will also be incorporated into the strategy Visual Presentation- To further increase the public's awareness surrounding workforce housing, staff proposes to work with a consultant to create a video Several of the City's workforce housing developments would be showcased throughout the video Testimonials from current workforce housing tenants would be included in the video along with testimonials from employers desiring workforce housing for their employees The video could be placed on the City's website and run monthly on the local cable channel Also, as needed the video could be shown at community meetings and during Council or Redevelopment Agency presentations The City of Irvine and the City of Chino Hills have developed similar videos and are actively utilizing them as part of their outreach efforts The video would give viewers an opportunity to see the P3 Page 3 October 17, 2007 faces of workers needing workforce housing, to see what workforce housing looks like in their community, and how workforce housing could make a difference in their lives and the lives of their loved ones Community Meetings- As needed the City's Housing Program Manager, along with Neighborhood Housing Services (NHS) staff, and Multi-Crime Free Housing staff would attend community meetings to address concerns or issues related to an existing workforce housing development or a proposed development NEXT STEPS Again the goal of a Workforce Housing Marketing Strategy is to increase public awareness and build support for workforce housing In order to successfully implement the goal, staff recommends the following next steps • Housing staff to develop a "theme" for the City's Workforce Housing Marketing Strategy and identify a consultant to produce a video The theme would be incorporated into the video, newspaper stones, and other marketing materials • Housing staff to work with local newspapers and other media venues to generate interest in workforce housing Local news reporters could work with staff to help disseminate helpful information to the public • Housing staff to work with the Chamber of Commerce to create a support base for workforce housing among local businesses Large employers and small employers would loin together to increase public awareness on the need for workforce housing Staff has already met with the Chamber of Commerce President, Norm Mackenzie and has received his support As part of the approval of the Marketing Strategy, the Redevelopment Agency would approve an appropriation of $10,000 for FY 07/08 from Agency fund balance into account number 2622801-5300 for the production of a video and related marketing material Linda D Daniels Redevelopment Director P4 EXAMPLE THEMES ATTACHMENT A P5 EXAMPLE THEME Workforce Housing Children and Education Student Test Scores Are Rising Everything Starts At Home-Teacners at Cucamonga Middle School have seen a big difference in their middle school students Their test scores have gone up and they are better prepared and eager to participate in the day to day lessons According to, Ms Smith, she contributes the growth it her 7th graders to the after school tutoring that they receive at the Villa Del Norte Housing Development Villa Del Norte is an 88-Umt Multi-Family Housing Development that was built m partnership with Northtown Housing Development Corporation and the City of Rancho Cucamonga Redevelopment Agency The development offers affordable rental units, day care for working families and support services for children Onsite tutoring is available to the kids residing in the development as well as kids from the surrounding area Villa Del Norte is proof that workforce housing is making a difference in the City of Rancho Cucamonga Working families are able to afford quality housing and get the needed day care and educational services for their children Stable home environments and support systems are in place at Villa Del Norte Housing Development and the effect of such an environment is being felt m the classrooms at Cucamonga Middle School EXAMPLE THEME Public Safety Officer I can protect your family and your home, but I can not afford a home of my own- As the cost of housing escalates in the City of Rancho Cucamonga and throughout San Bernardino County, the dream of homeownership has become dust that a dream for Deputy Moore The average cost of a three bedroom, two bath house in Rancho Cucamonga is $400,000 Deputy Moore and other officers are finding it hard to qualify to purchase a home in the City Like many officers, Deputy Moore puts in long hours protecting individuals and families living in Rancho Cucamonga He would like to live in the City and not have to commute home after working a long shift Note A Veteran Theme would also be appropriate P6 P7 EXAMPLE THEME Business "I'm looking to expand"- If the lack of workforce housing prevents my expansion- that is my business- I'm looking to expand my business and hire additional employees However, the high cost of housing in Rancho Cucamonga may prevent me from recruiting new employees Businesses like mine suffer when our employees are priced out of the housing market Workforce housing gives my employees an opportunity to live, work, and play in the same city As a business owner I also benefit because I'm able to recruit and retain qualified employees P8 EXAMPLE THEME First Year Teacher SHE IS A FRESH YOUNG FACE IN RANCHO CUCAMONGA SHE TEACHES FIRST GRADE AT LIGHTFOOT ELEMENTARY BUT SHE CAN'T AFFORD TO BE YOUR NEIGHBOR- ------ Fresh out of college and excited about working in the Etiwanda School Distract, Ms Jones teaches our first graders math, reading, science and social studies Her specialty is math and she loves stretching the minds and imaginations of her first graders Unfortunely, her first year teaching salary does not stretch enough to be able to rent an apartment or afford to purchase a home in the City of Rancho Cucamonga As a first year school teacher, earning $24,000 a year she is paced out of the housing market She like a number of young, eager professionals are forced to live elsewhere and spend a considerable amount of their time commuting on congested freeways When professionals are forced to commute to work communities and companies suffer Companies can't find and keep qualified workers and commurnty-based volunteerism disappears So much of their time is spent commuting- young professionals don't have time to volunteer For Rancho Cucamonga's continued economic success, the ability to provide decent and safe workforce housing is critical P9 EXAMPLE THEME Homebuyers/Economic Stability Workforce Housing- Creating Homeownership Opportunities and More- The Blevins can't stop smiling For over a year now they have been proud owners of a three bedroom, two bath home that they purchased with the help of the City's down payment assistance program For many years they persistently tried to save for a down payment Over the years, family emergenaes depleted their savings They thought that homeownership was out their reach, until they read an article about the City's First-Time Homebuyers Program After working with Neighborhood Housing Services (NHS), the Blevins received help with budgeting and started to save again With down payment assistance, they were able to qualify for a mortgage that they could afford Their mortgage payments turned out to be only $50 00 more than their previous rent The Blevins are still incorporating the budget tips that they learned through the services of NHS and are now able to save towards a down payment on equipment needed for Mr Blevins to start his own business MEMORANDUM - REDEVELOPMENT AGENCY Date October 17, 2007 RANCHO CUCAMONGA To Mayor and City Council Members Jack Lam, AICP, City Manager From Linda D Daniels, Redevelopment Dir ctor~ James Troyer, Planning Director Subtect Draft Inclusionary Workforce Housing Ordinance BACKGROUND Over the past several months, the Housing Subcommittee has been meeting with staff and counsel to discuss the feasibility of implementing an Inclusionary Workforce Housing Ordinance based on the City Council's direction during their July 2006 workshop As we all know, the production and preservation of affordable housing is a State regwrement imposed on California cities, but it is unrealistic to think that cities can meet affordable housing requirements solely using local funding sources Our research has shown that over 130 turisdictions in California currently include inclusionary housing programs as a component of their overall affordable housing development Rancho Cucamonga has made great strides in addressing its affordable housing obligations primarily through the use of Redevelopment Agency Housing Setaside funds Despite these efforts which have produced over 1700 units of affordable housing, a tremendous need still exists The memo that was prepared for the July 2006 workshop with the City Council outlines in more detail the accomplishments, as well as the unmet workforce housing need Briefly, the Agency is currently required to provide 2,755 units of workforce housing The Agency is currently providing approximately 68%, or 1,588 units, of its requirement The Southern California Assoaation of Governments (SCAG) also assigns an allocation to the City for providing housing that is affordable to families In June 2006, the City was meeting approximately 2% of the need as prescribed by SCAG The Redevelopment Agency's Housing Production Plan, which is part of the Housing Element of the City's General Plan, recognized the need for a mechanism to engage the development community in the production of affordable housing Many aties have chosen to adopt an Inclusionary Zoning Ordinance that regwres developers to either provide affordable units or pay an in-lieu fee as part of the entitlement process The Housing Subcommittee reviewed and discussed the various policies and programs, and concluded that a limited approach to inclusionary zoning could be considered in Rancho Cucamonga During the July 2006 workshop, the City Council discussed with the Housing Subcommittee and staff the concept of an Inclusionary Workforce Housing Ordinance and concurred with the Subcommittee that an inclusionary regwrement could be used on a limited basis as a tool to assist the City and Agency in meeting affordable housing production requrements At the conclusion of the workshop, the City Council requested further research on the financial impacts of applying the inclusion requirement to future protects based on the following goals P10 P11 INCLUSION!\R]' V/ORKAORCI. t-IOL`SING WORKS! IOP PAGE 2 OC10H7 R 17, ?007 • Achieve an inclusionary workforce housing requirement within all land use categories in the City, • Based on the Redevelopment Agency State requrement for housing production within the Redevelopment Agency project area, consider a minimum 15% of total number of units within a project to be restricted to affordable incomes, • Provide a balance of units affordable to income levels based on the Redevelopment Agency's income restrictions of 35%, 45%, 60% and 90% of the median incomes In order to evaluate this approach, staff was directed to obtain the consulting services of Keyser Marston Assocates to assist the Housing Subcommittee and staff in determining the feasibility of a proposed Inclusionary Workforce Housing Ordinance The Housing Subcommittee has met on several occasions with Agency staff, the economic and financal consultant, and City Attorney to discuss the inclusionary concept and has reviewed and accepted the attached draft Inclusionary Housing Ordinance The Housing Subcommittee recommends that the Ordinance be forwarded to the City Council for review and further direction ANALYSIS Ms Kathleen Head of Keyser Marston Associates was retained to conduct a Feasibility Analysis of a potential inclusionary requirement based on the Council's previously identified goals The Feasibility Analysis is provided as an attachment to this Memorandum Ms Kathleen Head concluded that because of the significant gap between the County's median income, which the Agency and City are requred to use for housing purposes, and the sales and rental prices in the City, the impact of imposing an affordable inclusionary regwrement on residentially zoned land developed at its approved density significantly impacts a land owner of the economic value of their property Ms Head advised that in order to reduce the economic impact on residentially zoned land to an acceptable level, the analysis indicates that the percentage of required affordable units would need to be reduced from the proposed 15% to 5% of the total development and restncted to only moderate incomes The financal modeling also indicated that to achieve an acceptable economic value that would not constitute a taking of property without dust compensation under State and Federal Constitutions, the ownership projects could provide units affordable only at the moderate income level of 110% of the area median income, which is the State definition of moderate income afforded to the City Rental units could provide 7 5% of the units at moderate income (110% of the median income) and 7 5% of the units at very low income levels (50% of median income) Ms Head explained that a project could apply for financial assistance from the Redevelopment Agency in order to further reduce the income levels to meet the Agency's requirements It is important to note that affordable units constructed at these income levels within the Redevelopment Project Area and without Agency assistance will qualify towards the State 15% affordable housing production requirement in Redevelopment Project Area that must be met prior to the expiration of the Redevelopment Plan Ms Head analyzed and explained that applying a 15% Inclusionary Workforce Housing regwrement on land which was not residentially zoned, but would require a zone or General Plan change to allow residential, was economically reasonable Ms Head explained that the same analysis held true for a project that requested a greater level of density than what it would be entitled to under the current zoning Ms Head further explained that the analysis indicates that an imposition of the inclusionary requirement on a proposal involving a change in land use or density on any protect of 20 units or less, regardless of density, creates a significant economic impact to the value of the P12 INCI US70NARY WORI:I ORCE HOUSING WORKSHOP OC ~ oBLR 17, 2007 PnGL3 property and advised the City to allow those projects to pay an in-lieu fee by right Additionally, the consultant recommended that protects proposing five (5) or fewer residential units should be excluded from the inclusionary regwrement SUGGESTED PROVISIONS Based on the analysis and presentation of the consultant, as well as input from staff and the City Attorney, the Housing Subcommittee supported the consultant's conclusions and refined the direction to staff to pursue the development of an Inclusionary Workforce Housing Ordinance that incorporated the following key points • Regwres 15% of any proposed residential development to include affordable housing units at various income ranges if a discretionary approval is regwred to allow o an increase in density, o a change in zoning regulation that does not permit residential use to one that does permit residential use, o conversion of rental units to condominium ownership • Income and Affordability Restrictions would be applied as follows Income Level Ownershi Pro ects Rental Pro ects Single- Townhomes Family Apartments Very Low (50% Median Income) 7 5% Moderate (110% Median Income 15% 15% 7 5% • Provides exemptions for o applications deemed complete prior to the effective date of the ordinance, o residential projects that have a Development Agreement which excludes the inclusionary regwrements, o projects that have an approved Regulatory Agreement with the Redevelopment Agency, o projects which contain 5 residential units or less • Provides the following alternatives to producing units within the protect o Constructing or substantially rehabilitating units on another site, o Purchasing equivalent affordable housing covenants for units in existing multi-family protects o Payment of an in-heu fee for protects with 20 or fewer units, and protects of more than 20 units upon approval of the City Counal based on findings that the cost of P13 I'~C] CSIOT~ARY WOlthl ORCF HOUSI`~G WORhS1IOP OCR Ot3[:R 17, ?007 P~ci. a providing the units on-site would substantially exceed the amount of the applicable in-lieu fee Under advisement of the City Attorney's office, the Housing Subcommittee supported the inclusion of an in-lieu fee calculation for small projects, or on a limited basis those protects which receive a hardship determination from the City Council The primary intent of the Ordinance is to regwre that the development provide the units on-site, build units at another approved location in the City, or purchase affordability covenants in existing multi-family projects The City Attorney's office advised that the inclusion of a methodology to calculate