HomeMy WebLinkAbout10-ATTACHMENT D (KEYSER MARSTON & ASSOCIATES INCLUSIONARY HOUSING IN-LIEU FEE ANALYSIS)G'�j
KEYSER MARSTON ASSOCIATES
ADVISORS IN PUBLIC/PRIVATE REAL ESTATE DEVELOPMENT
MEMORANDUM
ADVISORS IN:
Real Estate
To: Jerry Craig, Economic Development & Housing Manager
Redevelopment
Affordable Housing
City of Tustin
Economic Development
SAN FRANCISCO
From: Kathleen Head
A. Jerry Keyser
Timothy C. Kelly
Kate Earle Funk
Date: May 22, 2017
Debbie M. Kern
Reed T. Kawahara
David Doezema
Subject: Inclusionary Housing In -Lieu Fee Analysis
LOS ANGELES
Kathleen H. Head
James A. Rabe
At your request, Keyser Marston Associates, Inc. (KMA) prepared an analysis to assist
Gregory D. Soo -Hoo
Kevin E. Engstrom
the City of Tustin (City) in establishing the in -lieu fee amounts to be included in the
Julie L. Romey
City's Draft Inclusionary Housing Ordinance (Draft Ordinance). The payment of an in -
SAN DIEGG
lieu fee is one of three options the City plans to offer for fulfilling the requirements
Paul C. Marra
imposed by the Draft Ordinance.
BACKGROUND STATEMENT
The Draft Ordinance applies to new residential projects that include 20 or more units.
The Draft Ordinance provides developers with the following options for fulfilling the
inclusionary housing requirements:
1. The provision of the inclusionary units within the proposed market rate
residential project; or
2. The provision of the inclusionary units in an off-site location; or
3. The payment of an in -lieu fee.
The KMA analysis is focused on the in -lieu fee option offered by the Draft Ordinance. To
estimate the in -lieu fees supported under current market and financial conditions, KMA
prepared pro forma analyses of prototype apartment and ownership residential
projects.
500 SOUTH GRAND AVENUE, SUITE 1480 ➢ LOS ANGELES, CALIFORNIA 90071 ➢ PHONE 213.622.8095
W WW.KEYSERMARSTON.COM
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Inclusionary Housing In -Lieu Fee Analysis
May 22, 2017
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The City has not yet determined the affordability requirements that will be included in
the Draft Ordinance. For the purposes of this analysis, KMA has been instructed to
assume that developers will be allowed to choose one of the following options:
1. A 15% requirement that is allocated to 6% very -low income plus 4.5% low
income plus 4.5% moderate income units; or
2. A 12.5% requirement that is allocated to 7.5% very -low income plus 5%
moderate income units.
The scenarios that KMA evaluated can be described as follows:
1. Apartment Development:
a. KMA prepared pro forma analyses for market rate apartment projects
that provide the following mixes of affordable units:
i. 6% very low income plus 4.5% low income plus 4.5% moderate
income units.
ii. 7.5% very low income plus 5% moderate income units.
b. To illustrate the impact created by the use of outside leveraging sources,
KMA prepared an analysis of a 100% affordable project that is financed
with Tax -Exempt Multifamily Bonds (Bonds) allocated by the California
Debt Limit Allocation Committee (CDLAC) coupled with the automatically
awarded 4% Low Income Housing Tax Credits (Tax Credits).
2. KMA prepared pro forma analyses for ownership housing projects that include
the following affordable housing components:
a. 6% very low income plus 4.5% low income plus 4.5% moderate income
units.
b. 7.5% very low income plus 5% moderate income units.
3. To provide additional context, KMA prepared a summary of in -lieu fees currently
being charged by a sample of Southern California jurisdictions.
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The conceptual development scopes used in the pro forma analyses are based on
project types currently being developed in Tustin. However, actual development within
Tustin will vary from these assumptions on a project -by -project basis. Moreover, the
timing of development will influence the projects' costs and revenues. To reflect this,
the in -lieu fee recommendations are based on a conservative set of assumptions.
The pro forma analyses are presented in the following Appendices and Exhibits which
follow this memorandum:
Appendix A: Apartment Development Prototypes
Exhibit 1 100% Market Rate Scenario
Exhibit II Unleveraged: 4.5% Moderate, 4.5% Low & 6% Very -Low
Income Units
Exhibit III Unleveraged: 5% Moderate & 7.5% Very -Low Income Units
Exhibit IV Tax -Exempt Multifamily Bonds/4%Tax Credits
Appendix B: Apartment Data
Exhibit I Apartment Rent Information
Exhibit II Affordable Rent Calculations
Appendix C: Ownership Housing Prototypes
Exhibit 1 100% Market Rate Scenario
Exhibit II 4.5% Moderate, 4.5% Low and 6% Very -Low Income Units
Exhibit III 5% Moderate and 7.5% Very -Low Income Units
Appendix D: Ownership Housing Data
Exhibit I Home Sales Information
Exhibit II Affordable Sales Price Information
EXECUTIVE SUMMARY
The following KMA analysis evaluates the supportable in -lieu fees under the two
affordable housing requirement options currently being considered by the City. Under
the assumption that developers will be allowed to choose between the options, it is
appropriate to base the in -lieu fee amount on the scenario that generates the smaller
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affordability gap. Based on the results of the KMA analysis, the smaller gap is associated
with the 5% moderate and 7.5% very -low income scenario. Using that scenario as the
measurement tool, the supportable in -lieu fees are as follows:
Factors the City should consider in creating an in -lieu fee structure are:
1. An lieu fee that is charged per unit can be have a disproportionate impact on
projects with small units. An in -lieu fee based on unit sizes corresponds more
closely to the affordability gap associated with a project.
2. The in -lieu fee amounts identified in the table above represent the maximum
supportable amounts under current conditions. At the City's discretion, the in -
lieu fees can be set at lower amounts. The key issues that should be considered
are:
a. If the City wishes to encourage on-site affordable housing production, the
in -lieu fee should be based on the product type's affordability gap.
b. The City may wish to use in -lieu fees revenue to provide assistance to
affordable housing projects that can obtain assistance from outside
sources. The KMA analysis indicates that, at a minimum, the in -lieu fee
should be set at $17,600 per unit or $17 per square foot of GBA.
METHODOLOGY
The first step in establishing an in -lieu fee is to quantify the financial impact associated
with fulfilling the affordable housing requirements within market rate projects. That
financial impact is estimated using the following methodology:
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Apartment
Ownership
Allocation Methodology
Development
Housing
Per market rate unit in a proposed
$21,400
$85,700
project
Per square foot of GBA in a proposed
$21
$31
project
Factors the City should consider in creating an in -lieu fee structure are:
1. An lieu fee that is charged per unit can be have a disproportionate impact on
projects with small units. An in -lieu fee based on unit sizes corresponds more
closely to the affordability gap associated with a project.
2. The in -lieu fee amounts identified in the table above represent the maximum
supportable amounts under current conditions. At the City's discretion, the in -
lieu fees can be set at lower amounts. The key issues that should be considered
are:
a. If the City wishes to encourage on-site affordable housing production, the
in -lieu fee should be based on the product type's affordability gap.
b. The City may wish to use in -lieu fees revenue to provide assistance to
affordable housing projects that can obtain assistance from outside
sources. The KMA analysis indicates that, at a minimum, the in -lieu fee
should be set at $17,600 per unit or $17 per square foot of GBA.
METHODOLOGY
The first step in establishing an in -lieu fee is to quantify the financial impact associated
with fulfilling the affordable housing requirements within market rate projects. That
financial impact is estimated using the following methodology:
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May 22, 2017
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1. A pro forma analysis is prepared for a project where all the units are rented or
sold at unrestricted market rate prices (Base Case):
a. For apartment projects, the Base Case pro forma analysis provides an
estimate of the return on total investment generated by the market rate
scenario.
b. For ownership housing project, the Base Case pro forma analysis provides
an estimate of the developer profit generated by the market rate
scenario.
2. Using the scope of development and return on total investment/profit from the
Base Case, pro forma analyses are then prepared for scenarios that include the
inclusionary housing requirements proposed by the Draft Ordinance. The two
alternative standards that are currently being considered are:
a. 4.5% moderate, 4.5% low and 6% very -low income units; and
b. 5% moderate and 7.5% very -low income units.
3. The estimated financial gap derived from these analyses is known as the
affordability gap.
4. The affordability gap is translated into a fee that will be paid in lieu of providing
any inclusionary units. The total -lieu fee amount is translated into a fee charged
per unit in a proposed market rate project, or a fee per square foot of building
area in a proposed market rate project.
IN -LIEU FEE ANALYSIS - APARTMENT DEVELOPMENT
Basic Assumptions
The conceptual pro forma analyses for the apartment development scenarios are based
on the key assumptions identified in the following sections of this memorandum.
Project Scope
The development scope applied to the apartment development scenarios is based on
the following assumptions:
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1. The development site is set at 3.2 acres.
2. The project density is set at 50 units per acre, which yields 160 units.
3. Parking:
a. Two spaces per unit are provided in an above -ground garage; and
b. Surface parking spaces are used to fulfill the guest parking requirement.
One guest space is provided for every four units.
4. The unit mixes and unit sizes are based on the results of a KMA rent survey. The
survey is presented in Appendix B — Exhibit I, and summarized in the following
table:
Estimated Development Costs
The construction cost estimates applied in this analysis are based on the assumption
that prevailing wage requirements will not be imposed on the project. The key
assumptions applied in the development cost estimates are as follows:
Property Acquisition Costs
The property acquisition costs are estimated at $30 per square foot of land area. The
total cost is estimated at $4.2 million.
Direct Costs
1. The sitework costs are estimated at $15 per square foot of land area.
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Number of
Unit Size
Units
(Square Feet)
Studios
16
530
One Bedroom
56
760
Two Bedrooms
56
1,030
Three Bedrooms
32
1,310
Total/ Weighted Average
160
811
Estimated Development Costs
The construction cost estimates applied in this analysis are based on the assumption
that prevailing wage requirements will not be imposed on the project. The key
assumptions applied in the development cost estimates are as follows:
Property Acquisition Costs
The property acquisition costs are estimated at $30 per square foot of land area. The
total cost is estimated at $4.2 million.
Direct Costs
1. The sitework costs are estimated at $15 per square foot of land area.
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2. Parking costs are estimated at $5,000 per space for surface parking spaces and
$15,000 per space for above -ground spaces.
3. Direct building costs are estimated at $115 per square foot of gross building area
(G BA).
4. A 17% allowance is provided for contractors costs, builder's risk insurance and
direct cost contingencies.
1. The architecture, engineering and consulting; and taxes, insurance, legal and
accounting costs are estimated based on industry standard percentages of direct
costs.
2. The public permits and fees costs are set at $25,000 per unit.
3. A $2,500 per unit allowance is provided for marketing and leasing costs.
4. The Developer Fee is set at the following amounts:
a. In the Unleveraged Scenarios the Developer Fee is set at 5% of total
construction costs.
b. The 4% Tax Credit program allows the Developer Fee to equal 15% of
eligible costs, with no cap on the total dollar amount.
5. A soft cost contingency allowance equal to 5% of other indirect costs is provided.
Financing Costs
1. Construction period interest:
a. The interest rate on the construction loan is set at 5.5% for the
conventional financing scenarios, and 4% for the Bonds/4%Tax Credit
Scenarios.
b. The construction period is set at 21 months.
2. The loan origination fees are estimated as follows:
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a. The fees for the conventional financing scenarios are set at 2.0 points for
the construction loan and 2.0 points for the permanent financing loan.
b. The fees for the Bonds/4% Tax Credit Scenarios are set a 2.5 points for
the Series A Bonds, and 4.0 points for the Series B Bonds.
3. Additional costs related to the Bonds/4% Tax Credit Scenarios are as follows:
a. In accordance with the Tax Credit regulations, a three month reserve for
operating expenses and debt service is provided.
b. Tax Credit fees include a $2,000 application fee and a $410 per unit
monitoring fee. In addition a fee equal to 1% of the gross Tax Credit
proceeds for one year is applied.
