HomeMy WebLinkAbout2018-10-11 Study Session - Affordable HousingOVl
lily 0r M 0-1SIR'T
73-5i0 FRED WARING DRIVE
PALM DESERT, CALIFORNIA g2260-2578
TEL: 760 346—o6ii
info@cityofpalmdesert.org
NOTICE OF STUDY SESSION
OF THE
PALM DESERT CITY COUNCIL
NOTICE IS HEREBY GIVEN that the Palm Desert City Council will convene for a
Study Session Thursday, October 11, 2018, at 2:00 p.m. in the
Administrative Conference Room of the Palm Desert Civic Center. 73510 Fred Warina
Drive. Palm Desert. California 92260. Said Study Session will be for the purpose of
discussing development that includes Affordable Housing in the City.
RA6 ELLE D. KLASSE 1CITY CLER
CITY OF PALM DESERT, CALIFORNIA
October 4, 2018 -
NO ACTION WILL BE TAKEN AT THE STUDY SESSION.
PURPOSE OF THE STUDY SESSION IS INFORMATION ONLY.
L�J rmrzooxveiwonveo
CITY OF PALM DESERT
DEPARTMENT OF COMMUNITY DEVELOPMENT
INTEROFFICE MEMORANDUM
To: Honorable Mayor and Members of the City Council
From: Ryan Stendell, Director of Community Development
Date: October 11, 2018
Subject: Background Information: Affordable Housing Study Session 10/11/2018
In preparation for the study session of October 11, 2018, Housing Division staff in consultation
with legal counsel (Richards, Watson and Gershon) have prepared the following summary
related to a past Settlement Agreement that is often referred to as the "Stipulation." In addition
to the below summary, staff has also provided two previously produced nexus studies which
attempted to link housing affordability to the creation of market rate housing units. The
attached studies were completed in 2015, and could be useful for the upcoming study
session.
In 1987, following the adoption of the Redevelopment Plan for Project Area No. 2, the
Western Center on Law and Poverty and California Rural Legal Assistance filed a lawsuit
against the Palm Desert Redevelopment Agency in an effort to stop the formation of the
Project Area. The lawsuit was settled in May of 1991, and the settlement was incorporated
into a Stipulation for Entry of Judgment. In June of 1997 and again in September of 2002, the
Court entered amendments to the Stipulation.
Under the terms of the Stipulation, as amended, the Agency generally agreed to use its 20
percent set aside funds, and other tax increment revenues if necessary, to develop,
rehabilitate, or otherwise financially assist a certain number of affordable housing units and
to meet certain affordable housing needs of the City as determined in the Regional Housing
Needs Assessment prepared periodically by the Southern California Association of
Governments.
Following the dissolution of the Agency, the State Department of Finance ("DOF") declined
to treat the Stipulation as an enforceable obligation on the Regional Obligation Payment
Schedule ("ROPS"). As the Western Center expected us to do so, the Successor Agency filed
a lawsuit against the DOF and the Riverside County Auditor -Controller, seeking declaratory
relief that the Stipulation constitutes an enforceable obligation.
Several other lawsuits had also been filed which have similar facts regarding housing -related
judgments as enforceable obligations and which the Western Center believed would result in
victories for housing advocates. The Western Center believed the outcome of those cases
would provide support for a court determination that the Stipulation is an enforceable
October 11, 2018 - Mei..andum
Affordable Housing
Page 2 of 2
obligation. By June of 2015, however, no cases had come down from the Court of Appeal
with the results the Western Center anticipated. Because we had reached a point in our
lawsuit against the DOF where the Successor Agency would begin to incur significant
expenses, we dismissed our lawsuit against the DOF without prejudice. The Western Center
was advised of this.
There is still one case pending in the Court of Appeal, which the Western Center previously
advised would be relevant if decided favorably to the Western Center's position. That case,
entitled Shayne v. DOF is still pending. It is fully briefed as of January 23, 2017, and is still
awaiting scheduling of oral argument. We expect that will occur in the next six to eight months,
with a decision following 90 days after oral argument.
RYAN STENDELL
DIRECTOR OF COMMUNITY
\\srv-NI2k3\groups\Plennin8\Monice OReilly�WorcNStendell1\2018Wtto0eble Housing Study Session docx
Report
Nexus -Based Affordable Housing
ThrEranomirsgfl.nral Uar Fee Analysis for For -Sale Housing
Prepared for:
City of Palm Desert
Prepared by:
Economic & Planning Systems, Inc.
February 6, 2015
Economic& Planning Systems, Inc.
One Kaiser Plaza, Suite 1410
Oakland, CA 94612
510 841 9190 tel
510 240 2080 fax EPS # 141134
Oakland
Sacramento
Denver
Los Angeles
www.epsys.rom
Table of Contents
EXECUTIVESUMMARY.................................................................................................... 1
I. AFFORDABILITY GAP ANALYSIS.................................................................................. 7
ProductType............................................................................................................7
Development Cost Assumptions..................................................................................9
RevenueAssumptions...............................................................................................9
Affordability Gap Results.......................................................................................... 10
2. DEMAND -BASED NEXUS FEE CALCULATION................................................................. 11
Market -Rate Household Income Levels...................................................................... 11
Household Expenditures and Job Creation by Income Level .......................................... 11
Demand for Public -Sector Workers............................................................................ 15
Combined Demand for Income -Qualified Workers....................................................... 16
FeeCalculation.......................................................................................................16
APPENDIX A: Household Expenditures and Employment Generation
APPENDIX B: Income Levels for Worker Households
List of Figures and Tables
Figure 1 Illustration of Nexus -Based Housing Fee Methodology............................................2
Table 1
Summary of Housing Impact Fees or Unit Equivalents per Market -Rate Unit.............6
Table 2
Financing Gap Analysis -- Rental Product Type......................................................8
Table 3
Income Required to Purchase Homes at Various Prices........................................12
Table 4
HUD Income Limits.........................................................................................
17
Table 5
Maximum Impact Fee Calculations -- $200,000 Unit ............................................
18
Table 6
Maximum Impact Fee Calculations $400,000 Unit ............................................
19
Table 7
Maximum Impact Fee Calculations -- $600,000 Unit ............................................
20
Table 8
Maximum Impact Fee Calculations -- $800,000 Unit ............................................
21
Table 9
Maximum Impact Fee Calculations $1,000,000 Unit.........................................22
Table 10
Maximum Impact Fee Calculations $1,200,000 Unit.........................................23
EXECUTIVE SUMMARY
Economic & Planning Systems, Inc. (EPS) was retained by the City of Palm Desert (City) to
conduct a nexus study analyzing the impact that development of market -rate for -sale housing
has on the demand for below -market -rate housing and, based on the results, to determine the
defensible nexus -based fee that could be charged to market -rate development.
The technical approach used herein quantifies the impacts that the introduction of market -rate
homes have on the local economy and the demand for additional affordable housing. As new
households are added to the community, local employment also will grow to provide the goods
and services required by the new households. To the extent that these new jobs do not pay
adequate wages for the employees to afford market -rate housing in the community, the new
households' spending is creating a need for affordable housing. A nexus -based affordable
housing fee is therefore based on the impact of the new market -rate homes on the demand for
affordable housing. The fee calculated in this study represents the maximum fee that may be
charged to new market -rate housing units to mitigate their impacts on the affordable housing
supply. Such fees are then used by the City to subsidize the production of new affordable units
for lower -income households not accommodated by market -rate projects.
Calculating the impact of market -rate development in the City on affordable housing needs, and
the fees needed to mitigate those impacts, involves three main analytical steps:
Step #1. Estimate the typical subsidy required to construct units affordable at various
income levels (the "affordability gap"). The analysis focuses on very -low, low-, and median -
income households.
Step #2. Determine the market -rate households' demand for goods and services, the jobs
created by that demand, and the affordable housing needs of workers in those jobs.
• Step #3. Combine the affordability gap with the affordable housing demand projections to
compute the maximum supportable nexus -based affordable housing fees per market -rate
unit.
These technical steps are illustrated in Figure 1 and detailed in the body of this Report and the
attached Technical Appendices. The findings regarding each of these steps are presented below.
Economic & Planning Systems, Inc. i
Im
Figure t
Illustration of Nexus -Based Housing Fee Methodology
<negative Subsidy
Required
Step #1Affordability Gap Analysis AffordableDevelo ment(Subsidy Required to Construct Unit Value minus P equals Affordability
affordable Units) by Income Costs Gap
No Subsidy
Required
Required Total Workers to
Step #2 Market Rate Household Household Provide Goods and Total Demand for
Affordable Units for
Affordable Housing Demand Home Price Income by Category Expenditures Services
(Generated by Market Rate Housing) Level Expenditure Category
Afforegory Workers
Step #3 Affordabilit Demand for Maximum
Compute Impact Fee y multiplied Affordable Units for equals Supportable Nexus -
Gap by Workers Based Housing Fee
per Market Rate Unit (Subsidy Required) (permarket rate unit) (per market rate unit)
Economic & Planning Systems, Inc. 2/52015
P.114100asV 41134Pa lmDesertWode4141134rolsalemodeib20515.xlsx
Nexus -Based Affordable Housing Fee Analysis for For -Sale Housing
02106115
1. The costs to construct affordable housing units affordable to many households
exceed those units'values based on the rents or prices that the households can
afford to pay. The subsidy required to construct affordable housing units in Palm
Desert ranges from roughly $58,000 for a Median Income household to $164,000
for a Very Low Income (VLI) household. Moderate Income households do not
appear to require subsidies, as affordable prices for such households appear able to
support the costs of construction.
An "affordability gap analysis" evaluates whether or not the costs to construct affordable
units exceed the values of units that are affordable to lower- and moderate -income
households. For each affordable housing income level (Very Low Income [VLI], Low Income
[LI], Median Income, and Moderate Income) this analysis estimates the subsidy required to
construct affordable housing units.
The affordability gap analysis assumes that the average affordable unit for all income levels
will be a 2-bedroom unit in a multifamily development. The estimated costs to construct the
prototypical affordable unit are based on published data sources (RS Means Cost Estimator)
indexed to Coachella Valley labor and materials costs, and have been vetted with developers
active in Coachella Valley. The costs of land acquisition are included in these development
cost calculations, and have been based on recent appraisals for residential land in Palm
Desert. For units that are eligible for non-competitive Low Income Housing Tax Credits
(4 percent tax credits), the value of those tax credits is deducted from the development
costs.
A household's ability to pay is estimated based on standard percentages of income available
for housing costs at each household income level. Income available for housing costs is then
converted into a month ly'affordable rent and a capitalized unit value or an affordable
mortgage payment and supportable home price. This unit value is then compared to the
costs of development to determine the subsidy, if any, required to make the unit affordable
to each income level.
2. The demand for affordable housing generated by the expenditures of new
households in Palm Desert increases along with the market -rate home price (and
related buyer income). For example, a home that sells for $200,000 is estimated to
create demand for 0.1 affordable housing units requiring development subsidy,
while a unit that sells for $1.0 million creates demand for 0.356 affordable units.
A justified nexus fee is based on the total demand for affordable housing units generated by
construction of market -rate units. The link (or nexus) between market -rate housing and
increased demand for affordable housing is that residents of market -rate units demand goods
and services that rely on many wage earners (for example, retail sales clerks) who typically
cannot afford market -rate housing and thus require affordable housing.
Because more expensive housing units require buyers to have higher incomes, and higher
income households create more jobs through their spending, the nexus impacts and thus the
justified fees for for -sale units vary according to the price range of the market -rate units.
Nexus impacts and the justified fees for market -rate homes, therefore, vary based on home
price.
Economic & Planning Systems, Inc. 31 .
Nexus -Based Affordable Housing Fee Analysis for For -Sale Housing
02/06/15
This analysis evaluates the demand for affordable housing generated by a range of home
prices. For each unit price, the demand -based nexus fee calculation involves the following
steps:
A. Market -Rate Household Income Levels. The required income levels of households
occupying new market -rate housing are derived based on the home price, assuming
standard housing cost expenses as a proportion of overall household income. For
example, a typical household buying a recently constructed market -rate unit for around
$400,000 would have an annual income of roughly $93,000, if they spent 30 percent of
their income on housing costs (mortgage, taxes, insurance, and HOA expenses).
B. Household.Expenditures. Based on the household income computed in Step A,
Consumer Expenditure Survey data was used to evaluate the spending patterns of the
household. This analysis provides an estimate of how much the household spends on
specific categories of expenditures, such as "Food at Home." As the households' income
increases along with the price of the market -rate units, the total spending on goods and
services also increases. The Consumer Expenditure Survey also indicates that these
relationships are not linear (e.g., a household with twice the income does not necessarily
spend twice as much on food).
C. 3ob Creation and Worker Households. Having estimated the households' spending on
various items, that spending is then converted into an estimation of jobs created. For
each expenditure category, data regarding average worker wages and the ratio between
gross business receipts and wages were used to translate these household expenditures
into the total number of private -sector workers. For selected public -sector jobs that
typically grow in proportion to the local population size (e.g., teachers), the demand for
new workers was estimated by relating current levels of employment in such categories
to the current population and applying this ratio to future development. Because each
new worker does not represent an independent household (Palm Desert has an average
of 1.52 workers per working household), the total number of new households created is
somewhat less than the number of new jobs created. EPS has further adjusted the
household formation rates to reflect the expectation that a certain proportion of workers
will not form their own households, particularly those of younger ages.'
D. Worker Households by Income Category. Each worker household generated is
assigned to an income category —Very Low Income (VLI), Low Income (LI), Median,
Moderate, and Above Moderate —based on its estimated gross wages. This provides the
total number of households generated at each income level by construction of market -
rate units at various price points. The results indicate that residents of lower -priced units
generate fewer worker households requiring affordable housing than do residents of
higher -priced units.
I BLS data indicates that 12.5 percent of retail/restaurant workers are age 16-19, but an average of
only 1.9 percent of workers In other industries. EPS has assumed that such young workers do not
form their own households.
Economic & Planning Systems, Inc.
Nexus -Based Affordable Housing Fee Analysis for For -Sale Housing
02/06/15
These steps of the nexus -based fee calculation provide the total number of income -qualified
workers required to meet the needs for goods and services generated by market -rate
housing. The number of workers servicing market -rate housing (at each unit size) is then
converted to total income qualified households requiring affordable housing subsidy, and
each such household is assumed to require one housing unit.
3. This analysis calculates the fees that could be charged to fully mitigate the impact
that new market -rate housing has on Palm Desert's affordable housing demand at
various representative unit sizes. These fees could range from roughly $13,400 for
units sold at $200,000 to $58,400 for units sold at $1.2 million.
The nexus fee is calculated by applying the number of affordable units needed by income
qualified households to the affordability gap for each housing income category. This
calculation is made for several different market -rate home prices. Table 1 summarizes the
maximum nexus -based fees calculated for representative home prices. The City may also
consider whether to allow developers to provide affordable units within their projects, rather
than paying the nexus -based fee. Table 1 illustrates the proportions of affordable units that
correspond to the fee calculation and demands created by the market -rate units. For
instance, a project offering new homes in the $400,000 range would effectively mitigate the
demand being created by the market -rate units if it provided 0.17 affordable units (very -low,
low, and median income) for each market -rate unit. Please note that these maximum fees
are based on the nexus relationship of affordable housing demand created by new market -
rate units; EPS recommends that the City consider the feasibility impact of imposing fees
while setting any fee on new housing.
