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Real Estate Economics 101 A project is feasible if the face value is greater than the cost of project plus the entrepreneur's profit. The residual value of the land is equal to the finished value of the project less the entrepreneur's profit. Planning Commissions are beginning to consider the economics of development projects when they make land use decisions. If you reason for higher density, which is up- zoning, the greater the number of units per acre, the higher the cost of the project, but the residual land value also increases. This runs the risk of creating speculation in the market relative to that land unless the developer is told upfront what public benefits or exactions are expected from that land use. The exactions have to be based on the impact on the community and not on the need, as if it based on the need, there is the risk of being sued by the developer under California law. Transit Oriented Development One of the speaker was the Downtown Development Coordinator for Redwood City Form -based code is used to establish how the Downtown should look. Pictures of general architecture are provided so the developer knows what is going in and what is to be expected. An EIR is also done for the entire area. It speed us the process, reduces the amount of time the developer has to spend in the approval process, saves the City and the developer money, and gets the job done right away. A second speaker was from Portland. With form -based codes, in Portland, there are no parking requirements within 500 feet of the transit point. Senior and Affordable Housing One of the speakers was the Executive Vice President of Bridge House, who was the proponent for the Parkview Project here in Pleasanton. She spoke about the process and how cities can help bring a project forward, such as by donating land. Commissioner Narum stated that she attended Citv Finance 101, which was an eye- opener. Money from the General Fund can come only from property taxes and portion of sales tax. An analysis of the different types of development and their impact on the General Fund was presented. Some of the economics seems to be part of planning. Some decisions Planning Commissions make affect the financial health of city. Commissioner Pearce stated that she was disappointed that many of the good courses were frontloaded and that there was one afternoon when one of the only offerings was a Mobile Tour, which was interesting but basically involved redevelopment or the waterfront, neither of which is applicable to many cities. PLANNING COMMISSION MINUTES, April 9, 2008 Page 32 of 33