Stabilized Net Operating Income
Pnnt Rcvcni is
Market Rate Rents
KMA compiled information on the rents being achieved by apartment projects located in
Tustin. The rent survey is presented in Appendix B — Exhibit I. The market rent
estimates used in this analysis include a 15% premium to reflect the increased
marketability of newly constructed units. The resulting rent estimates are:
Studios $2,049
One -Bedroom Units $2,314
Two -Bedroom Units $2,665
Three -Bedroom Units $3,113
H&SC Section 50053 Rents
Under the terms of the Draft Ordinance, the affordable rents are calculated based on
the standards imposed by California Health and Safety Code (H&SC) Section 50053. 1
1 The household incomes used in the calculations are published annually by the California Housing and
Community Development Department (HCD).
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The rent calculations, and the deductions required for monthly utility allowances, are
presented in Appendix B — Exhibit 11, and summarized in the following table.
Moderate
Very -Low
Income
Low Income
Income
Studios $1,643
$880
$727
One Bedroom $1,866
$994
$820
Two Bedrooms $2,098
$1,117
$920
Three Bedrooms $2,302
$1,212
$994
Bonds/4% Tax Credit Scenario Rents
In this scenario, the rents are set at the more stringent of the standards set by the Draft
Ordinance, and the Tax Credit rents published by TCAC. The rent calculations are
presented in Appendix B — Exhibit 11, and summarized in the following tables:
H&SC Moderate Tax Credit at
Income 60%AM12 Applicable Rent
Studios $1,643 $1,060 $1,060
One Bedroom $1,866 $1,122 $1,122
Two Bedrooms $2,098 $1,347 $1,347
Three Bedrooms $2,302 $1,531 $1,531
H&SC Very -Low Tax Credit at
Income 50%AMI Applicable Rent
Studios $727 $877 $727
One Bedroom $820 $926 $820
Two Bedrooms $920 $1,112 $920
Three Bedrooms $994 $1,260 $994
2 AMI = Area Median Income.
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As can be seen in the preceding tables, the Tax Credit rents at 60% of AMI are lower
than the H&SC 50053 moderate income rents. Comparatively, the H&SC 50053 very -low
income rents are lower than the Tax Credit rents at 50% of AMI.
Vacancv Allowance and Operatine Expenses
1. A 5% allowance is provided for vacancy and collection costs.
2. The general operating expenses are estimated at $3,500 per unit per year.
3. The property tax expenses are estimated as follows:
a. For the Unleveraged Scenarios, the property tax expense is based on the
property's value estimated using a 5% capitalization rate, and a 1.1%
property tax rate.
b. For the Bonds/4% Tax Credit Scenarios it is assumed that the
development team would include a member that is entitled to receive
the property tax abatement accorded to non-profit organizations that
own and operate apartment projects restricted to low income
households.
4. Deposits to a reserve for capital repairs are set at $150 per unit per year for the
Unleveraged Scenarios and $250 per unit per year for the Bonds/4% Tax Credit
Scenario.
Outside Leveraging Assumptions
The Bonds/4%Tax Credit Scenario is predicated on the assumption that outside funding
sources are available to fill a portion of the financial gap associated with income -
restricted units. The funding assumptions associated with this scenario are:
1. The supportable permanent debt is estimated based on a 125% debt service
coverage ratio on the stabilized net operating income. The interest rate is set at
5%.
2. All of the units in the Bonds/4%Tax Credit Scenario qualify for the receipt of Tax
Credits. The yield on the gross Tax Credit amount is set at $.98 per Tax Credit
dollar.
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3. TCAC allows the developer to include a Developer Fee of up to 15% of eligible
development costs in the project's budget. The KMA analysis assumes that the
developer will defer Developer Fee proceeds in excess of $2.5 million.3 The
deferred amount becomes a funding source to the project.
Supportable In -Lieu Fees: Apartment Development
100% Market Rate Scenario
The conceptual pro forma analysis for the 100% Market Rate Scenario is presented in
Appendix A — Exhibit 1, as is organized as follows:
Table 1: Estimated Development Costs
Table 2: Estimated Stabilized Net Operating Income
Table 3: Projected Return on Total Investment
The results of this analysis are summarized in the following table:
Stabilized Net Operating Income $3,363,000
Total Development Cost $49,750,000
Return on Total Investment 6.8%
The 6.8% return on total investment is applied as the threshold return in the prototypes
that include affordable housing units. In this way it is possible to measure the financial
impact created by the imposition of income and affordability covenants.
Affordable Housing Scenarios
The conceptual pro forma analyses for the three apartment development scenarios that
include affordable housing units are organized as follows:
s Historically, the 4% Tax Credit program capped the allowable Developer Fee at $2.5 million. The cap has
since been removed, but a deferral requirement has been imposed by TCAC.
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Inclusionary Housing In -Lieu Fee Analysis
Table 1: Estimated Development Costs
Table 2: Estimated Stabilized Net Operating Income
Table 3: Estimated Financial Gap
May 22, 2017
Page 12
Unleveraged Scenario #1: 4.5% Moderate, 4.5% Low & 6% Very -Low Income Units
The results of the scenario that includes the identified mix of moderate, low and very -
low income units are presented in the following table:
Stabilized Net Operating Income
Threshold Return on Total Investment
Total Funds Available for Development Costs
Total Development Cost
Estimated Financial Gap
Per affordable unit that would be required in
a proposed project
Per market rate unit in a proposed project
Per square foot of GBA in a proposed project
$3,069,000
6.8%
$45,401,000
$49,750,000
$4,349,000
$181,200
$27,200
$27
Unleveraged Scenario #2: 5% Moderate and 7.5% Very -Low Income Units
The second affordable housing allocation being considered by the City increases the
percentages of moderate and very -low income units, and eliminates the requirement to
provide the low income units. The results of the conceptual pro forma analysis for this
scenario are summarized in the following table:
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Jerry Craig, City of Tustin
Inclusionary Housing In -Lieu Fee Analysis
Stabilized Net Operating Income
Threshold Return on Total Investment
Total Funds Available for Development Costs
Total Development Cost
Estimated Financial Gap
Per affordable unit that would be required in
a proposed project
Per market rate unit in a proposed project
Per square foot of GBA in a proposed project
Bonds/4%Tax Credit Scenario
$3,132,000
6.8%
May 22, 2017
Page 13
$46,333,000
$49,750,000
$3,417,000
$170,900
$21,400
$21
The conceptual pro forma analysis for the Bonds/4% Tax Credit Scenario is based on the
assumption that 100% of the units are subject to income and affordability restrictions.
For this analysis, KMA maintained the ratio of the 5% moderate and 7.5% very -low
income units in our allocation of the units in the Bonds/4% Tax Credit scenario. This
results in 40% moderate and 60% very -low income units.
The results of the analysis are presented in the following table:
Supportable Tax -Exempt MF Bond
Net Tax Credit Value
Deferred Developer Fee
Total Funds Available for Development Costs
Total Development Cost
Estimated Financial Gap
Per affordable unit that would be required in
a proposed project
Per market rate unit in a proposed project
Per square foot of GBA in a proposed project
$13,055,000
14,163,000
3,504,000
$30,722,000
$53,222,000
$22,500,000
$140,600
$17,600
$17
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Summary: In -Lieu Fee Analysis — Apartment Development
Based on the results of the apartment development in -lieu fee analysis, the supportable
in -lieu fees are presented in the following table:
Supportable In -Lieu Fees
Per
Affordable
Per Total
Per Square
Scenarios
Unit
Unit
foot of GBA
Unleveraged Scenarios:
4.5% Mod, 4.5% Low & 6%
$181,200
$27,200
$27
Very -Low Income Units
5% Moderate & 7.5% Very-
$170,900
$21,400
$21
Low Income Units
Bonds/4%Tax Credits
$140,600
$17,600
$17
Based on the assumption that developers will be allowed to choose between the two
affordable housing allocation options, it is appropriate to base the in -lieu fee amount on
the scenario that generates the smaller affordability gap. Under that assumption, the
in -lieu fee should be based on the 5% moderate and 7.5% very -low income allocation.
This results in a supportable in -lieu fee that can be defined in any of the following ways:
Allocation Methodology In -Lieu Fee
Per affordable unit that would be required in a proposed project $170,900
Per market rate unit in a 100% market rate project $21,400
Per square foot of GBA in a 100% market rate project $21
IN -LIEU FEE ANALYSIS — OWNERSHIP HOUSING DEVELOPMENT
Basic Assumptions
The conceptual pro forma analyses for the ownership housing development scenarios
are based on the following basic assumptions.
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Project Scope
The development scope applied to the ownership housing scenarios is based on the
following assumptions:
1. The development site is set at 10 acres.
2. The project density is set at 10 units per acre, which results in a 100 unit project.
3. It is assumed that a two -car attached garage is provided for each unit. The
requirement for one guest parking space for every four units is fulfilled with
surface parking spaces.
4. The unit mixes and unit sizes used in the conceptual pro forma analyses are
based on a KMA survey of new home construction in Tustin. The survey is
presented in Appendix D — Exhibit I, and summarized in the following table:
Estimated Development Costs
As was the case for the apartment development scenarios, the construction cost
estimates are based on the assumption that prevailing wage requirements will not be
imposed on the project. The major assumptions applied in the development cost
estimates are:
Property Acquisition Costs
The property acquisition costs are estimated at $30 per square foot of land area. The
total cost is estimated at $13.1 million.
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Number of
Unit Size
Units
(Square Feet)
Three Bedrooms
20
1,870
Four Bedrooms
50
2,680
Five Bedrooms
30
3,600
Total/ Weighted Average
100
2,794
Estimated Development Costs
As was the case for the apartment development scenarios, the construction cost
estimates are based on the assumption that prevailing wage requirements will not be
imposed on the project. The major assumptions applied in the development cost
estimates are:
Property Acquisition Costs
The property acquisition costs are estimated at $30 per square foot of land area. The
total cost is estimated at $13.1 million.
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Direct Costs
1. The sitework costs are estimated at $25 per square foot of land area.
2. The surface parking costs are estimated at $5,000 per space.
3. The direct building costs for the home and the attached garages are estimated at
$110 per square foot of GBA.
4. A 17% allowance is provided for contractors costs, builder's risk insurance and
direct cost contingencies.
Indirect Costs
1. The architecture, engineering and consulting; and taxes, insurance, legal and
accounting costs are estimated based on industry standard percentages of direct
costs.
2. The public permits and fees costs are set at $25,000 per unit.
3. A $10,000 per unit allowance is provided for marketing costs.
4. The Developer Fee is set at 3.0% of gross sales revenues.
5. A soft cost contingency allowance equal to 5% of other indirect costs is provided.
Financing Costs
1. Construction and absorption period interest costs:
a. The interest rate is set at 7%.
b. The total development period is estimated at 40 months. This is
comprised of a 21 -month construction period and a 19 month absorption
period.
2. The construction loan is based on a 60% loan to cost ratio. The loan origination
fees are estimated at two points.
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Projected Net Sales Revenue
Gross Sales Revenues
KMA gathered sales information for homes that were constructed in Tustin in 2015 and
2016, and the results are presented in Appendix D — Exhibit I. Based on this information,
KMA used the following market rate sales prices in the conceptual pro forma analyses:
Three -Bedroom Units $719,200
Four -Bedroom Units $952,400
Five -Bedroom Units $1,207,000
The Draft Ordinance calls for the affordable sales prices to be set using the H&SC
50052.5 calculation methodology The rent calculations, and the deductions required for
monthly utility allowances, are presented in Appendix D — Exhibit II. The resulting
affordable sales prices are estimated as follows:
Moderate
Very -Low
Income
Low Income
Income
Three -Bedroom Units $430,500
$203,000
$125,100
Four -Bedroom Units $450,800
$205,100
$120,800
Five -Bedroom Units $481,600
$219,200
$128,600
Cost of Sales
The net sales revenue is equal to the projected gross sales revenues minus following
costs of sale:
1. Sales commissions equal to 3% of gross sales revenue;
2. Closing costs equal to 2% of gross sales revenue; and
3. Home buyer warranties costs at .5% of gross sales revenue.
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Supportable In -Lieu Fees: Ownership Housing Development
100% Market Rate Scenario
The conceptual pro forma analysis for the 100% Market Rate Scenario is presented in
Appendix C— Exhibit 1, and is organized as follows:
Table 1:
Estimated Development Costs
Table 2:
Projected Net Sales Revenue
Table 3:
Projected Developer Profit
The results of the market rate analysis are summarized in the following table:
Net Sales Revenue $92,813,000
Total Development Cost $80,818,000
Developer Profit $11,995,000
As a Percentage of Total Development Cost 14.8%
The 14.8% developer profit is used as the threshold profit in the analyses of the two
affordable housing prototypes. In this way it is possible to measure the financial impact
created by the imposition of the identified income and affordability restrictions.
