3. KMA Financial Evaluation — Costa Mesa City Council, July 26, 2023

INCLUSIONARY HOUSING:

FINANCIAL EVALUATION
Prepared for:

City of Costa Mesa
Prepared by:

Keyser Marston Associates, Inc.

July 11, 2023
ATTACHMENT 3
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TABLE OF CONTENTS
I. EXECUTIVE SUMMARY ..................................................................................................... 1 A. BACKGROUND ....................................................................................................................... 1 B. PUBLIC POLICY OBJECTIVES ....................................................................................................... 2 C. INCLUSIONARY HOUSING PROGRAM DESIGN ................................................................................ 2 D. FINANCIAL ANALYSES .............................................................................................................. 2 E. FINDINGS .............................................................................................................................. 5 F. PRELIMINARY RECOMMENDATIONS ............................................................................................ 6 II. INCLUSIONARY HOUSING PROGRAM CHARACTERISTICS .................................................. 7 A. SURVEY OF EXISTING INCLUSIONARY HOUSING PROGRAMS .............................................................. 7 B. STATE DENSITY BONUS AND INCLUSIONARY HOUSING REQUIREMENTS ............................................... 9 C. STRUCTURING ISSUES ............................................................................................................ 10 III. METHODOLOGY ............................................................................................................. 12 A. PARAMETERS ....................................................................................................................... 12 B. PROGRAM FOUNDATION ........................................................................................................ 13 C. FINANCIAL EVALUATION STRUCTURE ......................................................................................... 13 D. FINANCIAL ANALYSIS ORGANIZATION ........................................................................................ 14 IV. APARTMENT DEVELOPMENT ANALYSIS ...................................................................... 15 A. PRO FORMA ORGANIZATION AND ASSUMPTIONS ........................................................................ 15 B. RESIDUAL LAND VALUE ANALYSES: MARKET RATE SCENARIOS ....................................................... 18 C. FUNDS AVAILABLE FOR INCLUSIONARY HOUSING ......................................................................... 18 D. SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS ............................................................... 19 E. RECOMMENDED INCLUSIONARY HOUSING PRODUCTION REQUIREMENTS.......................................... 21 V. OWNERSHIP HOUSING ANALYSES .................................................................................. 22 A. PRO FORMA ORGANIZATION AND ASSUMPTIONS ........................................................................ 22 B. RESIDUAL LAND VALUE ANALYSES: MARKET RATE SCENARIOS ....................................................... 23 C. FUNDS AVAILABLE FOR INCLUSIONARY HOUSING ......................................................................... 24 D. AFFORDABILITY GAP ANALYSES ................................................................................................ 24 E. SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS ............................................................... 26 F. RECOMMENDED INCLUSIONARY HOUSING PRODUCTION REQUIREMENTS.......................................... 26 -2-
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VI. SUMMARY ................................................................................................................. 27 A. APARTMENT DEVELOPMENT ................................................................................................... 27 B. OWNERSHIP HOUSING DEVELOPMENT ...................................................................................... 27

ATTACHMENTS
Attachment 1: Inclusionary Housing Program Surveys
Attachment 2: Property Sales Surveys
Appendix A: Land Sales
Appendix B: Sales of Improved Properties
Attachment 3: Affordable Housing Cost Calculation Methodologies Appendix A: Affordable Rent Calculation Methodology
Appendix B: Affordable Sales Price Calculation Methodology Attachment 4: Apartment Development
Appendix A: Rent Survey: 4+ Star Properties
Appendix B: Affordable Rent Calculations
Appendix C: Pro Forma Analyses – North Costa Mesa Prototype Appendix D: Pro Forma Analyses – Harbor Mixed Use Prototype Appendix E: Pro Forma Analyses – Mesa West Prototype
Appendix F: Pro Forma Analyses – 19 West Prototype
Appendix G: Pro Forma Analyses – SoBECA Prototype
Appendix H: Pro Forma Analyses – Corridors Prototype
Attachment 5: Ownership Housing Development
Appendix A: Home Sales Survey
Appendix B: Affordable Sales Price Calculations
Appendix C: Pro Forma Analyses – North Costa Mesa Prototype Appendix D: Pro Forma Analyses – Harbor Mixed Use Prototype Appendix E: Pro Forma Analyses – Mesa West Prototype
Appendix F: Pro Forma Analyses – 19 West Prototype
Appendix G: Pro Forma Analyses – SoBECA Prototype
Appendix H: Pro Forma Analyses – Corridors Prototype
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I. EXECUTIVE SUMMARY
A. Background
The City of Costa Mesa (City) recently received California Department of Housing and Community Development (HCD) approval of its the Sixth Cycle Housing Element (Housing Element). 1 The Housing Element includes numerous implementation strategies including:

1. An evaluation of the potential for imposing Inclusionary Housing obligations on specific sites; and

2. Amending zoning code standards in defined areas throughout Costa Mesa.

Keyser Marston Associates, Inc. (KMA) was engaged by the City to prepare an Inclusionary Housing: Financial Evaluation (Financial Evaluation) to assess the viability of enacting an Inclusionary Housing program. Fundamental to this analysis is the assumption that the City will tie the zoning code amendments to the creation and adoption of an Inclusionary Housing Ordinance (Ordinance).

By way of background, over the past 20+ years the KMA Los Angeles office has assisted 37 jurisdictions in the Inclusionary Housing program adoption and updating processes. KMA’s analyses reflect a real world perspective based on the firm’s core experience in real estate development economics, real estate transactions, and developer negotiations services.

The KMA Financial Evaluation identifies supportable Inclusionary Housing program requirements for apartment and ownership housing developments. The fundamental purpose is to identify Inclusionary Housing requirements that balance the interests of property owners and developers against the City’s need for affordable housing. The KMA evaluation methodology has been continually evolving over time. Each study is tailored to reflect the specific characteristics of the jurisdiction being evaluated.

1 The Housing Element covers the period between 2021 and 2029. -4-

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B. Public Policy Objectives
Inclusionary Housing programs are subject to both statutory parameters imposed by the State Legislature and the rulings in the court cases that have challenged Inclusionary Housing programs over the past 30+ years. These statutes and court rulings are described in Section 2 of this Financial Evaluation. It is important to understand the constraints and opportunities that are created by these statutes and court rulings.

C. Inclusionary Housing Program Design
In 2015, the California Supreme Court ruled in California Building Industry Association v. City of San Jose, 61 Cal 4th 435 (San Jose) that Inclusionary Housing Programs should be viewed as use restrictions that are a valid exercise of a jurisdiction’s zoning powers. However, the San Jose ruling also imposed the following limitations to the requirements that jurisdictions can impose:

1. Inclusionary Housing requirements cannot be confiscatory; and

2. Inclusionary Housing requirements cannot deprive a property owner of a fair and reasonable return on their investment.

The court did not provide criteria under which jurisdictions can evaluate these limitations. As a result, each jurisdiction is left to create an evaluation methodology that balances the interests of property owners, developers and the jurisdiction’s need for affordable housing. It is KMA’s practice to take a conservative approach in evaluating potential requirements in order to comport with the court’s ruling.

The first step in designing an Inclusionary Housing program is to identify the factors that will be considered in defining the program’s goals. The characteristics of the unmet need for affordable housing in the community are commonly assessed for this purpose. The Financial Evaluation uses information presented in the Housing Element for this purpose.

D. Financial Analyses
The Financial Evaluation considers the impacts created by the structure of the proposed Ordinance:
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1. Zoning code amendments are proposed to be enacted in defined overlay areas within Costa Mesa. The Financial Evaluation analyses the impact the amended standards could potentially have on the values supported by the impacted properties.

2. An Inclusionary Housing Ordinance establishes affordable housing obligations that will be imposed on residential development. The Financial Evaluation estimates the difference between the achievable market rate rent or sales price and the allowable rent or sales price for each “Inclusionary Unit”. This difference Is called the “Affordability Gap”.

Working in conjunction with the City staff, KMA created prototype apartment and ownership housing developments for analysis purposes. The apartment prototypes are described in the following table:

Area Base Zoning Density Existing Use of the Site
North Costa Mesa 60 Units Per Acre Vacant Business Park Land Harbor Mixed Use 40 Units Per Acre Improved Auto Property Mesa West 40 Units Per Acre Improved Industrial + Retail 19 West 40 Units Per Acre Improved Industrial + Retail
SoBECA 50 Units Per Acre Improved Industrial
Corridors 60 Units Per Acre Improved Auto Property

The ownership prototypes analyzed in the Financial Evaluation are described in the following table:

Area Base Zoning Density Existing Use of the Site
North Costa Mesa 25 Units Per Acre Vacant Residential Land Harbor Mixed Use 15 Units Per Acre Improved Warehouse
Mesa West 17 Units Per Acre Improved Auto Property
19 West 20 Units Per Acre Improved Warehouse
SoBECA 16 Units Per Acre Improved Warehouse
Corridors 16 Units Per Acre Improved Motel

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The apartment and ownership housing development prototypes were used to test the impacts associated with the following development characteristics:

1. Site size;

2. Achievable density;

3. Maximum allowable height;

4. Parking requirements; and

5. Value of the development site:
a. The value supported prior to any amendment to the zoning code standards; and b. The value created by the amendment to the zoning code standards.

The Financial Evaluation methodology can be described as follows:

1. KMA surveyed the market to compile information pertaining to:
a. Land and improved property sales values;
b. Common densities of apartment and ownership housing developments; c. Unit mixes in apartment and ownership housing developments; and d. Apartment rents and ownership housing sales prices.

2. City staff identified density and height standards that would be appropriate for application in the various overlay areas. The impacts created by the application of the California Government Code Section 65915 et seq. (Section 65915) density bonus were considered in creating the standards applied in this Financial Evaluation.

3. KMA prepared pro forma analyses to determine the following:
a. The land value supported by a 100% market rate apartment or ownership housing development.
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b. The magnitude of the value enhancement created by the identified modifications to the zoning code standards.
c. The share of the value enhancement that can reasonably be committed to the provision of “Inclusionary Units” within a market rate residential development.

It is the City’s intention to create an Inclusionary Housing program that provides sufficient incentives to create opportunities for new housing development to occur. The findings of the KMA financial analysis were used to create benefits and incentives that offset the financial impacts created by the imposition of affordable housing requirements.

E. Findings

APARTMENT DEVELOPMENT
KMA concluded that the City could reasonably offer the following Inclusionary Housing production options for apartment developments: 2

2 Only one option is provided for the lowest density category due to the limited requirement that is supported.

Density Range
Low Income
Units +
Very Low
Income Units =
Total
Obligation
0 to 39 Units Per Acre 6% + 0% = 6%
40 to
59 Units Per Acre
Low Income Only 11% + 0% = 11%
Very Low Income Only 0% + 7% = 7%
Low & Very Low Income 6% + 3% = 9%
60+ Units Per Acre
Low Income Only 19% + 0% = 19%
Very Low Income Only 0% + 12% = 12%
Low & Very Low Income 11% + 5% = 16%
Recommended Inclusionary Housing Production Options
Apartment Development
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OWNERSHIP HOUSING DEVELOPMENT
The KMA analysis of ownership housing developments identified Affordability Gaps that range from $557,000 to $745,000 per moderate income unit. Given the magnitude of the gaps, it is KMA’s recommendation that developers be permitted to pay a fee in lieu of producing affordable housing units. It is further our recommendation that the in-lieu revenue be used to create a first time homebuyer program that provides assistance to households who wish to purchase an existing home in Costa Mesa.

The Financial Evaluation is meant to assist the City in creating an Inclusionary Housing program that provides sufficient incentives and benefits to offset the impacts created by the affordable housing requirements being imposed. By definition, a program that is set up in this manner is not confiscatory and it does not deprive property owners of a fair and reasonable return on their investment.

F. Preliminary Recommendations
Based on the results of the Financial Evaluation, and to provide context to the City Council’s decision making process, KMA has prepared general policy recommendations for consideration.

These recommendations are presented in a memorandum that accompanies this Financial Evaluation. The topics covered include:

1. The minimum project size that would be subject to the Ordinance requirements;

2. The income and affordability standards to be imposed on apartment and ownership housing developments;

3. The covenant periods to be imposed on apartment and ownership housing developments;

4. Alternative means of fulfilling the Inclusionary Housing obligations; and

5. Recommended administrative procedures.
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II. INCLUSIONARY HOUSING PROGRAM CHARACTERISTICS
A. Survey of Existing Inclusionary Housing Programs
Over 170 jurisdictions in California currently include an Inclusionary Housing Program as a component in their overall affordable housing strategy. While the unifying foundation of these programs is the objective to attract affordable housing development, the characteristics of these programs vary widely from jurisdiction-to-jurisdiction.

To assist the City in evaluating options for creating an Inclusionary Housing Program it is useful to identify the elements that are typically included in Inclusionary Housing Programs being implemented in California jurisdictions. To that end, KMA compiled information on 99 Inclusionary Housing Programs being implemented throughout California. The survey information is presented in Attachment 1.

The survey results can be summarized as follows:

1. In California, the majority of Inclusionary Housing Programs include a threshold project size below which projects are not subject to the Inclusionary Housing requirements.

Common thresholds found in the survey fall between three and 10 units, with a 5 unit median threshold and a seven unit average threshold.

2. The income and affordability standards imposed by Inclusionary Housing Programs vary widely throughout California. The majority of programs have established standards in the range of 10% to 20% of the units in projects that will be subject to the requirements.

However, the following policy variations are commonly found:
a. The threshold standards are varied as a reflection of the depth of the affordability being required.
b. Inclusionary Housing requirements have a disproportionate impact on smaller projects, because there are fewer market rate units available to spread the impact created by the income and affordability standards. As shown in the survey, a sliding scale requirement is sometimes used to mitigate these impacts. -10-

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c. The length of the covenant period imposed on Inclusionary Units varies from jurisdiction-to-jurisdiction. California Health and Safety Code (H&SC) Section 33413 applies covenant periods of 45 years for ownership housing units and 55 years for apartment units. These standards are commonly used, but both shorter and longer covenant periods are imposed throughout Inclusionary Housing Programs in California.

Inclusionary Housing Programs focus on the production of affordable housing units by imposing specific affordable housing requirements on new development. However, an option for projects to pay a fee in lieu of producing affordable units is that the Inclusionary Housing requirements can be transferred to developers that have experience in constructing affordable housing projects. This is advantageous for the following reasons:

1. Affordable housing developers have specific expertise in the development and operation of affordable housing projects.

2. Dedicated affordable housing projects have access to state and federal funding sources that are not available to market rate projects. These funding sources provide a more cost-efficient way to achieve deeper affordability than can be supported by an Inclusionary Housing requirement. A representative sample of programs that are targeted to dedicated affordable housing projects are:
a. Low and Moderate Income Housing Asset funds generated by affordable housing projects that received assistance from the former Costa Mesa Redevelopment Agency;
b. HOME Program funds that are awarded to the City by the United States Department of Housing and Urban Development (HUD);
c. Funds allocated to the City by HCD under the Permanent Local Housing Allocation (PLHA) for Senate Bill 2 (Chapter 364, Statutes of 2017); d. County funding sources and the Section 8 rental assistance program; -11-

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e. State funding sources such as the Infill Infrastructure Grant (IIG), the Multifamily Housing Program (MHP), the Middle Income Program (MIP), the Affordable Housing and Sustainable Communities (AHSC) Program, and Project Homekey; and
f. Federal and state Low-Income Housing Tax Credits (Tax Credits) offered under Internal Revenue Code Section 42.

B. State Density Bonus and Inclusionary Housing Requirements A tool that is commonly used to reduce the financial impact created by the imposition of Inclusionary Housing requirements is the Section 65915 density bonus. The City is required to adopt an ordinance that specifies how it will comply with the State mandated density bonus requirements.

The City’s adopted ordinance is included in Chapter IX of the Costa Mesa Municipal Code (Chapter 9), and it was last amended in 2007. The City is currently in the process of amending the density bonus ordinance to reflect changes the State Legislature has made during the intervening period. Until the update is codified, State law will automatically prevail over any inconsistencies between State law and Chapter 9.

In July 2013, the First District Court of Appeal held that jurisdictions must agree to count the affordable units used to fulfill Section 65915 affordable housing requirements towards the Inclusionary Housing requirements that will be imposed on a project. 3 Based on that ruling, a
developer must be allowed to use the same affordable units to fulfill both the Inclusionary Housing requirements and the Section 65915 requirements. However, in order to exercise this option, the developer must apply the more stringent of the two programs’ requirements.

3 Latinos Unidos del Valle de Napa y Solano v. County of Napa, 217 Cal. App. 4th 1160 (Napa). -12-

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C. Structuring Issues
In structuring an Inclusionary Housing Program it is important to understand that the courts and the State Legislature have placed the following key limitations on the requirements that can be imposed Inclusionary Housing Programs:

SAN JOSE CASE
In the San Jose case, the California Supreme Court ruled that Inclusionary Housing Programs should be viewed as use restrictions that are a valid exercise of a jurisdiction’s zoning powers.

Specifically, the Court found that Inclusionary Housing requirements are a planning tool rather than an exaction. This is interpreted to mean that an in-lieu fee payment option that is included in an Inclusionary Housing Program, that includes an affordable housing production requirement, is not subject to the AB 1600 nexus requirements imposed by California Government Code §66000 et seq..

While Inclusionary Housing Programs are not subject to the Mitigation Fee Act, these programs must comply with the following criteria:

1. The requirements cannot be “Confiscatory”; and

2. The requirements cannot deprive a property owner of a fair and reasonable return on their investment.

Since the court did not provide criteria under which jurisdictions can evaluate these limitations, each jurisdiction is left to create an evaluation methodology. The objective is to balance the interests of property owners, developers and the jurisdiction’s need for affordable housing. It is KMA’s practice to take a conservative approach in identifying requirements that comport with the court’s ruling.

ASSEMBLY BILL 1505
Assembly Bill (AB) 1505 amended Section 65850 of the California Government Code and added Section 65850.01. This legislation provides jurisdictions with the ability to adopt programs that impose Inclusionary Housing requirements on apartment developments. -13-

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Section 65850.01 does not place a cap on the percentage of units that can be subject to income and affordability restrictions. However, Section 65850.01 (a) gives HCD the authority to review the restrictions imposed by an Inclusionary Housing Program on apartment developments if it requires that more than 15% of the units to be restricted to households earning less than 80% of the area median income (AMI), and if one of the following conditions applies:

1. The jurisdiction has failed to meet at least 75% of its Regional Housing Needs Assessment (RHNA) allocation for above moderate income units. This test is measured on a pro-rated basis over the planning period, which is set at a minimum of five years; or

2. HCD finds that the jurisdiction has not submitted their Housing Element report for at least two consecutive years.

The City has fulfilled the requirements imposed by both of the standards identified above. As such, HCD does not have authority under Section 65850.01 (a) to review the Inclusionary Housing requirements the City proposes to impose on apartment development. However, in a technical guidance memorandum dated October 21, 2019, HCD reaffirmed its authority to review Inclusionary Housing ordinances as part of its review of a jurisdiction’s Housing Element.

CALIFORNIA GOVERNMENT CODE SECTION 65583 (A)
California Government Code Section 65583 (a) (Section 65583 (a)) requires the City to analyze potential and actual constraints being placed on the development of housing. HCD has the discretion to require the City to demonstrate that the Inclusionary Housing requirements do not create a constraint to housing development.

Section 65583 (a) requires the City to analyze potential and actual constraints being placed on the development of housing. Within that context, it is important to recognize that the requirements imposed by an Inclusionary Housing Program can only be expected to fulfill a small portion of the unmet need for affordable housing in Costa Mesa. -14-

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III. METHODOLOGY
The purpose of the Financial Evaluation is to evaluate the financial feasibility of imposing Inclusionary Housing requirements on residential development in Costa Mesa. The financial feasibility analysis is comprised of the following steps:

A. Parameters
As the first step in the evaluation process, it is necessary to identify the parameters that will be applied in the analysis. One measurement is the RHNA, which is used as a tool in the Housing Element process. The Sixth Cycle RHNA Allocation Plan covers the period between 2021 and 2029, and the Costa Mesa allocations are detailed in the following table:

Sixth Cycle RHNA Allocation
October 2021 through October 2029
Income Category Total Obligation % of Total
Very Low 2,919 25%
Low 1,794 15%
Moderate 2,088 18%
Above Moderate 4,959 42%
Totals 11,760 100%

Notable factors to be considered are:

1. By far, the largest identified unmet need for affordable housing falls in the above moderate income category. Based on historical development patterns it can be assumed that these units will be produced by market rate developers without City intervention.

2. Outside financial assistance sources are widely available to affordable housing projects targeted to extremely low and very low income households. There are numerous nonprofit housing organizations in the region that have experience obtaining these funding sources.
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3. There are a limited number of outside funding available to assist low income units and effectively no outside funding sources available to assist moderate income units.

For these reasons it is KMA’s opinion that the Inclusionary Housing Program should focus on attracting development that serves households at the low and moderate income levels. In addition, the Inclusionary Housing Program should balance the interests of property owners and developers against the public benefit created by the production of affordable housing units.

B. Program Foundation
The courts have held that affordable housing is a “public benefit,” and that locally imposed Inclusionary Housing Programs are a legitimate means of providing this public benefit. The courts have tempered this with the requirement that the Inclusionary Housing obligations cannot be confiscatory, and they cannot deprive a property owner of a fair and reasonable return on their investment.

Recognizing that the courts have not provided guidance for determining how these limitations should be measured, it is left to the City to create a methodology for testing the financial impacts created by proposed Inclusionary Housing requirements. It is the City’s goal to create an Inclusionary Housing program that provides meaningful incentives and benefits that will encourage developers to produce affordable housing units.

C. Financial Evaluation Structure
The KMA financial analyses components are described in the following sections of this report.

