HomeMy WebLinkAboutItem 07 - COUNCIL READING FILE_a_2020 Nexus Study DAV I D P AU L RO S E N & A S S OC I ATE S
D EVELOPMENT, FINANCE AND POLICY ADVISORS
Affordable Housing Nexus Study
City of San Luis Obispo
February 12, 2020
Final Report
City of San Luis Obispo February 12, 2020
Affordable Housing Nexus Study
City of San Luis Obispo Affordable
Housing Nexus Study
PREPARED FOR:
City of San Luis Obispo
PREPARED BY:
David Paul Rosen & Associates
1330 Broadway, Suite 937
Oakland, CA 94612
510-451-2552
510-451-2554 Fax
david@draconsultants.com
www.draconsultants.com
3941 Hendrix Street
Irvine, CA 92614
949-559-5650
949-559-5706 Fax
nora@draconsultants.com
www.draconsultants.com
City of San Luis Obispo February 12, 2020
Affordable Housing Nexus Study
Table of Contents
Executive Summary .................................................................... 1
Introduction ..................................................................................... 1
Target Income Levels and Affordable Housing Cost ........................ 2
Affordability Gap Analysis ............................................................... 3
Nexus Analysis ................................................................................. 5
Recommendations ........................................................................... 9
1. Background and Introduction .............................................. 12
1.1 Target Income Levels ............................................................... 12
2. The Nexus Rationale ............................................................ 13
2.1 The Relationship Between Job and Population Growth ........... 14
2.2 The Relationship Between Construction and Job Growth ........ 14
3. Summary of Housing Market Trends .................................... 16
3.1 Affordable Rents and Home Prices .......................................... 16
3.2 Housing Inventory ................................................................... 18
3.3 Rental Housing Market Conditions .......................................... 18
3.4 For-Sale Housing Market Conditions ....................................... 21
4. Residential Nexus Analysis ................................................... 23
4.1 Impact Methodology and Use of the IMPLAN Model .............. 23
4.2 The IMPLAN Model ................................................................. 24
4.3 Disposable Income of New Households .................................. 25
4.4 Projected Employment Generation .......................................... 26
4.5 Projected Household Growth .................................................. 27
4.6 Projected Low and Moderate Income Households ................... 27
5. Non-Residential Nexus Analysis ........................................... 28
5.1 Overview of Non-Residential Nexus Methodology .................. 28
5.2 Non-Residential Nexus Methodology and Assumptions ........... 29
6. Affordability Gap Analysis ................................................... 32
6.1 Methodology ............................................................................ 33
6.2 Housing Development Costs .................................................... 34
6.3 Calculation of Per Unit Subsidy Amounts ................................ 34
7. Policy Recommendations ..................................................... 34
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7.1 IHO Set-Asides ........................................................................ 35
7.2 Affordable Housing Standards ................................................. 36
7.3 Geographical Variation ........................................................... 38
7.4 Project Size Adjustments ......................................................... 39
7.5 Residential In Lieu Fees and Annual Adjustments .................... 39
7.6 Methods of Securing Residential IHO Requirements ............... 41
7.7 Effective Date of Ordinance .................................................... 41
7.8 Non-Residential Nexus Fees .................................................... 41
Appendix A: Residential Nexus and Gap Analysis Tables
Appendix B: Non-Residential Nexus Tables
Appendix C: Inclusionary Housing Program Survey
Appendix D: Assessment of City’s Existing IHO Program
List of Tables
ES-1. Affordable Housing Income Limits by Percent of
Area Median Income and Household Size, City of
San Luis Obispo, 2019 ................................................... 3
ES-2. Per Unit Affordability Gaps by Income Level,
Housing Prototypes ........................................................ 5
ES-3. Maximum Justifiable Nexus Fees Per Unit and Per
SF, Residential Prototypes, Assumes Construction
of Rental Housing ......................................................... 6
ES-4. Per Square Foot Maximum Justifiable Nexus Fees,
Non-Residential Land Uses ............................................ 8
ES-5. Examples of Non-Residential Per Square Foot
Nexus Fees in Other Jurisdictions, 2016 to 2019 ........... 8
ES-6 Recommended Residential In Lieu Fees, City of
San Luis Obispo ........................................................... 11
1. Affordable Rents by Percent of AMI and Unit
Bedroom Count, City of San Luis Obispo, 2019 ........... 17
2. Affordable Home Prices by Percent of AMI and
Unit Bedroom Count, City of San Luis Obispo,
2019 ............................................................................ 17
3. Housing Units by Type, City of San Luis
Obispo, 2010 to 2019 ................................................. 18
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Affordable Housing Nexus Study
4. Distribution of Rental Housing Units by Rent
Paid, City of San Luis Obispo, 2017 ............................. 19
5. Average Asking Rents, City of San Luis Obispo,
2012 to 2019 ............................................................... 19
6. Annual Increase in Average Asking Rents City
of San Luis Obispo, 2012 to 2019 ................................ 20
7. Comparison of Average Market and Affordable
Rents, City of San Luis Obispo, 2019 ........................... 20
8. Trends in Median Home Values, City of San
Luis Obispo, August 2010 to August 2019 ................... 21
9. Summary of Single-Family Home Sales Prices
by Unit Bedroom Count, City of San Luis
Obispo, June 2019 to November 2019 ........................ 22
10. Summary of Condominium Sales Prices by Unit
Bedroom Count, City of San Luis Obispo, July
2019 to October 2019 ................................................. 22
11. Inclusionary Housing Set-Aside and Threshold
Size Provisions, Selected California
Inclusionary Housing Programs ................................... 38
12. Recommended Affordable Rent Standards ................... 42
13. Recommended Affordable Home Price
Standards ..................................................................... 43
14. Estimated Prototype Development Costs ...................... 44
15. Renter In Lieu Fee Calculation ..................................... 45
16 Owner In Lieu Fee Calculation .................................... 46
A-1 Housing Prototypes ..................................................... A-1
A-2 Estimated Disposable Household Income of
New Homebuyers ....................................................... A-2
A-3 Estimated Disposable Household Income of
New Renter Households ............................................. A-3
A-4 Estimated Employment Impacts by Industry
Sector, Prototype 1, SFD ............................................. A-4
A-5 Estimated Employment Impacts by Industry
Sector, Prototype 2, Owner Townhomes ..................... A-5
A-6 Estimated Employment Impacts by Industry
Sector, Prototype 3, Rental Apartments ....................... A-6
A-7 Estimated Households by Income Level,
Prototype 1, SFD ......................................................... A-7
A-8 Estimated Households by Income Level,
Prototype 2, Owner Townhomes ................................ A-8
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Affordable Housing Nexus Study
A-9 Estimated Households by Income Level,
Prototype 3, Rental Apartments ................................... A-9
A-10 Development Cost Assumptions and Budgets,
Housing Prototypes ................................................... A-10
A-11 Affordable Sales Price Calculations by Income
Level ......................................................................... A-11
A-12 Affordable Rent Calculations by Income Level .......... A-12
A-13 Owner Housing Affordability Gap Calculation,
Prototype 1, SFD ....................................................... A-13
A-14 Owner Housing Affordability Gap Calculation,
Prototype 2, Owner Townhomes .............................. A-14
A-15 Renter Housing Affordability Gap Calculation,
Prototype 3, Rental Apartments ................................. A-15
A-16 Maximum Justifiable Residential Nexus Fees ............ A-16
A-17 Single-Family Home Sales ........................................ A-17
A-18 Condominium Home Sales ....................................... A-19
A-19 Vacant Land Sales, City of San Luis Obispo,
July 2019 to October 2019 ....................................... A-21
B-1 2019 National Occupational Distribution by
Land Use .................................................................... B-1
B-2 Wages by Occupational Grouping, San Luis
Obispo County ........................................................... B-2
B-3 Estimated Occupational Distribution of New
Employee Households by Land Use ............................ B-4
B-4 Estimated Qualifying Extremely Low Income
Households by Land Use ............................................ B-5
B-5 Estimated Qualifying Very Low Income
Households by Land Use ............................................ B-6
B-6 Estimated Qualifying Low Income Households
by Land Use ............................................................... B-7
B-7 Estimated Qualifying Moderate Income
Households by Land Use ............................................ B-8
B-8 Justifiable Non-Residential Nexus Fee Per
Building Square Foot by Land Use .............................. B-9
D-1 Regional Housing Need Allocation ............................ D-2
D-2 Summary of Affordable Housing Unit
Production, On-Site IHO Units and Units
Subsidized by the Affordable Housing Fund .............. D-3
D-3 Comparison of Average Market and Affordable
Rents ......................................................................... D-4
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Executive Summary
Introduction
The City of San Luis Obispo (City) adopted its Inclusionary Housing Ordinance
(hereafter referred to as the IHO or Program) in 1999. In 2004, the Program was
revised as part of the Housing Element update to include housing affordability
requirements. The Program requires that certain new residential and commercial
developments of five or more units and commercial developments of more than
2,500 square feet of commercial floor area help to meet affordable housing needs
by one or a combination of the following methods: 1) building affordable units; 2)
dedicating real property; or 3) paying an in lieu fee used to fund the development of
new affordable housing.
The City retained David Paul Rosen & Associates (DRA) to prepare a nexus study to
establish a rational nexus between market-rate residential development and non-
residential development and the need for affordable housing in the City. To the
extent that new market-rate residential and non-residential development in the City
increases demand for housing and exacerbates the City’s shortage of affordable
housing, the City has a strong public interest in, and a legal basis for, causing new
affordable housing to be developed to meet this additional demand. This executive
summary provides an overview of the methodology and financings of the analysis.
The remainder of the report provides additional detail on the assumptions and
analysis of DRA’s nexus study.
In designing a fee on new residential and non-residential development to assist the
provision of affordable housing, the basis for the fee is that such development has a
deleterious impact by increasing employment, which also increases the demand for
housing for the added employees. Since the private for-profit housing market, with
no public assistance, has not demonstrated the ability to meet the housing needs of
lower-earning employees, a nexus fee is justified to help create that housing. Non-
residential development, such as retail/services, office and industrial uses, have a
direct employment impact with the creation of additional employment that generates
demand for additional housing. Residential development has an indirect impact on
employment, as household expenditures on goods and services are linked to the
employment necessary to produce those goods and services. A nexus study is
intended to determine whether: (1) those who must pay the fee are contributing to
the demand that the fee will address; and (2) the amount of the fee is reasonably
justified by the magnitude of the fee-payer's contribution to the problem. Affordable
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housing requirements, including nexus fees, have been successfully upheld against
legal challenge where the fees met standards set by case law.
This nexus study examines the impacts of new market-rate rental and owner housing
and non-residential development in San Luis Obispo on the demand for affordable
housing.
In addition to this main report, DRA’s study includes four Appendices with additional
detail on the data and analysis that are referenced in this report:
Appendix A: contains Tables A-1 through A-19 detailing the data, assumptions and
calculations used in the residential nexus analysis and affordability
gap analysis.
Appendix B: contains Tables B-1 through B-8 detailing the data, assumptions and
calculations used in the nonresidential nexus analysis.
Appendix C: contains case studies on inclusionary housing programs in six
comparison cities and the nonresidential nexus fee program in
Petaluma (the only one of the six cities profiled to have a
nonresidential nexus fee).1
Appendix D: contains analysis of the historical performance of the City’s IHO
Program.
Target Income Levels and Affordable Housing Cost
The nexus analysis uses State income limits for San Luis Obispo County shown in
Table ES-1 for Fiscal Year 2019-20. Extremely low income households are defined
as households with incomes up to 30 percent of area median income (AMI), or
$26,950 for a four-person household in San Luis Obispo County in 2019. Very low
income households are defined as households with incomes between 31 percent
and 50 percent of AMI, or up to $44,950 for a four-person household in San Luis
Obispo County in 2019. Low income households are defined as households with
incomes between 51 percent and 80 percent of AMI, or a maximum of $71,900 for
a four-person household in 2019. Moderate income households are defined as those
households earning between 81 and 120 percent of AMI, or a maximum of $105,000
1The six cities surveyed were Davis, Monterey, Santa Barbara, Santa Cruz, Ventura and Petaluma.
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for a four-person household. The 2019-20 State AMI for a household of four in the
County is $87,500.
Table ES-1 shows 2019 extremely low, very low, low and moderate income limits
for the City of San Luis Obispo for household sizes of one to eight persons using
HUD household size adjustment factors1.
Table ES-1
Affordable Housing Income Limits by Percent of Area Median Income (AMI)
and Household Size1
City of San Luis Obispo
FY 2019-2020
Income
Category
Household Size
1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons 7 Persons 8 Persons
Extremely
Low
30% AMI
$18,900 $21,600 $24,300 $26,950 $30,170 $34,590 $39,010 $43,430
Very Low
50% AMI
$31,500 $36,000 $40,500 $44,950 $48,550 $52,150 $55,750 $59,350
Low
80% AMI
$50,350 $57,550 $64,750 $71,900 $77,700 $83,450 $89,200 $94,950
Median*
100% AMI
$61,250 $70,000 $78,750 $87,500 $94,500 $101,500 $108,500 $115,500
Moderate
120% AMI
$73,500 $84,000 $94,500 $105,000 $113,400 $121,800 $130,200 $138,600
*Median income shown for reference only. This is not an official Affordable Housing Income Level.
Source: California Department of Housing and Community Development 2019 published income
limits; California Tax Credit Allocation Committee (CTCAC) 60% AMI income limits; DRA
Affordability Gap Analysis
The affordability gap analysis compares the cost of developing housing in the City
to the amount extremely low, very low, low, and moderate income households can
afford to pay for housing. The affordability gap represents the capital subsidy
required to develop housing affordable to families at these target income levels.
The per unit subsidy required to make new housing affordable to extremely low, very
low, low, and moderate income residents was calculated by subtracting per unit
1 HUD adjustment factors by household size are: 1 person: 70%; 2 persons: 80%; 3 persons:
90%; 4 persons: 100%, 5 persons: 108%; 6 persons: 116%; 7 persons: 124% and 8 persons:
132%.
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development costs from the per unit mortgage or home price supportable from
affordable rents and owner housing cost. Per affordable housing unit subsidies were
calculated for three prototypical housing developments developed by DRA in
consultation with City staff for this analysis. The resulting per unit subsidy
requirements by prototype and unit bedroom count are shown in Table ES-2.
The results of the gap analysis show significant affordability gaps for all three
identified prototypes for extremely low, very low, low and moderate income
households. The gaps for the rental prototype are based on affordable rents to each
income level based upon the City’s standard that rent will not exceed 25% to 30%
of annual income, dependent on the income group, and do not consider whether
affordable rents may be above market rents at higher income levels.
The purpose of the gap analysis is to determine the fee amount that would be
required to develop housing affordable to households whom will need to find
housing in the City in connection with new market-rate residential and non-
residential development in the City. Therefore, no other housing subsidies, or
leverage, are assumed.
For example, the cost to develop a two-bedroom townhome unit is $569,400, and
using the City’s current Affordability Standards, a three-person household at 80% of
AMI can afford a sales price of $194,130, leaving an affordability gap of $375,270.
Detailed calculations of the gap can be found in Tables A-13, A-14 and A-15.
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Table ES-2
Per Unit Affordability Gaps by Income Level1
Housing Prototypes
City of San Luis Obispo Affordable Housing Nexus Study
2019
Unit Bedroom
Count Extremely Low Very Low Low Moderate
Prototype #1
Owner SFD
Two Bedrooms $557,201 $508,669 $435,870 $299,250
Three Bedrooms $909,113 $855,188 $774,300 $622,500
Four Bedrooms $1,076,171 $1,013,618 $919,788 $743,700
Prototype #2
Owner
Townhome
Two Bedrooms $496,601 $448,069 $375,270 $238,650
Three Bedrooms $619,913 $565,988 $485,100 $333,300
Prototype #3
Rental Apartments
Studio $212,500 $170,200 $149,100 $99,900
One Bedroom $328,400 $280,201 $256,089 $199,873
Two Bedrooms $519,300 $465,200 $438,000 $374,700
Three Bedrooms $656,700 $594,000 $562,700 $489,500
1Calculated using the City’s 2019 Rent and Sales Affordability Standards.
SFD= Single-Family Dwelling
Source: DRA
Nexus Analysis
The methodology used for the residential nexus analysis begins with the estimated
sales prices or rents of a prototypical residential subdivision or apartment complex
and moves through a series of linkages to the incomes of the households that
purchase or rent the units, the annual expenditures of those households on goods
and services, the jobs associated with the delivery of these goods and services, the
income of the workers performing those jobs, the household income of those worker
households, and finally to the affordability level of the housing needed by those
worker households. DRA uses estimated market-rate sales prices and rents for
prototypical housing units to determine the typical household incomes of
households renting or purchasing these units. The consumer expenditures of
residents in the new market-rate housing and the jobs generated by these
expenditures are estimated using the IMPLAN model, an economic analysis model
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widely used for the past 25 years to quantify employment impacts from personal
income and now commercially available through the Minnesota IMPLAN Group
(MIG). The methodology of the IMPLAN model is described in Section 4 of this
report.
The methodology used for the non-residential nexus analysis estimates the number
of households at extremely low, very low, low and moderate income levels
associated with the employees that work in a building of a given size and land use
type in the City, based on employment and wage data by industry and occupation,
and calculates the development impact fee required to fill the gap to make housing
affordable to those income groups.
The result of the nexus methodology is the estimated number of households by
residential or non-residential land use prototype living in the City and qualifying as
extremely low, very low, low and moderate income as a result of new development
activity in the City. DRA uses the results of the housing affordability gap analysis to
calculate the development impact fee required to make housing affordable to the
low and moderate income households who will need to find housing in the City in
connection with new market-rate residential and non-residential development in the
City. This fee is referred to as the Maximum Justifiable Nexus Fee.
Tables ES-3 summarizes the maximum justifiable residential nexus fees by income
level and housing prototype based on the economic analysis. The fees for providing
new housing for the added employees assume the fees are spent on the construction
of rental housing, which is the most economical way to meet these extremely low,
very low, low and moderate income housing needs. The fees are both shown per
unit and per net square foot of living area. Detailed calculation of the fees is shown
in Table A-16. Single-family homes are typically more expensive and require higher
incomes to purchase than townhomes or apartments. Higher income households
generally spend more on goods and services in the community. Employment impacts
are related to household expenditures on goods and services, therefore the
employment impacts and associated employee households are higher with single-
family homes relative to other types of residential development.
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Table ES-3
Maximum Justifiable Nexus Fees Per Unit and Per SF
Residential Prototypes
Assumes Construction of Rental Housing1
2019
Income Group
Prototype 1
Owner SFD
Prototype 2
Owner Townhomes
Prototype 3
Renter Apartments
Per Unit Per NSF Per Unit Per NSF Per Unit Per NSF
Extremely Low
<30% AMI $30,695 $32.97 $18,793 $12.12 $14,909 $16.01
Very Low
30%-50% AMI $30,944 $33.24 $19,893 $12.83 $14,698 $15.79
Low
50%-80% AMI $25,263 $27.14 $16,498 $10.64 $12,271 $13.18
Moderate
80%-120% AMI $19,226 $20.65 $12,016 $7.75 $9,613 $10.33
Total Maximum
Nexus Fee $106,128 $113.99 $67,200 $48.33 $36,582 $55.31
1Fees for all prototypes based on gap to build affordable rental units
SFD=Single-Family Dwelling; NSF=Net Square Foot (Living Area)
Source: DRA
Table ES-4 summarizes the Maximum Justifiable Nexus Fees for the non-residential
land uses, per net square foot of building area, as they compare to six different non-
residential uses. Since most jurisdictions levy a single nexus fee by land use, the
table shows the justifiable fee by income level as well as a total fee across all of the
income levels analyzed.
These maximum fees are not the recommended fees for adoption by the City of San
Luis Obispo. DRA recommends that jurisdictions adopt fees less than the maximums
indicated in Tables ES-3 and ES-4, because fees at these high levels will affect the
financial feasibility of development as well as the competitiveness of development
in the City with neighboring jurisdictions with much lower fees. The City will look
to develop fee recommendations following review of the draft fee estimates and
consideration of a number of policy factors that may influence the City’s decision.
Table ES-5 provides a sample of recent nexus fees for new non-residential
development in other California jurisdictions to illustrate the range of actual nexus
fees. As part of this assignment, DRA surveyed six cities similar to San Luis Obispo
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regarding their inclusionary housing programs (see Appendix C)1. Since Petaluma is
the only one of the six cities surveyed with a non-residential nexus fee, DRA has
provided comparative information for other selected cities in California with non-
residential nexus fees. DRA is not aware of other cities the size of SLO that utilize a
non-residential nexus fee. At the top end of the range, San Francisco has a nexus fee
on office uses of $69.60 per square foot.
Table ES-4
Per Square Foot Maximum Justifiable Nexus Fees
Non-Residential Land Uses
2019
Extremely
Low
<30% AMI
Very Low
30%-50%
AMI
Low
50%-80%
AMI
Moderate
80%-120%
AMI
Total Nexus
Fee
Retail $17.11 $33.74 $14.78 $3.97 $69.60
Hotel $23.95 $35.62 $18.62 $7.93 $86.12
Service $17.11 $29.99 $14.78 $3.97 $65.85
Office $29.94 $56.24 $53.21 $33.71 $173.09
Industrial $14.97 $29.99 $23.65 $15.86 $84.47
Institutional $25.66 $54.36 $42.86 $28.75 $151.64
Source: DRA
Table ES-5
Examples of Total Non-Residential Per Square Foot Nexus Fees in Other Jurisdictions
2016-2019
Office Hotel Retail R&D Industrial
San Diego $2.12 $1.28 $1.28 $0.80 N/A
San Francisco $24.03 $17.99 $22.42 $16.01 N/A
Sacramento $1.84 $1.74 $1.47 $1.56 $0.50-$1.15
Oakland $4.00 N/A N/A N/A $4.00
Berkeley $4.50 $4.50 $4.50 $4.50 $2.25
Petaluma $2.84 N/A $4.91 N/A $2.93
Source: DRA
1 The six cities surveyed were Davis, Monterey, Santa Barbara, Santa Cruz, Ventura and
Petaluma.
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Recommendations
The following summarizes DRA’s recommendations for the City’s Program based on
the nexus study. Recommended changes to the City’s program are further detailed
and supported in Section 7 of this report.
1. IHO Set-Asides1
Based on the survey of comparable cities and analysis of San Luis Obispo’s
economic/market data DRA recommends the following:
Rental: 5% of units at 50% AMI (very low income) plus 10% of units at 80%
AMI (low income)
Owner: 5% of units at 80% AMI (low income) plus 10% of units at 120%
AMI (moderate income)
2. Affordable Housing Standards2
DRA recommends the City maintain its current definitions of affordable
housing expense in terms of the percent of AMI used to calculate affordable
rents and sales prices, but revise to adjust for various components of
affordable housing expense to ultimately calculate affordable sales prices.
DRA’s recommended Affordable Housing Standards for renters and owners
are as follows:
Affordable Rents:
30% AMI (extremely low income): shall not exceed 30% of 30% of AMI for
the number of persons expected to reside in the unit, divided by 12, and
adjusted for household/unit size and utility cost.
1 See Section 7.1
2 See Section 7.2
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50% AMI (very low income): shall not exceed 30% of 50% of AMI for the
number of persons expected to reside in the unit, divided by 12, and adjusted
for household/unit size and utility cost.
80% AMI (low income): shall not exceed 30% of 60% of AMI for the number
of persons expected to reside in the unit, divided by 12, and adjusted for
household/unit size and utility cost.
120% AMI (moderate income): shall not exceed 30% of 120% of AMI for
the number of persons expected to reside in the unit, divided by 12, and
adjusted for household/unit size and utility cost.
DRA recommends that the City use utility costs based on HUD utility
allowances published annually by the Housing Authority of the City of San
Luis Obispo (HASLO).
Affordable Sales Prices:
80% AMI (low income): 30% of 70% of AMI for PITI1 plus HOA dues
120% AMI (moderate income): 35% of 100% of AMI for PITI plus HOA
dues
3. Geographical Variation2
DRA recommends discontinuing the City’s IHO differential requirements
between City boundaries and Expansion Area. We consider this a best
practice used in 85% of California jurisdictions surveyed in 2017 in the
absence of compelling reasons for varying the requirements, which we do
not find in the City.
4. Project Size and Density Adjustments3
DRA recommends eliminating the project size and project density
adjustments currently contained in Table 2A of the Article 8: Housing-
Related Regulations. DRA recommends a minimum inclusionary
1 PITI = mortgage principal and interest, property taxes and property insurance.
2 See Section 7.3
3 See Section 7.4
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requirement of one unit for projects of five or more units not otherwise
exempt from the Program.
5. Residential In Lieu Fees and Annual Adjustments1
DRA recommends applying in lieu fees on a per square foot basis at the
estimated economic equivalent of providing on-site units, as derived from
the recommended set-aside requirements and gap analysis. The resulting
residential in lieu fees for renters and owners are summarized in Table ES-6.
Table ES-6
Recommended Residential In Lieu Fees
City of San Luis Obispo
Owner
Renter SFD Townhome
Very Low Income -- -- $19
Low Income $18 $16 $36
Moderate Income $31 $24 --
Total In Lieu Fee $49 $40 $55
The goal for in lieu fee annual adjustments is for them to be easily updated
administratively, without a lot of data analysis by staff. DRA recommends
that in lieu fees be updated annually based on the percentage difference
between the trailing three-year average annual change in median household
income for San Luis Obispo County and the All Transactions House Price
Index for San Luis Obispo-Paso Robles MSA published by the U.S. Federal
Housing Finance Agency.
6. Methods of Securing Residential IHO Requirements2
The City currently implements its IHO requirements through deeds of trust
for owner housing and regulatory agreements for rental housing. DRA
recommends that the City continue with these practices, which comport with
industry best practices.
1 See Section 7.5
2 See Section 7.6
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7. Effective Date of Ordinance1
DRA recommends that projects with planning applications that have been
deemed complete be exempt from any material changes to the IHO and
nexus fee programs. This will prevent changes to the ordinance from
affecting the financial feasibility of developments that are already far along
in their planning and financing process and unable to readily adapt to
additional regulatory requirements.
8. Non-Residential Nexus Fees2
Based on the non-residential nexus fees adopted in other California
communities, DRA recommends that the San Luis Obispo consider fees in
the range for $1 to $4 for industrial uses and $2 to $5 per square foot for
other non-residential uses. For ease of implementation, DRA recommends
establishing one rate for industrial uses and a single rate for all other non-
residential uses.
1. Background and Introduction
The City retained DRA to prepare a nexus study to analyze the rational nexus
between market-rate residential and non-residential development and the need for
affordable housing in the City. To the extent that new market-rate residential and
non-residential development in the City increases demand for housing and
exacerbates the City’s shortage of affordable housing, the City has a strong public
interest in, and a legal basis for, causing new affordable housing to be developed to
meet this additional demand.
1.1 Target Income Levels
The nexus analysis uses State income limits for San Luis Obispo County. DRA
estimated the maximum justifiable affordable housing nexus fee for the following
income categories:
1 See Section 7.7
2 See Section 7.8
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• Households with incomes up to 30 percent of AMI, or approximately $26,950
for a four-person household in San Luis Obispo County;
• Households with incomes between 31 percent and 50 percent of AMI, or
between $26,950 and $44,950 for a four-person household in San Luis
Obispo County;
• Households with incomes between 51 percent and 80 percent of AMI, or
between $44,950 and $71,900 for a four-person household; and
• Households with incomes between 81 percent and 120 percent of AMI, or
between $71,900 and $105,000 for a four-person household.
