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City of Pleasanton Lower Income Housing Fee Study Proposal September 18, 2012 demand by land use category will be converted into a fee, on a per-building-square-foot basis, based on the affordability gap calculations derived in Tasks 2.1 and 2.2. Please note that EPS is aware of the potential "double-counting" of income-qualified households generated by residential and nonresidential uses. For example, the same grocery store worker who needs affordable housing may be represented in the residential nexus studies, as well as the nonresidential nexus study. In a later task, EPS will reconcile these double-counting issues through recommendations on implementation of the fees at specific levels for different uses. EPS will prepare a draft report summarizing the results of the nonresidential nexus impact analysis. After incorporating City staff and stakeholder comments, EPS will issue a revised report for purposes of the public hearing process. EPS will prepare a final report for City adoption. Task 2.4; Lower Income Housing Fee Feasibility Analysis(Optional) Tasks 2.1 through 2.3 will produce"maximum supportable nexus-based fees," meaning the highest amount that the City could potentially charge different types of development to mitigate their full impact on demands for affordable housing. In many instances, it is impractical to charge the maximum amount because the fees would create too great a financial burden on desired new development, thus thwarting the City's other policy goals (economic development, housing production, etc.). In this optional task, EPS will compare the maximum fees to the costs and values of new development of various types, to determine whether the maximum fees represent such a burden and to estimate a figure at which the fees may be more feasibly incorporated into a developer's pro forma. EPS will create prototypical pro formas for residential and nonresidential development representing the various uses to which the fees may be applied. These pro formas will include the general costs of construction and other development activities, as well as the prevailing lease rates achieved for such development. EPS will assess the extent to which the maximum impact fee reduces the profit margins or residual land values of projects, comparing ( these results to those under past affordable housing policies. In addition to relying on published development cost and lease rate information, EPS will conduct additional informal outreach to stakeholders during this task. The deliverable for this task will be a technical memorandum detailing the results of the feasibility analysis and implications for the implementation of impact fees. Task 2.5: Survey of Comparable Jurisdictions'Fees EPS will conduct a survey of other jurisdictions in the Bay Area and throughout California that impose affordable housing fees on residential and nonresidential development:. The survey will not reflect every possible jurisdiction, but will include at least a dozen jurisdictions, and will include the current fee amounts by land use type, date of adoption and most recent update, and implementation considerations such as exemptions by project size or type. Where possible, EPS will also record whether the adopted fees represent the maximum fees calculated through nexus studies or some reduced amount. As a deliverable, EPS will produce a matrix that can be Incorporated into final documents. Economic&Planning Systems, Inc. 7 a.:tProuasaistumoanv11J iP asaomnu2tJIIyb{$917)2.dor