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City of Pleasanton Lower Income Housing Fee Study • Proposal September 18, 2012 Task 2.6: Present Lower Income Housing Fee Recommendations and Revenue Projections The maximum justifiable fees may yield feasibility impacts that affect other important policy goals, such as the City's desire to meet its housing allocation, economic development, or other revitalization goals. Also, the maximum fee may have unintended consequences on the ability to provide affordable units by creating a cost burden that deters the new market-rate housing production or nonresidential development, which presumably would be providing at least partial funding for the affordable units. For example, the maximum fees may be significantly higher than those imposed in comparable jurisdictions, creating a concern about the City's competitive position to attract new development. The City may wish to rely on other sources of revenue to fund affordable housing and may choose not to impose the entire burden on developers of market-rate housing or nonresidential development. For various reasons (including the double-counting issue described under Task 2.3), the City may consider setting the Lower Income Housing Fees below their maximum levels as indicated by the nexus study. EPS will assist the City to identify and assess the applicability of such mitigating factors, to assess the feasibility impacts of different requirements below the maximum levels, and to recommend fees for implementation. The recommendations will include suggestions for annual adjustments to the fees, illustrating the formulae that can account for economic changes while also being reasonably replicable by City staff on an ongoing basis. EPS also will provide a projection of the Lower Income Housing Fee revenues that may be generated over the next five years, by applying the current and recommended fees and annual adjustment factors to projected development absorption estimates. The revenues will be presented as a range, with one figure reflecting a continuation of market trends while another may represent future diversions from market trends as may be shown in ABAG projections or known development pipeline projects. These calculations will demonstrate the effect that the recommended fees can have on the City's overall resources for affordable housing production. The deliverable for this task will include: 1) a recommended fee schedule for 'esidential and nonresidential development, informed by the preceding technical analysis that will be incorporated by reference or as Appendices; 2) a comparison of the recommended fee program with the existing fee program and inclusionary zoning requirements, including any recommended !L changes to the Inclusionary Zoning Ordinance to reflect the revised methodology and recommendations; 3) a summary Implementation process including recommended adjustment formulae; 4) a comparison of projected revenues under the current and recommended fee (l programs; and 5) an analysis of the recommended fees'consistency with State regulations/laws and recent court decisions. The deliverable will be provided in draft for City staff review, and then revised as necessary to present to City elected and appointed officials. Task 2.7: Meetings and Public Outreach EPS will work with the City staff to develop meeting/presentation materials that offer an easily tf understood synopsis of the technical analysis and summary of the primary policy issues. EPS will be available to attend up to four (4) public meetings/workshops with the Housing Commission, Economic Vitality Committee, Planning Commission, and/or City Council. In addition to these formal presentations, the project initiation meeting under Task 1..1, and targeted stakeholder meeting under Task 1.2, EPS will also be available for up to three (3) meetings with the City's project team to review analysis results and strategize next steps. These meetings may be conducted In person or via teleconference. Economic&Planning Systems, Inc. 8 Mr*opaSadu],00e,II„JSWeaeePfoau?211$P6f_o»n:.do. •