DEVELOPMENT PROTOTYPES
KMA and the City staff worked together to create prototype residential developments to be evaluated. It is important to understand that the prototypes used in the Financial Evaluation do not represent actual projects. Instead, the prototypes represent composites of projects that have recently been developed or proposed for development and the results of KMA market surveys.
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PRO FORMA ANALYSES
KMA prepared pro forma analyses to determine the following:

1. The land value supported by a 100% market rate apartment or ownership housing development.

2. The magnitude of the value enhancement created by the modifications to the zoning code standards.

3. The share of the value enhancement that can reasonably be committed to the provision of Inclusionary Units within the residential development.

The results of the pro forma analyses were used to identify the range of Inclusionary Housing production requirements that can be supported.

D. Financial Analysis Organization
The following sections of the Financial Evaluation describe the assumptions, analysis and findings related to apartment and ownership housing developments. The analyses are supported by the following Attachments:

Financial Analysis Organization
Attachment 2: Property Sales Surveys
Attachment 3: Affordable Housing Cost Calculation Methodology Attachment 4: Apartment Development
Attachment 5: Ownership Housing Development

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IV. APARTMENT DEVELOPMENT ANALYSIS
KMA created six prototype apartment development scenarios that were used to evaluate the impacts created by variations in site sizes and densities of the project types anticipated to be developed in Costa Mesa. The characteristics of the apartment development prototypes are described in the following table:

A. Pro Forma Organization and Assumptions

MARKET RATE SCENARIOS
The 100% market rate apartment development prototypes are used to estimate the value enhancement created by the proposed changes to the zoning code in the overlay areas. The pro forma analyses are organized as follows:

Area / Existing Use
Site Area
(Acres) Total Units
Density
(Units/Acre)
Number of
Stories
Parking
Spaces Per
Unit
North Costa Mesa
Vacant Business Park Land
Harbor Mixed Use
Improved Auto Property
Mesa West
Improved .39 FAR Industrial + Retail
19 West
Improved .39 FAR Industrial + Retail
SoBECA
Improved .49 FAR Industrial
Corridors
Improved Auto Property
Project Descriptions
Apartment Development Prototypes

4.00 240 60 5 1.75

2.40 96 40 4 1.75

4.30 172 40 4 1.75

2.00 80 40 4 1.75

3.15 189 60 5 1.75

2.40 120 50 4 1.75
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Pro Forma Analysis - 100% Market Rate Scenario
Apartment Development Prototypes
Table 1: Estimated Construction Costs
Table 2: Estimated Stabilized Net Operating Income
Table 3: Estimated Residual Land Value
Table 4: Target Residual Land Value Analysis

AFFORDABLE HOUSING SCENARIOS
To assist in establishing the Inclusionary Housing production requirements that can be supported, KMA created the following affordability scenarios:

1. A low income scenario;

2. A very low income scenario;

3. A scenario that includes a mix of low and very low income units; and

4. A Section 65915 density bonus scenario.

KMA prepared sensitivity analyses for each scenario to identify the percentage of affordable housing units that could be supported by the enhanced value created by the zoning code modifications. The pro forma analyses for the affordable housing scenarios are organized as follows:

Pro Forma Analysis – Affordable Housing Scenarios
Apartment Development Prototypes
Table 1: Estimated Construction Costs
Table 2: Estimated Stabilized Net Operating Income
Table 3: Estimated Residual Land Value

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COMMON ASSUMPTIONS
To assist in gaining a consistent analysis of the impacts created by the zoning code changes being considered, the following assumptions are applied consistently to all the scenarios being evaluated.

Unit Mix Assumptions
Apartment Development Prototypes

Number of
Bedrooms
Unit Size
(Square Feet)
Percentage
Of Total
Studio 525 5%
One Bedroom 770 50%
Two Bedrooms 1,130 40%
Three Bedrooms 1,400 5%
Average / Total 933 100%

Projected Market Rents
Apartment Development Prototypes
Number of
Bedrooms

Total

Per Square Foot
Studio $2,410 $4.59
One Bedroom $2,970 $3.86
Two Bedrooms $3,660 $3.23
Three Bedrooms $4,400 $3.14
Averages $3,290 $3.52

The “Affordable Rent” calculation methodology is described in Attachment 3: Appendix A and the Affordable Rent calculations are detailed in Attachment 4: Appendix B. The results are presented in the following table:
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Affordable Rents (2023)
Apartment Development Prototypes

Number of
Bedrooms

Low Income
Very Low
Income
Studio $1,698 $1,027
One Bedroom $1,939 $1,172
Two Bedrooms $2,159 $1,297
Three Bedrooms $2,382 $1,424

B. Residual Land Value Analyses: Market Rate Scenarios
The residual land value estimates generated by the pro forma analyses of the unrestricted market rate apartment prototypes are presented in the following table:

C. Funds Available for Inclusionary Housing
The funds available for Inclusionary Housing are set at a percentage share of the value enhancement estimated to be achieved by the modifications to the zoning code that are being considered. The results of the analyses are presented in the following table:

Area Total Per Unit
Stabilized
NOI Total
Per Square
Foot
North Costa Mesa $96,481,000 $402,000 $6,512,000 $29,646,000 $170 Harbor Mixed Use $35,058,000 $365,000 $2,604,000 $15,377,000 $147 Mesa West $61,735,000 $359,000 $4,657,000 $28,464,000 $152 19 West $28,766,000 $360,000 $2,170,000 $13,263,000 $152 SoBECA $43,841,000 $365,000 $3,257,000 $19,242,000 $184 Corridors $75,975,000 $402,000 $5,128,000 $23,346,000 $170 Estimated Residual Land Values
100% Market Rate Apartment Development Prototypes
Construction Costs Residual Land Value
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D. Supportable Inclusionary Housing Requirements
The results of the single income category analyses are summarized in the following table:

Area
Market Rate
Apartments - Existing Use =
Value
Enhancement
Percentage
Share
Total
Contribution
North Costa Mesa $29,646,000 - $11,326,000 = $18,320,000 50% $9,160,000 Harbor Mixed Use $15,377,000 - $11,182,000 = $4,195,000 50% $2,098,000 Mesa West $28,464,000 - $23,953,000 = $4,511,000 50% $2,256,000 19 West $13,263,000 - $11,141,000 = $2,122,000 50% $1,061,000 SoBECA $19,242,000 - $16,586,000 = $2,656,000 50% $1,328,000 Corridors $23,346,000 - $14,677,000 = $8,669,000 50% $4,335,000 Funds Available for Inclusionary Housing
Apartment Development Prototypes
Estimated Land Value / Sq. Ft. Contribution
Area Low Income Units OR
Very Low Income
Units
North Costa Mesa 19% 12%
Ha
rbor Mixed Use 11% 7%
Mesa West 6% 4%
19 West 8% 4%
SoBECA 6% 3%
Corridors 12% 7%
Supportable Inclusionry Housing Requirements
Single Income Category Analyses
Apa
rtment Development Prototypes
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The results of the analyses that include a combination of low and very low income housing requirements are presented in the following table:4

SECTION 65915 DENSITY BONUS SCENARIOS
KMA’s primary analysis is based on prototype apartment developments that comport with a development site’s base zoning requirements. KMA also created Section 65915 density bonus prototypes that maximize the supportable Inclusionary Housing requirement, while minimizing the financial impact created by the requirement. The density bonus analyses are presented in Attachment 4 - Exhibit V of Appendices C, D and H, and Exhibit IV of Appendices E, F and G.

4 Areas with less than a 10% supportable requirement were excluded from the Mix of Income Categories Analyses.

Area
Low Income
Units +
Very Low
Income Units =
Total
Obligation
North Costa Mesa 11% + 5% = 16%
Ha
rbor Mixed Use 6% + 3% = 9%
Corridors 7% + 3% = 10%
Supportable Inclusionry Housing Requirements
Mix of Income Categories Analyses
Apa
rtment Development Prototypes
Area
Density
Bonus %
Very Low
Income %
Units /
Acre Financial Impact
North Costa Mesa 50% 15% 90 Equivalent to base zoning
Harbor Mixed Use 50% 15% 60 Marginally worse than base zoning Mesa West 50% 15% 60 Significantly worse than base zoning 19 West 50% 15% 60 Marginally worse than base zoning
SoBECA 20% 5% 60 Marginally better than base zoning
Corridors 50% 15% 90 Equivalent to base zoning
Section 65915 Density Bonus Analyses
Apartment Development Prototypes
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The key finding of the Section 65915 density bonus analyses is that in general the additional density is not anticipated to enhance the project economics. The primary reason is that the zoning code modifications being considered by the City provide significant parking relief.

Parking relief is a major reason that developers opt to use the Section 65915 density bonus.

E. Recommended Inclusionary Housing Production Requirements Based on all the factors considered in the apartment developments evaluation, KMA recommends that the City provide a menu of Inclusionary Housing production options from which developers can select. The recommended array of options is presented in the following table:

Inclusionary Housing: Financial Evaluation Page 22
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V. OWNERSHIP HOUSING ANALYSES
Ownership housing development in Costa Mesa is focused on detached single family homes and townhome developments. Stacked flat condominiums are not currently a factor in the ownership housing development inventory. In recognition of this, KMA created a variety of townhome development types with densities ranging from 15 to 25 units per acre.

The characteristics of the ownership housing development prototypes are described in the following table:

A. Pro Forma Organization and Assumptions

MARKET RATE SCENARIOS
The 100% market rate ownership development prototypes are used to estimate the value enhancement created by the proposed changes to the zoning code in the overlay areas. The pro forma analyses are organized as follows:

Area / Existing Use
Site Area
(Acres) Total Units
Density
(Units/Acre)
Bedroom
Mix
Parking
Spaces Per
Uni
t
North Costa Mesa 3.40 85 25 2 - 4 2. 00
Vacant Residential Land @ 20 Units/Acre
Harbor Mixed Use 0.53 8 15 3 & 4 2.00
Improved .39 FAR Industrial + Retail
Mesa West 1.18 20 17 3 & 4 2.00
Improved Auto Property
19 West 2.00 40 20 2 - 4 2.00
Improved .39 FAR Industrial + Retail
SoBECA 0.67 11 16 3 & 4 2.00
Improved .42 FAR Industrial + Retail
Corridors 0.63 10 16 3 & 4 2.00
31 Room Motel
Project Descriptions
Ownership Housing Development Prototypes
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Pro Forma Analysis - 100% Market Rate Scenario
Ownership Housing Development Prototypes
Table 1: Estimated Construction Costs
Table 2: Projected Net Sales Revenue
Table 3: Estimated Residual Land Value
Table 4: Value Enhancement Analysis

MODERATE INCOME HOUSING SCENARIOS
Inclusionary Housing programs generally set the affordability requirements for ownership housing development at the moderate income level. This is done as a reflection of the fact that higher income households are likely to have more discretionary income to devote to the ongoing costs associated with home ownership than that of lower income households.

KMA prepared Affordability Gap analyses for each scenario to identify the percentage of moderate income housing units that could be supported by the enhanced value created by the zoning code modifications. The Affordability Gap analyses are presented in Exhibit II of Appendices C – H of Attachment 5.

B. Residual Land Value Analyses: Market Rate Scenarios
The residual land values generated by the market rate ownership housing developments are:

Area Total Per Unit
Average Sales
Price Per Unit Total
Per Square
Foot
North Costa Mesa $55,435,000 $652,000 $1,055,000 $20,826,000 $141 Harbor Mixed Use $5,448,000 $681,000 $1,252,000 $3,262,000 $141 Mesa West $13,348,000 $667,000 $1,193,000 $7,174,000 $140 19 West $25,986,000 $650,000 $1,103,000 $11,961,000 $137 SoBECA $7,389,000 $672,000 $1,222,000 $4,298,000 $147
Corridors $6,701,000 $670,000 $1,210,000 $3,818,000 $139 Construction Costs Residual Land Value
Estimated Residual Land Values
100% Market Rate Ownership Housing Development Prototypes -26-

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As can be seen in the preceding table, the ownership housing development prototype being evaluated in the Corridors area does not generate any value enhancement. This does not mean that ownership housing development is infeasible in the Corridors area. Rather, it indicates that the premium costs associated with acquiring an operating motel currently exceed the land values associated with the development of a residential use.

D. Affordability Gap Analyses
The “Affordable Sales Price” calculation methodology is described in Attachment 3: Appendix B and the Affordable Sales Price calculations are detailed in Attachment 5: Appendix B. The results are presented in the following table:

Area
Market Rate
Units - Existing Use =
Value
Enhancement
Percentage
Share
Total
Contribution
North Costa Mesa $20,826,000 - $11,552,000 = $9,274,000 50% $4,637,000 Harbor Mixed Use $3,262,000 - $2,955,000 = $307,000 50% $154,000 Mesa West $7,174,000 - $5,500,000 = $1,674,000 50% $837,000 19 West $11,961,000 - $11,151,000 = $810,000 50% $405,000 SoBECA $4,298,000 - $3,736,000 = $562,000 50% $281,000
Corridors $3,818,000 - $6,504,000 = ($2,686,000)
Funds Available for Inclusionary Housing
Ownership Housing Development Prototypes
Estimated Land Value / Sq. Ft. Contribution
No Contribution is Supported
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Affordable Sales Prices (2023)
Ownership Housing Development Prototypes

Number of Bedrooms
Moderate Income
Affordable Sales Prices
Two Bedrooms $472,000
Three Bedrooms $500,400
Four Bedrooms $528,300

The weighted average Affordability Gaps exhibited by the ownership housing development prototypes are presented in the following table:

As can be seen in the preceding table, the gaps between the average market rate prices for new townhome development and the designated Affordable Sales Prices range from $557,000 to $745,000 per unit. Affordability Gaps of this magnitude severely limit the percentage of units in a new ownership housing development that can be required to be sold to moderate income households.

Area
Moderate Income
Units
North Costa Mesa $557,000
Ha
rbor Mixed Use $745,000
Mesa West $684,000
19 West $603,000
SoBECA $714,000
Corridors N/A
Weighted Average Affordability Gap Per Unit
Ownership Housing Development
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E. Supportable Inclusionary Housing Requirements
The preceding section of the Financial Evaluation used pro forma analyses of prototype ownership housing developments to assist in identifying the Inclusionary Housing requirements that can currently be supported. The resulting supportable requirements are summarized in the following table:

F. Recommended Inclusionary Housing Production Requirements Given the magnitude of the Affordability Gaps associated with new ownership housing units it is KMA’s recommendation that developers be permitted to pay a fee in lieu of producing affordable housing units. It is further our recommendation that the in-lieu revenue be used to create a first time homebuyer program that provides assistance to households who wish to purchase an existing home in Costa Mesa.

Area
Moderate Income
Units
North Costa Mesa 9.8%
Ha
rbor Mixed Use 2.5%
Mesa West 6.1%
19 West 1.7%
SoBECA 3.5%
Corridors N/A
Supportable Inclusionary Housing Requirements
Ownership Housing Development
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VI. SUMMARY
This section of the report summarizes the results of the Financial Evaluation. The analysis findings provide the first step towards developing a recommended package of requirements to be imposed by an Inclusionary Housing program. A policy recommendations memorandum accompanies this report.

A. Apartment Development
Based on the results of the Financial evaluation, KMA recommends that following menu of Inclusionary Housing production options be offered to apartment developers:

B. Ownership Housing Development
For ownership housing developments, KMA recommends that developers be permitted to pay a fee in lieu of producing affordable housing units. The revenues generated by the in-lieu fee could be dedicated to a first time homebuyer program that focused on the acquisition of existing homes in the Costa Mesa inventory.

INCLUSIONARY HOUSING PROGRAM SURVEYS

COSTA MESA, CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey Page 1 of 18
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APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
I. Inclusionary Requirements: Both Rental and Ownership Projects Agoura Hills
Create on-site units; pay an in-lieu fee for the required Low and/or Moderate Income Units. In-lieu fee cannot be paid to fulfill the very low income requirement.
15% No 10 7% @ VL + 4% @
Low + 4% @ mod 55 10 7% @ VL + 4% @
Low + 4% @ mod 45
Alameda
Create on-site units; create off-site units; pay in-lieu fee. Full sche 15% No 5 4% @ VL + 4% @ Low + 7% @ Mod 59 5 4% @ VL + 4% @
Low + 7% @ Mod 59
Albany Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land.
15% Yes 5 Perpetual 5 Perpetual
Alhambra
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
15% No 5 9% @ 120% + 6%
@ 80% 5 9% at 120% + 6%
at 80%
Avalon Create on-site units; create off-site units; pay in-lieu fee. Full sche 20% No 4 Decided per project 55 4 Decided per
project 55
Berkeley Create on-site units; pay in-lieu fee. 20% No 5 80% unless
subsidies are
available
Life of the
Building 5 80% Life of the
Building
Brea Create on-site units; pay in-lieu fee. City provides incentives to mitigate the impact of the requirement. 10% No 20
Undefined
Percentages of
Very Low & Low
55 20 120% 45
Calabasas Create on-site units; create off-site units; convert market rate units; preserve or rehab existing housing; pay in-lieu fee. 20% No 5 20% @ 110%; 15%
@ 90%; 10% @
75%; or 5% at 50%
5 20% @ 110%; 15%
@ 90%; 10% @
75%; or 5% at 50%
of AMI
Campbell Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land.
15% No 10 6% @ VL + 9% @
Low 55 10 120% 45
Capitola Create on-site units; pay in-lieu fee. 15% Yes 7 120% Life of Bldg Carlsbad
Create units; pay in-lieu fee. Reduced requirement is provided if the affordable units are set at very low or extremely low income.
15% No 1 Low 55 1 Low 30
Chula Vista
Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land. Excludes area west of I-805 identified as "Area of Low/Moderate Income Concentration".
10% No 50 5% @ Low + 5% @
Mod Life of Bldg 50 5% @ Low + 5% @
Mod Life of Bldg
Colma Create on-site units; pay in-lieu fee. 20% No 5 5% @ VL + 5% @ Low + 10% @ Mod 55 5 5% @ VL + 5% @
Low + 10% @ Mod 45
Concord Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee.
10% Yes 5 55 5 45
Rental Development Ownership Development
Prepared by: Keyser Marston Associates, Inc.

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APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

12.5% No 20
50% @ 120% +
20% @ 80% + 30%
@ 50%
55 20 5% @ 80% + 7.5%
@ 120% 55
Emeryville Create on-site units; pay impact/linkage fee. 12%/20% No 4% @ VL + 8% @ Low 55 10 55
Encinitas Create on-site units; create off-site units; create ADU's; preserve at-risk units; pay in-lieu fee; donate land. 10%/15% No 7 10% @ VL or 15% @ Low Perpetual 7 10% VL or 15% @
Low Perpetual
Fillmore Create on-site units; pay in-lieu fee; donate land. 15% No 4 20+: 5% ELI or VL
& 10%; Low 17-
19: 2 low + one ELI
or VL; 10-16: 2
low; 5-9:: 1 low
55 4
20+: 5% ELI or VL
& 10%; Low 17-
19: 2 low + one ELI
or VL; 10-16: 2
low; 5-9: 1 low
45 Fremont Has a production option, but the in-lieu fee option is more cost effective.
15% No 2 10% @ Low 2 5% @ Mod + 10%
@ Low
Fort Bragg Create on-site units 10% to 20% 5 80% / 120% 5 100% /120% 15 Goleta
Create on-site units; create off-site units; donate land; pay in- lieu fee; acquisition/rehabilitation. Income/Affordability trade off of extremley low and very low income units to low and moderate income units in demonstrated extreme hardship. 25% -
reduced to
20% with
public
benefit
No 2

2.5% @ ELI + 2.5%
@ VL+ 5% @ Low
+ 5% @ Mod + 5%
at Above Mod
In general
45 to 55
years, but
not less
than 30
years
2 2.5% @ ELI + 2.5%
@ VL+ 5% @ Low
+ 5% @ Mod + 5%
at Above Mod
In general
45 to 55
years, but
not less
than 30
years
Hayward Create on-site units; create off-site units; pay in-lieu fee; pay impact/linkage fee; donate land.
6% / 7.5% -
10% No 2 3% @ 50% + 3% @
60% 55 2 110% 45
Prepared by: Keyser Marston Associates, Inc.

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APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

Defined credits for
deeper
affordability & #
of bedrooms.
30 50
5% @ 50% +
5% @ 80% +
5% @ 120%.

Defined credits for
deeper
affordability & #
of bedrooms.
30 Jurupa Valley
Create on-site units; create off-site units; pay in-lieu fee; convert market rate units to affordable units; preserve at-risk housing; donate land.
7% No 1 25% Mod + 25%
Low + 50% VL 55 1 25% Mod + 25%
Low + 50% VL 45
Laguna Beach Create on-site units; pay in-lieu fee. 25% No 2-subdivision 3-other
Low and
Moderate
2-subdivision
3-other
Low and
Moderate
Laguna Woods
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
15% No 5 7.5% @ VL + 7.5%
@ Low 45 5 10% @ Low + 5%
@ Mod 45
La Habra Create on-site units; create off-site units; pay in-lieu fee; acquisition/rehabilitation.
9% / 15% No 10 9% @ Mod or 6%
@ VL & Low 55 10 110% 45
Long Beach Create on-site units; pay in-lieu fee; donate land. 11%/10% No 10 50% >55 or as long as resid 10 110% >55 or as
long as resid
Los Altos Create on-site units; create off-site units. Program requirements are only imposed in designated areas.

Rental: 5-9
@ 15% &
10+ @ 30%.

Ownership
@ 15%
No 5
5-9: 15% @ Mod,
10+: 5% @ Low +
15% @ Mod
30 10 7.5% @ Mod,

7.5% @ Low 30
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; Incl Survey Page 4 of 18 -34-

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

Avg 135% AMI:

Coastal SLA, SLA
(exc condos), &
ELA: 20% or 10% -
sm proj
SG Valley: 15% or
7% - sm proj
Santa Clarita &
Antelope Valleys
(exc condos): 5%
Equity share
on first sale
Menlo Park Create on-site units; create off-site units; pay in-lieu fee. Full sche 10% Yes 5 80% /120% 5 80% /120% Mill Valley Create on-site units. 25% Yes 4 120% Perpetual 4 120% Perpetual Nevada County Create on-site units; create off-site units Program requirements are only applied in designated areas.