Affordable Housing Scenarios
The conceptual pro forma analyses for the two ownership housing affordability
scenarios are organized as follows:
Table 1: Estimated Development Costs
Table 2: Projected Net Sales Revenue
Table 3: Estimated Financial Gap
Scenario #1: 4.5% Moderate, 4.5% Low & 6% Very -Low Income Units
The results of the Scenario #1 analysis are presented in the following table:
1705020.TUS: KH H
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Jerry Craig, City of Tustin
Inclusionary Housing In -Lieu Fee Analysis
May 22, 2017
Page 19
Net Sales Proceeds $82,409,000
(Less) Developer Profit @ 14.8% of Cost (11,941,000)
Total Funds Available for Development Costs $70,468,000
Total Development Cost $80,457,000
Estimated Financial Gap $9,989,000
Per affordable unit that would be required in $665,900
a proposed project
Per market rate unit in a proposed project $99,900
Per square foot of GBA in a proposed project $36
Scenario #2: 5% Moderate and 7.5% Very -Low Income Units
The results of the Scenario #2 analysis are summarized in the following table:
Net Sales Proceeds $83,916,000
(Less) Developer Profit @ 14.8% of Cost (11,952,000)
Total Funds Available for Development Costs $71,964,000
Total Development Cost $80,530,000
Estimated Financial Gap $8,566,000
Per affordable unit that would be required in $658,900
a proposed project
Per market rate unit in a proposed project $85,700
Per square foot of GBA in a proposed project $31
1705020.TUS: KH H
19830.007.001
Jerry Craig, City of Tustin
Inclusionary Housing In -Lieu Fee Analysis
May 22, 2017
Page 20
Summary: In -Lieu Fee Analysis — Ownership housing Development
Based on the results of the ownership housing in -lieu fee analysis, the supportable in -
lieu fees are presented in the following table:
Supportable In -Lieu Fees
Per
Affordable
Per Total
Per Square
Scenarios
Unit
Unit
foot of GBA
4% Moderate, 4.5% Low & 6%
$665,900
$99,900
$36
Very -Low Income Units
5% Moderate & 7.5% Very-
$658,800
$85,700
$31
Low Income Units
The 5% moderate and 7.5% very -low income scenario generates the smaller
affordability gap of the two available options. The resulting supportable in -lieu fee
would be:
Allocation Methodology In -Lieu Fee
Per affordable unit that would be required in a proposed project $658,800
Per market rate unit in a proposed project $85,700
Per square foot of GBA in a proposed project $31
IN -LIEU FEE SURVEY
For reference purposes, KMA has provided the following summary of the in -lieu fees
currently being charged by a sample of California jurisdictions:
Brea
An in -lieu fee can only be paid under extenuating circumstances. City Council approval
is required.
1705020.TUS: KH H
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Jerry Craig, City of Tustin
Inclusionary Housing In -Lieu Fee Analysis
May 22, 2017
Page 21
The in -lieu fee amount is set on a case-by-case basis. The in -lieu fee amount is equal to
the median price for a home in Brea minus the maximum affordable price for a
comparable unit.
Calabasas
The in -lieu fee is charged per market rate unit in a proposed project. The currently
applicable in -lieu fees are:
Apartments $17,713 per unit
Townhomes and Condominiums $44,947 per unit
Single -Family Homes $62,500 per unit
Chino Hills
The in -lieu fee is set at $1.00 per square foot of GBA.
Claremont
An in -lieu fee can be paid by right for projects with five or six units. City Council
approval is required for projects with seven or more units.
The in -lieu fee is charged per market rate unit in a proposed project. The currently
applicable in -lieu fees are:
5 Units $12,400 per unit
6 Units $13,700 per unit
7 + Units $17,400 per unit
Del Mar
An in -lieu fee must be paid for units in single-family home subdivisions. For all other
projects, an in -lieu fee can only be paid for projects with fewer than five units. The in -
lieu fee is set at $23,508 per market -rate unit in a proposed project.
1705020.TUS: KH H
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Jerry Craig, City of Tustin May 22, 2017
Inclusionary Housing In -Lieu Fee Analysis Page 22
Encinitas
The in -lieu fee is calculated on a case-by-case basis. The in -lieu fee amount is based on
the affordability gap between the projected market rate price of the proposed units and
the defined affordable sales prices.
Huntington Beach
An in -lieu fee can be paid by right for projects with 30 or fewer units, and for fractional
unit requirements. City Council approval is required for projects with more than 30
units.
The City produces a schedule that identifies the in -lieu fee amount per market rate unit
in a proposed project. The City also identifies the in -lieu fee amount per affordable unit
that would be required in a proposed project. This amount is used to calculate the in -
lieu fee for a fractional unit requirement.
The currently applicable in -lieu fees are:
3 Units
$16,420 per unit
4 Units
$18,480 per unit
5 Units
$20,520 per unit
6 Units
$22,580 per unit
7 Units
$24,640 per unit
8 Units
$26,700 per unit
9 Units
$28,750 per unit
10 Units
$30,790 per unit
11-15 Units
$35,960 per unit
16 — 20 Units
$41,128 per unit
21— 25 Units
$46,297 per unit
26 — 30 Units
$51,466 per unit
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Jerry Craig, City of Tustin May 22, 2017
Inclusionary Housing In -Lieu Fee Analysis Page 23
Irvine
An in -lieu fee can be paid by right for projects with 50 or fewer units. Under
extenuating circumstances, an in -lieu fee can be paid for larger projects with City
Council approval. The in -lieu fee is set at $17,000 per market -rate unit in a proposed
project.
Newport Beach
An in -lieu fee can be paid by right for projects with 50 or fewer units. Projects with
more than 50 units can only pay an in -lieu fee under the terms of an approved
Affordable Housing Implementation Plan (AHIP). The in -lieu fee is set at $31,076 per
market rate unit in a proposed project.
Pasadena
An in -lieu fee can be paid by right for any size residential development. In -lieu fee
schedules are published for rental and ownership projects in four subareas of the city.
The in -lieu fee is charged per square foot of building area in a proposed project.
The currently applicable in -lieu fees are:
Rental Units
Ownership Units
10-49 Units
10-49 Units
Subarea A
TBD
Subarea A
$43.56/sf
Subarea B
$1.14/sf
Subarea B
$16.04/sf
Subarea C
$25.21/sf
Subarea C
$26.36/sf
Subarea D
$22.92/sf
Subarea D
$20.63/sf
50 + Units
50 + Units
Subarea A
TBD
Subarea A
$60.75/sf
Subarea B
$1.14/sf
Subarea B
$21.78/sf
Subarea C
$34.39/sf
Subarea C
$36.68/sf
Subarea D
$32.10/sf
Subarea D
$28.65/sf
1705020.TUS: KH H
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Jerry Craig, City of Tustin May 22, 2017
Inclusionary Housing In -Lieu Fee Analysis Page 24
Rancho Palos Verdes
City Council approval is required for the payment of an in -lieu fee. Approval will only be
paid under extenuating circumstances. The in -lieu fee amount is set at $201,653 per
affordable unit that would be required in a proposed project.
San Diego
An in -lieu fee can be paid by right for any size residential development. In -lieu fee
schedules are published for new development and condominium conversions. The in -
lieu fee is charged per square foot of building area in a proposed project.
The currently applicable in -lieu fees are:
Santa Ana
An in -lieu fee can be paid by right for projects with 20 or fewer units. Under
extenuating circumstances, an in -lieu fee can be paid for larger projects with City
Council approval.
The in -lieu fee is charged per square foot of building area in a proposed project. The
currently applicable in -lieu fees are:
1705020.TUS: KH H
19830.007.001
New Development
Condominium Conversions
2 Units
$1.87/sf
2 Units
$0.93/sf
3 Units
$2.81/sf
3 Units
$1.40/sf
4 Units
$3.74/sf
4 Units
$1.87/sf
5 Units
$4.68/sf
5 Units
$2.34/sf
6 Units
$5.62/sf
6 Units
$2.81/sf
7 Units
$6.55/sf
7 Units
$3.27/sf
8 Units
$7.49/sf
8 Units
$3.74/sf
9 Units
$8.42/sf
9 Units
$4.21/sf
10 + Units
$9.36/sf
10 + Units
$4.68/sf
Santa Ana
An in -lieu fee can be paid by right for projects with 20 or fewer units. Under
extenuating circumstances, an in -lieu fee can be paid for larger projects with City
Council approval.
The in -lieu fee is charged per square foot of building area in a proposed project. The
currently applicable in -lieu fees are:
1705020.TUS: KH H
19830.007.001
Jerry Craig, City of Tustin May 22, 2017
Inclusionary Housing In -Lieu Fee Analysis Page 25
5 — 20 Units $5.00 per square foot
21 + Units $15.00 per square foot
Santa Monica
An in -lieu fee can be paid by right for apartment projects of any size. An in -lieu fee can
only be paid for ownership projects that include two or three units.
The current in -lieu fees are:
Apartment Projects $32.38 per square foot
Ownership Housing Projects $37.82 per square foot
West Hollywood
The City of West Hollywood has an affordable housing impact fee that can be paid for
projects of any size. The city also has an inclusionary housing in -lieu fee that can be paid
for projects with up to 10 units. Developers can choose between the two options.
The in -lieu fee is charged per square foot of building area in a proposed project. The
currently applicable in -lieu fees are:
1705020.TUS: KH H
19830.007.001
In -Lieu Fee
Impact Fee
2 Units
$12.65
2 Units
$12.65
3 Units
$14.47
3 Units
$14.47
4 Units
$16.28
4 Units
$16.28
5 Units
$18.09
5 Units
$18.09
6 Units
$19.90
6 Units
$19.90
7 Units
$21.71
7 Units
$21.71
8 Units
$23.53
8 Units
$23.53
9 Units
$25.33
9 Units
$25.33
10 Units
$27.13
10 Units
$27.13
11 + Units
$27.13
1705020.TUS: KH H
19830.007.001
Jerry Craig, City of Tustin May 22, 2017
Inclusionary Housing In -Lieu Fee Analysis Page 26
FINDINGS
Based on the results of the preceding financial analysis, KMA estimates the supportable
in -lieu fees at the following amounts:
The in -lieu fees programs KMA surveyed are evenly divided in the methodology used to
set the fee amounts. Seven of the programs charge the in -lieu fee on a per unit basis
and six programs charge the in -lieu fee per square foot of building area.4
RECOMMENDATIONS
The supportable in -lieu fee is directly tied to the affordability gap between the market
rate price for a unit and the defined affordable rent or sales price. Recognizing that unit
size is a significant determinant in a home's value, an lieu fee that is charged per unit
can be detrimental to projects with small units and beneficial to projects with large
units. An in -lieu fee based on the square footage of the units provides a better
representation of the actual affordability gap.
The in -lieu fee amounts identified in the preceding analysis represent the maximum
amounts that can be charged by the City based on current market and financial
conditions. However, the City has the discretion to set the in -lieu fees at less than the
maximum amounts determined in the KMA analysis. The factors that should be
considered when setting the in -lieu fee are:
4 Two of the programs set the in -lieu fee on a case-by-case basis.
1705020.TUS: KH H
19830.007.001
Apartment
Ownership
Allocation Methodology
Development
Housing
Per market rate unit in a proposed
$21,400
$85,700
project
Per square foot of GBA in a proposed
$21
$31
project
The in -lieu fees programs KMA surveyed are evenly divided in the methodology used to
set the fee amounts. Seven of the programs charge the in -lieu fee on a per unit basis
and six programs charge the in -lieu fee per square foot of building area.4
RECOMMENDATIONS
The supportable in -lieu fee is directly tied to the affordability gap between the market
rate price for a unit and the defined affordable rent or sales price. Recognizing that unit
size is a significant determinant in a home's value, an lieu fee that is charged per unit
can be detrimental to projects with small units and beneficial to projects with large
units. An in -lieu fee based on the square footage of the units provides a better
representation of the actual affordability gap.
The in -lieu fee amounts identified in the preceding analysis represent the maximum
amounts that can be charged by the City based on current market and financial
conditions. However, the City has the discretion to set the in -lieu fees at less than the
maximum amounts determined in the KMA analysis. The factors that should be
considered when setting the in -lieu fee are:
4 Two of the programs set the in -lieu fee on a case-by-case basis.
1705020.TUS: KH H
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Jerry Craig, City of Tustin
May 22, 2017
Inclusionary Housing In -Lieu Fee Analysis Page 27
1. If the City wishes to encourage developers to produce inclusionary units rather
than paying the in -lieu fee, the fee should be set at amounts that approximate
the project's affordability gap.