All of these income limits are based on the 2019 State income limits for San Luis
Obispo County, adjusted for household size. The 2019 State AMI for the County is
$87,500 for a four person household.
2. The Nexus Rationale
This section describes and substantiates the relationship between new residential
and non-residential development and the need for affordable housing, as quantified
using DRA’s nexus methodology developed using the standards established through
case law. This relationship has been well documented and nexus fees have been
successfully upheld against legal challenge where the fees met standards set by case
law.
Fees on development in California are subject to two overlapping sets of legal
requirements: constitutional requirements of nexus and "rough proportionality"
under the U. S. Supreme Court cases of Nollan v. California Coastal Commission
(1987) 483 U. S. 825 and Dolan v. City of Tigard (1994) 512 U. S. 374; and
California's statutory "reasonable relationship" requirements under California
Government Code sections 66000-66010. Although legally distinct, these two
standards are substantively similar and in practice a development fee that satisfies
one will almost certainly satisfy both. The California Supreme Court in Ehrlich v. City
of Culver City (1996) 12 Cal. 4th 854, 867 concluded that the two standards "for all
practical purposes, have merged."
The legal requirement is that a local government charging a fee make some
affirmative showing that: (1) those who must pay the fee are contributing to the
problem which the fee will address; and (2) the amount of the fee is justified by the
magnitude of the fee-payer's contribution to the problem. In designing a fee on new
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residential or non-residential development to assist the provision of affordable
housing, there is now likely to be little dispute that such development, by increasing
employment, also increases the demand for housing for the added employees. In
addition, it is well established that in most communities, market-rate housing
development, with no public assistance, will not provide housing affordable for all
of the additional lower-earning employees. The main legal concern is the amount of
responsibility for providing housing that is assigned to new development, and thus
the appropriate fee level.
More recent case law continues to uphold nexus fees, as long as the relationship
between proposed projects and the burdens imposed on developers for approval is
carefully considered. In Koontz v. St. Johns River Water Management District
(2013) 570 U.S. 595 (“Koontz”), the U.S. Supreme Court held that the requirements
of Nollan and Dolan for essential nexus and rough proportionality apply even when
a jurisdiction denies a permit for development, and emphasized the need for
permitting agencies to justify impact fees or fees in lieu attached to permit approval.
2.1 The Relationship Between Job Growth and Population Growth
The basis of the nexus fee concept is growth in lower to moderate income
households. New population growth in most U.S. regions occurs in response to job
growth. Many factors underlie the reasons for growth in employment in a given
region. These factors are complex, interrelated, and often associated with forces at
the national or even international level. However, most people coming to the region
would not come if they could not expect to find a job. People born in the local area
would not stay without jobs.
In the short-term, economic cycles and other factors can result in population growth
without jobs to support the growth. If an economic region in the U.S. does not
maintain job growth in the long term, however, there is an out-migration to regions
where job growth is occurring. Many cities in the Midwest during the 1970s and
1980s experienced such outmigration.
2.2 The Relationship Between Construction and Job Growth
Job growth does not occur in most industry sectors without buildings to house new
workers. Therefore, new buildings are constructed to accommodate the workers
associated with job growth.
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Any new building in the City of San Luis Obispo may be occupied partly or wholly
by employees relocating from elsewhere in the City or the region. Buildings are often
leased entirely to firms relocating from other buildings in the same jurisdiction.
However, when a firm relocates to a new building from elsewhere in the region, they
vacate building space somewhere else, which in turn is filled by new firms and
employees. Somewhere in the chain new jobs are created in the region. The net
effect is that new buildings accommodate new employees, although not necessarily
inside of the new buildings themselves.
Just as new non-residential buildings make room for new firms and their employees
relocating to the area, new residential construction makes room for new population
and households moving to the area. Even if the household moving into a new unit
may be relocating from the same jurisdiction, the household vacates an existing unit
that, in turn, is filled with another household. Again, somewhere in the chain new
population and households are added to the region.
New market-rate housing development accommodates growth in population and
households. The arrival of new population creates demand for additional jobs in
retail outlets and services that follow housing growth. A portion of the income of the
residents in new market-rate housing units will be spent to purchase a range of goods
and services, such as purchases at local supermarkets and restaurants or services at
local dry cleaners. These purchases in the local economy in turn generate
employment at a range of different compensation levels.
New housing affordable to lower income households is not added to the supply in
sufficient quantity to meet the needs of new employee households associated with
new commercial and residential buildings. This is because the cost to build new
housing, or to acquire and rehabilitate existing housing, is more than the rents or
home prices that lower income households can afford to pay. Retail and service
sectors, in particular, include a high proportion of low paying jobs.
DRA’s nexus analyses are designed to demonstrate the economic relationship
between residential and non-residential development and the need for affordable
housing in the City. The nexus methodology used by DRA quantifies the estimated
increase in lower income households associated with new residential and non-
residential development, and estimates the costs of providing housing affordable to
these new households. These costs are then translated into the maximum
supportable nexus fee that may be levied on residential and non-residential
development. DRA employs consistently conservative assumptions, so that the
resulting calculations of the maximum fees understate the maximum nexus
calculation for each land use type. This methodology is consistent with the standards
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of reasonable relationship established by Supreme Court case law and Government
Code sections 66000-66010.
3. Summary of Housing Market Trends
This section summarizes recent trends in the housing inventory, rents, and sales
prices in the City of San Luis Obispo, and serves as the basis for the market rent and
sales price assumptions used in the residential nexus analysis.
3.1 Affordable Rents and Home Prices
a. Affordable Housing Cost Definitions
Calculation of affordable rents and home prices requires defining affordable
housing expense for renters and owners. For the nexus calculations in this report,
DRA used the City’s existing affordable housing standards. Under these standards,
affordable housing expense for renters is defined as 30% of household income for
rent. For owners, affordable sales price limits are determined by multiplying the
annual income limit of the income group, adjusted by household size, by 3.0 for
extremely low, very low, low and moderate income households, and by 3.5 for
moderate income households, rounded to the nearest $25.
b. Occupancy Standards
Because income definitions for affordable housing assistance programs vary by
household size, calculation of affordable rents and sales prices require the definition
of occupancy standards (the number of persons per unit) for each unit size. For the
purposes of this analysis, affordable housing cost for renters is based on the
following occupancy standards:
Studio: One person
One Bedroom: Two persons
Two Bedroom: Three persons
Three Bedroom: Four to five persons (4.5 persons is used)
Four Bedroom: Six persons.
c. Affordable Rents and Sales Prices
Table 1 summarizes affordable monthly net rents by income level and unit bedroom
count, based on the City’s current Affordable Housing Standards.
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Table 2 shows affordable home prices by income level and unit bedroom count,
according to the City’s current Affordable Housing Standards.
Table 1
Affordable Net Rents by Percent of AMI and Unit Bedroom Count1
City of San Luis Obispo
2019
Unit Size Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom
Extremely Low
30% of AMI2 $459 $525 $591 $683 $761
Very Low
50% of AMI3 $766 $875 $984 $1,138 $1,296
Low
80% of AMI4 $919 $1,050 $1,181 $1,365 $1,523
Moderate
120% of AMI5 $1,838 $2,100 $2,363 $2,730 $3,045
1From City of San Luis Obispo 2019 Affordable Housing Standards.
2Calculated at 30% of 30% AMI, adjusted by household size.
3Calculated at 30% of 50% AMI, adjusted by household size.
4Calculated at 30% of 60% AMI, adjusted by household size.
5Calculated at 25% of 100% AMI, adjusted by household size.
Sources: City of San Luis Obispo; DRA.
Table 2
Affordable Home Prices by Percent of AMI and Unit Bedroom Count1
City of San Luis Obispo
2019
Unit Size Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom
Extremely Low
30% of AMI $56,700 $64,800 $72,900 $85,675 $103,761
Very Low
50% of AMI $94,500 $108,000 $121,550 $140,250 $156,400
Low
80% of AMI $151,050 $172,650 $194,250 $224,400 $250,350
Moderate
120% of AMI $257,250 $294,000 $330,750 $382,200 $426,300
1Affordable sales price limits are determined by multiplying the annual income limit of the income
group, adjusted by household size, by 3.0 for extremely low, very low, and low income households,
and by 3.5 for moderate income households, rounded to the nearest $25.
Source: HUD; San Luis Obispo County; DRA.
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3.2 Housing Inventory
Table 3 shows data from the California Department of Finance on the number of
housing units by type of unit in the City of San Luis Obispo from 2010 to 2019, as
well as the City’s household population and average household size. The City added
a total of 850 housing units between January 2010 and January 2019, including 388
units in five plus unit buildings and 341 single-family detached units. Average
household size fluctuated up and down slightly and is currently 2.27 persons per
household.
Table 3
Housing Units by Type
City of San Luis Obispo
2010 to 20191
2010 2015 2016 2017 2018 2019
Single-Family Detached 9,541 9,676 9,693 9,763 9,821 9,882
Single-Family Attached 1,379 1,381 1,383 1,387 1,391 1,403
Two to Four Unit Buildings 2,627 2,662 2,678 2,695 2,717 2,723
Five Plus Unit Buildings 5,524 5,685 5,714 5,812 5,861 5,912
Mobile Homes 1,482 1,483 1,483 1,483 1,483 1,483
Total Units 20,553 20,887 20,951 21,140 21,273 21,403
Persons Per Household 2.29 2.31 2.30 2.30 2.29 2.27
Household Population2 43,937 45,149 45,181 45,523 45,559 45,495
1As of January first of each year.
2Excludes persons in group quarters (numbering 1,307 in 2019, for a total population of 46,802).
Sources: California Department of Finance; DRA.
3.3 Rental Housing Market Conditions
a. Distribution of Market Rents
Table 4 summarizes 2017 ACS data (the most recent available) on the distribution of
rental housing units in the City of San Luis Obispo by the amount of rent paid, and
estimates the income categories to which those units are affordable, based on
affordable rents for two-bedroom units, calculated using San Luis Obispo County
AMI from Table 2. Based on the countywide definition of affordability,
approximately 80% of housing units are affordable to low income households.
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Table 4
Distribution of Rental Housing Units by Rent Paid
City of San Luis Obispo
2017
Monthly Rent
Category
Affordable to:
Number of
Units
Percent of
Units
Cumulative
Units
Cumulative
Percent
Less than $500 Extremely Low1 601 5.3% 601 5.3%
$500 to $749 Very Low 745 6.6% 1,346 11.9%
$750 to $999 Very Low 1,954 17.3% 3,300 29.1%
$1,000 to $1,499 Very Low/Low 3,713 32.8% 7,013 61.9%
$1,500 to 1,999 VL/Low/Mod 2,265 20.0% 9,278 81.9%
$2,000 to $2,499 Mod/Above Mod 1,290 11.4% 10,568 93.3%
$2,500 to $2,999 Above Mod 328 2.9% 10,896 96.2%
$3,000 or More Above Mod 420 3.8% 11,325 100.0%
Total 11,325 100%
1For studio and one-bedroom units.
Sources: American Community Survey, five-year data, 2017. This is the most recent source
available that tabulates the number of housing units by rent.
b. Apartment Asking Rents
Table 5 shows the trend in average advertised asking rents by unit bedroom count
in the City during the 2012 through 2019 period, which may include deed-restricted
affordable rental units. The average rent increased by nearly 85% from 2012 to 2019,
from $1,112 to $2,048 per month. Table 6 shows the annual compound growth rate
in apartment rents. The average rent increased at a rate 9% per year over the last
seven years.
Table 5
Average Asking Rents
City of San Luis Obispo
2012 to 2019
Number of
Bedrooms in
Unit 2012 2015 2016 2017 2018
2019
Jan-Apr
One Bedroom $892 $1,113 $1,177 $1,251 $1,376 $1,445
Two Bedroom $1,192 $1,335 $1,778 $1,354 $1,407 $2,094
All Units $1,112 $1,343 $1,502 $1,259 $1,277 $2,048
Annual averages of monthly rents (except for 2019 which is average of January through April).
Sources: Rentcafe.com; DRA.
Table 6
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Annual Increase in Average Asking Rents1
City of San Luis Obispo
2012 to 2019
2012 to 2016 2016 to 2019 2012 to 2019
One Bedroom 7% 7% 7%
Two Bedroom 11% 6% 8%
All Units 8% 11% 9%
1Annual compound growth rate.
Sourced: Rentcafe.com; DRA.
c. Comparison of Market and Affordable Rents
Table 7 compares affordable rents at different income levels and unit bedroom
counts with average market rents in the City of San Luis Obispo, and with HUD Fair
Market Rents (FMRs) for San Luis Obispo County. Affordable one-bedroom and two-
bedroom rents for moderate income households at 50% of AMI are well below
average market rents for these unit sizes in the City, and low income 60% AMI rents
are below market as well. For a two-bedroom unit, the moderate income 100% AMI
rent is also below market, while for a one-bedroom unit the 100% AMI rent is equal
to the market rent.
HUD FMRs for San Luis Obispo County are substantially below average asking rents
for one- and two-bedroom units in the City of San Luis Obispo.
Table 7
Comparison of Average Market and Affordable Rents
City of San Luis Obispo
2019
Unit Size
Affordable Rents HUD 2019
FMR
San Luis
Obispo Co.2
City of San Luis
Obispo Ave.
Market Apt.
Rent
Very Low
Income
50% AMI
Low Income
60%AMI1
Moderate Income
100%
AMI
110%
AMI
Studio $766 $919 $1,276 $1,684 $1,059 N/A
1 Bedroom $875 $1,050 $1,458 $1,925 $1,196 $1,445
2 Bedroom $984 $1,181 $1,641 $2,166 $1,542 $2,094
3 Bedroom $1,138 $1,365 $1,896 $2,503 $2,230 N/A
N/A = Not available (too few units available).
1These rents equal City’s 2019 Affordable Housing Standards for Low Income (80% AMI).
2From HUD FY 2019 Fair Market Rent Documentation System for the San Luis Obispo-Paso Robles-
Arroyo Grande MSA.
Sources: HUD; San Luis Obispo County; Rentcafe.com; DRA.
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3.4 For -Sale Housing Market Conditions
a. Market Home Price Trends
Table 8 shows trends in median home values in the City and neighboring
communities from August 2010 to August 2019. Median home values have
increased dramatically from the near-bottom prices of the Great Recession in 2010
to current prices in 2019. The estimated current median home value in the City is
$728,100, which exceeds the 2010 median home value of $466,100 by 56%. Home
prices have increased at an average rate of 5% per year since 2010.
Table 8
Trends in Median Home Values
City of San Luis Obispo
August 2010 to August 2019
Single-Family Condominium All Homes
Median Home Value1
2010 $502,100 $323,700 $466,100
2015 $666,100 $410,100 $614,700
2019 $774,800 $503,600 $728,100
Annual Compound
Growth Rate
2010-2015 5.8% 4.8% 5.7%
2015-2019 3.9% 5.3% 4.3%
2010-2019 4.9% 5.0% 5.1%
1Based on Zillow home value index. No other data sources on median home prices in the City were
identified.
Sources: Zillow; DRA.
b. Single-Family Home and Condominium Sales Prices
Table 9 summarizes sales prices for 120 single-family homes in the City of San Luis
Obispo sold between June, 2019 and November, 2019. The median home sales
price for a three-bedroom single-family home in the City was approximately
$720,000. Table 10 shows the prices for 46 condominium sales over the same time
period. The median sales price for a two-bedroom condo was $465,000.
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Table 9
Summary of Single-Family Home Sales Prices by Unit Bedroom Count
City of San Luis Obispo
July 2019 to October 2019
2 Bedroom 3 Bedroom 4 Bedroom 5-6 Bedroom
Number of Sales 23 61 28 8
Ave. Price $719, 000 $748,000 $1,000,000 $894,000
Median Price $715,000 $719,000 $950,000 $880,000
Low Price $256,000 $399,000 $249,000 $133,000
High Price $1,153,000 $1,200,000 $2,349,000 $2,675,000
Ave. Price/SF $552 $483 $418 $332
Median Price /SF $483 $469 $424 $321
Low Price/SF $277 $222 $177 $287
High Price/SF $1,000 $744 $543 $403
Note: Units with 5 or more bedrooms comprise only 3% of total housing units in the City as of
2017 ACS data. These may be older units, affecting their price in comparison with smaller units.
Source: CoreLogic; DRA.
Table 10
Summary of Condominium Sales Prices by Unit Bedroom Count
City of San Luis Obispo
July 2019 to October 2019
1 Bedroom 2 Bedroom 3 Bedroom
Number of Sales 3 37 6
Ave. Price $304,667 $458,554 $584,167
Median Price $310,000 $465,000 $594,500
Low Price $270,000 $300,000 $502,000
High Price $334,000 $650,000 $690,000
Ave. Price/SF $415 $403 $332
Median Price /SF $442 $392 $337
Low Price/SF $360 $280 $276
High Price/SF $443 $531 $375
Source: CoreLogic; DRA.
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4. Residential Nexus Analysis
4.1 Impact Methodology and Use of the IMPLAN Model
The methodology used for the residential nexus analysis begins with the estimated
sales prices of a prototypical residential development and moves through a series of
linkages to the incomes of the households that purchased the units, the annual
expenditures of those households on goods and services, the jobs associated with
the delivery of these goods and services, the income of the workers performing those
jobs, the household income of those worker households, and finally to the
affordability level of the housing needed by those worker households.
The Appendix A tables referred to in the following sections are contained at the end
of the text.
The steps of the residential nexus analysis are generally as follows:
1. Define a prototypical residential development.
2. Estimate the household income distribution of the households purchasing or
renting these homes.
3. Estimate the consumer expenditures of those households.
4. Estimate the number of new full-time employees required to provide the goods
and services purchased by these households.
5. Estimate the number of new households associated with this employment
growth.
6. Estimate the income distribution of these new employee households.
7. Estimate the number of new households requiring affordable housing.
8. Estimate the housing affordability gap for these affordable housing units.
9. Calculate the maximum supportable residential nexus fee.
For owner housing, DRA estimated the household income distribution of households
purchasing the new homes based on the estimated minimum income necessary to
afford the mortgage principal and interest, property taxes and property insurance
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required to purchase the home. For renters, tenant household income is calculated
from typical income to rent standards used by apartment owners. The consumer
expenditures of these households and the jobs generated by these expenditures are
estimated using the IMPLAN model, a model widely used for the past 25 years to
quantify employment impacts from personal income. Based on the employment
generation by industry from the IMPLAN model, DRA used its nexus model to
quantify the income of worker households by affordability level.
4.2 The IMPLAN Model
The IMPLAN model is an economic analysis software package now commercially
available through the Minnesota IMPLAN Group (MIG). IMPLAN was originally
developed by the U.S. Forest Service, the Federal Emergency Management Agency,
and the U.S. Department of the Interior Bureau of Land Management. It has been in
use since 1979 and refined over time. IMPLAN has become one of the industry
standards widely used across the United States to predict economic impacts in a
broad range of applications from major construction projects to natural resource
programs. IMPLAN’s clients include more than 20 federal government agencies, 60
state agencies across the country, and academic, local government, nonprofit and
private sector clients numbering in the hundreds. IMPLAN is also the industry
standard in California for use in local residential nexus impact fee analyses.
The IMPLAN model projects the number of employees needed to produce a given
amount of goods and services, based on actual 2017 economic data for San Luis
Obispo County. More specifically, IMPLAN is based on an input-output accounting
of commodity flows within an economy from producers to intermediate and final
consumers. The model establishes a matrix of supply chain relationships between
industries and also between households and the producers of household goods and
services. The model tracks changes in purchases for final consumption through the
supply chain. Industries that produce goods and services for final consumption must
purchase inputs from other producers that, in turn, purchase goods and services. The
model tracks these relationships through the economy to the point where leakages
from the region stop the cycle.
IMPLAN’s industry sectoring scheme is tied to the Bureau of Economic Analysis
(BEA) Input-Output Study, which uses a 440-sector scheme. This scheme
approximates 6-digit North American Industrial Classification System (NAICS) for
manufacturing, and is more highly aggregated for service sectors. IMPLAN data sets
are available for each county and state, so the model can be tailored to the specific
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economic conditions of the region being analyzed. This analysis uses the most
current 2017 data set for San Luis Obispo County.
Economic impacts estimated using the IMPLAN model are divided into three
categories:
Direct impacts result from the household spending included in the analysis. A
relevant example is restaurant employment created when households in new
residential buildings spend money dining out. Employment at the restaurant would
be considered a direct impact.
Indirect impacts result from supplier purchases made by the business operations of
the companies included in the analysis. With the restaurant example, indirect
impacts would include employment at food wholesalers, kitchen suppliers, and
producers of agricultural products.
Induced impacts result from increased demand for local-serving retail and services
by the new employees. Again, using the restaurant example, induced impacts would
include employment generated when employees of the restaurant, food wholesaler
and kitchen suppliers spend their earnings in the local economy.
DRA used the Household Income Change Activity feature of the IMPLAN model,
considered by IMPLAN staff to be the best option for determining the jobs impact
from household spending.
4.3 Disposable Income of New Households
This analysis uses estimated sales prices and rents for the four housing prototypes to
estimate the income of the new households moving into these units. Sales prices and
apartment rents for the prototypes were estimated based on a review of recent home
sales in the City of San Luis Obispo, as well as data on current rents for apartment
properties in the City. Data on single-family home sales and condominium home
sales in the City are summarized in Table A-17 and Table A-18, respectively, in
Appendix A.
To estimate the household incomes of the buyers of new for-sale homes, the analysis
assumes average incomes approximately equal to the minimum qualifying income
criteria for a new-home loan. This calculation assumes that the new buyers pay a 20
percent down payment and secure a mortgage equal to 80 percent of the home’s
sale price. Monthly principal and interest payments on the mortgage are calculated
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assuming a 30-year fixed rate mortgage at 5.0 percent interest. Qualifying household
income is estimated assuming households pay 35 percent of gross household income
for principal, income, taxes and insurance (PITI), a typical standard used by
mortgage lenders.
For renters, the income distribution of tenants in the new apartments is estimated
assuming tenants on average spend 33 percent of their household income for rent.
The IMPLAN Household Income Change model uses the increase in disposable
household income in the City from the new buyers and renters as the primary upfront
input. To arrive at disposable income, gross income for residents of prototypical units
must be adjusted downward to account for Federal and State income taxes, Social
Security and Medicare (FICA) taxes, and personal savings. Other taxes, including
sales tax, gas tax and property tax, are handled internally within the model. Housing
expenses are not deducted from disposable income as they are also handled
internally with the IMPLAN model. Based on a review of data from the Tax Policy
Center (a joint venture of the Brookings Institution and the Urban Institute), and the
California Franchise Tax Board, disposable income for households in the income
levels projected for the buyers and renters of the prototypical market-rate housing
units is estimated at 75 percent of gross household income.1
Table A-2 shows the estimated average household income, projected total
household income, and projected total disposable household income of new
homebuyers for each of the owner single-family and townhome prototypes. Table
A-3 shows the disposable household income projections for new renters for the
apartment prototype.
4.4 Projected Employment Generation
The IMPLAN model has been applied to link household consumption expenditures
to job growth occurring in the City. The IMPLAN model distributes spending among
various types of goods and services, and therefore industry sectors, based on data
from the Consumer Expenditure Survey and the Bureau of Economic Analysis
Benchmark Input-Output study to estimate direct, indirect, and induced employment
generated. The IMPLAN model also projects total industry output and payroll
associated with the direct, indirect and induced impacts. For the residential nexus
analysis, the projected impacts are induced by the spending of new resident
1 “Household Income and Disposable Income by State” retrieved from taxpolicycenter.org.
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households. The IMPLAN outputs are multiplied by Full-Time Equivalent (FTE)
conversion factors to convert the projections into estimated full-time employment.
The projected employment impacts from each residential prototype are summarized
in Tables A-4 through Table A-6, respectively. These tables show the breakdown of
the new jobs by major industry category created as a result of the development of
each prototype.
4.5 Projected Household Growth
The next step in this analysis is to translate the number of new employees into the
number of employee households in the City. The 2017 Five-Year ACS indicates that
the City of San Luis Obispo had an average of 1.82 workers per worker household.
Therefore, DRA divided the number of new employees by 1.82 to generate the
number of new households.
In this step we also adjust for potential jobs that are taken by existing residents in
San Luis Obispo County that are unemployed or underemployed. According to the
State of California Employment Development Department, as of October 2019 the
unemployment rate in San Luis Obispo County was 3.1%. Since employment is
currently at a historical low, we conservatively reduce the employment estimates by
a 5% labor force adjustment factor.
The number of employee households created as a result of the development of each
prototype are summarized in Tables A-7 through Table A-9, respectively.
4.6 Projected Low and Moderate Income Households
This step estimates the number of new employee households that will require
affordable housing. The IMPLAN model provides information on payroll per
employee. To estimate household incomes, DRA multiplied each payroll per
employee figure by 1.82, the citywide average number of workers per worker
household. This approach assumes that all workers in a household earn similar
wages.
The average household size in the City of San Luis Obispo was 2.27 persons
according to California Department of Finance estimates for January, 2019.
Therefore, we adjust income limits by a household size of 2.25 persons resulting in
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limits of $22,200 at 30% AMI, $36,950 at 50% AMI, $59,150 at 80% AMI, and
$86,350 at 120% AMI.
The percentage of employee households in each industry category expected to fall
into each of the four income categories (less than 30% AMI, 30% to 50% AMI, 50%
to 80% AMI, and 80% to 120% AMI) was estimated based on Occupational
Employment and Wage Data by occupational grouping for San Luis Obispo County
from the California Occupational Employment Statistics (OES) Survey for First
Quarter, 2019. Table B-2 summarizes this wage data by two-digit Standard
Occupational Classification (SOC) code, including mean, 25th percentile, median,
and 75th percentile wages for each occupational category.
Tables A-7 through A-9 detail the calculation of extremely low, very low, low and
moderate income households, respectively, that would be expected to move to the
City as a result of the development of each of the housing prototypes.
5. Non-Residential Nexus Analysis
5.1 Overview of Non-Residential Nexus Methodology
The numerical nexus analysis in this report identifies the number of households at
extremely low, very low, low and moderate income levels associated with the
employees that work in a building of a given size and land use type in the City, and
calculates the development impact fee required to make housing affordable to those
households.
DRA examined the development of six non-residential land use prototypes that are
expected to be built in the City in the near future: retail, hotel, service, office,
industrial and institutional.
The nexus analysis employs a tested nexus and gap methodology, described below,
that has proven acceptable to the courts1. The economic analysis uses a conservative
approach to understate the maximum fee amount. Therefore, the housing impacts
are likely even greater than indicated in the analysis.
The nexus economic analysis methodology employs the following steps:
1 Such as Commercial Builders of Northern California v. City of Sacramento (1991) 941 F2d
872.
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1. Estimate total new employees;
2. Estimate new employees living in the City;
3. Adjust for potential future increase in labor force participation;
4. Estimate the number of new households represented by the number of new
employees;
5. Distribute households by industry groupings for each land use; and
6. Estimate the number of employee households meeting extremely low, very low,
low and moderate income limits, adjusted for household size, based on
estimated wages by occupation and industry.
