5_Exhibit B_Resolution_Attachment 2

C-42 | City of Pleasanton Housing Constraints Per the Needs Assessment (Appendix A, Figure A-44), renter households in Pleasanton experience a higher housing cost burden than homeowners. An estimated 22.6 percent of renters spend 30 to 50 percent of their income on housing compared to 13.7 percent of those that own. Additionally, 21.0 percent of renters spend 50 percent or more of their income on housing, while 9.9 percent of owners are severely cost-burdened. In total, almost 24 percent of homeowners are cost burdened, while almost 44 percent of renters are cost burdened. C.3.2 Development Costs Land Costs Due to the shortage of vacant property in the city, a residual land value analysis was used to estimate the price of land in Pleasanton. The analysis used comparables recently sold within the past four years (2018 through 2021). Individual lots ranged from $44 to $137 per square foot, or about $1,928,134 to $5,956,728 per acre. Lot sizes ranged from approximately 3,920 to 146,797 square feet. Residential multi-family land in the city is estimated to cost an average of $74 per square foot, or about $3,228,376 per acre. Though there was some raw land sale activity in Pleasanton, the city has little undeveloped land available. The shortage of available land in Pleasanton is considered a constraint to development, as housing production will most likely occur on more expensive opportunity sites for redevelopment. A developer will need to pay for the existing on-site improvement before demolishing it, resulting in a cost premium over vacant land. In addition, sites with existing uses will most likely incur more costs due to the removal of on-site structures. Construction Costs According to a March 2020 report published by the Terner Center for Housing Innovation at UC Berkeley, construction costs for multi-family housing in California have climbed 25 percent between 2009 and 2018. This increase is in part due to the higher cost of building materials, such as wood, concrete, and steel, as well as prevailing wage requirements. According to RSMeans, construction costs (including materials and labor but excluding soft costs such as fees) for a small apartment complex in the Pleasanton area ranged between $171 to $201 per square foot in 2021. However, based on the City’s 2018 affordable housing impact fee nexus study, multi-family construction costs ranged from $215 per square foot for a rental development and $225 per square foot for a for-sale development. Construction costs have continued to increase since 2018. Construction costs can vary depending on the type of development, ranging from more expensive steel-frame Type I construction to more affordable wood-frame Type V. Due to the smaller scale, single-family homes tend to be more expensive to construct on a per square foot basis than multi- family. This cost can fluctuate depending on the type and quality of amenities to the property, such as expensive interior finishes, fireplaces, swimming pools, etc. Soft costs are the costs that are not directly incurred by the physical construction of the development. These costs include services for architectural, consultant, and legal services, as