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1. INTRODUCTION AND EXECUTIVE SUMMARY Background Incorporated in 1894, the City of Pleasanton (City) adopted its first low income housing fee in the late 1970s. The fee was amended in 1989 to apply to all residential and commercial development. Consistent with Assembly Bill (AB) 1600, the fee has been updated in 1998 and 2003 with the current schedule based on annual CPI adjustments made since the last adoption. While the nexus fee was updated in 2012 along with a new Housing Element, the City decided to update the fee simultaneously with other development impact fees. The current report is an update to the 2012 Nonresidential Development Housing Linkage Fee Nexus Study. It has been updated along with the Affordable Housing Impact Fee Reports for for-sale and rental housing as well as the Capital Facilities Development Impact Nexus Fee report, all produced under separate covers. The technical analysis presented in this report was completed in 2016 and is largely based on the 2015 numbers. This report is designed to update and re-affirm an affordable housing impact fee for new nonresidential development in Pleasanton. Purpose Economic & Planning Systems, Inc. (EPS) was retained by the City of Pleasanton to conduct a nexus study that quantifies the relationship between the growth in nonresidential land uses and the demand for and cost of affordable housing for the local workforce. As a development impact fee, the nonresidential linkage fee (fee) can only be charged to new development and must be based on the impact of new development on the need for resources to subsidize the development of new affordable housing. The purpose of this report is to provide the nexus (or reasonable relationship) between new nonresidential development that occurs in the City and the need for additional affordable housing as a result of this new development. The fee generated by this program will be deposited in the City's Lower Income Housing Fund, to provide assistance for production, acquisition of at-risk units, or rehabilitation of affordable housing. Authority This study serves as the basis for requiring development impact fees under AB 1600 legislation, as codified by the Mitigation Fee Act (California Government Code sections 66000 et seq.). This section of the Mitigation Fee Act sets forth the procedural requirements for establishing and collecting development impact fees. These procedures require that a reasonable relationship, or nexus, must exist between a governmental exaction and the purpose of the condition. Economic&Planning Systems, Inc. 1