2. The City can use in -lieu fees revenue to provide assistance to dedicated
affordable housing projects that can access outside leveraging sources.
At a minimum, the in -lieu fee should be set at an amount that is sufficient
to produce a comparable number of units as would have been required
under the terms of the Draft Ordinance.
Based on the KMA analysis, this equates to in -lieu fees of $17,600 per
unit or $17 per square foot of GBA.
1705020.TUS: KH H
19830.007.001
APPENDIX A
PRO FORMA ANALYSES
APARTMENT SCENARIOS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Apt Pf Page 1 of 22
APPENDIX A - EXHIBIT I
APARTMENT PRO FORMA ANALYSIS
100% MARKET RATE SCENARIO
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Mkt Apt Page 2 of 22
APPENDIX A - EXHIBIT I - TABLE 1
ESTIMATED DEVELOPMENT COSTS
APARTMENT PRO FORMA ANALYSIS
100% MARKET RATE SCENARIO
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Property Acquisition Costs
Direct Costs
Site Improvement Costs
Parking Costs
Surface Parking
Above -Ground Spaces
Building Costs
Contractor Fees/General Requirements
Builder's Risk Insurance
Contingency Allowance
Total Direct Costs
Indirect Costs
Architecture, Engineering & Consulting
Public Permits & Fees
Taxes, Insurance, Legal & Accounting
Marketing & Leasing
Developer Fee
Contingency Allowance
Total Indirect Costs
IV. Financing Costs
Interest During Construction
Property Acquisition Costs
Construction Costs
Loan Origination Fees
Construction Loan
Permanent Loan
Total Financing Costs
V
139,392 Sf Land
$30
/Sf Land
$4,182,000
i
139,392 Sf Land
$15
/Sf Land
$2,091,000
40 Spaces
$5,000
/Space
200,000
320 Spaces
$15,000
/Space
4,800,000
162,100 Sf of GBA
$115
/Sf of GBA
18,642,000
10.0% Construction Costs
2,573,000
2.0% Construction Costs
515,000
5.0% Other Direct Costs
1,441,000
160 Units
$189,100
/Unit
$30,262,000
8% Direct Costs
$2,421,000
160 Units
$25,000
/Unit
4,000,000
2.0% Direct Costs
605,000
160 Units
$2,500
/Unit
400,000
5.0% Total Construction Cost
2,278,000
5.0% Other Indirect Costs
485,000
$10,189,000
z $4,182,000 Financed
5.50%
Interest
$422,000
3 $45,568,000 Financed
5.50%
Interest
3,237,000
$45,568,000 Financed
2.00
Points
911,000
4 $27,341,000 Financed
2.00
Points
547,000
$5,117,000
Total Construction Cost 160 Units $284,800 /Unit $45,568,000
Total Development Cost 160 Units $310,900 /Unit $49,750,000
1 Direct costs assume prevailing wage requirements will NOT be imposed on the Project.
z Based on 21 months of construction with a 100% average outstanding balance, and 5 months of lease up with a 100% average outstanding balance.
3 Based on 21 months of construction with a 50% average outstanding balance, and 5 months of lease up with a 100% average outstanding balance.
4 See APPENDIX A - EXHIBIT I - TABLE 3.
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Mkt Apt Page 3 of 22
APPENDIX A - EXHIBIT I - TABLE 2
ESTIMATED STABILIZED NET OPERATING INCOME
APARTMENT PRO FORMA ANALYSIS
100% MARKET RATE SCENARIO
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Rental Income i
Market Rate
Studios
16
Units
$2,049
/Unit/Month
$393,000
One Bedroom
56
Units
$2,314
/Unit/Month
1,555,000
Two Bedrooms
56
Units
$2,665
/Unit/Month
1,791,000
Three Bedrooms
32
Units
$3,113
/Unit/Month
1,195,000
Total Rental Income
$4,934,000
(Less) Vacancy & Collection Allowance
5.0%
Rental Income
(247,000)
Effective Gross Income
$4,687,000
II. Operating Expenses
General Operating Expenses
160
Units
$3,500
/Unit
$560,000
Property Taxes z
160
Units
$4,625
/Unit
740,000
Reserves Deposits a
160
Units
$150
/Unit
24,000
Total Operating Expenses
160
Units
$8,280
/Unit
$1,324,000
III. IStabilized Net Operating Income $3,363,000
i Based on the apartment survey presented in APPENDIX B - EXHIBIT I, and a 15% premium for new construction. The average rent is equal to $2.34
per square foot of gross building area.
z Project value is estimated based on stabilized net operating income capitalized at a 5.0% cap rate. The property tax rate is set at 1.1% of the
estimated value.
a Based on the contributions applied to typical market rate projects.
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Mkt Apt Page 4 of 22
APPENDIX A - EXHIBIT I - TABLE 3
PROJECTED RETURN ON TOTAL INVESTMENT
APARTMENT PRO FORMA ANALYSIS
100% MARKET RATE SCENARIO
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Stabilized Net Operating Income See APPENDIX A - EXHIBIT I - TABLE 2 $3,363,000
II. Total Development Cost See APPENDIX A - EXHIBIT I - TABLE 1 $49,750,000
III. I Return on Total Investment 6.8%
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Mkt Apt Page 5 of 22
APPENDIX A - EXHIBIT II
APARTMENT PRO FORMA ANALYSIS
UNLEVERAGED SCENARIO #1: 4.5% MODERATE; 4.5% LOW; & 6.0% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Unlev 1 Page 6 of 22
APPENDIX A - EXHIBIT II - TABLE 1
ESTIMATED DEVELOPMENT COSTS
APARTMENT PRO FORMA ANALYSIS
UNLEVERAGED SCENARIO #1: 4.5% MODERATE; 4.5% LOW; & 6.0% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Property Acquisition Costs
Direct Costs
Site Improvement Costs
Parking Costs
Surface Parking
Above -Ground Spaces
Building Costs
Contractor Fees/General Requirements
Builder's Risk Insurance
Contingency Allowance
Total Direct Costs
Indirect Costs
Architecture, Engineering & Consulting
Public Permits & Fees
Taxes, Insurance, Legal & Accounting
Marketing & Leasing
Developer Fee
Contingency Allowance
Total Indirect Costs
IV. Financing Costs
Interest During Construction
Property Acquisition Costs
Construction Costs
Loan Origination Fees
Construction Loan
Permanent Loan
Total Financing Costs
V
139,392 Sf Land
$30
/Sf Land
$4,182,000
i
139,392 Sf Land
$15
/Sf Land
$2,091,000
40 Spaces
$5,000
/Space
200,000
320 Spaces
$15,000
/Space
4,800,000
162,100 Sf of GBA
$115
/Sf of GBA
18,642,000
10.0% Construction Costs
2,573,000
2.0% Construction Costs
515,000
5.0% Other Direct Costs
1,441,000
160 Units
$189,100
/Unit
$30,262,000
8% Direct Costs
$2,421,000
160 Units
$25,000
/Unit
4,000,000
2.0% Direct Costs
605,000
160 Units
$2,500
/Unit
400,000
5.0% Total Construction Cost
2,278,000
5.0% Other Indirect Costs
485,000
$10,189,000
z $4,182,000 Financed
5.50%
Interest
$422,000
3 $45,568,000 Financed
5.50%
Interest
3,237,000
$45,568,000 Financed
2.00
Points
911,000
4 $27,341,000 Financed
2.00
Points
547,000
$5,117,000
Total Construction Cost 160 Units $284,800 /Unit $45,568,000
Total Development Cost 160 Units $310,900 /Unit $49,750,000
1 Direct costs assume prevailing wage requirements will NOT be imposed on the Project.
z Based on 21 months of construction with a 100% average outstanding balance, and 5 months of lease up with a 100% average outstanding balance.
3 Based on 21 months of construction with a 50% average outstanding balance, and 5 months of lease up with a 100% average outstanding balance.
4 See APPENDIX A - EXHIBIT II - TABLE 3.
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Unlev 1 Page 7 of 22
APPENDIX A - EXHIBIT II - TABLE 2
ESTIMATED STABILIZED NET OPERATING INCOME
APARTMENT PRO FORMA ANALYSIS
UNLEVERAGED SCENARIO #1: 4.5% MODERATE; 4.5% LOW; & 6.0% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Rental Income i
Market Rate
Studios
14
Units
$2,049
/Unit/Month
$344,000
One Bedroom
48
Units
$2,314
/Unit/Month
1,333,000
Two Bedrooms
48
Units
$2,665
/Unit/Month
1,535,000
Three Bedrooms
26
Units
$3,113
/Unit/Month
971,000
Moderate Income
Studios
0
Units
$1,643
/Unit/Month
0
One Bedroom
2
Units
$1,866
/Unit/Month
45,000
Two Bedrooms
3
Units
$2,098
/Unit/Month
76,000
Three Bedrooms
2
Units
$2,302
/Unit/Month
55,000
Low Income
Studios
1
Unit
$880
/Unit/Month
11,000
One Bedroom
3
Units
$994
/Unit/Month
36,000
Two Bedrooms
2
Units
$1,117
/Unit/Month
27,000
Three Bedrooms
1
Unit
$1,212
/Unit/Month
15,000
Very -Low Income
Studios
1
Unit
$727
/Unit/Month
9,000
One Bedroom
3
Units
$820
/Unit/Month
30,000
Two Bedrooms
3
Units
$920
/Unit/Month
33,000
Three Bedrooms
3
Units
$994
/Unit/Month
36,000
Total Rental Income
$4,556,000
(Less) Vacancy & Collection Allowance
5.0%
Rental Income
(228,000)
Effective Gross Income
$4,328,000
II. Operating Expenses
General Operating Expenses
160
Units
$3,500
/Unit
$560,000
Property Taxes z
160
Units
$4,220
/Unit
675,000
Reserves Deposits a
160
Units
$150
/Unit
24,000
Total Operating Expenses
160
Units
$7,870
/Unit
$1,259,000
III. IStabilized Net Operating Income $3,069,000
i Based on the apartment survey presented in APPENDIX B - EXHIBIT I, and a 15% premium for new construction. The average rent is equal to $2.34
per square foot of gross building area. The affordable rents calculations are presented in APPENDIX B - EXHIBIT II.
z Project value is estimated based on stabilized net operating income capitalized at a 5.0% cap rate. The property tax rate is set at 1.1% of the
estimated value.
a Based on the contributions applied to typical market rate projects.
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Unlev 1 Page 8 of 22
APPENDIX A - EXHIBIT II - TABLE 3
ESTIMATED FINANCIAL GAP
APARTMENT PRO FORMA ANALYSIS
UNLEVERAGED SCENARIO #1: 4.5% MODERATE; 4.5% LOW; & 6.0% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Funds Available for Development Costs
Stabilized Net Operating Income See APPENDIX A - EXHIBIT II - TABLE 2
Threshold Return on Total Investment 1
Total Funds Available for Development Costs
$3,069,000
6.8%
$45,401,000
II. Total Development Cost See APPENDIX A - EXHIBIT II - TABLE 1 $49,750,000
Estimated Financial Gap ($4,349,000)
24 Affordable Units ($181,200) /Affordable Unit
160 Total Units ($27,200) /Total Unit
162,100 Sf of GBA ($27) /Sf of GBA
7
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File name: Rent ILF 5_22_17; Unlev 1 Page 9 of 22
APPENDIX A - EXHIBIT III
APARTMENT PRO FORMA ANALYSIS
UNLEVERAGED SCENARIO #2: 5.0% MODERATE & 7.50% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Unlev 2 Page 10 of 22
APPENDIX A - EXHIBIT III - TABLE 1
ESTIMATED DEVELOPMENT COSTS
APARTMENT PRO FORMA ANALYSIS
UNLEVERAGED SCENARIO #2: 5.0% MODERATE & 7.50% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Property Acquisition Costs
Direct Costs
Site Improvement Costs
Parking Costs
Surface Parking
Above -Ground Spaces
Building Costs
Contractor Fees/General Requirements
Builder's Risk Insurance
Contingency Allowance
Total Direct Costs
Indirect Costs
Architecture, Engineering & Consulting
Public Permits & Fees
Taxes, Insurance, Legal & Accounting
Marketing & Leasing
Developer Fee
Contingency Allowance
Total Indirect Costs
IV. Financing Costs
Interest During Construction
Property Acquisition Costs
Construction Costs
Loan Origination Fees
Construction Loan
Permanent Loan
Total Financing Costs
V
139,392 Sf Land
$30
/Sf Land
$4,182,000
i
139,392 Sf Land
$15
/Sf Land
$2,091,000
40 Spaces
$5,000
/Space
200,000
320 Spaces
$15,000
/Space
4,800,000
162,100 Sf of GBA
$115
/Sf of GBA
18,642,000
10.0% Construction Costs
2,573,000
2.0% Construction Costs
515,000
5.0% Other Direct Costs
1,441,000
160 Units
$189,100
/Unit
$30,262,000
8% Direct Costs
$2,421,000
160 Units
$25,000
/Unit
4,000,000
2.0% Direct Costs
605,000
160 Units
$2,500
/Unit
400,000
5.0% Total Construction Cost
2,278,000
5.0% Other Indirect Costs
485,000
$10,189,000
z $4,182,000 Financed
5.50%
Interest
$422,000
3 $45,568,000 Financed
5.50%
Interest
3,237,000
$45,568,000 Financed
2.00
Points
911,000
4 $27,341,000 Financed
2.00
Points
547,000
$5,117,000
Total Construction Cost 160 Units $284,800 /Unit $45,568,000
Total Development Cost 160 Units $310,900 /Unit $49,750,000
1 Direct costs assume prevailing wage requirements will NOT be imposed on the Project.
z Based on 21 months of construction with a 100% average outstanding balance, and 5 months of lease up with a 100% average outstanding balance.