No 20 30 20 30
Norco Create on-site units; create off-site units; pay in-lieu fee for projects with 20 or fewer units; donate land. 15% No 5
6% Mod+9% Low
Credits for deeper
affordability
Perpetual 5
6% Mod+9% Low
Credits for deeper
affordability
45%
Oceanside
Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land; purchase credits from another project.
10% No 3 Low (80%) 55 3 Mod (120%) 55
Oxnard Create on-site units; create off-site units; pay in-lieu fee in limited circumstances.
10% No 10 5% @ VL + 5%
Low 55 10 Low 20
Pacifica
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
15% No 8
6% @ VL + 4.5% @
Low + 4.5% @
Mod
55 8 45
Pasadena
Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land. Excludes area west of I-805 identified as "Area of Low/Moderate Income Concentration".
20% No 1
5% @ 50% + 5% @
80% + 10% @
120%
Perpetual 1 110% 45
Petaluma Create on-site units; pay in-lieu fee; donate land 15% No 5 7.5% @ VL; 7.5% @ Low 45 5 7.5% @ Low +

7.5% @ Mod 55
Pleasanton
Create on-site units; create off-site units; pay in-lieu fee; donate land; credit transfers; other alternate methods of compliance
15% Yes 15 50% to 80% 15 50% to 120% Perpetual
Pomona
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
13% / 7%-
11% Yes 3 120% Perpetual 3 120% 45
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; Incl Survey Page 5 of 18 -35-

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
Poway
Create on-site units; create off-site units; pay in-lieu fee. Full schedule goes into effect in 2023 for rental and 2025 for ownership.
15% / 15%-
20% No Very Low 55 15% @ Low or
20% @ Mod 45
Redondo Beach
(Proposed)
Create on-site units; create off-site units; pay in-lieu fee up to nine units. Fractional unit obligations are rounded down 10%-15% /
9%-15% Yes 2 Moderate >75 or as
long as resid 2 Moderate 55
Redwood City Create on-site units; create off-site units; preserve or rehab units; pay impact/linkage fee; donate land 20% / 15% No 20 10% @ Mod + 5%
@ Low + 5% @ VL 30 5 Moderate 30
Sacramento County Has a production option, but the in-lieu fee option is more cost effective.
10% No 1 80% 1 80%
San Bruno Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land. Excludes area 15% No 10 6% VL + 4.5% Low
+ 4.5% Mod 55 10 6% Low + 9% Mod 45
San Buenaventura Create on-site units; create off-site units; pay in-lieu fee; preserve or rehab existing housing; donate land. 15% / 10% No 7 Low 55 7 Mod 45 San Clemente
Create on-site units; create off-site units, pay in-lieu fee; donate land.
4% No 6 Very Low 30 6 Very Low 30
San Diego
Create on-site units; create off-site units; rehabilitate existing units, SRO hotel rooms, or conversion of guest rooms; pay in- lieu fee; donate land. The amended requirements were
approved in 2020 and are being phased in over five years. 10% to 15% No 10 10% @ 60% 55 10 10% @ 100% or
15% 120% 15
San Francisco
Create on-site units; create off-site units; pay in-lieu fee. Full schedule goes into effect in 2023 for rental and 2025 for ownership.
15% to 20%
/ 15% to
26%
Yes 10 55% to 110% 10 80% to 130%
San Jose
Create on-site units; create off-site units; preserve or rehab units; in-lieu fee; donate land; credit transfers; reduction for deeper affordability.
15% Yes 10 5% @50% + 5% @
60% + 5% @ 100% 99 10 120% 99
San Juan Capistrano Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land.
10% No 2 55 2 120% 55
San Luis Oblspo (City)
Create on-site units; pay an in-lieu fee to fulfill the entire oblgiation and pay an in-lieu fee for fractional unit
obligations.
6% / 10% No 1 5% Very Low +
5% Low 55 1 5% Low +
5% Moderate 45
San Mateo County Create on-site units, pay in-lieu fee. 20% Yes 5 10% @ ELI + 10% @ Low Life of Bldg 11 10% @ Low + 10%
@ Mod 45
San Rafael Create on-site units; pay in-lieu fee. City provides incentives to mitigate the impact of the requirement. 10% No 2 2 120% Prepared by: Keyser Marston Associates, Inc.

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APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

Create on-site units; off-site units; substantially rehab existing units; pay in-lieu fee.

Rental: 5% -
15% & Own:
5%
No 5
15% @ Low or
10% @ VL or 5%
@ ELI or 5% Low +
3% VL +2% ELI
55 5 120% 55
Santa Barbara (City) Create on-site units; create off-site units; pay in-lieu fee for 1 to 9 & fractional units; donate land. 10% / 15% No 5 Mod 90 1 120% to 200% 90 / restarts
on each
resale
Santa Clara (City) Create on-site units; create off-site units; dedicate land; pay an in-lieu fee for fractional unit obligations. 15% No 10 Mix of ELI, VL, Low
& Mod. Must
average less than
100% of AMI
55 10
Mix of ELI, VL, Low
& Mod. Must
average less than
100% of AMI
20 Santa Clara County
(Excludes Unincorp
Areas and Stanford
Community Plan Area)
Create on-site units; create off-site units; in-lieu fee payments for projects with six or fewer units and for fractional unit obligations; conversion of existing market rate units.
16% No 4 Lower 55 4 Moderate 55
Santa Cruz
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
20% Yes 2 50% for SRO's
80% all other Perpetual 2 120% Perpetual
Santa Monica
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
5% to 30% Yes 2 50%, 80% & 120%
Defined credits 55 2 50%, 80% & 120%
Defined credits 55
Santa Paula
Create on-site units; create off-site units; pay in-lieu fee. Full schedule goes into effect in 2023 for rental and 2025 for ownership.
10% to 17% Yes 10 15% Low or 10%
VL 55 10 15% Low or 10%
VL 45
Santa Rosa Has a production option, but the in-lieu fee option is more cost effective.
5% to 8% /
10% No 1 5% @ 50% or 8%
@ 60% 2 110%
Sonoma Create on-site units. 20% Yes 5 120% 55 5 120% 55 Sonoma County
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
10% or 15%
/ 20% Yes 1

7.5% @ VL + 7.5%
@ Low, or 5% @
ELI + 5% @ VL
55 1 10% @ Low + 10%
@ Mod 30
South San Francisco Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee
20% No 4 55 4 55
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APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

15.0% No 7 5% @ 50% + 10%
@ 60% 55 7 100% 30
Tiburon Create on-site units; create off-site units; pay in-lieu fee. Full sche 15% 3 5% @ Low + 10% @ Mod Perpetual 3 5% @ Low + 10%
@ Mod Perpetual
Union City Create on-site units; create off-site units; pay in-lieu fee. Full sche 15% No 7 4.5% @ VL +

10.5% @ Low 7

1.5% @ Low +

4.5% @ 100% +
9% @ 120%
West Sacramento Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land.
10% No 5 5% @ 50% + 5% @
60% 55 5 70% 45
West Hollywood Create on-site units; create off-site units; pay in-lieu fee for 2- 10 unit projects.
20% No 2 Low / Mod As long as
resid 2 Low / Mod As long as
resid
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; Incl Survey Page 8 of 18 -38-

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
II. Inclusionary Requirements: Ownership Projects Only
Carpinteria Create on-site units; pay in-lieu fee in limited circumstances. 12% No 5 200% 30 Danville Create on-site units; pay in-lieu fee. 10% Yes 7 110% 20 Folsom Create on-site units; create off-site units; pay in-lieu fee; donate land; acq/rehab; other proposals. 10% No 10 3% @ VL + 7% @ Low
Lafayette Create on-site units; create off-site units. 15% No 2 9% @ Mod + 6% @ VL 45
Monterey Create on-site units; donate land. 20% No 6 Perpetual Mountain View Create on-site units; pay in-lieu fee. 15% No 3 100% 55 Rohnert Park Create on-site units; create off-site units; pay in-lieu fee. 15% No 50 55 San Leandro Create on-site units; pay in-lieu fee. 15% Yes 2 9% @ Mod + 6% @ Low 55
San Mateo County Create on-site units; create off-site units; pay in-lieu fee; donate land. 20% No 5 10% @ Low + 10%
@ Mod 55
5-19: 1 Mod. 20+:

South Coast: 2.5%
VL + 2.5% Low +
5% Mod + 5%
Workforce
45 - restarts
up to 90
Santa Ynez: No
Workforce
Santa Maria &
Lompoc: 2.5% VL
+ 2.5 Low
Thousand Oaks Create on-site units; create off-site rental units; pay in-lieu fee. 10% No 5 Mod 45
Santa Barbara County Create on-site units; create off-site units in the coastal zone; pay in-lieu fee for certain unit types. 5% - 15% Yes 5
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; Incl Survey Page 9 of 18 -39-

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
III. Inclusionary for Ownership Projects & Impact Fee for Rental Projects Fontana Create on-site units; pay in-lieu fee; develop a reduced percentage at deeper affordability. 10% No 5 4% @ VL + 4% @ Low + 2% @ Mod 55
Palo Alto
Create on-site units; create off-site units; in-lieu for fractional unit; convert market rate units to affordable units; preserve at-risk housing; donate land.
15% < 5 /
20% 5 acres
+
Yes $22.69/sf Impact
Fee 1 67% @ 80-100%
33% @ 100-120% 99
San Carlos Create on-site units; create off-site units; pay impact/linkage fee.
15% Yes 55 2 10% @ Mod + 5%
@ Low 45
Truckee
Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; pay impact/linkage fee; donate land. Requirements vary by zones, neighborhoods or districts.
15% No 7 Perpetual 7 Perpetual
IV. Mandatory Inclusionary for Ownership Projects & Voluntary Inclusionary for Rental Projects Pittsburg Create on-site units; pay in-lieu fee. 15%/20% Yes 5 9% @ Mod + 6%
@ Low, or 20% @
Mod
Salinas Create on-site units; create off-site units; donate land. 20% No 10 30 San Juan Bautista Create on-site units; pay impact/linkage fee. 6% 6 80% San Luis Obispo Create on-site units; pay in-lieu fee; donate land. 3% or 5% Yes 55 5 3% low or 5% Moderate 45
San Marcos Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land.
15% No 55 120% 55
Solana Beach Create on-site units; create off-site units; preserve or rehab existing housing; pay impact/linkage fee.
15% No 5 55 5 45
V. Rental Projects Only
Fullerton Applies only to the Transportation Specific Plan area. Create on-site units. 15% No 5% @ VL + 5% @
Low + 5% @ Mod 55
Glendale
Create on-site units; create off-site units; pay in-lieu fee; donate land.
15% No 8 60% 55
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; Incl Survey Page 10 of 18 -40-

APPENDIX B

INCLUSIONARY HOUSING PROGRAM SURVEYS - LOS ANGELES, ORANGE, SAN DIEGO, VENTURA & SANTA BARBARA COUNTIES INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
I. Inclusionary Requirements: Both Rental and Ownership Projects Alhambra On-site or pay in-lieu fee. 15% No 7 9% at 120% & 6% at 80% 7 9% at 120% + 6%
at 80%
Fee Schedule: 5 -20 units.

Rental: $0.89 - $14.30/SF; Ownership:
$1.88 - $30.00/SF
Agoura Hills
Create on-site units; pay an in-
lieu fee for the required Low
and/or Moderate Income
Units. In-lieu fee cannot be
paid to fulfill the very low
income requirement.
15% N/A 10 7% @ VL + 4% @
Low + 4% @ mod 55 10 7% @ VL + 4% @
Low + 4% @ mod 45
Set in 2018 to be consistent with the
Affordability gap. $285,336 per VL
apartment unit, $262,541 per low income
condominium unit, and $427,002 per
moderate income single family home.

Brea
Create on-site units; pay in-lieu
fee. City provides incentives to
mitigate the impact of the
requirement.
10% No 20
Undefined
Percentages of
Very Low & Low
Income
55 20 120% 10 Calculated per project. Based on the
Affordability Gap
Carlsbad
Create units; pay in-lieu fee.

Reduced requirement is
provided if the affordable units
are set at very low or
extremely low income.
15% No 1 Low 1 Low Available up to 6 units. $8,529 for on SFH. $15.00/SF for 2-6 unit projects.

Chula Vista
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land. Excludes area
west of I-805 identified as
"Area of Low/Moderate
Income Concentration".
10% No 50 5% @ Low + 5% @
Mod Life of Bldg 50 5% @ Low + 5% @
Mod Life of Bldg In-lieu fee is based on the median home price minus the affordable home price
Coronado
Create units; pay in-lieu fee.

Reduced requirement is
provided if the affordable units
are set at very low or
extremely low income.
20% No 2 Low 2 Mod
In-lieu fee paid by right. $7,000 per market
rate unit
Downey Create on-site units; create off-
site units; pay in-lieu fee. 11%/10% No 10 Mod >55 or as long as resid 10 Mod 45
Rental: $23.50/SF - only allowed under
extreme hardship. Ownership: $15.90/SF
payable based on City Council criteria
Rental Development Ownership Development
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; LA Orange SD Ven SB Page 11 of 18 -41-

APPENDIX B

INCLUSIONARY HOUSING PROGRAM SURVEYS - LOS ANGELES, ORANGE, SAN DIEGO, VENTURA & SANTA BARBARA COUNTIES INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
Encinitas
Create on-site units; create off-
site units; create ADU's;
preserve at-risk units; pay in-
lieu fee; donate land.
10%/15% No 7 10% VL or 15%
Low Perpetual 7 10% VL or 15%
Low 45
One to 6 unit projects pay an in-lieu fee
based on a sliding scale. 7+ unit projects
pay $20 per sf in-lieu fee.

Fillmore
Create on-site units; pay in-lieu
fee; donate land. 15% No 4
20+: 5% ELI or VL
& 10%; Low 17-19:
2 low + one ELI or
VL; 10-16: 2 low; 5-
9:: 1 low
55 4
20+: 5% ELI or VL
& 10%; Low 17-19:
2 low + one ELI or
VL; 10-16: 2 low; 5-
9:: 1 low
Goleta
Create on-site units; create off-
site units; donate land, pay in-
lieu fee;
acquisition/rehabilitation.

Income/Affordability trade off
of extremley low and very low
income units to low and
moderate income units in
demonstrated extreme
hardship.
25% -
reduced to
20% with
public
benefit
No 2

2.5% @ ELI + 2.5%
@ VL+ 5% @ Low
+ 5% @ Mod + 5%
at Above Mod
In general
45 to 55
years, but
not less
than 30
years
2 2.5% @ ELI + 2.5%
@ VL+ 5% @ Low
+ 5% @ Mod + 5%
at Above Mod
In general 45
to 55 years,
but not less
than 30 years
Equal to the Affordability Gap associated
with providing the requisite number of
affordable units on site within the market
rate project.

Huntington Beach
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee.
10% No 3 80% 55 3 120% 45
Sliding Scale: 3 to 30 units. In-Lieu Fee
allowed for projects up to 100 units.

Rental: $3.58 to $35.80/SF Ownership:
$2.54 to $25.36/SF. The per SF
measurement caps at 2,000 SF.

Irvine
Projects with fewer than 50
units can create on-site units;
convert market rate housing to
affordable housing; extend the
term of an existing affordable
project; pay in-lieu fee;
transfer units to a nonprofit
housing agency; create off-site
units; donate land. Projects
with 50+ units must produce
the affordable units on site.
15% No
Ordinance
applies to all
housing
projects.
50 unit
threshold for
the production
requirement
5% @ 50% +
5% @ 80% +
5% @ 120%.

Defined credits for
deeper
affordability & #
of bedrooms.
30 Ordinance
applies to all
housing
projects.
50 unit
threshold for
the production
requirement
5% @ 50% +
5% @ 80% +
5% @ 120%.

Defined credits for
deeper
affordability & #
of bedrooms.
30 Calculated per project. The calculation
methodology is based on the average land
value in Irvine, the average density of
housing in Irvine, and a defined
predevelopment cost allowance.

Formula:
[(Land Value ÷ Density) + Predevelopment
Allowance] x Percentage Share of Cost
related to affordable units not being
produced
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; LA Orange SD Ven SB Page 12 of 18 -42-

APPENDIX B

INCLUSIONARY HOUSING PROGRAM SURVEYS - LOS ANGELES, ORANGE, SAN DIEGO, VENTURA & SANTA BARBARA COUNTIES INCLUSIONARY HOUSING: FINANCIAL EVALUATION

Laguna Beach Create on-site; pay in-lieu fee. 25% No 2-subdivision 3-other
Low and
Moderate
2-subdivision
3-other
Low and
Moderate
$247,317 per affordable rental unit.
$348,197 per affordable ownership unit or
lot.

Laguna Woods
Create on-site units; create off-
site units; pay in-lieu fee;
donate land.
15% No 5 7.5% @ VL + 7.5%
@ Low 45 5 10% @ Low + 5%
@ Mod 45
In-lieu fee is allowed for ownership housing
developments that can prove to the City
Council's satisfaction that including
affordable units is financially infeasible.

The fee is calculated based on: the median
price of homes sold in Laguna Woods
during the last quarter of the previous
calendar year minus the affordable price
for a 2-bedroom unit.

La Habra
Create on-site units; create off-
site units; pay in-lieu fee;
acquisition/rehabilitation.
15% No 10 9% Mod or 6% VL
& Low 55 10 110% 45 $6.50 per square foot of total building area Long Beach
Create on-site units; pay in-lieu
fee; donate land. 11%/10% No 10 50%
> of 55 yrs
or as long as
resid
10 120%
> of 55 yrs or
as long as
resid
Rental @ $38.00/SF; Ownership @
$29.10/SF
Norco
Create on-site units; create off-
site units; pay in-lieu fee for
projects with 20 or fewer
units; donate land.
15% No 5
6% Mod+9% Low
Credits for deeper
affordability
Perpetual 5
6% Mod+9% Low
Credits for deeper
affordability
45%
Sliding scale based on square feet of
leasable/saleable area:

Rental: $1.34 - $21.50
Ownership: $2.91 - $46.50
Oceanside
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land; purchase
credits from another project.
10% No 3 Low 55 3 Mod 55
In-lieu fee paid by right. The fee was set at
$15/SF on 1/1/23 and will increase to
$20/SF on 1/1/24.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; LA Orange SD Ven SB Page 13 of 18 -43-

APPENDIX B

INCLUSIONARY HOUSING PROGRAM SURVEYS - LOS ANGELES, ORANGE, SAN DIEGO, VENTURA & SANTA BARBARA COUNTIES INCLUSIONARY HOUSING: FINANCIAL EVALUATION

Low at $34.19/SF & High at $73.52/SF
Pomona
Create on-site units; create off-
site units; pay in-lieu fee;
donate land
13% / 7%-
11% Yes 3 120% Perpetual 3 120% 45 Rental @ $9.30/SF; SFH @ $11.40/SF Condominiums @ $9.30/SF
Poway Create on-site units; create off-
site units; pay in-lieu fee.
15% / 15%-
20% No Very Low 55 15% @ Low or
20% @ Mod 45
In-lieu fee is payable by right and is set at
$500 per unit for both rental and
ownership housing
Redondo Beach
(Proposed)
Create on-site units; created
off-site units; pay in-lieu fee up
to nine units. Fractional unit
obligations are rounded down.
10%-15% /
9%-15% Yes 2 Moderate >75 or as
long as resid 2 Mod 55
Sliding scale for 2 to 9 unit projects: Rental:
extrapolated from $34.20/SF of total
project area. Ownership: extrapolated from
$43.20/SF of total project area.

San Buenaventura
Create on-site units; create off-
site units; pay in-lieu fee;
preserve or rehab existing
housing; donate land.
15% / 10% No 7 Low 55 7 Mod 45 Ownership @ $29.80 - $66.30/SF; Apartments @ $20.30 - $48.90/SF
San Clemente
Create on-site units; create off-
site units, pay in-lieu fee;
donate land.
4% No 6 Very Low 30 6 Very Low 30
Based on the greater of 1% of construction
costs as determined by the Building
Division or 2% of the affordability gap
determined by the formula in the Housing
Element.

San Diego
Create on-site units; create off-
site units; pay in-lieu fee;
donate land.
10% to 15% No 10 50% or 80% 55 100% or 120% In 2024 the in-lieu fee will be set a $25/SF Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; LA Orange SD Ven SB Page 14 of 18 -44-

APPENDIX B

INCLUSIONARY HOUSING PROGRAM SURVEYS - LOS ANGELES, ORANGE, SAN DIEGO, VENTURA & SANTA BARBARA COUNTIES INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
San Juan Capistrano
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land. Excludes area
west of I-805 identified as
"Area of Low/Moderate
Income Concentration".
10% No 2 55 2 55
Based on 90% of the Affordability Gap,
which is updated monthly based on
benchmark market prices
Santa Ana
Only applies to changes in land
use and zoning designations.

Create on-site units; off-site
units; pay in-lieu fee.

Rental: 5% /
15% & Own:
5%
No 5
15% @ Low or
10% @ VL or 5%
@ ELI or 5% Low +
3% VL +2% ELI
55 5 120% 55
Fee charged per sf of habitable area: 5-9:
$6.00; 10-14: $9.00; 15-19: $12; 20+: $15.

Discounts for use of skilled and trained
labor force
Santa Barbara (City)
Create on-site units; create off-
site units; pay in-lieu fee for 1
to 9 & fractional units; donate
land.
10% / 15% No 5 Mod 90 1 120% to 200%
90 / restarts
on each
resale
In 2020 the in-lieu fee for rental projects
was set at $25 per SF. Adjusted annually by
the Engineering News Record (ENR)
Building Cost Index for Los Angeles. In-lieu
fee for ownership units is calculated based
on the median price for 2-bedroom condos,
a low income standard, and the estimated
production cost (sales price - 15% profit). A
discount schedule is provided from small
units.