Economic & Planning Systems, Inc. 5 ..»,.,ma
U
Table 1
Summary of Housing Impact Fees or Unit Equivalents per Market -Rate Unit
Palm Desert Housing Impact Fee, EPS #141134
Market -Rate Maximum Percent Affordable Units Generated/100 Market -Rate Units
Unit Price Impact Fee of Price Total Low (50%) Low (60%) Low (80%) Mad (100%)
$200,000
$13,406
6.7%
10.0
4.8
1.2
2.7
1.3
$400,000
$22,950
5.7%
17.0
8.3
2.0
4.6
2.1
$600,000
$33,182
5.5%
24.4
12.3
2.5
6.8
2.8
$800,000
$39,551
4.9%
28.8
15.0
2.7
8.2
2.9
$1,000,000
$48,945
4.9%
35.6
18.6
3.3
10.2
3.6
$1,200,000
$58,390
4.9%
42.5
22.2
3.9
12.2
4.3
Source: Economic & Planning Systems, Inc.
Economic & Planning Systems, Inc. 2/&2015
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1. AFFORDABILITY GAP ANALYSIS
For any nexus -based affordable housing fee calculation, it is necessary to estimate the subsidy
required to construct affordable housing units. Table 2 shows the subsidy needed to produce
multifamily housing that is affordable to very low-, low-, median- and moderate -income
households.
Product Type
This analysis assumes that new lower -income worker households would be housed in multifamily
developments in Palm Desert. Developable residential land in Palm Desert is assumed to be
approximately $200,000 per acre, based on an appraisal provided to the City by Lidgard and
Associates. EPS has assumed that these projects will have an average density of 20 units per
acre, and be built in wood -frame buildings of two to three stories with surface parking.
In order to determine the average household size of future affordable housing units, EPS used
two estimates from the Census Bureau. The American Community Survey indicates that the
average household size in Palm Desert is 2.05 people while the average family size is 2.75
people. The household size figure is significantly skewed by the high population of retirement -
age people in Palm Desert, where 46.1 percent of all households have one or more members
over age 65 (vs. only 24.9 percent statewide). The average family size is considered more
representative of worker households in Palm Desert, so the average household size for future
workers is assumed to round up to three people and EPS uses this assumption to determine the
applicable income limits for the new units.
California State law (California Health and Safety Code Section 50052.5) assumes that a 2-
bedroom unit is occupied by a 3-person household, and this assumption is used in this analysis.
An affordable 2-bedroom unit in Palm Desert is assumed to have a gross size of about 1,200
square feet (accounting for shared lobbies, hallways, etc.) and a net size of 1,000 square feet —
both somewhat smaller than recently constructed market rate units, but similar to recent
affordable housing developments.
This analysis assumes that all new affordable housing would be rental units, rather than for -sale
units. This assumption reflects the fact that many households at lower incomes will not have
adequate wealth reserves for down payments on homeownership units, and may have further
difficulty absorbing the ongoing costs of homeownership (taxes, repairs, etc.) that they can
effectively avoid by renting their homes rather than buying.
Economic & Planning Systems, Inc. 7
Table 2
Financing Gap Analysis - Rental Product Type
Palm Desert Housing Impact Fee, EPS 0141134
2 Stories Multifamily With Surface Parking
Very Low Low Low Median Moderate
Income Income Income Income Income
Item (SD%AMI) (60%AMI) (80%AMI) (100%AMI) (120%AMI)
Development Program Assumptions
DensilyfAcre
20
20
20
20
20
Average Gross Unit She
1,200
1,200
1,200
1,200
1.200
Average Net Unit Size
1.000
1,000
1,000
1,000
1.000
Average Number of Bedrooms
2
2
2
2
2
Average Number of Persons per Household
3
3
3
3
3
Parking SpacesNnil
2.0
2.0
2.0
. 2.0
2.0
Cost Assumptions [1]
Land/Acre 12]
$200,000
$200,000
$200,000
$200,000
$200,000
Land(Unil
$10,000
$10,000
$10.000
$10.000
$10,000
Direct Construction Costs/Gross SF[31
$150
$150
$115
$115
$115
Direct Construction Costs/Unit
$180,000
$180.000
$138,000
$13B,DDO
$138.000
Parking Construction CesWSpace
$2,500
$2.500
$2,500
$2,500
$2,500
Parking Construction CostaNnit
$5.000
$5,000
$5.000
$5,000
$5,000
Subtotal, Direct Costs/Unit
$185,0DO
$185,000
$143,ODO
$143.000
$143,000
Indirect Costs as a % of Direct Costs [41
60%
60%
35%
35%
35%
Indirect CostsfUnit
$111,000
$111,000
$50,050
$50,050
$50,050
Total CosllUnii
$306,000
$306,000
$203.050
$203,050
$203,050
less Value of 4%Tax Credits[5]
-$118,400
-$118,400
$0
$0
$0
Net CosWnit
$187,600
$187,600
$203.050
$203,050
$203,050
Maximum Supported Unit Value
Household Income (61 $27,350 $32,820 $43,700 $54.700 $65,640
Income Available for Housing CostsNear[71 $8,205 $9,846 $13.110 $16.410 $19.692
less Ullity Allowance[8] 1 $2.400 $2.400 $2,400 $2.400 $2.400
Remaining Income Available for Rent $5.805 $7,446 $10,710 $14,010 $17,292
Operatng Expenses per UniWear[9] $4,500 $4.500 $6.031 $6.031 $6.031
Net OpemOnglncome $1,305 $2,946 $4,680 $7,980 $11,262
Capitalization Rate[10) 5.5% 6.5% 6.5% 5.5% 5.5%
Total Supportable Unit Value $23.727 $53.564 $85.082 $145,082 $204,755
Financing Gap $163,873 $134,036 $117,968 $57,966 $0
[1) Costs for50-60%AMI units assume projects are purity non-profit builders, and require prevailing wage. For units at ll .120% of AMI, EPS has assumed lower development costs
consistent with for -profit builders' cost bases, and do not assume prevailing wage.
r21 The land costs represent an expected birds for developable residential land, per a December 2014 appraisal provided to the City of Palm Desert.
[3] Includes costs for labor and materials.
(4] Includes costs for architecture and engineering; battlement and fees; project management marketing, commissions, and general administration; financing and charges; Insurance; and
contingency. Tax credit projects (at or below 60%AMI) are assumed to Include developer fee at 14%of eligible basis.
15]4%Tax Cmdibamassumedtobemmivedforun0sal60%AMlorbelaw. Value of tax credits is estimated at 40%ofefgble basis, which is at direct and indeed costs but exdudes land
16] Based on HCD 2014 income Imils for Riverside5an Bernardino -Ontario MSA
[7] Assumes housing costs to be 30%of gross household income.
[01 Based on Housing Authority of Riverside County Allowances for Tenant punished UtiBges and other Services assuming an apartment using natural gas for heating and cooking.
[9) Opera0ng expenses include costs of tenarde'ublifies. Units forhooseholds above 60% Al are assumed to be built as fonprogt projects and thus subject to property tax
[101 Capdzluation rate estimated by EPS based an recent apartment industry investment standards.
Em+wruc4 Prarwrgay5ema,Irk Y31015 8 P.If110JdanIll.XPalmee+olWo4Y,lIflNAvaelemotlaVl05rSx/v
Nexus -Based Affordable Housing Fee Analysis for For -Sale Housing
02106115
Development Cost Assumptions
Affordable housing development costs include land costs, direct costs (e.g. labor and materials),
indirect or "soft" costs (e.g., architecture, entitlement, marketing, etc.), and developer profit.
For rental projects, operating costs also must be incorporated into the analysis. Data from
recent Palm Desert development and recent land transactions have been combined with EPS's
information from local housing developers and published data sources to estimate development
cost assumptions for a prototypical project in Palm Desert. These cost assumptions are shown
on Table 2.
Projects offering units affordable to households at or below 60 percent of Area Median Income
(AMI) are typically eligible for "40/o" Low Income Housing Tax Credits, which yield equity equal to
roughly 40 percent of the "eligible basis" of the development (all project costs excluding land
acquisition). Such projects are subject to prevailing wage requirements, however, which
increase their direct costs substantially. Also, the developer's fee for such projects is included as
an indirect cost, and can represent up to 14 percent of the eligible basis. These added costs are
more than offset by the value of the tax credit, however, so the net cost of development for such
units is estimated to be slightly less than the cost of developing units for households at 80 to 120
percent of AMI.
Revenue Assumptions
To calculate the values of the affordable units, assumptions must be made regarding the
applicable income level (moderate, median, LI, and VLI) and the percentage of income spent on
housing costs. In addition, translating these assumptions into unit prices and values requires
estimates of operating expenses, capital reserves, and capitalization rates. The following
assumptions were used in these calculations:
• Income Levels —The maximum allowable incomes used in each affordable housing income
category are consistent with those set forth by the federal government (U.S. Department of
Housing and Urban Development (HUD]): VLI = 50 percent of Area Median Income (AMI), LI
60% = 60 percent of AMI, LI 80% = 80 percent of AMI, Median Income = 100 percent of
AMI, and Moderate Income = 120 percent of AMI.
• Percentage of Gross Household Income Available for Housing Costs—HCD standards on
overpaying for rent indicate that households earning less than 80 percent of AMI should pay
no more than 30 percent of their gross income on housing costs. For this analysis, EPS has
assumed that all income qualified renter households shall spend 30 percent of their gross
income on housing costs, including rent and utilities.
• Other Costs Included for Rental Units —In addition to rent payments, the analysis assumes
$200 per month in utility costs based on the Riverside County Housing Authority utility
allowance table. This amount is subtracted from the total available housing costs (30
percent of household income) to determine the net amount available for rent payments.
Operating Costs for Rental Units —The analysis assumes that apartment operators incur
annual costs of $4,500 per unit for VLI and LI 60% units and about $6,000 for LI 80%,
Median, and Moderate units. EPS has assumed the LI 80%, Median, and Moderate income
units would be built by for -profit builders and subject to property taxes.
Economic & Planning Systems, Inc. 9
Nexus -Based Affordable Housing Fee Analysis for For -Sale Housing
02106115
Affordability Gap Results
Table 2 shows the subsidies for construction of for -rent apartments for VLI through moderate -
income households. The affordability gap ranges from $0 for moderate -income households (i.e.,
moderate -income households can afford home prices adequate to cover the costs of
construction) to roughly $164,000 for VLI households. The affordability gap for VLI households
is much higher because these households have significantly less income available for housing
costs, while construction costs remain essentially the same.
The affordability gaps by income level then were used to calculate the justified nexus -based fees
by multiplying this required subsidy by the number of units required to house workers providing
goods and services to new market -rate housing development. This methodology is discussed in
more detail in the following chapter.
Economic & Planning Systems, Inc. 10
2. DEMAND -BASED NEXUS FEE CALCULATION
The maximum supportable nexus fees are based on both the affordability gap, calculated in the
previous chapter, and the estimated impact that new market -rate units have on the need for
affordable units, as reflected in the number of income -qualified local workers required to support
the residents of market -rate units and the total subsidy required to construct housing for those
workers. This approach is based on the following logic: (a) residents of market -rate housing
have disposable incomes and require a variety of goods and services (including private sector
goods and services and government services); (b) the provision of those goods and services will
require some workers who make moderate or lower incomes and cannot afford market -rate
housing; and (c) fees charged to market -rate projects can mitigate the impact of those projects
on the increased need for affordable housing.
Market -Rate Household Income Levels
Households with larger incomes typically spend more on goods and services, therefore creating
additional lower income jobs, which in turn generate a greater demand for affordable housing.
To assess the impact that market -rate homes have on the need for affordable housing, EPS
determined the minimum income required to purchase a newly constructed home at various
prices, as shown in Table 3. These calculations are predicated on the assumption that a
household will spend 30 percent of their income on housing costs (mortgage principal and
interest, taxes, insurance, and homeowner association dues). As shown, required household
incomes range from approximately $50,000 for a $200,000 unit to roughly $265,000 for a $1.2
million home.
Household Expenditures and Sob Creation by Income
Level
Having established the income requirements for renting apartments of various sizes, 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 renting new market -rate units in Palm
Desert are "net new" households to the City. To assume otherwise —for instance, that only those
buyers or renters of new housing units relocating from outside Palm Desert should be counted in
the impact analysis —would require assuming that the homes left by those households
Economic & Planning Systems, Inc. 11
Table 3
Income Required to Purchase Homes at Various Prices
Palm Desert Housing Impact Fee, EPS #141134
Annual
Annual
Annual
Total
Required
Assumed
Down
Beginning
Mortgage
Taxes
HOA+
Annual
Household
Base
Payment at
Mortgage
Payment
at 1.25%
Insurance
Housing
Income
Price
20%
Principal
[1]
[2]
Fees [3]
Costs
[4]
$200,000
$40,000
$160,000
$10,408
$2,500
$2,184
$15,092
$50,300
$400,000
$80,000
$320,000
$20,816
$5,000
$2,184
$28,000
$93,300
$600,000
$120,000
$480,000
$31,225
$7,500
$2,184
$40,909
$136,400
$800,000
$160,000
$640,000
$41,633
$10,000
$2,184
$53,817
$179,400
$1,000,000
$200,000
$800,000
$52,041
$12,500
$2,184
$66,725
$222,400
$1,200,000
$240,000
$960,000
$62,449
$15,000
$2,184
$79,633
$265,400
[1] Assumes 5.0% interest for 30 years, reflecting higher than current rates but well below historical averages.
[2] Tax rate allows for some special assessments above 1.00% basic tax rate.
N [3] A Redfin.com survey of Palm Desert homes for sale on January 19, 2015 indicates an average HOA fee of $182/month for units listed at $550,000 or less.
Some of these projects may include insurance costs in the HOA fees, while others may not. To be conservative, EPS has assumed that the average HOA fee
does include insurance.
[4] Assumes households spend 30% of total household income on total annual housing costs.
Source: Economic & Planning Systems, Inc.
Economic & Planning Systems, Inc. 22542015 - P:114100051141134PalmDeserflMode11141134foma/emode1020515.x/sx
Nexus -Based Affordable Housing Fee Analysis for For -Sale Housing
02106115
relocating within Palm Desert 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. Palm Desert 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 $50,000 (adequate to
purchase a new $200,000 home) spend roughly 12,3 percent of their income on food and drink
(at home and eating out), while households earning $222,000 who can afford to buy a new $1.0
million home spend only about 7.0 percent of their income on these items. Because of these and
other differences in proportionate spending, the expenditure profile varies at different income
levels.
The 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,z which provides employment, gross sales, and payroll data by industry for Riverside
County. In certain instances, Riverside County 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
nearly 10 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 four times
the employees' wages. Where more than one Economic Census category was attributable to a
Consumer Expenditure Survey category, EPS estimated the proportion of expenditures
associated with each Economic Census category.
After determining the amount of the household's expenditures that were used for employee
wages, an estimation of the number of employees those aggregate wages represent is required.