The result of these steps is the estimated number of households by land use living in
the City and qualifying as extremely low, very low, low and moderate income based
on development in the City. DRA used the results of the housing affordability gap
analysis to calculate the development impact fee required to make housing
affordable to the extremely low, very low, low and moderate income households
who will need to find housing in the City in connection with new non-residential
development in the City.
The nexus analysis requires a number of assumptions. DRA consistently employs
conservative assumptions that serve to understate the nexus calculation. We expect
that the cumulative effect of these assumptions understates the maximum nexus fee
calculation for each building type.
The residential nexus fee calculation estimates affordable housing needs generated
by employees meeting the goods and services needs generated by new market rate
residential development in the City. This is particularly the case for commercial/retail
space. To address the overlap between employees created by new residential
development and those created by new non-residential development, DRA 1) adjusts
the retail employment generation downward by an estimated overlap factor and 2)
recommends that the City establish residential and non-residential nexus fees that
are below the maximum level.
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5.2 Non-Residential Nexus Methodology and Assumptions
Each of the steps in the nexus analysis is described below, along with corresponding
assumptions. The detailed assumptions and calculations for the non-residential
nexus analysis are included in Appendix B.
Estimate Total New Employees in Prototype Buildings
The first step estimates the total number of direct employees who will work at or in
the building type being analyzed. This step implicitly assumes that all employees are
new employees to the City. When firms and their employees relocate from other
buildings in the City, they will have vacated spaces that will likely be filled by other
firms and employees. A subsequent step in this analysis adjusts for existing
unemployed City residents who may be hired in the building.
The estimate of the number of employees that will be working in each prototype
building is based on an employment density factor for each land use (i.e. number of
net square feet per employee). The net square feet of building area is divided by the
employment density factor to calculate employment.
The employment density factors used in this analysis, based on DRA experience and
a review of recent fiscal and environmental impact studies, are as follows:
Retail/Service: 350 net square feet per employee for retail and 400 net square feet
for service. These assumptions accommodate a mix of retail and restaurant space
and a range of personal services. Restaurant space typically has a higher employment
density, while retail space ranges widely depending on the type of retail, with
furniture stores, for example, representing the lower end. The density range within
this category is wide, with some types of retail as much as five times as dense as
other types.
Hotel: 1,000 square feet per employee, representing a lower level of service than
more employment intensive higher service urban hotels.
Office/Institutional: 300 square feet per employee. This represents an average of a
range that includes traditional office uses, high tech activities, research &
development (R&D) space, and medical offices.
Industrial: 750 square feet per employee. This density covers flex space, typically
leased to a mix of office, light manufacturing, R&D and storage uses. This designation
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may also be applied to auto related servicing and other activities of a semi-industrial
character.
Estimate Employees Living in the City
This step estimates the number of new employees associated with new employment
growth in the City that would live in the City.
The 2017 Five-Year ACS indicates that 61 percent of workers in the City aged 16
years and older lived in the City1. For the purposes of this analysis, we have assumed
that 61 percent of new City workers will reside in the City.
Adjust from Employees to Employee Households
The next step in the analysis converts the number of employees living in the City to
the number of employee households that will work at or in the building type being
analyzed. This step recognizes that there is, on average, more than one worker per
household, and thus the number of housing units in demand for new workers must
be reduced. The worker per worker household ratio also eliminates all non-working
households, including retired persons, students, and those non-working households
on public assistance.
Based on ACS Five-Year estimates for 2017, the City of San Luis Obispo had 24,213
employed residents and 13,332 households with one or more workers, for an
average of 1.82 workers per worker households. The total number of employed
residents includes part-time and full-time workers. This is a conservative assumption.
If only full-time workers were included, the ratio of workers per household would
be smaller, leading to a larger estimate of new households created. In addition,
wages by occupation and industry assume full-time employment. Household
incomes will be lower for households with part-time workers, generating a larger
impact than projected in this study.
Distribute Employee Households by Occupation
This step distributes households by occupational groupings for each land use. This
step is necessary to estimate new workers’ incomes. DRA used data from the First
Quarter 2019 U.S. Bureau of Labor Statistics, National Industry-Specific
Occupational Employment and Wage Estimates to calculate the percentage
1 Based 4,131 workers in the City of San Luis Obispo and 1,080 workers who lived and
worked in San Luis Obispo
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distribution of employment by industry occupational category for each non-
residential land use category. These distributions are shown in Tables B-1.
Estimate Wages by Occupation
In this step, occupation is translated to income based on Occupational Employment
and Wage Data by occupational grouping for San Luis Obispo County from the
Occupational Employment Statistics (OES) Survey, First Quarter 2019. Data on
mean, median, 25th percentile, and 75th percentile hourly wages by occupation were
used to estimate the percentage of employees earning salaries in the extremely low,
very low, low and moderate income categories based on the 2019 HUD income
limits for San Luis Obispo County adjusted for an average household size of 2.25
persons. The wage data and the estimated percentages of each occupational
category falling into the extremely low, very low, low and moderate income
categories are summarized in Table B-2. The projected number of new employee
households and the distribution of these employee households by occupation are
shown in Table B-3.
Estimate Extremely Low, Very Low, Low and Moderate Income Households
The estimated percentage and number of households earning salaries under 30
percent AMI, between 31 percent and 50 percent AMI, between 51 percent and 80
percent AMI, and between 81 percent and 120 percent AMI are shown in Tables B-
4 through B-7, respectively. These estimates were derived using 2019 income limits
adjusted for an average household size of 2.25 persons.
Individual employee income data was used to calculate the number of households
that fall into these income categories by assuming that multiple earner households
are, on average, formed of individuals with incomes within the same income
category.
6. Affordability Gap Analysis
The affordability gap analysis compares the cost of housing development in the City
to the amount extremely low, very low, low and moderate income households can
afford to pay for housing. The affordability gap represents the capital subsidy
required to develop housing affordable to families at target income levels. The
methodology, key assumptions and findings of the affordability gap analysis are
summarized below.
The resulting affordability gaps are used to estimate the maximum residential and
non-residential nexus fees required to mitigate new demand generated by each
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building type for housing affordable to extremely low, very low, low and moderate
income households. Detailed calculations for the gap analysis are found in Appendix
A.
6.1 Methodology
The first step in the gap analysis establishes the amount a tenant or homebuyer can
afford to contribute to the cost of renting or owning a dwelling unit. This analysis
uses the income level and affordable housing cost definitions defined in prior
sections of this report.
The second step estimates the costs of constructing or preserving affordable housing
in the City. DRA calculated the affordability gap for two owner prototypes and one
renter prototype considered representative of recent and proposed new single-family
and multifamily development in the City. The prototypes used in this analysis are
detailed in Table A-1. Prototype #1 is a detached single-family infill product.
Prototype #2 is an attached townhome development. Prototype #3 consists of
stacked flat apartments. Affordability gaps are calculated for studio through three-
bedroom units for renters, and two-bedroom through four-bedroom units for owners,
depending upon the prototype.
The third step in the gap analysis establishes the housing expenses borne by the
tenants and owners. These costs can be categorized into operating costs, and
financing or mortgage obligations. Operating costs are the maintenance expenses of
the unit, including utilities, property maintenance, property taxes, management fees,
property insurance, replacement reserve, and insurance. For the rental prototype
used in this analysis, DRA assumed that the landlord pays all but certain tenant-paid
utilities as an annual operating cost of the unit paid from rental income.
Financing or mortgage obligations are the costs associated with the purchase or
development of the housing unit itself. These costs occur when all or a portion of
the development cost is financed. This cost is always an obligation of the landlord
or owner. Supportable financing is deducted from the total development cost, to
determine the capital subsidy required to develop the prototypical housing unit
affordable to an eligible family at each income level.
For the rental housing prototype used in this analysis, the gap analysis calculates the
difference between total development costs and the conventional mortgage
supportable by net operating income from restricted rents.
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The purpose of the gap analysis is to determine the fee amount that would be
required to develop housing affordable to the extremely low, very low, low and
moderate income households who will need to find housing in the City in
connection with new market-rate residential and non-residential development in the
City. Therefore, no other housing subsidies, or leverage, are assumed.
For the non-residential nexus analysis, justifiable nexus fees are calculated using the
affordability gap for the rental prototype, which is generally the most cost-effective
way of providing affordable housing to extremely low, very low, low and moderate
income households. For the residential nexus analysis, justifiable nexus fees are
calculated using the affordability gap for the rental prototype, but are also shown for
the construction of “like” housing (i.e. SFD for SFD and Townhome for Townhome).
6.2 Housing Development Costs
DRA estimated the costs to build the new rental housing and housing prototypes
based on DRA’s experience with housing development throughout California, as
well as a review of California Tax Credit Allocation 9% tax credit application
development budgets for projects in San Luis Obispo County over the past three
years.
Estimated development costs for the prototypes are shown in Table A-10. Land costs
were estimated based on a review of recent land sales in the City, shown in Table
A-19.
6.3 Calculation of Per Unit Subsidy Amounts
The per unit subsidy required to make new housing affordable to extremely low, very
low, low and moderate income residents was calculated by subtracting per unit
development costs from the per unit mortgage supportable from affordable rents.
Affordable sales price and rent calculations are shown in Tables A-11 and A-12,
respectively. The per unit subsidy calculations are shown in Tables A-13 through A-
15 for each of the housing prototypes.
7. Policy Recommendations
This section presents DRA’s policy recommendations for the residential IHO
program and the non-residential nexus fee program. Tables referred to in this section
are found at the end of the text.
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7.1 IHO Set-Asides
Based on the survey of comparable cities and analysis of local economic/market data
DRA recommends the City’s IHO requirements for residential uses be revised to the
following citywide:
Rental: 5% of units at 50% AMI plus 10% of units at 80% AMI
Owner: 5% of units at 80% AMI plus 10% of units at 120% AMI
Analysis of rental data for the City indicates that the average market rent for one-
bedroom units is affordable at 100% of AMI, while two-bedroom rents are affordable
to households at approximately 110% of AMI (see Table 7). The City’s current IHO
requirements include units at 120% of AMI, which is above market. DRA believes
the City’s IHO will better serve the City’s affordable housing needs and will minimize
market competition between market-rate units and IHO units if all units are restricted
below 80% AMI.
According to the City’s 2015 Housing Element, the City has approximately 2,032
cost-burdened extremely low and very low income households paying more than
30% of their gross income on rent, accounting for about 28% of all renter
households.1 Further, 24.9% of the City’s 2014 to 2019 Regional Housing Need
Allocation (RHNA) is for very low income households. Reducing a portion of the
IHO requirement to 50% of AMI will help meet these very low income housing
needs.
DRA does not recommend IHO requirements for owners below 80% of AMI. In
DRA’s experience, homeownership for very low income households (50% of AMI)
is a struggle even with an affordable home price, due to the maintenance and other
costs associated with long-term homeownership and their difficulty in qualifying for
a loan.
The survey of comparable cities, summarized in Table 11, indicates that a majority
of the selected cities have rental IHO requirements at 50% and 80% of AMI. Only
Santa Barbara and Monterey have affordability limits extending up to 120% of AMI.
For owners, the majority of the surveyed cities have IHO requirements at 80% and
120% of AMI, with Santa Barbara going up to 160% of AMI for single-family
dwellings. None of the cities have ownership requirements below 80% of AMI.
1 Source: 2015 Housing Element Table B-4. Includes 39% of 4,532 extremely low income
households and 15% of 1,764 very low income households.
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7.2 Affordable Housing Standards
DRA reviewed the City’s existing Affordable Housing Standards for renters and
owners. DRA recommends the City maintain its current definitions of affordable
housing expense in terms of the percent of AMI used to calculate affordable rents
and sales prices, but revise them in terms of the components of affordable housing
expense and the calculation of affordable sales prices. DRA’s recommended
standards are described below, using HUD utility allowances for renter utility costs,
as explained Affordable rent calculations using the recommended standards for one
to four bedroom units are shown in Table 12. Affordable home price calculations
using the recommended standards for one to four bedroom units are shown in Table
13.
Affordable Rents:
30% AMI (extremely low income): shall not exceed 30% of 30% of AMI for the
number of persons expected to reside in the unit, divided by 12, and adjusted for
household/unit size and utility cost.
50% AMI (very low income): shall not exceed 30% of 50% of AMI for the number
of persons expected to reside in the unit, divided by 12, and adjusted for
household/unit size and utility cost.
80% AMI (low income): shall not exceed 30% of 60% of AMI for the number of
persons expected to reside in the unit, divided by 12, and adjusted for household/unit
size and utility cost.
120% AMI (moderate income): shall not exceed 30% of 120% of AMI for the number
of persons expected to reside in the unit, divided by 12, and adjusted for
household/unit size and utility cost.
DRA recommends calculating affordable sales prices assuming an occupancy
standard of one person per bedroom plus one, per California Health and Safety Code
standards (for example, for a one-bedroom unit, the income limit for a two-person
household is used).
Under the City’s current Affordable Housing Standards for renters, affordable rent is
defined as 30% of gross income. DRA recommends this definition be revised to
include an appropriate utility allowance for the size of the unit and based on the
actual utilities paid by the tenant (electricity, gas, water, etc.) to comport with the
standard industry practice for affordable rental housing used in virtually all State,
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Federal and private leveraged financing sources. As revised, the standard would be
30% of gross income for rent plus utilities. The Housing Authority of the City of San
Luis Obispo (HASLO) publishes utility allowances by unit bedroom count annually
that can be used for this calculation.
Affordable Rent Calculation Example:
Two-person household at 50% of AMI (very low income)
Annual Income Limit $35,000
Monthly Income $2,917
Affordable Monthly Housing Cost @ 30% $875
Less Utility Allowance1 $73
Affordable Rent $802
Affordable Sales Prices:
80% AMI: 30% of 70% of AMI for PITI2 plus HOA dues
120% AMI: 35% of 100% of AMI for PITI plus HOA dues
Under the City’s current Affordable Housing Standards for owners, maximum
affordable sales prices are derived by multiplying the annual income limit of the
income group, adjusted by household size, by 3 for extremely low, very low, low,
and moderate income households and by 3.5 for moderate income households,
rounded to the nearest $25. DRA recommends revising these standards to better
match industry best practices.
Standard industry practice is to define owner affordable housing expense for low
income households at 30% of gross income for mortgage principal and interest,
property taxes, property insurance, and homeowner association (HOA) dues. In
DRA’s experience, this is the most common standard used for ownership affordable
housing programs in California, and is consistent with most available subsidy sources
for affordable ownership housing.
DRA recommends increasing affordable housing expense to 35% of gross income
for moderate income households, since higher income households can afford to pay
a greater share of their income on housing and still have sufficient income for other
1 Based on all electric utility allowance for a one-bedroom unit for South County from the
Housing Authority of the City of San Luis Obispo, effective 2/1/2019.
2 PITI = mortgage principal and interest, property taxes and property insurance.
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living expenses. This standard is consistent with former California Redevelopment
Law and private mortgage underwriting criteria.
DRA recommends calculating affordable sales prices assuming an occupancy
standard of one person per bedroom plus one, per California Health and Safety Code
standards (for example, for a three-bedroom unit, the income limit for a four-person
household is used).
Affordable Sales Price Calculation Example:
Four-person household at 100% of AMI (moderate income)
Annual Income Limit $87,500
Monthly Income $7,292
Affordable Monthly Housing Expense @35% $2,552
Less: HOA Expense $200
Less: Property Insurance $100
Less: Property Taxes1 $369
Affordable Monthly Mortgage Payment $1,883
Affordable Mortgage $350,768
Plus: 5% Downpayment2 $18,460
Affordable Home Price (Rounded) $369,200
7.3 Geographical Variation
DRA recommends that the IHO recommendations be applied citywide with no
differential requirements between City boundaries and Expansion Area. We consider
this a best practice in the absence of compelling reasons for varying the
requirements. A 2017 nationwide inclusionary housing survey by Lincoln Institute
of Land Policy found that 85% of the 140 California jurisdictions included in the
survey have uniform citywide requirements and only 6% have varying requirements
across the jurisdiction. The remaining 9% have requirements that apply only in
certain zones, neighborhoods or districts.
1 Property taxes estimated at 1.2% of approximate affordable home price.
2 At 5% of affordable home price.
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7.4 Project Size and Density Adjustments
DRA recommends applying the residential in lieu fee on a per square foot basis.
Applying the in lieu fee on a per square foot basis results in higher fees for larger,
generally more expensive, units and lower fees for smaller, generally less expensive
units.
Based on DRA’s experience and industry best practices, IHO requirements are
seldom adjusted by project size (number of units) and project density. Due to 1) the
complexity of applying the project size adjustment factors in Table 2A of the existing
ordinance (Article 8: Housing-Related Regulations), 2) the difficulty of substantiating
the link between the project size and density adjustment factors and the economic
impact of the IHO requirements as justification for the project size adjustment
factors, and 3) the potential for influencing developer’s choice of project size and
density because of the factors, DRA recommends eliminating Table 2A and the
project size and density adjustment factors. DRA recommends a minimum
inclusionary requirement of one unit for projects of five or more units not otherwise
exempt from the Program.
7.5 Residential In Lieu Fees and Annual Adjustments
DRA recommends applying in lieu fees on a per square foot basis at the estimated
economic equivalent of providing on-site units, as derived from the set-aside
requirements and gap analysis.
Table 14 summarizes estimated development costs for the prototypical single-family
detached, townhome and apartment developments used in the nexus and gap
analysis.
Table 15 calculates rental in lieu fees for the apartment prototype, based on the
difference between the cost of producing a typical rental unit and the per unit rental
mortgage supported by affordable rents for very low and low income households.
Applying the proposed rental IHO requirements of 5% very low income units and
10% low income units, assuming a typical two-bedroom unit, it also shows the
resulting in lieu fees per gross square foot. The resulting in lieu fee is $19 per square
foot for the very low income requirement and $36 per square foot for the low income
requirement, for a total rental in lieu fee of $55 per square foot.
Table 16 calculates owner in lieu fees for the single-family detached and townhome
prototypes based on the difference between the cost of producing a typical
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ownership unit and the per unit affordable sales prices for low and moderate income
households. Applying the proposed owner IHO requirements of 5% low income
units and 10% moderate income units, assuming a typical three-bedroom unit, it
also shows the resulting in lieu fees per gross square foot. For single-family homes,
the resulting in lieu fee is $18 per square foot for the low income requirement and
$31 per square foot for a moderate income requirement for a total owner in lieu fee
of $49 per square foot. For townhomes, the resulting in lieu fee is $16 per square
foot for the low income requirement and $24 per square foot for a moderate income
requirement for a total owner in lieu fee of $40 per square foot.
The goal for in lieu fee annual adjustments is for them to be easily updated
administratively, without a lot of data analysis by staff. DRA recommends that in lieu
fees be updated annually based on the percentage difference between the trailing
three-year average annual change in median household income for San Luis Obispo
County and the All Transactions House Price Index for San Luis Obispo-Paso Robles
MSA published by the U.S. Federal Housing Finance Agency1. This will help adjust
the in lieu fee upwards by the extent housing costs exceed (or lag) growth in income.
An example of the percentage changes in each index for the past three years is shows
as follows:
All Transactions House Price Index, San Luis Obispo-Paso Robles2 16.6%
Area Median Income, San Luis Obispo County, 2016 to 20193 13.5%
Annual Percent Adjustment to In Lieu Fees 3.1%
Since the House Price Index increased at a lower rate than the increase in the AMI
from January 2018 to January 2019, the result would be a reduction in the in lieu
fees based on the one-year trend. DRA recommends using a three-year average trend
to smooth out the changes and make the in lieu fee adjustments more predictable
for developers.
1 Source: https://fred.stlouisfed.org/series/ATNHPIUS42020Q
2 Calculated as the percent change from the 1/1/16 index of 288.9 and the 1/1/19 index of 336.83
3 Calculated as the percent change from 2016 AMI of $77,100 to 2019 AMI of $87,500. To
adjust fees in 2020 DRA recommends using change from 2019 to 2020 AMI, the latter which
is not yet available.
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7.6 Methods of Securing Residential IHO Requirements
The City’s implements its residential IHO requirements through deeds of trust for
owner housing and regulatory agreements for rental housing. DRA recommends that
the City continue with these practices, which comport with industry best practices.
7.7 Effective Date of Ordinance
DRA recommends that projects with planning applications that have been deemed
complete be exempt from any material changes to the IHO and nexus fee programs.
This will prevent changes to the ordinance from affecting the financial feasibility of
developments that are already far along in their planning and financing process and
unable to readily adapt to additional regulatory requirements.
7.8 Non-Residential Nexus Fees
The nexus analysis indicates that high nexus fees are justified for non-residential uses
in the range of $69 to $173 per square foot. However, the justifiable fees are much
higher than have been adopted in other jurisdictions throughout California. DRA
recommends that San Luis Obispo consider fees in the range for $1 to $4 for
industrial uses and $2 to $5 per square foot for other non-residential uses. For ease
of implementation, DRA recommends establishing one rate for industrial uses and a
single rate for all other non-residential uses. Generally, communities are interested
in encouraging industrial uses over, retail/commercial and charge lower fees or no
fees for industrial uses. In addition, higher fees tend to affect the financial feasibility
of industrial development more than commercial/residential because the rents and
sales prices are substantially lower.
Table 11
Inclusionary Housing Set-Aside and Threshold Size Provisions
Selected California Inclusionary Housing Programs
2019
City Year Adopted
Rental Owner Project
Size
Threshold
2019 Population
(2010-2019 %
Pop. Growth) % of Units % of AMI % of Units % of AMI
Davis
1987 5-19 Units: 15% plus
15%
80% AMI
50% AMI
SFD >5000 SF Lots: 25%
80%-120% AMI
w/ 100% AMI
Ave
5 units 69,761
(6.3%) SFD <5000 SF Lots: 15%
20+ Units: 25% plus
10% 80% AMI
50% AMI
SFA: 10%
Stacked Condos or Vertical
Mixed Use: 5%
Monterey 2003 20% 120% AMI 20% 120% AMI 6 units 28,448
(2.3%)
Petaluma 2018
(Orig. 1984)
7.5% plus
7.5%
50%
80%
7.5% plus
7.5%
80%
120%
5 units 62,427
(7.4%)
Santa Barbara1 2009 5-9 Units: 1 unit 120% AMI 10+ Units: 15% 120% AMI 5 units
(Rental)
2 units
(Owner)
93,532
(5.8%) 10+ Units: 10% 120% AMI Duplexes, Luxury Condos:
15%
130% AMI
SFD: 15% 160% AMI
Santa Cruz 2006 DT Dev. Area: 15% 80% AMI 2-4 units: 1 Unit 80% AMI 2 units 65,807
(9.8%) Outside DDA: %
Rental2
80% AMI 5+ Units: 15%
120% AMI
SROs: 15% 50% AMI
Ventura
2004 6% plus
9%
50% AMI
80% or 120%
6% plus
9%
80% AMI
120% AMI
7 units 108,170
(1.6%)
San Luis Obispo3 2004
(Orig. 1994)
City Limits: 3% or
5%
80% AMI
120% AMI
City Limits: 3% or
5%
80% AMI
120% AMI
5 units 46,802
(3.7%)
Expansion Area: 5% and
10%
80% AMI
120% AMI
Expansion Area: 5% and
10%
80% AMI
120% AMI
Table 11
Inclusionary Housing Set-Aside, Density Bonus, and Threshold Size Provisions
Selected California Inclusionary Housing Programs
2019
NOTES:
1 Rental projects of 5-9 units may build one unit or pay a fee; owner projects of 2-9 units must pay a fee.
2 For rental projects outside the Downtown Development Area, the % set-aside requirement equals the most recent % of rental units (of total units) in the City. For
owner projects with 2-4 units, the requirement is one owner unit or one rental unit. Off-site construction is allowed but must provide 30% more IZ units than on-site.
3The required number of dwelling units is determined by multiplying the set-aside requirements by the appropriate Inclusionary Housing Requirement Adjustment
Factor, which varies by project size (number of units) and average unit size (square feet).
Source: DRA survey of selected inclusionary housing programs. Note: % of AMI is for eligibility.
Table 12
Recommended Affordable Rent Standards
City of San Luis Obispo
2019
Assumptions
2019 State Median Income, San Luis Obispo County $87,500
Affordable Housing Cost As a % of Income 30%
No. of Bedrooms Studio One Bedroom Two Bedroom Three Bedroom Four Bedroom
Household Size Adjustment 1 Person 2 Persons 3 Persons 4.5 Persons 6 Persons
Household Size Income Adjust. Factor (1)70%80%90%104%116%
Renter Utility Allowance (2)$51 $73 $128 $158 $210
Affordable Rents by Income Level
Studio One Bedroom Two Bedroom Three Bedroom Four Bedroom
Extremely Low Income
30% of Median
Annual Gross Income $18,375 $21,000 $23,625 $27,300 $30,450
Affordable Monthly Housing Cost $459 $525 $591 $683 $761
Less: Monthly Utility Allowance ($51)($73)($128)($158)($210)
Affordable Monthly Rent $408 $452 $463 $525 $551
Very Low Income
50% of Median
Annual Gross Income $30,625 $35,000 $39,375 $45,500 $50,750
Affordable Monthly Housing Cost $766 $875 $984 $1,138 $1,269
Less: Monthly Utility Allowance ($51)($73)($128)($158)($210)
Affordable Monthly Rent $715 $802 $856 $980 $1,059
Low Income
60% of Median
Annual Gross Income $36,750 $42,000 $47,250 $54,600 $60,900
Affordable Monthly Housing Cost $919 $1,050 $1,181 $1,365 $1,523
Less: Monthly Utility Allowance ($51)($73)($128)($158)($210)
Affordable Monthly Rent $868 $977 $1,053 $1,207 $1,313
Moderate Income
100% of Median
Annual Gross Income $61,250 $70,000 $78,750 $91,000 $101,500
Affordable Monthly Housing Cost $1,531 $1,750 $1,969 $2,275 $2,538
Less: Monthly Utility Allowance ($51)($73)($128)($158)($210)
Affordable Monthly Rent $1,480 $1,677 $1,841 $2,117 $2,328
Summary of Affordable Rents
As Calculated Above
30% of Median $408 $452 $463 $525 $551
50% of Median $715 $802 $856 $980 $1,059
60% of Median $868 $977 $1,053 $1,207 $1,313
100% of Median $1,480 $1,677 $1,841 $2,117 $2,328
(1) HUD published factors for adjusting household income by household size.
(2) Based on all electric utility allowance by unit bedroom count for South County from the Housing Authority of the County of San Luis Obispo,
effective 2/1/2019.
Source: DRA.