Santa Monica
Create on-site units; create off-
site units; pay in-lieu fee;
donate land.
5% to 30% Yes 2 50%, 80% & 120%
Defined credits 55 2 50%, 80% & 120%
Defined credits 55 Rental @ $35.70/SF Ownership @
$41.70/SF
Santa Paula Create on-site units; create off-
site units; pay in-lieu fee. 10% to 17% Yes 10 15% Low or 10% VL 55 10 45 In-Lieu Fee is set on a project-by-project
basis.

South Pasadena
Create on-site units; create off-
site units; pay in-lieu fee for 3
or 4 rental unit projects,
ownership for any size project,
& fractional units; rehab
existing market rate units;
donate land.
20% No 3
10 or fewer units:
multiple options
11 or more units:
10% ELI or VL +
10% Low
55 3 Moderate 55
The in-lieu fee will be set by the City
Council. Until that occurs, the fee will be
calculated on a project-by-project basis.

West Hollywood
Create on-site units; create off-
site units; pay in-lieu fee for 2-
10 units projects.
20% No 2 Low / Mod As long as
resid 2 Low / Mod As long as
resid
Sliding scale: 2 Units @ $13.63/SF - 10
Units @ $29.23/SF
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; LA Orange SD Ven SB Page 15 of 18 -45-

APPENDIX B

INCLUSIONARY HOUSING PROGRAM SURVEYS - LOS ANGELES, ORANGE, SAN DIEGO, VENTURA & SANTA BARBARA COUNTIES INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
II. Inclusionary Requirements: Ownership Projects Only
Carpinteria Create on-site units; pay in-lieu
fee in limited circumstances. 12% No 5 200% 30
In-lieu fee allowed if infeasibility can be
proved. The fee is based on the difference
between the median sales price of
condominiums and/or single family homes
and the affordable price at 121% of AMI
with 30% of income dedicated to housing
expenses
5-19: 1 Mod. 20+:

South Coast: 2.5%
VL + 2.5% Low +
5% Mod + 5%
Workforce
45 - restarts
up to 90
In-Lieu fee is measured per affordable unit.

Varies by HMA & income / affordability
level. Fee: Very Low & Low are based on
the estimated cost for the County to
subsidize very low & low income units. Cost
of Construction Fee: Moderate &
Workforce are based on the median condo
sales prices minus 15% of the median price
of condos.

Santa Ynez: No
Workforce
2020 Very Low & Low Fees: South Coast
$176,000; Santa Maria $96,600; Santa Ynez
$146,200; Lompoc $99,500
Santa Maria &
Lompoc: 2.5% VL +

2.5 Low
2020 Mod & Workforce Fees: South Coast
$658,000; Santa Maria $248,000; Santa
Ynez $431,600; Lompoc $227,600
III. Inclusionary Requirements: Rental Projects Only
Glendale
Create on-site units; create off-
site units; pay in-lieu fee;
donate land.
15% No 8 60% 55 Sliding scale: 8 Units @ $28.71/SF - 21 Units @ $55/SF
Santa Barbara County
Create on-site units; create off-
site units in the coastal zone;
pay in-lieu fee for certain unit
types.
5% - 15% Yes 5
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; LA Orange SD Ven SB Page 16 of 18 -46-

APPENDIX C

INCLUSIONARY HOUSING PROGRAM SURVEYS - ORANGE COUNTY
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Brea
Create on-site units; pay in-lieu
fee. City provides incentives to
mitigate the impact of the
requirement.
10% No 20
Undefined
Percentages of
Very Low & Low
Income
55 20 120% 10 Calculated per project. Based on the
Affordability Gap
Huntington Beach
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee.
10% No 3 80% 55 3 120% 45
Sliding Scale: 3 to 30 units. In-Lieu Fee
allowed for projects up to 100 units.

Rental: $3.58 to $35.80/SF Ownership:
$2.54 to $25.36/SF. The per SF
measurement caps at 2,000 SF.

Defined credits for
deeper
affordability & #
of bedrooms.
30 Ordinance
applies to all
housing
projects.
50 unit
threshold for
the production
requirement
5% @ 50% +
5% @ 80% +
5% @ 120%.

Formula:
[(Land Value ÷ Density) + Predevelopment
Allowance] x Percentage Share of Cost
related to affordable units not being
produced
Laguna Beach Create on-site; pay in-lieu fee. 25% No 2-subdivision 3-other
Low and
Moderate
2-subdivision
3-other
Low and
Moderate
$247,317 per affordable rental unit.
$348,197 per affordable ownership unit or
lot.

The fee is calculated based on: the median
price of homes sold in Laguna Woods
during the last quarter of the previous
calendar year minus the affordable price
for a 2-bedroom unit.

File name: 7 11 23 Inclusionary Survey; Orange Page 17 of 18 -47-

APPENDIX C

INCLUSIONARY HOUSING PROGRAM SURVEYS - ORANGE COUNTY
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

San Juan Capistrano
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land.
10% No 2 55 2 55
Based on 90% of the Affordability Gap,
which is updated monthly based on
benchmark market prices
Santa Ana
Only applies to changes in land
use and zoning designations.

Create on-site units; off-site
units; pay in-lieu fee.

Rental: 5% /
15% & Own:
5%
No 5
15% @ Low or
10% @ VL or 5%
@ ELI or 5% Low +
3% VL +2% ELI
55 5 120% 55
Fee charged per sf of habitable area: 5-9:
$6.00; 10-14: $9.00; 15-19: $12; 20+: $15.

Discounts for use of skilled and trained
labor force
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 Inclusionary Survey; Orange Page 18 of 18 -48-
ATTACHMENT 2

PROPERTY SALES SURVEYS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; ATT 2 TITLE Page 1 of 8
-49-
ATTACHMENT 2: APPENDIX A

LAND SALES

PROPERTY SALES SURVEYS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Address City Sale Date Site Size (SF) Zoning Total Per SF I. Residential Land Sales 1
390 Ford Road Costa Mesa 11/18 19,166 Commercial $1,765,000 $92 17532 Cameron Ln Huntington Beach 7/22 40,946 R3 $5,700,000 $139 2089-2099 Harbor Blvd Costa Mesa 12/19 66,699 Residential $6,000,000 $90 2602 McGaw Ave Irvine 3/23 80,586 5.1 IBC Multi Use $11,000,000 $137 671 W 17th Street Costa Mesa 6/17 94,090 Residential $17,100,000 $182 8371-8461 Talbert Ave Huntington Beach 8/22 104,544 RL $6,150,000 $59 929 Baker Street Costa Mesa 1/17 206,004 Industrial $21,350,000 $104 671 W 17th Street Costa Mesa 5/17 313,632 Commercial $35,000,000 $112 Minimum 19,166 $1,765,000 $59
Maximum 313,632 $35,000,000 $182
Weighted Average 115,708 $13,008,125 $112
II. Commercial Land Sales
7422 Warner Ave Huntington Beach 9/22 7,780 RT Flex $739,000 $95 7942 Speer Dr Huntington Beach 8/22 22,978 Commercial $2,100,000 $91 17850 Von Karman Ave Irvine 5/23 28,314 5.1 IBC $7,500,000 $265 17771 Fitch Irvine 3/22 31,000 IBC $1,700,000 $55
17931 Von Karman Ave Irvine 11/22 67,953 5.1 IBC Multi Use $10,800,000 $159 SWC Main St & Garfield Ave Huntington Beach 2/22 74,052 Neighborhood Cml $5,350,000 $72 101-105 E 17th Street Costa Mesa 10/21 114,583 Commercial $14,300,000 $125 18700 Delaware St Huntington Beach 6/22 169,448 SP 14 $25,200,000 $149 18582 Teller Ave Irvine 11/21 274,428 5.1 IBC $38,740,000 $141 Minimum 7,780 $739,000 $55
Maximum 274,428 $38,740,000 $265
Weighted Average 87,837 $11,825,444 $198
Source: Costar; June 2023
1 The commercially zoned properties were acquired for subsequent residential development.

Sales Price
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt Page 2 of 8
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ATTACHMENT 2: APPENDIX B

SALES OF IMPROVED PROPERTIES

PROPERTY SALES SURVEYS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; App B Imp Sales Page 3 of 8
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ATTACHMENT 2: APPENDIX B - EXHIBIT I

RETAIL BUILDING SALES

SALES OF IMPROVED PROPERTIES

PROPERTY SALES SURVEYS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Address City Sale Date Tenant
Building
Area (SF)
Site Area
(SF) Total
Per SF Building
Area
Per SF Land
Area
I. Commercial Streets
A. Harbor Boulevard
2112 Harbor Blvd Costa Mesa 12/21 OC Archery 1,564 5,227 $1,325,000 $847 $253 2075 Harbor Blvd Costa Mesa 12/21 Red-e-rentals 3,993 28,314 $4,200,000 $1,052 $148 2035 Harbor Blvd Costa Mesa 1/23 Multiple Tenants 4,116 17,860 $1,818,500 $442 $102 1921-1925 Harbor Blvd Costa Mesa 9/21 Multiple Tenants 7,360 16,553 $6,400,000 $870 $387 Minimum 1,564 5,227 $1,325,000 $442 $102
Maximum 7,360 28,314 $6,400,000 $1,052 $387
Weighted Average 4,258 16,988 $3,435,875 $803 $202
B. Newport Boulevard
1854 Newport Blvd Costa Mesa 8/21 Dippity Donut 1,236 11,326 $5,000,000 $4,045 $441 2013 Newport Blvd Costa Mesa 6/21 Chiropractor 3,566 13,473 $5,000,000 $1,402 $371 2332 Newport Blvd Costa Mesa 6/21 Multiple Tenants 3,790 9,148 $2,100,000 $554 $230 1816 Newport Blvd Costa Mesa 9/22 Storefront 5,300 5,663 $2,225,000 $420 $393 Minimum 1,236 5,663 $2,100,000 $420 $230
Maximum 5,300 13,473 $5,000,000 $4,045 $441
Weighted Average 3,473 9,902 $3,581,250 $1,605 $362
C. 17th Street
424 E 17th St Costa Mesa 12/21 Peet's Coffee & Tea 1,534 27,007 $1,365,072 $890 $51 124 E 17th St Costa Mesa 9/21 2 tenants 2,340 8,712 $3,800,000 $1,624 $436 428 E 17th Street Costa Mesa 12/21 Restaurant 4,759 13,068 $4,234,928 $890 $324 Minimum 1,534 8,712 $1,365,072 $890 $51
Maximum 4,759 27,007 $4,234,928 $1,624 $436
Weighted Average 2,878 16,262 $3,133,333 $1,135 $193
Sales Price
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt Page 4 of 8
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ATTACHMENT 2: APPENDIX B - EXHIBIT I

RETAIL BUILDING SALES

SALES OF IMPROVED PROPERTIES

PROPERTY SALES SURVEYS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Address City Sale Date Tenant
Building
Area (SF)
Site Area
(SF) Total
Per SF Building
Area
Per SF Land
Area
Sales Price
II. Anchor Retail 1
1750 Newport Blvd Costa Mesa 7/21 Grant Boys 12,000 23,522 $3,200,000 $267 $136 1844 Newport Blvd Costa Mesa 7/21 Lightstyles 15,784 21,000 $6,000,000 $380 $286 620 W 17th St Costa Mesa 9/22 Petsmart 19,730 58,806 $11,500,000 $583 $196 851 N Harbor Blvd La Habra 10/21 Stater Bros. 20,784 74,052 $7,000,000 $337 $95 26752 Portola Pky Foothill Ranch 6/21 Michael's 25,000 114,563 $4,850,000 $194 $42 Minimum 12,000 21,000 $3,200,000 $194 $42
Maximum 25,000 114,563 $11,500,000 $583 $286
Weighted Average 18,660 58,389 $6,510,000 $352 $111
III. Auto Retail
400 E 17th St Costa Mesa 6/21 Valvoline 1,533 9,583 $3,109,000 $2,028 $324 12972 Newport Ave Tustin 9/21 Valvoline 1,800 13,504 $3,200,000 $1,778 $237 9032 Adams Ave Huntington Beach 6/22 Jiffy Lube 2,511 14,810 $2,248,000 $895 $152 1470 Dale Way Costa Mesa 7/21 McClaren Auto Repair 6,439 11,761 $2,668,528 $414 $227 3005 Harbor Blvd Costa Mesa 12/22 Just Tires 8,402 25,700 $3,700,000 $440 $144 2541 El Camino Real Tustin 7/21 Goodyear 8,900 44,431 $6,596,000 $741 $148 2146-2156 W Lincolna Ave Anaheim 10/22 Firestone 9,440 38,986 $3,225,000 $342 $83 2929 Harbor Blvd Costa Mesa 9/21 Auto Dealership 18,368 148,104 $11,600,000 $632 $78 1425 Baker St Costa Mesa 7/21 Auto Dealership 20,705 82,764 $5,331,472 $257 $64 Minimum 1,533 9,583 $2,248,000 $257 $64
Maximum 20,705 148,104 $11,600,000 $2,028 $324
Weighted Average 8,678 43,294 $4,630,889 $458 $107
Source: Costar; June 2023
1 Anchor Retail consists of stores between 10,000 and 25,000 square feet. They can be on single use sites or located in a center but under separate ownership.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt Page 5 of 8
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ATTACHMENT 2: APPENDIX B - EXHIBIT II

INDUSTRIAL & OFFICE BUILDING SALES

SALES OF IMPROVED PROPERTIES

PROPERTY SALES SURVEYS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Address City Sale Date Zoning
Building
Area (SF)
Site Area
(SF) Total
Per SF Building
Area
Per SF Land
Area
I. Industrial Buildings
3539 Howard Way Costa Mesa 9/22 MP 12,588 135,472 $23,250,000 $1,847 $172 3128 Red Hill Ave Costa Mesa 1/22 MP 28,583 144,184 $20,259,079 $709 $141 3115 Red Hill Ave Costa Mesa 12/21 MP 12,463 53,579 $6,435,000 $516 $120 141 E 16th St 1 Costa Mesa 12/21 C-2 7,586 29,621 $6,500,000 $857 $219 770 W 19th St Costa Mesa 6/22 C-1 3,000 10,454 $2,200,000 $733 $210 3121 Red Hill Ave Costa Mesa 12/21 C-L 15,571 48,352 $6,880,000 $442 $142 1720 Whittier Ave Costa Mesa 9/21 MG 2,562 7,841 $2,290,000 $894 $292 722 W 16th St Costa Mesa 11/21 MG 3,000 9,148 $1,623,000 $541 $177 3130 Airway Ave Costa Mesa 8/21 CL 20,069 55,321 $5,100,000 $254 $92 385 Clinton St Costa Mesa 5/22 MP 53,120 139,392 $16,500,000 $311 $118 1618 Ohms Way Costa Mesa 7/22 MG 6,572 16,117 $4,400,000 $670 $273 333 McCormick Ave Costa Mesa 2/22 MP 22,500 52,272 $9,000,000 $400 $172 775-777 W 16th St Costa Mesa 11/21 MG 17,180 37,897 $2,550,000 $148 $67 1690 Scenic Ave Costa Mesa 5/22 MP 34,885 67,082 $10,605,500 $304 $158 345 McCormick Ave Costa Mesa 11/21 MP 28,400 52,708 $11,155,200 $393 $212 Minimum 2,562 7,841 $1,623,000 $148 $67
Maximum 53,120 144,184 $23,250,000 $1,847 $292
Weighted Average 17,872 57,296 $8,583,185 $601 $150
Sales Price
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt Page 6 of 8
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ATTACHMENT 2: APPENDIX B - EXHIBIT II

INDUSTRIAL & OFFICE BUILDING SALES

SALES OF IMPROVED PROPERTIES

PROPERTY SALES SURVEYS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Address City Sale Date Zoning
Building
Area (SF)
Site Area
(SF) Total
Per SF Building
Area
Per SF Land
Area
Sales Price
II. Office Building Sales
534 W 19th St Costa Mesa 5/23 C2 3,828 12,197 $2,630,000 $687 $216 3161 Airway Ave Costa Mesa 2/22 4,360 5,227 $480,000 $110 $92 2925 Bristol St Costa Mesa 3/23 C2 5,226 17,424 $3,800,000 $727 $218 1831 Orange Ave Costa Mesa 4/22 66 Pro, Med 6,420 23,958 $3,200,000 $498 $134 1122 Bristol St - Bldg B Costa Mesa 3/22 C3 14,193 34,848 $5,950,000 $419 $171 345 E Baker St Costa Mesa 8/22 PDI 33,463 67,518 $11,042,790 $330 $164 3330 Harbor Blvd Costa Mesa 1/22 MP 53,908 134,165 $16,579,000 $308 $124 Minimum 3,828 5,227 $480,000 $110 $92
Maximum 53,908 134,165 $16,579,000 $727 $218
Weighted Average 17,343 42,191 $6,240,256 $440 $148
Source: Costar; June 2023
1 The property is located in the 19 West Overlay Plan area. This allows for mixed use and live/work development at up to 1.0 FAR.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt Page 7 of 8
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ATTACHMENT 2: APPENDIX B - EXHIBIT III

MOTEL SALES

SALES OF IMPROVED PROPERTIES

PROPERTY SALES SURVEYS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Name Address City Sale Date
Number of
Rooms
Site Area
(SF) Total Per Room
Per SF Land
Area
Pine Knot Motel 6302 W Coast Hwy Newport Beach 8/21 12 8,712 $2,200,000 $183,333 $253 La Vista Inn Motel 1 2435 S El Camino Real San Clemente 5/23 12 12,197 $3,190,000 $265,833 $262 Sun N Sands Motel 1102 Pacific Coast Hwy Huntington Beach 3/22 17 16,177 $2,370,000 $139,412 $147 Star Inn 2656 Newport Blvd Costa Mesa 10/22 30 19,824 $5,750,000 $191,667 $290 Minimum 12 8,712 $2,200,000 $139,412 $147
Maximum 30 19,824 $5,750,000 $265,833 $290
Weighted Average 18 14,228 $3,377,500 $195,061 $237
Source: Costar; June 2023
1 The motel was purchased by the Friendship Shelter for affordable housing purposes.

Sales Price
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt Page 8 of 8
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ATTACHMENT 3

AFFORDABLE HOUSING COST CALCULATION METHODOLOGIES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA

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Affordable Housing Cost Calculation Methodologies Page 1 Inclusionary Housing: Financial Evaluation July 11, 2023

APPENDIX A

AFFORDABLE RENT CALCULATION METHODOLOGY

ASSUMPTIONS
The Affordable Rent calculations are presented in Attachment 4 – Appendix B. The calculations are based on the following assumptions:

1. The household income information used in the calculations is based on 2023 income statistics for Orange County as a whole. This information is published annually by the United States Department of Housing and Urban Development (HUD) and distributed by the California Department of Housing and Community Development (HCD).

2. The household size appropriate for the unit is based on the California Health and Safety Code (H&SC) Section 50052.5 standard of the number of bedrooms in the home plus one.1 H&SC Section 50052.5 refers to this as “the family size appropriate for the unit.” This is a benchmark that is used for calculation purposes only. It is neither an occupancy minimum nor a maximum.

3. The benchmark household incomes used in the Affordable Rent analyses are based on the following standards:
a. The low income rents are based on 80% of area median income (AMI). This percentage of AMI is based on the standard imposed in Assembly Bill 1505. b. The very low income rents are based on 50% of AMI, which is the standard imposed by H&SC Section 50053.
c. The affordable rents used in the California Government Code Section 65915 et seq. density bonus analyses are based on the household income standards imposed by H&SC Section 50053.

4. Thirty percent (30%) of defined household income is allocated to housing-related expenses.

1 For example, the imputed household size for a two-bedroom unit is three persons. -58-
Affordable Housing Cost Calculation Methodologies Page 2 Inclusionary Housing: Financial Evaluation July 11, 2023

5. The following monthly utilities allowances were applied in this analysis.2

Utility Allowances
Apartment Development Prototypes
Number of
Bedrooms
Monthly Utilities
Allowances
Studio $91
1 $106
2 $141
3 $174

AFFORDABLE RENTS
The resulting affordable rents are presented in the following table:

Affordable Rents
Apartment Development Prototypes
Number of
Bedrooms

Low Income
Very Low
Income
Studio $1,698 $1,027
1 $1,939 $1,172
2 $2,159 $1,297
3 $2,382 $1,424

2 Utilities allowances are based on utilities costs comprised of electric heating, cooking and water heating; and basic electric. The allowances are based on the Orange County Housing Authority schedule effective as of October 1, 2022. -59-
Affordable Housing Cost Calculation Methodologies Page 3 Inclusionary Housing: Financial Evaluation July 11, 2023

APPENDIX B

AFFORDABLE SALES PRICE CALCULATION METHODOLOGY

ASSUMPTIONS
The Affordable Sales Price calculations are presented in Attachment 5 – Appendix B. The calculations are based on the following assumptions:

1. The household income information used in the calculations is based on 2023 income statistics for Orange County as a whole:
a. The household incomes for low income households is produced by HUD and distributed by HCD.
b. The household incomes for moderate income households are produced and distributed annually by HCD.

2. The Affordable Sales Price estimates are based on the calculation methodology imposed by H&SC Section 50052.5.

The elements included in the Affordable Sales Price calculations are described in the following sections of this Attachment.

Household Size
For the sole purposes of calculating Affordable Sales Prices, H&SC Section 50052.5 sets household sizes based on the number of bedrooms in the home plus one. As discussed previously, this is not an occupancy minimum or maximum. Rather, it is a benchmark that creates a consistent Affordable Sales Price calculation methodology.

Household Income
For calculation purposes only, H&SC Section 50052.5 applies benchmark household incomes as the standard for determining the Affordable Sales Prices. These benchmarks are based on the following percentages of the Orange County AMI:

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Affordable Housing Cost Calculation Methodologies Page 4 Inclusionary Housing: Financial Evaluation July 11, 2023

Income Category % of AMI
Moderate 110%
Low 70%

The identified benchmark percentages of AMI are not income caps. The household income qualification standards are set at the upper limits presented in the HCD and are based on the actual size of the homebuyer’s household.