the fee would ensure fairness and consistency from project to project Ms Head subsequently provided a proposed methodology to calculate an in-lieu fee for projects proposed with 6 to 20 units, and for projects meeting certain hardship requirements The in-lieu fee methodology is also attached for your reference During the October 17, 2007 workshop the Housing Subcommittee also requested a discussion with the Cdy Council regarding • Adoption of Resolution of Intention to impose the inclusionary requirement on projects submitted in the interim time period of the Ordinance becoming effective, Notification process to development organizations and companies of the City's interest in adopting an Inclusionary Workforce Housing Ordinance, and How to address the requrement for Inclusionary Workforce Housing as part of the General Plan process where land that is not currently zoned residential, but which may be changed as part of the General Plan process to permit residential (including mixed use), is proposed If you have any questions about the attached information, please feel free to contact the Housing Subcommittee or staff prior to the City Council workshop on October 17, 2007 Attachments Draft Ordinance Keyser Marston Feasibility Analysis July 6, 2006 Housing Subcommittee Memo with attachments 1 to 7 P14 DRAFT Ordinance AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA ADDING TO THE CITY OF RANCHO CUCAMONGA MUNICIPAL CODE CHAPTER 17 42 PERTAINING TO INCLUSIONARY HOUSING REQUIREMENTS FOR CERTAIN RESIDENTIAL PROJECTS THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA DOES HEREBY ORDAIN AS FOLLOWS Section 1. Anew Chapter 17 42, entitled Incluslonary Housing Requirements, is hereby added to Title 17 (Development Code) of the Rancho Cucamonga Municipal Code to read as follows "Chapter 17 42 INCLUSIONARY HOUSING REQUIREMENTS 17 42 010 Purpose 17 42 020 Definitions 17 42 030 Additional Regulations 17 42 040 Apphcabihty and Inclusionary Unit Requirements 17 42 050 Exempt projects 17 42 060 Alternatives to Units within Protect 17 42 070 Housing Plan and Housing Agreement Required 17 42 080 Standards 17 42 090 Takings Determination 17 42 100 Enforcement 17 42 110 Inclusionary Housing Trust Fund 17 42 120 Admmistratrve Fees 17 42 010 Purpose This Chapter establishes standards and procedures to encourage the development of housing that is affordable to a range of households with varying income levels The purpose of this Chapter is to encourage the development and availability of affordable housing by requiring the inclusion of affordable housing units wrtlun developments that involve an increase m the density otherwise available by City and State law, a change from a zoning regulation that does not permit residential uses to one that does permit residential uses, or the conversion of rental units to condominium ownership 17 42 020 Definrtions As used m this Chapter, the following terms shall have the following meanings "Adjusted for Household Size Appropriate for the Unit" means a household of one person in the case of a studio unit, two persons in the case of aone-bedroom unit, three persons 11231-0001\985141v6 doc P15 m the case of atwo-bedroom unit, four persons m the case of athree-bedroom unit, and five persons in the case of afour-bedroom unit "Affordable Housing Cost" means the total housing costs paid by a qualifying household, which shall not exceed the fraction of gross income specified, as follows, m accordance with Sections 50052 5 and 50053 of the Health & Safety Code A Very low-income households Thirty percent of the income of a household earning 50 percent of the San Bemardmo County median income adjusted for family size appropriate for the unit B Low-income households Thirty percent of the income of a household earning 70 percent of the San Bemardmo County medlan income for for-sale units, and 30 percent of the income of a household earning 60 percent of the San Bemardmo County median income for rental units, adjusted m either case for family size appropriate for the unit C Moderate income households Thirty-five percent of the income of a household earning 110 percent of the San Bemardmo County medlan income for for-sale units, and 30 percent of the income of a household earning 110 percent of the San Bemardmo County medlan income for rental units, adjusted m either case for family size appropriate for the unit D In the event of a conflict between the fractions speclfied m this definition and those found m Sections 50052 5 and 50053 of the Health & Safety Code, the fractions specified by State law shall control "Developer" means any association, corporation, firm, ~omt venture, partnership, person, or any entity or combination of entities, which seeks City approval for all or part of a residential project "Iclusionary Umt" means a dwelling unit that will be offered for sale or rent to low- or moderate-income households, at an affordable housing cost, in compliance with this Chapter "Low-Income Households" means "lower income households" as that term is defined by Section 50079 5 of the Health & Safety Code "Low-Income Units, Moderate-Income Units, and Very Low-Income Units" means inclusionary units restricted to occupancy by low, moderate, or very low-income households, respectively, at an affordable housing cost "Market Rate Units" means dwelling units m a residential project that are not inclusionary units "Moderate-Income Households" means "persons and families of low or moderate income" as that term is defined by Section 50093 of the Health & Safety Code "Planning Director" means the Planning Director of the Crty of Rancho Cucamonga or his or her designee 2 11231-0001\985141v( doc P16 "Regulatory Agreement" means an agreement entered into between the Rancho Cucamonga Redevelopment Agency and a developer by which the developer covenants to keep certain housing units at an affordable housing cost for a specified period of time "Regulations" means the regulations adopted by the Council m compliance with Section 17 42 020(A) for the implementation and enforcement of the provisions of this Chapter "Residential project" means any of the following A A subdivision resulting m the creation of 5 or more residential lots or residential units, or B The new construction of a project consisting of 5 or more multi-family unris or single-room occupancy units, or C The new construction of 5 or more separate houses or dwelling units D The conversion of 5 or more rental units to condominium ownership "Total Housing Costs" the total monthly or annual retuning expenses required of a household to obtain shelter For a rental unit, total housing costs shall include the monthly rent payment and utilities For an ownership unit, total housing costs shall include the mortgage payment (principal and interest), homeowners' association dues, mortgage insurance, taxes, utilities, and any other related assessments "Very Low-Tncome Households" means "very low income households" as that term is defined by Section 50105 of the Health & Safety Code 17 42 030 Additional Regulations The Council may by resolution establish additional regulations for the implementation of this Chapter 17 42.040. Apphcabdrty and Inclusionary Unit Requirements A The requirements of this Chapter shall apply to any residential proTect proposed m connection with an application to do any of the following 1 Increase the permitted residential density of the subject property above the density allowed under City and State law at the time of the application 2 Increase the permitted percentage of residential development allowed for a mixed-use development above the percentage under City and State law at the time of the application 3 Convert commercial or mdustnal land to residential uses, including, but not limited to, the conversion of a hotel to residential use 4 Convert rental units to condominium ownership 3 11231-0001\985141 v6 dot P17 B Units for sale If the residential project consists of units for sale, then a minimum of 15-percent of the total number of units in the project shall be sold to moderate-income households C Rental units If the residential project conslsts of rental units, then a minimum of 7 5-percent of the units shall be rented to low or very low-income households and 7 5-percent of the units shall be rented to moderate-income households D Allowable credits The mclusionary unit requirements of this Section may be reduced as follows 1 Very low-income units m heu of low-income units If very low-income units are provided m heu of the required low-income units, then the protect shall receive a credit of 1 5 affordable units for each unit actually provided 2 Very low-income units m heu of moderate-income units If very low- mcome units are provided m heu of required moderate-income units, then the project shall receive a credit of two units for each unit actually provided 3 Low-income units m lieu of moderate-income units If low-income units are provided m heu of required moderate-income units, then the protect shall receive a credit of 1 5 units for each unit actually provided E Rounding of quantities m calculations In calculating the required number of mclusionary units, fractional units of 0 75 or above shall be rounded-up to a whole unit if the residential project consists of 5 to 20 units, and fractional units of 0 50 or above shall be rounded-up to a whole unit if the project consists of 21 units or more F Displacement of existing mclusionary units Notwithstanding any other provision of this Chapter, any project subject to this Chapter that results m the displacement of very low, low, and/or moderate income household(s) shall be required to provide on-site mclusionary units as regmred by this Chapter G The requirements of this Chapter shall apply to all developers and their agents, successors-m-interest, and assigns proposing a residential protect within the scope of Paragraph A of this Section All mclusionary units required by this Chapter shall be sold or rented m compliance with this Chapter and the City's regulations for the implementation of this Chapter 17 42 050 Exempt projects The following are exempt from the requirements of this Chapter A Applications deemed complete A residential project for which a development application has been deemed complete B Development Agreements A residential project that is the subject of a development agreement that expressly provides for an exclusion to this Chapter or provides for a different amount of mcluswnary amts from that specified by this Chapter 4 1 I23I-0001\955141 v6 doc P18 C Project with Regulatory Agreement A residential project for which the Rancho Cucamonga Redevelopment Agency has executed a Regulatory Agreement, provided that the Regulatory Agreement is effective at the time the residential project would otherwise be required to comply with the requirements of this Chapter, and there is no uncured breach of the Regulatory Agreement before issuance of a Certificate of Occupancy for the project 17 42.060. Alternatives to Units within Protect The primary means of complying with the mclusionary requirements of this Chapter shall be the provision of on-site mclusionary units m accordance with Section 17 42 040 A developer may only satisfy the regwrements of this Chapter by means of an alternative to on-site mclusionary units m accordance with the requirements and procedures of this Section A Off-site units Upon apphcaUon by the developer and at the discretion of the City Council, the developer may satisfy the mclusionary unit requirements for the protect, m whole or m part, by any combination of the following means 1 Constructing or substantially rehabilitating the required number of units on a site other than that of the affected residential project For purposes of providing off-site units, substantially rehabilitating means rehabilitating a dwelling unit that has substantial building and other code violations, and has been vacant for at least 90 days, such that the unit is returned to the City's housing supply as decent, safe, and sanitary housing, and the cost of the work exceeds twenty-five percent of the market value of the unit after rehabilitation 2 Purchasing equivalent affordable housing covenants for units m existing multi-family projects All such units shall be (i) reasonably dispersed throughout the multi- family project, (u) located m an area or areas of the Crty as approved by the Planning Director, (in) proportional m number of bedrooms, and location, to the market rate units included m the developer's residential protect, and (iv) comparable to the market rate units included m the residential project m teens of design, materials, finished quality, and appearance B In lieu fee 1 Twenty or fewer units In the case of a residential project containing between five (5) and twenty (20) residential lots or residential units, the developer may elect to satisfy the mclusionary unit requirements for the project, m whole or m part, by payment of a fee m lieu of constructing some or all of the required units 2 More than twenty units In the case of a residential project comprised of more than 20 residential lots or residential units, the developer may apply to pay a fee m lieu of constructing some or all of the regmred units, and such application shall be subject to the review and approval of the City Council, which may grant such the developer's request if substantial evidence supports a finding that the cost of providing mclusionary units on-site would substantially exceed the amount of the applicable m-lieu fee 3 Calculation of fee The amount of the fees allowed by this Section shall be calculated m accordance with the methodology set forth m the regulations adopted for the miplementation of this Chapter 5 11231-0001\985141 v6 doc P19 4 Timing of payment The developer shall pay any m-lieu fees allowed by this Section m full before issuance of a Bwldmg Permit for any portion of the residential project, including any non-residential portions of a mixed-use development 5 Housing Trust Fund Fees collected m compliance with this Section shall be deposited m the Inclus~onary Housing Trust Fund 17 42 070 Housing Plan and Housing Agreement Required A Submittal and execution The developer shall comply with the following requirements at the rimes and m compliance with the standards and procedures m the City's regulations for the implementation of this Chapter 1 Inclus~onary Housing Plan The developer shall submit an mclus~onary housing plan, m a form specified by the Planning Director, detailing how the provisions of this Chapter will be implemented for the proposed residential project If the mclus~onary housing plan includes alternatives to on-site amts that require the approval of the Crty Council, then the mclusionary housing plan shall be subject to the review and approval of the City Council All other inclus~onary housing plans shall be subject to the approval of the Planning Director, subject to appeal to the City Council Any such appeal shall be filed w~thm fifteen (15) days of the Planning Director's decision m accordance with Section 17 02 080 2 Housing Agreement The developer shall execute and cause to be recorded an Inclusionary Housing Agreement The Inclusionary Housing Agreement shall be a legally binding agreement between the developer and the City, m a form and substance satisfactory to the Planning Director and the Crty Attorney, and containing those provrsions necessary to ensure that the requirements of this Chapter are satisfied, whether through the provision of mclusionary units or through an approved alternative method B Discretionary approvals No discretionary approval shall be issued for a residential project subject to this Chapter until the developer has submitted an Inclusionary Housing Plan C Issuance of Building Permit No Building Permit shall be issued for a residential project subject to thrs Chapter unless the Planning Drrector has approved the Inclusionary Housing Plan, and any required Inclusionary Housing Agreement has been recorded D Issuance of Certificate of Occupancy A Certificate of Occupancy shall not be issued for a residential project subject to this Chapter unless the approved Inclus~onary Housing Plan has been fully implemented 17.42 080 Standards A Locarion within project, relationship to non-mclusionary amts All mclusionary units shall be Reasonably dispersed throughout the res~dent~al project, 6 11231-0001985141 v6 doc P20 2 Proportional, in number of bedrooms, and location, to the market rate units, 3 Comparable to the market rate units included m the residential protect m terms of design, matenals, finished quality, and appearance, and 4 Permitted the same access to protect amenities and recreational facilities, as are market rate units B Timing of construction All mclusionary units m a residential protect shall be constructed concurrent with, or before the construction of the mazket rate units If the Crty approves a phased protect, a proportional shaze of the required mclusionary units shall be provided within each phase of the residential protect C Units for