3 Based on 21 months of construction with a 50% average outstanding balance, and 5 months of lease up with a 100% average outstanding balance.
4 See APPENDIX A - EXHIBIT III - TABLE 3.
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File name: Rent ILF 5_22_17; Unlev 2 Page 11 of 22
APPENDIX A - EXHIBIT III - TABLE 2
ESTIMATED STABILIZED NET OPERATING INCOME
APARTMENT PRO FORMA ANALYSIS
UNLEVERAGED SCENARIO #2: 5.0% MODERATE & 7.50% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Rental Income i
Market Rate
Studios
14
Units
$2,049
/Unit/Month
$344,000
One Bedroom
49
Units
$2,314
/Unit/Month
1,361,000
Two Bedrooms
49
Units
$2,665
/Unit/Month
1,567,000
Three Bedrooms
28
Units
$3,113
/Unit/Month
1,046,000
Moderate Income
Studios
1
Unit
$1,643
/Unit/Month
20,000
One Bedroom
3
Units
$1,866
/Unit/Month
67,000
Two Bedrooms
2
Units
$2,098
/Unit/Month
50,000
Three Bedrooms
2
Units
$2,302
/Unit/Month
55,000
Very -Low Income
Studios
1
Unit
$727
/Unit/Month
9,000
One Bedroom
4
Units
$820
/Unit/Month
39,000
Two Bedrooms
5
Units
$920
/Unit/Month
55,000
Three Bedrooms
2
Units
$994
/Unit/Month
24,000
Total Rental Income
$4,637,000
(Less) Vacancy & Collection Allowance
5.0%
Rental Income
(232,000)
Effective Gross Income
$4,405,000
II. Operating Expenses
General Operating Expenses
160
Units
$3,500
/Unit
$560,000
Property Taxes z
160
Units
$4,305
/Unit
689,000
Reserves Deposits a
160
Units
$150
/Unit
24,000
Total Operating Expenses
160
Units
$7,960
/Unit
$1,273,000
III. IStabilized Net Operating Income $3,132,000
i Based on the apartment survey presented in APPENDIX B - EXHIBIT I, and a 15% premium for new construction. The average rent is equal to $2.34
per square foot of gross building area. The affordable rents calculations are presented in APPENDIX B - EXHIBIT II.
z Project value is estimated based on stabilized net operating income capitalized at a 5.0% cap rate. The property tax rate is set at 1.1% of the
estimated value.
a Based on the contributions applied to typical market rate projects.
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File name: Rent ILF 5_22_17; Unlev 2 Page 12 of 22
APPENDIX A - EXHIBIT III - TABLE 3
ESTIMATED FINANCIAL GAP
APARTMENT PRO FORMA ANALYSIS
UNLEVERAGED SCENARIO #2: 5.0% MODERATE & 7.50% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Funds Available for Development Costs
Stabilized Net Operating Income See APPENDIX A - EXHIBIT III - TABLE 2
Threshold Return on Total Investment 1
Total Funds Available for Development Costs
$3,132,000
6.8%
$46,333,000
II. Total Development Cost See APPENDIX A - EXHIBIT III - TABLE 1 $49,750,000
Estimated Financial Gap ($3,417,000)
20 Affordable Units ($170,900) /Affordable Unit
160 Total Units ($21,400) /Total Unit
162,100 Sf of GBA ($21) /Sf of GBA
7
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File name: Rent ILF 5_22_17; Unlev 2 Page 13 of 22
APPENDIX A - EXHIBIT IV
APARTMENT PRO FORMA ANALYSIS
BONDS/4% TAX CREDIT SCENARIO: 40% MODERATE & 60% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; 4% TC Page 14 of 22
APPENDIX A - EXHIBIT IV - TABLE 1
ESTIMATED DEVELOPMENT COSTS
APARTMENT PRO FORMA ANALYSIS
BONDS/4%TAX CREDIT SCENARIO: 40% MODERATE & 60% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Property Acquisition Costs
II. Direct Costs
Site Improvement Costs
Parking Costs
Surface Parking
Above -Ground Spaces
Building Costs
Contractor Fees/General Requirements
Builder's Risk Insurance
Contingency Allowance
Total Direct Costs
III. Indirect Costs
Architecture, Engineering & Consulting
Public Permits & Fees
Taxes, Insurance, Legal & Accounting
Marketing & Leasing
Developer Fee
Contingency Allowance
Total Indirect Costs
IV. Financing Costs
Interest During Construction
Series A Bond
Series B Bond
Loan Origination Fees
Series A Bond
Series B Bond
Operating Reserve
TCAC Fees
Total Financing Costs
V
0
139,392 Sf Land
$30.00
/Sf Land
$4,182,000
139,392 Sf Land
$15
/Sf Land
$2,091,000
40 Spaces
$5,000
/Space
200,000
320 Spaces
$15,000
/Space
4,800,000
162,100 Sf of GBA
$115
/Sf of GBA
18,642,000
10.0% Construction Costs
2,573,000
2.0% Construction Costs
515,000
5.0% Other Direct Costs
1,441,000
160 Units
$189,100
/Unit
$30,262,000
8% Direct Costs
$2,421,000
160 Units
$25,000
/Unit
4,000,000
2.0% Direct Costs
605,000
160 Units
$2,500
/Unit
400,000
15.0% Eligible Costs
6,004,000
5.0% Other Indirect Costs
672,000
z $13,055,000
Financed
4.00% Interest
$566,000
a 40,167,000
Financed
4.00% Interest
1,741,000
$13,055,000
Financed
2.50 Points
326,000
4 $40,167,000
Financed
4.00 Points
1,607,000
3
Months Operating
Expenses/Debt Service.
420,000
5
16,000
$14,102,000
$4,676,000
Total Construction Cost 160 Units $306,500 /Unit $49,040,000
Total Development Cost 160 Units $332,600 /Unit $53,222,000
1 Direct costs assume prevailing wage requirements will NOT be imposed on the Project.
z Based on the debt supported by the project's stabilized net operating income. Assumes an 21 -month construction period with a 50% average
outstanding balance, and a 5 -month lease -up period with a 100% average outstanding balance.
a Based on the estimated development costs minus the Series A bond. Assumes an 21 -month construction period with a 50% average outstanding
balance, and a 5 -month lease -up period with a 100% average outstanding balance.
4 See APPENDIX A - EXHIBIT IV - TABLE 3.
5 Includes a $2,000 application fee; a $410 per unit monitoring fee; and 1% of the gross Tax Credit proceeds for one year.
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; 4%TC Page 15 of 22
APPENDIX A - EXHIBIT IV - TABLE 2
ESTIMATED STABILIZED NET OPERATING INCOME
APARTMENT PRO FORMA ANALYSIS
BONDS/4%TAX CREDIT SCENARIO: 40% MODERATE & 60% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Rental Income 1
General Operating Expenses 160 Units
$5,000
/Unit $800,000
H&SC 50053 Moderate Income/Tax Credit @ 60% AMI
$0
/Unit 0
Reserves Deposits a 160 Units
$250
/Unit 40,000
Studios
6
Units
$1,060
/Unit/Month
$76,000
One Bedroom
22
Units
$1,122
/Unit/Month
296,000
Two Bedrooms
22
Units
$1,347
/Unit/Month
356,000
Three Bedrooms
13
Units
$1,531
/Unit/Month
239,000
H&SC 50053 Very -Low Income/Tax Credit @ 50% AMI
Studios
10
Units
$727
/Unit/Month
87,000
One Bedroom
34
Units
$820
/Unit/Month
335,000
Two Bedrooms
34
Units
$920
/Unit/Month
375,000
Three Bedrooms
19
Units
$994
/Unit/Month
227,000
Total Rental Income
$1,991,000
(Less) Vacancy & Collection Allowance
5.0%
Rental Income
(100,000)
Effective Gross Income $1,891,000
II. Operating Expenses
General Operating Expenses 160 Units
$5,000
/Unit $800,000
Property Tax Expense z 160 Units
$0
/Unit 0
Reserves Deposits a 160 Units
$250
/Unit 40,000
Total Operating Expenses 160 Units
$5,250
/Unit $840,000
III. IStabilized Net Operating Income $1,051,000
i The applicable rents are equal to the lesser of the H&SC Section 50053 rents and the rents published by TCAC. The affordable rents calculations are
presented in APPENDIX B - EXHIBIT II.
z Assumes that the developer will be entitled to the property tax abatement accorded to non-profit organizations that own and operate apartment
projects restricted to low income households.
a Based on the minimum contribution required by TCAC.
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File name: Rent ILF 5_22_17; 4%TC Page 16 of 22
APPENDIX A - EXHIBIT IV - TABLE 3
ESTIMATED FINANCIAL GAP
APARTMENT PRO FORMA ANALYSIS
BONDS/4%TAX CREDIT SCENARIO: 40% MODERATE & 60% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Funds Available for Development Costs
A. Supportable Tax -Exempt Multifamily Bond
Stabilized Net Operating Income
Income Available for Mortgage
Supportable Tax -Exempt Multifamily Bond
B. Net Tax Credit Value i
C. Deferred Developer Fee z
Total Funds Available for Development Costs
II. Total Development Cost
See APPENDIX A - EXHIBIT IV - TABLE 2 $1,051,000
125% DSCR $841,000 Debt Service
5.00% Interest Rate 6.44% Mtg Constant
See APPENDIX A - EXHIBIT IV - TABLE 1
$13,055,000
$14,163,000
$3,504,000
$30,722,000
($53,222,000)
Estimated Financial Gap
Per Affordable Unit a 160 Affordable Units ($140,600) /Affordable Unit ($22,500,000)
Per Total Unit in a Market Rate Project 4 ($17,600)
Per SF of GBA in a Market Rate Project 4 ($17)
i Assumes a $45.17 million eligible basis; a 0% difficult -to -develop premium, a 3.2% Tax Credit rate; an applicable fraction of 100%; and a $0.98/dollar
Syndication Value.
z Equal to the amount by which the Developer Fee exceeds $2.50 million.
a The ratio of very -low and moderate income units is based on the mix included in UNLEVERAGED SCENARIO #2: 5.0% MODERATE & 7.50% VERY -LOW
INCOME UNITS.
4 The estimates are extrapolated from the results of the UNLEVERAGED SCENARIO #2: 5.0% MODERATE & 7.50% VERY -LOW INCOME UNITS.