Income Allocated to Housing-Related Expenses
H&SC Section 50052.5 allocates the following percentages of the benchmark household incomes to the payment of housing-related expenses:

Income Category
% of Benchmark
Income
Moderate 35%
Low 30%

Housing-Related Expenses
Based on research undertaken by KMA, the variable housing related expense assumptions used in this analysis are presented in the following table:

Variable Housing Related Expenses
Ownership Housing Development Prototypes

Number of
Bedrooms

Monthly Utilities
Allowances 3
Monthly HOA,
Insurance &
Maintenance
2 $242 $350
3 $308 $400
4 $381 $450

3Utilities allowances are based on utilities costs comprised of electric heating, cooking and water heating; basic electric; and water, sewer and trash services. The allowances are based on the Orange County Housing Authority schedule effective as of October 1, 2022.
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Affordable Housing Cost Calculation Methodologies Page 5 Inclusionary Housing: Financial Evaluation July 11, 2023

The property tax expense estimates are based on 1.15% of the defined Affordable Sales Prices. This assumes that the City will require the homes to be resold on an Affordable Sales Price throughout one cumulative 45-year covenant period.

Supportable Mortgage Amount
The mortgage amounts used in the Affordable Sales Price calculations are estimated using the income available after the other housing-related expenses are paid. The mortgage terms used in this Financial Evaluation were based on a 30-year fully amortizing loan at a 7.24% interest rate. 4 Benchmark Down Payment
KMA set the benchmark down payment at 5% of the estimated Affordable Sales Price. A down payment of this magnitude is commonly allowed by affordable housing programs.

AFFORDABLE SALES PRICES
The resulting Affordable Sales Prices are estimated as follows:

Affordable Sales Prices
Ownership Housing Development Prototypes
Number of
Bedrooms
Moderate
Income

Low Income
2 $472,000 $221,300
3 $500,400 $229,700
4 $528,300 $237,300

4 Based on a 100 basis points premium applied to the Freddie Mac monthly average, between July 2022 and June 2022, for a fixed-interest rate loan with a 30-year amortization period. -62-
ATTACHMENT 4

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; ATT 4 TITLE Page 1 of 126
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ATTACHMENT 4

RENT SURVEY
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA

APARTMENT DEVELOPMENT
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; App A Apt Titles Page 2 of 126 -64-
ATTACHMENT 4: APPENDIX A

RENT SURVEY

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Name Address # of Units
Unit Size
(SF) Total Per SF Year Built
I.
580 Anton 580 Anton Blvd Costa Mesa 92626 5 506 $2,365 $4.67 2018 3400 Avenue of the Arts Apartments 3400 Avenue of the Arts Costa Mesa 92626 85 539 $2,315 $4.29 1987 Baker Block 123 Baker Street E Costa Mesa 92626 31 623 $2,346 $3.77 2018 Wimbledon Glen 1142 Buckhingham Dr Costa Mesa 92626 50 505 $1,999 $3.96 1985 27 Seventy Five Mesa Verde 2775 Mesa Verde Dr Costa Mesa 92626 64 480 $2,084 $4.34 1979 Minimum 480 $1,999 $3.77
Maximum 623 $2,365 $4.67
Weighted Average 526 $2,190 $4.17
II.
580 Anton 580 Anton Blvd Costa Mesa 92626 165 745 $2,879 $3.86 Halcyon House 585 Anton Blvd Costa Mesa 92626 221 741 $3,022 $4.08 3400 Avenue of the Arts Apartments 3400 Avenue of the Arts Costa Mesa 92626 349 756 $2,637 $3.49 Baker Block 123 Baker Street E Costa Mesa 92626 108 789 $2,730 $3.46 Blue Sol 421 Bernard Street Costa Mesa 92627 73 771 $2,592 $3.36 2014 Wimbledon Glen 1142 Buckhingham Dr Costa Mesa 92626 102 942 $2,649 $2.81 The Enclave at South Coast 400 Enclave Circle Costa Mesa 92626 459 731 $2,787 $3.81 2008 27 Seventy Five Mesa Verde 2775 Mesa Verde Dr Costa Mesa 92626 468 780 $2,451 $3.14 Azulon at Mesa Verde 1500 Mesa Verde Dr E Costa Mesa 92626 132 834 $2,559 $3.07 2014 Minimum 731 $2,451 $2.81
Maximum 942 $3,022 $4.08
Weighted Average 770 $2,687 $3.51
Average Effective Rent
Studio Units
One-Bedroom Units
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt Page 3 of 126
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ATTACHMENT 4: APPENDIX A

RENT SURVEY

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Name Address # of Units
Unit Size
(SF) Total Per SF Year Built
Average Effective Rent
III.
580 Anton 580 Anton Blvd Costa Mesa 92626 80 1,144 $3,780 $3.30 Halcyon House 585 Anton Blvd Costa Mesa 92626 172 1,230 $4,149 $3.37 3400 Avenue of the Arts Apartments 3400 Avenue of the Arts Costa Mesa 92626 336 1,228 $3,306 $2.69 Baker Block 123 Baker Street E Costa Mesa 92626 93 1,124 $3,376 $3.00 Blue Sol 421 Bernard Street Costa Mesa 92627 30 1,110 $3,555 $3.20 Wimbledon Glen 1142 Buckhingham Dr Costa Mesa 92626 92 1,146 $2,872 $2.51 The Enclave at South Coast 400 Enclave Circle Costa Mesa 92626 431 1,033 $3,353 $3.25 27 Seventy Five Mesa Verde 2775 Mesa Verde Dr Costa Mesa 92626 408 1,119 $2,972 $2.66 Azulon at Mesa Verde 1500 Mesa Verde Dr E Costa Mesa 92626 83 1,075 $3,045 $2.83 Minimum 1,033 $2,872 $2.51
Maximum 1,230 $4,149 $3.37
Weighted Average 1,130 $3,317 $2.94
IV.
321 Avocado Street 321 Avocado Street Costa Mesa 92627 18 1,222 $3,406 $2.79 Baker Block 123 Baker Street E Costa Mesa 92626 8 1,452 $4,540 $3.13 Blue Sol 421 Bernard Street Costa Mesa 92627 10 1,448 $4,539 $3.13 27 Seventy Five Mesa Verde 2775 Mesa Verde Dr Costa Mesa 92626 24 1,456 $3,931 $2.70 Minimum 1,222 $3,406 $2.70
Maximum 1,456 $4,540 $3.13
Weighted Average 1,384 $3,956 $2.86
Source: CoStar; April 2023
Two-Bedroom Units
Three-Bedroom Units
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt Page 4 of 126
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ATTACHMENT 4: APPENDIX B

APARTMENT DEVELOPMENT

AFFORDABLE RENT CALCULATIONS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; App B Apt Titles Page 5 of 126 -67-
ATTACHMENT 4: APPENDIX B

AFFORDABLE RENT CALCULATIONS
2023 INCOME STANDARDS

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Studio Units
One-Bedroom
Units
Two-Bedroom
Units
Three-
Bedroom Units
I. General Assumptions
Area Median Income (AMI) 1 $89,450 $102,250 $115,000 $127,800 Monthly Utilities Allowance 2 $91 $106 $141 $174
II. Affordable Rent Calculations
A. Low Income - Rent Based on 80% AMI 3
Benchmark Annual Household Income $71,560 $81,800 $92,000 $102,240 Percentage of Income Allotted to Housing Expenses 30% 30% 30% 30% Annual Income Available for Housing Expenses $21,468 $24,540 $27,600 $30,672 Monthly Income Available for Housing Expenses $1,789 $2,045 $2,300 $2,556 (Less) Monthly Utilities Allowance (91) (106) (141) (174) Maximum Allowable Rent $1,698 $1,939 $2,159 $2,382
B. Very Low Income - Rent Based on 50% AMI 4
Benchmark Annual Household Income $44,725 $51,125 $57,500 $63,900 Percentage of Income Allotted to Housing Expenses 30% 30% 30% 30% Annual Income Available for Housing Expenses $13,418 $15,338 $17,250 $19,170 Monthly Income Available for Housing Expenses $1,118 $1,278 $1,438 $1,598 (Less) Monthly Utilities Allowance (91) (106) (141) (174) Maximum Allowable Rent $1,027 $1,172 $1,297 $1,424
1 2
3 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. 4 Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053.

Based on the 2023 Orange County household incomes published by the California Housing & Community Development Department (HCD). The benchmark household size is set at the number of bedrooms in the unit plus one.

Based on the Orange County Housing Authority utilities allowance schedule effective as of October 1, 2022. Assumes: Electric Cooking, Electric Heating, and Electric Water Heater; and Basic Electric.

Prepared by: Keyser Marston Associates
File name: 7 11 23 CM Apt; Aff Rent Page 6 of 126
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ATTACHMENT 4: APPENDIX C

PRO FORMA ANALYSES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA

OVERLAY ZONE APARTMENT PROPERTIES

NORTH COSTA MESA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; App C NC Title Page 7 of 126 -69-

MARKET RATE SCENARIO
ATTACHMENT 4: APPENDIX C - EXHIBIT I
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA

PRO FORMA ANALYSIS
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Mkt Page 8 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTION COSTS

MARKET RATE SCENARIO
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 174,240 Sf of Land $20 /Sf of Land $3,485,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 232 Spaces $20,000 /Space 4,640,000 1st Level Subterranean 188 Spaces $35,000 /Space 6,580,000 Building Costs 223,980 Sf of GLA $195 /Sf of GLA 43,676,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 11,676,000 Total Direct Costs 223,980 Sf of GLA $313 /Sf of GLA $70,057,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $4,203,000 Public Permits & Fees 4 240 Units $27,600 /Unit 6,624,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,401,000 Marketing 240 Units $2,500 /Unit 600,000
Developer Fee 5% Direct Costs 3,503,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 817,000 Total Indirect Costs $17,148,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $29,646,000 Cost 6.2% Avg Rate $2,757,000 Construction 6 $96,481,000 Cost 6.2% Avg Rate 5,384,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,135,000 Total Financing Costs $9,276,000
IV. Total Construction Cost 240 Units $402,000 /Unit $96,481,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Includes an allowance for permits and fees cost and estimates of the Parking Development Fee, the Drainage Impact Fee, the Traffic Impact Fee, and the Newport-Mesa Unified School District Developer Fee.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Mkt Page 9 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE SCENARIO
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 12 Units @ $2,410 /Unit/Month $347,000
One-Bedroom Units 120 Units @ $2,970 /Unit/Month 4,277,000 Two-Bedroom Units 96 Units @ $3,660 /Unit/Month 4,216,000 Three-Bedroom Units 12 Units @ $4,400 /Unit/Month 634,000 B. Miscellaneous Income 240 Units @ $75 /Unit/Month 216,000 Total Gross Income $9,690,000
Vacancy & Collection Allowance 5% Gross Income (485,000) II. Effective Gross Income $9,205,000
III. Operating Expenses
General Operating Expenses 240 Units @ $4,500 /Unit $1,080,000 Property Taxes 2 240 Units @ $6,600 /Unit 1,577,000
Replacement Reserve Deposits 240 Units @ $150 /Unit 36,000 Total Operating Expenses ($2,693,000)
IV. Stabilized Net Operating Income $6,512,000
1 2 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Mkt Page 10 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE

MARKET RATE SCENARIO
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 2 $6,512,000 Capitalization Rate 4.75%
Estimated Project Value $137,095,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 1 $96,481,000 Threshold Developer Profit 8% of Value 10,968,000
Total Project Cost ($107,449,000)
III. Estimated Residual Land Value 174,240 Sf of Land $170 /Sf of Land $29,646,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Mkt Page 11 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 4

TARGET RESIDUAL LAND VALUE ANALYSIS

MARKET RATE SCENARIO
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
North Costa Mesa See ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 3 $29,646,000 Vacant Business Park Land 1 174,240 Sf of Land $65 /Sf of Land 11,326,000 Estimated Value Enhancement $18,320,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $18,320,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $9,160,000 III. Target Residual Land Value
Estimated Land Value: North Costa Mesa $29,646,000
Minus Value Enhancement Funds Available for Inclusionary Housing (9,160,000) Target Residual Land Value $20,486,000
IV. Supportable In-Lieu Fee 2 223,980 Sf of GLA $41 /Sf of GLA $9,160,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.
2 Based on the Value Enhancement Funds Available for Inclusionary Housing.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Mkt Page 12 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT II
RECOMMENDED REQUIREMENT: 19% LOW INCOME UNITS
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA

PRO FORMA ANALYSIS
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Low Page 13 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 19% LOW INCOME UNITS
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 174,240 Sf of Land $20 /Sf of Land $3,485,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 232 Spaces $20,000 /Space 4,640,000 1st Level Subterranean 188 Spaces $35,000 /Space 6,580,000 Building Costs 223,980 Sf of GLA $195 /Sf of GLA 43,676,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 11,676,000 Total Direct Costs 223,980 Sf of GLA $313 /Sf of GLA $70,057,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $4,203,000 Public Permits & Fees - All Converted to 5 240 Units $27,600 /Unit 6,624,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,401,000 Marketing 240 Units $2,500 /Unit 600,000
Developer Fee 5% Direct Costs 3,503,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 817,000 Total Indirect Costs $17,148,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $20,635,000 Cost 6.2% Avg Rate $1,919,000 Construction 5 $95,498,000 Cost 6.2% Avg Rate 5,329,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,045,000 Total Financing Costs $8,293,000
IV. Total Construction Cost 240 Units $398,000 /Unit $95,498,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Low Page 14 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 19% LOW INCOME UNITS
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 10 Units @ $2,410 /Unit/Month $289,000
One-Bedroom Units 97 Units @ $2,970 /Unit/Month 3,457,000 Two-Bedroom Units 78 Units @ $3,660 /Unit/Month 3,426,000 Three-Bedroom Units 10 Units @ $4,400 /Unit/Month 528,000 B. Low Income Units 2
Studio Units 2 Units @ $1,698 /Unit/Month 41,000
One-Bedroom Units 23 Units @ $1,939 /Unit/Month 535,000 Two-Bedroom Units 18 Units @ $2,159 /Unit/Month 466,000 Three-Bedroom Units 2 Units @ $2,382 /Unit/Month 57,000 C. Miscellaneous Income 240 Units @ $75 /Unit/Month 216,000 Total Gross Income $9,015,000
Vacancy & Collection Allowance 5% Gross Income (451,000) II. Effective Gross Income $8,564,000
III. Operating Expenses
General Operating Expenses 240 Units @ $4,500 /Unit $1,080,000 Property Taxes 3 240 Units @ $6,100 /Unit 1,452,000
Replacement Reserve Deposits 240 Units @ $150 /Unit 36,000 Total Operating Expenses 240 Units @ $10,700 /Unit ($2,568,000) IV. Stabilized Net Operating Income $5,996,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Low Page 15 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 19% LOW INCOME UNITS
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 2 $5,996,000 Capitalization Rate 4.75%
Estimated Project Value $126,232,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 1 $95,498,000 Threshold Developer Profit 8% of Value 10,099,000
Total Project Cost ($105,597,000)
III. Estimated Residual Land Value 174,240 Sf of Land $118 /Sf of Land $20,635,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC Low Page 16 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT III

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 12% VERY LOW INCOME UNITS
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC VL Page 17 of 126
-79-
ATTACHMENT 4: APPENDIX C - EXHIBIT III - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 12% VERY LOW INCOME UNITS
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 174,240 Sf of Land $20 /Sf of Land $3,485,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 232 Spaces $20,000 /Space 4,640,000 1st Level Subterranean 188 Spaces $35,000 /Space 6,580,000 Building Costs 223,980 Sf of GLA $195 /Sf of GLA 43,676,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 11,676,000 Total Direct Costs 223,980 Sf of GLA $313 /Sf of GLA $70,057,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $4,203,000 Public Permits & Fees - All Converted to 5 240 Units $27,600 /Unit 6,624,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,401,000 Marketing 240 Units $2,500 /Unit 600,000
Developer Fee 5% Direct Costs 3,503,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 817,000 Total Indirect Costs $17,148,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $20,531,000 Cost 6.2% Avg Rate $1,909,000 Construction 5 $95,486,000 Cost 6.2% Avg Rate 5,328,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,044,000 Total Financing Costs $8,281,000
IV. Total Construction Cost 240 Units $398,000 /Unit $95,486,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC VL Page 18 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 12% VERY LOW INCOME UNITS
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 10 Units @ $2,410 /Unit/Month $289,000
One-Bedroom Units 106 Units @ $2,970 /Unit/Month 3,778,000 Two-Bedroom Units 85 Units @ $3,660 /Unit/Month 3,733,000 Three-Bedroom Units 11 Units @ $4,400 /Unit/Month 581,000 B. Very Low Income Units 2
Studio Units 2 Units @ $1,027 /Unit/Month 25,000
One-Bedroom Units 14 Units @ $1,172 /Unit/Month 197,000 Two-Bedroom Units 11 Units @ $1,297 /Unit/Month 171,000 Three-Bedroom Units 1 Unit @ $1,424 /Unit/Month 17,000
C. Miscellaneous Income 240 Units @ $75 /Unit/Month 216,000 Total Gross Income $9,007,000
Vacancy & Collection Allowance 5% Gross Income (450,000) II. Effective Gross Income $8,557,000
III. Operating Expenses
General Operating Expenses 240 Units @ $4,500 /Unit $1,080,000 Property Taxes 3 240 Units @ $6,000 /Unit 1,451,000
Replacement Reserve Deposits 240 Units @ $150 /Unit 36,000 Total Operating Expenses 240 Units @ $10,696 /Unit ($2,567,000) IV. Stabilized Net Operating Income $5,990,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC VL Page 19 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT III - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 12% VERY LOW INCOME UNITS
NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX C - EXHIBIT III - TABLE 2 $5,990,000 Capitalization Rate 4.75%
Estimated Project Value $126,105,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT III - TABLE 1 $95,486,000 Threshold Developer Profit 8% of Value 10,088,000
Total Project Cost ($105,574,000)
III. Estimated Residual Land Value 174,240 Sf of Land $118 /Sf of Land $20,531,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC VL Page 20 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT IV

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT:

NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
11% LOW INCOME UNITS + 5% VERY LOW INCOME UNITS
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC L VL Page 21 of 126
-83-
ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 11% LOW INCOME UNITS + 5% VERY LOW INCOME UNITS NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 174,240 Sf of Land $20 /Sf of Land $3,485,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 232 Spaces $20,000 /Space 4,640,000 1st Level Subterranean 188 Spaces $35,000 /Space 6,580,000 Building Costs 223,980 Sf of GLA $195 /Sf of GLA 43,676,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 11,676,000 Total Direct Costs 223,980 Sf of GLA $313 /Sf of GLA $70,057,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $4,203,000 Public Permits & Fees - All Converted to 5 240 Units $27,600 /Unit 6,624,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,401,000 Marketing 240 Units $2,500 /Unit 600,000
Developer Fee 5% Direct Costs 3,503,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 817,000 Total Indirect Costs $17,148,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $20,321,000 Cost 6.2% Avg Rate $1,890,000 Construction 5 $95,464,000 Cost 6.2% Avg Rate 5,327,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,042,000 Total Financing Costs $8,259,000
IV. Total Construction Cost 240 Units $398,000 /Unit $95,464,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC L VL Page 22 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 11% LOW INCOME UNITS + 5% VERY LOW INCOME UNITS NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 11 Units @ $2,410 /Unit/Month $318,000
One-Bedroom Units 101 Units @ $2,970 /Unit/Month 3,600,000 Two-Bedroom Units 80 Units @ $3,660 /Unit/Month 3,514,000 Three-Bedroom Units 10 Units @ $4,400 /Unit/Month 528,000 B. Low Income Units 2
Studio Units 1 Unit @ $1,698 /Unit/Month 20,000
One-Bedroom Units 13 Units @ $1,939 /Unit/Month 302,000 Two-Bedroom Units 11 Units @ $2,159 /Unit/Month 285,000 Three-Bedroom Units 1 Unit @ $2,382 /Unit/Month 29,000
B. Very Low Income Units 3
Studio Units 0 Units @ $1,027 /Unit/Month 0
One-Bedroom Units 6 Units @ $1,172 /Unit/Month 84,000
Two-Bedroom Units 5 Units @ $1,297 /Unit/Month 78,000
Three-Bedroom Units 1 Unit @ $1,424 /Unit/Month 17,000
C. Miscellaneous Income 240 Units @ $75 /Unit/Month 216,000 Total Gross Income $8,991,000
Vacancy & Collection Allowance 5% Gross Income (450,000) II. Effective Gross Income $8,541,000
III. Operating Expenses
General Operating Expenses 240 Units @ $4,500 /Unit $1,080,000 Property Taxes 4 240 Units @ $6,000 /Unit 1,447,000
Replacement Reserve Deposits 240 Units @ $150 /Unit 36,000 Total Operating Expenses 240 Units @ $10,679 /Unit ($2,563,000) IV. Stabilized Net Operating Income $5,978,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 4 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC L VL Page 23 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 11% LOW INCOME UNITS + 5% VERY LOW INCOME UNITS NORTH COSTA MESA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 2 $5,978,000 Capitalization Rate 4.75%
Estimated Project Value $125,853,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 1 $95,464,000 Threshold Developer Profit 8% of Value 10,068,000
Total Project Cost ($105,532,000)
III. Estimated Residual Land Value 174,240 Sf of Land $117 /Sf of Land $20,321,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC L VL Page 24 of 126
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COSTA MESA, CALIFORNIA
ATTACHMENT 4: APPENDIX C - EXHIBIT V

PRO FORMA ANALYSIS
50% §65915 DENSITY BONUS
NORTH COSTA MESA:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC 15% VL DB Page 25 of 126 -87-
ATTACHMENT 4: APPENDIX C - EXHIBIT V - TABLE 1