sale 1 Time limit for mclusionary restnctions A unit For sale shall be restncted to the target income level group at the applicable affordable housing cost for a minimum of 55 years 2 Certification of purchasers The developer and all subsequent owners of an mclusionary unit offered for sale shall certify, on a form provided by the Crty, the income of the purchaser 3 Resale pnce control In order to maintain the availability of mclusionary units required by this Chapter, the resale pnce of an owner occupied mclusionary unit shall be limited to the lesser of the fair market value of the unit as established by a licensed real estate agent based upon three compazable properties or the restncted resale pnce For these purposes, the restncted resale pnce shall be the greater of either the applicable Affordable Housing Cost or an amount equal to the sum of a The purchase pnce, b A percentage increase m the purchase pnce equal to three (3) percent of any increase m the Consumer Price Index, and c The adjusted amount of any capital improvements for which a building permit has been issued by the Crty of Rancho Cucamonga and a certification of completion has been filed, or other improvements which adds assessed value to the unit, d Any applicable transaction fee charged by a real estate professional e If the occupant has allowed the unit to detenorate due to defened maintenance, the restncted retail pnce shall be discounted m an amount equal to the costs necessary to bang the unit into confonnrty with Title 15 or Title 16 of this Code 4 Inhentance of mclusionary units Upon the death of an owner of an owner-occupied mclusionary unit, title m the property may transfer to the surviving Iomt tenant 7 11231-0001\985141 v6 doc P21 without respect to the Income-eligibility of the household Upon the death of a sole owner or of all owners of an inclusionary unit and the inheritance of the property by one or more non-income eligible children or step-children of the decedent, the property shall be sold to an income eligible household within one year of the time when the decedent's estate is settled Inheritance of an inclusionary unit by any other non-income eligible person or persons shall require the sale of the property to an income eligible person as soon as is feasible, but not more than 180 days after the decedent's estate is settled 5 Forfeiture If an inclusionary unit for sale is sold for an amount m excess of the resale pnce controls required by this Section, the buyer and the seller shall be~ointly and severally liable to the City for the entire purchase pnce of the unit Recovered funds shall be deposited into the Inclusionary Housing Funds Notwithstanding the foregoing, rt shall be within the discretion of the City Manager to allow the buyer and seller to cure any violation of the resale pnce controls within 180 days D Rental units 1 Time limit for inclusionary restrictions A rental unit shall remain restricted to the target income level group at the applicable affordable housing cost m perpetuity 2 Certification of renters The owner of any rental inclusionary units shall certify, on a form provided by the Crty, the income of the tenant at the time of the initial rental and annually thereafter 3 Forfeiture Any lessor who leases an inclusionary unit m violation of this Chapter shall be required to forfeit to the City all money so obtained Recovered funds shall be deposited into the Inclusionary Housing Funds E The Planning Director may require the execution and recording of whatever documents required to ensure enforcement of this Section, including but not limited to promissory notes, deeds of trust, resale restrictions, rights of first refusal, options to purchase, and/or other documents, which shall be recorded against all inclusionary units F General Prohibitions 1 No person shall sell or rent an inclusionary unit at a pnce or rent m excess of the maximum amount allowed by any restriction placed on the unit m accordance with this Chapter 2 No person shall sell or rent an inclusionary unit to a person or persons that do not meet the income restrictions placed on the unit m accordance with this Chapter 3 No person shall provide false or materially incomplete mfonnaUon to the City or to a seller or lessor of an inclusionary unit to obtain occupancy of housing for which that person is not eligible 8 11231-0001\955141 v6 doc P22 G Principal Residency Requirement 1 The owner or lessee of an mclusionary unit shall reside m the unit for not less than ten out of every twelve months Notwithstanding this requirement, the owner or lessee may live elsewhere for a period up to 6 months every five (5) years on account of hardships including but not hmrted to medical reasons, the need to assist family member m crisis or medical need, and relocation for employment purposes 2 No owner or lessee of an inclusionary unit shall lease or sublease, as applicable, an mclusionary unit without the poor permission of the Planning Director 17 42 090. Takings Determination A Determmahon of a taking of property without lust compensation In accordance with the procedures provided by this Section, a developer may request a determination as to whether the regmrements of this Chapter, taken together with the mclusionary incentives as applied to the residential protect, would constitute a taking of property without lust compensation under the California or Federal Constitutions 1 If an inclusionary housing plan is subject to the approval of the Planning Director, the developer may request the Planning Director to make a takings determination within fifeen (15) days of the decision by the Planning Director to approve or disapprove the Inclusionary Housing Plan The developer may file an appeal of the Planning Director's takings determination within fifteen (15) calendaz days after the date of the decision m compliance with Section 17 02 080 2 If an Inclusionary Housing Plan is subject to the approval of the City Council, the developer may request the City Council to make a takings determination at the time it acts to approve or disapprove the inclusionary housing plan B Presumption of facts In making the taking recommendation or determination, the Planning Director or City Council, as appropriate, shall presume each of the following facts 1 Application of requirements Application of the mclusionary housing requirement to the residential protect, 2 Incentives Application and utilization of all density bonuses and incentives available under State and local law, 3 Product type Uhhzation of the most cost-efficient product type for the inclusionary units that would meet the standards of this Chapter, and 4 External funding The reasonable availability of external funding C Modifications to reduce obligations If rt is determined that the application of the provisions of this Chapter would be a taking, the Inclusionary Housing Plan shall be modified to reduce the obligations m the mclusionary housing component to the extent, and only to the extent 9 11231-0001\985141 v6 doc P23 necessary, to avoid a taking If rt is determined no taking would occur though application of this Chapter to the residential project, the requirements of this Chapter remain applicable 17 42 100. Enforcement D Any violation of this Chapter constitutes a misdemeanor E Forfeiture of funds Any mdrvidual who sells or rents an mclusionary unit m violation of this Chapter shall be required to forfeit all money so obtained Recovered funds shall be deposited into the Inclusionary Housing Trust Fund F Legal actions The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this Chapter, including actions 1 To disapprove, revoke, or suspend any permit, including a Building Permit, Certificate of Occupancy, or discretionary approval, and 2 For m)unctive relief or damages G Recovery of costs In any action to enforce this Chapter, or an Inclusionary Housing Agreement recorded hereunder, the Crty shall be entitled to recover its reasonable attorney's fees and costs 17 42 110 Inclusionary Housing Trust Fund There is hereby established a separate fund of the City, to be known as the Inclusionary Housing Trust Fund All monies collected m compliance with Sections 17 42 060(B) (In lieu fee), 17 42 080(C)(5), 17 42 080(D)(3) (Forfeiture), or 17 42 100 (Enforcement), above, shall be deposited m the Inclusionary Housing Trust Fund 17 42 120 Administrative Fees The Council may by resolution establish reasonable fees and deposits for the administration of this Chapter " Section 2 On or before the second, fourth, and sixth annrversanes of the effective date of this Ordinance, the Planning Director shall prepare and present to the Crty Council an evaluation of the effectiveness of Chapter 17 42, or any successor provisions, during the preceding (2) years and any recommendations for changes Section 3. If any section, subsection, sentence, clause, portion, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent Iunsdiction, such decision shall not affect the validity of the remaining sections, subsections, sentences, clauses, portions, or phrases of this Ordinance The City Council hereby declares that rt would have passed this Ordinance and each and every section, subsection, sentence, clause, portion, or phrase without regard to whether any other section, subsection, sentence, clause, portion, or phrase of the Ordinance would be subsequently declared invalid or unconstitutional 10 11231-0001\985141 v6 doc P24 Section 4 The City Clerk shall certify the adoption of thls Ordinance and cause Its publication m accordance with applicable law Slgned and approved this day of , 2007 Dr Donald J Kurth Mayor of the Crty of Rancho Cucamonga I HEREBY CERTIFY that the foregoing ordinance was adopted by the Crty Council at rts meeting held , 2007, by the following vote AYES NOES ABSENT ABSTAIN Published City Clerk, City of Rancho Cucamonga 11 11231-0001\985141 v6 doc P25 i~G~ ;~ i ~~~~~` -- , u~~s~~_~55~,~_~~~r~~~~ r~~s~cr~.~~~ ADVISO0.51N PURIIC/PRIVATE RFAI ESTATE DFV FI OPMFNT MEMORANDUM AUVISOIl51N REAL F$TATf Rtoev ELOI Mf NE AEIOR DABLE HOb$ING ECONOMIC DEVELOPMI NT SAN fMNCI5C0 A BERRY KEVSfR TIMOTHTC KELLY KniE Enuf Furvl. DE6111f M KE0.N R08E0.Te WFTMORE ~()S AVC fItI CALVIN E HOLUS II Knin L[ENH HFeD ~AMF$ A RAGE PAULO AN OE RSON G REC01tY D SOO HOO KFVIM1 E ENGSTROM iUtlE L ROMFY SAN DIECO GERALD M THIMBLE PAUL C MARM To Linda Daniels, Redevelopment Agency Manager City of Rancho Cucamonga From Kathleen Head Date June 18, 2007 Subtect Incluslonary Housing Fenanceal Feasebelety Analyses At your request, Keyser Marston Associates, Inc (KMA) prepared a financial feasibility analyses for the proposed Clty of Rancho Cucamonga (City) Incluslonary Housing Ordenance (Ordenance) The analyses Is comprised of the following components 1 KMA evaluated the financial impact created by the Income and affordabllety controls recommended at the Incluslonary Zoneng Workshop conducted by the Housing Subcommittee of the Rancho Cucamonga Redevelopment Agency (Incluslonary Workshop) 2 KMA recommended a tiered schedule of Income and affordabllety restrections to be imposed by the Ordenance The recommended schedule is provided for new residential development proposed for land that is currently not zoned for residential uses, and new residential development on residentially zoned land BACKGROUND Regional Housing Needs Assessment (RHNA) The Southern California Association of Governments (SCAG) periodically prepares a Regional Housing Needs Assessment (RHNA) that identefies houseng production goals for the region In turn, the RHNA serves as the basis for the Cety's Housing Element component of the General Plan Given that the Housing Element must be certifeed by the California Housing and Community Development Department (HOD), it Is imperative for the Cety to be able to demonstrate that the RHNA goals can be met 500 SOUTH GRAND AVENUE SUITE 1480 LOS ANGELES CALIFO RNin 90071 .- PHONL 2(3 622 8095 IAX 213 622 $204 0705018 doc RC KHH gbd W W W KFVSCRMARSTON COM 18000 003/001 P26 To Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subtect Inclusronary Housing Financial Feasibility Analysis Page 2 The RHNA goals to be fulfilled during the current five-year Housing Element cycle are Number of Units % of Total Very-Low Income 317 25% Low Income 216 17% Moderate Income 245 19% Above-Moderate Income 504 39% Total 1,282 100% As can be seen in the table, approximately 61% of the RHNA goals are tied to very-low, low and moderate income units The other 39% is related to above-moderate income housing Affordable Housing Production The proposed new developments in Rancho Cucamonga are focused on above- moderate income residential development, and it is ant~apated that the RHNA goals in this category can be met without any government intervention Comparatively, the market is not producing units that are affordable to low or moderate income households, and therefore government intervention will be required to fulfill the RHNA regwrements for this type of housing The Ordinance is one tool being considered by the City to assist in fulfilling these unmet needs Inclusronary Housing Programs Over 130 jurisdictions in California currently include inclusionary housing programs as a component of their overall affordable housing strategies Generally, inclusionary housing ordinances are designed to produce only a portion of the ~urisdretion's affordable housing development, other programs provide for the majority of the affordable housing development within communities Inclusronary housing programs typically impose a speafic affordable housing regwrement on new development, and then offer developers a range of options for fulfilling the affordable housing requirements The most common options offered to developers are Construction of a defined percentage of income restricted units within new market rate residential projects, 0705018 doc RC KHH qbd 18000 003/001 P27 To Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject Inclusionary Housing Financial Feasibility Analysis Page 3 2 Construction of a defined percentage of income restricted units in a protect located in an off-site location, and Payment of an in-lieu fee, which will subsequently be used to assist in the development of affordable housing units within the community The threshold requirements to be imposed on developers should reflect the established unmet need for affordable housing in the community The following analysis is focused on the impacts assoaated with providing the units within market rate protects A separate analysis recommends an in-lieu fee structure to be included in the program INCLUSIONARY HOUSING PROGRAM FOUNDATION As the first step in the evaluation process it is necessary to identify the affordable housing requirements that will be imposed on the various product types In establishing the regwrements it is important to both identify the composition of the unmet need for affordable housing within the community, and to recognize that the Ordinance should not place an onerous finanaal burden on the developers of market rate housing Within that context, it is clear that inclusionary housing can only be expected to fulfill a portion of the unmet need for affordable housing The Inclusionary Workshop recommended that the Ordinance set the inclusionary obligations as follows Percents a of Units in Pro ect Income Level Ownership Rental Very-Low 7 5% Moderate 15% 7 5% Total 15% 15% To assist in determining whether the proposed thresholds are reasonable, KMA performed a survey of over 100 California jurisdictions that currently impose /nclusionary housing requirements The results of this survey indicate that the proposed requirements fall within the norm of the income and affordability standards imposed by inclusionary housing programs being implemented throughout the state It is important to understand that the impact created by the imposition of income and affordability restrictions varies from city-to-city For example, the market rate home prices and rents in Rancho Cucamonga are significantly higher than the median price for homes in San Bernardino County Nonetheless, the Rancho Cucamonga income and affordability standards must be based on the household incomes in the County This results in a disproportionate disparity between market rate prices and affordable prices 0705018 doc RC KHH gbd 18000 003/ODi P28 To Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subtect Inclusionary Housing Finanaal Feasibility Analysis Page 4 It also further explains why it is anticipated that government intervention will be regwred to attract affordable housing units to Rancho Cucamonga The courts have held that affordable housing is a "public benefit", and that locally imposed inclusionary housing ordinances are a legitimate means of providing this public benefit The courts have further found that the requirements cannot deprive an owner of "all econom/cally benefic/al use" of the property However, to date, no definition of all economically benefiaal use has been provided For reference purposes, it should be noted that inclusionary