09 - Laserfiche WebLink

Nexus-Based Affordable Housing Fee Analysis for For-Sale Housing Draft Report 02/26/18 Household Expenditures and Job Creation by Income Level Having established the income requirements for purchasing units at various sizes and values, the fee calculation then requires an analysis of the household spending patterns at those required income levels. Consistent with nexus fee calculations and impact analysis for schools, parks, roads, etc., this analysis also assumes that all households purchasing new market-rate units in Pleasanton are "net new" households to the City. To assume otherwise—for instance, that only those buyers of new housing units relocating from outside Pleasanton should be counted in the impact analysis—would require assuming that the homes left by those households relocating within Pleasanton would be demolished or left vacant in perpetuity. This would only be the case were the City experiencing a significant loss of population and housing inventory, as has occurred, for instance, in Detroit. Pleasanton has not experienced such declines. The Consumer Expenditure Survey from the United States Bureau of Labor Statistics provides data for households at a variety of income levels, detailing the amounts that typical households spend on things like "Food at Home,""Apparel and Services," and "Vehicle Maintenance and Repairs." Interestingly, household expenditures by category are not uniformly proportional to household income levels. For example, households earning around $81,300 (adequate to purchase a 1,000-square foot unit) spend roughly 11 percent of their income on food and drink (at home and eating out), while households earning $236,800 who can afford to purchase a 3,500-square foot unit spend only about 7.3 percent of their income on food and drink. Because of these and other differences in proportionate spending, the expenditure profile varies at different income levels. The homebuyer household's typical expenditures were converted to the number of jobs created by their spending. The first step in this process is to determine how much of an industry's gross receipts are used to pay wages and employee compensation. EPS relied on data from the Economic Census,3 which provides employment, gross sales, and payroll data by industry for the City of Pleasanton. In certain instances, Pleasanton data was not available for every Economic Census industry—in those cases, EPS relied on statewide Economic Census data for that industry. To link the Economic Census data and the Consumer Expenditure Survey data, EPS made determinations as to the industries involved with expenditures in various categories. For example, purchases in the Consumer Expenditure Survey's "Food at Home" category would likely involve the Economic Census's "Food & Beverage Stores" industry, where gross receipts were more than eight times the employees' wages. By contrast, purchases in the Consumer Expenditure Survey's "Entertainment Fees and Admissions" category were attributed to the Economic Census'"Arts, Entertainment, and Recreation" industry, where gross receipts are only about three times the employees' wages. Where more than one Economic Census category was 3 Note that the Consumer Expenditure Survey data is based on information current as of 2014. The latest data available for the Economic Census was published in 2013. Because the data sources were from different years, EPS converted all numbers to 2015 dollars using the Consumer Price Index (CPI) for the San Francisco Metropolitan Statistical Area (MSA) from the Bureau of Labor Statistics. Economic& Planning Systems, Inc. 14 p us,o.,,suuveasamonFe,n<ro«wrc«naep nouaoyusuu.mo«02261.o,aie no,,