EPS calculated the number of workers supported by that spending using the average wage per
worker (also from the 2007 Economic Census). These wages ranged from a low of roughly
$14,000 per year for workers in the food services industry to a high of roughly $85,000 average
salary for legal services.3
2 Note that the Consumer Expenditure Survey data is based on information current as of 2013 and
data from the Economic Census was published in 2007. Because the data sources were from different
years, EPS converted the 2013 expenditures to 2007 dollars using the Consumer Price Index (CPI) for
the Riverside -San Bernardino -Ontario Statistical Area (MSA) from the Bureau of Labor Statistics.
3 Note that the average salary reported for legal services reflects the full range of workers employed
by that industry sector, including administrative staff and entry-level employees, as well as the
attorneys.
Economic & Planning Systems, Inc. 13
Nexus -Based Affordable Housing Fee Analysis for For -Sale Housing
02106115
This methodology recognizes that a range of occupations and incomes exist in a given industry
sector. For instance, the methodology used to generate Tables A-1 to A-6 in Appendix A
distinguishes between the typical incomes of workers in different types of retail stores (e.g.,
"food and beverage stores" versus "general merchandise stores"), rather than assuming all retail
sector workers earn the same income. However, the average wage is used for each sub-
category of industry employment and represents a reasonable proxy for the range of incomes in
that group: while some employees will have higher wages and require lower subsidies, others
will have lower incomes and require higher subsidies. Using the average approximates the total
housing subsidy needed by workers in that industry.
To calculate the number of households supported by the expenditures of market -rate housing
units, EPS estimated the employees' household formation rates. Importantly, employees
generated from the increase in housing units do not all form households; some employees, in the
retail and food services industries in particular, are young workers and do not form households.
Data from the Bureau of Labor Statistics indicates that 12.5 percent of retail/restaurant workers
are age 16-19, but an average of only 1.9 percent of workers in other industries. EPS applied
these discounts to household formation to get a more accurate calculation of households formed
by the employees and the average total incomes of those households.
To get the overall households' income rather than the individual workers', the wages of workers
forming households were multiplied by the average of approximately 1.52 workers per working
household in Palm Desert.4 This assumption implies the workers in a given household will have
roughly equivalent pay per hour. While certainly there will often be some variation in wages per
employee within a household, on average this assumption is reasonable because it implies
comparable levels of education and training among all workers in a household. The average
household incomes then are allocated to various income categories to estimate the number of
affordable housing units demanded in each income category (VLI, LI, Median, and moderate -
income).
4 Workers per working household based on American Community Survey (ACS) Census data current
as of January 2015. The average workers per working household estimate is calculated by taking the
total number of people in the labor force and dividing it by the number of households with earnings.
This methodology seeks to provide a conservative estimate of household formation by excluding
households without workers or earnings (such as those with retired persons).
Economic & Planning Systems, Inc. 14
Nexus -Based Affordable Housing Fee Analysis for For -Sale Housing
02106115
A simplified example of these calculations follows:
A.
Number of Households (prototype project)
1,000
B.
Average Household Income (in the project)
$75,000
C.
Aggregate Household Income (A x B)
$75 million
D.
Average Income Spent on Retail (Consumer Expenditure Survey)
$20,000
E.
Aggregate Retail Spending (A x D)
$20 million
F.
Retail Gross Receipts: Payroll Ratio (Economic Census)
10:1
G.
Estimated Retail Payroll (E+F)
$2 million
H.
Average Retail Wage (Economic Census)
$20,000
I.
Estimated Total Retail Jobs (G + H)
100
J.
Percent Age 20+ (Bureau of Labor Statistics)
87.5%
K.
Total Retail Workers Forming Households
88
J.
Average Workers/Household (Census Data)
1.52
K.
Estimated Households Created (I + J)
58
L.
Average Household Income (H x J)
$30,400
M.
Income Category (HCD Income Standards)
LI 60%
In this simplified example, 1,000 new market -rate homes sold to households earning $75,000
per year would create demand for 58 housing units for retail workers' households typically
earning less than 60 percent of AMI. Actual calculations and impact distinctions by type of
household expenditure for various home prices are shown in the series of tables presented in
Appendix A.
Demand for Public -Sector Workers
In addition to the jobs created by the spending of the new market -rate households, this analysis
also aims to evaluate the number of public -sector employees generated by the public service
demands of new market -rate households. Rather than a comprehensive computation of public -
sector employment, the analysis aims to be conservative by sampling only certain public -sector
jobs (e.g., teachers and transportation providers) that are expected to grow in proportionate
measure to household growth.
Data from the 2013 Occupational Employment Survey for the Riverside -San Bernardino -Ontario
MSA was used to determine the number of these public -sector employees needed to serve new
market -rate development, and the average annual wage among each selected public -sector job
type. EPS reviewed the data and sampled occupations that were public sector -related, as shown
in Table A-5 in Appendix A.
Based on the ratio of the selected public -sector jobs to the total households in the MSA, EPS
estimates that approximately 62 government jobs or 41 households with a government
employee are required per 1,000 total households. These figures are conservative (i.e., low)
because numerous types of public -sector jobs are not included in this analysis (such as federal
postal workers, County health and human services workers, etc.). Also, please note that EPS
has no basis to distinguish differences in the number of public -sector workers demanded by
households based on different income levels, so the same numbers of public -sector jobs are
assumed to be generated by units of all prices.
Economic & Planning Systems, Inc. 15..,.,„,.,n...,mo�x„wv�un,..m��uuz,=,•.
Nexus -Based Affordable Housing fee Analysis for For -Sale Housing
02106115
Combined Demand for Income -Qualified Workers
The total number of income -qualified households required to support the expenditure and public -
sector service needs of new market -rate units were determined based on the affordable housing
income limits from HUD for a 3-person household. Table 4 summarizes the HUD income limits
used to compute the total number of income -qualified households generated by construction of
market -rate units.s The numbers of income -qualified households required to provide goods and
services to new housing units at various prices are detailed in Appendix B.
The nexus methodology used herein computes the total number of income -qualified households
generated by market -rate units and calculates the impact fee based on the estimated cost to
subsidize the production of units to meet that affordable housing demand. This methodology
does not suggest that all lower income service workers serving City residents reside in the City,
but it does assume that new development should mitigate for the new affordable housing
demand it creates.
Fee Calculation
The affordability gap analysis quantifies the subsidy required to construct affordable housing at
various income levels (VLI, LI, Median, etc.). Analysis of consumer expenditures that rely on
lower wage workers provides an estimate of the total number of income -qualified households
generated by new for -sale units. Then for each category of market -rate units, the nexus -based
fee is calculated by applying the total number of income -qualified households generated to the
affordability gap computed for each affordable household income level. The analysis provides
the maximum supportable nexus -based fees for new housing development in the City of Palm
Desert.
Tables 5 through 10 show the impact fee calculation for different prices of homes. The total
impact fees required for a representative project of 100 units is calculated by multiplying the
number of affordable units required per income level by the cost of subsidizing such housing. All
income -qualified households are assumed to be housed in multifamily units and the subsidies
needed are calculated as the affordability gaps shown in Table 2. The resulting maximum
impact fee for market -rate rental units ranges from approximately $13,400 for homes sold at
$200,000 to roughly $58,400 for homes sold at $1.2 million.
5 To correspond to the available data regarding employee wages, the 2007 Riverside County
affordable housing income limits from HUD and HCD were used to determine the number of income -
qualified households, based on household expenditures, while 2013 income limits were used for
public -sector employment.
Economic & Planning Systems, Inc. 16
Table 4
HUD Income Limits
Palm Desert Housing Impact Fee, EPS #141134
2007
2013
2014
Percentage of
Max Income Threshold
Max Income Threshold
Max Income Threshold
Affordability Category
County Median
3-person household
3-person household
3-person household
Very Low Income (LI) - 50%
31 % - 50%
$26,650
$28,700
$27,350
Low Income (LI) - 60%
51%-60%
$31,980
$34,440
$32,820
Low Income (LI) - 80%
61 % - 80%
$42,600
$45,900
$43,700
Median Income (Med)
81%- 100%
$53,300
$57,400
$54,700
Moderate Income (Mod)
101%-120%
$63,960
$68,880
$65,640
Above Moderate Income (Above Mod)
120%+
`Note: Data for Riverside -San Bernardino -Ontario, CA MSA
Sources: US Department of Housing and Urban Development; California Department of Housing and Community Development; Economic & Planning Systems, Inc.
V
Economic B Planning Systems, Inc. 2WO15
P.1141000s1141134PalmDesertWode11141134famalemOde/020515.xisK
Table 5
Maximum Impact Fee Calculations — $200,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Financing Gap per
Affordable Unit 11]
(B)
Total Impact Fee Required
Per 100 Market -Rate Per Market Rate Unit
Units
(C=A*B)
Affordable Units - Very Low Income (50%)
4.8
$163,873
$781,605
Affordable Units - Low Income (60%)
1.2
$134,036
$161,379
Affordable Units - Low Income (80%)
2.7
$117,968
$321,492
Affordable Units - Median Income
1_3
$57,968
$76,165
Total
10.0
$1, 340, 640
[1] Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
(D=C/100)
$13,406
Emnomic&Planning Systems, Inn ZWO15 P:114f000sll4ll34PalmDmer Mode11141134fomalemode/020515.xlu
Table 6
Maximum Impact Fee Calculations — $400,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Total Impact Fee Required
Financing Gap per Per 100 Market -Rate Per Market Rate Unit
Affordable Unit 11] Units
(B) (C = A * B) (D = C 1100)
Affordable Units - Very Low Income (50%)
8.3
$163,873
$1,357,807
Affordable Units - Low Income (60%)
2.0
$134,036
$270,207
Affordable Units - Low Income (80%)
4.6
$117,968
$544,178
Affordable Units - Median Income
2_1
$57,968
$122,847
Total
17.0
$2, 295, 039
11] Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
Econamic & Planning Systems, Inc. 2/52015
$22,950
P:1141000s1141134Pa/mDesenWode1V41134romalemode/020515.xlsx
N
O
Table 7
Maximum Impact Fee Calculations — $600,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Financing Gap per
Affordable Unit [1]
(B)
Total Impact Fee Required
Per 100 Market -Rate Per Market Rate Unit -
Units
(C=A-B)
Affordable Units - Very Low Income (50%)
12.3
$163,873
$2,015,437
Affordable Units - Low Income (60%)
2.5
$134,036
$340,053
Affordable Units - Low Income (80%)
6.8
$117,968
$802,693
Affordable Units - Median Income
2_8
$57,968
$160,058
Total
24.4
$3,318,246
[11 Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
Economic & Planning Systems, Inc 21WO15
(D=C/100)
$33,182
P:1141000sll41134PalmDeserAMOdeM411341omalemode1020515.xlsx
N
F+
Table 8
Maximum Impact Fee Calculations — $800,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Total Impact Fee Required
Financing Gap per Per 100 Market -Rate Per Market Rate Unit
Affordable Unit [1] Units
(B) (C = A * B) (D = C / 100)
Affordable Units - Very Low Income (50%)
15.0
$163,873
$2,456,571
Affordable Units - Low Income (60%)
2.7
$134,036
$357,010
Affordable Units - Low Income (80%)
8.2
$117,968
$971,179
Affordable Units - Median Income
2_9
$57,968
$170,312
Total
28.8
$3,955,072
11] Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
Eamomic & Planning Systems, Inc. 2(612015
$39,551
P:4141000s1141134PatmDesenWodeA141134fomalemodeio20515.xisx
N
N
Table 9
Maximum Impact Fee Calculations — $1,000,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Financing Gap per
Affordable Unit [1]
(B)
Total Impact Fee Required
Per 100 Market -Rate Per Market Rate Unit
Units
(C=A-B)
Affordable Units - Very Low Income (50%)
18.6
$163,873
$3,045,381
Affordable Units - Low Income (60%)
3.3
$134,036
$436,264
Affordable Units - 'Low Income (80%)
10.2
$117,968
$1,203,958
Affordable Units - Median Income
3_6
$57,968
$208,894
Total
35.6
$4, 894, 497
[1] Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
Economic & Planning Systems, Inc. 2162015
(D=C/100)
$48,945
P:1141000s1141134PalmDeser Mode1114ll34romatemode1020515.xlu
N
W
Table 10
Maximum Impact Fee Calculations — $1,200,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Financing Gap per
Affordable Unit [1]
(B)
Total Impact Fee Required
Per 100 Market -Rate Per Market Rate Unit
Units
(C=A-B)
Affordable Units - Very Low Income (50%)
22.2
$163,873
$3,634,191
Affordable Units - Low Income (60%)
3.9
$134,036
$520,613
Affordable Units - Low Income (80%)
12.2
$117,968
$1,436,738
Affordable Units - Median Income
4_3
$57,968
$247,477
Total
42.5
$5, 839, 019
[1] Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
Economic 8 Planning Systems, Inc 243/2015
(D=C/100)
$58,390
P.,1141000s1141134PalmOosenWodeAI41134tbmalemode1020515.x1sx
APPENDICES:
Appendix A: Household Expenditures and
Employment Generation
—ems Appendix B: Income Levels for Worker Households
C� ,
APPENDIX A:
Household Expenditures and
Employment Generation
Table A-1 Estimated Average Annual Household Expenditures and
Associated Employment Generation - $200,000 Unit ............A-1
Table A-2 Estimated Average Annual Household Expenditures and
Associated Employment Generation - $400,000 Unit ............A-2
Table A-3 Estimated Average Annual Household Expenditures and
Associated Employment Generation - $600,000 Unit ............A-3
Table A-4 Estimated Average Annual Household Expenditures and
Associated Employment Generation $800,000 Unit ............A-4
Table A-5 Estimated Average Annual Household Expenditures and
Associated Employment Generation - $1,000,000 Unit .......... A-5
Table A-6 Estimated Average Annual Household Expenditures and
Associated Employment Generation - $1,200,000 Unit .......... A-6
Table A-7 Representative Government Employment and Wages,
2010.............................................................................. A-7
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Table A-7
Representative Government Employment and Wages, 2010 [1]
Palm Desert Housing Impact Fee, EPS #141134
Govt
2013 Govt
Govt Empll
Govt
Employee
Employment
2013 MSA
1,000
Employee
2013 Avg.
HH Income
2013 Income
Item
[2]
Total HH [3]
County HH
HH [4]
Wage [2]
[4]
Category [5]
Protective Service Occupations
33,990
1,297,675
26
17.3
$49.516
$83,715
Above Mod
Preschool Teachers, Except Special
Education
3,170
1,297,675
2
1.6
$30,837
$52,135
Mad
Kindergarten Teachers, Except Special
Education
2,250
1,297,675
2
1.1
$68,240
$115,372
Above Mod
Elementary School Teachers, Except
Special Education
17,170
1,297,675
13
8.7
$73,835
$124,831
Above Mod
Middle School Teachers, Except Special
and Vocational Education
5,170
1,297,676
4
2.6
$75,221
$127,174
Above Mod
Secondary School Teachers, Except
Special and Vocational Education
6,370
1,297,675
5
3.2
$70,952
$119,957
Above Mod
Special Education Teachers, Preschool,
Kindergarten, and Elementary School
2,280
1,297,675
2
1.2
$79,187
$133,879
Above Mod
Special Education Teachers, Middle School
640
1,297,675
0
0.3
$69,495
$117,493
Above Mod
Special Education Teachers, Secondary
School
930
1,297,675
1
0.5
$68,281
$115,441
Above Mod
Teachers and Instructors, All Other
2,610
1,297,675
2
1.3
$58,528
$98,952
Above Mod
Bus Drivers, Transit and Intercity
1,020
1,297,675
1
0.5
$39,593
$66,939
Mod
Bus Drivers, School
4,710
1,297,675
4
2.4
$34,959
$59,104
Mod
Total
62
40.8
[1] Not a comprehensive list of government employment. Rather a sampling of government jobs for which employment is likely to be directly affected by
increases in local population.