housing programs recently adopted in several California locations have been protected to generate land value reductions in the 30% range In turn, the KMA evaluation of the Ordinance is focused on identifying income and affordability standards that would fall within that parameter FINANCIAL FEASIBILITY ANALYSIS It is the KMA recommendation that the City establish separate income and affordability standards for residential development occurring on residentially zoned land, and for residential development on non-residentially zoned land Specifically, it is the KMA opinion that the regwrements imposed on residentially zoned land should be set at levels that fall within the 30% land value diminution range Comparatively, the City has materially more latitude on non-residentially zoned land because, by defimtion, the imposition of income and affordability restrictions on residential development cannot deprive the owner of the economically beneficial use of their property Affordability Gap Analysis The financial impact assoaated with fulfilling the affordable housing requirements within market rate protects is equal to the difference between the achievable market rate prices/rents and the allowable prices/rents for the income restricted units This is known as the affordability gap, and the calculation methodology can be described as follows The prolected market rate sales prices and rents are estimated for prototypical new residential protects KMA performed a field survey of recently constructed protects to assist in Identifying the product types currently being developed in the market place, and Estimating the achievable sales prices and rents The maximum affordable home prices for the income restricted units are calculated based on the following information 0705018 tloc RC KHH gbd 16000 003/001 P29 To Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subtect Inclusionary Housing Financial Feasibility Analysis Page 5 The household income information used m the calculations is based on San Bernardino County income statistics The household incomes for very-low and low income households are produced annually by the United States Department of Housing and Urban Development (HUD) This information is distributed by HCD annually The household incomes for moderate income households are produced and distributed annually by HCD The affordable housing cost definition is based on the regwrements imposed by California Health and Safety Code Sections 50052 5 and 50053 These standards must be applied to allow the Rancho Cucamonga Redevelopment Agency (Agency) to count the affordable housing units toward the fulfillment of the California Health and Safety Code Section 33413 inclusionary housing production requirements' Units produced using this standard can also be counted towards the fulfillment of the City's RHNA affordable housing goals The difference between the market price and the affordable price represents the affordability gap associated with each income restricted unit required to be included in a market rate residential protect This gap is then multiplied times the number of units that must be income restricted to quantify the effective cost to a developer of fulfilling the inclusionary housing regwrements on site Ownership Protects To evaluate the impacts of the proposed inclusionary housing regwrements, KMA tested the following prototype development alternatroes ' Units provided within redevelopment protect areas can be counted on a 1 1 basis Units provided outside a redevelopment protect area receive 50% credit 0705018 doc RC KHH g5d 18000 003/001 P30 To Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject Inclusionary Housing Financial Feasibility Analysis Page 6 A Townhomes 100% Market Rate Scenario and Proposed Income and Affordability Standards Scenario B Townhomes Feasible Affordability Mix Scenario C Townhomes Density Bonus Scenario D Single-Family Homes 100% Market Rate Scenaro and Proposed Income and Affordability Standards Scenario Homes Feasible Affordability Mix Scenario The 100% market rate unit scenarios provide a baseline against which to measure the impacts associated with the imposition of income and affordability restrictions The results of the alternatives testing can be summarized as follows Townhome Umts 1 The requirement to set-aside 15% of the units for moderate income households acts to reduce the land value in the near-term by 69% 2 If the oblectroe is to limit the land value impact to +/- 30%, it will be necessary to set the affordable housing requirement at 6% of the total units 3 The California State Density Bonus enacted under Senate Bill 1818 and Senate Bill 435 (State Density Bonus), allows fora 10% density bonus to be provided to an ownership project that allocates 15% of the base units to moderate income households The KMA analysis indicates that if a developer took advantage of that density bonus, the impact on land value would be reduced to approximately 25% The results of the townhome analysis indicate that the income and affordability restrictions proposed at the Inclusionary Workshop impose an onerous burden on developers unless they can take advantage of the State Density Bonus To reach an acceptable impact, without the use of the density bonus, the inclusionary requirement would need to be set at no more than 6% of the units Single-Family Home Umts The proposed requirement to set-aside 15% of the units is estimated to reduce the land value by 57% 0705018 doc, RC KHH gbd 18000 003/001 P31 To Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subtect Inclusionary Housing Financial Feasibility Analysis Page 7 The developers of single-family home subdivisions do not typically perceive a value to receiving an increase in the allowable density Within this context, it is the KMA recommendation that the inclusionary requrement for single-family homes should be set at 5% of the units Rental Protects The KMA survey indicates that new apartment development is occurring in Rancho Cucamonga, and that premwm rents are being achieved for the units However, the analysis also indicates that apartment development 1s occurring at very tight profit margins To test the impacts associated with the proposed income and affordability restrictions on apartment development, KMA prepared pro forma analyses for the following prototype protects 100% Market Rate Scenario and Proposed Income and Affordability Standards Scenario G Feasible Affordability Mix Scenario H Density Bonus Scenario The requirement to set-aside 7 5% of the units for moderate income households and 7 5% of the units for very-low income households is protected to wipe out the land value entirely To reach an impact in the range of 30%, the restriction could be limited to moderate income units, and set at 10% of the total units in the protect 3 The State Density Bonus is based on a sliding scale related to the depth of the affordability restrictions imposed on a protect The maximum density bonus allowed is 35%, and it can be achieved 1f 11 % of the units aside for very-low income households KMA estimates that the land value impact under this alternative would equal approximately 54% Based on the results of the feasibility analysis, KMA recommends that the Ordinance require 10% of the units in apartment protects to be set aside for moderate income households However, this standard does not assist the City in achieving it's RHNA goals for very-low and low lncome households As such, 1t may be advantageous to offer Agency financial assistance and/or City development standards relief to developers that fulfill their inclusionary housing requirements by providing units at the very-low and low income levels rather than at the moderate income level 070501 B doc RC KHH gbd 18000 003/001 P32 To Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subtect Inclusionary Housing Financial Feasibility Analysis Page 8 CONCLUSIONSIRECOMMENDATIONS If developers produce affordable housing units within market rate projects, the City is relieved of the obligation to find suitable sites and qualified developers to provide the requisite number of affordable housing units Therefore, it is the KMA recommendation that the City focus the Ordinance on the on-site fulfillment of the income and affordability restrictions However, the Ordinance should also provide the City Council with the discretion to approve alternative methods for fulfilling the affordable housing obligations that comport with the Ordinance's stated goals and objectives Income and Affordabdity Restnctions Based on the results of the preceding analysis, KMA recommends that Ordinance impose the following income and affordability restrictions on residential development _ Non-Residential) Zoned Land Ownership Income Level Townhomes Sin le-Famil Rental Very-Low 7 5% Moderate 15% 15% 7 5% Total 15% 15% 15% Residential) Zoned Land Ownership Income Level Townhomes Sin le-Famil Rental Very-Low Moderate 6% 5% 10% Total 6% 5% 10% If the City wishes to achieve a greater level of affordability within new residential projects, developers should be encouraged to make use of the State Density Bonus In addition, the Agency could potentially provide financial assistance to developers that will agree to impose deeper affordability restrictions than those imposed by the Ordinance Project Slze Thresholds The KMA survey of inclusionary housing ordinances throughout the State indicates that there is wide variance in the size of residential protects that trigger income and affordability restrictions To assist the City in establishing protect size thresholds for the Ordinance, KMA summarized the survey results in the following table 0705078 doc RC KHH gbd 18000 0031001 P33 To Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject Incluslonary Housing Financial Feasibility Analysis Page 9 Number of % of Programs Pro rams All Projects are Subtect to Requirements 21 20% Protects with 5+ Units are Subtect to Requirements 42 39% Protects with 10+ Units are Subtect to Requrements 30 28% Other Threshold Limits 14 13% Total 107 100% The KMA survey indicates that the median threshold protect size is set at five units, and that five units is also the most frequently applied threshold in the 107 turisdictions KMA also found that approximately 40% of the turisdictions prowde different restrictions for small protects than are regwred for mid- to large-sized protects The most typical variations are Small protects are allowed to pay an in-lieu fee by right, and/or to pay a lower fee than 1s charged for larger protects The in-lieu fee amounts are typically established in a schedule, with the fee increasing as a function of the protect size, or The percentage of units regwred to be made affordable is reduced Based on the survey results, KMA recommends that the City Impose the Ordinance requirement on protects that include five or more units KMA further recommends that protects with up to 20 units should be allowed to pay an in-lieu fee by right ,and that any fractional unit obligation should also be allowed to be fulfilled with the payment of an in- lieufee 0705018 doc RC KHH gbd 18000 003/001 P34 APPENDIX A TOWNHOME BASE CASE 90 UNITS (18 UNITS/ACRE) Preparetl oy Keyser Marston Associates Inc Filename Rancho_Cucamon9a_Incl_~ens_O6_18_07 x1s TH_Base P35 APPENDIX A -TABLE 1 ESTIMATED DEVELOPMENT COSTS TOWNHOME BASE CASE 90 UNITS (16 UNITSlACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA. CALIFORNIA I Land Cost 217,800 Sf Land Area II Direct Costs t Site Work Costs 217 800 Sf Land Area Parking z Attached Garage 171 Spaces Podium 23 Spaces Below Ground 0 Spaces Building Shell Costs a 123,750 /Sf GBA Total Drrect Costs III Indlrect Costs General Indlrect Costs ° 13% Dlrect Costs Permits & Fees 90 Units Insurance 90 Units Developer Fee 3% Sales Revenues Total Indvect Costs IV Financing/Closing Costs Interest During Construction/Absorption 6 Loan Origination Fees 6 $24,768,000 Loan Amount Closing & Sales & Warranties' Total FinancmglClosmg Costs $15 /Sf Land $3,314 000 $14 00 /Sf Land $3,049,000 $0 /Space 0 $20,000 /Space 460 000 $30,000 /Space 0 $115 /Sf GBA 14 231,000 $17,740,000 $2,306,000 $20,000 /Unit 1,800,000 $15,000 !Unit 1,350,000 1 062, 000 $6,518,000 $1,951,000 2 5 Points 619,000 1 949 000 $4 519,000 V Total Development Costs 123,750 /Sf GBA $260 /Sf GBA $32,091,000 Total Construction Costs 123 750 !Sf GBA $230 !Sf GBA $28,777 000 ' Assumes that no prevailing wage requirements well be imposed on the development z Total number of spaces equals 194, or 2 15 spaces/unit a Average unit size equal to 1,375 square feet GBA includes a 0% allowance for non-livable area ° Includes architecture, englneenng & consulting, taxes, legal & accounting, marketing, and soft cost contingency 6 Construction and absorption period interest set at a 7 0% blended return on debt and egwty Carrying costs are based on an 1 B month development period Absorption rate is set at 15 units/month 6 Based on a 70% loan to value ratio ~ Based on 5% of sales revenues plus $2 000/unit for warranties costs Prepareo by Keyser Marston Assoaates Inc Fde name Rancho_Cucamonga_Incl_Dens_O6_t8 07 xis TH_Base P36 APPENDIX A -TABLE 2 PROJECTED SALES REVENUES TOWNHOME BASE CASE 90 UNITS (18 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO' Two-Bedroom Units 45 Units @ $381,300 /Unit $17,158,500 Three-Bedroom Units 45 Units @ $405 000 /Unit 18,225,000 Total Sales Revenues $35 383,500 TOWNHOME BASE CASE 15% Moderate Income Market Rate Units 1 Two-Bedroom Units Three-Bedroom Units Moderate Income_Units a 38 Units @ $381 300 /Unit $14,489,400 38 Units @ $405,000 /Unit $15,390,000 Two-Bedroom Units 7 Units @ $197 400 /Unit 1,381,800 Three-Bedroom Units 7 Units @ $221,400 /Unit 1,549 800 Total Sales Revenues $32,811,000 ' Sales price at $305/sf of net livable area for Two-Bedroom Units, and $270/sf of net livable area for Three-Bedroom Units z Moderate Income is based on 110% of the County median Income 35% of income is allocated to housing related expenses Housing related expenses include mortgage debt serwce @ 8 5% interest, property taxes @ 1 1% of affordable puce, HOA @ $2 700 for Two-Bedroom Units & $2 700 for Three-Bedroom Units, utilities @ $1 428 for Two- Bedroom Units & $1,704 for Three-Bedroom Units, & 5% down payment Prepared by Keyser Marston Associates Inc FPe name Rancnc Cucamonga_Incl_Dens 06 1a 07 xis TH_Base P37 APPENDIX A -TABLE 3 LAND VALUE IMPACT ANALYSIS TOWNHOME BASE CASE 90 UNITS (18 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Total Sales Revenues See APPENDIX A -TABLE 2 $35,383 500 Total Development Costs See APPENDIX A -TABLE 1 $32,091,000 Total Sales Revenues Total Development Costs 15% Moderate Income See APPENDIX A -TABLE 2 See APPENDIX A -TABLE 1 532,811,000 532,091,000 Net Land Value Reduction Decrease in Land Value $2,302,000 Prepared by Keyser Marston Assoaates Inc File name Rancho_CuCamonga Incl_Dens 06_18_07 %IS TH_Base P38 APPENDIX B TOWNHOME FEASIBLE AFFORDABILITY MIX 90 UNITS (18 UNITSlACRE) Preparetl by Keyser Marston Associates Inc Filename Rancho_Cucamonga Incl_Dens 06_16_07 zis TH_Feasible P39 APPENDIX B -TABLE 1 ESTIMATED DEVELOPMENT COSTS TOWNHOME FEASIBLE AFFORDABILITY MIX 90 UNITS (18 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Land Cost II Direct Costs' Site Work Costs Parking ~ Attached Garage Podium Below Ground Building Shell Costs' Total Direct Costs III Indirect Costs General Indirect Costs ` Permits & Fees Insurance Developer Fee Total Indirect Costs IV Financmq/Closing Costs 217,800 Sf Land Area 217,800 Sf Land Area 171 Spaces 23 Spaces 0 Spaces 123,750 /Sf GBA 13% Dlrecf Costs 90 Units 90 Units 3% Sales Revenues Interest Dunng Construction/Absorption s Loan Origination Fees 6 $24,768,000 Loan Amount Closing & Sales, 8 Warranties ~ Total Financing/Closing Costs V $4 519 ODO Total Development Costs 123,750 /Sf GBA $260 /Sf GBA $32 091,000 Total Construction Costs 123,750 /Sf GBA $230 /Sf GBA $28,777 000 ' Assumes that no prevailing wage requirements well be imposed on the development ~ Total number of spaces equals 194, or 2 15 spaces/unit ' Average unit size equal to 1,375 square feet GBA includes a 0% allowance for non-livable area Includes architecture, engineenng & consulting, taxes, legal 8 accounting marketing, and soft cost contingency s Construction and absorption period interest set at a 7 0% blended return on debt and equity Carrying costs are based on an 18 month development period Absorption rate is set at 15 unitslmonth r, Based on a 70% loan to value ratio ~ Based on 5% of sales revenues plus $2 000/unit for warranties costs $15 /SfLand $3,314,000 $14 00 /Sf Land $3,049,000 $0 /Space 0 $20,000 /Space 460,000 $30,000 /Space 0 $115 /SfGBA 14231,000 517,740 000 $2 306 000 $20 000 /Unit 1,SOD,000 $15,000 /Unit 1,350,000 1,062,000 $6,518 000 $1,951,000 2 5 Points 619,000 1,949,000 Prepared by Keyser Marston Associates Inc File name Rancho_Cucamonga_InG_Dens 06_18_07 xis TH Feasble P40 APPENDIX B -TABLE 2 PROJECTED SALES REVENUES TOWNHOME FEASIBLE AFFORDABILITY MIX 90 UNITS (18 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO ~ Two-Bedroom Units 45 Uniis @ $381 300 /Unit $17,158 500 Three-Bedroom Units 45 Units @ $405,000 /Unit 18 225,000 Total Sales Revenues 535 383,500 TOWNHOME FEASIBLE AFFORDABILITY MIX 6% Moderate Income Market Rate Units ~ Two-Bedroom Units 42 Units @ $381,300 /Unit $16 014 600 Three-Bedroom Units 42 Units @ $405,000 /Unit $17,010,000 Moderate Income Units s Two-Bedroom Units 3 Units @ $197,400 /Unit 592,200 Three-Bedroom Units 3 Units @ $221,400 /Unit 664 200 Total Sales Revenues $34,281,000 ' Sales price at $305/sf of net Iivabie area for Two-Bedroom Units, and 5270/sf of net livable area for Three-Bedroom Units z Moderate Income is based on 110% of the County median income 35% of income is allocated to housing related expenses Housing related expenses include mortgage debt service @ 6 5% Interest, property taxes @ 1 1% of affordable price HOA @ $2 700 for Two-Bedroom Units & $2,700 for Three-Bedroom Units utilities @ $1 428 for Two-Bedroom Units & $1,704 for Three-Bedroom Unds, 8 5% down payment Prepared by Keyser Marston Assoaales Inc File name Rancho_Cucamonga_Incl_Dens_O6_78_07 xis TH_Feasible P41 APPENDIX B -TABLE 3 LAND VALUE IMPACT ANALYSIS TOWNHOME FEASIBLE AFFORDABILITY MIX 90 UNITS (18 UNITSlACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Total Sales Revenues See APPENDIX B -TABLE 2 $35 383,500 Total Development Costs See APPENDIX B -TABLE 1 $32 091 000 Total Sales Revenues Total Development Costs 6% Moderate Income See APPENDIX B -TABLE 2 See APPENDIX B -TABLE 1 $34,281,000 $32 091 000 Net Land Value Reduction Decrease in Land Value $987,000 Prepared by Keyser Marston Assoaa'es Inc Ftle name Rancho Cucamonga_Ind_Dens_~6 18 07 xls TH Feasible P42 APPENDIX C TOWNHOME DENSITY BONUS 99 UNITS (20 UNITSIACRE) Preparetl by Keyser Marston Assouales Inc File name Rancho_Cucamonga_Incl_Dens_O6 78_07 xls TH_Densily P43 APPENDIX C -TABLE 1 ESTIMATED DEVELOPMENT COSTS TOWNHOME DENSITY BONUS 99 UNITS (20 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Land Cost 217,800 Sf Land Area $15 /Sf Land $3,314,000 II Direct Costs' Site Work Costs 217 800 Si Land Area $14 00 /Sf Land $3 049 000 Parking ~ Attached Garage 213 Spaces $0 /Space 0 Podium 0 Spaces $20,000 /Space 0 Below Ground 0 Spaces $30 000 /Space 0 Building Shell Costs a 136,250 /Sf GBA $115 /Sf GBA 15 669,000 Total Direct Coss $18,718,000 III Indirect Costs General Indirect Costs ° 13% Direct Costs $2,433,000 Permits & Fees 99 Units $20,000 /Unit 1,980,000 Insurance 99 Units $15,000 /Unit 1,485,000 Developer Fee 3% Sales Revenues 1 168 OOD Total Indirect Costs $7,066,000 IV Financmq/Ciosmg Costs Interest During Construction/Absorption s $2,084 000 Loan Origination Fees 6 $27,254 000 Loan Amount 2 5 Points 681,000 Closing & Sales & Warranties ~ 2 145,000 Total Financmg/Closing Costs $4,910,000 V Total Development Costs 136,250 /Sf GBA $250 /Sf GBA $34 008,000 Total Construction Costs 136,250 /Sf GBA $230 /Sf GBA $30 694,000 i Assumes that no prevailing wage requirements veill be imposed on the development ~ Tolal number of spaces equals 213, or 2 15 spaces/unit a Average unit size equal to 1,376 square feet GBA includes a 0% allowance for non-livable area a Includes architecture engineering & consulting, taxes, legal & accounting marketing and soft cost contingency 6 Construction and absorption period interest set at a 7 0% blended return on debt and equity Carrying costs are based on an 18 month development penod Absorption rate is set at 15 units/month a Based on a 70% loan to value ratio ~ Based on 5% of sales revenues plus $2 OOO/unit for warranties costs Prepared by Keyser Marston Associates Inc Ftle name Rancho_Cucamonga_Ind_~ens_O6_ie_07 zls TH_~ensity P44 APPENDIX C -TABLE 2 PROJECTED SALES REVENUES TOWNHOME DENSITY BONUS 99 UNITS (20 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA TOWNHOME DENSITY BONUS 15% Moderate Income (Base Units) Market Rate Units' Two-Bedroom Units 42 Units @ $381,300 /Unit $16,014,600 Three-Bedroom Umts 43 Unds @ $405 000 /Und $17,415,000 Moderate Income Units s Two-Bedroom Units 7 Units @ $197,400 /Unit 1,381,800 Three-Bedroom Units 7 Units @ S221 400 /Unit 1,549,800 Total Sates Revenues $36,361,200 Sales price at $305/sf of net livable area for Two-Bedroom Units, and $270/51 of net livable area for Three-Bedroom Unds 2 Moderate income Is based on 110% of the County median Income 35% of Income is allocated to housing related expenses Housing related expenses include mortgage debt service @ 6 5% interest, property taxes @ 1 1% of affordable price, HOA @ $2,700 for Two-Bedroom Units & $2,700 for Three-Bedroom Units, utilities @ $1,428 for Two- Bedroom Units & $1,704 for Three-Bedroom Units, & 5% down payment Preparetl Oy Keyser Marston Associates Inc File name Rancho_Cucamonga_Incl Dens_06_ie_07 xis TH_Density P45 APPENDIX C -TABLE 3 LAND VALUE IMPACT ANALYSIS TOWNHOME DENSITY BONUS 99 UNITS (20 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Total Sales Revenues See APPENDIX A -TABLE 2 $35,383 500 Tofal Development Costs See APPENDIX A -TABLE 1 $32 091,000 7WNHOME DENSITY BONUS 15% Moderate Income (Base Unlts) Tolal Sales Revenues See APPENDIX C -TABLE 2 $36,361,200 Total Development Costs See APPENDIX C -TABLE 1 $34,008,000 Net Land Value Redudlon $841,000 Decrease In Land Value 25% Prepared by Keyser Marston Assot ales Inc File name Rancho_CUCamonga Incl Dens_O6 18_07 xls TH_Density P46 APPENDIX D SFH BASE CASE 26 UNITS (5 UNITSIACRE) Preparetl by Keyser Marston Assoaates Inc File name Rancho OpGamonBa_~00I_Dens_06 18_07 xls SFR Base P47 APPENDIX D -TABLE 1 ESTIMATED DEVELOPMENT COSTS SFH BASE CASE 26 UNITS (5 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Land Cost 217 800 Sf Land Area $15 /Sf Land 11 Dvect Costs' Site Work Costs 217 800 Sf Land Area $14 00 /Sf Land Parking s Attached Garage 65 Spaces $0 /Space Podium 0 Spaces $20,000 /Space Below Ground 0 Spaces $30,000 /Space Building Shell Costs ~ 76,700 /Sf GBA $80 /Sf GBA Total Dvect Costs III Indirect Casts General Indirect Costs" Permits & Fees Insurance Developer Fee Total Indirect Costs IV FnanunglClosmg Costs 13% Direct Costs 26 Units 26 Units 3% Sales Revenues Interest During Construction/Absorption s Loan Origination Fees s $13,807,000 Loan Amount Closing & Sales, & Warranties 7 Total Finanang/Closing Costs V $2,364,000 Total Development Costs 76,700 /Si GBA $230 /Sf GBA $17,559,000 Total Construction Costs 76,700 /Sf GBA $190 !Sf GBA $14,245 000 ' Assumes that no prevailing wage requirements well be imposed on the development s Total number of spaces equals 65, or 2 50 spaces/unit ~ Average unit size equal to 2,950 square feet GBA Includes a 0% allowance for non-livable area 4 Includes architecture, engineering & consulting taxes legal & accounting, marketing and soft cost contingency 5 Construction and absorption period interest set at a 7 0% blended return on debt and equity Carrying costs are based on an 18 month development period Absorption rate is set at 15 units/month e Based on a 70% loan to value ratio 7 Based on 5% of sales revenues plus $2,000/unit for warranties costs $9 185 000 $1,194,D00 $20,000 /Unit 520 000 $15,000 /Und 390,000 592,000 $2,696 000 $981 000 2 5 Points 345 000 1,038,000 $3 049,000 $3,314,000 0 0 0 6 136,000 Preparetl by Keyser Marston Assoaates Inc FOe name Rancho Cucamorga_Incl DenS_O6 1 B_07 xis SFR_Base P48 APPENDIX D -TABLE 2 PROJECTED SALES REVENUES SFH BASE CASE 26 UNITS (5 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO ~ Three-Bedroom Units 13 Units @ $775,700 /Unit $10,084 100 Four-Bedroom Units 13 Units @ $741,500 !Unit 9 639,500 Total Sales Revenues $19,723 60D SFH BASE CASE 15% Moderate Income Market Rate Units ~ Three-Bedroom Units 11 Uniis @ $775,700 /Unit $8,532,700 Four-Bedroom Units 11 Units @ $741,500 /Unit $8,156,500 Moderate Income Units z Three-Bedroom Units 2 Units @ $221,400 /Unit 442,800 Four-Bedroom Units 2 Units @ $238,300 Nnit 476 600 Total Sales Revenues $17,608,600 ' Sales price at $267/sf of net I~vable area for Three-Bedroom Units, and $247/sf of net livable area for Four-Bedroom Unds % Moderate income is based on 110% of the County median income 35% of income is allocated to housing related expenses Housing related expenses include mortgage debt service @ 6 5% interest, property taxes @ 1 1% of affordable pace, HOA @ $2,700 for Three-Bedroom Unrts & $2 700 for Four-Bedroom Unrts, uti6hes @ $1,704 for Three- Bedroom Units & $2 112 for Four-Bedroom Units, & 5% down payment Preparetl by Keyser Marston Associates Inc FAe name Rancho Cucamonga_Incl Dens 09_78_07 xls SFR Base P49 APPENDIX D -TABLE 3 LAND VALUE IMPACT ANALYSIS SFH BASE CASE 26 UNITS (5 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Total Sales Revenues See APPENDIX D -TABLE 2 $19,723 600 Total Development Costs See APPENDIX D -TABLE 1 $17,559,000 Total Sales Revenues Total Development Costs Net Land Value Reduction Decrease in Land Value $1,893,000 15% Moderate Income See APPENDIX D -TABLE 2 $17,608 600 See APPENDIX D -TABLE 1 $17,559,000 Prepared by Keyser Marston Associates Inc Fi,e name RanCbo_Cuwmonga_Incl_Dens_O6_78_07 x15 SFR_ease P50 APPENDIX E SFH FEASIBLE AFFORDABILITY MIX 26 UNITS (5 UNITS/ACRE) Preparetl by Keyser Marston Assouales Inc RIe name Rancho_CUCamonga Ind_Dens_O6_18 07 xls SFR_Feasible P51 APPENDIX E -TABLE 1 ESTIMATED DEVELOPMENT COSTS SFH FEASIBLE AFFORDABILITY MIX 26 UNITS (5 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA Land Cost II Drect Costs' Site Work Costs Parking s Attached Garage Podium Below Ground Bwlding Shell Costs a Total Direct Costs III Indirect Costs General Indirect Costs ° Permits & Fees Insurance Developer Fee Total Indirect Costs IV Financmq/Ciosma Costs 217,800 Sf Land Area 217,800 Sf Land Area 65 Spaces 0 Spaces 0 Spaces 76,700 /Sf GBA 13°/a Drect Costs 26 Units 26 Unds 3°/o Sales Revenues Interest Dunng Construction/Absorption s Loan Origination Fees 6 $13,807,000 Loan Amount Closing & Sales, & Warranties 7 Total Financing/Closing Costs V $2,364 000 Total Development Costs 76 700 /Sf GBA $230 !Sf GBA $17 559,000 Total Construction Costs 76,700 /Sf GBA $190 /Sf GBA $14 245,OOD ' Assumes that no prevailing wage requirements wdl be imposed on the development 2 Total number of spaces equals 65, or 2 50 spaces/unit a Average unit size equal to 2,950 square feet GBA includes a 0% allowance for non-Iwabie area a Includes archdecture, engineenng & consulting, taxes, legal & accounting marketing, and soft cost contingency s Construction and absorption period interest set at a 7 0% blended return on debt and equity Carrying costs are based on an 18 month development penod Absorption rate is set at 15 units/month 6 Based on a 70% loan to value ratio ~ Based on 5% of sales revenues plus $2,000/unit for warranties costs $15 /Sf Land $14 00 /Sf Land $0 /Space $20 000 /Space $30,000 /Space $80 /Sf GBA $9,185 000 $1 194,000 $20 000 /Unit 520,000 $15 000 /Unit 390 000 592,000 $2,696,000 $981 000 2 5 Points 345 000 1 038,000 $3,049,000 $3,314 000 0 0 0 6,136,000 Prepared by Keyser Marston Associates Inc File name Rancno_Cucamonga_Incl_Dens 06_18_07 xis SFR Feasible P52 APPENDIX E -TABLE 2 PROJECTED SALES REVENUES SFH FEASIBLE AFFORDABILITY MIX 26 UNITS (5 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO' Three-Bedroom Units 13 Units @ $775 700 /Unit $10,084,100 Four-Bedroom Units 13 Units @ $741,500 /Unit 9,639,5D0 Total Sales Revenues $19,723,600 SFH FEASIBLE AFFORDABILITY MIX 5% Moderate Income Market Rate Units' Three-Bedroom Units 12 Units @ $775 700 /Unit $9,306,400 Four-Bedroom Units t2 Units @ $741 500 /Unit $8,898 000 Moderate Income Units z Three-Bedroom Units 1 Unit @ $221,400 lUnlt 221,400 Four-Bedroom Units 1 Unit @ $238,300 /Unit 238,300 Total Sales Revenues $18 666,100 ' Sales price at $267/sf of net livable area for Three-Bedroom Units and $247/si of net livable area for Four-Bedroom Units z Moderate income Is based on 110% of the County median Income 35% of Income Is allocated to housing related expenses Housing related expenses include mortgage debt service @ 6 5% interest, property taxes @ 1 1% of affordable price, HOA @ $2,700 for Three-Bedroom Units & $2,700 for Four-Bedroom Units, utilities @ $1,704 for Three- Bedroom Unils & $2 112 for Four-Bedroom Uniis, & 5% down payment Prepared by Keyser Marston Associates Inc Rle name Rancho Cucamonga_Inci_Dens 06_18 07 xis SFR_Feas ble P53 APPENDIX E -TABLE 3 LAND VALUE IMPACT ANALYSIS SFH FEASIBLE AFFORDABILITY MIX 26 UNITS (5 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Total Sales Revenues See APPENDIX E -TABLE 2 $19,723,600 Total Development Costs See APPENDIX E -TABLE 1 $17 559,000 Total Sales Revenues Total Development Costs 5% Moderate Income See APPENDIX E -TABLE 2 See APPENDIX E -TABLE 1 $18 666,100 517,559,000 Net Land Value Reduction Decrease in Land Value $sas,ooo 29% Prepared by Keyser Marston Assoaates Inc Fie name Rancho_Cucamonga_ircl_Dens_g6_t6_07 x15 SFR Feas ble P54 APPENDIX F APARTMENT BASE CASE 90 APARTMENT UNITS (30 UNITS/ACRE) Preparetl by Keyser Marston Associates Inc Ftle name Rancho_CU;.zmorga_Incl_Dens 06_18_07 xls Apt_Base P55 APPENDIX F -TABLE 1 ESTIMATED DEVELOPMENT COSTS APARTMENT BASE CASE 90 APARTMENT UNITS (30 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Land Cost 130,680 Sf Land Area $15 /Sf Land $1,988,000 II Dvect Costs' Site Work Costs 130,680 Sf Land Area $12 00 /Sf Land $1,568,000 Podium Parking Z 182 Spaces $20,000 /Space 3,640,000 Bwlding Shell Costs ~ 116,862 Sf GBA $125 /Sf GBA 14 608 000 Total Dvect Costs $19,816 000 III Indlrect Costs General Indirect Costs" 10% Direct Costs $1,982,000 Permits & Fees 90 Umts $20,000 /Unit 1,800,000 Insurance 90 Units $5,000 /Unit 450000 Developer Fee 5% Dlrect Costs 991,000 Total Indlrect Costs $5,223,000 IV Financing Costs Interest During Construction e Land $1,988,000 Land Cost 7 0% Interest $209,000 Budding $27,695,000 Cost 7 0% Interest 1,890 ODO Loan Origination Fees a $15 908,000 Loan Amount 3 5 Points 557 000 Total Financing Costs $2,656,000 V Total Development Costs 116,862 Sf GBA $250 /Sf GBA $29 683,000 Total Construction Costs 116,862 Sf GBA $240 /Sf GBA $27 695 000 ' Assumes that no prevading wage regwremenis well be Imposed on the development Z Total number of spaces equals 182 or 2 02 spaces/unit ' Average unit size equal to 1,129 square feet GBA includes a 115% allowance for non-rentable area Includes archdecture, engmeenng & consulting, taxes, legal 8 accounting, marketing, and soft cost contingency e Construction interest set at 7 0% on debt and 7 0% on equity Land carrying costs are based on a 100% average outstanding balance, and an 1 B month development period Construction costs are based on a 65% average outstanding balance and an 18 month construction period a Based on a 70% loan to value ratio Prepared by Keyser Marston Assoaates Inc Fie name Rancho_Cucamonga Ind_Dens_O6 18_07 xis Apt_6ase P56 APPENDIX F -TABLE 2A STABILIZED NET OPERATING INCOME MARKET RATE SCENARIO APARTMENT BASE CASE 90 APARTMENT UNITS (30 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA 1 Income Rent ' One-Bedroom Unts 27 Units @ $1,359 /Month $440,200 Two-Bedroom Units 36 Units @ $1,695 /Month 732,200 Three-Bedroom Units 27 Units @ $2 201 /Month 713,200 Gross Income $1,885,600 Vacancy & Collection Allowance 5% Gross Income (94,300) Effective Gross Income $1,791 300 II Operating Expenses General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes z 90 Units @ $2,778 /Unit 250,000 Total Operating Expenses 90 Units @ ($7,280) /Unit ($655,000) III Net Operator Income $1,136 300 ' Markel rent = $1 79/sf for One-Bedroom Units $1 52/sf for Two-Bedroom Units, and $1 45/sf for Three-Bedroom Units Based on the prgect value at a 5 0% capdalization rate and a 1 1% tax rate Prepared oy Keyser Marston Associates Inc Filename Rancho_CUCamonga_Incl_Dens_O6_18_07 x1s Apl_Base P57 APPENDIX F -TABLE 2B STABILIZED NET OPERATING INCOME APARTMENT BASE CASE APARTMENT BASE CASE 90 APARTMENT UNITS (30 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Income Market Rent t One-Bedroom Units 23 Units @ $1,359 /Month $375,000 Two-Bedroom Units 30 Units @ $1,695 /Month 610,100 Three-Bedroom Units 23 Uniis @ $2 201 /Month 607 500 Moderate Income a One-Bedroom Units 2 Units @ $1,258 /Month 30,200 Two-Bedroom Units 3 Units @ $1 407 /Month 50,600 Three-Bedroom Units 2 Units @ $1,556 /Month 37,300 Verv-Low Income a One-Bedroom Units 2 Units @ $547 /Month 13,100 Two-Bedroom Units 3 Unlls @ $607 /Month 21,900 Three-Bedroom Units 2 Units @ 5668 /Month 16,000 Gross Income $1 761,700 Vacancy & Collection Allowance 5% Gross Income (88 100) Effective Gross Income $1,673,600 II Operatmg Expenses General Operating Expenses 90 Umts @ $4,500 /Unit $405 000 Property Taxes ° 90 Units @ $2 542 /Unit 226 800 Total Operating Expenses 90 Units @ ($7 040) /Unit ($633 800) III Net Operatln Income $1,039,800 Market rent = $1 79/sf for One-Bedroom Units, $1 52/sf for Two-Bedroom Units, and $1 45/sf for Three-Bedroom Units ~ Moderate Income Is based on 110% of the County median 30% of Income is allocated to housing related expenses Utilities @ S46 for One-Bedroom Units, $59 for Two-Bedroom Units, and $72 for Three-Bedroom Units Rents are the lesser of moderate Income rents and market rents a Very-low income is based on 50% of the County median 30% of income Is allocated to housing related expenses Utilities @ $46 for One-Bedroom Unds $59 for Two-Bedroom Umts, and $72 for Three-Bedroom Unrts Preparetl by Keyser Marston Associates Inc FAe name Rancho_Cucamonga_Incl_Dens_OB_18 07 xis Apt Base P58 APPENDIX F -TABLE 3 LAND VALUE IMPACT ANALYSIS APARTMENT BASE CASE 90 APARTMENT UNITS (30 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Net Operating Income See APPENDIX F -TABLE 2A $1,136,300 Total Development Costs See APPENDIX F -TABLE 1 $29,683,000 APARTMENT BASE CASE 7 5°/a Moderate Income 8 7 5% Very-Low Income Net Operating Income See APPENDIX F -TABLE 2B $1,039,800 Total Development Costs See APPENDIX F -TABLE 1 $29,683,000 Nel Land Value Reduction $2 256,000 Decrease in Land Value 113"/° Prepared by Keyser Marston Associates Inc Filename Rancho_Cucamonga Ircl Dens_O6_18_07 ws Apt_Base P59 APPENDIX G APARTMENT FEASIBLE AFFORDABILITY MIX 90 APARTMENT UNITS (30 UNITS/ACRE) Preparetl by Keyser Marston Associates Inc Flle name Rancho Cucamonga Incl_Dens_O6_78_07 xls Api_Feasible P60 APPENDIX G -TABLE 1 ESTIMATED DEVELOPMENT COSTS APARTMENT FEASIBLE AFFORDABILITY MIX 90 APARTMENT UNITS (30 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Land Cast 130 680 Sf Land Area $15 /Sf Land $1,988,000 II Dvect Costs' Site Work Costs 130 680 Sf Land Area $12 00 /Sf Land $1 568,000 Podium Parking ~ 182 Spaces $20,000 /Space 3,640,000 Bwlding Shell Costs a 116,862 Sf GBA $125 /Sf GBA 14 608,000 $19,816,000 Total Direct Costs III Indirect Costs General Indirect Costs ° 1D% Direct Costs $1,962,000 Permits & Fees 90 Units $20 000 !Unit 1,800,000 90 Units $5,000 /Unit 450,000 Insurance Developer Fee 5% Dvect Costs 991 000 $5,223,000 Total Indirect Costs IV Ponancmq Costs Interest Dunng Construc4on 6 Land $1,988,000 Land Cost 7 0% Interest $209 000 Building $27,695,000 Cosl 70%Interest 1,890,000 Loan Origination Fees 6 $15 908,000 Loan Amount 3 5 Points 557,000 $2,656,000 Total Financing Costs V Total Development Costs 116,862 Sf GBA $250 1Sf GBA $29 663 000 Total Construction Costs 116 862 Sf GBA $240 /Si GBA $27 695 000 ' Assumes that no prevailing wage requirements will be imposed on the development z Total number of spaces equals 182 or 2 02 spaces/und a Average unit size equal to 1,129 square feet GBA includes a 115% allowance for non-rentable area ° Includes architecture, engineenng & consulting, taxes, legal 8 accounting marketing, and soft cost contingency s Construction interest set al 7 0% on debt and 7 0% on equity Land carrying costs are based on a 100% average outstanding balance, and an 18 month development period Construction costs are based on a 65% average outstanding balance and an 18 month construction period e Based on a 70% loan to value ratio Prepared by Keyser Marston Associates Inc Fie name Rancho_CUwmon9a_Incl_Dens O6_t 6_07 xis Apt Feasible P61 APPENDIX G • TABLE 2A STABILIZED NET OPERATING INCOME MARKET RATE SCENARIO APARTMENT FEASIBLE AFFORDABILITY MIX 90 APARTMENT UNITS (30 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Income Rent' One-Bedroom Units 27 Umts @ $1,359 /Month $440,200 Two-Bedroom Units 36 Units @ $1,695 /Month 732,200 Three-Bedroom Units 27 Unlts @ $2,201 !Month 713 200 Gross Income $1 885,600 Vacancy & Collection Allowance 5% Gross Income (94,300) Effective Gross Income $1,791,300 II Operating Expenses General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes s 90 Units @ $2,778 /Unit 250 000 Total Operating Expenses 90 Units @ ($7 280) /Unit ($655,000) III Ne[Operating Income $1,136,300 ' Market rent = $1 79lsf for One-Bedroom Units $1 52/sf for Two-Bedroom Units, and S1 45/sf for Three-Bedroom Units s Based on the protect value at a 5 0% capitalization rate and a 1 1% tax rate Prepared by Keyser Marston Associates Inc Fde name Rancho Cucamonga_Incl_Dens_O6 18_07 xis Apt Feasible P62 APPENDIX G -TABLE 2B STABILIZED NET OPERATING INCOME APARTMENT FEASIBLE AFFORDABILITY MIX APARTMENT FEASIBLE AFFORDABILITY MIX 90 APARTMENT UNITS (30 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Income Market Rent' One-Bedroom Units 24 Units @ $1 359 /Month $391,300 Two-Bedroom Units 32 Units @ $1,695 /Month 650,800 Three-Bedroom Units 25 Units @ $2 201 !Month 660,300 Moderate Income s One-Bedroom Units 3 Units @ $1 258 /Month 45,300 Two-Bedroom Units 4 Units @ $1,407 /Month 67,500 Three-Bedroom Units 2 Units @ $1,556 !Month 37,300 Gross Income $1,652,500 Vacancy & Collection Allowance 5% Gross Income (92 600) Effec4ve Gross Income $1 759 900 II Operating Expenses General Operating Expenses 90 Units @ $4,500 /Unit $405 000 Property Taxes a 90 Units @ $2,732 /Unit 245,900 Total Operating Expenses 90 Units @ ($7,230) /Unit ($650,900) III Net Operating Income $1 109,000 ' Market rent = $1 79/sf for One-Bedroom Units, $1 52/sf for Two-Bedroom Unlts and $1 45/st for Three-Bedroom Units s Moderate Income is based on 110% of the County median 30% of income is allocated to housing related expenses Utilities @ $46 for One-Bedroom Units $59 for Two-Bedroom Units, and $72 for Three-Bedroom Units Rents are the lesser of moderate Income rents and market rents ' Based on the protect value at a 5 0% capitalization rate and a 1 1% tax rate Preparetl by Keyser Marston Associates Inc Filename Rancho_CUCamonga Inc! Hens 06_18 07 x1s Apt_Feasible P63 APPENDIX G -TABLE 3 LAND VALUE IMPACT ANALYSIS APARTMENT FEASIBLE AFFORDABILITY MIX 90 APARTMENT UNITS (30 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Net Operating Income See APPENDIX G -TABLE 2A $1,136,300 Total Development Costs See APPENDIX G -TABLE 1 $29,683,000 APARTMENT FEASIBLE AFFORDAE 10% Moderate Income Net Operating Income See APPENDIX G -TABLE 2B $1,109,000 Total Development Costs See APPENDIX G -TABLE 1 $29,683,000 Net Land Value Reduction 5638 000 Decrease in land Value 32% Prepared Dy Keyser Marston Associates Inc File name Rancho_CUCamonga_Incl ~ens_O6_ie_07 xls Apt Feasible P64 APPENDIX H APARTMENT DENSITY BONUS 122 APARTMENT UNITS (41 UNITS/ACRE) Preparetl by Keyser Marston AssoGales Inc Filename Rancho Cucamonga_Ind Dens_O6_t8 07 x1s Apt_DensM1y P65 APPENDIX H -TABLE 1 ESTIMATED DEVELOPMENT COSTS APARTMENT DENSITY BONUS 122 APARTMENT UNITS (41 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Land Cost II Direct Costs' Site Work Costs Podium Parking s Building Shell Costs 6 Total Direct Costs III Indirect Costs General Indirect Cosfs " Permits & Fees Insurance Developer Fee Total Indirect Costs IV Financing Costs Interest During Construction s Land Bwldmg Loan Ongination Fees s Total Financing Costs V 130,680 Sf Land Area 130,680 Sf Land Area 246 Spaces 158,844 Sf GBA 10% Direct Costs 122 Units 122 Units 5% Direct Costs $1,988,000 Land Cost $36,823,000 Cost $21,629 000 Loan Amount $15 /Sf Land $1,966 000 $12 00 /Sf Land $1 568,000 520,000 /Space 4,920 000 $125 /Sf GBA 19,855 000 $26,343 000 $20,000 /Und $5,000 /Unit $2 634,000 2,440,000 610,000 1.317 000 7 0% Interest 7 0% Interest 3 5 Points $7,001 000 $3,479 000 Total Development Costs 156 844 Sf GBA $240 /Sf GBA $38,811 000 Total Construction Costs 158,844 Sf GBA $230 /Sf GBA $36,823 000 ' Assumes that no prevailing wage requirements will be imposed on the development s Total number of spaces equals 246 or 2 02 spaces/unit s Average unit size equal to 1 132 square feet GBA includes a 115% allowance for non-rentable area ^ Includes architecture, engineering & consulting, taxes, legal & accounting, marketing, and soft cost contingency s Construction interest set at 7 0% on debt and 7 0% on equity Land carrying costs are based on a 100% average outstanding balance and an 18 month development period Construction costs are based on a 65% average outstanding balance and an 18 month construction penod ~ Based on a 70% loan to value ratio $209 000 2,513 000 757.000 Prepared by Keyser Marston Assooates Inc File name Rancho_CUCamonga_Ind_Dens_06_16_07 xis Apt_Densiry P66 APPENDIX H -TABLE 2 STABILIZED NET OPERATING INCOME APARTMENT DENSITY BONUS APARTMENT DENSITY BONUS 122 APARTMENT UNITS (41 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I Income Market Rent' One-Bedroom Units 32 Units @ $1,359 /Month $521,700 Two-Bedroom Units 46 Units @ $1,695 /Month 935,500 Three-Bedroom Units 34 Units @ $2,201 !Month 898,000 Moderate Income ~ One-Bedroom Units - Units @ $1,258 !Month 0 Two-Bedroom Units - Units @ $1,407 /Month 0 Three-Bedroom Units - Units @ $1 556 /Month 0 Verv-Low Income 3 One-Bedroom Units 4 Units @ $547 /Month 26,200 Two-Bedroom Units 3 Units @ $607 /Month 21,900 Three-Bedroom Units 3 Units @ $668 /Month 24,000 Gross Income $2 427 300 Vacancy & Collection Allowance 5% Gross Income (121,400) Effective Gross Income $2,305,900 II Operating Expenses General Operating Expenses 122 Units @ $4 500 /Urnt $549,000 Property Taxes " 122 Unds @ $2,597 /Umt 316,800 Total Operating Expenses 122 Units @ ($7,100) /Unit ($865,800) III Net Operating Income $1,440,100 ' Market rent = $1 79/sf for One-Bedroom Units, $1 52/sf for Two-Bedroom Units, and $1 45/sf for Three-Bedroom Units s Moderate Income Is based on 110% of [he County median 30% of income is allocated to housing related expenses Utllltles @ $46 for One-Bedroom Units, $59 for Two-Bedroom Units and 572 for Three-Bedroom Units Rents are the lesser of moderate income rents and market rents ' Very-low income is based on 50% of the County median 30% of income is allocated to housing related expenses Utilities @ $46 for One-Bedroom Units $59 for Two-Bedroom Units, and $72 for Three-Bedroom Units Preparetl by Keyser Marston Associates Inc Fi a name Rancho Cucamonga_Incl Dens OB_t 9_07 xis Apt_Density P67 APPENDIX H • TABLE 3 LAND VALUE IMPACT ANALYSIS APARTMENT DENSITY BONUS 122 APARTMENT UNITS (41 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Net Operating Income See APPENDIX F -TABLE 2A $1,136,300 Total Development Costs See APPENDIX F -TABLE 1 $29,683 000 APARTMENT DENSITY BONUS 11% Very-Low Income (Base Units) Net Operating Income See APPENDIX H -TABLE 2 $1,440,100 Total Development Costs See APPENDIX H -TABLE 1 $38,811,000 Net Land Value Reduction $1 067 000 Decrease in Land Value 64% Preparetl by Keyser Marston ASSOCIates Inc Filename Rancho_Cucamonga_Incl_Dens O6_78_O~xls Apt_Density P68 MEMORANDUM ; REDEVELOPMENT AGENCY RANCxo Date• July 6, 2006 CUCAMONGA To: Mayor and City Council Members Jadc Lam, AICP, Executive Directo~o~'~{ /~n/~ From• Housing Subcommittee Members Gutierrez and Mich) • Y _ SubJect. INCLUSIONARY ZONING WORKSHOP - 4.00 P.M JULY 19, 200fi Over the past several months, the Housing Subcommittee has been meeting Hnth staff and counsel to discuss the City and Agency's obligations and opportunities in providing affordable housing As we all know, the production and preservation of affordable housing is a State requirement imposed on redevelopment agencies and sties, but it is unrealistic to think that local communities can meet affordable housmg requirements solely using local funding sources Rancho Cucamonga has made great strides in addressing its aNordable housing obligations pnmanly through the use of Redevelopment Agency Housing Set-aside funds Despite these efforts, which have produced approwmately 1700 units of affordable housmg (1,320 through Redevelopment and the balance through City/County Agreements), a tremendous need still exists Dunng the approval of the Redevelopment Agency's Housing Production Plan {Attachment 1), which ~ part of the Housing Element of the City's General Plan, 12 potential programs to assist in providing affordable housing were identified Programs 9 and 10 present goals for investigating the feasibiliiy of an affordable housmg overlay zone and a mixed use overlay zone in order to create new opportunities for providing affordable housing Given the need to provide a balanced community and recognizing there are iimded resources remaining to provide affordable housing (both in terms of available land and finances) the Subcommittee is proposing the Ciry Council discuss creating a Iirnited Inclusionary Zoning Ordinance The pollees which the Subcommittee is proposing for discussion will also help accomplish the program goals of the Housing Production Plan and the Housing Element Many cities have adopted an Inclusionary Zoning Ordinance that requires developers to either provide affordabte units (on or off-site) or pay an in-lieu fee as part of the entitlement process The Housing Subcommittee has reviewed and discussed several InGusionary Zoning options and concluded that a limited approach to Inclusionary Zoning could be considered in Rancho Cucamonga The Subcommittee has requested a workshop on Wednesday, July 19`" at 4 00 p,m. to discuss with the full City Counal the status of our affordable housing efforts and potential policies for a limited Inc{usionary Zoning application To faalitate the discussion, the following background material and information has been provided in advance of the workshop P69 INCLUSIONARY ZONII3G WORKSHOP - 4 00 P M ,JULY 19, 2006 v 6, 2006 WHAT IS AFFORDABLE HOUSING AND WHY IS IT IMPORTANT TO A COMMUNITY PAGE 2 As the City Council is aware, aver the past 25 years the City has groom in population, lobs and housing units In the early years of the City's growth, Rancho Cucamonga was viewed as a haven for affordable land and housing for young families as compared to the Orange and Los Angeles county areas Whfle paces for land and housing in Rancho Cucamonga remain lower than unt125: - - ~ changed dramatically in recent years How many times have you heard your fnends and neighbors say they wouldn't be able to afford the home they are in today The Housing Subcommittee is also aware that the growth in the City has begun to expand the employment opportunities and thus the wage eammg opportunibes in the City In the past 10 years the City has seen signrficant growth in office and higher end fobs that are generally assoaated wish higher wage eammg capabilities The City has also seen a significant increase in the number of retail, sernce/restaurant and hospitality (hotel) labs The Subcommittee has frequently discussed the value to the community in providing affordable workforce housing for the residents, and employees of companies in Rancho Cucamonga The ability for people to live and work in the community has far reaching social and economic benefits to the city and the families employees needing affordable housing Far 2006, the median income for the County of San Bernardino for a family of 4 is $57,500 While the median income for Rancho Cucamonga is much higher, approximately $72,525, it is the County median income figure that is used to calculate eligible incomes and affordable housing rates Dunng the Subcommittee meetings infonnabon was discussed regarding wages and fob types that would be considered affordable wages Attached #2 to Phis memo is a small sampling of the types of fobs which at entry level would typically qualify as being an affordable income assuming a family size of 4 The Subcommittee also noted that using the lowest mcome possible, minimum wage at $6 75 an hour, a single person househdd would have to work 115 hours per week in order to achieve the median inaxne While this is an extreme example of wage eammg, it is important to note that even at an hourly rate of $15, a single person would have to work 52 hours a week in order to achieve the median income The following table illustrates the vanous eligible income limits, based on family size Famd Slze County of S B Median Income 35°k income 45°!° mcome 609'° income 90% income 1 $40,300 $14,105 $18,135 $24,180 $36,270 2 $46,000 $16,100 $20,700 $27,600 $41,400 3 $51,800 $18,130 $23,310 $31,080 $46,620 4 $57,500 $20,125 $25,875 $34,500 $51,750 5 $62,100 $21,735 $27,945 $37,260 $55,890 6 $66,700 $23,345 $30,015 $40,020 $60,030 7 $71,300 $24,955 $32,085 $42,780 $64,170 8 $75,900 $26,585 $34,155 545,540 $68,310 P70 INCf USIONARY ZONING WORKSHOP -4 00 P M ,JULY 19, 2006 PAGE 3 f ULY 6, 2006 These family incomes translate Into the following affordable monthly rental rates, inGuding the amount allocated for ubhties FAMILY SIZE 35% income 45% income 60% income 90% income 1 $353 $453 $605 $907 `v~.