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File name: Rent ILF 5_22_17; 4%TC Page 17 of 22
APPENDIX B
APARTMENT DATA
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Apt Data Page 18 of 22
APPENDIX B - EXHIBIT I
APARTMENT RENT INFORMATION
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Project Name
Studio Units
Sierra Vista
Sierra Vista
Amalfi Apartment Homes
Address
Number of
Bedrooms
Number of
Bathrooms
Rent
Unit Size Per Square
(SF) Total Foot
2955 Champion Way 0 1 490 $1,750 $3.57
2955 Champion Way 0 1 515 $1,805 $3.50
16000 Legacy Road 0 1 584 $1,790 $3.07
Average 530 $1,782 $3.38
Minimum 490 $1,750 $3.07
Maximum 580 $1,805 $3.57
II. One -Bedroom Units
Amalfi Apartment Homes
16000 Legacy Road
1
1
552
$1,930
$3.50
Sierra Vista
2955 Champion Way
1
1
640
$2,050
$3.20
Sierra Vista
2955 Champion Way
1
1
640
$2,050
$3.20
Amalfi Apartment Homes
16000 Legacy Road
1
1
681
$1,900
$2.79
EI Paseo
14901 Newport Avenue
1
1
695
$1,850
$2.66
Amalfi Apartment Homes
16000 Legacy Road
1
1
695
$2,050
$2.95
Rancho Monterey
100 Robinson Drive
1
1
703
$1,900
$2.70
Rancho Monterey
100 Robinson Drive
1
1
703
$1,975
$2.81
Rancho Monterey
100 Robinson Drive
1
1
703
$2,115
$3.01
Rancho Alisal Apt Homes
13800 Parkcenter Lane
1
1
706
$1,805
$2.56
Rancho Monterey
100 Robinson Drive
1
1
718
$1,835
$2.56
Rancho Monterey
100 Robinson Drive
1
1
718
$1,835
$2.56
Rancho Monterey
100 Robinson Drive
1
1
718
$1,835
$2.56
Amalfi Apartment Homes
16000 Legacy Road
1
1
730
$2,100
$2.88
Amalfi Apartment Homes
16000 Legacy Road
1
1
741
$2,005
$2.71
Amalfi Apartment Homes
16000 Legacy Road
1
1
746
$2,050
$2.75
Anton Legacy
3100 Park Avenue
1
1
749
$1,824
$2.44
Rancho Maderas
13408 Heritage Way
1
1
750
$1,915
$2.55
Amalfi Apartment Homes
16000 Legacy Road
1
1
751
$1,905
$2.54
Amalfi Apartment Homes
16000 Legacy Road
1
1
760
$2,120
$2.79
Anton Legacy
3100 Park Avenue
1
1
761
$1,824
$2.40
Anton Legacy
3100 Park Avenue
1
1
764
$1,824
$2.39
Rancho Monterey
100 Robinson Drive
1
1
764
$2,020
$2.64
Rancho Monterey
100 Robinson Drive
1
1
764
$2,170
$2.84
Rancho Alisal Apt Homes
13800 Parkcenter Lane
1
1
777
$1,780
$2.29
Anton Legacy
3100 Park Avenue
1
1
784
$1,824
$2.33
Amalfi Apartment Homes
16000 Legacy Road
1
1
800
$2,095
$2.62
Amalfi Apartment Homes
16000 Legacy Road
1
1
813
$2,270
$2.79
Sierra Vista
2955 Champion Way
1
1
895
$2,065
$2.31
Sierra Vista
2955 Champion Way
1
1
895
$2,100
$2.35
Sierra Vista
2955 Champion Way
1
1
895
$2,175
$2.43
Amalfi Apartment Homes
16000 Legacy Road
1
1
906
$2,275
$2.51
Sierra Vista
2955 Champion Way
1
1
930
$2,215
$2.38
Sierra Vista
2955 Champion Way
1
1
930
$2,365
$2.54
Amalfi Apartment Homes
16000 Legacy Road
1
1
955
$2,390
$2.50
Average
760
$2,013
$2.66
Minimum
550
$1,780
$2.29
Maximum
960
$2,390
$3.50
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Apt Comps Page 19 of 22
APPENDIX B - EXHIBIT I
APARTMENT RENT INFORMATION
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Project Name
Address
Number of
Bedrooms
Number of
Bathrooms
Rent
Unit Size Per Square
(SF) Total Foot
III. Two -Bedroom Units
EI Paseo
14901 Newport Avenue
2
2
902
$2,190
$2.43
Rancho Alisal Apt Homes
13800 Parkcenter Lane
2
2
925
$2,140
$2.31
Rancho Alisal Apt Homes
13800 Parkcenter Lane
2
2
925
$2,140
$2.31
Rancho Alisal Apt Homes
13800 Parkcenter Lane
2
2
925
$2,270
$2.45
Rancho Tierra Apartments
13202 Myford Road
2
2
935
$2,260
$2.42
Anton Legacy
3100 Park Avenue
2
2
944
$2,052
$2.17
Amalfi Apartment Homes
16000 Legacy Road
2
2
963
$2,480
$2.58
Rancho Alisal Apt Homes
13800 Parkcenter Lane
2
2
1,005
$2,190
$2.18
Rancho Alisal Apt Homes
13800 Parkcenter Lane
2
2
1,005
$2,215
$2.20
Rancho Alisal Apt Homes
13800 Parkcenter Lane
2
2
1,005
$2,265
$2.25
Anton Legacy
3100 Park Avenue
2
2
1,016
$2,052
$2.02
Rancho Monterey
100 Robinson Drive
2
2
1,018
$2,365
$2.32
Rancho Monterey
100 Robinson Drive
2
2
1,018
$2,385
$2.34
Amalfi Apartment Homes
16000 Legacy Road
2
2
1,021
$2,460
$2.41
Anton Legacy
3100 Park Avenue
2
2
1,031
$2,052
$1.99
Rancho Tierra Apartments
13203 Myford Road
2
2
1,035
$2,275
$2.20
Rancho Tierra Apartments
13204 Myford Road
2
2
1,035
$2,335
$2.26
Rancho Tierra Apartments
13204 Myford Road
2
2
1,035
$2,365
$2.29
Sierra Vista
2955 Champion Way
2
2
1,040
$2,325
$2.24
Sierra Vista
2955 Champion Way
2
2
1,040
$2,325
$2.24
Sierra Vista
2955 Champion Way
2
2
1,040
$2,405
$2.31
Rancho Maderas
13408 Heritage Way
2
2
1,058
$2,250
$2.13
Sierra Vista
2955 Champion Way
2
2
1,060
$2,335
$2.20
Sierra Vista
2955 Champion Way
2
2
1,060
$2,425
$2.29
Sierra Vista
2955 Champion Way
2
2
1,060
$2,485
$2.34
Amalfi Apartment Homes
16000 Legacy Road
2
2
1,095
$2,685
$2.45
Rancho Monterey
100 Robinson Drive
2
2
1,110
$2,435
$2.19
Rancho Monterey
100 Robinson Drive
2
2
1,110
$2,460
$2.22
Rancho Monterey
100 Robinson Drive
2
2
1,110
$2,510
$2.26
Anton Legacy
3100 Park Avenue
2
2
1,119
$2,052
$1.83
Amalfi Apartment Homes
16000 Legacy Road
2
2
1,208
$2,655
$2.20
Average
1,030
$2,317
$2.26
Minimum
900
$2,052
$1.83
Maximum
1,210
$2,685
$2.58
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Apt Comps
Page 20 of 22
APPENDIX B - EXHIBIT I
APARTMENT RENT INFORMATION
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Rent
Source: Zillow, May 2017
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Apt Comps Page 21 of 22
Number of
Number of
Unit Size
Per Square
Project Name
Address
Bedrooms
Bathrooms
(SF)
Total
Foot
IV. Three -Bedroom Units
Rancho Alisal Apt Homes
13800 Parkcenter Lane
3
2.0
1,063
$2,595
$2.44
Rancho Alisal Apt Homes
13800 Parkcenter Lane
3
2.0
1,063
$2,675
$2.52
Rancho Alisal Apt Homes
13800 Parkcenter Lane
3
2.0
1,063
$2,675
$2.52
Rancho Alisal Apt Homes
13800 Parkcenter Lane
3
2.5
1,205
$2,835
$2.35
Rancho Tierra Apartments
13203 Myford Road
3
2.5
1,205
$2,875
$2.39
Rancho Tierra Apartments
13203 Myford Road
3
2.5
1,205
$2,930
$2.43
Anton Legacy
3100 Park Avenue
3
2.0
1,315
$2,247
$1.71
Anton Legacy
3100 Park Avenue
3
2.0
1,334
$2,247
$1.68
Tustin Cottages
1361 EI Camino Real
3
2.5
1,582
$2,885
$1.82
Tustin Cottages
1361 EI Camino Real
3
2.5
1,691
$2,940
$1.74
Tustin Cottages
1361 EI Camino Real
3
2.5
1,715
$2,870
$1.67
Average
1,310
$2,707
$2.12
Minimum
1,060
$2,247
$1.67
Maximum
1,720
$2,940
$2.52
Source: Zillow, May 2017
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Apt Comps Page 21 of 22
APPENDIX B - EXHIBIT II
AFFORDABLE RENT CALCULATIONS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Bond/Tax Credit Rents - 2017
I. Tax Credit @ 60%AMI 3
Maximum Monthly Gross Rent $1,096 $1,174 $1,408 $1,627
(Less) Monthly Utility Allowance z ($36) ($52) ($61) ($96)
Maximum Tax Credit @ 60% AMI $1,060 $1,122 $1,347 $1,531
II. Tax Credit @ 50%AMI 3
Maximum Monthly Gross Rent $913 $978 $1,173 $1,356
(Less) Monthly Utility Allowance z ($36) ($52) ($61) ($96)
Maximum Tax Credit @ 50% AMI $877 $926 $1,112 $1,260
1 The California Department of Housng and Community Development (HCD) has not yet published 2017 household income information.
z Based on information published by the Orange County Housing Authority 10/1/2016. Assumes Gas: Cooking, Heating, Water Heater.
Electric: Basic
3 Based on rents published by the California Tax Credit Allocation Committee for 2017.
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Aff Rents Page 22 of 22
Studios
One Bedroom
Two Bedrooms
Three Bedrooms
H&SC 50053 Rents - 2016
I. 2016 HCD Median Income
i $61,050
$69,750
$78,500
$87,200
II. Moderate Income Rents
Household Income @ 110% AMI
$67,155
$76,725
$86,350
$95,920
30% of Income Alloted to Housing Costs
$20,147
$23,018
$25,905
$28,776
Maximum Monthly Gross Rent
$1,679
$1,918
$2,159
$2,398
(Less) Monthly Utility Allowance
z ($36)
($52)
($61)
($96)
Maximum Moderate Income Rents
$1,643
$1,866
$2,098
$2,302
III. Low Income Rents
Household Income @ 60% AMI
$36,630
$41,850
$47,100
$52,320
30% of Income Alloted to Housing Costs
$10,989
$12,555
$14,130
$15,696
Maximum Monthly Gross Rent
$916
$1,046
$1,178
$1,308
(Less) Monthly Utility Allowance
z ($36)
($52)
($61)
($96)
Maximum Low Income Rents
$880
$994
$1,117
$1,212
IV. Vert/ -Low Income Rents
Household Income @ 50% AMI
$30,525
$34,875
$39,250
$43,600
30% of Income Alloted to Housing Costs
$9,158
$10,463
$11,775
$13,080
Maximum Monthly Gross Rent
$763
$872
$981
$1,090
(Less) Monthly Utility Allowance
z ($36)
($52)
($61)
($96)
Maximum Very -Low Income Rents
$727
$820
$920
$994
Bond/Tax Credit Rents - 2017
I. Tax Credit @ 60%AMI 3
Maximum Monthly Gross Rent $1,096 $1,174 $1,408 $1,627
(Less) Monthly Utility Allowance z ($36) ($52) ($61) ($96)
Maximum Tax Credit @ 60% AMI $1,060 $1,122 $1,347 $1,531
II. Tax Credit @ 50%AMI 3
Maximum Monthly Gross Rent $913 $978 $1,173 $1,356
(Less) Monthly Utility Allowance z ($36) ($52) ($61) ($96)
Maximum Tax Credit @ 50% AMI $877 $926 $1,112 $1,260
1 The California Department of Housng and Community Development (HCD) has not yet published 2017 household income information.
z Based on information published by the Orange County Housing Authority 10/1/2016. Assumes Gas: Cooking, Heating, Water Heater.
Electric: Basic
3 Based on rents published by the California Tax Credit Allocation Committee for 2017.
Prepared by: Keyser Marston Associates, Inc.