ESTIMATED CONSTRUCTION COSTS
50% §65915 DENSITY BONUS
NORTH COSTA MESA:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 174,240 Sf of Land $30 /Sf of Land $5,227,000 Parking 2
At-Grade Spaces 86 Spaces $5,000 /Space 430,000
Above-Ground Parking Spaces 0 Spaces $20,000 /Space 0
1st Level Subterranean 436 Spaces $35,000 /Space 15,260,000 Building Costs 335,970 Sf of GLA $205 /Sf of GLA 68,874,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 17,958,000 Total Direct Costs 335,970 Sf of GLA $321 /Sf of GLA $107,749,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $6,465,000 Public Permits & Fees - All Converted to 4 360 Units $27,600 /Unit 9,936,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 2,155,000 Marketing 360 Units $2,500 /Unit 900,000
Developer Fee 5% Direct Costs 5,387,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 1,242,000 Total Indirect Costs $26,085,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $29,694,000 Cost 6.2% Avg Rate $2,762,000 Construction 6 $146,346,000 Cost 6.2% Avg Rate 8,166,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,584,000 Total Financing Costs $12,512,000
IV. Total Construction Cost 360 Units $407,000 /Unit $146,346,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Section 65915 (p) requires jurisdictions to allow projects to meet statutorily established parking standards. For marketability reasons, KMA set the parking standards at 1.0 space per Studio Units unit; 1.0 space per One-Bedroom Units unit; 2.0 spaces per Two-Bedroom Units unit; and 2.0 Includes an allowance for permits and fees cost and estimates of the Parking Development Fee, the Drainage Impact Fee, the Traffic Impact Fee, and the Newport-Mesa Unified School District Developer Fee.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC 15% VL DB Page 26 of 126 -88-
ATTACHMENT 4: APPENDIX C - EXHIBIT V - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
50% §65915 DENSITY BONUS
NORTH COSTA MESA:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 16 Units @ $2,410 /Unit/Month $463,000
One-Bedroom Units 162 Units @ $2,970 /Unit/Month 5,774,000 Two-Bedroom Units 130 Units @ $3,660 /Unit/Month 5,710,000 Three-Bedroom Units 16 Units @ $4,400 /Unit/Month 845,000 B. Density Bonus Very Low Income Units 2
Studio Units 2 Units @ $1,027 /Unit/Month 25,000
One-Bedroom Units 18 Units @ $1,172 /Unit/Month 253,000 Two-Bedroom Units 14 Units @ $1,297 /Unit/Month 218,000 Three-Bedroom Units 2 Units @ $1,424 /Unit/Month 34,000 C. Miscellaneous Income 360 Units @ $75 /Unit/Month 324,000 Total Gross Income $13,646,000
Vacancy & Collection Allowance 5% Gross Income (682,000) II. Effective Gross Income $12,964,000
III. Operating Expenses
General Operating Expenses 360 Units @ $4,500 /Unit $1,620,000 Property Taxes 3 360 Units @ $6,100 /Unit 2,201,000
Replacement Reserve Deposits 360 Units @ $150 /Unit 54,000 Total Operating Expenses 360 Units @ $10,764 /Unit ($3,875,000) IV. Stabilized Net Operating Income $9,089,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Section 65915 (c) (1) (B) (i) calculates very low income rents based on household income based on 50% of AMI. This represents the standard identified in California Health & Safety Code Section 50503. See ATTACHMENT 4: APPENDIX B.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC 15% VL DB Page 27 of 126 -89-
ATTACHMENT 4: APPENDIX C - EXHIBIT V - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
50% §65915 DENSITY BONUS
NORTH COSTA MESA:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX C - EXHIBIT V - TABLE 2 $9,089,000 Capitalization Rate 4.75%
Estimated Project Value $191,347,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT V - TABLE 1 $146,346,000 Threshold Developer Profit 8% of Value 15,308,000
Total Project Cost ($161,654,000)
III. Estimated Residual Land Value 174,240 Sf of Land $170 /Sf of Land $29,693,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF NC 15% VL DB Page 28 of 126 -90-

COSTA MESA, CALIFORNIA
ATTACHMENT 4: APPENDIX D

PRO FORMA ANALYSES

HARBOR MIXED USE

OVERLAY ZONE APARTMENT PROPERTIES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; App D HMU Title Page 29 of 126 -91-
ATTACHMENT 4: APPENDIX D - EXHIBIT I

PRO FORMA ANALYSIS

MARKET RATE SCENARIO
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Mkt Page 30 of 126
-92-
ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTION COSTS

MARKET RATE SCENARIO
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $20 /Sf of Land $2,091,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 139 Spaces $20,000 /Space 2,780,000 1st Level Subterranean 29 Spaces $35,000 /Space 1,015,000 Building Costs 89,525 Sf of GLA $165 /Sf of GLA 14,772,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 4,132,000 Total Direct Costs 89,525 Sf of GLA $277 /Sf of GLA $24,790,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,487,000 Public Permits & Fees 4 96 Units $27,700 /Unit 2,659,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 496,000 Marketing 96 Units $2,500 /Unit 240,000
Developer Fee 5% Direct Costs 1,240,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 306,000 Total Indirect Costs $6,428,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $15,377,000 Cost 6.2% Avg Rate $1,430,000 Construction 6 $35,058,000 Cost 6.2% Avg Rate 1,956,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 454,000 Total Financing Costs $3,840,000
IV. Total Construction Cost 96 Units $365,000 /Unit $35,058,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Mkt Page 31 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE SCENARIO
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 5 Units @ $2,410 /Unit/Month $145,000
One-Bedroom Units 48 Units @ $2,970 /Unit/Month 1,711,000 Two-Bedroom Units 38 Units @ $3,660 /Unit/Month 1,669,000 Three-Bedroom Units 5 Units @ $4,400 /Unit/Month 264,000 B. Miscellaneous Income 96 Units @ $75 /Unit/Month 86,000 Total Gross Income $3,875,000
Vacancy & Collection Allowance 5% Gross Income (194,000) II. Effective Gross Income $3,681,000
III. Operating Expenses
General Operating Expenses 96 Units @ $4,500 /Unit $432,000 Property Taxes 2 96 Units @ $6,600 /Unit 631,000
Replacement Reserve Deposits 96 Units @ $150 /Unit 14,000 Total Operating Expenses ($1,077,000)
IV. Stabilized Net Operating Income $2,604,000
1 2 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Mkt Page 32 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE

MARKET RATE SCENARIO
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 2 $2,604,000 Capitalization Rate 4.75%
Estimated Project Value $54,821,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 1 $35,058,000 Threshold Developer Profit 8% of Value 4,386,000
Total Project Cost ($39,444,000)
III. Estimated Residual Land Value 104,544 Sf of Land $147 /Sf of Land $15,377,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Mkt Page 33 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 4

TARGET RESIDUAL LAND VALUE ANALYSIS

MARKET RATE SCENARIO
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
Harbor Mixed Use See ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 3 $15,377,000 Improved Auto Property 1 104,544 Sf of Land $107 /Sf of Land 11,182,000 Estimated Value Enhancement $4,195,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $4,195,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $2,098,000 III. Target Residual Land Value
Estimated Land Value: Harbor Mixed Use $15,377,000
Minus Value Enhancement Funds Available for Inclusionary Housing (2,098,000) Target Residual Land Value $13,279,000
IV. Supportable In-Lieu Fee 2 89,525 Sf of GLA $23 /Sf of GLA $2,098,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.
2 Based on the Value Enhancement Funds Available for Inclusionary Housing.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Mkt Page 34 of 126
-96-
ATTACHMENT 4: APPENDIX D - EXHIBIT II

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 11% LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Low Page 35 of 126
-97-
ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 11% LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $20 /Sf of Land $2,091,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 139 Spaces $20,000 /Space 2,780,000 1st Level Subterranean 29 Spaces $35,000 /Space 1,015,000 Building Costs 89,525 Sf of GLA $165 /Sf of GLA 14,772,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 4,132,000 Total Direct Costs 89,525 Sf of GLA $277 /Sf of GLA $24,790,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,487,000 Public Permits & Fees - All Converted to 5 96 Units $27,700 /Unit 2,659,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 496,000 Marketing 96 Units $2,500 /Unit 240,000
Developer Fee 5% Direct Costs 1,240,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 306,000 Total Indirect Costs $6,428,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $13,124,000 Cost 6.2% Avg Rate $1,221,000 Construction 5 $34,813,000 Cost 6.2% Avg Rate 1,943,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 431,000 Total Financing Costs $3,595,000
IV. Total Construction Cost 96 Units $363,000 /Unit $34,813,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Low Page 36 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 11% LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 5 Units @ $2,410 /Unit/Month $145,000
One-Bedroom Units 42 Units @ $2,970 /Unit/Month 1,497,000 Two-Bedroom Units 34 Units @ $3,660 /Unit/Month 1,493,000 Three-Bedroom Units 4 Units @ $4,400 /Unit/Month 211,000 B. Low Income Units 2
Studio Units 0 Units @ $1,698 /Unit/Month 0
One-Bedroom Units 6 Units @ $1,939 /Unit/Month 140,000
Two-Bedroom Units 4 Units @ $2,159 /Unit/Month 104,000
Three-Bedroom Units 1 Unit @ $2,382 /Unit/Month 29,000
C. Miscellaneous Income 96 Units @ $75 /Unit/Month 86,000 Total Gross Income $3,705,000
Vacancy & Collection Allowance 5% Gross Income (185,000) II. Effective Gross Income $3,520,000
III. Operating Expenses
General Operating Expenses 96 Units @ $4,500 /Unit $432,000 Property Taxes 3 96 Units @ $6,200 /Unit 599,000
Replacement Reserve Deposits 96 Units @ $150 /Unit 14,000 Total Operating Expenses 96 Units @ $10,885 /Unit ($1,045,000) IV. Stabilized Net Operating Income $2,475,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Low Page 37 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 11% LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 2 $2,475,000 Capitalization Rate 4.75%
Estimated Project Value $52,105,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 1 $34,813,000 Threshold Developer Profit 8% of Value 4,168,000
Total Project Cost ($38,981,000)
III. Estimated Residual Land Value 104,544 Sf of Land $126 /Sf of Land $13,124,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU Low Page 38 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT III

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 7% VERY LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU VL Page 39 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 7% VERY LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $20 /Sf of Land $2,091,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 139 Spaces $20,000 /Space 2,780,000 1st Level Subterranean 29 Spaces $35,000 /Space 1,015,000 Building Costs 89,525 Sf of GLA $165 /Sf of GLA 14,772,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 4,132,000 Total Direct Costs 89,525 Sf of GLA $277 /Sf of GLA $24,790,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,487,000 Public Permits & Fees - All Converted to 5 96 Units $27,700 /Unit 2,659,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 496,000 Marketing 96 Units $2,500 /Unit 240,000
Developer Fee 5% Direct Costs 1,240,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 306,000 Total Indirect Costs $6,428,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $13,386,000 Cost 6.2% Avg Rate $1,245,000 Construction 5 $34,841,000 Cost 6.2% Avg Rate 1,944,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 434,000 Total Financing Costs $3,623,000
IV. Total Construction Cost 96 Units $363,000 /Unit $34,841,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU VL Page 40 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 7% VERY LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 5 Units @ $2,410 /Unit/Month $145,000
One-Bedroom Units 45 Units @ $2,970 /Unit/Month 1,604,000 Two-Bedroom Units 35 Units @ $3,660 /Unit/Month 1,537,000 Three-Bedroom Units 5 Units @ $4,400 /Unit/Month 264,000 B. Very Low Income Units 2
Studio Units 0 Units @ $1,027 /Unit/Month 0
One-Bedroom Units 3 Units @ $1,172 /Unit/Month 42,000
Two-Bedroom Units 3 Units @ $1,297 /Unit/Month 47,000
Three-Bedroom Units 0 Units @ $1,424 /Unit/Month 0
C. Miscellaneous Income 96 Units @ $75 /Unit/Month 86,000 Total Gross Income $3,725,000
Vacancy & Collection Allowance 5% Gross Income (186,000) II. Effective Gross Income $3,539,000
III. Operating Expenses
General Operating Expenses 96 Units @ $4,500 /Unit $432,000 Property Taxes 3 96 Units @ $6,300 /Unit 603,000
Replacement Reserve Deposits 96 Units @ $150 /Unit 14,000 Total Operating Expenses 96 Units @ $10,927 /Unit ($1,049,000) IV. Stabilized Net Operating Income $2,490,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU VL Page 41 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 7% VERY LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 2 $2,490,000 Capitalization Rate 4.75%
Estimated Project Value $52,421,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 1 $34,841,000 Threshold Developer Profit 8% of Value 4,194,000
Total Project Cost ($39,035,000)
III. Estimated Residual Land Value 104,544 Sf of Land $128 /Sf of Land $13,386,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU VL Page 42 of 126
-104-

COSTA MESA, CALIFORNIA
ATTACHMENT 4: APPENDIX C - EXHIBIT IV

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT:
6% LOW INCOME UNITS + 3% VERY LOW INCOME UNITS
HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU L VL Page 43 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS + 3% VERY LOW INCOME UNITS HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $20 /Sf of Land $2,091,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 139 Spaces $20,000 /Space 2,780,000 1st Level Subterranean 29 Spaces $35,000 /Space 1,015,000 Building Costs 89,525 Sf of GLA $165 /Sf of GLA 14,772,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 4,132,000 Total Direct Costs 89,525 Sf of GLA $277 /Sf of GLA $24,790,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,487,000 Public Permits & Fees - All Converted to 5 96 Units $27,700 /Unit 2,659,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 496,000 Marketing 96 Units $2,500 /Unit 240,000
Developer Fee 5% Direct Costs 1,240,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 306,000 Total Indirect Costs $6,428,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $13,404,000 Cost 6.2% Avg Rate $1,247,000 Construction 5 $34,843,000 Cost 6.2% Avg Rate 1,944,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 434,000 Total Financing Costs $3,625,000
IV. Total Construction Cost 96 Units $363,000 /Unit $34,843,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU L VL Page 44 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS + 3% VERY LOW INCOME UNITS HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 3 Units @ $2,410 /Unit/Month $87,000
One-Bedroom Units 44 Units @ $2,970 /Unit/Month 1,568,000 Two-Bedroom Units 35 Units @ $3,660 /Unit/Month 1,537,000 Three-Bedroom Units 5 Units @ $4,400 /Unit/Month 264,000 B. Low Income Units 2
Studio Units 1 Unit @ $1,698 /Unit/Month 20,000
One-Bedroom Units 3 Units @ $1,939 /Unit/Month 70,000
Two-Bedroom Units 2 Units @ $2,159 /Unit/Month 52,000
Three-Bedroom Units 0 Units @ $2,382 /Unit/Month 0
B. Very Low Income Units 3
Studio Units 1 Unit @ $1,027 /Unit/Month 12,000
One-Bedroom Units 1 Unit @ $1,172 /Unit/Month 14,000
Two-Bedroom Units 1 Unit @ $1,297 /Unit/Month 16,000
Three-Bedroom Units 0 Units @ $1,424 /Unit/Month 0
C. Miscellaneous Income 96 Units @ $75 /Unit/Month 86,000 Total Gross Income $3,726,000
Vacancy & Collection Allowance 5% Gross Income (186,000) II. Effective Gross Income $3,540,000
III. Operating Expenses
General Operating Expenses 96 Units @ $4,500 /Unit $432,000 Property Taxes 4 96 Units @ $6,300 /Unit 603,000
Replacement Reserve Deposits 96 Units @ $150 /Unit 14,000 Total Operating Expenses 96 Units @ $10,927 /Unit ($1,049,000) IV. Stabilized Net Operating Income $2,491,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 4 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.51 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU L VL Page 45 of 126
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ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS + 3% VERY LOW INCOME UNITS HARBOR MIXED USE: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 2 $2,491,000 Capitalization Rate 4.75%
Estimated Project Value $52,442,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT IV - TABLE 1 $34,843,000 Threshold Developer Profit 8% of Value 4,195,000
Total Project Cost ($39,038,000)
III. Estimated Residual Land Value 104,544 Sf of Land $128 /Sf of Land $13,404,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU L VL Page 46 of 126
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ATTACHMENT 4: APPENDIX D - EXHIBIT V

PRO FORMA ANALYSIS
50% §65915 DENSITY BONUS
HARBOR MIXED USE:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU 15% VL DB Page 47 of 126 -109-
ATTACHMENT 4: APPENDIX D - EXHIBIT V - TABLE 1

ESTIMATED CONSTRUCTION COSTS
50% §65915 DENSITY BONUS
HARBOR MIXED USE:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $30 /Sf of Land $3,136,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 139 Spaces $20,000 /Space 2,780,000 1st Level Subterranean 70 Spaces $35,000 /Space 2,450,000 Building Costs 134,455 Sf of GLA $195 /Sf of GLA 26,219,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 6,917,000 Total Direct Costs 134,455 Sf of GLA $309 /Sf of GLA $41,502,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $2,490,000 Public Permits & Fees - All Converted to 4 144 Units $27,700 /Unit 3,989,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 830,000 Marketing 144 Units $2,500 /Unit 360,000
Developer Fee 5% Direct Costs 2,075,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 487,000 Total Indirect Costs $10,231,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $14,035,000 Cost 6.2% Avg Rate $1,088,000 Construction 6 $56,059,000 Cost 6.2% Avg Rate 2,607,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 631,000 Total Financing Costs $4,326,000
IV. Total Construction Cost 144 Units $389,000 /Unit $56,059,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU 15% VL DB Page 48 of 126 -110-
ATTACHMENT 4: APPENDIX D - EXHIBIT V - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
50% §65915 DENSITY BONUS
HARBOR MIXED USE:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 7 Units @ $2,410 /Unit/Month $202,000
One-Bedroom Units 64 Units @ $2,970 /Unit/Month 2,281,000 Two-Bedroom Units 52 Units @ $3,660 /Unit/Month 2,284,000 Three-Bedroom Units 6 Units @ $4,400 /Unit/Month 317,000 B. Density Bonus Very Low Income Units 2
Studio Units 0 Units @ $1,027 /Unit/Month 0
One-Bedroom Units 8 Units @ $1,172 /Unit/Month 113,000
Two-Bedroom Units 6 Units @ $1,297 /Unit/Month 93,000
Three-Bedroom Units 1 Unit @ $1,424 /Unit/Month 17,000
C. Miscellaneous Income 144 Units @ $75 /Unit/Month 130,000 Total Gross Income $5,437,000
Vacancy & Collection Allowance 5% Gross Income (272,000) II. Effective Gross Income $5,165,000
III. Operating Expenses
General Operating Expenses 144 Units @ $4,500 /Unit $648,000 Property Taxes 3 144 Units @ $6,100 /Unit 876,000
Replacement Reserve Deposits 144 Units @ $150 /Unit 22,000 Total Operating Expenses 144 Units @ $10,736 /Unit ($1,546,000) IV. Stabilized Net Operating Income $3,619,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF HMU 15% VL DB Page 49 of 126 -111-
ATTACHMENT 4: APPENDIX D - EXHIBIT V - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
50% §65915 DENSITY BONUS
HARBOR MIXED USE:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX D - EXHIBIT V - TABLE 2 $3,619,000 Capitalization Rate 4.75%
Estimated Project Value $76,189,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX D - EXHIBIT V - TABLE 1 $56,059,000 Threshold Developer Profit 8% of Value 6,095,000
Total Project Cost ($62,154,000)
III. Estimated Residual Land Value 104,544 Sf of Land $134 /Sf of Land $14,035,000 Prepared by: Keyser Marston Associates, Inc.