[2] Government employment and wages based on 2013 Occupational Employment Statistics data for Riverside -San Bemardino-Ontario MSA.
[3] Riverside -San Bemardino-Ontario MSA figure from 2013 ACS Census data.
[4] Assumes 1.52 workers per working household per 2009-2013 Census data. '
[5] See Table 4.
Sources: 2013 Occupational Employment Statistics, CA Employment Development Department; US Census; Economic & Planning Systems, Inc
Eronomice Planning Systems, Inc @ 015 P.114100051141134Pe1meewa odeltl41134lamWem elO20515•/lea
APPENDIX B:
Income Levels for Worker Households
Table B-1 Household Generation per 1,000 Market Rate Units -
$200,000 Unit.................................................................B-1
Table B-2 Household Generation per 1,000 Market Rate Units -
$400,000 Unit.................................................................B-2
Table B-3 Household Generation per 1,000 Market Rate Units -
$600,000 Unit.................................................................B-3
Table B-4 Household Generation per 1,000 Market Rate Units -
$800,000 Unit.................................................................B-4
Table B-5 Household Generation per 1,000 Market Rate Units -
$1,000,000 Unit..............................................................B-5
Table B-6 Household Generation per 1,000 Market Rate Units -
$1,200,000 Unit..............................................................B-6
Table B-1
Household Generation per 1,000 Market Rate Units-$200,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Industry
Retail
Unspecified Retail
Food & Beverage Stares
Food Services and Drinking Places
Health and Personal Care Stores
General Merchandise
Furniture and Home Furnishings Stores
Building Material and Garden Equipment and Supplies Dealer
Electronics and Appliance Stores
Clothing and Clothing Accessories Stores
Motor Vehicle and Parts Dealers
Gasoline Stations
Sporting Goods, Hobby, and Musical Instrument Stores
Miscellaneous Store Retailers
Nonstore Retailers
Arts, Entertainment, & Recreation
Medical/Health
Ambulatory Health Care Services
General Medical and Surgical Hospitals
Nursing and Residential Care Facilities
Social Assistance
Services
Personal and Household Goods Repair and Maintenance
Services to Buildings and Dwellings
Waste Management and Remediation Services
Real Estate and Rental and Leasing
Personal Care Services
Dry Cleaning and laundry Services
Auto Repair and Maintenance
Veterinary Services
Photographic Services
Educational Services
Accounting
Architectural, Engineering, and Related
Specialized Design Services
Death Care Services
Legal Services
Government
Total
Employees HH[11 Very LmvLow(60%'J.ow(80%; Med
Total HH Generated Per 1,000 Market -Rate Units
Total Income -Qualified HH Generated Per 100 Market -Rate Units
2 1
0
1
0 0
17 10
0
0
10 0
64 32
32
0
0 0
2 2
0
0
0 2
3 2
0
2
0 0
3 2
0
0
0 2
2 1
0
0
0 1
7 4
0
4
0 0
4 2
2
0
0 0
6 3
0
0
0 0
4 2
0
2
0 0
4 2
2
0
0 0
4 2
0
2
0 0
1 0
0
0
0 0
4 2
0
0
2 0
2 2
0
0
0 0
2 1
0
0
0 0
6 4
0
0
4 0
2 1
0
0
1 0
6
10
2
1
6
1
7
1
0
14
2
1
1
1
0
62
241
Above
Mod Mod
0 0
0 2
0 1
0 0
0 0
3
0
0
3
0 0
7
0
0
7
0 0
1
0
0
0
0 0
0
0
0
0
0 0
3
3
0
0
0 0
0
0
0
0
0 0
5
0
0
0
5 0
1
0
0
0
1 0
0
0
0
0
0 0
8
8
0
0
0 0
1
0
0
0
1 0
0
0
0
0
0 0
0
0
0
0
0 0
1
0
0
0
0 1
0
0
0
0
0 0
41
0
0
0
2 3
148
48
12
27
13 7
4.8
1
3
1 1
[1] Assumes 1.69 workers per worker household based on the 2010 Census. Includes a 12.5%discount for retail and 1.9% discount
for other industries to account for workers under age 20.
(2] Excludes above moderate -Income households bemuse these incomes are adequate to acquire market -rate housing.
Source: Economic & Planning Systems, Inc.
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
36
41
4
Emnamw 6 PlannmO Sy#em0. I= Y 015 B-1 RIL1MOsVH19Palmesel WeAI41139r W=odelOW515 xbx
Table B-2
Household Generation per 1,000 Market Rate Units-$400,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Industry
Retail
Unspecified Retail
Food & Beverage Stores
Food Services and Drinking Places
Health and Personal Care Stores
General Merchandise
Furniture and Home Furnishings Stores
Building Material and Garden Equipment and Supplies Dealer
Electronics and Appliance Stores
Clothing and Clothing Accessories Stores
Motor Vehicle and Paris Dealers
Gasoline Stations
Sporting Goods, Hobby, and Musical Instrument Stores
Miscellaneous Store Retailers
Nonstore Retailers
Arts, Entertainment, & Recreation
MedlcallHealth
Ambulatory Health Care Services
General Medical and Surgical Hospitals
Nursing and Residential Care Facilities
Social Assistance
Services
Personal and Household Goods Repair and Maintenance
Services to Buildings and Dwellings
Waste Management and Remediation Services
Real Estate and Rental and Leasing
Personal Care Services
Dry Cleaning and Laundry Services
Auto Repair and Maintenance
Veterinary Services
Photographic Services
Educational Services
Accounting
Architectural, Engineering, and Related
Specialized Design Services
Death Cam Services
Legal Services
Government
Total
Employees HH[1] Very Low Low (60%)Low(80%1 Mod
Total HH Generated Per 1,000 Market -Rate Units
Total Income -Qualified HH Generated Per 100 Market -Rate Units
3 2
0
2 0
26 15
0
0 15
91 53
53
0 0
4 2
0
0 0
7 4
0
4 0
5 3
0
0 0
4 2
0
0 0
11 7
0
7 0
7 4
4
0 0
10 6
0
a 0
5 3
0
3 0
7 4
4
0 0
8 5
0
5 0
1 0
0
a 0
7 4
0
0 4
Above
Mod Mod
0 a 0
4
2
0
0
0
0
0
2
2
0
0
0
0
0
10
6
0
0
6
0
0
4
3
0
0
3
0
0
10
6
0
0
6
0
0
16
10
0
0
t0
0
0
4
2
0
0
0
0
0
1
1
0
0
0
1
0
9
6
6
0
0
0
0
2
1
0
0
1
0
0
12
8
0
0
0
8
0
2
1
0
0
0
1
a
1
0
0
0
0
0
0
27
15
15
0
0
0
0
3
2
0
0
0
2
0
1
1
0
0
0
0
0
1
1
0
0
0
0
0
2
1
0
0
0
0
1
1
1
0
0
0
0
0
fit
41
0
0
Q
2
3
369
224
83
20
46
21
10
8
2
5
2
1
(11 Assumes 1.69 workers per worker household based on the 2010 Census. Includes a 12.5% discount for retail and 1.9% discount for
other industries to account lorworxers under age 20.
[21 Excludes above moderate -income households because these Incomes are adequate to acquire market -rate housing.
Source: Economic & Planning Systems, Inc
2
z
0
0
36
44
4
Econwmc 6P/annm95YNemq lnc L5 M B--L P1f410.'VSI1Hf3IPamL�salLNcdM1I1131Iw5elemotlN ^15tla+
Table B-3
Household Generation per 1,000 Market Rate Units-$600,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Industry
Retail
Unspecified Retail
Food & Beverage Stores
Food Services and Drinking Places
Health and Personal Care Stares
General Merchandise
Furniture and Home Furnishings Stores
Building Material and Garden Equipment and Supplies Dealer
Electronics and Appliance Stores
Clothing and Clothing Accessories Stores
Motor Vehicle and Parts Dealers
Gasoline Stations
Sporting Goods, Hobby, and Musical Instrument Stores
Miscellaneous Store Retailers
Nonslore Retailers
Arts, Entertainment, & Recreation
Medical/Health
Ambulatory Health Care Services
General Medical and Surgical Hospitals
Nursing and Residential Care Facilities
Social Assistance
Services
Personal and Household Goods Repair and Maintenance
Services to Buildings and Dwellings
Waste Management and Remediation Services
Real Estate and Rental and Leasing
Personal Care Services
Dry Cleaning and Laundry Services
Auto Repair and Maintenance
Veterinary Services
Photographic Services
Educational Services
Accounting
Architectural, Engineering, and Related
Specialized Design Services
Death Care Services
Legal Services
Total
Above
Employees
HH]1]
Very Low Low (60%) Low (80%)
Med
Mod
Mod
5
3
0 3 0
0
0
0
33
19
0 0 19
0
0
0
130
76
76 0 0
0
0
0
6
3
0 0 0
3
0
0
9
5
0 5 0
0
0
0
7
4
0 0 0
4
0
0
5
3
0 0 0
3
0
0
15
9
0 9 0
0
0
0
9
5
5 0 0
0
0
0
16
9
0 0 0
0
9
0
6
4
0 4 0
0
0
0
10
6
6 0 0
0
0
0
9
5
0 5 0
0
0
0
1
1
0 0 0
1
0
0
16
9
0 0 9
0
0
0
5
3
0 0 0
0
0
3
3
2
0 0 0
0
0
2
15
10
0 0 10
0
0
0
8
5
0 0 5
0
0
0
Government
Total HH Generated Per 1,000 Market -Rate Units
Total Income -Qualified HH Generated Per 100 Market -Rate Units
14
9
0
0
9
0 0
22
14
0
0
14
0 0
4
3
0
0
0
0 0
2
1
0
0
0
1 0
13
9
9
0
0
0 0
2
1
0
0
1
0 0
16
11
0
0
0
11 0
2
1
0
0
0
1 0
1
1
0
0
1
0 0
47
27
27
0
0
0 0
4
3
0
0
0
3 0
1
1
0
0
0
0 0
1
1
0
0
0
0 0
2
1
0
0
0
0 1
1
1
0
0
0
0 0
62
41
0
0
0
2 3
Sol
304
123
25
68
28 13
12
3
7
3 1
11] Assumes 1.69 workers per worker household based on the 2010 Census. Includes a 12.5 % discount for retail and 1.9% discount for
other indusbies to account for workers under age 20.
[2] Excludes above moderate -income households because these incomes are adequate to acquire market -rate housing.
Source: Economic & Planning Systems, Inc.
36
47
5
Emnomlee PlannMg Syalema, Inc vsrzol5 B-3 P1141W 11411VPNm0eseR adeAI41154ksal=m e1000515 Wu
Table 04
Household Generation per 1,000 Market Rate Units-$800,000 Unit
Palm Desert Housing impact Fee, EPS #141134 -
Industry
Retail
Unspecified Retail
Food & Beverage Stores
Food Services and Drinking Places
Health and Personal Care Stares
General Merchandise
Furniture and Home Furnishings Stores
Building Material and Garden Equipment and Supplies Dealer
Electronics and Appliance Stores
Clothing and Clothing Accessories Stores
Motor Vehicle and Parts Dealers
Gasoline Stations
Sporting Goods, Hobby, and Musical Instrument Stores
Miscellaneous Store Retailers
Nonstwe Retailers
Arts, Entertainment, & Recreation
Medical/Health
Ambulatory Health Care Services
General Medical and Surgical Hospitals
Nursing and Residential Care Facilities
Social Assistance
Services
Personal and Household Goods Repair and Maintenance
Services to Buildings and Dwellings
Waste Management and Remediation Services
Real Estate and Rental and Leasing
Personal Care Services
Dry Cleaning and Laundry Services
Auto Repair and Maintenance
Veterinary Services
Photographic Services
Educational Services
Accounting
Architectural, Engineering, and Related
Specialized Design Services
Death Care Services
Legal Services
Total
Above
Employees
HH[1) Very
Low Low (60%)Low (80%)
Med
Mod
Mod
4
3
0 3 0
0
0
0
31
18
0 0 18
0
0
0
136
79
79 0 0
0
0
0
5
3
0 a 0
3
0
0
10
6
0 6 0
0
0
0
8
5
0 0 0
5
0
0
6
3
0 0 0
3
0
0
16
9
0 9 0
0
0
0
10
6
6 0 0
0
0
D
15
8
0 0 0
0
B
0
5
3
0 3 0
0
0
0
15
9
9 0 0
0
0
0
11
6
0 6 0
0
0
0
1
1
0 D 0
1
0
0
22
12
0 0 12
0
0
0
Government
Total HH Generated Per 1,000 Market -Rate Units
Total Income -Qualified HH Generated Per 100 Market -Rate Units
5
3
0
0
0
0 0
3
2
0
0
0
0 0
18
12
0
0
12
0 0
12
8
0
0
8
0 0
14
9
0
0
9
0 0
32
21
0
0
21
0 0
4
3
0
0
0
0 0
2
1
0
0
0
1 0
13
8
8
0
0
0 0
2
1
0
0
1
0 0
16
11
0
0
0
11 0
2
2
0
0
0
2 0
2
1
0
0
1
0 0
83
48
48
0
0
0 0
5
3
0
0
0
3 0
1
1
0
0
0
0 0
2
1
0
0
0
0 0
2
2
0
0
0
0 2
1
1
0
0
0
a 0
62
Al
0
0
0
a 3
576
348
150
27
82
29 13
15
3
8
3 1
(1) Assumes 1,69 workers per worker household based on the 2010 Census. Includes a 12.5 % discount far retail and 1.9 % discount for
other industries to account for workers under age 20,
(2] Excludes above moderate -income households because these incomes are adequate to acquire market -rate housing.
Source: Economic 8 Planning Systems, Inc.