Table 13
Recommended Affordable Home Price Standards
City of San Luis Obispo
2019
Assumptions
2019 State Median Income, San Luis Obispo County $87,500
No. of Bedrooms Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom
Household Size 1 Persons 2 Persons 3 Persons 4 Persons 5 Persons
Household Size Income Adjust. Factor 70%80%90%100%108%
Monthly HOA Fee $200
Monthly Property Insurance $100
Property Tax Rate (1)1.20%
Mortgage Interest Rate 5.00%
Term (Years)30
Downpayment (% of Sales Price)5.00%
Per Unit Affordable Sales Price by Unit Bedroom Count
Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom
Low Income
70% of Median
Annual Income Limit $42,875 $49,000 $55,125 $61,250 $66,150
Affordable Monthly Housing Expense 30%$1,072 $1,225 $1,378 $1,531 $1,654
Less: HOA ($200)($200)($200)($200)($200)
Less: Property Insurance ($100)($100)($100)($100)($100)
Less: Property Taxes (1)1.20%($127)($152)($177)($202)($222)
________________________________________
Available for Mortg. Principal and Interest $645 $773 $901 $1,029 $1,132
Supportable Mortgage $120,152 $143,996 $167,840 $191,684 $210,871
Plus: Downpayment @ 5.00%$6,325 $7,580 $8,835 $10,090 $11,100
Affordable Purchase Price (Rounded)$126,500 $151,600 $176,700 $201,800 $222,000
Estimated Affordable Price for Property Taxes (2)$127,000 $152,000 $177,000 $202,000 $222,000
Moderate Income
100% of Median
Annual Income Limit $61,250 $70,000 $78,750 $87,500 $94,500
Affordable Monthly Housing Expense 35%$1,786 $2,042 $2,297 $2,552 $2,756
Less: HOA ($200)($200)($200)($200)($200)
Less: Property Insurance ($100)($100)($100)($100)($100)
Less: Property Taxes (1)1.20%($243)($285)($327)($369)($402)
________________________________________
Available for Mortg. Principal and Interest $1,243 $1,457 $1,670 $1,883 $2,054
Supportable Mortgage $231,548 $271,412 $311,090 $350,768 $382,622
Plus: Downpayment @ 5.00%$12,185 $14,285 $16,375 $18,460 $20,140
Affordable Purchase Price (Rounded)$243,700 $285,700 $327,500 $369,200 $402,800
Estimated Affordable Price for Property Taxes (2)$243,000 $285,000 $327,000 $369,000 $402,000
(1) Property taxes estimated at 1.2% of approximate affordable price
Source: DRA
Table 14
Estimated Prototype Development Costs
City of San Luis Obispo
2019
Prototype 1 Prototype 2 Prototype 3
Single-Family For-Sale Townhomes Apartments
Tenure Owner Owner Rental
Construction Type Wood Frame Wood Frame Wood Frame
Total Residential Units 50 35 50
Average Unit Size (Net SF)2,200 1,551 931
Residential Net SF 110,000 54,300 46,550
Total Net Building SF 110,000 54,300 46,550
Total Gross SF Building Area (Excluding Parking)110,000 54,300 51,722
Total Gross SF Building Area (Including Subt. Parking)110,000 54,300 51,722
Site Area (SF)311,143 127,050 90,750
Approximate Building Stories 1 to 2 Stories 2 2 to 3 Stories
ASSUMPTIONS
Development Cost Assumptions
Land Price Per Hsg. Unit $560,057 $326,700 $163,350
Per Site SF $90 $90 $90
Bldg. Hard Construction Cost (1)Per Net SF $150 $175 $250
Soft Costs (Incl. Dev. Impact Fees)% of Hard Costs + Cont.30%30%30%
DEVELOPMENT BUDGET
Land Acquisition $28,002,857 $11,434,500 $8,167,500
Construction Hard Costs $16,500,000 $9,503,000 $11,638,000
Soft Costs $4,950,000 $2,850,900 $3,491,400
_________________________________
Total Development Costs, Including Land $49,452,857 $23,788,400 $23,296,900
TDC Per Gross SF $450 $438 $450
TDC Per Housing Unit $989,057 $679,669 $465,938
TDC per Net SF Residential Area $450 $438 $500
(1) Hard construction costs include parking construction. For renter prototypes, estimated hard costs assume payment of prevailing wages.
Source: DRA
Table 15
Renter In Lieu Fee Calculation
City of San Luis Obispo
2019
Income Level
for Calculation
of Aff. Rent
Assumed Unit
Bedroom
Count
Estimated Unit
Size (GSF) (1)
Development
Cost Per Unit
(2)
Maximum
Monthly Rent
Per Unit
Project Annual
Gross Income
Annual Net
Operating
Income (3)
Affordable
First
Mortgage (4)
Gap Per
Affordable
Unit
(Rounded)
Required %
of Units
In Lieu Fee
Per Unit in
Development
In Lieu Fee
Per GSF (5)
Very Low:
50% AMI 2 Bedroom 1,100 $495,000 $856 $10,272 $5,558 $67,181 $427,800 5%$21,390 $19
Low:
60% AMI 2 Bedroom 1,100 $495,000 $1,053 $12,636 $7,804 $94,324 $400,700 10%$40,070 $36
Total In Liue Fee $61,460 $55
(1) For a typical two-bedroom unit.
(2) Based on estimated total development cost per square foot of:$450
(3) Net operating income projected based on the following assumptions:
Vacancy rate:5%
Annual operating expense/unit:$4,200
(4) Affordable first mortgage from Table A-2 based on following financing terms:
Debt Coverage Ratio:1.15
Mortgage interest rate:6%
Mortgage Term:30
(5) In lieu fee per unit divided by estimated unit size (GSF).
Source: DRA.
Table 16
Owner In Lieu Fee Calculation
City of San Luis Obispo
2019
Income Level for
Calculation of Aff.
Rent
Assumed Unit
Bedroom Count
Estimated Unit
Size (GSF) (1)
Development Cost
Per Unit (2)
Affordable Sales
Price Per Unit (3)
Gap Per
Affordable Unit
(Rounded)
Required % of
Units
In Lieu Fee Per
Unit in
Development
In Lieu Fee Per
GSF (4)
SINGLE-FAMILY DETACHED HOME
Low:
70% AMI 3 Bedroom 2,200 $990,000 $201,800 $788,200 5%$39,410 $18
Moderate
100% AMI 3 Bedroom 2,200 $990,000 $309,400 $680,600 10%$68,060 $31
Total In Lieu Fee $107,470 $49
TOWNHOME
Low:
70% AMI 3 Bedroom 1,600 $700,900 $201,800 $499,100 5%$24,955 $16
Moderate
100% AMI 3 Bedroom 1,600 $700,900 $309,400 $391,500 10%$39,150 $24
Total In Lieu Fee $64,105 $40
(1) For a typical three-bedroom units
(2) Based on estimated total development cost per square foot of:$450 for SFD units;$438 for townhome units.
(3) For a three-bedroom unit from Table 13 .
(4) In lieu fee per unit divided by estimated unit size (GSF).
Source: DRA.
City of San Luis Obispo
Residential Nexus and Gap Analysis
Appendix A Tables
2/12/20
List of Tables
Table
Number Table Title Table Subheading
Page
No.
Table A-1 Housing Prototypes A-1
Table A-2 Estimated Disposable Household Income of New
Homebuyers
Owner Housing Prototypes A-2
Table A-3 Estimated Disposable Household Income of New Renter
Households
Rental Housing Prototype A-3
Table A-4 Estimated Employment Impacts by Industry Sector Prototype 1 SFD A-4
Table A-5 Estimated Employment Impacts by Industry Sector Prototype 2 Townhomes A-5
Table A-6 Estimated Employment Impacts by Industry Sector Prototype 3 Apartments A-6
Table A-7 Estimated Households by Income Level Prototype 1 SFD A-7
Table A-8 Estimated Households by Income Level Prototype 2 Townhomes A-8
Table A-9 Estimated Households by Income Level Prototype 3 Apartments A-9
Table A-10 Development Cost Assumptions and Budgets Housing Prototypes A-10
Table A-11 Affordable Sales Price Calculations by Income Level Owner Housing A-11
Table A-12 Affordable Rent Calculations by Income Level Rental Housing A-12
Table A-13 Owner Housing Affordability Gap Calculation Single-Family Detached A-13
Table A-14 Owner Housing Affordability Gap Calculation Towhomes A-14
Table A-15 Rental Housing Affordability Gap Calculation Apartments A-15
Table A-16 Maximum Justifiable Residential Nexus Fees A-16
Table A-17 Single-Family Home Sales City of San Luis Obispo June 2019 to
November 2019
A-17
Table A-18 Condominium Home Sales City of San Luis Obispo April 2019 to
August 2019
A-19
Table A-19 Vacant Land Sales City of San Luis Obispo October 2018 to
October 2019
A-21
Table A-1
Housing Prototypes
City of San Luis Obispo Nexus Study
2019
Prototype 1 Prototype 2 Prototype 3
Single-Family
For-Sale
Townhomes Apartments
Total Housing Unit Count 50 Units 35 Units 50 Units
Tenure Owner Owner Rental
Total Site Area (Acre) 7.14 Acres 2.92 Acres 2.08 Acres
Total Site Area (SF)311,143 127,050 90,750
Density (Units Per Acre)7 12 24
Construction Type Wood Frame Wood Frame Wood Frame
Parking Type Garage Garage/Surface Surface
Approximate Building Stories 1 to 2 Stories 2 Stories 2 to 3 Stories
Net Residential Square Feet 110,000 SF 54,300 SF 46,550 SF
Building Efficiency Ratio (%)100%100%90%
Total Gross Building SF (Excl. Pkg.)110,000 54,300 51,722
Unit Bedroom Count Distribution
Studio/Loft 0%0%11%
One Bedroom 0%0%32%
Two Bedroom 20%30%50%
Three Bedroom 40%70%7%
Four Bedroom 40%0%0%
Total 100%100%100%
Units by BR Count
Studio/Loft 0 0 5
One Bedroom 0 0 16
Two Bedroom 10 11 25
Three Bedroom 20 25 4
Four Bedroom 20 0 0
Total Residential Units 50 36 50
Unit Size (Net SF)
Studio/Loft 450 SF
One Bedroom 700 SF
Two Bedroom 1,400 SF 1,300 SF 1,100 SF
Three Bedroom 2,200 SF 1,600 SF 1,400 SF
Four Bedroom 2,600 SF 0 SF
Average Unit Size 2,200 SF 1,551 SF 931 SF
Source: DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-1
Table A-2
Estimated Disposable Household Income of New Homebuyers
Owner Housing Prototypes
City of San Luis Obispo Nexus Study
2019
Prototype #1 Prototype #2
SFD Townhomes
Number of Units
Studio 0 0
One Bedroom 0 0
Two Bedroom 10 11
Three Bedroom 20 25
Four Bedroom 20 0
Total 50 36
Sales Price Per Unit (1)
Studio $0 $0
One Bedroom $0 $0
Two Bedroom $687,400 $509,600
Three Bedroom $1,014,200 $539,200
Four Bedroom $1,105,000 $0
Average $985,160 $530,156
Unit Size (Square Feet)
Studio 0 0
One Bedroom 0 0
Two Bedroom 1,400 1,300
Three Bedroom 2,200 1,600
Four Bedroom 2,600 0
Five Bedroom 0 0
Average 2,200 1,551
Sales Price Per Square Foot
Studio
One Bedroom $0.00 $0.00
Two Bedroom $491.00 $392.00
Three Bedroom $461.00 $337.00
Four Bedroom $425.00 $0.00
Average Price/SF $447.80 $341.82
Disposable Housing Income Projection
Average Sales Price Per Unit $985,160 $530,156
Mortgage Amount (2)$788,128 $424,124
Monthly Principal and Interest Payment (3)$4,231 $2,277
Monthly Property Taxes (4)$985 $530
Monthly Insurance Cost $100 $100
Monthly HOA Dues $0 $200
Total Monthly Housing Cost $5,316 $3,107
Estimated Average Annual Income (5)$182,000 $107,000
Sales Price to Income Ratio 5.41 4.95
Percent of Income Available for Expenditures (6)75%75%
Ave. Disposable Income Available for Expenditures $136,500 $80,250
Number of Units in Prototype 50 36
Total Disposable Household Income of Resident HHs $6,825,000 $2,889,000
(1) Based on DRA analysis of home sales prices by unit bedroom count in San Luis Obispo in 2019.
(2) At an 80% loan to value (price) ratio, assuming a 20% buyer downpayment.
(3) Monthly mortgage principal and interest payment assuming a 5.0% fixed-rate loan for 30 years.
(4) Monthly property taxes estimated at 1.2% annual tax rate.
(5) Assumes principal, interest, taxes and insurance (PITI) at 35% of gross annual household income.
(6) After deductions forfederal and state income taxes, Social Security and Medicare (FICA) taxes, and personal savings. Based on data
from the Tax Policy Center for at the income levels projected for the housing prototypes.
Source: DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-2
Table A-3
Estimated Disposable Household Income of New Renter Households
Rental Housing Prototype
City of San Luis Obispo Nexus Study
2019
Prototype #3
Stacked Flat Apts.
Number of Units
Studio 5
One Bedroom 16
Two Bedroom 25
Three Bedroom 4
Total 50
Monthly Rent Per Unit
Studio $1,125
One Bedroom $1,750
Two Bedroom $2,750
Three Bedroom $3,500
Weighted Average $2,328
Unit Size (Square Feet)
Studio 450
One Bedroom 700
Two Bedroom 1,100
Three Bedroom 1,400
Average 931
Monthly Rent Per Square Foot (1)
Studio $2.50
One Bedroom $2.50
Two Bedroom $2.50
Three Bedroom $2.50
Average Mo. Rent/SF $2.50
Disposable Housing Income Projection
Average Unit Size (SF)931
Average Monthly Rent Per SF $2.50
Average Monthly Rent Per Unit $2,300
Average Household Income (2)$83,600
Annual Household Income to Rent Ratio 3.0
Percent of Income Available for Expenditures (3)75%
Disposable Income Available for Expenditures $62,700
Number of Units in Prototype 50
Total Disposable Household Income of Resident HHs $3,135,000
(1) Estimated based on review of Rentcafe.com data for San Luis Obispo through October 2019, adjusted for
larger prototype unit sizes than existing average unit sizes in the market.
(2) Assumes rent at 33% of household income.
(3) After deductions forfederal and state income taxes, Social Security and Medicare (FICA) taxes, and
personal savings. Based on data fromhouseholds the Tax Policy Center for at the income levels
projected for the housing prototypes.
Source: DRA
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-4
Table A-4
Estimated Employment Impacts by Industry Sector
Prototype 1
SFD
City of San Luis Obispo Nexus Study
2019
Industry Sector
Total
Employment (1)
FTE Conversion
Factor (2)
Full-Time
Employment (3)
Manufacturing 0.696 0.964872 0.671
Wholesale Trade 0.811 0.963002 0.781
Retail Trade 5.941 0.858520 5.100
Transportation 0.560 0.940711 0.527
Warehousing and Storage 0.034 0.940345 0.032
Information and Communication 0.399 0.927466 0.370
Finance and Insurance 2.256 0.963254 2.173
Real Estate, Rentals and Leasing 2.376 0.909984 2.162
Professional, Scientific and Technical 1.816 0.943261 1.713
Management and Administrative
Services 1.753 0.923231 1.618
Educational Services 0.685 0.887449 0.607
Health Care and Social Assistance 7.348 0.893779 6.568
Arts, Entertainment and Recreation 1.415 0.820378 1.161
Other Services 10.655 0.841627 8.968
Government 0.204 0.619877 0.126
___________________
Total 36.948 32.577
_____
(1) Includes total direct, indirect and induced employment, full-time and part-time.
(2) Full-time equivalent (FTE) conversion ratios from the IMPLAN model.
(3) Total number of employees mulitplied by FTE conversion factor.
Source: IMPLAN Input/Output Model; DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-3
Table A-5
Estimated Employment Impacts by Industry Sector
Prototype 2
Townhomes
City of San Luis Obispo Nexus Study
2019
Industry Sector
Total
Employment (1)
FTE Conversion
Factor (2)
Full-Time
Employment (3)
Manufacturing 0.31 0.964872 0.295
Wholesale Trade 0.36 0.963002 0.343
Retail Trade 2.65 0.858520 2.273
Transportation 0.23 0.940711 0.219
Warehousing and Storage 0.01 0.940345 0.014
Information and Communication 0.18 0.927466 0.165
Finance and Insurance 1.06 0.963254 1.025
Real Estate, Rentals and Leasing 1.29 0.909984 1.176
Professional, Scientific and
Technical 0.77 0.943261 0.729
Management and Administrative
Services 0.78 0.923231 0.716
Educational Services 0.26 0.887449 0.232
Health Care and Social Assistance 3.16 0.893779 2.827
Arts, Entertainment and Recreation 0.53 0.820378 0.431
Other Services 4.72 0.841627 3.969
Government 0.09 0.619877 0.054
___________________
Total 16.395 14.470
_____
(1) Includes total direct, indirect and induced employment, full-time and part-time.
(2) Full-time equivalent (FTE) conversion ratios from the IMPLAN model.
(3) Total number of employees mulitplied by FTE conversion factor.
Source: IMPLAN Input/Output Model; DRA.
Table A-6
Estimated Employment Impacts by Industry Sector
Prototype 3
Apartments
City of San Luis Obispo Nexus Study
2019
Industry Sector
Total
Employment (1)
FTE Conversion
Factor (2)
Full-Time
Employment (3)
Manufacturing 0.33 0.964872 0.320
Wholesale Trade 0.39 0.963002 0.373
Retail Trade 2.88 0.858520 2.468
Transportation 0.25 0.940711 0.238
Warehousing and Storage 0.02 0.940345 0.015
Information and Communication 0.17 0.927466 0.158
Finance and Insurance 1.15 0.963254 1.113
Real Estate, Rentals and Leasing 1.40 0.909984 1.277Professional, Scientific and
Technical 0.84 0.943261 0.792
Management and Administrative
Services 0.84 0.923231 0.777
Educational Services 0.28 0.887449 0.252
Health Care and Social Assistance 3.43 0.893779 3.070
Arts, Entertainment and Recreation 0.57 0.820378 0.469
Other Services 5.12 0.841627 4.310
Government 0.09 0.619877 0.059
___________________
Total 17.779 15.690
_____
(1) Includes total direct, indirect and induced employment, full-time and part-time.
(2) Full-time equivalent (FTE) conversion ratios from the IMPLAN model.
(3) Total number of employees mulitplied by FTE conversion factor.
Source: IMPLAN Input/Output Model; DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-6
Table A-7
Estimated Households by Income Level
Prototype 1
SFD
City of San Luis Obispo Nexus Study
2019
Economic Sector
Total New FTE
Employees
Generated by
Development (1)
Total New FTI
Employees After
Adjustment for
Increased Labor
Force
Participation (2)
No. of New
Households
(3)
Average
Payroll Per
Employee (4)
Estimated
Household
Income (5)
Estimated
Percent of HH
Earning
Incomes Below
30% AMI
(6)(7)
Estimated Percent
of HH Earning
Between 31%
and 50% AMI
(6)(7)
Estimated
Percent of HH
Earning Incomes
Between 51%
and 80% AMI
(6)(7)
Estimated
Percent of HH
Earning Incomes
Between 81%
and 120% AMI
(6)(7)
Estimated
Households
Earning
Incomes
Below 30%
AMI
Estimated
Households
Earning
Between 31%
and 50%
AMI
Estimated
Households
Earning
Incomes
Between 51%
and 80% AMI
Estimated
Households
Earning
Incomes
Between 81%
and 120% AMI
Manufacturing 0.67 0.64 0.35 $66,067 $120,241 0%0%20%25%0.00 0.00 0.07 0.09
Wholesale Trade 0.78 0.74 0.41 $51,505 $93,739 20%10%25%25%0.08 0.04 0.10 0.10
Retail Trade 5.10 4.85 2.66 $42,699 $77,713 15%8%25%30%0.40 0.21 0.67 0.80
Transportation 0.53 0.50 0.27 $46,709 $85,010 0%0%25%30%0.00 0.00 0.07 0.08
Warehousing and Storage 0.03 0.03 0.02 $41,144 $74,883 5%5%30%35%0.00 0.00 0.00 0.01
Information and Communication 0.37 0.35 0.19 $96,029 $174,773 30%5%25%25%0.06 0.01 0.05 0.05
Finance and Insurance 2.17 2.06 1.13 $46,109 $83,918 0%0%20%50%0.00 0.00 0.23 0.57
Real Estate, Rentals and Leasing 2.16 2.05 1.13 $29,820 $54,273 10%20%30%20%0.11 0.23 0.34 0.23
Professional, Scientific and Technical 1.71 1.63 0.89 $48,804 $88,824 30%15%35%5%0.27 0.13 0.31 0.04
Management and Administrative Services 1.62 1.54 0.84 $38,804 $70,624 5%5%25%20%0.04 0.04 0.21 0.17
Educational Services 0.61 0.58 0.32 $23,781 $43,281 25%25%30%15%0.08 0.08 0.10 0.05
Health Care and Social Assistance 6.57 6.24 3.43 $61,593 $112,100 25%25%25%15%0.86 0.86 0.86 0.51
Arts, Entertainment and Recreation 1.16 1.10 0.61 $20,570 $37,438 30%45%10%5%0.18 0.27 0.06 0.03
Other Services 8.97 8.52 4.68 $33,930 $61,753 30%45%10%10%1.40 2.11 0.47 0.47
Government 0.13 0.12 0.07 $83,780 $152,479 20%15%10%10%0.01 0.01 0.01 0.01____________________________________________
Total/Average 32.58 30.31 17.00 3.50 3.99 3.54 3.20
______
(1) Includes full-time equivalent employees.
(2) Assumes 5% reduction in new employment to account for jobs taken by currently unemployed residents.
(3) Number of FTE conversion employees divided by 1.82 employees per worker household.
(4) From IMPLAN input/output model.
(5) Average payroll per employee multiplied by 1.82 employees per worker household in the City of San Luis Obispo. Source: American Community Survey, five-year estimates, 2017.
(6) Assumes 2.25 persons per household and associated income limits of $22,200 for ELI households, $36,950 for VLI households, $59,150 for low income households, and $86,350 for moderate income households.
(7) Percentage of employees by income category estimated based California Employment Development Department wage survey, San Luis Obispo County, first quarter 2019.
Source: IMPLAN; California Employment Development Department, Occupational Employment Statistics Survey, First Quarter 2019; DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-7
Table A-8
Estimated Households by Income Level
Prototype 2
Townhomes
City of San Luis Obispo Nexus Study
2019
Economic Sector
Total New FTE
Employees
Generated by
Development (1)
Total New FTI
Employees After
Adjustment for
Increased Labor Force
Participation (2)
No. of New
Households
(3)
Average
Payroll Per
Employee (4)
Estimated
Household
Income (5)
Estimated
Percent of HH
Earning
Incomes Below
30% AMI
(6)(7)
Estimated
Percent of HH
Earning
Between 31%
and 50% AMI
(6)(7)
Estimated
Percent of HH
Earning Incomes
Between 51%
and 80% AMI
(6)(7)
Estimated
Percent of HH
Earning Incomes
Between 81%
and 120% AMI
(6)(7)
Estimated
Households
Earning
Incomes
Below 30%
AMI
Estimated
Households
Earning
Between 31%
and 50%
AMI
Estimated
Households
Earning
Incomes
Between 51%
and 80% AMI
Estimated
Households
Earning
Incomes
Between 81%
and 120% AMI
Manufacturing 0.29 0.28 0.15 $66,131 $120,358 0%0%20%25%0.00 0.00 0.03 0.04
Wholesale Trade 0.34 0.33 0.18 $51,505 $93,739 20%10%25%25%0.04 0.02 0.04 0.04
Retail Trade 2.27 2.16 1.19 $42,683 $77,684 15%8%25%30%0.18 0.09 0.30 0.36
Transportation 0.22 0.21 0.11 $47,171 $85,852 0%0%25%30%0.00 0.00 0.03 0.03
Warehousing and Storage 0.01 0.01 0.01 $41,144 $74,883 5%5%30%35%0.00 0.00 0.00 0.00
Information and Communication 0.16 0.16 0.09 $96,255 $175,184 30%5%25%25%0.03 0.00 0.02 0.02
Finance and Insurance 1.02 0.97 0.53 $45,558 $82,916 0%0%20%50%0.00 0.00 0.11 0.27
Real Estate, Rentals and Leasing 1.18 1.12 0.61 $29,589 $53,853 10%20%30%20%0.06 0.12 0.18 0.12
Professional, Scientific and Technical 0.73 0.69 0.38 $49,033 $89,240 30%15%35%5%0.11 0.06 0.13 0.02
Management and Administrative Services 0.72 0.68 0.37 $39,081 $71,128 5%5%25%20%0.02 0.02 0.09 0.07
Educational Services 0.23 0.22 0.12 $23,154 $42,140 25%25%30%15%0.03 0.03 0.04 0.02
Health Care and Social Assistance 2.83 2.69 1.48 $62,493 $113,737 25%25%25%15%0.37 0.37 0.37 0.22
Arts, Entertainment and Recreation 0.43 0.41 0.23 $19,600 $35,672 30%45%10%5%0.07 0.10 0.02 0.01
Other Services 3.97 3.77 2.07 $33,958 $61,804 30%45%10%10%0.62 0.93 0.21 0.21
Government 0.05 0.05 0.03 $83,871 $152,644 20%15%10%10%0.01 0.00 0.00 0.00____________________________________________
Total/Average 14.47 13.47 7.55 1.53 1.75 1.58 1.44
______
(1) Includes full-time equivalent employees.
(2) Assumes 5% reduction in new employment to account for jobs taken by currently unemployed residents.
(3) Number of FTE conversion employees divided by 1.82 employees per worker household.
(4) From IMPLAN input/output model.
(5) Average payroll per employee multiplied by 1.82 employees per worker household in the City of San Luis Obispo. Source: American Community Survey, five-year estimates, 2017.
(6) Assumes 2.25 persons per household and associated income limits of $22,200 for ELI households, $36,950 for VLI households, $59,150 for low income households, and $86,350 for moderate income households.
(7) Percentage of employees by income category estimated based California Employment Development Department wage survey, San Luis Obispo County, first quarter 2019.
Source: IMPLAN; California Employment Development Department, Occupational Employment Statistics Survey, First Quarter 2019; DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-8
Table A-9
Estimated Households by Income Level
Prototype 3
Apartments
City of San Luis Obispo Nexus Study
2019
Economic Sector
Total New FTE
Employees
Generated by
Development (1)
Total New FTI
Employees After
Adjustment for
Increased Labor
Force Participation
(2)
No. of New
Households
(3)
Average
Payroll Per
Employee (4)
Estimated
Household
Income (5)
Estimated
Percent of HH
Earning
Incomes Below
30% AMI
(6)(7)
Estimated
Percent of HH
Earning
Between 31%
and 50% AMI
(6)(7)
Estimated
Percent of HH
Earning
Incomes
Between 51%
and 80% AMI
Estimated
Percent of
HH Earning
Incomes
Between
81% and
Estimated
Households
Earning
Incomes
Below 30%
AMI
Estimated
Households
Earning
Between
31% and
50% AMI
Estimated
Households
Earning
Incomes
Between 51%
and 80% AMI
Estimated
Households
Earning
Incomes
Between 81%
and 120% AMI
Manufacturing 0.32 0.30 0.17 $66,131 $120,358 0%0%20%25%0.00 0.00 0.03 0.04
Wholesale Trade 0.37 0.35 0.19 $51,505 $93,739 20%10%25%25%0.04 0.02 0.05 0.05
Retail Trade 2.47 2.34 1.29 $42,683 $77,684 15%8%25%30%0.19 0.10 0.32 0.39
Transportation 0.24 0.23 0.12 $47,171 $85,852 0%0%25%30%0.00 0.00 0.03 0.04
Warehousing and Storage 0.02 0.01 0.01 $41,144 $74,883 5%5%30%35%0.00 0.00 0.00 0.00
Information and Communication 0.16 0.15 0.08 $109,127 $198,610 30%5%25%25%0.02 0.00 0.02 0.02
Finance and Insurance 1.11 1.06 0.58 $45,558 $82,916 0%0%20%50%0.00 0.00 0.12 0.29
Real Estate, Rentals and Leasing 1.28 1.21 0.67 $29,589 $53,853 10%20%30%20%0.07 0.13 0.20 0.13
Professional, Scientific and Technical 0.79 0.75 0.41 $49,033 $89,240 30%15%35%5%0.12 0.06 0.14 0.02
Management and Administrative Services 0.78 0.74 0.41 $39,081 $71,128 5%5%25%20%0.02 0.02 0.10 0.08
Educational Services 0.25 0.24 0.13 $23,154 $42,140 25%25%30%15%0.03 0.03 0.04 0.02
Health Care and Social Assistance 3.07 2.92 1.60 $62,493 $113,737 25%25%25%15%0.40 0.40 0.40 0.24
Arts, Entertainment and Recreation 0.47 0.45 0.24 $19,600 $35,672 30%45%10%5%0.07 0.11 0.02 0.01
Other Services 4.31 4.09 2.25 $33,958 $61,804 30%45%10%10%0.67 1.01 0.22 0.22
Government 0.06 0.06 0.03 $83,871 $152,644 20%15%10%10%0.01 0.00 0.00 0.00____________________________________________
Total/Average 15.69 14.60 8.19 1.66 1.90 1.71 1.56
______
(1) Includes full-time equivalent employees from direct, indirect and induced employment, from Table A-30.