~°. ru° econ 21 MS -$953 $`a$3_I $7J_7 ~ $1,166 4 $503 $647 $863 $1,294 5 $543 $699 $932 $1,397 6 $584 $750 $1,001 $1,501 7 $624 $802 $1,070 $1,604 8 $664 $854 51,139 $1,708 As a comparison, the current average rental rate for an apartment in Rancho Cucamonga is $1,166 per month Attachment #3 shows a listing of some of the rental complexes and rental rates in Rancho Cucamonga that are advertised on www apartments coin The average ewsting home price in the City is $533,930 At an interest rate of fi%, a 3D year mortgage and a down payment ranging between 10% ($53,400) and 20% (108,800), a family of 4 would need an income between $102,450 and $115,245 in order to qualrfy for the mortgage payment These inwmes are almost double the current County median income for 2006 Attachment #4 shaws a comparison of incomes to ewsting and new home prices for the past 10 year period of fame The chart shows that housing costs have increased sign~cantly more than increases in income, which impacts home ownership affordability BACKGROUND DATA AND INFORMATION Attachment #5 is a summary table which the Subcommittee has reviewed with staff regarding our achrevements in the providing affordable housing Attachment #6 is information summarizing the Regional Housing Needs Assessment and identifes the number and distribution by income category of affordable units that were expected to be provided in the City between 1999 and 2005 A review and explanation of this information Hnli be part of the staff presentation at the workshop The more cnGcal data that is important for the City Council to be aware of are the following • Based on the State Housing Production Requirements, the Agency has a responsibility of providing approximately 2,755 units of affordable housing to meet the 15% minimum affordable housing requirement for the Protect Area • The Agency has duectly provided 1,025 units, and another 295 units are proposed (1,320 total units) Through multi faintly bond financing, another 268 units have been provided which the Agency can recewe credit for The total number of units the Agency receives credit for is 1,588 units, approximately 68% of the number of units that should be available The Agency has an exisbng 1,167 unit shortfall In the number of affordable housing units • Between 1999 and 2005 the Regional Housing Needs Assessment (RHNA} estimated the need for 7,700 units to serve families who were paying more than 30% of their income on P71 II3CLUSIONARY ZONING WORKSHOP - 4 00 P Af ,JULY ] 9, 2006 tuLY G. 2006 PAGE 4 housing Of these units, approximately 79%, or 6,110, were for families earning 60% or less of median income During this time period the CitylAgency was able to obtain covenants for i44 units fvr families earning 60% or less of median income - or 2% of the need • The RHNA numbers for the City for 2006-2011 time frames are currently being developed, but have not been distributed Staff expects the CiN's "fair share' numbers for housinc for families earning 90% or less of the median income to be adfusted to account for the families - a a unme nee s in e - line tame approxima e y snit es , as we as the protected families that unit need affordable housing in the upcoming 5 years based on the City's growth. • The Agency has expended or pledged more than $232 million from its housing set aside fund in order to provide the 1,320 units The Agency's resources are nearing capaGty as the Protect Area and tax increment reach the limits of the Redevelopment Plan • Unlike the early 1980's when the City was seeing tremendous moderately priced housing growth, the ma]ority of the units that are being constructed today are not considered to be affordable to low or moderate income families • The Agency can provide affordable housing by either obtaining covenants on either existing units or through new construction of units At a minimum, 50% of the units provided must be through new construction methods, and no more than 50% of the units can be acquired through covenants on existing protects • The Agency is required to spend housing set aside monies on family/senior protects in proportion to the City's population Based on the 2000 census, the City's senior population (65 and older as defined by State law) is 5 5% and its faintly age population (64 and under} ~S 94 5% At the workshop, staff will present maps that identity properties that could be affected by an inclusionary requirement and a vacant land summary that clearly identifies the limited opportunities for construction of new housing units Attachment #7 is a listing of sties in the State of California that have some form of Inclusionary Zoning Requirement, Attachment #13 is a sampling of ar4Ges that discuss the issue of affordable housing in the local communities PURPOSE The purpose of an Inclusionary Zoning Ordinance is to require private development pro]ects to provide a share of housing that is affordable to low and moderate income households These housing units are to be provided without finanaal assistance from bcal sources Some aUes regwre inclusionary units as part of any residential development, and other cities have regwred Inclusionary Zoning be accomplished on a more limited practice After many meetings of discussion and review of affordable housing material, the Subcommittee is suggesting the City Council consider devebping a limited fnclusionary Zoning regwrement which would only apply to protects that request the following types of discretionary approvals • Land Use change from aNon-Residential land use (Open Space, Flood Control, Industrial, or Commercial) to a Residential or Mixed Use land use, P72 IIQCLUSIONARY ZONING WORKSHOP-4 DO P Ivf ,JULY 19, 2006 PnGE 5 juLY 6, 2006 __ • Land Use change from Residential to Commercial, • An increased density on Residential land, • A Map revision to allow a conversion from apartments to condominiums Ttw S~~hr~,mm~ttQP.c rPa~~t~Ettind this_apyfoaS.h_LS_th;t? a_prooosed re-zoning could add value to the property, and the community could also add value through the provision of affordable housing Additionally, property owners that convert apartments to for-sale condominiums are removing rental units from the market and potentially dnvmg up the rents of the remaining rental housing in the City The Inclusionary Zoning requrrement could compensate the community for the loss of affordable housmg rental stock when this occurs Requfnng affordable units as part of an mcreased residential density application ensures that the increase in housing units is in proportion with the overall affordable housing need The requirement for providing affordable housing when a land use change Is proposed to convert a residential site to commercial is also sound because you are removing potential housing opportunities for residents When this type of zone change is requested, the opportunity to provde housing on-site would be limited to those instances where a mixed use designation is granted Othervnse, the developer would have to provide the required affordable housing off-site, or pay In-lieu fees since a commercial zoning does not permit residential land uses Through a hmded Inclusionary Zoning practice, the city could gain workforce housmg for the empbyees of the proposed commercial development and the city as a whole The Subcommittee felt it was important that any Inclusionary Zoning requirement not be applied to property that is currently allowed to be developed for residential uses If a developer must receive an approval to a proposed development that they would not otherwise be entitled to, then the City should be able to share in the benefits of that development through the provision of affordable housing RECOMMENDED STANDARDS The Subcommittee and staff have compiled the following standards that could be considered as part of an Inclusionary requirement The Subcommittee Is suggesting these standards as a starting point for discussion only, and could be mod~ed or enhanced dunng the workshop, and any subsequent public workshops 1 When a land use or density change application is made, as part of the entitlement process the developer would be allowed to meet the Inclusionary Zoning requirement in one of four ways, subject to Gty approval: • construct the affordable units as part of the proposed protect • donate land and/or construct the required affordable units on another residentially zoned site • acquire units or covenants in another property • pay an In-lieu fee 2 The minimum percentage of Inclusionary units should be 15% of the total residential units proposed as part of the zone or density change The Subcommittee has proposed that 50% P73 INCLUSIONARY ZONING WORKSHOP - 4 00 P M ,JULY 19, 2006 IULY 6, 2000 PAGE 6 of the Indusionary units provided be affordable to families earning 5l}% or less of median income Through recorded covenants, indusionary units produa~ could be legally restnded to occupancy by affordable income households for a minimum of 55-years for rental units and 45-years for owner-occupied units in usionary um s s ou a cons ruc ed air d oc~te;tJ-L$ncanerttly-wtttr- construction and occupancy of proposed protect In phased developments, incluswnary urnts could be constructed and occupied in proportion to the number of residential or commercial units in each phase of the development Developer would be required to enter into an Affordable Housing Agreement with City/Agency to ensure on-going maintenance and preservation of urnts 6 Within a proposed rental protect, the number of bedrooms of the restncted units should be m the same proportion to the non-restricted urnts In the case of a for sale single family affordable unit, the resale regwrements of the Agency's first tnr~ home buyer program vnll apply When an affordable single family unlt is sold at a profit and not to an income qualified family, the seller will be requred to share a percentage of the egwty for reinvestment back into the affordable housing program for future single family home purchases Rental and Home Ownership Inclusronary units should be indisttngwshable from market-rate units, they should be of similar construction and contain similar amenfies The minimum bedroom unit size for any rental Inclusronary unit should be T bedroom and there will be a need for a percentage of the units to be 2 and 3 bedrooms as detenrnned by RHfJA goa{s at the time a protect is proposed The bedroom mix for an Incusronary home ownership unit will be based on the ratio of bedrooms in the protect that is being proposed 9 A Development Agreement will be required as part of the land use or density change entdlement process which approves the location and method for meeting the Inclusronary Zoning requirement POLICY QUESTIONS The Housing Subcommittee has ident~ed the fallowing as the 2 initial policy questions for discussion by the Cdy Council • Is there CounGl support for continued discussions on possible implementation of a limited Inclusronary Zoning Ordmance~ • Should the Ordinance apply only to applications for zone or density changes Following the discussion by the City Councl of these two policy questions, the Subcommittee would recommend that the CounGl discuss the recommended standards in order to provide staff the needed direction to work wdh legal counsel on the framework of a limited Inclusronary Zoning Ordinance P74 INCLUSIONARY ZONII3G WORKSHOP -4 00 P M., JULY 19, 2006 Tui.r 6, 2006 PAGE 7 CONCLUSION At the conclusion of the workshop, should the Council recommend moving forward with the limded Inclusionary Zoning concept, the Housing Subcommittee would suggest that staff be directed to begin a senes of meetings with the Bwiding Industry Assoaation (BIA), non-profit housing nmarnzatinns Chamher of Commerce local developers, and bn~{cers to gather input on polices and recommendat3onsfnr Council's consideration at a future meeting P75 a TW r 666N ~_ O fq a C J c tC U lQ X w C3 ~+~-a.chment ~l 9 T ^' r ~.. Qz ~y a R m ;_ a ~ E; 0 0 ~ u E c A N ~ oa e. _ _ ~ r ~ 3 ~ k_°m cm~ O ~ v~ ~ b 9 J~ d A C ~ rye r°d mEv ~ V UY¢~H~S 0 ~ c o ~ m d "' w ~ ~ ~ T 0 .fit( ~ L v ~' Q m >< ` m ~ ;< ~' ~ ro ~ ~ F .~ T O f l ~ 1J w W r i 1 b 1 S N a m r X P76 RedevelopmentAgency's Housing Production Plan G HPP PROGRAMS AND IMPLEMENTATION MEASURES, JULY 1, 2000, THROUGH JUNE 30, 2005 Having examined the mandatory production requirement and the resources available to meet the regwrement, programs and quantdatrve goals for the perad July 1, 2000, through June 30, 2DD5, are set forth below These programs shall be consistent with the General Plan, the cattlorr,anr warn rha wE+¢ram Center for Law and Poverty and with Article 34 of the State As stated above, the protected production requirement from the formation of the RDA through June 30, 2005, is 1,024 units As of January 1, 2000, a total of fi75 unds have been provded In addition the RDA has a current unmet obl~gai[on of 911 new or substantralty rehabilitated restncted, affordable units The discussion of programs, includuig aerogram-by-program quantification and timetable for implementation is induded below Tables X-9 and X-70 illustrate the program quantification Eleven programs are recommended. Pro4ram 1: Nelghbofiood Non-Profit HDC To meat the needs of specific neighborhoods, the RDA shall faalitate the development of Non- Profrt, 501(c)(3), Neighborhood Housing Development Corporations Speaal neighborhood needs may include areas of bng-term residential overcrowding, special infrastructure needs, or histonc neighborhood identdicaUOn. lmplementatron This program is underway Dunng the 1992-1993 fiscal year, the RDA facilRated incorporation of the NHDC to serve the Northtown neighborhood The RDA shall conbnue to work with the NHDC through the 2005 reporting pencil. Prooram 2: Land Bank The RDA continue to seek Non-Profit Housing Development Corporations to assist in the development of affordable housing on property that the agency has banked to date for affordable housing. No new land bank purchases are planned since the program has not meet planned e~ectatrons Imp/ementatron This program is underway As of June 30, 2000 a total of 38 9 acres of land capable of accommodating up to 359 affordable units had been purchased by the RDA (see Table X-7 and Figure X-4) Of the 38 9 acres, 4 acres are curentfy being devebped by NHDC The RDA is seeking Non-profd Devebpment Corporations to assist in the development of the remaining 34 acres X - 14 (June ?001) P77 Redevelopment Agency's Housing Production Plan Program 3: RDA Assisted Muttl-Family Protect Development The RDA shall work with property owners, financial instdiitlons, public agencies, non-profit housing development corporations, and for-profit corporations to construct new restricted, affordable rental units within the redevelopment area The RDA shall also work with private for- prof+t corporetions to achieve affordable housing goals Consistent with the HAS, priority for gnren to City-based housing development corporatOns, then to non-profd housing developmenl corporations with experience in the area Also, consistent with the HAS, tax credit participation shall be encouraged as the primary, but not the only, role of for-prof! corporations Consistent with the State Densely Bonus Requirement for Affordable Housing, the RDA anticipates that affordable housing will be developed at 125% of the maximum density for the residentlal zone Consistent with the HAS, a minimum of 40% of the units shall be restricted, affordable units. Implementation This program is underway. The RDA is ass+st+ng the SCHDC and the NHDC has developed 88 restricted, affordable units from land bank resources The goal for this program is development of a total of 400 units of restricted, affordable rental housing units between Juty 1,2000 and June 30, 2005 Program 4: RDA Assisted Mufti-Family Pro}ect Acquisition The RDA shall tdenttty and purchase, or facilitate purchase, of existing multi-family projects that become available for sate On a case-by-case basis, the RDA shall lease, purchase, or by oii,er means secure affordability restnctioris for individual units within existing and new construction multi-family units The purpose will be to increase the supply of restricted, affordable units. Consistent with HAS policy, 40% of the units shall be affordable to low and moderate income renters implementation This program is underway By June 30, 2000, the RDA had assisted the SCHDC with acquisition of 1,096 units- Consistent with HAS policy, 504 units (45%} are restricted, affordable units for low- and moderate-Income families The RDA also assisted in the development of Ylla del Norte, an lib-unit apartment complex, where all units are held as affordable The goal of this program as to assist in conversion of one adddional multi-family protect to 40% restricted, affordable status between July 1, 2000 and June 30, 2005 Prooram 5: RDA Assisted Conservation of Multi-family Units at Risk of Conversion To Market Rate As required by taw, the City has completed a study of the restricted, affordable multi-famity units that are at risk of conversion to market rate The RDA shall enter into discussion with property X -15 tnnre 2oori P78 Redevelopment Agency's Housing Production Plan owners regarding acquisWon and/or conservation of the 79 units-at-nsk that are k>cated wrthrn the redevelopment area /mplementaLon This program +s undenwway As of June 30, 2000, the RDA has conserved 592 units-at-nsk. The RDA shall enter +nto d+scussron w+th property owners regardrg acquis+tion and/or conservation of units at nsk during the next reporting period Of the 404 units-at-nsk of conversion, 79 are Program 6: RDA Assisted Existing Single-Family Acquisition and Rehabilitation The RDA shall ass+st non-profd agencres with the purchase of ex+st+ng single-family homes that may then be offered for resale w+th affordability restrictions on future sales. Under