File name: Rent ILF 5_22_17; Aff Rents Page 22 of 22
APPENDIX C
PRO FORMA ANALYSES
OWNERSHIP HOUSING SCENARIOS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Pf Page 1 of 20
APPENDIX C - EXHIBIT I
OWNERSHIP HOUSING PRO FORMA ANALYSIS
100% MARKET RATE SCENARIO
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Mkt Page 2 of 20
APPENDIX C - EXHIBIT I - TABLE 1
ESTIMATED DEVELOPMENT COSTS
OWNERSHIP HOUSING PRO FORMA ANALYSIS
100% MARKET RATE SCENARIO
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Property Acquisition Costs
Direct Costs
On -Sites / Landscaping
Guest Parking
Building Costs
Contractor/DC Contingency Allow
Total Direct Costs
III. Indirect Costs
Architecture, Eng & Consulting
Public Permits & Fees
Taxes, Ins. Legal & Accounting
Marketing
Developer Fee
Soft Cost Contingency Allowance
Total Indirect Costs
IV. Financing Costs
Interest During Construction
Loan Origination Fees
Total Financing Costs
V
435,600 Sf of Land
i
435,600
Sf of Land
25
Spaces
z 279,400
Sf of GBA
17%
Other Direct Costs
100
Units
$30 /Sf
$25 /Sf $10,890,000
$5,000 /Space 125,000
$110 /Sf of GBA 30,734,000
7,097,000
$488,500 /Unit
8.0% Direct Costs
100 Units $25,000 /Unit
3.0% Direct Costs
100 Units $10,000 /Unit
3.0% Gross Sales Revenue
5.0% Other Indirect Costs
$13,068,000
$48,846,000
$3,908,000
2,500,000
1,465,000
1,000,000
2,946,000
591,000
$12,410,000
3 $5,602,000
60.0% Loan to Cost 2.0 Points 892,000
$6,494,000
Total Construction Cost 100 Units $678,000 /Unit $67,750,000
Total Development Cost 100 Units $808,000 /Unit $80,818,000
1 Direct costs assume prevailing wage requirements will NOT be imposed on the Project.
z Includes the cost for two -car attached garages.
3 A 7.0% interest cost for debt; a 21 month construction period; a 19 month absorption period; 30% of the units are presold and close during first
month after completion; and 2.0 points for loan origination fees.
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Mkt Page 3 of 20
APPENDIX C - EXHIBIT I - TABLE 2
PROJECTED NET SALES REVENUE
OWNERSHIP HOUSING PRO FORMA ANALYSIS
100% MARKET RATE SCENARIO
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Gross Sales Revenue
Three Bedrooms
Four Bedrooms
Five Bedrooms
Total Gross Sales Revenue
II. Cost of Sales
Closing
Warranty
Total Cost of Sales
20 Units @ $719,200 /Unit
50 Units @ $952,400 /Unit
30 Units @ $1,207,000 /Unit
3.0% Gross Sales Revenue
2.0% Gross Sales Revenue
0.5% Gross Sales Revenue
$14,384,000
47, 620,000
36,210,000
$98,214,000
$2,946,000
1,964,000
491,000
($5,401,000)
III. I Net Sales Revenue $92,813,000
i Based on the average sales price per square foot derived from the sales data presented in APPENDIX D - EXHIBIT II - TABLE 1. The weighted
average price equates to $352 per square foot of saleable area.
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Mkt Page 4 of 20
APPENDIX C - EXHIBIT I - TABLE 3
PROJECTED DEVELOPER PROFIT
OWNERSHIP HOUSING PRO FORMA ANALYSIS
100% MARKET RATE SCENARIO
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Net Sales Revenue See APPENDIX C - EXHIBIT I - TABLE 2 $92,813,000
II. Total Development Cost See APPENDIX C - EXHIBIT I - TABLE 1 $80,818,000
III. I Developer Profit 14.8% Total Development Cost $11,995,000
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Mkt Page 5 of 20
APPENDIX C - EXHIBIT II
OWNERSHIP HOUSING PRO FORMA ANALYSIS
AFFORDABLE SCENARIO #1: 4.5% MODERATE; 4.5% LOW; & 6.0% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Aff 1 Page 6 of 20
APPENDIX C - EXHIBIT II - TABLE 1
ESTIMATED DEVELOPMENT COSTS
OWNERSHIP HOUSING PRO FORMA ANALYSIS
AFFORDABLE SCENARIO #1: 4.5% MODERATE; 4.5% LOW; & 6.0% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Property Acquisition Costs
Direct Costs
On -Sites / Landscaping
Guest Parking
Building Costs
Contractor/DC Contingency Allow
Total Direct Costs
III. Indirect Costs
Architecture, Eng & Consulting
Public Permits & Fees
Taxes, Ins. Legal & Accounting
Marketing
Developer Fee
Soft Cost Contingency Allowance
Total Indirect Costs
IV. Financing Costs
Interest During Construction
Loan Origination Fees
Total Financing Costs
V
435,600 Sf of Land
$30 /Sf
$13,068,000
i
435,600 Sf of Land
$25
/Sf
$10,890,000
25 Spaces
$5,000
/Space
125,000
z 279,400 Sf of GBA
$110
/Sf of GBA
30,734,000
17% Other Direct Costs
7,097,000
100 Units
$488,500
/Unit
$48,846,000
8.0% Direct Costs
$3,908,000
100 Units
$25,000
/Unit
2,500,000
3.0% Direct Costs
1,465,000
100 Units
$10,000
/Unit
1,000,000
3.0% Gross Sales Revenue
2,616,000
5.0% Other Indirect Costs
574,000
$12,063,000
3
5,592,000
60.0% Loan to Cost
2.0
Points
888,000
$6,480,000
Total Construction Cost 100 Units $674,000 /Unit $67,389,000
Total Development Cost 100 Units $805,000 /Unit $80,457,000
1 Direct costs assume prevailing wage requirements will NOT be imposed on the Project.
z Includes the cost for two -car attached garages.
a A 7.0% interest cost for debt; a 21 month construction period; a 16 month absorption period; 30% of the units are presold and close during first
month after completion; and 2.0 points for loan origination fees.
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Aff 1 Page 7 of 20
APPENDIX C - EXHIBIT II - TABLE 2
PROJECTED NET SALES REVENUE
OWNERSHIP HOUSING PRO FORMA ANALYSIS
AFFORDABLE SCENARIO #1: 4.5% MODERATE; 4.5% LOW; & 6.0% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Gross Sales Revenue
A. Market Rate Units
Three Bedrooms
Four Bedrooms
Five Bedrooms
B. Moderate Income Units
Three Bedrooms
Four Bedrooms
Five Bedrooms
C Low Income Units
Three Bedrooms
Four Bedrooms
Five Bedrooms
D. Very -Low Income Units
Three Bedrooms
Four Bedrooms
Five Bedrooms
Total Gross Sales Revenue
II. Cost of Sales
Closing
Warranty
Total Cost of Sales
0
z
z
z
17 Units @
$719,200
/Unit
$12,226,400
42 Units @
$952,400
/Unit
40,000,800
26 Units @
$1,207,000
/Unit
31,382,000
1 Unit @
$430,500
/Unit
430,500
2 Units @
$450,800
/Unit
901,600
1 Unit @
$481,600
/Unit
481,600
1 Unit @
$203,000
/Unit
203,000
3 Units @
$205,100
/Unit
615,300
1 Unit @
$219,200
/Unit
219,200
1 Unit @
$125,100
/Unit
125,100
3 Units @
$120,800
/Unit
362,400
2 Units @
$128,600
/Unit
257,200
3.0% Gross Sales Revenue
2.0% Gross Sales Revenue
0.5% Gross Sales Revenue
$87,205,100
$2,616,200
1,744,100
436,000
($4,796,300)
III. I Net Sales Revenue $82,408,800
i Based on the average sales price per square foot derived from the sales data presented in APPENDIX D - EXHIBIT II - TABLE 1. The weighted average
price equates to $352 per square foot of saleable area.
z See APPENDIX D - EXHIBIT II - TABLE 1 for AFFORDABLE SALES PRICE CALCULATIONS.
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Aff 1 Page 8 of 20
APPENDIX C - EXHIBIT II - TABLE 3
ESTIMATED FINANCIAL GAP
OWNERSHIP HOUSING PRO FORMA ANALYSIS
AFFORDABLE SCENARIO #1: 4.5% MODERATE; 4.5% LOW; & 6.0% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Funds Available for Development Costs
Net Sales Revenue See APPENDIX C - EXHIBIT II - TABLE 2
(Less) Threshold Developer Profit i 14.8% Total Development Cost
Total Funds Available for Development Costs
II. Total Development Cost
See APPENDIX C - EXHIBIT II - TABLE 1
$82,409,000
(11,941,000)
$70,468,000
$80,457,000
Estimated Financial Gap ($9,989,000)
15 Affordable Units ($665,900) /Affordable Unit
100 Total Units ($99,900) /Total Unit
279,400 Sf of GBA ($36) /Sf of GBA
1 Based on the profit as a percentage of Total Development Cost estimated to be generated by the 100% MARKET RATE SCENARIO.
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Aff 1 Page 9 of 20
APPENDIX C - EXHIBIT III
OWNERSHIP HOUSING PRO FORMA ANALYSIS
AFFORDABLE SCENARIO #2: 5.0% MODERATE & 7.5% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Aff 2 Page 10 of 20
APPENDIX C - EXHIBIT III - TABLE 1
ESTIMATED DEVELOPMENT COSTS
OWNERSHIP HOUSING PRO FORMA ANALYSIS
AFFORDABLE SCENARIO #2:5.0% MODERATE & 7.5% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Property Acquisition Costs
Direct Costs
On -Sites / Landscaping
Guest Parking
Building Costs
Contractor/DC Contingency Allow
Total Direct Costs
III. Indirect Costs
Architecture, Eng & Consulting
Public Permits & Fees
Taxes, Ins. Legal & Accounting
Marketing
Developer Fee
Soft Cost Contingency Allowance
Total Indirect Costs
IV. Financing Costs
Interest During Construction
Loan Origination Fees
Total Financing Costs
V
435,600 Sf of Land
$30 /Sf
$13,068,000
i
435,600 Sf of Land
$25
/Sf
$10,890,000
25 Spaces
$5,000
/Space
125,000
z 279,400 Sf of GBA
$110
/Sf of GBA
30,734,000
17% Other Direct Costs
7,097,000
100 Units
$488,500
/Unit
$48,846,000
8.0% Direct Costs
$3,908,000
100 Units
$25,000
/Unit
2,500,000
3.0% Direct Costs
1,465,000
100 Units
$10,000
/Unit
1,000,000
3.0% Gross Sales Revenue
2,664,000
5.0% Other Indirect Costs
577,000
$12,114,000
3
5,614,000
60.0% Loan to Cost
2.0
Points
888,000
$6,502,000
Total Construction Cost 100 Units $675,000 /Unit $67,462,000
Total Development Cost 100 Units $805,000 /Unit $80,530,000
1 Direct costs assume prevailing wage requirements will NOT be imposed on the Project.
z Includes the cost for two -car attached garages.
a A 7.0% interest cost for debt; a 21 month construction period; a 17 month absorption period; 30% of the units are presold and close during first
month after completion; and 2.0 points for loan origination fees.
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Aff 2 Page 11 of 20
APPENDIX C - EXHIBIT III - TABLE 2
PROJECTED NET SALES REVENUE
OWNERSHIP HOUSING PRO FORMA ANALYSIS
AFFORDABLE SCENARIO #2:5.0% MODERATE & 7.5% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Gross Sales Revenue
A. Market Rate Units
Three Bedrooms
Four Bedrooms
Five Bedrooms
B. Moderate Income Units
Three Bedrooms
Four Bedrooms
Five Bedrooms
C Low Income Units
Three Bedrooms
Four Bedrooms
Five Bedrooms
D. Very -Low Income Units
Three Bedrooms
Four Bedrooms
Five Bedrooms
Total Gross Sales Revenue
II. Cost of Sales
Closing
Warranty
Total Cost of Sales
0
z
z
z
17
Units @
$719,200
/Unit
$12,226,400
44
Units @
$952,400
/Unit
41,905,600
26
Units @
$1,207,000
/Unit
31,382,000
1
Unit @
$430,500
/Unit
430,500
2
Units @
$450,800
/Unit
901,600
2
Units @
$481,600
/Unit
963,200
0
Units @
$203,000
/Unit
0
0
Units @
$205,100
/Unit
0
0
Units @
$219,200
/Unit
0
2
Units @
$125,100
/Unit
250,200
4
Units @
$120,800
/Unit
483,200
2
Units @
$128,600
/Unit
257,200
3.0% Gross Sales Revenue
2.0% Gross Sales Revenue
0.5% Gross Sales Revenue
$88,799,900
$2,664,000
1,776,000
444,000
($4,884,000)
III. I Net Sales Revenue $83,915,900
i Based on the average sales price per square foot derived from the sales data presented in APPENDIX D - EXHIBIT II - TABLE 1. The weighted average
price equates to $352 per square foot of saleable area.
z See APPENDIX D - EXHIBIT II - TABLE 1 for AFFORDABLE SALES PRICE CALCULATIONS.