3
2
0
0
36
47
5
Ewnwnc6%enrvnD SplemAlnc ZeW15 B_4 P 1141MS1141IMPSMC $ HMa 141154tmWmWa 2M?545x
a
Table B-5
Household Generation per 1,000 Markel Rate Units - 51,000,000 Unit
Palm Desert Housing Impact Fee, EPS 0141134
Total
Industry Employees HH [11 Very Low Low (60%) Low (80%) Mad Mod Above Mod
Retail
Unspecified Retail
Food & Beverage Stores
Food Servlms and Drinking Places
Health and Personal Care Stores
General Merchandise
Furniture and Home Furnishings Stores
Building Material and Garden Equipment and Supplies Dealer
Electronics and Appliance Stores
Clothing and Clothing Accessories Stores
-Motor Vehicle and Pads Dealers
Gasoline Stations
Sporting Goods, Hobby, and Musical Instrument Stores
Miscellaneous Store Retailers
Nonslore Retailers
Arts, Entertainment, & Recreation
Medical/Health
Ambulatory Health Care Services
General Medical and Surgical Hospitals
Nursing and Residential Care Facilities
Social Assistance
Services
Personal and Household Goods Repair and Maintenance
Services to Buildings and Dwellings
Waste Management and Remediation Services
Real Estate and Rental and Leasing
Personal Care Services
Dry Cleaning and Laundry Services
Auto Repair and Maintenance
Veterinary Services
Photographic Services
Educational Services
Accounting
Architectural, Engineering, and Related
Specialized Design Services
Death Care Services
Legal Services
Government
Total HH Generated Per 1,000 Market -Rate Units
Total Income -Qualified HH Generated Per 100 Markel -Rate Units
5
3
0
3
0
0
0
0
38
22
0
0
22
0
0
0
168
98
98
0
0
0
0
0
6
3
0
0
0
3
0
0
12
7
0
7
0
0
0
0
10
6
0
0
0
6
0
0
7
4
0
0
0
4
0
0
19
11
0
11
0
0
0
0
12
7
7
0
0
0
0
0
18
10
0
0
0
0
10
0
7
4
0
4
0
0
0
0
18
11
11
0
0
0
0
0
13
7
0
7
0
0
0
0
2
1
0
0
0
1
0
0
27
15
0
0
15
0
0
0
6
4
0
0
0
0
0
4
4
3
0
0
0
0
0
3
22
14
0
0
14
0
0
0
15
10
0
0
10
0
0
0
18
11
0
0
11
0
0
0
40
26
0
0
26
0
0
0
5
3
0
0
0
0
0
3
2
1
0
0
0
1
0
0
16
10
10
0
0
0
0
0
3
2
0
0
2
0
0
0
20
13
0
0
0
13
0
0
3
2
0
0
0
2
0
0
2
2
0
0
2
0
0
0
103
60
60
0
0
0
0
0
6
4
0
0
0
4
0
0
2
1
0
0
0
0
0
1
2
1
0
0
0
0
0
1
3
2
0
0
0
0
2
0
2
1
0
0
0
0
0
1
fit
41
0
0
0
2
3
36
698
421
186
33
102
36
15
50
19
3
10
4
2
5
11] Assumes 1.69 workers per worker household based on the 2010 Census. Includes a 12.5% discount for retail and 1.9 % discount for other industrie:
to account forworkers under age 20.
[21 Excludes above moderate -income households bemuse these incomes are adequate to acquire market -rate housing.
Source: Economic 8 Planning Systems, Inc.
E[mmucd Namly Sysleme, lna M015 B_5 p110/WOeliaf l]IPelmnsxaMlWe6fa1f30baLemotle.9M5/S alas
Table B-6
Household Generation per 1.050 Market Rate Units-51,200,000 Unit
Palm Desert Housing Impact Fee, EPS #141134
Total
Industry Employees HH [1] Vary Low Low (60%1 Low (80%] Mad Mod Above Mod
Retail
Unspecified Retail
7
4
0
4
0
0
0 0
Food & Beverage Stores
45
26
0
0
26
0
0 0
Food Services and Drinking Places
201
117
117
0
0
0
0 0
Health and Personal Care Stores
7
4
0
0
0
4
0 0
General Merchandise
15
6
0
8
0
0
0 0
Furniture and Home Fumishings Stores
12
7
0
0
0
7
0 0
Building Material and Garden Equipment and Supplies Dealer
8
5
0
0
0
5
0 0
Electronics and Appliance Stores
23
13
0
13
0
0
0 0
` Clothing and Clothing Accessories Stores
14
8
8
0
0
0
0 0
Motor Vehicle and Parts Dealers
22
12
0
0
0
0
12 0
Gasoline Stations
8
5
0
5
0
0
0 0
Sporting Goads, Hobby, and Musical Instrument Stores
22
13
13
0
0
0
0 0
Miscellaneous Store Retailers
15
9
0
9
0
0
0 0
Nonstore Retailers
2
1
0
0
0
1
0 0
Arts, Entertainment, 8 Recreation
32
18
0
0
18
0
0 0
MadicaOHealth
Ambulatory Health Care Services
7
5
0
0
0
0
0 5
General Medical and Surgical Hospitals
5
3
0
0
0
0
0 3
Nursing and Residential Care Facilities
27
17
0
0
17
0
0 0
Social Assistance
18
12
0
0
12
0
0 0
Services
Personal and Household Goods Repair and Maintenance
21
14
0
0
14
0
0 0
Services to Buildings and Dwellings
47
31
0
0
31
0
0 0
Waste Management and Remediation Services
6
4
0
0
0
0
0 4
Real Estate and Rental and Leasing
2
2
0
0
0
2
0 0
Personal Care Services
19
12
12
0
D
0
0 0
Dry Cleaning and Laundry Services
3
2
0
0
2
0
0 0
Auto Repair and Maintenance
24
16
0
0
0
16
0 0
Veterinary Services
4
2
0
0
0
2
0 0
Photographic Services
3
2
0
0
2
0
0 0
Educational Services
124
71
71
0
0
0
0 0
Accounting
7
4
0
0
0
4
0 0
Architectural, Engineenng. and Related
2
1
0
0
0
0
0 1
Specialized Design Services
2
1
0
0
0
0
0 1
Death Care Services
4
2
0
0
0
0
2 0
Legal Services
2
3
0
0
0
0
0 3
Government
62
41
0
0
0
2
3 36
Total HH Generated Per 1,000 Market -Rate Units
821
496
222
39
122
43
18 54
Total Income-Qualifiad HH Generated Per 100 Market -Rate Units
22
4
12
4
2 5
113 Assumes 1.69 workers per worker household based on the 2010 Census. Includes a 12.5% discount for rela0 and 1.9%discountfor other industhe:
to account for workers under age 20.
[2] Excludes above moderate -Income households because these Incomes are adequate to acquire market -rate housing.
Source: Economic& Planning Systems, Inc.
Emnmx[6P'. J151ffi 011 Y3'M19 B_6 P I141=414 I INPehneeeMlM 0141134�—1020515 I'll
Report
Nexus -Based Affordable Housing
The lira,tn,nrr.,q/Land l,, Fee Analysis for Rental Housing
Prepared for:
City of Palm Desert
Prepared by:
Economic & Planning Systems, Inc.
February 6, 2015
Economic & Planning Systems, Inc.
One Kaiser Plaza, Suite 1410
Oakland, CA 94612
510 841 9190 tel
510 740 2080 fax EPS #141134
Oakland
Sacramento
Denver
Los Angeles
vv w.epsys.com
Table of Contents
EXECUTIVESUMMARY.................................................................................................... 1
1. AFFORDABILITY GAP ANALYSIS.................................................................................. 7
ProductType............................................................................................................ 7
Development Cost Assumptions..................................................................................9
RevenueAssumptions...........................:...................................................................9
Affordability Gap Results.......................................................................................... 10
2. DEMAND -BASED NEXUS FEE CALCULATION................................................................. 11
Market -Rate Household Income Levels...................................................................... 11
Household Expenditures and Job Creation by Income Level .......................................... 11
Demand for Public -Sector Workers............................................................................ 15
Combined Demand for Income -Qualified Workers....................................................... 16
FeeCalculation....................................................................................................... 16
APPENDIX A: Household Expenditures and Employment Generation
APPENDIX B: Income Levels for Worker Households
List of Figures and Tables
Figure 1
Illustration of Nexus -Based Housing Fee Methodology............................................2
Table 1
Summary of Housing Impact Fees or Unit Equivalents per Market -Rate Unit.............6
Table 2
Financing Gap Analysis -- Rental Product Type......................................................8
Table 3
Required Income by Unit Type- Market -Rate Rental Apartments ...........................
12
Table4
HUD Income Limits.........................................................................................
17
Table 5
Maximum Impact Fee Calculations -- Studio .......................................................
18
Table 6
Maximum Impact Fee Calculations -- 1 Bedroom .................................................
19
Table 7
Maximum Impact Fee Calculations -- 2 Bedroom.................................................20
Table 8
Maximum Impact Fee Calculations -- 3 Bedroom .................................................
21
EXECUTIVE SUMMARY
Economic & Planning Systems, Inc. (EPS) was retained by the City of Palm Desert (City) to
conduct a nexus study analyzing the impact that development of market -rate rental housing has
on the demand for below -market -rate housing and, based on the results, to determine the
defensible nexus -based fee that could be charged to market -rate development.
The technical approach used herein quantifies the impacts that the introduction of market -rate
rental apartments have on the local economy and the demand for additional affordable housing.
As new households are added to the community, local employment also will grow to provide the
goods and services required by the new households. To the extent that these new jobs do not
pay adequate wages for the employees to afford market -rate housing in the community, the new
households' spending is creating a need for affordable housing. A nexus -based affordable
housing fee is therefore based on the impact of the new market -rate homes on the demand for
affordable housing. The fee calculated in this study represents the maximum fee that may be
charged to new market -rate housing units to mitigate their impacts on the affordable housing
supply. Such fees are then used by the City to subsidize the production of new affordable units
for lower -income households not accommodated by market -rate projects.
Calculating the impact of market -rate development in the City on affordable housing needs, and
the fees needed to mitigate those impacts, involves three main analytical steps:
Step #1. Estimate the typical subsidy required to construct units affordable at various
income levels (the "affordability gap"). The analysis focuses on very -low, low-, and median -
income households.
• Step #2. Determine the market -rate households' demand for goods and services, the jobs
created by that demand, and the affordable housing needs of workers in those jobs.
Step #3. Combine the affordability gap with the affordable housing demand projections to
compute the maximum supportable nexus -based affordable housing fees per market -rate
unit.
These technical steps are illustrated in Figure 1 and detailed in the body of this Report and the
attached Technical Appendices. The findings regarding each of these steps are presented below.
Economic & Planning Systems, Inc. 1•:vaoo•,.,,>.>.x��,.�ww.m„»,..,,�>os,,,.,.,,,
Figure 1
Illustration of Nexus -Based Housing Fee Methodology
Step #1
Affordability Gap Analysis
(Subsidy Required to Construct
Affordable Units)
Affordable
Unit Value minus
by Income
Development equals Affordability
Costs I I Gap
Ifnegative � Subsidy
/ � Required
No Subsidy
Itpositive Required
Required Total Workers to
Step #2 Market Rate Household Household Total Demand for
ExpenditurProvide Goods and
Affordable Housing Demand Unit Rents IncoAffordable Units for
me by Category es Services by AfforWorkers
(Generated by Market Rate Housing) Level Expenditure Category
Step #3
AffordabilityDemand
for
Maximum
Compute Impact Fee
Compute
Gap
multiplied
by
Affordable Units for
Workers
equals
Supportable Nexus -
P Market Rate Unit
(Subsidy Required)
(per market rate unit)
Based Housing Fee
(per market rate unit)
Economic & Planning Systems, Inc. ZWO15
Nexus -Based Affordable Housing Fee Analysis for Rental Housing
02106115
1, The costs to construct affordable housing units affordable to many households
exceed those units'values based on the rents or prices that the households can
afford to pay. The subsidy required to construct affordable housing units in Palm
Desert ranges from roughly $58,000 for a Median Income household to $164,000
for a Very Low Income (VLZ) household. Moderate Income households do not
appear to require subsidies, as affordable prices for such households appear able to
support the costs of construction.
An "affordability gap analysis" evaluates whether or not the costs to construct affordable
units exceed the values of units that are affordable to lower- and moderate -income
households. For each affordable housing income level (Very Low Income [VLI], Low Income
[LI], Median Income, and Moderate Income) this analysis estimates the subsidy required to
construct affordable housing units.
The affordability gap analysis assumes that the average affordable unit for all income levels
will be a 2-bedroom unit in a multifamily development. The estimated costs to construct the
prototypical affordable unit are based on published data sources (RS Means Cost Estimator)
indexed to Coachella Valley labor and materials costs, and have been vetted with developers
active in Coachella Valley. The costs of land acquisition are included in these development
cost calculations, and have been based on recent appraisals for residential land in Palm
Desert. For units that are eligible for non-competitive Low Income Housing Tax Credits
(4 percent tax credits), the value of those tax credits is deducted from the development
costs.
A household's ability to pay is estimated based on standard percentages of income available
for housing costs at each household income level. Income available for housing costs is then
converted into a monthly affordable rent and a capitalized unit value or an affordable
mortgage payment and supportable home price. This unit value is then compared to the
costs of development to determine the subsidy, if any, required to make the unit affordable
to each income level.
2. The demand for affordable housing generated by the expenditures of new
households in Palm Desert increases along with the market -rate rent price (and
related renter income). For example, a one -bedroom unit that rents for $1,200 per
month is estimated to create demand for 0.109 affordable housing units requiring
development subsidy, while a 3-bedroom unit that rents for $1,900 per month
creates demand for 0.156 affordable units.
A justified nexus fee is based on the total demand for affordable housing units generated by
construction of market -rate units. The link (or nexus) between market -rate housing and
increased demand for affordable housing is that residents of market -rate units demand goods
and services that rely on many wage earners (for example, retail sales clerks) who typically
cannot afford market -rate housing and thus require affordable housing.
Because more expensive housing units require renters to have higher incomes, and higher
income households create more jobs through their spending, the nexus impacts and thus the
justified fees for rental units vary according to the rental price range of the market -rate
units. Typically, larger apartments (i.e., more bedrooms) command higher rents, so their
occupants are required to have higher household incomes than renters of smaller units.
Economic & Planning Systems, Inc. - 3
Nexus -Based Affordable Housing fee Analysis for Rental Housing
02/06/15
Thus, larger units create more jobs as a result of their occupants' spending. Nexus impacts
and the justified fees for market -rate rental apartments, therefore, vary based on unit size.
This analysis evaluates the demand for affordable housing generated by a range of for -rent
unit sizes. For each unit size, the demand -based nexus fee calculation involves the following
steps:
A. Market -Rate Household Income Levels. The required income levels of households
occupying new market -rate housing are derived based on the rental rate, assuming
standard housing cost expenses as a proportion of overall household income. For
example, a typical household renting a recently constructed market -rate two -bedroom
unit for around $1,400 per month would have an annual income of roughly $64,000, if
they spent 30 percent of their income on housing costs (rent and utilities).
B. Household Expenditures. Based on the household income computed in Step A,
Consumer Expenditure Survey data was used to evaluate the spending patterns of the
household. This analysis provides an estimate of how much the household spends on
specific categories of expenditures, such as "Food at Home." As the households' income
increases along with the price and size of the market -rate units, the total spending on
goods and services also increases. The Consumer Expenditure Survey also indicates that
these relationships are not linear (e.g., a household with twice the income does not
necessarily spend twice as much on food).
C. 3ob Creation and Worker Households. Having estimated the households' spending on
various items, that spending is then converted into an estimation of jobs created. For
each expenditure category, data regarding average worker wages and the ratio between
gross business receipts and wages were used to translate these household expenditures
into the total number of private -sector workers. For selected public -sector jobs that
typically grow in proportion to the local population size (e.g., teachers), the demand for
new workers was estimated by relating current levels of employment in such categories
to the current population and applying this ratio to future development. Because each
new worker does not represent an independent household (Palm Desert has an average
of 1.52 workers per working household), the total number of new households created is
somewhat less than the number of new jobs created. EPS has further adjusted the
household formation rates to reflect the expectation that a certain proportion of workers
will not form their own households, particularly those of younger ages.'