(2) Assumes 5% reduction in new employment to account for jobs taken by currently unemployed residents.
(3) Number of FTE conversion employees divided by 1.82 employees per worker household.
(4) From IMPLAN input/output model.
(5) Average payroll per employee multiplied by 1.82 employees per worker household in the City of San Luis Obispo. Source: American Community Survey, five-year estimates, 2017.
(6) Assumes 2.25 persons per household and associated income limits of $22,200 for ELI households, $36,950 for VLI households, $59,150 for low income households, and $86,350 for moderate income households.
(7) Percentage of employees by income category estimated based California Employment Development Department wage survey, San Luis Obispo County, first quarter 2019.
Source: IMPLAN; California Employment Development Department, Occupational Employment Statistics Survey, First Quarter 2019; DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-9
Table A-10
Development Cost Assumptions and Budgets
City of San Luis Obispo Nexus Study
Prototype 1 Prototype 2 Prototype 3
Single-Family
For-Sale
Townhomes Apartments
Tenure Owner Owner Rental
Construction Type Wood Frame Wood Frame Wood Frame
Total Residential Units 50 35 50
Average Unit Size (Net SF)2,200 1,551 931
Residential Net SF 110,000 54,300 46,550
Total Net Building SF 110,000 54,300 46,550
Total Gross SF Building Area (Excluding Parking)110,000 54,300 51,722
Total Gross SF Building Area (Including Subt. Parking)110,000 54,300 51,722
Site Area (SF)311,143 127,050 90,750
Approximate Building Stories 1 to 2 Stories 2 2 to 3 Stories
ASSUMPTIONS
Development Cost Assumptions
Land Price Per Hsg. Unit $560,057 $326,700 $163,350
Per Site SF $90 $90 $90
Bldg. Hard Construction Cost (1)Per Net SF $150 $175 $250
Hard Cost Contingency % of Hard Costs 0.0%0.0%0.0%
Soft Costs (Incl. Dev. Impact Fees)% of Hard Costs + Cont.30%30%30%
DEVELOPMENT BUDGET
Land Acquisition $28,002,857 $11,434,500 $8,167,500
Construction Hard Costs $16,500,000 $9,503,000 $11,638,000
Soft Costs $4,950,000 $2,850,900 $3,491,400
_________________________________
Total Development Costs, Including Land $49,452,857 $23,788,400 $23,296,900
TDC Per Gross SF $450 $438 $450
TDC Per Housing Unit $989,057 $679,669 $465,938
TDC per Net SF Residential Area $450 $438 $500
(1) Hard construction costs include parking construction. For renter prototypes, estimated hard costs assume payment of prevailing wages.
Source: DRA
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-10
Table A-11
Affordable Sales Price Calculations by Income Level
Owner Housing
City of San Luis Obispo Nexus Study
2019
Assumptions
2019 State Median Income, San Luis Obispo County $87,500
City of San Luis Obispo Home Price Multiplier
Extremely Low, Very Low and Low Income Households (0%-80%)3
Moderate Income Households (80%-120%)3.5
Unit Size (Number of Bedrooms)Studio One Bedroom Two Bedroom Three Bedroom Four Bedroom
Household Size 1 Person 2 Persons 3 Persons 4 Persons 6 Persons
Household Size Income Adjust. Factor (1)70%80%90%100%116%
Affordable Home Prices (Not Rounded)
30% of Median
Annual Gross Income $18,874 $21,570 $24,266 $26,963 $31,277
Affordable Home Price $56,621 $64,710 $72,799 $80,888 $93,830
50% of Median
Annual Gross Income $31,456 $35,950 $40,444 $44,938 $52,128
Affordable Home Price $94,369 $107,850 $121,331 $134,813 $156,383
80% of Median
Annual Gross Income $50,330 $57,520 $64,710 $71,900 $83,404
Affordable Home Price $150,990 $172,560 $194,130 $215,700 $250,212
100% of Median
Annual Gross Income $61,250 $70,000 $78,750 $87,500 $101,500
Affordable Home Price $214,375 $245,000 $275,625 $306,250 $355,250
120% of Median
Annual Gross Income $73,500 $84,000 $94,500 $105,000 $121,800
Affordable Home Price $257,250 $294,000 $330,750 $367,500 $426,300
(1) HUD household size adjustment factors.
(2) City of San Luis Obispo sales price limits are determined by multiplying the annual income limit of the income group, adjusted by household size,
by 3.0 for extremely low, very low, and low income households, and by 3.5 for moderate income households, rounded to the nearest $25.
Source: DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-11
Table A-12
Affordable Rent Calculations by Income Level
Rental Housing
City of San Luis Obispo Nexus Study
2019
Assumptions
2019 State Median Income, San Luis Obispo County $87,500
2019 Adjusted Median Income for Calculating Rents (1)$89,875
Affordable Housing Cost As a % of Income 30%
Project Vacancy Rate 5%
Annual Operating Cost Per Unit (Exluding Property Taxes)$4,200
Debt Coverage Ratio 1.15
Mortgage Interest Rate 6%
Mortgage Term 30
No. of Bedrooms Studio One Bedroom Two Bedroom Three Bedroom
Household Size Adjustment 1 Person 2 Persons 3 Persons 4.5 Persons
Household Size Income Adjust. Factor (2)70%80%90%104%
No. of Units in Renter Prototype 0 100 88 12
Affordable Rents by Income Level
Studio One Bedroom Two Bedroom Three Bedroom
Extremely Low Income
30% of Median
Annual Gross Income $18,874 $21,570 $24,266 $28,041
Affordable Monthly Housing Cost $472 $539 $607 $701
Less: Monthly Utility Allowance $0 $0 $0 $0
Affordable Monthly Rent $472 $539 $607 $701
Very Low Income
50% of Median
Annual Gross Income $31,456 $35,950 $40,444 $46,735
Affordable Monthly Housing Cost $786 $899 $1,011 $1,168
Less: Monthly Utility Allowance $0 $0 $0 $0
Affordable Monthly Rent $786 $899 $1,011 $1,168
Low Income
60% of Median
Annual Gross Income $37,748 $43,140 $48,533 $56,082
Affordable Monthly Housing Cost $944 $1,079 $1,213 $1,402
Less: Monthly Utility Allowance $0 $0 $0 $0
Affordable Monthly Rent $944 $1,079 $1,213 $1,402
80% of Median
Annual Gross Income $50,330 $57,520 $64,710 $74,776
Affordable Monthly Housing Cost $1,258 $1,438 $1,618 $1,869
Less: Monthly Utility Allowance $0 $0 $0 $0
Affordable Monthly Rent $1,258 $1,438 $1,618 $1,869
Moderate Income
100% of Median
Annual Gross Income $61,250 $70,000 $78,750 $91,000
Affordable Monthly Housing Cost $1,531 $1,750 $1,969 $2,275
Less: Monthly Utility Allowance $0 $0 $0 $0
Affordable Monthly Rent $1,531 $1,750 $1,969 $2,275
120% of Median
Annual Gross Income $73,500 $84,000 $94,500 $109,200
Affordable Monthly Housing Cost $1,838 $2,100 $2,363 $2,730
Less: Monthly Utility Allowance $0 $0 $0 $0
Affordable Monthly Rent $1,838 $2,100 $2,363 $2,730
Summary of Affordable Rents
As Calculated Above
30% of Median $472 $539 $607 $701
50% of Median $786 $899 $1,011 $1,168
60% of Median $944 $1,079 $1,213 $1,402
100% of Median $1,531 $1,750 $1,969 $2,275
2019 San Luis Obispo Housing Standards (3)
30% of Median $459 $525 $591 $683
50% of Median $766 $875 $984 $1,138
60% of Median $919 $1,050 $1,181 $1,365
100% of Median $1,276 $1,458 $1,641 $1,896
(1) As a high housing cost area, income limits for households at 80% of AMI and below are adjusted upwards from the straight
AMI calculations; the effective median income equals $89,875 for a household of four at 100% AMI.
(2) HUD published factors for adjusting household income by household size.
(3) Current City Affordable Housing Standard rents are used in the gap analysis.
Source: DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-12
Table A-13
Owner Housing Affordability Gap Calculation
Prototype 1
Single-Family
City of San Luis Obispo Nexus Study
Income Level No. of BR Unit SF
Affordable
Sales Price
Per Unit
Total
Development
Cost Per Unit (2)Total Units
Total
Affordable
Sales Price
Total
Development
Cost (3)
Affordability
Gap Gap Per Unit
30% AMI 2 1,400 $72,799 $630,000 10 $727,988 $6,300,000 $5,572,013 $557,201
50% AMI 2 1,400 $121,331 $630,000 10 $1,213,313 $6,300,000 $5,086,688 $508,669
80% AMI 2 1,400 $194,130 $630,000 10 $1,941,300 $6,300,000 $4,358,700 $435,870
120% AMI 2 1,400 $330,750 $630,000 10 $3,307,500 $6,300,000 $2,992,500 $299,250
30% AMI 3 2,200 $80,888 $990,000 20 $1,617,750 $19,800,000 $18,182,250 $909,113
50% AMI 3 2,200 $134,813 $990,000 20 $2,696,250 $19,800,000 $17,103,750 $855,188
80% AMI 3 2,200 $215,700 $990,000 20 $4,314,000 $19,800,000 $15,486,000 $774,300
120% AMI 3 2,200 $367,500 $990,000 20 $7,350,000 $19,800,000 $12,450,000 $622,500
30% AMI 4 2,600 $93,830 $1,170,000 20 $1,876,590 $23,400,000 $21,523,410 $1,076,171
50% AMI 4 2,600 $156,383 $1,170,000 20 $3,127,650 $23,400,000 $20,272,350 $1,013,618
80% AMI 4 2,600 $250,212 $1,170,000 20 $5,004,240 $23,400,000 $18,395,760 $919,788
120% AMI 4 2,600 $426,300 $1,170,000 20 $8,526,000 $23,400,000 $14,874,000 $743,700
30% AMI
Weighted
Average (1)2,200 $84,447 $990,000 50 $4,222,328 $49,500,000 $45,277,673 $905,600
50% AMI
Weighted
Average (1)2,200 $140,744 $990,000 50 $7,037,213 $49,500,000 $42,462,788 $849,300
80% AMI
Weighted
Average (1)2,200 $225,191 $990,000 50 $11,259,540 $49,500,000 $38,240,460 $764,800
120% AMI
Weighted
Average (1)2,200 $383,670 $990,000 50 $19,183,500 $49,500,000 $30,316,500 $606,300
(1) Weighted average based on unit distribution by bedroom count for the owner housing prototype.
(2) Equals total development cost per NSF multiplied by unit size (NSF).
Source: DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-13
Table A-14
Owner Housing Affordability Gap Calculation
Prototype 2
Towhomes
City of San Luis Obispo Nexus Study
Income Level No. of BR Unit SF
Affordable
Sales Price
Per Unit
Total
Development
Cost Per Unit (2)Total Units
Total
Affordable
Sales Price
Total
Development
Cost (3)
Affordability
Gap Gap Per Unit
30% AMI 2 1,300 $72,799 $569,400 11 $800,786 $6,263,400 $5,462,614 $496,601
50% AMI 2 1,300 $121,331 $569,400 11 $1,334,644 $6,263,400 $4,928,756 $448,069
80% AMI 2 1,300 $194,130 $569,400 11 $2,135,430 $6,263,400 $4,127,970 $375,270
120% AMI 2 1,300 $330,750 $569,400 11 $3,638,250 $6,263,400 $2,625,150 $238,650
30% AMI 3 1,600 $80,888 $700,800 25 $2,022,188 $17,520,000 $15,497,813 $619,913
50% AMI 3 1,600 $134,813 $700,800 25 $3,370,313 $17,520,000 $14,149,688 $565,988
80% AMI 3 1,600 $215,700 $700,800 25 $5,392,500 $17,520,000 $12,127,500 $485,100
120% AMI 3 1,600 $367,500 $700,800 25 $9,187,500 $17,520,000 $8,332,500 $333,300
30% AMI
Weighted
Average (1)1,551 $78,416 $661,000 36 $2,822,974 $23,783,400 $20,960,426 $582,200
50% AMI
Weighted
Average (1)1,551 $130,693 $661,000 36 $4,704,956 $23,783,400 $19,078,444 $530,000
80% AMI
Weighted
Average (1)1,551 $209,109 $661,000 36 $7,527,930 $23,783,400 $16,255,470 $451,500
120% AMI
Weighted
Average (1)1,551 $356,271 $661,000 36 $12,825,750 $23,783,400 $10,957,650 $304,400
(1) Weighted average based on unit distribution by bedroom count for the owner housing prototype.
(2) Equals total development cost per NSF multiplied by unit size (NSF).
Source: DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-14
Table A-15
Rental Housing Affordability Gap Calculation
Prototype 3
Apartments
City of San Luis Obispo Nexus Study
Income Level No. of BR Unit SF
Total
Units
Development
Cost Per Unit
(1)
Maximum
Monthly Rent
Per Unit
Project Annual
Gross Income
Annual Net
Operating
Income (2)
Affordable
First
Mortgage (3)
Development
Cost
Affordability
Gap
Gap Per
Unit
Extremely Low:
30% AMI 0 450 5 $225,000 $459 $27,540 $5,163 $62,402 $1,125,000 $1,062,598 $212,500
Very Low:
50% AMI 0 450 5 $225,000 $766 $45,960 $22,662 $273,901 $1,125,000 $851,099 $170,200
Low:
60% AMI 0 450 5 $225,000 $919 $55,140 $31,383 $379,306 $1,125,000 $745,694 $149,100
Moderate:
100% AMI 0 450 5 $225,000 $1,276 $76,560 $51,732 $625,251 $1,125,000 $499,749 $99,900
30% AMI 1 700 16 $350,000 $525 $100,800 $28,560 $345,186 $5,600,000 $5,254,814 $328,400
50% AMI 1 700 16 $350,000 $875 $168,000 $92,400 $1,116,779 $5,600,000 $4,483,221 $280,201
60% AMI 1 700 16 $350,000 $1,050 $201,600 $124,320 $1,502,575 $5,600,000 $4,097,425 $256,089
100% AMI 1 700 16 $350,000 $1,458 $279,936 $198,739 $2,402,031 $5,600,000 $3,197,969 $199,873
30% AMI 2 1,100 25 $550,000 $591 $177,300 $63,435 $766,698 $13,750,000 $12,983,302 $519,300
50% AMI 2 1,100 25 $550,000 $984 $295,200 $175,440 $2,120,429 $13,750,000 $11,629,571 $465,200
60% AMI 2 1,100 25 $550,000 $1,181 $354,300 $231,585 $2,799,017 $13,750,000 $10,950,983 $438,000
100% AMI 2 1,100 25 $550,000 $1,641 $492,300 $362,685 $4,383,537 $13,750,000 $9,366,463 $374,700
30% AMI 3 1,400 4 $700,000 $683 $32,784 $14,345 $173,376 $2,800,000 $2,626,624 $656,700
50% AMI 3 1,400 4 $700,000 $1,138 $54,624 $35,093 $424,144 $2,800,000 $2,375,856 $594,000
60% AMI 3 1,400 4 $700,000 $1,365 $65,520 $45,444 $549,252 $2,800,000 $2,250,748 $562,700
100% AMI 3 1,400 4 $700,000 $1,896 $91,008 $69,658 $841,906 $2,800,000 $1,958,094 $489,500
30% AMI
Weighted
Average (1)931 50 $465,500 $564 $338,424 $111,503 $1,347,662 $23,275,000 $21,927,338 $438,500
50% AMI
Weighted
Average (1)931 50 $465,500 $940 $563,784 $325,595 $3,935,252 $23,275,000 $19,339,748 $386,800
60% AMI
Weighted
Average (1)931 50 $465,500 $1,128 $676,560 $432,732 $5,230,150 $23,275,000 $18,044,850 $360,900
100% AMI
Weighted
Average (1)931 50 $465,500 $1,566 $939,804 $682,814 $8,252,726 $23,275,000 $15,022,274 $300,400
100% AMI
(2) Net operating income projected based on the following assumptions:
Vacancy rate:5%
Annual operating expense/unit:$4,200
(3) Affordable first mortgage from Table A-2 based on following financing terms:
Debt Coverage Ratio:1.15
Mortgage interest rate:6%
Mortgage Term:30
Source: DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-15
Table A-16
Maximum Justifiable Residential Nexus Fees
City of San Luis Obispo Nexus Study
Assumes Construction of Rental Housing (1)
2019
Extremely Low Income Very Low Income Low Income Moderate Income Total
Prototype #1
Single-Family
Est. No. of New Employee Households Moving to
San Luis Obispo
3.5 4.0 3.5 3.2 10.7
Gap Per Household (2)
To Provide Rental Units $438,500 $386,800 $360,900 $300,400
Total Gap
To Provide Rental Units $1,534,750 $1,547,200 $1,263,150 $961,280 $3,771,630
No. of Units in Prototype 50 50 50 50
Gap Per Unit in Prototype = Supportable Nexus Fee (3)$30,695 $30,944 $25,263 $19,226 $106,128
Average Square Feet Per Unit in Prototype 931 931 931 931
Gap Per Net Square Foot = Supportable Nexus Fee (4)$32.97 $33.24 $27.14 $20.65 $113.99
Prototype #2
For-Sale Townhomes
Est. No. of New Employee Households Moving to
San Luis Obispo
1.5 1.8 1.6 1.4 4.8
Gap Per Household (2)
To Provide Rental Units $438,500 $386,800 $360,900 $300,400
Total Gap
To Provide Rental Units $657,750 $696,240 $577,440 $420,560 $1,694,240
No. of Units in Prototype 35 35 35 35
Gap Per Unit in Prototype = Supportable Nexus Fee (3)$18,793 $19,893 $16,498 $12,016 $67,200
Average Square Feet Per Unit in Prototype 1,551 1,551 1,551 1,551
Gap Per Net Square Foot = Supportable Nexus Fee (4)$12.12 $12.83 $10.64 $7.75 $43.33
Prototype #3
Apartments
Est. No. of New Employee Households Moving to
San Luis Obispo
1.7 1.9 1.7 1.6 5.2
Gap Per Household (2)
To Provide Rental Units $438,500 $386,800 $360,900 $300,400
Total Gap
To Provide Rental Units $745,450 $734,920 $613,530 $480,640 $2,574,540
No. of Units in Prototype 50 50 50 50
Gap Per Unit in Prototype = Supportable Nexus Fee (3)$14,909 $14,698 $12,271 $9,613 $36,582
Average Square Feet Per Unit in Prototype 931 931 931 931
Gap Per Net Square Foot = Supportable Nexus Fee (4)$16.01 $15.79 $13.18 $10.33 $55.31
(1) Assumes fees are used to assist the development of affordable rental housing using Prototype #3 costs.
(2) Weighted average per unit gap based on distribution of units by bedroom count for rental housing prototype.
(4) Equals gap per unit divided by average square feet per unit for each prototype.
Source: DRA
(3) Total gap divided by the number of units in each prototype.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-16
Table A-17
Single-Family Home Sales
City of San Luis Obispo
June 2019 through November 2019
No. of Year Total Sales Unit Price Per
No.Zip Code Address Sale Date Bedrooms Built Price Sq. Ft.Sq. Ft.
1 93401-3316 1222 Ella St 06/10/2019 2 1940 $256,500 638 $402
2 93401-4410 1845 Chorro St 09/11/2019 2 1938 $312,500 813 $384
3 93405-6526 1464 Gulf St 08/23/2019 2 1963 $525,000 1,116 $470
4 93401-3003 1539 Oceanaire Dr 06/11/2019 2 1963 $530,000 1,250 $424
5 94560-2304 1658 Wilson St 10/01/2019 2 1948 $627,500 808 $777
6 93401-6712 3080 Rockview Pl 10/22/2019 2 $635,000 1,433 $443
7 93405-1240 294 Craig Way 08/29/2019 2 1953 $656,000 795 $825
8 93401-4604 1760 Alrita St 10/03/2019 2 1950 $662,500 2,394 $277
9 93401-5355 1425 Sydney St 06/12/2019 2 1956 $680,000 1,048 $649
10 93405-1756 70 Broad St 08/21/2019 2 1930 $683,000 1,331 $513
11 93401-8028 45 Rafael Way 09/03/2019 2 1950 $694,000 906 $766
12 93704-3107 1957 Partridge Dr 06/12/2019 2 1977 $715,000 2,215 $323
13 93401-5124 335 High St 07/21/2019 2 1938 $730,000 1,104 $661
14 93405-2123 2134 Santa Ynez Ave 11/05/2019 2 1951 $730,000 2,158 $338
15 93428-5910 771 Islay St 06/12/2019 2 1939 $732,000 892 $821
16 93401-2606 1355 Pacific St 08/02/2019 2 $767,500 1,676 $458
17 93446-7767 526 Stoneridge Dr 08/22/2019 2 2002 $795,000 1,645 $483
18 93401-4306 1425 Garden St 10/16/2019 2 1910 $820,000 1,245 $659
19 94596-5838 388 Kentucky Ave 07/18/2019 2 1963 $860,000 1,200 $717
20 93432-0577 1744 Garden St 08/13/2019 2 1941 $900,000 2,164 $416
21 93401-3015 1680 San Luis Dr 07/23/2019 2 1940 $1,000,000 2,874 $348
22 93405-383 Lincoln St 10/11/2019 2 1950 $1,080,000 1,080 $1,000
23 92075-2141 300 Longview Ln 06/06/2019 2 1959 $1,153,000 2,105 $548
Two-Bedroom Units Bottom of Range $256,500 638 $277
Top of Range $1,153,000 2,874 $1,000
Average $719,326 1,430 $552
Median $715,000 1,245 $483
1 93401-7947 1297 Rich Ct 07/01/2019 3 1959 $399,000 1,801 $222
2 93401-4430 1730 Morro St 08/13/2019 3 1973 $500,000 1,404 $356
3 93401-6911 3165 Calle Malva 07/11/2019 3 0 $519,000 1,412 $368
4 93442-3103 1594 Cucaracha Ct 09/23/2019 3 1972 $562,000 1,272 $442
5 93405-6816 1741 Lima Dr 09/18/2019 3 1962 $580,000 1,040 $558
6 93406-0708 334 Highland Dr 10/30/2019 3 1958 $587,000 1,120 $524
7 93405-4923 1109 Oceanaire Dr 06/06/2019 3 1977 $595,000 1,264 $471
8 93130-3156 1511 Balboa St 06/27/2019 3 1963 $599,000 1,116 $537
9 93405-1203 227 N Tassajara Dr 08/23/2019 3 1951 $600,000 983 $610
10 93401-3046 271 La Canada Dr 06/12/2019 3 1951 $610,000 988 $617
11 93405-4901 1347 Avalon St 10/08/2019 3 1963 $615,000 1,116 $551
12 93405-6845 1833 Sola Ct 09/18/2019 3 1963 $617,500 1,040 $594
13 93405-6836 1749 Pico Ct 07/22/2019 3 1963 $629,000 1,540 $408
14 93401-4655 3198 Rose Ave 08/19/2019 3 1960 $634,000 1,404 $452
15 93405-7430 1675 Southwood Dr 07/09/2019 3 1963 $635,000 1,355 $469
16 93406-3005 1142 Atascadero St 06/25/2019 3 1961 $647,000 1,458 $444
17 93405-4709 1705 Diablo Dr 08/13/2019 3 $649,000 1,412 $460
18 93451-9060 350 Calle Lupita 06/20/2019 3 1972 $650,000 1,630 $399
19 93405-6334 1678 Royal Way 07/09/2019 3 1975 $668,000 1,920 $348
20 93401-7619 947 Lobelia Ln 08/13/2019 3 1985 $675,000 1,350 $500
21 93401-7623 3945 Hollyhock Way 11/08/2019 3 1985 $675,000 1,365 $495
22 93401-4641 1507 La Cita Ct 07/22/2019 3 1985 $675,500 1,648 $410
23 92653-5843 288 Craig Way 07/16/2019 3 1953 $680,000 1,202 $566
24 93405-4905 1301 Cavalier Ln 10/24/2019 3 1977 $682,000 1,570 $434
25 93401-6072 1634 Crestview Cir 07/10/2019 3 1963 $700,000 1,321 $530
26 95337-8918 1737 Oceanaire Dr 07/08/2019 3 1961 $705,000 1,848 $381
27 93405-1520 286 Luneta Dr 10/10/2019 3 $705,500 1,175 $600
28 93401-6029 1663 Southwood Dr 09/12/2019 3 1963 $707,000 1,506 $469
29 93405-4845 1463 Oceanaire Dr 06/14/2019 3 1963 $715,000 1,324 $540
30 93405-7434 2186 Augusta Ct 10/02/2019 3 1988 $717,500 1,923 $373
31 93401-4553 2247 Bushnell St 10/08/2019 3 1997 $720,000 1,440 $500
32 93401-5530 464 Corrida Dr 08/22/2019 3 1980 $738,000 1,684 $438
33 93401-5355 1475 Sydney St 06/05/2019 3 1953 $740,000 1,470 $503
34 92653-4911 1065 Fuller Rd 08/27/2019 3 1988 $750,000 1,580 $475
35 93401-7697 1050 Goldenrod Ln 08/30/2019 3 1993 $750,500 1,711 $439
36 93405-4715 1708 Cordova Dr 07/23/2019 3 1984 $759,500 2,207 $344
37 93405-7423 1719 Welsh Ct 07/19/2019 3 2003 $780,000 1,834 $425
38 93401-7860 3273 Violet St 10/22/2019 3 $785,000 1,640 $479
39 93401-7855 3219 Daisy Ln 09/24/2019 3 2015 $785,000 1,746 $450
40 93401-7646 1120 Poppy Ln 09/03/2019 3 1988 $789,000 1,300 $607
41 93401-5526 374 Corrida Dr 08/20/2019 3 1983 $799,000 1,579 $506
42 85752-9175 361 Sage St 07/31/2019 3 2014 $805,000 1,955 $412
43 93401-6809 3238 Cherry Ln 08/23/2019 3 2015 $810,000 1,746 $464
44 93401-7675 1365 Aralia Ct 10/23/2019 3 1990 $825,000 1,818 $454
45 94019-1886 725 Serrano Dr 06/10/2019 3 1952 $827,000 1,329 $622
46 93405-1756 60 Broad St 07/24/2019 3 1953 $832,500 1,120 $743
47 93401-2834 773 Johnson Ave 08/15/2019 3 1925 $843,500 1,134 $744
Table A-17
Single-Family Home Sales
City of San Luis Obispo
June 2019 through November 2019
No. of Year Total Sales Unit Price Per
No.Zip Code Address Sale Date Bedrooms Built Price Sq. Ft.Sq. Ft.