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COSTA MESA, CALIFORNIA
ATTACHMENT 4: APPENDIX E

PRO FORMA ANALYSES

MESA WEST

OVERLAY ZONE APARTMENT PROPERTIES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT I

PRO FORMA ANALYSIS

MARKET RATE SCENARIO
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTION COSTS

MARKET RATE SCENARIO
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 187,308 Sf of Land $20 /Sf of Land $3,746,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 250 Spaces $20,000 /Space 5,000,000 1st Level Subterranean 51 Spaces $35,000 /Space 1,785,000 Building Costs 160,115 Sf of GLA $165 /Sf of GLA 26,419,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 7,390,000 Total Direct Costs 160,115 Sf of GLA $277 /Sf of GLA $44,340,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $2,660,000 Public Permits & Fees 4 172 Units $27,700 /Unit 4,764,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 887,000 Marketing 172 Units $2,500 /Unit 430,000
Developer Fee 5% Direct Costs 2,217,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 548,000 Total Indirect Costs $11,506,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $28,464,000 Cost 6.2% Avg Rate $2,206,000 Construction 6 $61,735,000 Cost 6.2% Avg Rate 2,871,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 812,000 Total Financing Costs $5,889,000
IV. Total Construction Cost 172 Units $359,000 /Unit $61,735,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE SCENARIO
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 9 Units @ $2,410 /Unit/Month $260,000
One-Bedroom Units 86 Units @ $2,970 /Unit/Month 3,065,000 Two-Bedroom Units 69 Units @ $3,660 /Unit/Month 3,030,000 Three-Bedroom Units 8 Units @ $4,400 /Unit/Month 422,000 B. Miscellaneous Income 172 Units @ $75 /Unit/Month 155,000 Total Gross Income $6,932,000
Vacancy & Collection Allowance 5% Gross Income (347,000) II. Effective Gross Income $6,585,000
III. Operating Expenses
General Operating Expenses 172 Units @ $4,500 /Unit $774,000 Property Taxes 2 172 Units @ $6,600 /Unit 1,128,000
Replacement Reserve Deposits 172 Units @ $150 /Unit 26,000 Total Operating Expenses ($1,928,000)
IV. Stabilized Net Operating Income $4,657,000
1 2 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE

MARKET RATE SCENARIO
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX E - EXHIBIT I - TABLE 2 $4,657,000 Capitalization Rate 4.75%
Estimated Project Value $98,042,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX E - EXHIBIT I - TABLE 1 $61,735,000 Threshold Developer Profit 8% of Value 7,843,000
Total Project Cost ($69,578,000)
III. Estimated Residual Land Value 187,308 Sf of Land $152 /Sf of Land $28,464,000 Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT I - TABLE 4

TARGET RESIDUAL LAND VALUE ANALYSIS

MARKET RATE SCENARIO
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
Mesa West See ATTACHMENT 4: APPENDIX E - EXHIBIT I - TABLE 3 $28,464,000 Improved .39 FAR Industrial + Retail 1 187,308 Sf of Land $128 /Sf of Land 23,953,000 Estimated Value Enhancement $4,511,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $4,511,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $2,256,000 III. Target Residual Land Value
Estimated Land Value: Mesa West $28,464,000
Minus Value Enhancement Funds Available for Inclusionary Housing (2,256,000) Target Residual Land Value $26,208,000
IV. Supportable In-Lieu Fee 2 160,115 Sf of GLA $14 /Sf of GLA $2,256,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.
2 Based on the Value Enhancement Funds Available for Inclusionary Housing.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT II

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT II - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 187,308 Sf of Land $20 /Sf of Land $3,746,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 250 Spaces $20,000 /Space 5,000,000 1st Level Subterranean 51 Spaces $35,000 /Space 1,785,000 Building Costs 160,115 Sf of GLA $165 /Sf of GLA 26,419,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 7,390,000 Total Direct Costs 160,115 Sf of GLA $277 /Sf of GLA $44,340,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $2,660,000 Public Permits & Fees - All Converted to 5 172 Units $27,700 /Unit 4,764,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 887,000 Marketing 172 Units $2,500 /Unit 430,000
Developer Fee 5% Direct Costs 2,217,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 548,000 Total Indirect Costs $11,506,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $26,193,000 Cost 6.2% Avg Rate $2,030,000 Construction 5 $61,526,000 Cost 6.2% Avg Rate 2,861,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 789,000 Total Financing Costs $5,680,000
IV. Total Construction Cost 172 Units $358,000 /Unit $61,526,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 9 Units @ $2,410 /Unit/Month $260,000
One-Bedroom Units 80 Units @ $2,970 /Unit/Month 2,851,000 Two-Bedroom Units 65 Units @ $3,660 /Unit/Month 2,855,000 Three-Bedroom Units 7 Units @ $4,400 /Unit/Month 370,000 B. Low Income Units 2
Studio Units 0 Units @ $1,698 /Unit/Month 0
One-Bedroom Units 6 Units @ $1,939 /Unit/Month 140,000
Two-Bedroom Units 4 Units @ $2,159 /Unit/Month 104,000
Three-Bedroom Units 1 Unit @ $2,382 /Unit/Month 29,000
C. Miscellaneous Income 172 Units @ $75 /Unit/Month 155,000 Total Gross Income $6,764,000
Vacancy & Collection Allowance 5% Gross Income (338,000) II. Effective Gross Income $6,426,000
III. Operating Expenses
General Operating Expenses 172 Units @ $4,500 /Unit $774,000 Property Taxes 3 172 Units @ $6,400 /Unit 1,097,000
Replacement Reserve Deposits 172 Units @ $150 /Unit 26,000 Total Operating Expenses 172 Units @ $11,029 /Unit ($1,897,000) IV. Stabilized Net Operating Income $4,529,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT II - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX E - EXHIBIT II - TABLE 2 $4,529,000 Capitalization Rate 4.75%
Estimated Project Value $95,347,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX E - EXHIBIT II - TABLE 1 $61,526,000 Threshold Developer Profit 8% of Value 7,628,000
Total Project Cost ($69,154,000)
III. Estimated Residual Land Value 187,308 Sf of Land $140 /Sf of Land $26,193,000 Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT III

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 4% VERY LOW INCOME UNITS
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT III - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 4% VERY LOW INCOME UNITS
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 187,308 Sf of Land $20 /Sf of Land $3,746,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 250 Spaces $20,000 /Space 5,000,000 1st Level Subterranean 51 Spaces $35,000 /Space 1,785,000 Building Costs 160,115 Sf of GLA $165 /Sf of GLA 26,419,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 7,390,000 Total Direct Costs 160,115 Sf of GLA $277 /Sf of GLA $44,340,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $2,660,000 Public Permits & Fees - All Converted to 5 172 Units $27,700 /Unit 4,764,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 887,000 Marketing 172 Units $2,500 /Unit 430,000
Developer Fee 5% Direct Costs 2,217,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 548,000 Total Indirect Costs $11,506,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $26,158,000 Cost 6.2% Avg Rate $2,027,000 Construction 5 $61,523,000 Cost 6.2% Avg Rate 2,861,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 789,000 Total Financing Costs $5,677,000
IV. Total Construction Cost 172 Units $358,000 /Unit $61,523,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF MW VL Page 62 of 126
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ATTACHMENT 4: APPENDIX E - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 4% VERY LOW INCOME UNITS
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 9 Units @ $2,410 /Unit/Month $260,000
One-Bedroom Units 82 Units @ $2,970 /Unit/Month 2,922,000 Two-Bedroom Units 66 Units @ $3,660 /Unit/Month 2,899,000 Three-Bedroom Units 8 Units @ $4,400 /Unit/Month 422,000 B. Very Low Income Units 2
Studio Units 0 Units @ $1,027 /Unit/Month 0
One-Bedroom Units 4 Units @ $1,172 /Unit/Month 56,000
Two-Bedroom Units 3 Units @ $1,297 /Unit/Month 47,000
Three-Bedroom Units 0 Units @ $1,424 /Unit/Month 0
C. Miscellaneous Income 172 Units @ $75 /Unit/Month 155,000 Total Gross Income $6,761,000
Vacancy & Collection Allowance 5% Gross Income (338,000) II. Effective Gross Income $6,423,000
III. Operating Expenses
General Operating Expenses 172 Units @ $4,500 /Unit $774,000 Property Taxes 3 172 Units @ $6,400 /Unit 1,096,000
Replacement Reserve Deposits 172 Units @ $150 /Unit 26,000 Total Operating Expenses 172 Units @ $11,023 /Unit ($1,896,000) IV. Stabilized Net Operating Income $4,527,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF MW VL Page 63 of 126
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ATTACHMENT 4: APPENDIX E - EXHIBIT III - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 4% VERY LOW INCOME UNITS
MESA WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX E - EXHIBIT III - TABLE 2 $4,527,000 Capitalization Rate 4.75%
Estimated Project Value $95,305,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX E - EXHIBIT III - TABLE 1 $61,523,000 Threshold Developer Profit 8% of Value 7,624,000
Total Project Cost ($69,147,000)
III. Estimated Residual Land Value 187,308 Sf of Land $140 /Sf of Land $26,158,000 Prepared by: Keyser Marston Associates, Inc.

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-126-
ATTACHMENT 4: APPENDIX E - EXHIBIT IV

PRO FORMA ANALYSIS
50% §65915 DENSITY BONUS
MESA WEST:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF MW 15% VL DB Page 65 of 126 -127-
ATTACHMENT 4: APPENDIX E - EXHIBIT IV - TABLE 1

ESTIMATED CONSTRUCTION COSTS
50% §65915 DENSITY BONUS
MESA WEST:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 187,308 Sf of Land $30 /Sf of Land $5,619,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 250 Spaces $20,000 /Space 5,000,000 1st Level Subterranean 124 Spaces $35,000 /Space 4,340,000 Building Costs 240,745 Sf of GLA $195 /Sf of GLA 46,945,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 12,381,000 Total Direct Costs 240,745 Sf of GLA $309 /Sf of GLA $74,285,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $4,457,000 Public Permits & Fees - All Converted to 4 258 Units $27,700 /Unit 7,147,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,486,000 Marketing 258 Units $2,500 /Unit 645,000
Developer Fee 5% Direct Costs 3,714,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 872,000 Total Indirect Costs $18,321,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $25,813,000 Cost 6.2% Avg Rate $2,001,000 Construction 6 $100,412,000 Cost 6.2% Avg Rate 4,669,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,136,000 Total Financing Costs $7,806,000
IV. Total Construction Cost 258 Units $389,000 /Unit $100,412,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
50% §65915 DENSITY BONUS
MESA WEST:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 11 Units @ $2,410 /Unit/Month $318,000
One-Bedroom Units 116 Units @ $2,970 /Unit/Month 4,134,000 Two-Bedroom Units 93 Units @ $3,660 /Unit/Month 4,085,000 Three-Bedroom Units 12 Units @ $4,400 /Unit/Month 634,000 B. Density Bonus Very Low Income Units 2
Studio Units 2 Units @ $1,027 /Unit/Month 25,000
One-Bedroom Units 13 Units @ $1,172 /Unit/Month 183,000 Two-Bedroom Units 10 Units @ $1,297 /Unit/Month 156,000 Three-Bedroom Units 1 Unit @ $1,424 /Unit/Month 17,000
C. Miscellaneous Income 258 Units @ $75 /Unit/Month 232,000 Total Gross Income $9,784,000
Vacancy & Collection Allowance 5% Gross Income (489,000) II. Effective Gross Income $9,295,000
III. Operating Expenses
General Operating Expenses 258 Units @ $4,500 /Unit $1,161,000 Property Taxes 3 258 Units @ $6,100 /Unit 1,578,000
Replacement Reserve Deposits 258 Units @ $150 /Unit 39,000 Total Operating Expenses 258 Units @ $10,767 /Unit ($2,778,000) IV. Stabilized Net Operating Income $6,517,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX E - EXHIBIT IV - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
50% §65915 DENSITY BONUS
MESA WEST:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX E - EXHIBIT IV - TABLE 2 $6,517,000 Capitalization Rate 4.75%
Estimated Project Value $137,200,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX E - EXHIBIT IV - TABLE 1 $100,412,000 Threshold Developer Profit 8% of Value 10,976,000
Total Project Cost ($111,388,000)
III. Estimated Residual Land Value 187,308 Sf of Land $138 /Sf of Land $25,812,000 Prepared by: Keyser Marston Associates, Inc.

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COSTA MESA, CALIFORNIA
ATTACHMENT 4: APPENDIX F

PRO FORMA ANALYSES
19 WEST

OVERLAY ZONE APARTMENT PROPERTIES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; App F 19W Title Page 69 of 126 -131-
ATTACHMENT 4: APPENDIX F - EXHIBIT I

PRO FORMA ANALYSIS

MARKET RATE SCENARIO
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX F - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTION COSTS

MARKET RATE SCENARIO
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 87,120 Sf of Land $20 /Sf of Land $1,742,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 116 Spaces $20,000 /Space 2,320,000 1st Level Subterranean 24 Spaces $35,000 /Space 840,000 Building Costs 74,660 Sf of GLA $165 /Sf of GLA 12,319,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 3,444,000 Total Direct Costs 74,660 Sf of GLA $277 /Sf of GLA $20,665,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,240,000 Public Permits & Fees 4 80 Units $27,700 /Unit 2,216,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 413,000 Marketing 80 Units $2,500 /Unit 200,000
Developer Fee 5% Direct Costs 1,033,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 255,000 Total Indirect Costs $5,357,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $13,263,000 Cost 6.2% Avg Rate $1,028,000 Construction 6 $28,766,000 Cost 6.2% Avg Rate 1,338,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 378,000 Total Financing Costs $2,744,000
IV. Total Construction Cost 80 Units $360,000 /Unit $28,766,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX F - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE SCENARIO
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 4 Units @ $2,410 /Unit/Month $116,000
One-Bedroom Units 40 Units @ $2,970 /Unit/Month 1,426,000 Two-Bedroom Units 32 Units @ $3,660 /Unit/Month 1,405,000 Three-Bedroom Units 4 Units @ $4,400 /Unit/Month 211,000 B. Miscellaneous Income 80 Units @ $75 /Unit/Month 72,000 Total Gross Income $3,230,000
Vacancy & Collection Allowance 5% Gross Income (162,000) II. Effective Gross Income $3,068,000
III. Operating Expenses
General Operating Expenses 80 Units @ $4,500 /Unit $360,000 Property Taxes 2 80 Units @ $6,600 /Unit 526,000
Replacement Reserve Deposits 80 Units @ $150 /Unit 12,000 Total Operating Expenses ($898,000)
IV. Stabilized Net Operating Income $2,170,000
1 2 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX F - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE

MARKET RATE SCENARIO
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX F - EXHIBIT I - TABLE 2 $2,170,000 Capitalization Rate 4.75%
Estimated Project Value $45,684,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX F - EXHIBIT I - TABLE 1 $28,766,000 Threshold Developer Profit 8% of Value 3,655,000
Total Project Cost ($32,421,000)
III. Estimated Residual Land Value 87,120 Sf of Land $152 /Sf of Land $13,263,000 Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX F - EXHIBIT I - TABLE 4

TARGET RESIDUAL LAND VALUE ANALYSIS

MARKET RATE SCENARIO
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
19 West See ATTACHMENT 4: APPENDIX F - EXHIBIT I - TABLE 3 $13,263,000 Improved .39 FAR Industrial + Retail 1 87,120 Sf of Land $128 /Sf of Land 11,141,000 Estimated Value Enhancement $2,122,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $2,122,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $1,061,000 III. Target Residual Land Value
Estimated Land Value: 19 West $13,263,000
Minus Value Enhancement Funds Available for Inclusionary Housing (1,061,000) Target Residual Land Value $12,202,000
IV. Supportable In-Lieu Fee 2 74,660 Sf of GLA $14 /Sf of GLA $1,061,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.
2 Based on the Value Enhancement Funds Available for Inclusionary Housing.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W Mkt Page 74 of 126
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ATTACHMENT 4: APPENDIX F - EXHIBIT II

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 8% LOW INCOME UNITS
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W Low Page 75 of 126
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ATTACHMENT 4: APPENDIX F - EXHIBIT II - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 8% LOW INCOME UNITS
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 87,120 Sf of Land $20 /Sf of Land $1,742,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 116 Spaces $20,000 /Space 2,320,000 1st Level Subterranean 24 Spaces $35,000 /Space 840,000 Building Costs 74,660 Sf of GLA $165 /Sf of GLA 12,319,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 3,444,000 Total Direct Costs 74,660 Sf of GLA $277 /Sf of GLA $20,665,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,240,000 Public Permits & Fees - All Converted to 5 80 Units $27,700 /Unit 2,216,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 413,000 Marketing 80 Units $2,500 /Unit 200,000
Developer Fee 5% Direct Costs 1,033,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 255,000 Total Indirect Costs $5,357,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $12,058,000 Cost 6.2% Avg Rate $934,000 Construction 5 $28,654,000 Cost 6.2% Avg Rate 1,332,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 366,000 Total Financing Costs $2,632,000
IV. Total Construction Cost 80 Units $358,000 /Unit $28,654,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W Low Page 76 of 126
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ATTACHMENT 4: APPENDIX F - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 8% LOW INCOME UNITS
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 4 Units @ $2,410 /Unit/Month $116,000
One-Bedroom Units 37 Units @ $2,970 /Unit/Month 1,319,000 Two-Bedroom Units 29 Units @ $3,660 /Unit/Month 1,274,000 Three-Bedroom Units 4 Units @ $4,400 /Unit/Month 211,000 B. Low Income Units 2
Studio Units 0 Units @ $1,698 /Unit/Month 0
One-Bedroom Units 3 Units @ $1,939 /Unit/Month 70,000
Two-Bedroom Units 3 Units @ $2,159 /Unit/Month 78,000
Three-Bedroom Units 0 Units @ $2,382 /Unit/Month 0
C. Miscellaneous Income 80 Units @ $75 /Unit/Month 72,000 Total Gross Income $3,140,000
Vacancy & Collection Allowance 5% Gross Income (157,000) II. Effective Gross Income $2,983,000
III. Operating Expenses
General Operating Expenses 80 Units @ $4,500 /Unit $360,000 Property Taxes 3 80 Units @ $6,400 /Unit 509,000
Replacement Reserve Deposits 80 Units @ $150 /Unit 12,000 Total Operating Expenses 80 Units @ $11,013 /Unit ($881,000) IV. Stabilized Net Operating Income $2,102,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W Low Page 77 of 126
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ATTACHMENT 4: APPENDIX F - EXHIBIT II - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 8% LOW INCOME UNITS
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX F - EXHIBIT II - TABLE 2 $2,102,000 Capitalization Rate 4.75%
Estimated Project Value $44,253,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX F - EXHIBIT II - TABLE 1 $28,654,000 Threshold Developer Profit 8% of Value 3,540,000
Total Project Cost ($32,194,000)
III. Estimated Residual Land Value 87,120 Sf of Land $138 /Sf of Land $12,059,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W Low Page 78 of 126
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ATTACHMENT 4: APPENDIX F - EXHIBIT III

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 4% VERY LOW INCOME UNITS
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W VL Page 79 of 126
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ATTACHMENT 4: APPENDIX F - EXHIBIT III - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 4% VERY LOW INCOME UNITS
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 87,120 Sf of Land $20 /Sf of Land $1,742,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 116 Spaces $20,000 /Space 2,320,000 1st Level Subterranean 24 Spaces $35,000 /Space 840,000 Building Costs 74,660 Sf of GLA $165 /Sf of GLA 12,319,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 3,444,000 Total Direct Costs 74,660 Sf of GLA $277 /Sf of GLA $20,665,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,240,000 Public Permits & Fees - All Converted to 5 80 Units $27,700 /Unit 2,216,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 413,000 Marketing 80 Units $2,500 /Unit 200,000
Developer Fee 5% Direct Costs 1,033,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 255,000 Total Indirect Costs $5,357,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $12,325,000 Cost 6.2% Avg Rate $955,000 Construction 5 $28,678,000 Cost 6.2% Avg Rate 1,334,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 367,000 Total Financing Costs $2,656,000
IV. Total Construction Cost 80 Units $358,000 /Unit $28,678,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W VL Page 80 of 126
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ATTACHMENT 4: APPENDIX F - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 4% VERY LOW INCOME UNITS
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 4 Units @ $2,410 /Unit/Month $116,000
One-Bedroom Units 38 Units @ $2,970 /Unit/Month 1,354,000 Two-Bedroom Units 31 Units @ $3,660 /Unit/Month 1,362,000 Three-Bedroom Units 4 Units @ $4,400 /Unit/Month 211,000 B. Very Low Income Units 2
Studio Units 0 Units @ $1,027 /Unit/Month 0
One-Bedroom Units 2 Units @ $1,172 /Unit/Month 28,000
Two-Bedroom Units 1 Unit @ $1,297 /Unit/Month 16,000
Three-Bedroom Units 0 Units @ $1,424 /Unit/Month 0
C. Miscellaneous Income 80 Units @ $75 /Unit/Month 72,000 Total Gross Income $3,159,000
Vacancy & Collection Allowance 5% Gross Income (158,000) II. Effective Gross Income $3,001,000
III. Operating Expenses
General Operating Expenses 80 Units @ $4,500 /Unit $360,000 Property Taxes 3 80 Units @ $6,400 /Unit 512,000
Replacement Reserve Deposits 80 Units @ $150 /Unit 12,000 Total Operating Expenses 80 Units @ $11,050 /Unit ($884,000) IV. Stabilized Net Operating Income $2,117,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W VL Page 81 of 126
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ATTACHMENT 4: APPENDIX F - EXHIBIT III - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 4% VERY LOW INCOME UNITS
19 WEST: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX F - EXHIBIT III - TABLE 2 $2,117,000 Capitalization Rate 4.75%
Estimated Project Value $44,568,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX F - EXHIBIT III - TABLE 1 $28,678,000 Threshold Developer Profit 8% of Value 3,565,000
Total Project Cost ($32,243,000)
III. Estimated Residual Land Value 87,120 Sf of Land $141 /Sf of Land $12,325,000 Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX F - EXHIBIT IV

PRO FORMA ANALYSIS
50% §65915 DENSITY BONUS
19 WEST:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W 15% VL DB Page 83 of 126 -145-
ATTACHMENT 4: APPENDIX F - EXHIBIT IV - TABLE 1

ESTIMATED CONSTRUCTION COSTS
50% §65915 DENSITY BONUS
19 WEST:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 87,120 Sf of Land $30 /Sf of Land $2,614,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 116 Spaces $20,000 /Space 2,320,000 1st Level Subterranean 58 Spaces $35,000 /Space 2,030,000 Building Costs 111,990 Sf of GLA $195 /Sf of GLA 21,838,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 5,760,000 Total Direct Costs 111,990 Sf of GLA $309 /Sf of GLA $34,562,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $2,074,000 Public Permits & Fees - All Converted to 4 120 Units $27,700 /Unit 3,324,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 691,000 Marketing 120 Units $2,500 /Unit 300,000
Developer Fee 5% Direct Costs 1,728,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 406,000 Total Indirect Costs $8,523,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $11,830,000 Cost 6.2% Avg Rate $917,000 Construction 6 $46,701,000 Cost 6.2% Avg Rate 2,172,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 527,000 Total Financing Costs $3,616,000
IV. Total Construction Cost 120 Units $389,000 /Unit $46,701,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W 15% VL DB Page 84 of 126 -146-
ATTACHMENT 4: APPENDIX F - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
50% §65915 DENSITY BONUS
19 WEST:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 6 Units @ $2,410 /Unit/Month $174,000
One-Bedroom Units 54 Units @ $2,970 /Unit/Month 1,925,000 Two-Bedroom Units 43 Units @ $3,660 /Unit/Month 1,889,000 Three-Bedroom Units 5 Units @ $4,400 /Unit/Month 264,000 B. Density Bonus Very Low Income Units 2
Studio Units 0 Units @ $1,027 /Unit/Month 0
One-Bedroom Units 6 Units @ $1,172 /Unit/Month 84,000
Two-Bedroom Units 5 Units @ $1,297 /Unit/Month 78,000
Three-Bedroom Units 1 Unit @ $1,424 /Unit/Month 17,000
C. Miscellaneous Income 120 Units @ $75 /Unit/Month 108,000 Total Gross Income $4,539,000
Vacancy & Collection Allowance 5% Gross Income (227,000) II. Effective Gross Income $4,312,000
III. Operating Expenses
General Operating Expenses 120 Units @ $4,500 /Unit $540,000 Property Taxes 3 120 Units @ $6,100 /Unit 732,000
Replacement Reserve Deposits 120 Units @ $150 /Unit 18,000 Total Operating Expenses 120 Units @ $10,750 /Unit ($1,290,000) IV. Stabilized Net Operating Income $3,022,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W 15% VL DB Page 85 of 126 -147-
ATTACHMENT 4: APPENDIX F - EXHIBIT IV - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
50% §65915 DENSITY BONUS
19 WEST:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX F - EXHIBIT IV - TABLE 2 $3,022,000 Capitalization Rate 4.75%
Estimated Project Value $63,621,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX F - EXHIBIT IV - TABLE 1 $46,701,000 Threshold Developer Profit 8% of Value 5,090,000
Total Project Cost ($51,791,000)
III. Estimated Residual Land Value 87,120 Sf of Land $136 /Sf of Land $11,830,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF 19W 15% VL DB Page 86 of 126 -148-