D. Worker Households by Income Category. Each worker household generated is
assigned to an income category —Very Low Income (VLI), Low Income (LI), Median,
Moderate, and Above Moderate —based on its estimated gross wages. This provides the
total number of households generated at each income level by construction of market -
rate units at various price points. The results indicate that residents of lower -priced units
generate fewer worker households requiring affordable housing than do residents of
higher -priced units.
1 BLS data indicates that 12.5 percent of retail/restaurant workers are age 16-19, but an average of
only 1.9 percent of workers in other industries. EPS has assumed that such young workers do not
form their own households.
Economic & Planning Systems, Inc. 4 .:u.1oo .1,.",..'' ,.,„,.,,,,rt,,., ,�,.,....
Nexus -Based Affordable Housing Fee Analysis for Rental Housing
02/06/15
These steps of the nexus -based fee calculation provide the total number of income -qualified
workers required to meet the needs for goods and services generated by market -rate
housing. The number of workers servicing market -rate housing (at each unit size) is then
converted to total income qualified households requiring affordable housing subsidy, and
each such household is assumed to require one housing unit.
3. This analysis calculates the fees that could be charged to fully mitigate the impact
that new market -rate housing has on Palm Desert's affordable housing demand at
various representative unit sizes. These fees could range from roughly $12,000 for
studio apartments to $21,000 for 3-bedroom apartments.
The nexus fee is calculated by applying the number of affordable units needed by income
qualified households to the affordability gap for each housing income category. This
calculation is made for several different apartment sizes. Table 1 summarizes the maximum
nexus -based fees calculated for representative rental unit sizes. The City may also consider
whether to allow developers to provide affordable units within their projects, rather than
paying the nexus -based fee. Table 1 illustrates the proportions of affordable units that
correspond to the fee calculation and demands created by the market -rate units. For
instance, a project offering only two -bedroom units would effectively mitigate the demand
being created by the market -rate units if it provided 0.117 affordable units (very -low, low,
and median income) for each market -rate unit. Please note that these maximum fees are
based on the nexus relationship of affordable housing demand created by new market -rate
units; EPS recommends that the City consider the feasibility impact of imposing fees while
setting any fee on rental housing.
Economic & Planning Systems, Inc. 5
M
Table 1
Summary of Housing Impact Fees or Unit Equivalents per Market -Rate Unit
Palm Desert Housing Impact Fee, EPS #141134
Market -Rate Maximum Affordable Units Generated/100 Market -Rate Units
Unit Size Impact Fee Total Low (50%) Low (60%) Low (80%) Med (100%)
Studio
$12,123
9.2
4.1
1.1
2.6
1.3
1 Bedroom
$14,650
10.9
5.2
1.3
3.0
1.4
2 Bedroom
$15,772
11.7
5.7
1.4
3.2
1.5
3 Bedroom
.$20,969
15.6
7.6
1.8
4.2
1.9
Source: Economic & Planning Systems, Inc.
Emnomic & Planning Systems, Inc 2WO15
P.1141000S1141134PalmDesertlMode11141134mntmode1020515 xlsx
1. AFFORDABILITY GAP ANALYSIS
For any nexus -based affordable housing fee calculation, it is necessary to estimate the subsidy
required to construct affordable housing units. Table 2 shows the subsidy needed to produce
multifamily housing that is affordable to very low-, low-, median- and moderate -income
households.
Product Type
This analysis assumes that new lower -income worker households would be housed in multifamily
developments in Palm Desert. Developable residential land in Palm Desert is assumed to be
approximately $200,000 per acre, based on an appraisal provided to the City by Lidgard and
Associates. EPS has assumed that these projects will have an average density of 20 units per
acre, and be built in wood -frame buildings of two to three stories with surface parking.
In order to determine the average household size of future affordable housing units, EPS used
two estimates from the Census Bureau. The American Community Survey indicates that the
average household size in Palm Desert is 2.05 people while the average family size is 2.75
people. The household size figure is significantly skewed by the high population of retirement -
age people in Palm Desert, where 46.1 percent of all households have one or more members
over age 65 (vs. only 24.9 percent statewide). The average family size is considered more
representative of worker households in Palm Desert, so the average household size for future
workers is assumed to round up to three people and EPS uses this assumption to determine the
applicable income limits for the new units.
California State law (California Health and Safety Code Section 50052.5) assumes that a 2-
bedroom unit is occupied by a 3-person household, and this assumption is used in this analysis.
An affordable 2-bedroom unit in Palm Desert is assumed to have a gross size of about 1,200
square feet (accounting for shared lobbies, hallways, etc.) and a net size of 1,000 square feet —
both somewhat smaller than recently constructed market rate units, but similar to recent
affordable housing developments.
This analysis assumes that all new affordable housing would be rental units, rather than for -sale
units. This assumption reflects the fact that many households at lower incomes will not have
adequate wealth reserves for down payments on homeownership units, and may have further
difficulty absorbing the ongoing costs of homeownership (taxes, repairs, etc.) that they can
effectively avoid by renting their homes rather than buying.
Economic & Planning Systems, Inc. 7
Table 2
Financing Gap Analysis — Rental Product Type
Palm Desert Housing Impact Fee, EPS #141134
2 Stories Multifamily With Surface Parking
Very Low Low Low Median Moderate
Income Income Income Income Income
Item ($0%AMI) (60% AM]) (80%AMI) (100%AMI) (120%AMI)
Development Program Assumptions
Density/Ave
20
20
20
20
20
Average Gross Unit Size
1.200
1,200
1,200
1,200
1.200
Average Net Unit Size
1,000
1,000
1,000
1,000
1,000
Average Number of Bedrooms
2
2
2
2
2
Average Number of Persons per Household
3
3
3
3
3
Parking Spacesi
2.0
2.0
2.0
2.0
2.0
Cost Assumptions 111
Lend/Acre [21
$200.000
$200.000
$200.000
$200,000
$200,000
Land/Unit
$10,000
$10,000
$10,000
$10,000
$10.000
Direct Construction Costs/Gross SF (3]
$150
$150
$115
$115
$115
Direct Construction Costs/Unit
$180,000
$180.000
$138.000
$138,000
$138.000
Parking Construction Costs/Space
$2.500
$2,500
$2.500
$2,500
$2,500
Parking Construction CoshNnil
$5,000
$5,000
$5.000
$5,000
$5,000
Subtotal, Direct CoslsfUnil
$185,000
$185,000
$143,000
$143,000
$143.000
Indirect Costs as a % of Direct Costs (4)
60%
60%
35%
35%
35%
Indirect Cosis/Unit
$111.000
$111.000
$50.050
$50,050
$50,050
Total Cost(Unit
$306,000
$306,000
$203.050
$203.050
$203.050
less Value of 4%Tax Credits[5]
-$118,400
-$118,400
$0
$0
$0
Net Cosl Unit
$187,600
$187.600
$203,050
$203,050
$203,050
Maximum Supported Unit Value
Household Income [6] $27,350 $32,820 $43,700 $54,700 $65,640
Income Available for Housing Costs/Year 171 $8.205 $9.846 $13,110 $16.410 $19.692
less Utility Allowance [81 $2.400 $2,400 $2.400 $2,400 $2.400
Remaining Income Available for Rent $5,805 $7.446 $10,710 $14,010 $17.292
Operating Expenses per Unit/Year 191 $4,500 $4,500 $6.031 $6,031 $6.031
Net Opemting Income $1,305 $2,946 $4.680 $7,980 $11.262
Capitalization Rate (10] 5.5% 5.5% 5.5% 5.5% 5.5%
Total Supportable Unit Value $23.727 $53,564 $85.082 $145,082 $204.755
Financing Gap $163,873 $134,036 $117,968 $57.968 $0
[1]Costs for 50E0% AMI units assume protects are built by non-profit builders, and require prevailing wage For units at a0.120%of AMI, EPS has assumed lower development costs
consistent with for -profit builders' cast bases, and do not assume prevailing wage.
[2) The land costs represent an expected price for developable residential land, per a December 2014 appraisal provided to the City of Palm Desert
[31 Includes seats for labor and materials.
14] Includes costs far architecture and engineering; entitlement and fees; project management, marketing, commissions, and general administrator; financing and charges, insurance, and
contingency. Tax credit projects (at or below 60% AMI) are assumed to include developer fee at 14%of eligible basis
(514% Tax Credits are assumed to be received forunits at 60% AMI or below. Value of tax credits is estimated at 40%of eligible basis, which is all direct and morect costs but excludes land
seats.
161 Based on HCD 2014 income limits for RiveradeSan Bemardmo Ontam MSA
M Assumes housing costs to be 30%of gross household income.
[8] Based on Housing Authority of Riverside County Allowances for Tenant Furnished UbIdes and other Services assuming an apartment using natural gas for healing and making.
[91 Operating expenses include costs of tenants'utilities. Units for households above 60% AMl are assumed to be built asfor-protil projects and thus subject to property tax
[101 Capitalization rate estimated by EPS based on recent apartment industry Investment standards.
Ecmwnm6Plem1S,v,. 23,2015 8 P I141=31141134Patm so WWeN41134ranlmYal010515 s1v
Nexus -Based Affordable Housing Fee Analysis for Rental Housing
02106115
Development Cost Assumptions
Affordable housing development costs include land costs, direct costs (e.g. labor and materials),
indirect or "soft" costs (e.g., architecture, entitlement, marketing, etc.), and developer profit.
For rental projects, operating costs also must be incorporated into the analysis. Data from
recent Palm Desert development and recent land transactions have been combined with EPS's
information from local housing developers and published data sources to estimate development
cost assumptions for a prototypical project in Palm Desert. These cost assumptions are shown
on Table 2.
Projects offering units affordable to households at or below 60 percent of Area Median Income
(AMI) are typically eligible for "40/u" Low Income Housing Tax Credits, which yield equity equal to
roughly 40 percent of the "eligible basis" of the development (all project costs excluding land
acquisition). Such projects are subject to prevailing wage requirements, however, which
increase their direct costs substantially. Also, the developer's fee for such projects is included as
an indirect cost, and can represent up to 14 percent of the eligible basis. These added costs are
more than offset by the value of the tax credit, however, so the net cost of development for such
units is estimated to be slightly less than the cost of developing units for households at 80 to 120
percent of AMI.
Revenue Assumptions
To calculate the values of the affordable units, assumptions must be made regarding the
applicable income level (moderate, median, LI, and VLI) and the percentage of income spent on
housing costs. In addition, translating these assumptions into unit prices and values requires
estimates of operating expenses, capital reserves, and capitalization rates. The following
assumptions were used in these calculations:
• Income Levels —The maximum allowable incomes used in each affordable housing income
category are consistent with those set forth by the federal government (U.S. Department of
Housing and Urban Development [HUD]): VLI = 50 percent of Area Median Income (AMI), LI
60%= 60 percent of AMI, LI 80%= 80 percent of AMI, Median Income = I00 percent of AMI,
and Moderate Income = 120 percent of AMI.
Percentage of Gross Household Income Available for Housing Costs—HCD standards on
overpaying for rent indicate that households earning less than 80 percent of AMI should pay
no more than 30 percent of their gross income on housing costs. For this analysis, EPS has
assumed that all income qualified renter households shall spend 30 percent of their gross
income on housing costs, including rent and utilities.
• other Costs Included for Rental Units —In addition to rent payments, the analysis assumes
$200 per month in utility costs based on the Riverside County Housing Authority utility
allowance table. This amount is subtracted from the total available housing costs (30
percent of household income) to determine the net amount available for rent payments.
operating Costs for Rental Units —The analysis assumes that apartment operators incur
annual costs of $4,500 per unit for VLI and LI 60% units and about $6,000 for LI 80%,
Median, and Moderate units. EPS has assumed the LI 80%, Median, and Moderate income
units would be built by for -profit builders and subject to property taxes.
Economic & Planning Systems, Inc. 9 .-uuoo.,,.,».rmrcww•nom.... :u:, �.�s
Nexus -Based Affordable Housing Fee Analysis for Rental Housing
02106115
Affordability Gap Results
Table 2 shows the subsidies for construction of for -rent apartments for VLI through moderate -
income households. The affordability gap ranges from $0 for moderate -income households (i.e.,
moderate -income households can afford home prices adequate to cover the costs of
construction) to roughly $164,000 for VLI households. The affordability gap for VLI households
is much higher because these households have significantly less income available for housing
costs, while construction costs remain essentially the same.
The affordability gaps by income level then were used to calculate the justified nexus -based fees
by multiplying this required subsidy by the number of units required to house workers providing
goods and services to new market -rate housing development. This methodology is discussed in
more detail in the following chapter.
Economic & Planning Systems, Inc. 10
2. DEMAND -BASED NEXUS FEE CALCULATION
The maximum supportable nexus fees are based on both the affordability gap, calculated in the
previous chapter, and the estimated impact that new market -rate units have on the need for
affordable units, as reflected in the number of income -qualified local workers required to support
the residents of market -rate units and the total subsidy required to construct housing for those
workers. This approach is based on the following logic: (a) residents of market -rate housing
have disposable incomes and require a variety of goods and services (including private sector
goods and services and government services); (b) the provision of those goods and services will
require some workers who make moderate or lower incomes and cannot afford market -rate
housing; and (c) fees charged to market -rate projects can mitigate the impact of those projects
on the increased need for affordable housing.
Market -Rate Household Income Levels
Households with larger incomes typically spend more on goods and services, therefore creating
additional lower income jobs, which in turn generate a greater demand for affordable housing.
To assess the impact that market -rate rental units have on the need for affordable housing, EPS
determined the minimum income required to rent a market -rate apartment at various bedroom
sizes, as shown in Table 3. Average rents for various apartment sizes (studio, and 1, 2, and 3
bedrooms) are based on a survey of rental rates for six of the most recent market -rate
multifamily projects developed in Palm Desert. The rents for the most recent apartment projects
were used, rather than average rents for all apartments, because these newer apartments best
represent the rents that can be expected with new market -rate apartment development.
Assuming utility costs for each unit size based on the Riverside County Housing Authority utility
allowance table, the minimum household income needed to rent each unit is then computed,
predicated on the assumption that a household will spend 30 percent of their income on housing
costs (rent and utility payments). As shown, required household incomes range from
approximately $46,000 for a studio apartment to roughly $85,000 for a 3-bedroom apartment.
Household Expenditures and Job Creation by Income
Level
Having established the income requirements for renting apartments of various sizes, 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 renting new market -rate units in Palm
Desert are "net new" households to the City. To assume otherwise —for instance, that only those
buyers or renters of new housing units relocating from outside Palm Desert should be counted in
the impact analysis —would require assuming that the homes left by those households
Economic & Planning Systems, Inc. 11..,,os,.H."�a�.
Table 3
Required Income by Unit Type- Market -Rate Rental Apartments
Palm Desert Housing Impact Fee, EPS #141134
Required Income by Unit Type
Annual Rent
Minimum
Average
Utility
Subtotal Rent
and Utility
Annual Household
Apartment Size
Rent [1]
Allowance[2]
and Utilities
Expenditures
Income Required[3]
Formula
A
B
C=A+B
D=C'12
E=0130%
Studio
$975
$165
$1,140
$13,680
$45,600
1-Bedroom
$1,200
$175
$1,375
$16,500
$55,000
2-Bedroom
$1,400
$200
$1,600
$19,200
$64,000
3-Bedroom
$1,900
$229
$2,129
$25,548
$85,160
[1] Based on average rents for available multifamily rentals in each unit size in early January 2015 within the City of Palm Desert.