48 94559-2826 380 Sage St 08/15/2019 3 2016 $844,000 1,746 $483
49 93402-1702 1741 Devaul Ranch Dr 11/05/2019 3 2003 $875,000 1,905 $459
50 93401-7842 953 Goldenrod Ln 06/10/2019 3 2001 $890,000 2,173 $410
51 93401-8276 5660 Tamarisk Way 09/16/2019 3 1989 $890,000 2,792 $319
52 94065-1007 1524 Eto Cir 08/13/2019 3 2004 $892,500 2,075 $430
53 93401-2819 1150 Peach St 10/01/2019 3 1922 $910,000 1,812 $502
54 93405-4820 910 Vista Del Collados 10/02/2019 3 1985 $925,000 2,286 $405
55 93405-6300 2025 Royal Way 06/17/2019 3 1996 $949,000 2,095 $453
56 93401-5644 540 Perkins Ln 06/26/2019 3 2018 $980,000 1,866 $525
57 93405-2144 2280 Santa Ynez Ave 08/16/2019 3 $1,040,000 2,389 $435
58 93401-4649 2449 Parkland Ter 07/01/2019 3 1959 $1,075,000 1,659 $648
59 95928-3933 370 Kentucky Ave 07/19/2019 3 1999 $1,115,000 2,550 $437
60 93405-2330 226 Lincoln St 06/11/2019 3 1952 $1,200,000 2,172 $552
Three-Bedroom Units Bottom of Range $399,000 983 $222
Top of Range $1,200,000 2,792 $744
Average $747,625 1,605 $480
Median $718,750 1,575 $466
1 92108-5720 811 Mission St 06/25/2019 4 1981 $249,000 1,404 $177
2 93444-6600 1157 Leff St 06/10/2019 4 1920 $595,000 1,196 $497
3 93405-1241 255 Donna Way 09/30/2019 4 1953 $650,000 1,605 $405
4 93405-6501 1125 Atascadero St 09/06/2019 4 1961 $674,000 1,604 $420
5 93401-6026 3478 Sequoia Dr 07/12/2019 4 1968 $729,000 1,420 $513
6 93401-5320 2410 Helena St 10/09/2019 4 1953 $750,000 2,008 $374
7 93401-5910 1351 Fernwood Dr 08/15/2019 4 1961 $770,000 1,735 $444
8 93405-7434 1542 Royal Way 07/19/2019 4 1994 $785,000 2,510 $313
9 93401-7675 1372 Aralia Ct 06/14/2019 4 1990 $849,000 2,005 $423
10 93405-1513 3 La Entrada Ave 06/12/2019 4 1940 $850,000 2,244 $379
11 93401-7682 1473 Ashmore St 08/26/2019 4 1989 $884,000 2,005 $441
12 95037-3195 477 Ramona Dr 06/18/2019 4 1970 $889,000 1,984 $448
13 92673-3470 1713 Singletree Ct 06/07/2019 4 2003 $900,000 2,431 $370
14 93401-7840 916 Goldenrod Ln 07/25/2019 4 2001 $925,000 2,382 $388
15 93401-5651 679 Woodbridge St 06/26/2019 4 2002 $975,000 2,524 $386
16 93401-4609 1670 Corona Ct 07/11/2019 4 1990 $985,000 2,909 $339
17 93405-2112 2302 Santa Ynez Ave 10/22/2019 4 2006 $985,000 2,283 $431
18 93405-617 Al Hil Dr 08/13/2019 4 1961 $1,000,000 1,977 $506
19 95125-3325 390 San Miguel Ave 10/07/2019 4 1973 $1,139,000 3,282 $347
20 93401-4624 316 Leroy Ct 06/24/2019 4 2003 $1,139,000 2,438 $467
21 95030-3102 1764 Mccollum St 08/08/2019 4 2002 $1,200,000 2,826 $425
22 93401-3681 121 Twin Ridge Dr 09/12/2019 4 1990 $1,200,000 4,236 $283
23 94941-1544 376 Buena Vista Ave 06/18/2019 4 1959 $1,210,000 2,230 $543
24 93405-1051 711 Skyline Dr 07/22/2019 4 1975 $1,240,000 2,915 $425
25 75225-7210 1555 Slack St 08/08/2019 4 1953 $1,245,000 2,374 $524
26 93428-3107 1643 Carla Ct 08/05/2019 4 1977 $1,390,000 3,357 $414
27 93401-6057 1658 Colina Ct 09/16/2019 4 1983 $1,450,000 2,947 $492
28 93405-1007 651 Al Hil Dr 07/22/2019 4 1990 $2,349,000 4,540 $517
Four-Bedroom Units Bottom of Range $249,000 1,196 $177
Top of Range $2,349,000 4,540 $543
Average $1,000,214 2,406 $418
Median $950,000 2,329 $424
1 93405-1244 612 Patricia Dr 08/13/2019 5 1958 $725,000 2,529 $287
2 93405-6536 1534 Oceanaire Dr 07/24/2019 5 1963 $775,000 2,400 $323
3 93401-7671 1317 Ironbark St 06/19/2019 5 1989 $800,000 2,194 $365
4 93401-7840 928 Goldenrod Ln 07/25/2019 5 2001 $960,000 2,382 $403
5 93401-7939 4200 La Posada 07/25/2019 5 2004 $1,005,000 3,148 $319
6 93405-2371 286 Lincoln St 10/07/2019 5 $1,099,000 3,683 $298
7 75225-7210 1724 Mccollum St 08/16/2019 5 2002 $1,260,000 2,826 $446
8 94061-1810 367 Hill St 08/14/2019 5 1993 $1,265,000 4,398 $288
Five-Bedroom Units Bottom of Range $725,000 2,194 $287
Top of Range $1,099,000 3,683 $403
Average $894,000 2,723 $332
Median $880,000 2,465 $321
All Units Bottom of Range $133,500 638 $75
Top of Range $2,675,000 5,497 $1,000
Average $924,371 2,081 $469
Median $810,000 1,905 $444
Source: CoreLogic; DRA.
Table A-18
Condominium Sales
City of San Luis Obispo
April through August 2019
No. of Year Total Sales Unit Price Per
No.Zip Code Address Sale Date Bedrooms Built Price Sq. Ft.Sq. Ft.
1 93401-5879 1041 Southwood Dr L 06/26/2019 1 1987 $270,000 751 $360
2 93401-5866 1023 Southwood Dr F 08/20/2019 1 1987 $310,000 700 $443
3 93405-1669 411 E Foothill Blvd 4 06/19/2019 1 1985 $334,000 755 $442
One-Bedroom Units Bottom of Range $270,000 700 $360
Top of Range $334,000 755 $443
Average $304,667 735 $415
Median $310,000 751 $442
4 93401-5822 1189 Laurel Ln 26 08/07/2019 2 1963 $300,000 900 $333
5 93401-5872 1031 Southwood Dr G 06/04/2019 2 1987 $345,000 966 $357
6 93401-5920 1261 Southwood Dr 5 05/16/2019 2 1963 $350,000 900 $389
7 93401-6753 3335 Broad St 20 06/06/2019 2 1982 $360,000 1,190 $303
8 93405-6133 1750 Prefumo Canyon Rd 57 09/03/2019 2 1973 $366,000 850 $431
9 93401-6752 3335 Broad St 12 06/26/2019 2 1982 $370,000 1,190 $311
10 93401-5879 1041 Southwood Dr G 06/13/2019 2 1987 $370,000 966 $383
11 93405-6137 1750 Prefumo Canyon Rd 74 07/29/2019 2 1973 $375,000 1,001 $375
12 93401-5868 1025 Southwood Dr J 08/16/2019 2 1987 $375,000 966 $388
13 93405-6119 1750 Prefumo Canyon Rd 1 07/22/2019 2 1973 $390,000 850 $459
14 93401-5875 1035 Southwood Dr F 07/02/2019 2 1987 $390,000 966 $404
15 93401-6754 3290 Rockview Pl 4 08/15/2019 2 1982 $402,000 1,436 $280
16 93401-5874 1033 Southwood Dr T 08/02/2019 2 1987 $413,000 1,047 $394
17 93401-3400 589 Brizzolara St B 04/09/2019 2 1988 $416,000 960 $433
18 93401-5543 2250 King Ct 51 04/24/2019 2 1980 $422,000 1,256 $336
19 93405-1314 375 N Chorro St A 08/23/2019 2 1984 $435,000 971 $448
20 93401-5950 1330 Southwood Dr 18 07/11/2019 2 1979 $455,000 1,208 $377
21 93401-5502 2250 King Ct 21 06/06/2019 2 1980 $457,000 1,256 $364
22 93405-4937 1106 Oceanaire Dr 13 07/16/2019 2 1982 $465,000 1,369 $340
23 93401-5177 2221 King Ct 17 07/29/2019 2 1988 $465,000 1,192 $390
24 93405-4936 1106 Oceanaire Dr 1 05/06/2019 2 1982 $469,000 1,330 $353
25 93401-5553 2220 Exposition Dr 77 05/06/2019 2 1985 $470,000 1,067 $440
26 93405-4937 1106 Oceanaire Dr 21 05/30/2019 2 1982 $475,000 1,369 $347
27 93401-5176 2221 King Ct 2 08/30/2019 2 1988 $480,000 1,192 $403
28 93401-3426 877 Nipomo St F 06/14/2019 2 1988 $480,000 1,012 $474
29 93401-7266 944 Tarragon Ln 1403 07/09/2019 2 2010 $495,000 1,417 $349
30 93405-1872 35 Stenner St B 07/08/2019 2 1985 $495,000 1,025 $483
31 93401-7277 841 Coriander Ln 3001 07/25/2019 2 $510,000 1,300 $392
32 93405-1870 25 Stenner St H 05/20/2019 2 1985 $520,000 1,025 $507
33 93401-7274 806 Basil Ln 06/04/2019 2 $525,000 1,321 $397
34 93401-7275 821 Basil Ln 04/15/2019 2 $525,000 1,321 $397
35 93401-7607 876 Marigold Ct 5 08/09/2019 2 1985 $550,000 1,035 $531
36 93401-7656 975 Bluebell Way 55 07/02/2019 2 1988 $572,500 1,110 $516
37 93405-8502 1185 E Foothill Blvd 12 05/23/2019 2 1986 $580,000 1,218 $476
38 93401-7660 927 Bluebell Way 13 07/31/2019 2 1988 $607,000 1,348 $450
39 93401-4545 1060 Trevor Way 26 05/20/2019 2 1989 $642,000 1,756 $366
40 93401-7600 4144 Poinsettia St 2 05/03/2019 2 1988 $650,000 1,250 $520
Two-Bedroom Units Bottom of Range $300,000 850 $280
Top of Range $650,000 1,756 $531
Average $458,554 1,150 $403
Median $465,000 1,190 $392
41 93401-7266 960 Tarragon Ln 1501 06/25/2019 3 2010 $502,000 1,658 $303
42 93401-7264 850 Tarragon Ln 1309 08/27/2019 3 2009 $525,000 1,905 $276
43 93401-7249 3591 Sacramento Dr 56 04/16/2019 3 2007 $594,000 1,659 $358
44 93401-7265 910 Bay Leaf Dr 08/19/2019 3 2016 $595,000 1,879 $317
45 93401-7242 3591 Sacramento Dr 12 04/24/2019 3 2006 $599,000 1,596 $375
46 93401-7245 3591 Sacramento Dr 26 05/08/2019 3 2007 $690,000 1,893 $365
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-19
Table A-18
Condominium Sales
City of San Luis Obispo
April through August 2019
No. of Year Total Sales Unit Price Per
No.Zip Code Address Sale Date Bedrooms Built Price Sq. Ft.Sq. Ft.
Three-Bedroom Units Bottom of Range $502,000 1,596 $276
Top of Range $690,000 1,905 $375
Average $584,167 1,765 $332
Median $594,500 1,769 $337
All Units Bottom of Range $270,000 700 $276
Top of Range $690,000 1,905 $531
Average $464,902 1,203 $394
Median $467,000 1,191 $389
Source: CoreLogic; DRA.
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-20
Table A-19
Vacant Land Sales
City of San Luis Obispo
October 2018 to October 2019
Total Sales Lot Size Price Per
No.Zip Code Address Sale Date Price (Sq. Ft.)Sq. Ft.
1.93401-Sequoia Dr 11/21/2018 $800,000 22,216 $36.01
2.Loomis 01/24/2019 $145,000 7,725 $18.77
3.93401-Fixlini 03/06/2019 $340,000 42,085 $8.08
4.93401-Prado Rd 05/24/2019 $746,500 5,927 $125.95
5.93401-Prado Rd 05/24/2019 $723,000 6,306 $114.65
6.93401-Prado Rd 05/24/2019 $686,000 5,480 $125.18
7.93401-1565 Phillips Ln 05/31/2019 $379,000 7,500 $50.53
8.93401-6821 473 Mesa Way 06/13/2019 $667,000 5,824 $114.53
9.93401-Prado Rd 06/13/2019 $753,500 7,903 $95.34
10.93405-140 Highland Dr 06/13/2019 $607,000 14,385 $42.20
11.Prado Rd 07/03/2019 $737,500 5,936 $124.24
12.93401-6821 427 Mesa Way 07/09/2019 $727,000 6,305 $115.31
13.93401-Prado Rd 07/10/2019 $677,000 7,062 $95.87
14.93401-Orcutt Rd 07/25/2019 $2,706,500 13,718 $197.30
15.93405-710 Bassi Dr 07/26/2019 $900,000 107,158 $8.40
16.93401-Prado Rd 08/15/2019 $759,000 8,273 $91.74
17.93401-Prado Rd 08/15/2019 $775,500 9,473 $81.86
18.93401-Prado Rd 08/15/2019 $752,000 6,091 $123.46
Bottom of Range $8.08
Top of Range $197.30
Average $87.19
Median $95.60
Source: CoreLogic; David Paul Rosen & Associates
City of San Luis Obispo Nexus Study
Appendix A: Residential Nexus Tables
December 10, 2019
A-21
City of San Luis Obispo
Non-Residential Nexus Study
Appendix B Tables
2/12/20
List of Tables
Table
Number Table Title
Page
No.
Table B-1 2019 National Occupational Distribution by Land Use B-1
Table B-2 Wages by Occupational Grouping, San Luis Obispo County B-2
Table B-3 Estimated Occupational Distribution of New Employee Households by Land
Use
B-4
Table B-4 Estimated Qualifying Extremely Low Income Households by Land Use B-5
Table B-5 Estimated Qualifying Very Low Income Households by Land Use B-6
Table B-6 Estimated Qualifying Low Income Households by Land Use B-7
Table B-7 Estimated Qualifying Moderate Income Households by Land Use B-8
Table B-8 Justifiable Non-Residential Nexus Fee Per Building Square Foot by Land
Use
B-9
Table B-1
2019 National Occupational Distribution by Land Use
2019
Industry/Occupation Category (1)
Management 628,109 4%68,960 5%2,478,949 9%349,650 9%
Business and Financial Operations 0 0%0 0%3,109,766 11%256,476 6%
Computer and Mathematical 0 0%0 0%6,461,261 23%282,133 7%
Architecture and Engineering 0 0%0 0%1,358,359 5%379,825 10%
Life, Physical and Social Science 0 0%0 0%0 0%605,361 15%
Community and Social Services 0 0%0 0%0 0%0 0%
Legal 0 0%0 0%0 0%0 0%
Education, Training, and Library 0 0%0 0%0 0%0 0%
Arts, Design, Entertainment, Sports and Media 0 0%0 0%0 0%0 0%
Healthcare Practitioners and Technical 0 0%0 0%1,152,766 4%0 0%
Healthcare Support 0 0%0 0%0 0%0 0%
Protective Service 0 0%0 0%0 0%0 0%
Food Preparation and Serving Related 11,168,090 33%379,520 27%0 0%0 0%
Building and Grounds Cleaning and Maintenance 0 0%489,570 29%0 0%0 0%
Personal Care and Service 761,400 0%61,530 7%0 0%0 0%
Sales and Related 8,674,839 35%33,960 3%1,789,343 6%132,409 3%
Office and Administrative Support 2,539,341 11%310,980 17%5,752,417 21%444,439 11%
Farming, Fishing and Forestry 0 0%0 0%0 0%0 0%
Construction and Extraction 0 0%0 0%0 0%0 0%
Installation, Maintenance and Repair 632,209 3%76,990 4%0 0%444,487 11%
Production 572,365 0%34,090 0%0 0%602,981 15%
Transportation and Material Moving 1,225,101 6%0 0%0 0%245,346 6%
All Other Occupations 1,239,781 8%78,960 8%5,488,426 20%245,863 6%
________________________________________________________________
Industry Total 27,441,235 100%1,534,560 100%27,591,287 100%3,988,970 100%
(1) Broken out for categories that account for 2% or more of total employment by land use. Categories accounting for less than 2% are combined in "all other occupations."
Source: Bureau of Labor Statistics, Occupational Employment Statistics program; DRA.
Retail/Service Hotel Office/Institutional Industrial
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-1
Table B-2
Wages by Occupational Grouping, San Luis Obispo County
San Luis Obispo County
1st Quarter 2019
SOC
Code
Prefix
(1)
Occupational
Category
May
2018
Employ-
ment
Estimates
% of
Total
Employ-
ment
Mean
Hourly
Wage
Mean
Annual
Wage
25th
Percentile
Hourly
Wage
Median
(50th
Percentile)
Hourly
Wage
75th
Percentile
Hourly
Wage
25th
Percentile
Annual
Wage
Median
(50th
Percentile)
Annual
Wage
75th
Percentile
Annual
Wage
Est. % of
Jobs
Below
30% AMI
Est. % of
Jobs
Between
30%-50%
AMI
Est. % of
Jobs
Between
50%-80%
AMI
Est. % of
Jobs
Between
80%-
120%
AMI
11 Management 5,720 5%$51.44 $106,994 $31.18 $45.00 $65.67 $64,854 $93,600 $136,594 0%0%20%20%
13 Business and
Financial
Operations
4,220 4%$37.88 $78,787 $24.33 $32.71 $42.56 $50,606 $68,037 $88,525 5%15%25%25%
15 Computer and
Mathematical
2,510 2%$36.77 $76,479 $24.05 $34.33 $47.17 $50,024 $71,406 $98,114 5%15%20%25%
17 Architecture
and Engineering
2,070 2%$46.24 $96,176 $30.37 $46.12 $59.71 $63,170 $95,930 $124,197 0%0%25%30%
19 Life, Physical
and Social
Science
980 1%$40.44 $84,120 $26.10 $38.93 $54.07 $54,288 $80,974 $112,466 5%5%20%30%
20 Community and
Social Services
1,650 1%$29.91 $62,215 $18.39 $27.21 $39.62 $38,251 $56,597 $82,410 10%15%25%30%
23 Legal 690 1%$38.45 $79,969 $23.28 $28.32 $52.23 $48,422 $58,906 $108,638 5%15%30%15%
25 Education,
Training, and
Library
8,150 7%$27.36 $56,904 $16.06 $23.31 $36.45 $33,405 $48,485 $75,816 10%25%30%20%
27 Arts, Design,
Entertainment,
Sports, Media
1,100 1%$26.44 $55,011 $15.73 $22.80 $30.04 $32,718 $47,424 $62,483 10%25%35%20%
29 Healthcare
Practitioners
and Technical
7,180 6%$45.56 $94,772 $28.15 $39.82 $55.24 $58,552 $82,826 $114,899 2%5%25%25%
31 Healthcare
Support
2,510 2%$19.09 $39,725 $14.80 $18.12 $22.85 $30,784 $37,690 $47,528 10%40%30%15%
33 Protective
Service
3,470 3%$35.07 $72,938 $20.45 $35.45 $45.91 $42,536 $73,736 $95,493 5%15%20%30%
35 Food
Preparation and
Serving-Related
14,770 13%$13.79 $28,682 $11.56 $12.34 $14.66 $24,045 $25,667 $30,493 25%40%25%10%
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-2
Table B-2
Wages by Occupational Grouping, San Luis Obispo County
San Luis Obispo County
1st Quarter 2019
SOC
Code
Prefix
(1)
Occupational
Category
May
2018
Employ-
ment
Estimates
% of
Total
Employ-
ment
Mean
Hourly
Wage
Mean
Annual
Wage
25th
Percentile
Hourly
Wage
Median
(50th
Percentile)
Hourly
Wage
75th
Percentile
Hourly
Wage
25th
Percentile
Annual
Wage
Median
(50th
Percentile)
Annual
Wage
75th
Percentile
Annual
Wage
Est. % of
Jobs
Below
30% AMI
Est. % of
Jobs
Between
30%-50%
AMI
Est. % of
Jobs
Between
50%-80%
AMI
Est. % of
Jobs
Between
80%-
120%
AMI
37 Building and
Grounds
Cleaning and
Maintenance
4,580 4%$16.38 $34,059 $12.46 $14.71 $18.79 $25,917 $30,597 $39,083 25%35%20%20%
39 Personal Care
and Service
7,020 6%$14.17 $29,476 $11.77 $12.61 $14.68 $24,482 $26,229 $30,534 25%40%25%10%
40 Sales and
Related
13,040 11%$19.06 $39,633 $12.33 $15.03 $20.10 $25,646 $31,262 $41,808 25%40%20%15%
43 Office and
Administrative
Support
15,280 13%$19.48 $40,521 $13.77 $18.21 $23.43 $28,642 $37,877 $48,734 15%35%25%15%
45 Farming,
Fishing,
Forestry
2,770 2%$14.01 $29,138 $11.54 $12.64 $15.02 $24,003 $26,291 $31,242 25%40%25%10%
47 Construction
and Extraction
5,710 5%$27.04 $56,241 $18.96 $25.32 $31.97 $39,437 $52,666 $66,498 10%20%35%15%
49 Installation,
Maintenance
and Repair
3,970 3%$24.56 $51,091 $15.92 $21.62 $30.02 $33,114 $44,970 $62,442 10%25%35%20%
51 Production 5,270 4%$21.03 $43,746 $12.99 $16.79 $24.56 $27,019 $34,923 $51,085 15%45%20%15%
53 Transportation
and Material
Moving
4,780 4%$18.34 $38,150 $12.47 $15.88 $22.11 $25,938 $33,030 $45,989 25%40%15%10%
TOTAL 117,440 100%
(1) The first two digits of the six digit Standard Occupational Classification (SOC) code.
Source: California Employment Development Department, Occupational Employment Statistics (OES) Survey, First Quarter 2019; DRA
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-3
Table B-3
Estimated Occupational Distribution of New Employee Households by Land Use
City of San Luis Obispo Nexus Study
2019
Retail Hotel Service Office Industrial Institutional
Steps Factor %No.Units %No.Units %No.Units %No.Units %No.Units %No.Units
1.Assumed Amount Land Use 10,000 GSF 100 Rooms 10,000 GSF 10,000 GSF 20,000 GSF 20,000 GSF
2.Employment Density Factor 350 SF/Emp.1.00 Emp./Rm.400 SF/Emp.300 SF/Emp.750 SF/Emp.300 SF/Emp.
1,000 SF/Room
Number of EmployeesTotal Employees 29.0 Emp.100.0 Emp.25.0 Emp.33.0 Emp.27.0 Emp.67.0 Emp.
3.Employees Living in City of
City of Elk Grove (1) San Luis Obispo (1)61.0%17.7 Emp.61.0 Emp.15.3 Emp.20.1 Emp.16.5 Emp.40.9 Emp.
4.Adjustment for Labor Force Participation (2)5%16.8 Emp.58.0 Emp.14.5 Emp.19.1 Emp.15.6 Emp.38.8 Emp.
5.Number of Employees Per Household 1.97 8.5 HH 29.4 HH 7.4 HH 9.7 HH 7.9 HH 19.7 HH
Employees Per Household (3)
6.Adjustment for Overlap with Residential 70%2.6 HH 29.4 HH 2.2 HH 9.7 HH 7.9 HH 19.7 HH
Nexus Fee--Retail and Service Only (4)
7. Household Occupational Distribution (5)
Management 4%0.1 HH 5%1.5 HH 4%0.1 HH 9%0.9 HH 9%0.7 HH 9%1.8 HH
Business and Financial Operations 0%0.0 HH 0%0.0 HH 0%0.0 HH 11%1.1 HH 6%0.5 HH 11%2.2 HH
Computer and Mathematical 0%0.0 HH 0%0.0 HH 0%0.0 HH 23%2.3 HH 7%0.6 HH 23%4.6 HH
Architecture and Engineering 0%0.0 HH 0%0.0 HH 0%0.0 HH 5%0.5 HH 10%0.8 HH 5%1.0 HH
Life, Physical and Social Science 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 15%1.2 HH 0%0.0 HH
Community and Social Services 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Legal 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Education, Training, and Library 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Arts, Design, Entertainment, Sports and
Media 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Healthcare Practitioners and Technical 0%0.0 HH 0%0.0 HH 0%0.0 HH 4%0.4 HH 0%0.0 HH 4%0.8 HH
Healthcare Support 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Protective Service 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Food Preparation and Serving-Related 33%0.8 HH 27%8.0 HH 33%0.7 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Building/Grounds Cleaning and
Maintenance 0%0.0 HH 29%8.5 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Personal Care and Service 0%0.0 HH 7%2.1 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Sales and Related 35%0.9 HH 3%0.9 HH 35%0.8 HH 6%0.6 HH 3%0.3 HH 6%1.3 HH
Office and Administrative Support 11%0.3 HH 17%5.0 HH 11%0.2 HH 21%2.0 HH 11%0.9 HH 21%4.1 HH
Farming, Fishing and Forestry 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Construction and Extraction 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH
Installation, Maintenance and Repair 3%0.1 HH 4%1.1 HH 3%0.1 HH 0%0.0 HH 11%0.9 HH 0%0.0 HH
Production 0%0.0 HH 0%0.0 HH 0%0.0 HH 0%0.0 HH 15%1.2 HH 0%0.0 HH
Transportation and Material Moving 6%0.2 HH 0%0.0 HH 6%0.1 HH 0%0.0 HH 6%0.5 HH 0%0.0 HH
All Other Occupations 8%0.2 HH 8%2.3 HH 8%0.2 HH 20%1.9 HH 6%0.5 HH 20%3.9 HH____________________________________________________________
Total 100%2.6 100%29.4 100%2.2 100%9.7 100%7.9 100%19.7
______
Legend: HH = households; SF = square feet; Emp = employees.
(1) For City of San Luis Obispo. Source: American Community Survey, five-year estimates, 2017.