this program, opportuntt+es shall be explored to aoqurre homes that become ava+lable through mortgage foreclosure. Toward this goal, the RDA shall open commun+cabon with FHA, as well as w+th banks and mortgage companies, mdicat+ng +nterest in su+tabfe purchases In instances where rehabilitation +s required as a condition of resale, acqu+s+bon and resale may be coordinated with the City's Housing Rehab+l+tation Program These homes shall be +ncorporated into affordable owner or renter programs Owner programs shalt be combined wdh I+mRed equity strategies to maintain affordability for the lifebme of the protect. r Implementation This program is underway Three units have been purchased, substantially rehabilitated, and sold with restncted affordability provisions The goal of th+s program +s to ass+st with the purchase and, N necessary, substantial rehabilitation of up to 20 units between July 1, 2000 and June 30, 2005, which shall then be rented or resold with affordab+lity restrictions Program 7: RDA Assisted Single-Family New Construction The RDA shall facrl+tate new constructwn single-fam+ly ownership programs, including but not limited to, single-family Inf+ll projects, as well as condominium and townhouse developments These projects may be rented or sold. Owner programs shall be combined with Eimded equity strateg+es to maintain affordability for the Irfedme of the proect. Imp/ementation The goal of this program +s 65 units of single-fam+ly new construct+on between July 1, 2000 and June 30, 2005 These unds may be rented or sold with restricted affordability prov+sfons X-16 (.xnezaor/ ,_- P79 Redevelopment Agency's Housing Production Plan Program 8• RDA Assisted Single-Famlty Home Ownership The RDA shall continue to provide down payment assistance to qualrfied households through several programs, first-tune homebuyer programs including the program administered by the Neighborhood Housing Services and NHDC The NHDC operates a first nine homebuyer program where homes are offered to buyers earning up to 90% of the area median income The goal of this program is to assist 75 qualified single-family homebuyers July t, 2000, and June 30, 2005 Program 9: Affordable Housing Overlay Zone The RDA shall investigate the feasibiliiy of establishing an Affordable Housing Overlay Zone using the Senior Housing Overlay Zone as a model as recommended by the HAS {I-D-6) The purpose of an overlay zone would be to taal'itate the ssng of affordable housing Imp/ementabon Between July 1, 2000, and June 30, 2005, rf adequate funding is available, or upon request by a developer, the RDA and the City's Planning Division shall investigate the feasibility of /~, establishing an Affordable Housing Overlay Zone to facilrtate the siling of affordable housng ~_ J Program 10: Mixed-Use The RDA and the City shall investigate the feasibility of a mixed-use overlay zone to faalitate the development of affordable housing. The primary focus shall be to introduce residential use Into commercial and possibly industrial dlstncts where design opportunities would allow residential units above ground level nmulti-level commercial buildings or behind commercial stops Also, part of this study would investigate the feasibility of rezoning industnai areas for mixed rndustnal, commercial, and residential use The study for this program maybe combined with the Affordable Housing Overlay Distnct Study Implementaf+on Between July 1, 2000, and June 30, 2005, rf adequate funding is available, or rf requested by a developer, the RDA and the City's Planning Division shall research and develop a mixed use overlay zone, including an analysis of the benetAS of a muted use overlay zone compared with rezoning. X - 17 (dvn° 2000 P80 Redevelopment Agency's Housing Production Plan Program 11: Financial Mechanisms The RDA shall utilize a vanety of financial mechanisms to assist deveopment of affordable housing units including, but not limned to, the following Loan wnte-down, mortgage revenue bonds, state tax credits, on-site improvement rests off-site improvement costs and City fee waiver and as well as a school tPa waiver for Senior Housing Imp/ementabon This program is underway Between July 1, 2000, and June 30, 2005, the RDA shall continue to use the above financial mechanisms to assist with the development of restncted, affordable housing units Program i2: Community Outreach A Community Outreach Program is desirable An outreach program goes further tfian legally required public participation and notice Ii can serve as an educabonal tool to inform the community of the RDA's legal obligation to provide affordable housing as well as to inform the community of the RDA's past actions which resulted m affordability to first time owners and first Ume renters Further, a Community Outreach Program could enlist community direction on which programs and actans should be emphas¢ed to reach mandated affordability goals /^ lmp/emenfaGOn `~ Between July 7, 2000, and June 30, 2005, H adequate funding is available, or if requested by a developer, the RDA, and the City's Planning Division shall oversee a community outreach program TABLE X-7: Restricted, Affordable Housing Production in the Redevelopment Area from December 23. 1981. through June 30, 2000 Program Total T4tat income Laver ltnka Afford- t p ~ tit Projected abk 9elow 3696 36-4596 4s-b096 6•t-901C Program 4 RDA Assisted 1,326 548 140 146 142 116 MultfFamily Acquisition Program 5 RDA Assisted 592 592 126 170 170 126 Conservation Urob-At- Risk Program 6• Substantial 3 3 1 0 0 2 Rehebiiita4on Existing Single Family Units Program 7 RDA Assisted 65 65 4 11 21 29 Single Family New Construction Total 1,986 1,208 271 329 333 274 X -18 (rune zoo rl P81 ~4i+ach meat ~2. The following is a partial list of common fob titles whose entry level salaries (national/state averages) are considered to be wages that qualify as a low or moderate income This information was obtained from a variety of sources including a survey by USA Today, the Clty of Rancho Cucamonga General Plan and the California Emolovment Development Department Accommodations (hotel) Machinist Administrative and support Miscellaneous manufacturing seances Miscellaneous store retailers Amusements, gambimg, and Museums, historical sites, zoos, recreation and parks Apparel manufacturing Auto Mechanic Bank Tellers Bookkeeper) Bulldvig material and garden supply stores ClerklTypist Clothing and Clothing accessories stores Cook Credit Intermediation and related activities Dental Assistant Dental Hygienist Electrical equipment and appliances mfg Electronics and appliance stores Fabncaled metal products manufacturing Firemen Food and beverege scores Food manufacturing Food services and drinking places fumdure and home furnishings stores Furniture and related products rnfg Gasoline stations General merchandise stores Groundskeeper Health and personal care stores Nurse Aid Nursing and residential care facdihes Personal and laundry services Plastics and rubber products manufacturing Police Officers Primary metals manufacturing Printing and related support activities Reaf estate Rental and leasing services Repair and maintenance Retail Manager Scenic and sightseeing transporiatron Secretary Social assistance, incl daygre Sporting goods, hobby, book, music stores Stock Clerk Teachers Teller Transit and ground passenger transportation Truck Driver Wader/Wadress Warehousing and storage Weider Wholesale trade, nondurable goods P82 ~i-l-ac.~l n~n-f' ~3 The following is a sampling of apartment complexes and their rents as shown on www apartments coin This is not a complete Ilsting of apartment units that are available in the City of Rancho Cucamonga Apartment Complex Rental Un+t Range The Reserve at Empire Lakes $1180- $2030 11210 41h Street Rancho tucamonga. Verano at Rancho Cucamonga $1100 - $2536 Town Square 8200 Haven Ava Rancho Cucamonga, CA 91730 Chambra at V~ctona Arbors 51105 - $2025 7828 Day Creek Blvd Rancho Cucamonga, CA 91739 Heritage at Victoria Arbors $1140 - $2040 7922 Day Creek Blvd Rancho Cucamonga, CA 91730 Sierra Heights $1050 - $1845 10801 Lemon Ave RANCHO CUCAMONGA, CA 91737 Heritage Park Alta Loma Senior $750 - $995 Community 9601 Lomita Ct Alta Loma, CA 91701 The Terrace Apartments $875 - $900 8383 Fir Dr Rancho Cucamonga, CA 91730 Miramonte $968 - $1773 10757 Lemon Ave Rancho Cucamonga, CA 91737 Ironwood At Empire Lakes $1185 - $1985 11100 4th Street Rancho Cucamonga, CA 91730 AMLI at Empire Lakes $1060 - $1920 9200 Milliken Ave Rancho Cucamonga, CA 91730 P83 Barrington Place $1215-$2035 7650 Etiwanda Ave Rancho Cucamonga, CA 91739 Camino Real $1210 - $2160 7951 Ehwanda Ave Rancho Cucamonga CA 91739 0o s ng - 8255 Vineyard Ave RANCHO CUCAMONGA, CA 91730 Waterbrook Apartments $1045 - $1520 10400 Arrow Rte Rancho Cucamonga, CA 91730 Village art the Green $905 - $2025 9400 Fairway View PI Rancho Cucamonga, CA 91730 Vlctorla Woods $1000 - $1530 8496 Etrvoanda Ave Rancho Cucamonga, CA 91739 P84 y+ d Z V W Q C~ Z a U ~~. U S ~..~ Z O V Z •~ W _U 'Q^. V Z_ O ~~ N ~ ~ \ H \ \ _ t ~ $ ~ 1 \ _ vi N w sl i1C I ~ I I O1 ~ ` m N ~ ~ r o } ~ O ~'yy p aD LI N ~ I ~ ~I w Q ' 9' ~ N w ~ 1n Y SS ~ ~ gm d M S g g S S o o g f.4 °o o $ °o °o °o °0 4u ~ u W Q ' H M en N eA w h ~ a° N N C ~ N _ y w 'O ~ N m y E t? X L ~ ~ O n ~ 3 R ~ m ~' N II !' ? c y G ~ a E ~ e W n n o, N m ~ l0 P C E 2 = T N ~ d m = L s~g~, ~ g q W~ c 3 N ~ 0 ~ (p ~ ~O C1 n c E ~ r ~ ~ U o N O O p y d V ~ 1 ]1 N y 7 L L ~ N a A ~ ~ °' U ~ n ~ O S = m W ,~ o C N m t~ ~ y N p. Z E ~ v Q1 z N N ~ ~ A~ ~ ~ y ~~1111W~011 y ~ O T o .}7 C 7 Q L• N I , m U N~ d C E O ~ v.Q ~ v 4i $ y L` O = (n 1 C N ~j ~ N ~ I UU ~ ~1 O ~ N 1 ll~ Q E a ~ E ~ ~, n c ~n o N t W E W L Ip T C _ C C .-. ~ n N ~ ~ ~ ~ ~ ~ C S' d ~ ~ ~ 3 A C ~ c m l0 T N _T ~ w a Of d ~ 'Egv ~ ~ - 0 of c ~, a P85 >~c~merrt' ~ 5 REDEVELOPMENT AGENCY 15% HOUSING PRODUCTION REQUIRMENT* Very Low Low Moderate Pro ect Tenure Less than 50% 50-79°!0 80-120% IIait Total Villa del Norte Rental 47 41 88 Las Casttas Rental 14 0 14 Rancho Verde Village" Rental 26 10 16 52 Mountatnstde Rental 96 48 44 188 Monterey Village Rental 56 28 26 1 i0 Sycamore Spnngs" Rental 30 15 3 48 Pepperwood Rental 100 130 230 Villa Pactfica "' Rental 0 79 0 79 Hentage Potnte" Rental 12 12 24 OIen Jones Sr Apartrnents" Rental 22 26 48 Woodhaven Manor ** Rental 30 28 58 Pazkvrew Place -Terra Vtsta Rental 30 30 Mountain View -Terra Vista Rental 54 54 Sycamore Terrace - Terra V Rental 26 26 Evergreen -Terra Vista Rental 79 79 Waterbrook Rental 79 79 First Tune Homebuyers Owner 2 9 75 86 Total 435 426 432 1293 Percentage of Total Umts 34% 33% 33°!° *Based on 2001 General Plan prolcctron of 18,368 res~denttal units m the protect azea at buildout 2,755 affordable amts will be regwred to meet Redevelopment Protect Area requirements *" These amts aze outside the Pro ect Area and have been calculated as 1 amt er 2 amts roduced Proposed Protects Tenure Very Low Low Moderate Total NHDC Foothill/East" Rental 55 27 28 110 SCHDC Rancho Verde F,c Rental 6 13 19 Foothill Vistas Rental 83 83 166 Pro osed Pro ed Total 144 123 28 Cumulative Total 579 549 460 1588 Cumulative Percenta a 36% 35% 29% unit numbers are estimates State Mandate Acencv Totals 2001 GP Protect Area Unds 2005 Ex~shng Units Unbudt Residential Units Very Low 50-120% Total 1,102 1653 2,755 579 1009 1,588 58% 18,368 17,791 96°k Bwlt Out 577 6!26/2006 P86 A~chmerrt' ~`~ J T w AI N ~ ~G Z ~+N2 D ~ ~ 3 O c°nZm z C ~ N ~ ~D D ~ 00 ~~ N P N y O N 3 m °m~ °m- n C O ~ D_ ~,ds m ~g~m W ~ zm ~ ~ ~ N a o c m a a ~ n Z ~ a ~ o ~^F m a 2 o- ~ ~ ~ a a m rtt a c ~ ~ O a c n m - c 5 c ~ w 2 .n» `D 3 ~ g ~ c ~ ~~ A 9 ~ ~ ~ ~ o V ~ ? n ~ V V~ r- A ~ u C ~ o ~ e a° 3 e ~ ~ ~ ~ A ~ ~ O 2 ~ ~ O ~ '"'~ O d 41 C 3 C ' V V pW v O ~ ONO V V (fN 0f ~ p 0 N O) Z r ~ A F p O ~ lO ~ ~ a° ~ ~ o m ~' ~ ~ o m ~ -I ~ ~ ~ ~_ ~ o n ~ C v w C ~v CJ r> f1i A G ~ ~ ~ Ci ~ n O O ~ ~ t D p~ ~ ~ ~° ~ ~ o o ~ ~ °, ~ Z .. m O ~ of m D1 n m G7 Z r C I/~ W Z CO ~ om o m ~" v N m m z ~Cf-hz~mcnt ~7 } .,. f a r ~_... Research Methodology CCRH and NPH rnttrated the 2002/03 survey to reassess the use of inclturonar housutg pncuces across California The survey quationna~re used in CCRH's 1994 stud was modified, updated and expanded to mdude detail on housing production and oche program fcaturrs Local advocates, planrung officals and academics were consulted u these revisions and a final questiotmaie was drstnbuted by mail in early Aprll 2002 Al planning agenaes listed in the Califorrna Planners' Information Network were contacted mdudmg 5S counties and 467 cruel CSan F:ancssco rs counted as both a my and county) .~,.- ... „~„ _ c, V., ~- ~„`,~. ~: T~ nm.. ~ .m Y•~ :,.. y _ ~ City with inclttsiortary housing program ~4^' County with inctusionary _„ ~ l horsing program •• V 1 NI:..A~ y ~ "~ y~ c '" ~- ~ y ~ Lame iac..• , :is ' , ~rM,~ si.. ' t r,..., ~'^vf ~ j l~.a. ~r ~ ; ,- • .W, ,..~, ~`~--J . Z - ,~ ~•" -~, r '~4 MM+s y :~~' ' r" ' Imo` ~~nr ! + I. yT FTI • I~ ~ flq, ' _~_~ ~.lw. ~ bum '~` fi. ~`- 4 ~~~ 7 Map provided by fr'ceniefo Nelworlr. rr Sr Swad K 41evu V: i' l~ - ~`` • • • • - - `_J •-4~ • v..n~t. ~~"° • ~{ Tn~ ~ IYW~uI 1 I _ '~~~ O4'r~ r t I P87 P88 To increase the r+csponse rate, two rounds of follow-up surveys were condudcd June 2002, the quesnonnaire was again waded and telephone contact was made a nontespondutg lurlsdictions reported to have local programs In January 2003. a sh followrrp survey was prepared and forwarded to respondutg j»tisdicdons seek additional information on methodology for determination of tn4lcu fees, total h colkctcd, Income targeting goals and produaron numbers *n total, 98 lunsdictit returned completed qucsnonnaires acrnunting for 92 percent oP known programs Califomta Based on pmlous studies and Internet searches of jttnsdtctton Web sit another mne lurisdicuons that did not return mmpltted questionnaires arc lodged have some form of indusIonary housing t Findings A. Number of Inctusionary Jurisdictions As of Match 2003. 107 California lttrlsdicdons are known to use loal indusion practices to provide affordable housutg oumde of the **r+~~Mments of State redevdopm law These ntdude cl[frs and countlcs that require affordable construction through ordurancc, general plan or petmtt approval process.ZThis Est cotrsrsts of 12 counties percrnt of all counties) and 95 dries (20 percent of all dtles) The spread of mdturartary programs is most dramatic among does, which reprrs 41 of the 43 new progntns As the map (see p. 11) darty demonstrates, indusron housing s most prcvalrnt m hrghtost housing markets In the coastal cotmua The m sigrtrfiant dusters are in the Sera Ftanrs4co Bay Area, metropolitan Satramrnto, and ! Drego County At last two dozen other Califomta lunsdrenotss are presently mnsrda adopmg mdustonary housing, inchtdurg the loges[ dry, Los Angeles Figure 1 shows the increasing popularity of lndusonary housing in the 1990s Na half (48 percent) of aB progruns were adopted doting that decade compared to obi one•thud (37 pacrnq tit the 1970s and 1980s The trend is continuing in the 2000s iz Figure 1: Year of Adoption Jurisdtctions that have an Inclusionary Housing Program Inclusionary housing programs re4Wre developers to subsidize affordable housing as a Condit approval This may include malang a percentage of the project available to low and moderate residents or payment of an m-lieu fee. The following crhes and wunttes report that they have an mclusionary housing program Agoura Hills Amencan Canyon Arroyo Grande Bakersfield Beaumont Bell Belmont Bentcia Berkeley Biythe Brawley Brea Buellton Califomma City Calistoga Carlsbad Chula Vista Clayton Clovis Coalinga Colusa County Corcoran Coronado Corte Madera Cupertino Daly City Davis Del Mar Del Norte County Del Rey Oaks Desert Hot Springs East Palo Alto Encinitas Escondido Farmersville Fort Bragg Gonzales Grover Beach Half Moon Bay Hawthorne Healdsburg Hemet Hidden Hills Hollnster Huntington Park Indio Ione of project form of P89 t..._, u_.,_..,. __ __. ~-'---•--^-~ti_.._...., i.....,.:.... i..».i ~ cis-~~~..,.. lurISQ1GLlUI1J 13161 uuvc naa aaaw..~...••~--~ -------o - --c--- Irvtne La Habra La Quints La Verne Lakewood Larkspur Lathrop Livermore Los Altos Los Angeles Los Gatos Mammoth Lakes Mann County Mendota Menlo Park M~II Valley Mono County Monterey Napa County Newport Beach Novato Oceanside Palo Alto Paramount Patterson Perris Petaluma Pico Rivera Placer County Pleasant Hlll Port Hueneme , Portola Valley Poway Rancho Palos Verdes Redwood City Ripon Rolling Htlls Estates Sahnas San Anselmo San Bernardino County San Carlos San Clemente San Franclsco San Gabnel San Jacinto San Juan Caplstrano San Leandro San Luis Oblspo San Marcos San Mateo County San Rafael Santa Barbara County Santa Cruz Santa Cruz County ~i~-3nnn~ P90 Santa Monica Sebastopol Shasta County . Signal Hill Solana Beach Sonoma South Gate Sutter County Vtsta Waterford Watsonville West Hollywood West Sacramento Willits Wtnters Woodland Yolo County Yorba Linda Yountvtlic ~ Wgb Search ~ Comment ~ ~ UPIN Home ~ CERES Homy ~ P91 r_~. _ u _ r ~_ _ _ n ~r _ L La~1 I nM~rn nni