Properties include: The Vineyards, Canterra, Mirabella, Ariana, The Regent, and The Enclave.
[2] Based on Housing Authority of Riverside County Allowances for Tenant Furnished Utilities and other Services assuming an
apartment using natural gas for heating and cooking.
[3] Assumes that a maximum of 30% of annual household income is dedicated to utility and rent expenditures.
Sources: ForRent.com; U.S. Department of Housing and Urban Development; Economic & Planning Systems, Inc
Economic & Planning Systems, Inc. 2/52015
P.1141000SI141134PalmDesenVdode0141134mntmade1020515.xiu
Nexus -Based Affordable Housing Fee Analysis for Rental Housing
02106115
relocating within Palm Desert 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. Palm Desert 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 $55,000 (adequate to rent a
new one -bedroom apartment) spend roughly 12.3 percent of their income on food and drink (at
home and eating out), while households earning $85,000 who can afford to rent a new three -
bedroom apartment spend only about 10.5 percent of their income on these items, Because of
these and other differences in proportionate spending, the expenditure profile varies at different
income levels.
The 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,z which provides employment, gross sales, and payroll data by industry for Riverside
County. In certain instances, Riverside County 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
nearly 10 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 4 times the
employees' wages. Where more than one Economic Census category was attributable to a
Consumer Expenditure Survey category, EPS estimated the proportion of expenditures
associated with each Economic Census category.
After determining the amount of the household's expenditures that were used for employee
wages, an estimation of the number of employees those aggregate wages represent is required.
EPS calculated the number of workers supported by that spending using the average wage per
worker (also from the 2007 Economic Census). These wages ranged from a low of roughly
$14,000 per year for workers in the food services industry to a high of roughly $85,000 average
salary for legal services.3
2 Note that the Consumer Expenditure Survey data is based on information current as of 2013 and
data from the Economic Census was published in 2007. Because the data sources were from different
years, EPS converted the 2013 expenditures to 2007 dollars using the Consumer Price Index (CPI) for
the Riverside -San Bernardino -Ontario Statistical Area (MSA) from the Bureau of Labor Statistics.
3 Note that the average salary reported for legal services reflects the full range of workers employed
by that industry sector, including administrative staff and entry-level employees, as well as the
attorneys.
Economic & Planning Systems, Inc. 13 •.u.,00a,�,.,,,...,mom,."�,.,,,.�s„,��.,>,..
Nexus -Based Affordable Housing Fee Analysis for Rental Housing
02106115
This methodology recognizes that a range of occupations and incomes exist in a given industry
sector. For instance, the methodology used to generate Tables A-1 to A-4 in Appendix A
distinguishes between the typical incomes of workers in different types of retail stores (e.g.,
"food and beverage stores" versus "general merchandise stores"), rather than assuming all retail
sector workers earn the same income. However, the average wage is used for each sub-
category of industry employment and represents a reasonable proxy for the range of incomes in
that group: while some employees will have higher wages and require lower subsidies, others
will have lower incomes and require higher subsidies. Using the average approximates the total
housing subsidy needed by workers in that industry.
To calculate the number of households supported by the expenditures of market -rate housing
units, EPS estimated the employees' household formation rates. Importantly, employees
generated from the increase in housing units do not all form households; some employees, in the
retail and food services industries in particular, are young workers and do not form households.
Data from the Bureau of Labor Statistics indicates that 12.5 percent of retail/restaurant workers
are age 16-19, but an average of only 1.9 percent of workers in other industries. EPS applied
these discounts to household formation to get a more accurate calculation of households formed
by the employees and the average total incomes of those households.
To get the overall households' income rather than the individual workers', the wages of workers
forming households were multiplied by the average of approximately 1.52 workers per working
household in Palm Desert.4 This assumption implies the workers in a given household will have
roughly equivalent pay per hour. While certainly there will often be some variation in wages per
employee within a household, on average this assumption is reasonable because it implies
comparable levels of education and training among all workers in a household. The average
household incomes then are allocated to various income categories to estimate the number of
affordable housing units demanded in each income category (VLI, LI, Median, and moderate -
income).
4 Workers per working household based on American Community Survey (ACS) Census data current
as of January 2015. The average workers per working household estimate is calculated by taking the
total number of people in the labor force and dividing it by the number of households with earnings.
This methodology seeks to provide a conservative estimate of household formation by excluding
households without workers or earnings (such as those with retired persons).
Economic & Planning Systems, Inc. 14
Nexus -Based Affordable Housing Fee Analysis for Rental Housing
02/06/15
A simplified example of these calculations follows:
A.
Number of Households (prototype project)
1,000
B.
Average Household Income (in the project)
$75,000
C.
Aggregate Household Income (A x B)
$75 million
D.
Average Income Spent on Retail (Consumer Expenditure Survey)
$20,000
E.
Aggregate Retail Spending (A x D)
$20 million
F.
Retail Gross Receipts: Payroll Ratio (Economic Census)
10:1
G.
Estimated Retail Payroll (E+ F)
$2 million
H.
Average Retail Wage (Economic Census)
$20,000
I.
Estimated Total Retail Jobs (G _ H)
100
J.
Percent Age 20+ (Bureau of Labor Statistics)
87.5%
K.
Total Retail Workers Forming Households
88
J.
Average Workers/Household (Census Data)
1.52
K.
Estimated Households Created (I _ J)
58
L.
Average Household Income (H x J)
$30,400
M.
Income Category (HCD Income Standards)
LI 60%
In this simplified example, 1,000 new market -rate apartments rented to households earning
$75,000 per year would create demand for 58 housing units for retail workers' households
typically earning less than 60 percent of AMI. Actual calculations and impact distinctions by type
of household expenditure for various rental unit sizes are shown in the series of tables presented
in Appendix A.
Demand for Public -Sector Workers
In addition to the jobs created by the spending of the new market -rate households, this analysis
also aims to evaluate the number of public -sector employees generated by the public service
demands of new market -rate households. Rather than a comprehensive computation of public -
sector employment, the analysis aims to be conservative by sampling only certain public -sector
jobs (e.g., teachers and transportation providers) that are expected to grow in proportionate
measure to household growth.
Data from the 2013 Occupational Employment Survey for the Riverside -San Bernardino -Ontario
MSA was used to determine the number of these public -sector employees needed to serve new
market -rate development, and the average annual wage among each selected public -sector job
type. EPS reviewed the data and sampled occupations that were public sector -related, as shown
in Table A-5 in Appendix A.
Based on the ratio of the selected public -sector jobs to the total households in the MSA, EPS
estimates that approximately 62 government jobs or 41 households with a government
employee are required per 1,000 total households. These figures are conservative (i.e„ low)
because numerous types of public -sector jobs are not included in this analysis (such as federal
postal workers, County health and human services workers, etc.). Also, please note that EPS
has no basis to distinguish differences in the number of public -sector workers demanded by
households based on different income levels or in different sizes of units, so the same numbers
of public -sector jobs are assumed to be generated by units of all sizes and prices.
Economic & Planning Systems, Inc. 15
Nexus -Based Affordable Housing Fee Analysis for Rental Housing
02106115
Combined Demand for Income -Qualified Workers
The total number of income -qualified households required to support the expenditure and public -
sector service needs of new market -rate units were determined based on the affordable housing
income limits from HUD for a 3-person household. Table 4 summarizes the HUD income limits
used to compute the total number of income -qualified households generated by construction of
market -rate units.s The numbers of income -qualified households required to provide goods and
services to new housing units are detailed in Appendix B.
The nexus methodology used herein computes the total number of income -qualified households
generated by market -rate units and calculates the impact fee based on the estimated cost to
subsidize the production of units to meet that affordable housing demand. This methodology
does not suggest that all lower income service workers serving City residents reside in the City,
but it does assume that new development should mitigate for the new affordable housing
demand it creates.
Fee Calculation
The affordability gap analysis quantifies the subsidy required to construct affordable housing at
various income levels (VLI, LI, Median, etc.). Analysis of consumer expenditures that rely on
lower wage workers provides an estimate of the total number of income -qualified households
generated by new for -rent units. Then for each category of market -rate units, the nexus -based
fee is calculated by applying the total number of income -qualified households generated to the
affordability gap computed for each affordable household income level. The analysis provides
the maximum supportable nexus -based fees for new housing development in the City of Palm
Desert.
Tables 5 through 8 show the impact fee calculation by number of bedrooms for rental units.
The total impact fees required for a representative project of 100 units is calculated by
multiplying the number of affordable units required per income level by the cost of subsidizing
such housing. All income -qualified households are assumed to be housed in multifamily units
and the subsidies needed are calculated as the affordability gaps shown in Table 2. The
resulting maximum impact fee for market -rate rental units ranges from approximately $12,000
for a studio apartment to roughly $21,000 for a. 3-bedroom apartment.
5 To correspond to the available data regarding employee wages, the 2007 Riverside County
affordable housing income limits from HUD and HCD were used to determine the number of income -
qualified households, based on household expenditures, while 2013 income limits were used for
public -sector employment. '
Economic & Planning Systems, Inc. 16
Table 4
HUD Income Limits
Palm Desert Housing Impact Fee, EPS #141134
2007
2013
2014
Percentage of
Max Income Threshold
Max Income Threshold
Max Income Threshold
Affordability Category
County Median
3-person household
3-person household
3-person household
Very Low Income (LI) - 50%
31 % - 50%
$26,650
$28,700
$27,350
Low Income (LI) - 60%
51 % - 60%
$31,980
$34,440
$32,820
Low Income (LI) - 80%
61%- 80%
$42,600
$45,900
$43,700
Median Income (Med)
81%- 100%
$53,300
$57,400
$54,700
Moderate Income (Mod)
101%- 120%
$63,960
$68,880
$65,640
Above Moderate Income (Above Mod)
120%+
'Note: Data for Riverside -San Bernardino -Ontario, CA MSA
Sources: US Department of Housing and Urban Development; California Department of Housing and Community Development; Economic & Planning Systems, Inc.
V
ECOnon110 & Planning Systems, Ina 21&2015 P:1141000s1141134Pa/mOesertWode4141134mntmode1020515'XIU
Table 5
Maximum Impact Fee Calculations — Studio
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Financing Gap per
Affordable Unit [1]
(B)
Total In -Lieu Fee Required
Per 100 Market -Rate Per Market Rate Unit'
Units
(C=A-B)
Affordable Units - Very Low Income (50%)
4.1
$163,873
$678,298
Affordable Units - Low Income (60%)
1.1
$134,036
$153,471
Affordable Units - Low Income (80%)
2.6
$117,968
$306.101
Affordable Units - Median Income
1_3
$57,968
$74,445
Total
9.2
$1, 212, 314
[11 Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
(D=C/100)
$12,123
Economic & Planning Systems, Inc. 2162015 P:1141000s1141134PalmDesertWodel1141134mntmode/020515.xlsx
Table 6
Maximum Impact Fee Calculations --1 Bedroom
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Financing Gap per
Affordable Unit [1]
(B)
Total In -Lieu Fee Required
Per 100 Market -Rate Per Market Rate Unit
Units
(C=A-B)
Affordable Units - Very Low Income (50%)
5.2
$163,873
$854,638
Affordable Units - Low Income (60%)
1.3
$134,036
$176,458
Affordable Units - Low Income (80%)
3.0
$117,968
$351,532
Affordable Units - Median Income
1_4
$57,968
$82,409
Total
10.9
$1,465,036
It ] Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic 8 Planning Systems, Inc.
(D=C/100)
$14,650
Economic & Planning Systems, Inc. 2/6/2015 P:1141000s1141134PalmOoser Mode11141134mntmode1020515.xlsx
Table 7
Maximum Impact Fee Calculations — 2 Bedroom
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
(A)
Financing Gap per
Affordable Unit [1]
(B)
Total In -Lieu Fee Required
Per 100 Market -Rate Per Market Rate Unit
Units
(C=A"B)
Affordable Units - Very Low Income (50%)
5.7
$163,873
$931,400
Affordable Units - Low Income (60%)
1.4
$134,036
$185,351
Affordable Units - Low Income (80%)
3.2
$117,968
$373,284
Affordable Units - Median Income
1_5
$57,968
$87,202
Total
11.7
$1, 577, 237
o [1] Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
(D = C 1100)
$15,772
Economic B Planning Systems, Inc 2162015 P:1141000s1141134PalmDesertlMode11141134mntmode1020515.xlsx
Table 8
Maximum Impact Fee Calculations -- 3 Bedroom
Palm Desert Housing Impact Fee, EPS #141134
Item
Affordable Units
Required Per 100
Market -Rate Units
Total In -Lieu Fee Required
Financing Gap per Per 100 Market -Rate Per Market Rate Unit
Affordable Unit [1J Units
(A) (B)
(C=A*B) (D=C/100)
Affordable Units - Very Low Income (50%)
7.6
$163,873
$1,240,652
Affordable Units - Low Income (60%)
1.13
$134,036
$246,633
Affordable Units - Low Income (80%)
4.2
$117,968
$496,701
Affordable Units - Median Income
1_9
$57,968
$112,944
Total
15.6
$2,096,930
N [1] Subsidies are based on financing gap for rental units, as shown on Table 2.
Source: Economic & Planning Systems, Inc.
$20,969
Eamomic & Planning Systems, Inc 2/612015 P.i141000si141134PalmDesertwlode11141134mntmode1020515.x1sx
APPENDICES:
Appendix A: Household Expenditures and
Employment Generation
Appendix B: Income Levels for Worker Households
(ell
APPENDIX A:
Household Expenditures and
Employment Generation
Table A-1 Estimated Average Annual Household Expenditures and
Associated Employment Generation - Studio .......................A-1
Table A-2 Estimated Average Annual Household Expenditures and
Associated Employment Generation - 1 Bedroom.................A-2
Table A-3 Estimated Average Annual Household Expenditures and
Associated Employment Generation - 2 Bedroom .................A-3
Table A-4 Estimated Average Annual Household Expenditures and
Associated Employment Generation - 3 Bedroom.................A-4
Table A-5 Representative Government Employment and Wages,
2013.............................................................................. A-5
Table Lt
Estimated Avenge Annual Household Expenditures and Also aLLW Employment CYne]aem-Studio
Palm Oesert Housing Impact Fee. EP5941134
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Table A-5
Representative Government Employment and Wages, 2013 [1]
Palm Desert Housing Impact Fee, EPS #141134
Govt
2013 Govt
Govt Empl!