(2) Adjustment for potential new jobs taken by existing residents of San Luis Obispo County.
(3) For City of San Luis Obispo. Source: American Community Survey, five-year estimates, 2017.
(4) Adjustment to eliminate potential overlap with residential nexus fee in retail and service categories. Assumes 70% overlap, with 30% of demand coming from sources other than local residents.
(5) From Bureau of Labor Statistics, Occupational Employment Statistic Program.
Source: American Community Survey; Bureau of Labor Statistics, Occupational Employment Statistic Program; DRA.
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-4
Table B-4
Estimated Qualifying Extremely Low Income Households by Land Use
City of San Luis Obispo Nexus Study
2019
% of
Occupation
Qualifying Retail Hotel Service Office Industrial Institutional
Steps as ELI Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)
8. Households Earning Less than
30% AMI
Management 0%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Business and Financial Operations 5%0%0.0 0%0.0 0%0.0 1%0.1 0%0.0 1%0.1
Computer and Mathematical 5%0%0.0 0%0.0 0%0.0 1%0.1 0%0.0 1%0.2
Architecture and Engineering 0%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Life, Physical and Social Science 5%0%0.0 0%0.0 0%0.0 0%0.0 1%0.1 0%0.0
Community and Social Services 10%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Legal 5%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Education, Training, and Library 10%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Arts, Design, Entertainment, Sports and Media 10%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Healthcare Practitioners and Technical 2%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Healthcare Support 10%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Protective Service 5%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Food Preparation and Serving Related 25%8%0.2 7%2.0 8%0.2 0%0.0 0%0.0 0%0.0
Building and Grounds Cleaning and Maintenance 25%0%0.0 7%2.1 0%0.0 0%0.0 0%0.0 0%0.0
Personal Care and Service 25%0%0.0 2%0.5 0%0.0 0%0.0 0%0.0 0%0.0
Sales and Related 25%9%0.2 1%0.2 9%0.2 2%0.2 1%0.1 2%0.3
Office and Administrative Support 15%2%0.0 3%0.7 2%0.0 3%0.3 2%0.1 3%0.6
Farming, Fishing and Forestry 25%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Construction and Extraction 10%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Installation, Maintenance and Repair 10%0%0.0 0%0.1 0%0.0 0%0.0 1%0.1 0%0.0
Production 15%0%0.0 0%0.0 0%0.0 0%0.0 2%0.2 0%0.0
Transportation and Material Moving 25%1%0.0 0%0.0 1%0.0 0%0.0 2%0.1 0%0.0________________________________________________________________________
Total 21%0.4 20%5.6 21%0.4 7%0.7 9%0.7 7%1.2
______
(1) Based on distribution of wages by occupation from California Employment Development Department occupational wage survey.
(2) Percent distribution of households by occupation by land use multiplied by percent of occupation qualifying as each income level.
(3) Percent of occupation qualifying at specified income level by land use multiplied by total employee households generated by land use prototype.
Source: Bureau of Labor Statistics, Occupational Employment Statistics program; California Employment Development Department First Quareter 2019 occupational wage survey; DRA
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-5
Table B-5
Estimated Qualifying Very Low Income Households by Land Use
City of San Luis Obispo Nexus Study
2019
% of
Occupation
Qualifying Retail Hotel Service Office Industrial Institutional
Steps as VLI Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)
8. Households Earning Between 30% AMI
and 50% AMI
Management 0%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Business and Financial Operations 15%0%0.0 0%0.0 0%0.0 2%0.2 1%0.1 2%0.3
Computer and Mathematical 15%0%0.0 0%0.0 0%0.0 4%0.3 1%0.1 4%0.7
Architecture and Engineering 0%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Life, Physical and Social Science 5%0%0.0 0%0.0 0%0.0 0%0.0 1%0.1 0%0.0
Community and Social Services 15%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Legal 15%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Education, Training, and Library 25%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Arts, Design, Entertainment, Sports and Media 25%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Healthcare Practitioners and Technical 5%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Healthcare Support 40%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Protective Service 15%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Food Preparation and Serving Related 40%13%0.3 11%3.2 13%0.3 0%0.0 0%0.0 0%0.0
Building and Grounds Cleaning and Maintenance 35%0%0.0 10%3.0 0%0.0 0%0.0 0%0.0 0%0.0
Personal Care and Service 40%0%0.0 3%0.9 0%0.0 0%0.0 0%0.0 0%0.0
Sales and Related 40%14%0.4 1%0.4 14%0.3 3%0.3 1%0.1 3%0.5
Office and Administrative Support 35%4%0.1 6%1.7 4%0.1 7%0.7 4%0.3 7%1.4
Farming, Fishing and Forestry 40%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Construction and Extraction 20%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Installation, Maintenance and Repair 25%1%0.0 1%0.3 1%0.0 0%0.0 3%0.2 0%0.0
Production 45%0%0.0 0%0.0 0%0.0 0%0.0 7%0.5 0%0.0
Transportation and Material Moving 40%2%0.1 0%0.0 2%0.1 0%0.0 2%0.2 0%0.0________________________________________________________________________
Total 34%0.9 32%9.5 34%0.8 15%1.5 20%1.6 15%2.9
______
(1) Based on distribution of wages by occupation from California Employment Development Department occupational wage survey.
(2) Percent distribution of households by occupation by land use multiplied by percent of occupation qualifying as each income level.
(3) Percent of occupation qualifying at specified income level by land use multiplied by total employee households generated by land use prototype.
Source: Bureau of Labor Statistics, Occupational Employment Statistics program; California Employment Development Department First Quareter 2019 occupational wage survey; DRA
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-6
Table B-6
Estimated Qualifying Low Income Households by Land Use
City of San Luis Obispo Nexus Study
2019
% of
Occupation
Qualifying Retail Hotel Service Office Industrial Institutional
Steps as LI Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)
8.Households Earning Between 51% AMI
and 80% AMI
Management 20%1%0.0 1%0.3 1%0.0 2%0.2 0%0.0 0%0.0
Business and Financial Operations 25%0%0.0 0%0.0 0%0.0 3%0.3 1%0.1 2%0.3
Computer and Mathematical 20%0%0.0 0%0.0 0%0.0 5%0.5 1%0.1 4%0.7
Architecture and Engineering 25%0%0.0 0%0.0 0%0.0 1%0.1 0%0.0 0%0.0
Life, Physical and Social Science 20%0%0.0 0%0.0 0%0.0 0%0.0 1%0.1 0%0.0
Community and Social Services 25%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Legal 30%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Education, Training, and Library 30%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Arts, Design, Entertainment, Sports and Media 35%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Healthcare Practitioners and Technical 25%0%0.0 0%0.0 0%0.0 1%0.1 0%0.0 0%0.0
Healthcare Support 30%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Protective Service 20%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Food Preparation and Serving Related 25%8%0.2 7%2.0 8%0.2 0%0.0 0%0.0 0%0.0
Building and Grounds Cleaning and Maintenance 20%0%0.0 6%1.7 0%0.0 0%0.0 0%0.0 0%0.0
Personal Care and Service 25%0%0.0 2%0.5 0%0.0 0%0.0 0%0.0 0%0.0
Sales and Related 20%7%0.2 1%0.2 7%0.2 1%0.1 1%0.1 3%0.5
Office and Administrative Support 25%3%0.1 4%1.2 3%0.1 5%0.5 4%0.3 7%1.4
Farming, Fishing and Forestry 25%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Construction and Extraction 35%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Installation, Maintenance and Repair 35%1%0.0 1%0.4 1%0.0 0%0.0 3%0.2 0%0.0
Production 20%0%0.0 0%0.0 0%0.0 0%0.0 7%0.5 0%0.0
Transportation and Material Moving 15%1%0.0 0%0.0 1%0.0 0%0.0 2%0.2 0%0.0________________________________________________________________________
Total 21%0.5 22%6.3 21%0.5 18%1.8 20%1.6 15%2.9
______
(1) Based on distribution of wages by occupation from California Employment Development Department occupational wage survey.
(2) Percent distribution of households by occupation by land use multiplied by percent of occupation qualifying as each income level.
(3) Percent of occupation qualifying at specified income level by land use multiplied by total employee households generated by land use prototype.
Source: Bureau of Labor Statistics, Occupational Employment Statistics program; California Employment Development Department First Quareter 2019 occupational wage survey; DRA
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-7
Table B-7
Estimated Qualifying Moderate Income Households by Land Use
City of San Luis Obispo Nexus Study
2019
% of
Occupation
Qualifying Retail Hotel Service Office Industrial Institutional
Steps as MI Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)Percent (2)No. (3)
8.Households Earning Between 81% AMI
and 80% AMIand 120% AMI
Management 20%1%0.0 1%0.3 1%0.0 2%0.2 0%0.0 0%0.0
Business and Financial Operations 25%0%0.0 0%0.0 0%0.0 3%0.3 1%0.1 2%0.3
Computer and Mathematical 25%0%0.0 0%0.0 0%0.0 6%0.6 1%0.1 4%0.7
Architecture and Engineering 30%0%0.0 0%0.0 0%0.0 1%0.1 0%0.0 0%0.0
Life, Physical and Social Science 30%0%0.0 0%0.0 0%0.0 0%0.0 1%0.1 0%0.0
Community and Social Services 30%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Legal 15%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Education, Training, and Library 20%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Arts, Design, Entertainment, Sports and Media 20%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Healthcare Practitioners and Technical 25%0%0.0 0%0.0 0%0.0 1%0.1 0%0.0 0%0.0
Healthcare Support 15%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Protective Service 30%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Food Preparation and Serving Related 10%3%0.1 3%0.8 3%0.1 0%0.0 0%0.0 0%0.0
Building and Grounds Cleaning and Maintenance 20%0%0.0 6%1.7 0%0.0 0%0.0 0%0.0 0%0.0
Personal Care and Service 10%0%0.0 1%0.2 0%0.0 0%0.0 0%0.0 0%0.0
Sales and Related 15%5%0.1 0%0.1 5%0.1 1%0.1 1%0.1 3%0.5
Office and Administrative Support 15%2%0.0 3%0.7 2%0.0 3%0.3 4%0.3 7%1.4
Farming, Fishing and Forestry 10%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Construction and Extraction 15%0%0.0 0%0.0 0%0.0 0%0.0 0%0.0 0%0.0
Installation, Maintenance and Repair 20%1%0.0 1%0.2 1%0.0 0%0.0 3%0.2 0%0.0
Production 15%0%0.0 0%0.0 0%0.0 0%0.0 7%0.5 0%0.0
Transportation and Material Moving 10%1%0.0 0%0.0 1%0.0 0%0.0 2%0.2 0%0.0________________________________________________________________________
Total 12%0.2 14%4.0 12%0.2 17%1.7 20%1.6 15%2.9
______
(1) Based on distribution of wages by occupation from California Employment Development Department occupational wage survey.
(2) Percent distribution of households by occupation by land use multiplied by percent of occupation qualifying as each income level.
(3) Percent of occupation qualifying at specified income level by land use multiplied by total employee households generated by land use prototype.
Source: Bureau of Labor Statistics, Occupational Employment Statistics program; California Employment Development Department First Quareter 2019 occupational wage survey; DRA
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-8
Table B-8
Justifiable Non-Residential Nexus Fee Per Building Square Foot by Land Use
City of San Luis Obispo Nexus Study
2019
Retail Hotel Service Office Industrial Institutional
Gross Building Square Feet in Prototype 10,000 100,000 10,000 10,000 20,000 20,000
New Low and Moderate Income Households
Extremely Low Income (Less than 30% AMI)0.4 5.6 0.4 0.7 0.7 1.2
Very Low Income (30% to 50% AMI)0.9 9.5 0.8 1.5 1.6 2.9
Low Income (50% to 80% AMI)0.5 6.3 0.5 1.8 1.6 2.9
Moderate Income 0.2 4.0 0.2 1.7 1.6 2.9
Total 2.0 25.4 1.9 5.7 5.5 9.9
TOTAL HOUSING GAP
Based on Construction of Rental Housing (1)
Extremely Low Income @ Per Unit Gap of:$427,700 $171,080 $2,395,120 $171,080 $299,390 $299,390 $513,240
Very Low Income @ Per Unit Gap of:$374,900 $337,410 $3,561,550 $299,920 $562,350 $599,840 $1,087,210
Low Income @ Per Unit Gap of:$295,600 $147,800 $1,862,280 $147,800 $532,080 $472,960 $857,240
Moderate Income $198,300 $39,660 $793,200 $39,660 $337,110 $317,280 $575,070
Total Housing Gap $695,950 $8,612,150 $658,460 $1,730,930 $1,689,470 $3,032,760
Justifiable Fee Per Square Foot Bldg. Area
Extremely Low Income (Less than 30% AMI)$17.11 $23.95 $17.11 $29.94 $14.97 $25.66
Very Low Income $33.74 $35.62 $29.99 $56.24 $29.99 $54.36
Low Income $14.78 $18.62 $14.78 $53.21 $23.65 $42.86
Moderate Income $3.97 $7.93 $3.97 $33.71 $15.86 $28.75
Total Fee Per Square Foot $69.60 $86.12 $65.85 $173.09 $84.47 $151.64
(1) Based on average per unit affordability gap by income level for Prototype #3, Rental Apartments.
Legend: HH = households; SF = square feet; Emp = employees..
Source: DRA
City of San Luis Obispo Nexus Study
Appendix B: Non-Residential Nexus Tables
February 12, 2020
B-9
DAV I D PAU L ROS E N & A S S O C I ATE S
D EVELOPMENT, FINANCE AND POLICY ADVISORS
Appendix C: Inclusionary Housing
Program Survey
City of San Luis Obispo
February 12, 2020
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey
Inclusionary Housing Program Survey
PREPARED FOR:
City of San Luis Obispo
990 Palm St.
San Luis Obispo, CA 93401
PREPARED BY:
David Paul Rosen & Associates
3527 Mt. Diablo Blvd, #361
Lafayette, CA 94549
510-451-2552
david@draconsultants.com
www.draconsultants.com
3941 Hendrix Street
Irvine, CA 92614
949-559-5650
nora@draconsultants.com
www.draconsultants.com
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey
Table of Contents
Summary Table ...................................................................... 1
Inclusionary Housing Programs
Davis ...................................................................................... 2
Monterey ............................................................................... 7
Santa Barbara ....................................................................... 10
Santa Cruz ........................................................................... 14
Ventura ................................................................................ 21
Petaluma .............................................................................. 24
Non-Residential Nexus Fee Programs
Petaluma .............................................................................. 27
Table 1
Inclusionary Housing Set-Aside and Threshold Size Provisions
Selected California Inclusionary Housing Programs
2019
City Year Adopted
Rental Owner Project
Size
Threshold
2019 Population
(2010-2019 %
Pop. Growth) % of Units % of AMI % of Units % of AMI
Davis
1987 5-19 Units: 15% plus
15%
80% AMI
50% AMI
SFD >5000 SF Lots: 25%
80%-120% AMI
w/ 100% AMI
Ave
5 units 69,761
(6.3%) SFD <5000 SF Lots: 15%
20+ Units: 25% plus
10% 80% AMI
50% AMI
SFA: 10%
Stacked Condos or Vertical
Mixed Use: 5%
Monterey 2003 20% 120% AMI 20% 120% AMI 6 units 28,448
(2.3%)
Petaluma 2018
(Orig. 1984)
7.5% plus
7.5%
50%
80%
7.5% plus
7.5%
80%
120%
5 units 62,427
(7.4%)
Santa Barbara1 2009 5-9 Units: 1 unit 120% AMI 10+ Units: 15% 120% AMI 5 units
(Rental)
2 units
(Owner)
93,532
(5.8%) 10+ Units: 10% 120% AMI Duplexes, Luxury Condos:
15%
130% AMI
SFD: 15% 160% AMI
Santa Cruz 2006 DT Dev. Area: 15% 80% AMI 2-4 units: 1 Unit 80% AMI 2 units 65,807
(9.8%) Outside DDA: %
Rental2
80% AMI 5+ Units: 15%
120% AMI
SROs: 15% 50% AMI
Ventura
2004 6% plus
9%
50% AMI
80% or 120%
6% plus
9%
80% AMI
120% AMI
7 units 108,170
(1.6%)
San Luis Obispo3 2004
(Orig. 1994)
City Limits: 3% or
5%
80% AMI
120% AMI
City Limits: 3% or
5%
80% AMI
120% AMI
5 units 46,802
(3.7%)
Expansion Area: 5% and
10%
80% AMI
120% AMI
Expansion Area: 5% and
10%
80% AMI
120% AMI
Table 11
Inclusionary Housing Set-Aside, Density Bonus, and Threshold Size Provisions
Selected California Inclusionary Housing Programs
2019
NOTES:
1 Rental projects of 5-9 units may build one unit or pay a fee; owner projects of 2-9 units must pay a fee.
2 For rental projects outside the Downtown Development Area, the % set-aside requirement equals the most recent % of rental units (of total units) in the City. For
owner projects with 2-4 units, the requirement is one owner unit or one rental unit. Off-site construction is allowed but must provide 30% more IZ units than on-site.
3The required number of dwelling units is determined by multiplying the set-aside requirements by the appropriate Inclusionary Housing Requirement Adjustment
Factor, which varies by project size (number of units) and average unit size (square feet).
Source: DRA survey of selected inclusionary housing programs. Note: % of AMI is for eligibility.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 2
City of Davis
1) Program Overview
Name: Affordable Housing Program
Administration: City of Davis
Year Adopted: 1987
2019 Population: 69,761
2010-2019 Population Change: 6.3%
2) Types of Projects Covered by Ordinance
The ordinance applies to residential development of five (5) or more units.
Developers of ownership housing developments of five (5) or more units and
rental housing developments of 20 or more limits must prepare an affordable
housing plan for approval by the city. The city council, at its discretion, may
exempt residential developments that are located within the boundaries of the
city’s Core Area Specific Plan and constructed as stacked condominiums or as part
of a vertical mixed-use development
3) Affordability Requirements
Set-aside Requirements:
On-site Rental:
Projects with 5 to 19 units 15% of total units @ 80% AMI; plus
15% of total units @ 50% AMI
Projects with 20+ units 25% of total units @ 80% AMI; plus
10% of total units @ 50% AMI
Vertical mixed-use projects 5% of total units @ 80R AMI
Off-site Rental:
There is no provision for off-site rental units.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 3
On-site For-sale:
Single-family detached units on lots larger than 5,000 SF 25% of total units
Single-family detached units on lots smaller than 5,000 SF 15% of total units
Single-family attached units 10% of total units
Stacked condominiums or units in vertical mixed-use projects 5% of total units
Affordable ownership units must be affordable to moderate income households
between 80% and 120% of AMI, with the average affordability targeted at 100%
of AMI.
If the developer chooses to provide affordable rental units in lieu of ownership
units, the affordable rental units must be leased at an affordable rent to low and
very low income households, with a maximum affordability of 80% AMI and an
average affordability of no more than 65% of AMI.
Off-site For-sale:
The affordability requirement may be fulfilled through the provision of off-site
units purchased/acquired and placed permanently into the city’s affordable
housing program through the recordation of affordability deed restrictions, subject
to discretionary approval by the city council following review of the affordable
housing plan. Any units provided under this option must have a useful life of no
less than 30 years and may require rehabilitation prior to qualifying.
Affordability Term:
Rental Units: Affordable rental units must be maintained as affordable units
in perpetuity.
For-sale Units: Restrictions must be placed on the units to ensure a
measure of sustained affordability into the unforeseeable future. Housing
built on dedicated land must be permanently affordable.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 4
4) Incentives and Offsets
a. Density bonus: a one-for-one city density bonus shall be awarded for
construction of on-site affordable units meeting the requirements for a state
density bonus.
b. Small developments: small developments of 15 units or fewer and totaling no
greater than 38 bedrooms that are located within the core area and found to
meet a specified community goal can request to fulfill the affordable housing
requirements through one of the following options, to be considered during the
review process of the affordable housing plan:
i. Construction subsidy: City staff will work with the developer to provide
financial assistance to be used in the construction of the on-site
affordable units in an amount necessary to make the project financial
feasible.
ii. Combination of on-site construction and in-lieu fees: The affordability
requirements may be fulfilled through a combination of on-site units and
payment of in lieu fees.
5) Compliance Alternatives
Land
Transfer
Land dedication is a compliance option for both owner and rental
projects. It must be an irrevocable offer of sufficient land without
abnormalities (shape and terrain) and with complete environmental
review, appropriate general plan designation and zoning, frontage
improvements (curb, gutter, sidewalk), paved street access, utility
service connections (water, gas, sewer and electric) stubbed to the
property line and other such off-site improvements as may be
necessary for to accommodate the affordable housing requirement
for the project. For rental developments, the density of development
used for the purpose of calculating the acreage to be dedicated is 20
units per net acre.
Cash-in-
lieu Fee
For-sale: The affordability requirement may be fulfilled through the
payment of in-lieu fees upon approval by the city council of the
project’s affordable housing plan. The fee is $75,000 per affordable
unit. For projects with 100+ units, the payment of in lieu fees is
allowed for no more than 50% of the affordable housing obligation
of the project, if approved by city council.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 5
Rental: For projects of 15 units or less, if the proposed project
cannot accommodate onsite affordable units, the affordability
requirement may be fulfilled through the payment of in-lieu fees.
Waiver Requirements may be adjusted or waived if the developer
demonstrates to the satisfaction of the city council that there is not a
reasonable relationship between the impact of the proposed
residential project and the requirements of the ordinance or that
applying the requirements would take property in violation of the
U.S. or California Constitutions.
Other On-site development of rental units may be substituted for owner
units and owner units for rental units.
6) Key Administration Provisions
Development Requirements:
• For ownership developments, the developer must provide a mix of two-
and three-bedroom units, with a minimum of 50% three-bedroom units.
Smaller and larger unit sizes shall be provided as an option, based on local
housing needs and project character, as approved during the affordable
housing plan review process.
• For rental developments, the affordable units must:
o Include a mix of unit sizes, as approved by the director of the
department of community development, based on the local housing
needs of unit sizes.
o Affordable housing units must not be clustered together in any
building, complex, or area of the development
o Affordable housing units must be constructed of the same building
materials and include equivalent amenities as the market rate units.
Tenant and Homebuyer Marketing and Selection:
Buyer/tenant selection and screening shall be carried out by the developer, owner,
city, or by the designated responsible party, at the sole expense of the developer.
The affordable housing plan submitted by the developer must include a proposed
marketing plan with an estimated timeline of events, which must be approved by
the city and shall adhere to the city’s buyer/tenant selection and screening
guidelines.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 6
The City monitors the buyer selection and screening process through required
monthly reports, and through the ability to review any and all files regarding the
process at any time that city staff requests to do so.
Resale Provisions: Appreciation of owner units is capped at 3.75% per year,
compounded annually. Affordable ownership units must deed to the city a
permanent right of first refusal on the property, allowing the city the ability to
either purchase the unit, or designate an appropriate buyer for the unit at its
resale. The deed restriction shall allow the city to designate a third party to carry
out its right of first refusal, and shall also allow for a one percent fee to be taken
from the real estate transaction in order to pay for the costs of carrying out the
right of first refusal.
7) Program Information, Documentation and Resources
http://qcode.us/codes/davis/view.php?topic=18-18_05&showAll=1&frames=on
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 7
Monterey Inclusionary Housing Program
1) Program Overview
Name: Inclusionary Housing Ordinance
Administration: City of Monterey
Year Adopted: 2003
2019 Population: 28,448
2010-2019 Population Change: 2.3%
2) Types of Projects Covered by Ordinance
Projects of more than six (6) new housing units, including subdivisions and
condominium conversions.
3) Affordability Requirements
Set-aside Requirements:
On-site Rental:
20% of units at 120% AMI
Off-site Rental:
Same as on-site rental.
On-site For-sale:
20% of units at 120% AMI
Off-site For-sale:
Same as on-site rental.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 8
Affordability Term:
Rental Units: Permanently affordable
For-sale Units: Permanently affordable
4) Incentives and Offsets
Incentives may include non-general fund subsidies, mortgage revenue bonds,
waivers or requirements and density increases, or other such incentives.
If the developer chooses to produce twenty percent (20%) of units at 80% AMI
instead of 120% AMI, the City may choose to increase the level of incentives. If a
developer provides land or funds in lieu of producing housing, the City or other
housing sponsor may choose to use these resources to produce low- or moderate-
income housing
5) Compliance Alternatives
In lieu of standard on-site inclusionary housing requirements, developers may
provide an approved developer housing program to the City promoting the City’s
goal that at least twenty percent (20%) of all new housing be affordable to low-
and moderate-income households. Designation of levels of affordability shall be
subject to Council approval of the developer housing program. Compliance
alternatives may include:
Land
Transfer
Contribution and dedication of residential land.
Off-site Erection of low- or moderate-income housing units on land other
than that upon which the developer intends to place units. Off-site
units must be placed within the City of Monterey.
Cash-in-
lieu Fee
Payment of cash made in lieu of development of units or dedication
of land, and this money shall be restricted in use for acquisition of
sites, or for subsidy of low- to moderate-income housing.
For-sale:
Rental:
Waiver Not specified.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 9
6) Key Administration Provisions
Development Requirements:
a. All low- or moderate-income units in a project and in phases of a project
shall be constructed concurrently with, or prior to the corresponding upper
and middle income units unless waived by the City Council.
b. Inclusionary units must be a proportionate mix of units to the number of
units in the entire project, and similar in size and type, excluding
amenities.
c. Inclusionary units need not have the same level of amenities or market
value as the upper- and middle-income units of the project unless
specifically required by the City.
Tenant and Homebuyer Marketing and Selection:
Preference must be given for low- or moderate-income units to persons who live
or work within the City of Monterey. The City or a designated agent administers
this facet of the project.
Resale Provisions:
To meet inclusionary requirements, the developer may use such devices as deed
restrictions, wrap-around financing, land sales contracts, and first right of refusal
vested in the City and other similar devices which will ensure the perpetration of
low- or moderate-income housing. These devices are set forth as guidelines only,
with the developer free to meet the goals and of this chapter utilizing other similar
guarantee methods, as approved by the City.
7) Program Information, Documentation and Resources
https://www.codepublishing.com/CA/Monterey/html/Monterey08.html
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 10
Santa Barbara
1) Program Overview
Name: Inclusionary Housing Ordinance (and Inclusionary Housing Requirements
for the Average Unit-size Density Incentive Housing Program (AUD))
Administration: City of Santa Barbara Community Development Department
Year Adopted: 2009 (Amended July 23, 2019, effective August 22, 2019;
amendments reflected below)
2019 Population: 93,532
2000-2019 Population Change: 5.8%
2) Types of Projects Covered by Ordinance
Inclusionary Housing Ordinance applies to all new residential developments of
two or more units
Inclusionary Housing Requirements for the Average Unit-size Density Incentive
Housing Program (AUD) applies to all residential rental developments within the
High Density or Priority Housing Overlay areas, as defined by the AUD Program
3) Affordability Requirements
Set-aside Requirements:
On-site Rental:
Residential rental developments within the AUD Program Area:
• Five to nine units are required to either build a unit affordable to Moderate-
Income Households at 120% AMI or pay an in-lieu fee.
• Ten or more units are required to provide at least 10% of the units
affordable to Moderate-Income Households at 120% AMI.
On-site For-sale:
Residential developments of two through 9 units must pay an inclusionary housing
fee.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 11
Residential developments with ten or more units are required to provide 15%
affordable units at 120% AMI.