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Aff 2 Page 12 of 20
APPENDIX C - EXHIBIT III - TABLE 3
ESTIMATED FINANCIAL GAP
OWNERSHIP HOUSING PRO FORMA ANALYSIS
AFFORDABLE SCENARIO #2:5.0% MODERATE & 7.5% VERY -LOW INCOME UNITS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. Funds Available for Development Costs
Net Sales Revenue See APPENDIX C - EXHIBIT III - TABLE 2
(Less) Threshold Developer Profit i 14.8% Total Development Cost
Total Funds Available for Development Costs
II. Total Development Cost
See APPENDIX C - EXHIBIT III - TABLE 1
$83,916,000
(11,952,000)
$71,964,000
$80,530,000
Estimated Financial Gap ($8,566,000)
13 Affordable Units ($658,900) /Affordable Unit
100 Total Units ($85,700) /Total Unit
279,400 Sf of GBA ($31) /Sf of GBA
1 Based on the profit as a percentage of Total Development Cost estimated to be generated by the 100% MARKET RATE SCENARIO.
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Aff 2 Page 13 of 20
APPENDIX D
OWNERSHIP HOUSING DATA
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.
File Name: Own ILF 5_22_17; Own Info Page 14 of 20
APPENDIX D - EXHIBIT II - TABLE 1
HOME SALES INFORMATION
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Sales Price
Prepared by: Keyser Marston Associates, Inc.
File name: Own ILF 5_22_17; Sales Comps Page 15 of 20
Number of
Number of
Per Square
Address
Sale Date
Year Built
Bedrooms
Baths
Unit Size (Sf)
Total
Foot
I. Three -Bedroom Units
1885 Harvest Cir
10/14/16
2016
3
2
1,804
$714,047
396
93 Barnes Rd
11/23/16
2016
3
3
1,860
$775,000
417
35 Barnes Rd
5/17/16
2015
3
3
1,860
$799,900
430
17019 Traditions Way
9/24/16
2016
3
3
1,867
$590,629
316
1887 Harvest Cir
10/31/16
2016
3
3
1,929
$715,000
371
1878 Harvest Cir
1/13/17
2016
3
3
1,929
$732,000
379
Average
1,870
$721,100
$385
Minimum
1,800
$590,600
$316
Maximum
1,930
$799,900
$430
II. Four -Bedroom Units
13682 Green Valley Dr
12/7/16
2016
4
3
1,900
$648,000
341
207 Barnes Rd
8/5/16
2016
4
3
2,126
$824,900
388
126 Barnes Rd
2016
4
3
2,126
$876,000
412
189 Barnes Rd
2016
4
3
2,142
$820,000
383
36 Brisbane Ct
2015
4
3
2,144
$999,000
466
133 Barnes Rd
1/20/17
2015
4
3
2,171
$755,000
348
181 Barnes Rd
9/30/16
2015
4
3
2,171
$795,900
367
201 Barnes Rd
6/22/16
2015
4
3
2,171
$829,900
382
137 Barnes Rd
2016
4
3
2,171
$902,500
416
1876 Harvest Cir
3/1/17
2016
4
3
2,258
$715,000
317
1879 Harvest Cir
10/28/16
2016
4
4
2,258
$805,460
357
203 Barnes Rd
7/7/16
2015
4
4
2,342
$890,900
380
127 Barnes Rd
12/23/16
2015
4
3
2,343
$876,000
374
197 Barnes Rd
2015
4
3
2,344
$950,000
405
129 Evelyn PI
3/24/17
2016
4
3
2,604
$968,000
372
1521 Lanai Way
8/8/16
2016
4
3
2,614
$838,000
321
263 Barnes Rd
6/1/16
2016
4
3
2,614
$910,000
348
265 Barnes Rd
6/24/16
2016
4
3
2,807
$932,000
332
299 Barnes Rd
11/4/16
2016
4
5
3,008
$1,010,055
336
127 Evelyn PI
12/19/16
2016
4
5
3,008
$1,057,539
352
230 Downs Rd
7/15/16
2016
4
3
3,012
$1,075,900
357
230 Barnes Rd
2016
4
3
3,012
$1,076,000
357
278 Barnes Rd
1/27/17
2016
4
3
3,012
$1,099,900
365
117 Patton Way
10/13/16
2015
4
4
3,412
$1,122,000
329
273 Downs Rd
3/31/17
2016
4
4
3,612
$1,197,000
331
118 Evelyn PI
3/13/17
2016
4
4
3,612
$1,200,000
332
207 Downs Rd
9/13/16
2015
4
5
3,866
$1,149,900
297
295 Downs Rd
3/31/17
2016
4
4
4,096
$1,313,000
321
Average
2,680
$951,400
$355
Minimum
1,900
$648,000
$297
Maximum
4,100
$1,313,000
$466
Prepared by: Keyser Marston Associates, Inc.
File name: Own ILF 5_22_17; Sales Comps Page 15 of 20
APPENDIX D - EXHIBIT II - TABLE 1
HOME SALES INFORMATION
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Sales Price
Source: Redfin, May 2017
Prepared by: Keyser Marston Associates, Inc.
File name: Own ILF 5_22_17; Sales Comps Page 16 of 20
Number of
Number of
Per Square
Address
Sale Date
Year Built
Bedrooms
Baths
Unit Size (Sf)
Total
Foot
III. Five -Bedroom Units
18 Brisbane Ct
12/2/16
2016
5
3
2,343
$882,000
376
291 Barnes Rd
2016
5
3
2,836
$974,000
343
291 Downs Rd
3/17/17
2016
5
4
3,280
$1,165,000
355
218 Barnes Rd
5/31/16
2015
5
4
3,412
$1,174,900
344
119 Patton Way
11/2/16
2016
5
5
3,612
$1,160,000
321
226 Barnes Rd
12/30/16
2015
5
5
3,679
$1,150,900
313
86 Holmes PI
3/10/17
2016
5
5
3,834
$1,300,000
339
128 Cape Myrtle PI
10/3/16
2015
5
5
3,834
$1,333,000
348
90 Windwalker Way
6/15/16
2016
5
5
3,842
$1,350,000
351
27 Meadow PI
6/27/16
2016
5
5
3,880
$1,100,000
284
22 Stafford PI
2017
5
5
3,880
$1,407,900
363
18 Windrow Rd
1/30/17
2016
5
5
3,918
$1,180,000
301
16 Stafford PI
2017
5
5
3,961
$1,464,900
370
220 Barnes Rd
9/20/16
2015
5
6
4,096
$1,257,900
307
Average
3,600
$1,207,200
$335
Minimum
2,340
$882,000
$284
Maximum
4,100
$1,464,900
$376
Source: Redfin, May 2017
Prepared by: Keyser Marston Associates, Inc.
File name: Own ILF 5_22_17; Sales Comps Page 16 of 20
APPENDIX D - EXHIBIT II
AFFORDABLE SALES PRICE CALCULATIONS
2016 INCOME STANDARDS - ORANGE COUNTY
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
Prepared by: Keyser Marston Associates
File name: Own ILF 5_22_17; Aff Sales Price Page 17 of 20
APPENDIX D - EXHIBIT II - TABLE 1
AFFORDABLE SALES PRICE CALCULATIONS
2016 INCOME STANDARDS - ORANGE COUNTY
MODERATE INCOME HOUSEHOLDS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. 2016 HCD Median Income
II. Income Information
Household Income @ 110% AMI
35% of Income Allotted to Housing Costs
III. Ongoing Expenses
Annual Utility Allowance
HOA Fees (Maintenance & Insurance)
Property Taxes @ 1.10% of Affordable Sales Price
Total Ongoing Expenses
IV. Income Available for Mortgage
V. Affordable Sales Price
Supportable Mtg @ 4.25% Interest
Home Buyer Down Payment @ 5% Affordable Sales Price
Affordable Sales Price
Three Bedrooms
Four Bedrooms
Five Bedrooms
$87,200
$94,200
$101,150
$95,920
$103,620
$111,265
$33,570
$36,270
$38,940
i $1,812
$2,064
$2,220
z 2,880
3,960
4,320
4,736
4,960
5,298
$9,428
$10,984
$11,838
$24,142
$25,286
$27,102
$409,000
$428,300
$459,100
21,500
22,500
22,500
$430,500
$450,800
$481,600
i Based on information published by the Orange County Housing Authority 10/1/16. Assumes Gas: Cooking, Heating, Water Heater.
Electric: Basic. Water and Trash.
z Based on the average HOA dues derived from the home sales survey.
Prepared by: Keyser Marston Associates
File name: Own ILF 5_22_17; Aff Sales Price Page 18 of 20
APPENDIX D - EXHIBIT II - TABLE 2
AFFORDABLE SALES PRICE CALCULATIONS
2016 INCOME STANDARDS - ORANGE COUNTY
LOW INCOME HOUSEHOLDS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. 2016 HCD Median Income
II. Income Information
Household Income @ 70% AMI
30% of Income Allotted to Housing Costs
III. Ongoing Expenses
Annual Utility Allowance
HOA Fees (Maintenance & Insurance)
Property Taxes @ 1.10% of Affordable Sales Price
Total Ongoing Expenses
IV. Income Available for Mortgage
V. Affordable Sales Price
Supportable Mtg @ 4.25% Interest
Home Buyer Down Payment @ 5% Affordable Sales Price
Affordable Sales Price
Three Bedrooms
Four Bedrooms
Five Bedrooms
$87,200
$94,200
$101,150
$61,040
$65,940
$70,805
$18,310
$19,780
$21,240
i $1,812
$2,064
$2,220
z 2,880
3,960
4,320
2,234
2,256
2,411
$6,926
$8,280
$8,951
$11,384
$11,500
$12,289
$192,800
10,200
$203,000
$194,800
10,300
$205,100
$208,200
11,000
$219,200
i Based on information published by the Orange County Housing Authority 10/1/16. Assumes Gas: Cooking, Heating, Water Heater.
Electric: Basic. Water and Trash.
z Based on the average HOA dues derived from the home sales survey.
Prepared by: Keyser Marston Associates
File name: Own ILF 5_22_17; Aff Sales Price Page 19 of 20
APPENDIX D - EXHIBIT II - TABLE 3
AFFORDABLE SALES PRICE CALCULATIONS
2016 INCOME STANDARDS - ORANGE COUNTY
VERY -LOW INCOME HOUSEHOLDS
IN -LIEU FEE ANALYSIS
TUSTIN, CALIFORNIA
I. 2016 HCD Median Income
II. Income Information
Household Income @ 50% AMI
30% of Income Allotted to Housing Costs
III. Ongoing Expenses
Annual Utility Allowance
HOA Fees (Maintenance & Insurance)
Property Taxes @ 1.10% of Affordable Sales Price
Total Ongoing Expenses
IV. Income Available for Mortgage
V. Affordable Sales Price
Supportable Mtg @ 4.25% Interest
Home Buyer Down Payment @ 5% Affordable Sales Price
Affordable Sales Price
Three Bedrooms
Four Bedrooms
Five Bedrooms
$87,200
$94,200
$101,150
$43,600
$47,100
$50,575
$13,080
$14,130
$15,170
i $1,812
$2,064
$2,220
z 2,880
3,960
4,320
1,376
1,329
1,415
$6,068
$7,353
$7,955
$7,012
$6,777
$7,215
$118,800
6,300
$125,100
$114,800
6,000
$120,800
$122,200
6,400
$128,600
i Based on information published by the Orange County Housing Authority 10/1/16. Assumes Gas: Cooking, Heating, Water Heater.
Electric: Basic. Water and Trash.
z Based on the average HOA dues derived from the home sales survey.
Prepared by: Keyser Marston Associates
File name: Own ILF 5_22_17; Aff Sales Price Page 20 of 20