Govt
Employee
Employment
2013 MSA
1,000
Employee
2013 Avg.
HH Income
2013 Income
Item
[2]
Total HH [3]
County HH
HH [4]
Wage [2]
[4]
Category [5]
Protective Service Occupations
33,990
1,297,675
26
17.3
$49,516
$83.715
Above Mod
Preschool Teachers, Except Special
Education
3,170
1,297,675
2
1.6
$30,837
$52,135
Med
Kindergarten Teachers, Except Special
Education
2,250
1,297,675
2
1.1
$68,240
$115,372
Above Mod
Elementary School Teachers, Except
Special Education
17,170
1,297,675
13
8.7
$73,835
$124,831
Above Mod
Middle School Teachers, Except Special
and Vocational Education
5,170
1,297,675
4
2.6
$75,221
$127,174
Above Mod
Secondary School Teachers, Except
Special and Vocational Education
6,370
1,297,675
5
3.2
$70,952
$119,957
Above Mod
D Special Education Teachers, Preschool,
Kindergarten, and Elementary School
2,280
1,297,675
2
1.2
$79,187
$133,879
Above Mod
Special Education Teachers, Middle School
640
1,297,675
0
0.3
$69,495
$117,493
Above Mod
Special Education Teachers, Secondary
School
930
1,297,675
1
0.5
$68.281
$115,441
Above Mod
Teachers and Instructors, All Other
2,610
1,297,675
2
1.3
$58,528
$98,952
Above Mod
Bus Drivers, Transit and Intercity,
1,020
1,297,675
1
0.5
$39,593
$66,939
Mod
Bus Drivers, School
4,710
1,297,675
4
2.4
$34,959
$59.104
Mod
Total
62
40.8
[1] Not a comprehensive list of government employment. Rather a sampling of government jobs for which employment is likely to be directly affected by
increases in local population.
[2] Government employment and wages based on 2013 Occupational Employment Statistics data for Riverside -San Bernardino -Ontario MSA.
[3] Riverside -San Bemardino-Ontario MSA figure from 2013 ACS Census data.
[4] Assumes 1.52 workers perworking household per 2009-2013 Census data.
[5] See Table 4.
Sources: 2013 Occupational Employment Statistics, CA Employment Development Department; US Census; Economic & Planning Systems, Inc
Emeomi, a Rants,,, System, Inc, P/0/L015 P3141000s%141134Palmeesetlb .AI41134renfmrde10205taxlsr
APPENDIX B:
Income Levels for. Worker Households
Table B-1 Household Generation per 1,000 Market Rate Units -
Studio............................................................................ B-1
Table B-2 Household Generation per 1,000 Market Rate Units -
1 Bedroom......................................................................B-2
Table B-3 Household Generation per 1,000 Market Rate Units -
2 Bedroom......................................................................B-3
Table B-4 Household Generation per 1,000 Market Rate Units -
3 Bedroom......................................................................B-4
Table B-1
Household Generation per 1.000 Market Rate UnHs -Studio
Palm Desert Housing Impact Fee, EPS #141134
Total
Industry Employees HH[11 Very Law Low(60%) Low(90%) Mod Mod Above Mod
Retail
Unspecified Retail
Food 8 Beverage Stores
Food Services and Drinking Places
Health and Personal Care Stores
General Merchandise
Furniture and Ham. Furnishings Stares
Building Material and Garden Equipment and Supplies Dealer
Electronics and Appliance Stores
Clothing and Clothing Accessories Stores
Motor Vehicle and Pads Dealers
Gasoline Stations
Sporting Goods, Hobby, and Musical Instrument Stores
Miscellaneous Store Retailers
Nonstore Retailers
Arts, Entertainment, & Recreation
MedlcaUHealth
Ambulatory Health Care Services
General Medical and Surgical Hospitals
Nursing and Residential Care Faaldes
Social Assistance
Services
Personal end Household Goods Repair and Maintenance
Services to Buildings and Dwellings
Waste Management and Remedlabon Services
Real Estate and Rental and Leasing
Personal Care Services
Dry Cleaning and Laundry Services
Auto Repair and Maintenance
Veterinary Services
Photographic Services
Educational Services
Accounting
Architecture[, Engineering, and Related
Specialized Design Services
Death Cam Sendces
Legal SeMces
Government
Total HH Generated Per 1,000 Market -Rate Units
%of Taral Afrordable Households
Total Income -Qualified HH Generated Per 100 Market -Rate Units [2
2 1
0
1
0
0
0 0
17 10
0
0
10
0
0 0
49 29
29
0
0
0
0 0
3 2
0
0
0
2
0 0
4 2
0
2
0
0
0 0
2 1
0
0
0
1
0 0
2 1
0
0
0
1
0 0
7 4
0
4
0
0
0 0
4 2
2
0
0
0
0 0
6 3
0
0
0
0
0 3
4 2
0
2
0
0
0 0
3 2
2
0
0
0
0 0
4 2
0
2
0
0
0 0
0 0
0
0
0
0
0 0
3 2
0
0
2
0
0 0
2 1
0
0
0
0
0 1
1 1
0
0
0
0
0 1
4 3
0
0
3
0
0 0
2 1
0
0
1
0
0 0
6
4
0
0
4
0
0
9
6
0
0
6
0
0
2
2
0
0
0
0
0
1
0
0
0
0
0
0
6
3
3
0
0
0
0
1
0
0
0
0
0
0
7
5
0
0
0
5
0
1
1
0
0
0
1
D
D
0
0
0
0
0
0
9
5
5
0
0
0
0
2
1
0
0
0
1
0
1
0
0
0
0
0
0
1
0
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0
0
0
0
3
Al
2
0
4
2
3
226
139
41
11
26
13
3
1
0
0
0
0
4.1
1.1
2.6
1.3
0.3
[I] Assumes 1.69 workers per worker household based an the 2010 Census. Includes a 12.5%discount canted and 1.9%discount for other Industries to account larw rosrs under age 20.
12] Excludes above moderate -Income households because these incomes ere adequate to acquire mallet -rote housing
Sours: Econormc is Planning Systems, Inc.
35
45
0
0.0
Em+vmca PlenNnp]ytleny lnc ]/Y[of9 PIfd IGWalldlf]dPebMese,nMolenldf l]MnimalsU]W14vin
Table B-2
Household Generation per 1,000 Market Rate Units -1 Bedroom
Palm Desert Housing Impact Fee, EPS 91411M
Industry Total Employees
HH III
VeryLow
Low(60%1
Low(aa%1
Med Mod
Above Mod
Retail
UnspeclOed Retail
2
1
0
1
0
0
0
0
Food S Beverage Stores
18
11
0
0
11
0
0
a
Pood Services and Drinking Places
69
35
35
0
0
0
Health and Personal Care Stores
3
2
a
0
0
0
0
General Merchandise
4
2
0
2
0
2
0
0
Furniture and Home Furnishings Stores
3
2
0
0
0
0
2
0
a
0
0
Building Material and Garden Equipment and Supplies Dealer
2
1
0
0
0
1
0
0
Electronics antl Appliance Stares
8
5
0
5
0
0
0
0
Clothing and Clothing Accessories Stores
4
2
2
0
0
a
0
0
Motor Vehicle and Pads Dealers
6
4
0
0
0
0
0
0
Gasoline Stations
4
2
0
2
0
0
0
0
Sporting Goods. Hobby, and Musical Instrument Stores
6
3
3
0
0
0
0
0
Miscellaneous Stare Retailers
5
3
0
3
0
0
0
0
Nonstore Retailers
1
0
0
0
0
0
0
0
Arts, Entertainment, 6 Recreation
4
3
0
0
3
0
0
a
MedlealMealth
Ambulatory Health Care Services
3
2
0
0
0
0
0
0
General Medical and Surgical Hospitals
2
1
0
0
0
0
0
0
Nursing and Residential Care Facilities
6
4
0
a
4
0
0
0
Social Assistance
2
1
0
0
1
0
0
0
Services
Personal and Household Goods Repair and Maintenance
5
3
0
0
3
0
0
0
SeMces to Buildings and Dwellings
11
T
0
0
y
0
0
0
Waste Management and Remediation SeMces
2
2
0
0
0
0
0
0
Real Estate and Rental and Leasing
1
0
0
0
0
0
0
0
Personal Cara Services
6
4
4
0
0
0
0
0
Dry Cleaning and Laundry SeMces
1
1
0
a
1
0
0
0
Auto Repair and Maintenance
8
5
0
0
0
5
0
0
Veterinary SeMces
1
1
0
0
0
1
0
0
Photographic SeMces
0
0
0
0
0
0
0
0
Educational Services
15
9
9
0
0
0
0
0
Accounting
2
1
0
0
0
1
0
a
Architectural, Engineering, and Related
1
0
0
0
0
0
0
0
Specialized Design Services
1
a
0
0
a
0
0
0
Death Care Senaces
1
1
0
0
0
0
0
0
Legal Services
0
0
0
0
0
0
0
0
Government
62
41
0
0
0
2
3
36
Total HH Generated Per 1,000 Marke114tate Units
258
158
62
13
30
14
3
36
Total income-pualiiled HH Generated Per 100 Market -Rate Untie 12)
5
1
3
1
0
0
(1) Assumes 1.59 workers per worker household based on the 2011 ALS census. Includes a 12.5%discount for retail am 1.9%discount
for oilier mdustrles
to account for waders under age 20.
[2) Excludes show moderate-Incems households because these Incomes are adequate
to acquire madel-rate
housing.
Source. Ecunomlc 4 Planning systems, Inc
Emnem'[aflrnNnp Syffimr/na .,,a plflfeers"I alPtl ..opM111fea—easiossm }du
7
Table Ba
Household Generation per 1,000 Market Rate Units-2 Bedroom
Palm Desert Housing Impact Fee, EPS R141134
Industry
Total
Employees HH[1] Very Low Low(60%) Low(80%) Med Mod Above Mod
Retail
Unspecified Retail
2
1
0
1
0
0 0
Food 8 Beverage Stores
18
10
0
0
10
0 0
Food Services and Drinking Places
62
36
36
0
0
0 0
Health and Personal Care Stores
3
2
0
0
0
2 0
General Merchandise
5
3
0
3
0
0 0
Furniture and Home Furnishings Stores
3
2
0
0
0
2 0
Building Material and Garden Equipment and Supplies Dealer
3
2
0
0
0
2 0
Electronics and Appliance Stores
8
5
0
5
0
0 0
Clothing and Clothing Accessories Stores
5
3
3
0
0
0 0
Motor Vehicle and Pads Dealers
7
4
0
D
0
0 0
Gasoline Stations
4
2
0
2
0
0 0
SpoNng Goods, Hobby, and Musical Instrument Stores
5
3
3
0
0
0 0
Miscellaneous Stare Retailers
5
3
0
3
0
0 0
Nonstore Retailers
1
0
0
0
0
0 0
Ads, Entertainment, B Recreation
5
3
0
0
3
0 0
MedieaVHealth
Ambulatory Health Care Services
3
2
0
0
0
0 0
General Medial and Surgical Hospitals
2
1
0
0
0
0 0
Nursing and Residential Cam Facilities
7
4
0
0
4
0 0
Social Assistance
3
2
D
0
2
0 0
Seroleea
Personal and Household Goods Repair and Maintenance
7
4
0
0
4
0 0
Services to Buildings and Dwellings
11
7
0
0
7
0 0
Waste Management and Remediation Services
2
2
0
0
0
0 0
Real Estate and Rental and Leasing
1
0
0
0
0
0 0
Personal Care Services
6
4
4
0
0
0 0
Dry Cleaning and Laundry Services
1
1
0
0
1
0 0
Auto Repair and Maintenance
8
5
0
0
0
5 0
Veterinary Services
2
1
0
0
0
1 0
Photographic Services
0
0
0
0
0
0 0
Educational Services
18
11
11
0
0
0 0
Accounting
2
1
0
0
0
1 0
Architectural, Engineering, and Related
i
0
0
0
0
0 0
Specialaed Design Services
1
0
0
0
0
0 0
Death Co. Services
1
1
0
0
0
0 0
Legal Services
1
0
0
0
0
0 0
Government
62
41
0
0
0
2 3
Total HH Generated Per 1,000 Market Rate Units
272
167
57
14
32
15 3
Total Income-0uall0ed Hit Generated Per 100 Market -Rate Units 12]
6
1
3
2 0
[1]Assumes 1.69 workers per worker Household based on me 2010 Census Includes a 125%discount for mad and Le%discount for other industries to account for
workers underage 20
[2] Eecludes above moderate -Income households because these Incomes are adequate to arqulm markeHmle
Housing
Source Economic 6 Planning Systems, Inc
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
36
36
U
EavnoMca RannNa a)'ysma,/no }Mall %111 FI0IlaaPLmivM.fo0Mla11s'—No.svydehs.
Table 8.4
Household Generation per 1,000 Market Rare Units -1 Bedroom
Palm Desert Housing Impact Fee, EPS N141134
Total
Industry Employees HH (1] Very Low LOw(60%) Low (8a%) Mad Mod Above Mad
Retail
Unspecified Retail
3
2
a
2
0
0
0
0
Food 8 Beverage Stores
24
14
0
0
14
0
0
0
Food Services and Drinking Places
93
48
48
0
0
0
0
0
Health and Personal Care Stores
4
2
0
0
0
2
0
0
General Merchandise
6
4
0
4
0
0
0
0
Furniture and Home Furnishings Stares
4
3
0
0
0
3
0
0
Building Material and Garden Equipment and Supplies Dealer
4
2
0
0
0
2
0
0
Electronics and Appliance Stares
10
6
0
6
0
0
0
0
Clothing and Clothing Accessories Stores
7
4
4
0
0
0
0
0
Motor Vehlde and Pads Dealers
9
5
0
0
0
0
o
a
GasoOne Stations
5
3
0
3
a
0
0
0
Sporwg Goods, Hobby, and Musical Instrument Stores
7
4
4
0
0
0
0
0
Miscellaneous Store Retailers
7
4
0
4
0
0
0
0
Homilies Retailers
1
D
0
0
0
0
0
D
Arts, Entertalnment, B Recreation
7
4
0
0
4
0
0
0
MedlcaUHealth
Ambulatory Health Care Services
3
2
0
0
0
0
0
0
General Medical and Surgical Hospitals
2
1
0
0
0
0
0
0
Nursing and Residential Care Factiitea
9
6
0
0
6
0
0
0
Social Assistance
4
2
0
0
2
0
0
0
Services
Personal and Household Goods Repair and Maintenance
9
6
0
0
6
0
0
0
Services to Buildings and Dwellings
14
9
0
0
9
0
0
0
Waste Management and Remadiahon Services
3
2
D
0
0
0
0
0
Real Estate and Rental and Leasing
1
1
0
0
0
1
0
0
Personal Care Services
a
5
5
0
0
0
0
0
Dry Cleaning and Laundry Services
1
1
a
a
1
a
0
0
Auto Repair and Maintenance
11
7
0
0
0
7
0
0
Veterinary Services
2
1
0
0
0
1
0
0
Photolimphieservices
1
D
0
0
D
0
0
0
Educational Services
24
14
14
0
0
0
0
0
Accounting
3
2
0
0
0
2
0
0
Architectural, Engineering, and Related
1
1
0
0
0
0
0
0
Specialized Design Services
1
1
0
0
0
0
0
0
Death Care Services
1
1
0
0
0
0
0
0
Legal Services
1
0
0
0
0
0
0
0
Government
3
41
0
0
0
$
3
M
Total HH Generated Per 1,000 Market -Rate Units
342
209
76
.18
42
19
3
36
Total Income -Qualified HH Generated Per 100 MwImt-Rate Units [Z
a
2
4
2
0
0
11] Assumes 169 worms perwod,er household based on the 2010 Census Includes a 12.5% discount for retail and 19%discount for other Indushes to account forwormes underage 20.
121 Excludes above moderate-incoms households because these Incomes are adequate to acquire rmnet-rate housing
Soufre. Economic 5 Planning Simkins, line,
Eronorrrca Plunnp Sy4emy trio ]/92a/9 PIHIOGaaIfa1131WbMeswM1<tlM11f l3MnfmoOefa]a919 x1u