For duplexes or luxury condominiums, the Community Development Director
may approve target income of 130% AMI. For inclusionary units built as detached
single-family homes, each on its own separate lot, target income is 160% AMI.
Affordability Term:
Rental Units: 90 years
For-sale Units: 90 years
4) Incentives and Offsets
An Applicant for a Residential Development of ten or more dwelling units who
elects to satisfy the inclusionary housing requirements of this Chapter by
producing owner-occupied Inclusionary Housing units on the site of a Residential
Development shall be entitled to a density bonus for the number of Inclusionary
Units to be provided on-site without the need to separately apply for a lot area
modification for the density bonus.
Separate from the Inclusionary Housing program, the City approved the Average
Unit-Size Density Incentive Program. The intent of the Program is to support the
construction of smaller, more affordable residential units near transit and within
easy walking and biking distance to commercial services and parks. Increased
densities and development standard incentives are allowed in most multi-family
and commercial zones of the City to promote additional housing.
5) Compliance Alternatives
Developers may propose one or a combination of the following alternative
compliance measures in an Inclusionary Housing Plan subject to the Planning
Commission’s (or the City Council’s on appeal) reasonable determination that the
Plan of equivalent or greater value than the standard inclusionary housing
obligation:
Land
Transfer
Dedicate land to the City (or a City-designated non-profit housing
developer) under circumstances where the land is suitable for the
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 12
construction of Inclusionary Units and is of equivalent or greater
value than would be produced by applying the City’s current in-lieu
fee to the Applicant’s inclusionary housing obligation.
Off-site Construct some or all of the units offsite if the combination of
location, unit size, unit type, pricing, and timing of availability of the
proposed off-site Inclusionary Units would provide equivalent or
greater benefit than providing those Inclusionary Units on-site.
Cash-in-
lieu Fee
Pay an in-lieu fee to the City for deposit into the City’s Affordable
Housing Inclusionary Fund.
For-sale: Per unit fee, calculated as the Median sale price of 2-
bedroom condominiums during the most recent 4 quarters ($639,000
on 4/1/18), less 15% to arrive at the “estimated production cost”
($543,150), less the affordable sale price of a 2 bedroom low income
unit under the City’s policies ($108,000), which equals $435,150.
Recalculated annually. Fee is reduced if projects are smaller-than-
average.
For developments with 2 through 9 units, the pro-rated inclusionary
housing fee is 5% of the in-lieu fee, per unit developed.
Rental: $25.00 per square foot, based on the net floor area of each
unit
Waiver An Applicant may request a waiver, adjustment, or reduction of the
requirements upon showing that strict application would effectuate
an unconstitutional taking of the property or otherwise have an
unconstitutional application to the property.
6) Key Administration Provisions
Development Requirements:
a. Inclusionary Units must be dispersed evenly throughout a Residential
Development and must be comparable in construction quality and exterior
design to the Market-Rate Units constructed as part of the Development.
Inclusionary Units may be smaller in aggregate size and may have different
interior finishes and features than Market-Rate Units so long as the interior
features are durable, of good quality and consistent with contemporary
standards for new housing.
b. The average number of bedrooms in the Inclusionary Units must equal or
exceed the average number of bedrooms in the Market-Rate Units of the
Development. Absent a waiver from the Community Development Director,
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 13
two-bedroom Inclusionary Units shall generally have at least one and one-half
bathrooms, and three-bedroom Inclusionary Units shall generally have at least
two bathrooms. However, the required number of bathrooms shall not be
greater than the number of bathrooms in the Market-Rate Units. The minimum
Unit Size of each Inclusionary Unit shall be in conformance with the City’s
Affordable Housing Policies and Procedures.
c. All Inclusionary Units must be constructed and occupied concurrently with or
prior to the construction and occupancy of Market-Rate Units of the
Development. In phased developments, Inclusionary Units may be constructed
and occupied in proportion to the number of units in each phase of the
Residential Development.
Tenant and Homebuyer Marketing and Selection:
a. The developer must submit a marketing plan acceptable to Housing Programs
staff. Such plan must describe the proposed advertising methods and staff
training the developer plans in order to comply with federal, State and local
fair housing laws. The plan must also propose a process for the application
procedure, selection of eligible occupant purchasers and identify preferences,
if any, to be given. Typically, for affordable projects without City or other
public financing, a preference is given to applicants who live or work in the
South Coast area of Santa Barbara County (from Gaviota to the Ventura County
line).
b. Housing Programs staff must approve the eligibility of the initial renters or
occupant purchasers, and the initial rent levels or sales prices and financing.
Housing Programs staff will inform the prospective occupant purchasers of the
resale requirements affecting the unit they are purchasing.
Resale Provisions:
As a part of escrow proceedings on an affordable unit, a new covenant in which
the occupant purchaser agrees to comply with the requirements of the affordable
housing program must be recorded.
7) Program Information, Documentation and Resources
https://records.santabarbaraca.gov/OnBaseAgendaOnline/Documents/ViewDocument/Attachment%20%20-
%20ORDINANCE.pdf?meetingId=480&documentType=Agenda&itemId=14942&publishId=9921&isSection=
false
https://www.santabarbaraca.gov/civicax/filebank/blobdload.aspx?BlobID=17340
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 14
Santa Cruz Inclusionary Housing Program
1) Program Overview
Name: Measure O (Inclusionary Housing Program)
Administration: City of Santa Cruz
Year Adopted: 2006
2019 Population: 65,807
2010-2019 Population Change: 9.8%
2) Types of Projects Covered by Ordinance
All residential projects creating two or more new and/or additional dwelling units
or SRO units at one location by construction or alteration of structures, except for
rental residential developments with two to four dwelling units.
3) Affordability Requirements
Set-aside Requirements:
On-site Rental:
Within the Downtown Development Area 15% of units @ 80% of AMI
Outside the Downtown Development Area Most recent rental percentage
rate of units1 @ 80% of AMI
SRO Developments 15% of units @ 50% of AMI
If the number of dwelling units required results in a fractional requirement of 0.7
or less, then there will be no inclusionary requirement for the fractional unit. If the
number of dwelling units required results in a fractional requirement of greater
than 0.7, then the applicant shall make one inclusionary unit available at an
affordable rent.
1 Equal to the number of units that result from multiplying the total number of residential units by the
most recent residential rental percentage rate.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 15
Off-site Rental:
Off-site developments must provide the greater of one affordable unit or thirty
percent more inclusionary units than would otherwise be required if the
inclusionary units were constructed on site.
On-site For-sale:
Projects with 2 to 4 units 1 owner unit @ 80% AMI or
1 rental unit @ 80% AMI
Projects with 5+ units 15% of units @ 120% AMI
Off-site For-sale:
Off-site developments must provide the greater of one affordable unit or thirty
percent more inclusionary units than would otherwise be required if the
inclusionary units were constructed on site.
Affordability Term:
Rental Units: Perpetuity
For-sale Units: Perpetuity
4) Incentives and Offsets
The following incentives may be available for the provision of inclusionary units:
a. If the developer agrees to make at least forty percent of the residential project
available for rent to low income households at a rental cost affordable to low
income households, in addition to reduction of development requirements, by
mutual agreement by the developer, the planning and community
development director, and the economic development director, the city may
also provide financial incentives to increase the number of inclusionary units
in a project.
b. Fee waivers.
c. The interior amenities and square footage of the inclusionary units may be
reduced below those required for the market rate units.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 16
d. Residential developments in which all dwelling units are offered for rent,
inclusionary units are provided within the development, and no subdivision
map has been recorded are eligible for a twenty-seven and one-half percent
“city rental housing bonus.”
5) Compliance Alternatives
Land
Transfer
Off-site An applicant may propose to construct all or a portion of the
required inclusionary units off site. Off-site inclusionary units may
include any combination of new dwelling units, or new dwelling
units created in existing structures at the higher inclusionary set-aside
cited above if the application meets the following conditions:
The off-site location is suitable for the proposed affordable housing
and will not tend to cause residential segregation;
(3) The developer has provided clear and convincing evidence that
financing has been secured for the off-site inclusionary units; and
(4) Each entity responsible for development of the inclusionary and
market rate units has adequate site control and the capacity to
construct the units as proposed.
(5) Rehabilitation plans for existing units include all construction
required to meet all current requirements of the Uniform Housing
Code, as determined by the chief building official of the city.
An applicant may propose to convert existing residential units or
upper floors of commercial/office buildings into inclusionary units in
lieu of constructing new inclusionary units on site. No inclusionary
units may be created by converting existing rental dwelling units into
condominiums.
Cash-in-
lieu Fee
(2018)
An applicant may pay in-lieu fees to the city rather than construct
inclusionary units on site under the following circumstances:
(1) For all ownership residential developments or residential
subdivisions that would create two but no more than four additional
dwelling units or parcels at one location, the applicant may elect to
pay an in-lieu fee for the fraction of an inclusionary unit equal to
0.15 times the number of units or parcels in the residential
development or subdivision reduced by sixty percent.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 17
(2) For ownership residential developments where any dwelling units
are offered for sale, or where all dwelling units are offered for rent,
but where a subdivision map has been recorded to create parcels
containing single dwelling units, the applicant may elect to pay an
in-lieu fee for any fraction of an inclusionary unit equal to 0.7 or less.
(3) For rental residential developments that would create five but no
more than ten additional dwelling units at one location, the applicant
may elect to pay an in-lieu fee for any inclusionary unit or fraction of
an inclusionary unit.
(4) For residential developments that the approval body determines
are assisted living units, co-housing developments, congregate living
units, or live/work units the applicant may elect to pay an in-lieu fee
for the entire inclusionary unit requirement.
(5) For all other residential developments creating five or more units,
in-lieu fees may be paid for all or a portion of the required
inclusionary units at the discretion of the approval body if the
approval body finds that the proposal for the alternative method of
compliance is consistent with the Santa Cruz General Plan and all of
its elements and conforms to the standards established for
inclusionary units, unless the alternative method does not require
compliance with that section. The approval body must also find that
either the in-lieu fees will provide for the greater of one affordable
unit or at least thirty percent more inclusionary units or affordable
housing than would be provided by the on-site provision of
inclusionary units by providing matching funds for state or federal
grants or otherwise. It is the city council’s intent that in-lieu fees be
infrequently approved.
For-sale: $15 per net SF for projects with 5+ units; on a sliding scale
of $2 to $15 per net SF for single unit projects and $7 to $15 per net
SF for 2-4 unit projects.
Rental: $2 per net SF.
Waiver Inclusionary housing requirements may be waived, adjusted, or
reduced if an applicant shows, based on substantial evidence, that
there is no reasonable relationship between the impact of a
proposed development and the requirements, or that applying the
requirements would take property in violation of the United States or
California Constitutions.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 18
Other An applicant may propose to receive credit for affordable units
constructed prior to or concurrently with the market rate project.
The residential development that includes the excess inclusionary
units may not receive or have received any local, state, or federal
affordable housing financial assistance.
6) Key Administration Provisions
Development Requirements:
a. Inclusionary units shall be dispersed throughout the residential development to
prevent the creation of a concentration of affordable units within the
residential development.
b. Inclusionary units shall be compatible with the design of market rate units in
terms of exterior appearance, materials, and finished quality. Interior finishes,
features, and amenities may differ from those provided in the market rate units,
so as long as the finishes, features, and amenities are durable, of good quality,
compatible with the market rate units, and consistent with contemporary
standards for new housing.
c. The applicant may reduce square footage of inclusionary units as compared to
the market rate units, provided all units conform to all requirements of Titles
18 and 19 and meet the minimum square footage requirement that affordable
units are at least seventy-five percent of the average size of all market rate units
in the development with the same bedroom count.
d. For developments with multiple market rate unit types containing differing
numbers of bedrooms, inclusionary units shall be representative of the market
rate unit mix.
e. All building permits for inclusionary units in a phase of a residential
development shall be issued concurrently with, or prior to, issuance of
building permits for the market rate units, and the inclusionary units shall be
constructed concurrently with, or prior to, construction of the market rate
units. Occupancy permits and final inspections for inclusionary units in a
phase of a residential development shall be approved concurrently with, or
prior to, approval of occupancy permits and final inspections for the market
rate units. When alternative methods of compliance are proposed, the
planning and community development director and the economic
development director may jointly approve alternative phasing of market rate
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 19
and inclusionary units if it finds that the proposal provides adequate security to
ensure construction of the inclusionary units. Phases of construction shall be
defined as a part of the first approval.
Tenant and Homebuyer Marketing and Selection:
Prospective tenants contact the landlord and demonstrate that 1) the tenant’s
income will be below the maximum allowed for that unit when verified, and 2)
that the tenant will be a good choice to rent the unit. If the landlord agrees to
consider a potential tenant, the tenant must submit a Measure O application to the
Housing Authority of the County of Santa Cruz, with the concurrence of the
landlord, and only for a specific Measure O unit.
Landlords of rental units and sellers of for-sale units constructed under previous
Measure O regulations may rent or sell to any eligible household of their choice.
Landlords and sellers of Measure O units created after January 15, 2007 must give
preference to 1) residents of the City of Santa Cruz with at least one year’s
residency, 2) those who work in the City of Santa Cruz, 3) residents of the County
of Santa Cruz with at least one year’s residency, and 4) those who work in the
County of Santa Cruz. A family member or employee of any person having an
interest in the development is ineligible to rent or buy an inclusionary unit.
The City charges fees associated with the creation and recording of IHP
documents as follows (2018):
New Construction $1,560
Unit Resale $1,040
Unit Refinance $ 832
Resale Provisions:
The maximum sales price shall be calculated using the methodology defined in
the resolution and/or guidelines identified in and applied under the inclusionary
agreement for that property, unless another basis has been defined and mutually
been agreed upon by the developer, the planning and community development
director, and the economic development director or otherwise authorized by the
approval body. The resale restrictions must allow the city a right of first refusal or
option to purchase any owner-occupied inclusionary unit at the maximum resale
price permitted under this section at any time the owner proposes sale.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 20
7) Program Information, Documentation and Resources
https://www.codepublishing.com/CA/SantaCruz/html/SantaCruz24/SantaCruz2416.ht
ml
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 21
Ventura
1) Program Overview
Name: Inclusionary Housing Program, Residential Growth Management Program
(RGMP)
Administration: City of Ventura Community Development Department
Year Adopted: 2004
2019 Population: 108,170
2000-2019 Population Change: 1.6%
NOTE: The sections below describe the existing ordinance. In May, 2019, the
City Council directed a series amendments to the City’s Inclusionary Housing
Program (IHP) and Affordable Housing Program (AHP), and associated actions.
Public hearings are scheduled through September, 2019. Proposed IHP
amendments include the following:
• Flexibility in adjusting the income level mix
• Minimum Housing Standards for inclusionary units, including number of
bedrooms based on targeted household sizes; square footage; and access to
common areas and outdoor spaces
• Specific comparability (in terms of size, location, materials) and proportionality
(by bedroom count) of unit types
• Implementation and Compliance Monitoring Fees for the reasonable cost of
preparing documents and processing applications, implementing the program,
and ongoing monitoring
• Expansion of the marketing process requirements and sales strategies for initial
and subsequent sales of units
• Consolidation of Inclusionary Housing policies into one city-wide,
comprehensive program
2) Types of Projects Covered by Ordinance
For all new residential developments of seven or more units in the Merged Area
(Beachfront, Mission and Downtown), at least 15 percent of the total units must be
Inclusionary Housing Units restricted for occupancy by Moderate-, Low-, or Very
Low-Income Households
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 22
3) Affordability Requirements
Set-aside Requirements: At least 15% of the total units must be Inclusionary
Housing Units. Of those, at least 40% must be restricted to very low-income
households (less than 50% Median Family Income (MFI)). The remainder, up to
60%, may be restricted to moderate- or low-income households (81 to 120% MFI
and 51 to 80 percent of MFI, respectively).
Affordability Term:
Rental Units: 55 years
For-sale Units: 45 years
4) Incentives and Offsets
A pro-rata refund of the following fees for each of the Inclusionary Units in the
residential development will be granted to the Developer upon recordation of the
Affordable Housing Agreement as required by Section 25.300.635, Recording of
Affordable Housing Agreement:
• Planned Development Permit Fees
• Use Permit Fees
• Variance Fee
• Coastal Development Permit Fee
• Tentative Subdivision Map Fee
• Design Review Fee
• RGMP Allocation Process Fee
• Downtown Specific Plan Additional Use Permit Fee
• Density Review Fee
5) Compliance Alternatives
Land
Transfer
No provisions for land transfer.
Off-site No provisions for land transfer.
Cash-in-
lieu Fee
No provisions for in lieu fee payments.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 23
Waiver If the Executive Director determines that applying the requirement of
this Ordinance would take property in violation of the United States
or California Constitutions, the requirements of this Ordinance shall
be modified, adjusted or waived to reduce the obligations to the
extent necessary to avoid an unconstitutional result.
6) Key Administration Provisions
Development Requirements:
Unless otherwise specified in an Affordable Housing Agreement, Inclusionary
Units must be dispersed throughout a residential development and be comparable
in infrastructure (including sewer, water and other utilities), construction quality
and exterior design to the Market-rate Units. Inclusionary Units may be smaller in
aggregate size and have different interior finishes and features than Market-rate
Units, so long as the interior features are durable, of good quality and consistent
with contemporary standards for new housing.
Residents and tenants of Inclusionary Units shall be provided the same rights and
access to common amenities in the development project as residents and tenants
occupying Market-rate Units.
Tenant and Homebuyer Marketing and Selection:
The owner of rental Inclusionary Units shall certify each tenant Household's
income to the City or designee at the time of initial rental and annually thereafter.
The owner must obtain and review documents that demonstrate the prospective
renter's total income, such as income tax returns or W-2s for the previous
calendar year.
7) Program Information, Documentation and Resources
https://library.municode.com/ca/san_buenaventura/codes/code_of_ordinances?nodeId=DIV25ININHO
PR_CH25.300AFHOPRMESABUREPRAR_ART3INHOPR
https://www.cityofventura.ca.gov/DocumentCenter/View/16818/NEGATIVE-DECLARATION---CITY-
OF-VENTURA-IHP-AMENDMENT-Circ-05-10-19
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 24
City of Petaluma
1) Program Overview
Name: Inclusionary Housing Program
Administration: City of Petaluma
Year Adopted: 2018 (Original IHO adopted 1984)
2019 Population: 62,427
2010-2019 Population Change: 7.4%
Production: Since 1984, the Housing Program has produced 1,336 affordable
units. The City exceeded its General Plan mandate to provide 10-15% of all
market rate units as affordable, by providing 22.5% affordable units over the last
fifteen years.
2) Types of Projects Covered by Ordinance
All projects of five or more units.
3) Affordability Requirements
Set-aside Requirements:
Fractional units are rounded up to the nearest unit.
On-site Rental:
7.5% of total units affordable to very low income households,(50% AMI) plus
7.5% of total units affordable to low income households (80% AMI).
Off-site Rental:
There are no provisions for off-site rental units.
On-site For-sale:
7.5% of total units affordable to low income households (80% AMI), plus
7.5% of total units affordable to moderate income households (120% AMI).
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 25
Off-site For-sale:
There are no provisions for off-site rental units.
Affordability Term:
Rental Units: 55 years
For-sale Units: 45 years
4) Incentives and Offsets
a. The square footage and interior amenities of inclusionary units may be
reduced in comparison with market rate units, provided that all other zoning
and building codes are met. Inclusionary units shall be the same product types
and the exterior design shall be consistent and compatible with the overall
project design in terms of appearance, materials, and finished quality, as
determined through the Site Plan and Architectural Review process.
5) Compliance Alternatives
At the sole discretion of the City Council, a project’s inclusionary housing
requirement may be met through one or a combination of the following
alternative compliance measures:
Land
Transfer
Donation of a portion of the project site or an off-site property to the
City or a non-profit organization deemed acceptable by the City for
development of affordable housing
Off-site No provisions for off-site units
Cash-in-
lieu Fee
(2019)
Payment of a housing in-lieu fee established by the City’s adopted
fee schedule, or a combination of on-site units and in lieu fees. C
For-sale fee: $10.12 per SF, collected at time of purchase
Rental fee: $10.12 per SF, collected at issuance of occupancy
Waiver No waiver provisions
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 26
6) Key Administration Provisions
Development Requirements:
• Inclusionary units must be constructed and occupied concurrently with or
prior to construction and occupancy of the market rate units, unless an
alternative schedule based on extenuating circumstances is adopted as part
of the project approval. In phase projects, inclusionary units must be
constructed and occupied in proportion to the number of units in each
phase
• Inclusionary units must be distributed throughout the residential project site
to the fullest extent practicable.
Tenant and Homebuyer Marketing and Selection:
No provisions in ordinance.
Resale Provisions:
7) Program Information, Documentation and Resources
https://petaluma.granicus.com/MetaViewer.php?view_id=31&clip_id=2531&meta_id
=398291
https://cityofpetaluma.net/cmgr/pdf/residential-in-lieu-fees.pdf
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 27
City of Petaluma
1) Program Overview
Name: Commercial Development Housing Linkage Fee for NonResidential
Development Projects “Housing Linkage Fee”
Administration: City of Petaluma
Year Adopted: 2003
2019 Population: 62,427
2010-2019 Population Change: 7.4%
2) Types of Projects Covered by Ordinance
Applies to any project resulting in new or expanded nonresidential gross square
footage. Nonresidential land uses are divided into three classifications:
commercial, retail and industrial for the purposes of applying the fee.
3) Adjustment of Fee
Adjusted annually by the same percentage as the latest “Engineering News Record
Construction Cost Index—20 City Average” (“Index”) annually increases or
decreases. The adjustment is made based on a comparison of the most recent
Index to the Index in the month of adoption of the fee, or the Index used for the
prior adjustment of the fee. The finance director shall compute the increase or
decrease in the fee.
The fee may be adjusted from time to time based on amendments or adjustments
to the nexus study used in determining the initial fee.
4) Time of Collection
Fees are due and payable prior to the issuance of a building permit, or if no permit
is to be issued by the city, at the time a new business license is issued.
City of San Luis Obispo February 12, 2020
Inclusionary Housing Program Survey 28
5) Amount of Fee
The current Housing Linkage Fees, adopted by City Council Resolution on August 6,
2018 are as follows:
Office/Commercial Retail Industrial
$2.84 $4.91 $2.93
6) Program Information, Documentation and Resources
https://petaluma.municipal.codes/Code/19.36
https://xara1-4.cityofpetaluma.net/WebLink/9/doc/306686/Page1.aspx
Assessment of Existing Program
City of San Luis Obispo
Residential Nexus and Gap Analysis
Appendix D
2/12/20
City of San Luis Obispo February 12, 2020
Appendix D: Assessment of Existing IHO Program D- 1
Appendix D: Assessment of City’s Existing IHO Program
1. Total Unit Production
Table D-1 summarizes the City’s Regional Housing Need Allocation for the 2014 to
2019 period, obtained from the City’s Housing Element.
Table D-2 summarizes the City’s affordable housing production by income level,
including on-site units and those assisted by the City’s Affordable Housing Fund
(AHF) over the 2014 to 2019 period with the RHNA allocation for the same time
period. The City’s total affordable housing production from the 1999 to 2019 period
is also shown.
There were a number of units shown in the information provided to DRA by the City
that are designated as “ELI, VLI, LI”. In Table D-2, DRA included these units the low
income category, which undercounts the extremely low income and very low
income units. The City’s total RHNA allocation for ELI, VLI and LI units is 464 units.
The City produced 400 units, or 86% of its allocation for these three categories in
the 2014 to 2019 period.
Assessment of Existing Program
City of San Luis Obispo
Residential Nexus and Gap Analysis
Appendix D
2/12/20
City of San Luis Obispo February 12, 2020
Appendix D: Assessment of Existing IHO Program D- 2
Table D-1
Regional Housing Need Allocation, City of San Luis Obispo, 2014-2019
Income Category (% of
County Median Income)
Regional Housing Need Allocation
Single
Family
Dwellings
Multi-Family
Dwellings Total Percent of
Total RHNA
Extremely Low (< 30%)1 0 142 142 12%
Very Low (30-50%)1 0 143 143 13%
Low (51-80%) 72 107 179 16%
Moderate (81-120%) 81 121 202 18%
Above Moderate (>
120%) 191 287 478 42%
TOTAL UNITS 344 800 1,144 100%
1Given the deep subsidies needed to construct extremely low and very-low income single-family
units, most housing for these income groups is expected to be multi-family units.
Sources: San Luis Obispo Council of Governments, February 2013: San Luis Obispo Housing Element
2014-2019.
City of San Luis Obispo February 12, 2020
Appendix D: Assessment of Existing IHO Program D- 3
Table D-2
Summary of Affordable Housing Unit Production
On-Site IHO Units and Units Subsidized by the Affordable Housing Fund
City of San Luis Obispo
2014 through October 2019
Extremely
Low
Income
Very Low
Income
Low
Income
Moderate
Income
Total
RHNA
2014-2019
142 143 179 202 666
HOUSING
PRODUCTION
2014-2019
On-Site IHO 2 18 189 21 230
Renter 2 16 1761 3 197
Owner 0 2 13 18 33
AHF 24 104 63 0 191
Renter 24 103 63 0 190
Owner 0 1 0 0 1
Total 26 122 252 21 421
Renter 26 119 2392 3 387
Owner 0 3 13 19 34
1 Includes 142 units designated as ELI, VLI and LI without a breakdown. All have been included in
low income category.
City of San Luis Obispo February 12, 2020
Appendix D: Assessment of Existing IHO Program D- 4
2. Income Targeting
On-site housing units created under City’s IHO program represent 55% of total
affordable housing units produced over the past five years, based on the figures in
Table D-2. With lower income targeting, the City’s IHO could potentially become
more effective in reaching the very low income category. In addition, DRA
recommends setting target income levels at 10% below market price, to reduce
competition with market-rate units. This is particularly important for ownership
units. As shown in Table D-3, market rents for one-bedroom units are affordable at
the 80% level, suggesting that IHO income targeting for rental housing should be
below 80% AMI. Rents at the moderate income level (120% AMI) are well above
market rents for one- and two-bedroom units.
Table D-3
Comparison of Average Market and Affordable Rents1
City of San Luis Obispo
2019
Unit Size
Affordable Rents HUD 2019
FMR
San Luis
Obispo
Co.2
City of San
Luis
Obispo
Ave.
Market
Apt. Rent
Very Low
Income
50% AMI
Low
Income
60%AMI
Low
Income
80% AMI
Moderate
Income
100%
AMI
Moderate
Income
120%
AMI
Studio $786 $944 $1,258 $1,531 $1,838 $1,059 N/A
1 Bedroom $899 $1,079 $1,438 $1,750 $2,100 $1,196 $1,445
2 Bedroom $1,011 $1,213 $1,618 $1,969 $2,363 $1,542 $2,094
3 Bedroom $1,123 $1,348 $1,798 $2,188 $2,625 $2,230 N/A
N/A = Not available (too few units available).
1The extremely low income category (30% AMI) is not included in this table as these rents are even
lower than 50% AMI rents and well below market rents and FMRs.
2From HUD FY 2019 Fair Market Rent Documentation System for the San Luis Obispo-Paso Robles-
Arroyo Grande MSA.
Sources: HUD; San Luis Obispo County; Rentcafe.com; DRA.