COSTA MESA, CALIFORNIA
ATTACHMENT 4: APPENDIX G

PRO FORMA ANALYSES
SOBECA

OVERLAY ZONE APARTMENT PROPERTIES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; App G SoB Title Page 87 of 126 -149-
ATTACHMENT 4: APPENDIX G - EXHIBIT I

PRO FORMA ANALYSIS

MARKET RATE SCENARIO
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Mkt Page 88 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTION COSTS

MARKET RATE SCENARIO
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $20 /Sf of Land $2,091,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 139 Spaces $20,000 /Space 2,780,000 1st Level Subterranean 71 Spaces $35,000 /Space 2,485,000 Building Costs 111,990 Sf of GLA $165 /Sf of GLA 18,478,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 5,167,000 Total Direct Costs 111,990 Sf of GLA $277 /Sf of GLA $31,001,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,860,000 Public Permits & Fees 4 120 Units $27,700 /Unit 3,324,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 620,000 Marketing 120 Units $2,500 /Unit 300,000
Developer Fee 5% Direct Costs 1,550,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 383,000 Total Indirect Costs $8,037,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $19,241,000 Cost 6.2% Avg Rate $1,789,000 Construction 6 $43,841,000 Cost 6.2% Avg Rate 2,446,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 568,000 Total Financing Costs $4,803,000
IV. Total Construction Cost 120 Units $365,000 /Unit $43,841,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Mkt Page 89 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE SCENARIO
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 6 Units @ $2,410 /Unit/Month $174,000
One-Bedroom Units 60 Units @ $2,970 /Unit/Month 2,138,000 Two-Bedroom Units 48 Units @ $3,660 /Unit/Month 2,108,000 Three-Bedroom Units 6 Units @ $4,400 /Unit/Month 317,000 B. Miscellaneous Income 120 Units @ $75 /Unit/Month 108,000 Total Gross Income $4,845,000
Vacancy & Collection Allowance 5% Gross Income (242,000) II. Effective Gross Income $4,603,000
III. Operating Expenses
General Operating Expenses 120 Units @ $4,500 /Unit $540,000 Property Taxes 2 120 Units @ $6,600 /Unit 788,000
Replacement Reserve Deposits 120 Units @ $150 /Unit 18,000 Total Operating Expenses ($1,346,000)
IV. Stabilized Net Operating Income $3,257,000
1 2 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Mkt Page 90 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE

MARKET RATE SCENARIO
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX G - EXHIBIT I - TABLE 2 $3,257,000 Capitalization Rate 4.75%
Estimated Project Value $68,568,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX G - EXHIBIT I - TABLE 1 $43,841,000 Threshold Developer Profit 8% of Value 5,485,000
Total Project Cost ($49,326,000)
III. Estimated Residual Land Value 104,544 Sf of Land $184 /Sf of Land $19,242,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Mkt Page 91 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT I - TABLE 4

TARGET RESIDUAL LAND VALUE ANALYSIS

MARKET RATE SCENARIO
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
SoBECA See ATTACHMENT 4: APPENDIX G - EXHIBIT I - TABLE 3 $19,242,000 Improved .49 FAR Industrial 1 104,544 Sf of Land $159 /Sf of Land 16,586,000 Estimated Value Enhancement $2,656,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $2,656,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $1,328,000 III. Target Residual Land Value
Estimated Land Value: SoBECA $19,242,000
Minus Value Enhancement Funds Available for Inclusionary Housing (1,328,000) Target Residual Land Value $17,914,000
IV. Supportable In-Lieu Fee 2 111,990 Sf of GLA $12 /Sf of GLA $1,328,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.
2 Based on the Value Enhancement Funds Available for Inclusionary Housing.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Mkt Page 92 of 126
-154-
ATTACHMENT 4: APPENDIX G - EXHIBIT II

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Low Page 93 of 126
-155-
ATTACHMENT 4: APPENDIX G - EXHIBIT II - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $20 /Sf of Land $2,091,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 139 Spaces $20,000 /Space 2,780,000 1st Level Subterranean 71 Spaces $35,000 /Space 2,485,000 Building Costs 111,990 Sf of GLA $165 /Sf of GLA 18,478,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 5,167,000 Total Direct Costs 111,990 Sf of GLA $277 /Sf of GLA $31,001,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,860,000 Public Permits & Fees - All Converted to 5 120 Units $27,700 /Unit 3,324,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 620,000 Marketing 120 Units $2,500 /Unit 300,000
Developer Fee 5% Direct Costs 1,550,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 383,000 Total Indirect Costs $8,037,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $17,897,000 Cost 6.2% Avg Rate $1,664,000 Construction 5 $43,694,000 Cost 6.2% Avg Rate 2,438,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 554,000 Total Financing Costs $4,656,000
IV. Total Construction Cost 120 Units $364,000 /Unit $43,694,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Low Page 94 of 126
-156-
ATTACHMENT 4: APPENDIX G - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 5 Units @ $2,410 /Unit/Month $145,000
One-Bedroom Units 57 Units @ $2,970 /Unit/Month 2,031,000 Two-Bedroom Units 45 Units @ $3,660 /Unit/Month 1,976,000 Three-Bedroom Units 6 Units @ $4,400 /Unit/Month 317,000 B. Low Income Units 2
Studio Units 1 Unit @ $1,698 /Unit/Month 20,000
One-Bedroom Units 3 Units @ $1,939 /Unit/Month 70,000
Two-Bedroom Units 3 Units @ $2,159 /Unit/Month 78,000
Three-Bedroom Units 0 Units @ $2,382 /Unit/Month 0
C. Miscellaneous Income 120 Units @ $75 /Unit/Month 108,000 Total Gross Income $4,745,000
Vacancy & Collection Allowance 5% Gross Income (237,000) II. Effective Gross Income $4,508,000
III. Operating Expenses
General Operating Expenses 120 Units @ $4,500 /Unit $540,000 Property Taxes 3 120 Units @ $6,400 /Unit 770,000
Replacement Reserve Deposits 120 Units @ $150 /Unit 18,000 Total Operating Expenses 120 Units @ $11,067 /Unit ($1,328,000) IV. Stabilized Net Operating Income $3,180,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Low Page 95 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT II - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 6% LOW INCOME UNITS
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX G - EXHIBIT II - TABLE 2 $3,180,000 Capitalization Rate 4.75%
Estimated Project Value $66,947,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX G - EXHIBIT II - TABLE 1 $43,694,000 Threshold Developer Profit 8% of Value 5,356,000
Total Project Cost ($49,050,000)
III. Estimated Residual Land Value 104,544 Sf of Land $171 /Sf of Land $17,897,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB Low Page 96 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT III

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 3% VERY LOW INCOME UNITS
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB VL Page 97 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT III - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 3% VERY LOW INCOME UNITS
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $20 /Sf of Land $2,091,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 139 Spaces $20,000 /Space 2,780,000 1st Level Subterranean 71 Spaces $35,000 /Space 2,485,000 Building Costs 111,990 Sf of GLA $165 /Sf of GLA 18,478,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 5,167,000 Total Direct Costs 111,990 Sf of GLA $277 /Sf of GLA $31,001,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $1,860,000 Public Permits & Fees - All Converted to 5 120 Units $27,700 /Unit 3,324,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 620,000 Marketing 120 Units $2,500 /Unit 300,000
Developer Fee 5% Direct Costs 1,550,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 383,000 Total Indirect Costs $8,037,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $17,897,000 Cost 6.2% Avg Rate $1,664,000 Construction 5 $43,694,000 Cost 6.2% Avg Rate 2,438,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 554,000 Total Financing Costs $4,656,000
IV. Total Construction Cost 120 Units $364,000 /Unit $43,694,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB VL Page 98 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 3% VERY LOW INCOME UNITS
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 6 Units @ $2,410 /Unit/Month $174,000
One-Bedroom Units 58 Units @ $2,970 /Unit/Month 2,067,000 Two-Bedroom Units 46 Units @ $3,660 /Unit/Month 2,020,000 Three-Bedroom Units 6 Units @ $4,400 /Unit/Month 317,000 B. Very Low Income Units 2
Studio Units 0 Units @ $1,027 /Unit/Month 0
One-Bedroom Units 2 Units @ $1,172 /Unit/Month 28,000
Two-Bedroom Units 2 Units @ $1,297 /Unit/Month 31,000
Three-Bedroom Units 0 Units @ $1,424 /Unit/Month 0
C. Miscellaneous Income 120 Units @ $75 /Unit/Month 108,000 Total Gross Income $4,745,000
Vacancy & Collection Allowance 5% Gross Income (237,000) II. Effective Gross Income $4,508,000
III. Operating Expenses
General Operating Expenses 120 Units @ $4,500 /Unit $540,000 Property Taxes 3 120 Units @ $6,400 /Unit 770,000
Replacement Reserve Deposits 120 Units @ $150 /Unit 18,000 Total Operating Expenses 120 Units @ $11,067 /Unit ($1,328,000) IV. Stabilized Net Operating Income $3,180,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB VL Page 99 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT III - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 3% VERY LOW INCOME UNITS
SOBECA: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX G - EXHIBIT III - TABLE 2 $3,180,000 Capitalization Rate 4.75%
Estimated Project Value $66,947,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX G - EXHIBIT III - TABLE 1 $43,694,000 Threshold Developer Profit 8% of Value 5,356,000
Total Project Cost ($49,050,000)
III. Estimated Residual Land Value 104,544 Sf of Land $171 /Sf of Land $17,897,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB VL Page 100 of 126
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ATTACHMENT 4: APPENDIX G - EXHIBIT IV

PRO FORMA ANALYSIS
20% §65915 DENSITY BONUS
SOBECA:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB 5% VL DB Page 101 of 126 -163-
ATTACHMENT 4: APPENDIX G - EXHIBIT IV - TABLE 1

ESTIMATED CONSTRUCTION COSTS
20% §65915 DENSITY BONUS
SOBECA:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 104,544 Sf of Land $30 /Sf of Land $3,136,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 209 Spaces $20,000 /Space 4,180,000 1st Level Subterranean 0 Spaces $35,000 /Space 0
Building Costs 134,455 Sf of GLA $195 /Sf of GLA 26,219,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 6,707,000 Total Direct Costs 134,455 Sf of GLA $299 /Sf of GLA $40,242,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $2,415,000 Public Permits & Fees - All Converted to 4 144 Units $27,700 /Unit 3,989,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 805,000 Marketing 144 Units $2,500 /Unit 360,000
Developer Fee 5% Direct Costs 2,012,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 479,000 Total Indirect Costs $10,060,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $18,689,000 Cost 6.2% Avg Rate $1,448,000 Construction 6 $54,969,000 Cost 6.2% Avg Rate 2,556,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 663,000 Total Financing Costs $4,667,000
IV. Total Construction Cost 144 Units $382,000 /Unit $54,969,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 15 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 15 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB 5% VL DB Page 102 of 126 -164-
ATTACHMENT 4: APPENDIX G - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
20% §65915 DENSITY BONUS
SOBECA:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 6 Units @ $2,410 /Unit/Month $174,000
One-Bedroom Units 69 Units @ $2,970 /Unit/Month 2,459,000 Two-Bedroom Units 56 Units @ $3,660 /Unit/Month 2,460,000 Three-Bedroom Units 7 Units @ $4,400 /Unit/Month 370,000 B. Density Bonus Very Low Income Units 2
Studio Units 1 Unit @ $1,027 /Unit/Month 12,000
One-Bedroom Units 3 Units @ $1,172 /Unit/Month 42,000
Two-Bedroom Units 2 Units @ $1,297 /Unit/Month 31,000
Three-Bedroom Units 0 Units @ $1,424 /Unit/Month 0
C. Miscellaneous Income 144 Units @ $75 /Unit/Month 130,000 Total Gross Income $5,678,000
Vacancy & Collection Allowance 5% Gross Income (284,000) II. Effective Gross Income $5,394,000
III. Operating Expenses
General Operating Expenses 144 Units @ $4,500 /Unit $648,000 Property Taxes 3 144 Units @ $6,400 /Unit 921,000
Replacement Reserve Deposits 144 Units @ $150 /Unit 22,000 Total Operating Expenses 144 Units @ $11,049 /Unit ($1,591,000) IV. Stabilized Net Operating Income $3,803,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB 5% VL DB Page 103 of 126 -165-
ATTACHMENT 4: APPENDIX G - EXHIBIT IV - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
20% §65915 DENSITY BONUS
SOBECA:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX G - EXHIBIT IV - TABLE 2 $3,803,000 Capitalization Rate 4.75%
Estimated Project Value $80,063,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX G - EXHIBIT IV - TABLE 1 $54,969,000 Threshold Developer Profit 8% of Value 6,405,000
Total Project Cost ($61,374,000)
III. Estimated Residual Land Value 104,544 Sf of Land $179 /Sf of Land $18,689,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF SoB 5% VL DB Page 104 of 126 -166-

COSTA MESA, CALIFORNIA
ATTACHMENT 4: APPENDIX H

PRO FORMA ANALYSES

CORRIDORS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; App H C Title Page 105 of 126 -167-
ATTACHMENT 4: APPENDIX H - EXHIBIT I

PRO FORMA ANALYSIS

MARKET RATE SCENARIO
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Mkt Page 106 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTION COSTS

MARKET RATE SCENARIO
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 137,214 Sf of Land $20 /Sf of Land $2,744,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 183 Spaces $20,000 /Space 3,660,000 1st Level Subterranean 148 Spaces $35,000 /Space 5,180,000 Building Costs 176,355 Sf of GLA $195 /Sf of GLA 34,389,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 9,195,000 Total Direct Costs 176,355 Sf of GLA $313 /Sf of GLA $55,168,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $3,310,000 Public Permits & Fees 4 189 Units $27,600 /Unit 5,216,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,103,000 Marketing 189 Units $2,500 /Unit 473,000
Developer Fee 5% Direct Costs 2,758,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 643,000 Total Indirect Costs $13,503,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $23,346,000 Cost 6.2% Avg Rate $2,171,000 Construction 6 $75,975,000 Cost 6.2% Avg Rate 4,239,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 894,000 Total Financing Costs $7,304,000
IV. Total Construction Cost 189 Units $402,000 /Unit $75,975,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Mkt Page 107 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE SCENARIO
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 9 Units @ $2,410 /Unit/Month $260,000
One-Bedroom Units 95 Units @ $2,970 /Unit/Month 3,386,000 Two-Bedroom Units 76 Units @ $3,660 /Unit/Month 3,338,000 Three-Bedroom Units 9 Units @ $4,400 /Unit/Month 475,000 B. Miscellaneous Income 189 Units @ $75 /Unit/Month 170,000 Total Gross Income $7,629,000
Vacancy & Collection Allowance 5% Gross Income (381,000) II. Effective Gross Income $7,248,000
III. Operating Expenses
General Operating Expenses 189 Units @ $4,500 /Unit $851,000 Property Taxes 2 189 Units @ $6,600 /Unit 1,241,000
Replacement Reserve Deposits 189 Units @ $150 /Unit 28,000 Total Operating Expenses ($2,120,000)
IV. Stabilized Net Operating Income $5,128,000
1 2 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Mkt Page 108 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE

MARKET RATE SCENARIO
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX H - EXHIBIT I - TABLE 2 $5,128,000 Capitalization Rate 4.75%
Estimated Project Value $107,958,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX H - EXHIBIT I - TABLE 1 $75,975,000 Threshold Developer Profit 8% of Value 8,637,000
Total Project Cost ($84,612,000)
III. Estimated Residual Land Value 137,214 Sf of Land $170 /Sf of Land $23,346,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Mkt Page 109 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT I - TABLE 4

TARGET RESIDUAL LAND VALUE ANALYSIS

MARKET RATE SCENARIO
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
Corridors See ATTACHMENT 4: APPENDIX H - EXHIBIT I - TABLE 3 $23,346,000 Improved Auto Property 1 137,214 Sf of Land $107 /Sf of Land 14,677,000 Estimated Value Enhancement $8,669,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $8,669,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $4,335,000 III. Target Residual Land Value
Estimated Land Value: Corridors $23,346,000
Minus Value Enhancement Funds Available for Inclusionary Housing (4,335,000) Target Residual Land Value $19,011,000
IV. Supportable In-Lieu Fee 2 176,355 Sf of GLA $25 /Sf of GLA $4,335,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.
2 Based on the Value Enhancement Funds Available for Inclusionary Housing.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Mkt Page 110 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT II

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 12% LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Low Page 111 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT II - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 12% LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 137,214 Sf of Land $20 /Sf of Land $2,744,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 183 Spaces $20,000 /Space 3,660,000 1st Level Subterranean 148 Spaces $35,000 /Space 5,180,000 Building Costs 176,355 Sf of GLA $195 /Sf of GLA 34,389,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 9,195,000 Total Direct Costs 176,355 Sf of GLA $313 /Sf of GLA $55,168,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $3,310,000 Public Permits & Fees - All Converted to 5 189 Units $27,600 /Unit 5,216,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,103,000 Marketing 189 Units $2,500 /Unit 473,000
Developer Fee 5% Direct Costs 2,758,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 643,000 Total Indirect Costs $13,503,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $18,910,000 Cost 6.2% Avg Rate $1,759,000 Construction 5 $75,492,000 Cost 6.2% Avg Rate 4,212,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 850,000 Total Financing Costs $6,821,000
IV. Total Construction Cost 189 Units $399,000 /Unit $75,492,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Low Page 112 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 12% LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 8 Units @ $2,410 /Unit/Month $231,000
One-Bedroom Units 84 Units @ $2,970 /Unit/Month 2,994,000 Two-Bedroom Units 67 Units @ $3,660 /Unit/Month 2,943,000 Three-Bedroom Units 8 Units @ $4,400 /Unit/Month 422,000 B. Low Income Units 2
Studio Units 1 Unit @ $1,698 /Unit/Month 20,000
One-Bedroom Units 11 Units @ $1,939 /Unit/Month 256,000 Two-Bedroom Units 9 Units @ $2,159 /Unit/Month 233,000
Three-Bedroom Units 1 Unit @ $2,382 /Unit/Month 29,000
C. Miscellaneous Income 189 Units @ $75 /Unit/Month 170,000 Total Gross Income $7,298,000
Vacancy & Collection Allowance 5% Gross Income (365,000) II. Effective Gross Income $6,933,000
III. Operating Expenses
General Operating Expenses 189 Units @ $4,500 /Unit $851,000 Property Taxes 3 189 Units @ $6,200 /Unit 1,180,000
Replacement Reserve Deposits 189 Units @ $150 /Unit 28,000 Total Operating Expenses 189 Units @ $10,894 /Unit ($2,059,000) IV. Stabilized Net Operating Income $4,874,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.53 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Low Page 113 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT II - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 12% LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX H - EXHIBIT II - TABLE 2 $4,874,000 Capitalization Rate 4.75%
Estimated Project Value $102,611,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX H - EXHIBIT II - TABLE 1 $75,492,000 Threshold Developer Profit 8% of Value 8,209,000
Total Project Cost ($83,701,000)
III. Estimated Residual Land Value 137,214 Sf of Land $138 /Sf of Land $18,910,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C Low Page 114 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT III

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT: 7% VERY LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C VL Page 115 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT III - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 7% VERY LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 137,214 Sf of Land $20 /Sf of Land $2,744,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 183 Spaces $20,000 /Space 3,660,000 1st Level Subterranean 148 Spaces $35,000 /Space 5,180,000 Building Costs 176,355 Sf of GLA $195 /Sf of GLA 34,389,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 9,195,000 Total Direct Costs 176,355 Sf of GLA $313 /Sf of GLA $55,168,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $3,310,000 Public Permits & Fees - All Converted to 5 189 Units $27,600 /Unit 5,216,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,103,000 Marketing 189 Units $2,500 /Unit 473,000
Developer Fee 5% Direct Costs 2,758,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 643,000 Total Indirect Costs $13,503,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $18,699,000 Cost 6.2% Avg Rate $1,739,000 Construction 5 $75,470,000 Cost 6.2% Avg Rate 4,211,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 849,000 Total Financing Costs $6,799,000
IV. Total Construction Cost 189 Units $399,000 /Unit $75,470,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C VL Page 116 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 7% VERY LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 8 Units @ $2,410 /Unit/Month $231,000
One-Bedroom Units 88 Units @ $2,970 /Unit/Month 3,136,000 Two-Bedroom Units 71 Units @ $3,660 /Unit/Month 3,118,000 Three-Bedroom Units 8 Units @ $4,400 /Unit/Month 422,000 B. Very Low Income Units 2
Studio Units 1 Unit @ $1,027 /Unit/Month 12,000
One-Bedroom Units 7 Units @ $1,172 /Unit/Month 98,000
Two-Bedroom Units 5 Units @ $1,297 /Unit/Month 78,000
Three-Bedroom Units 1 Unit @ $1,424 /Unit/Month 17,000
C. Miscellaneous Income 189 Units @ $75 /Unit/Month 170,000 Total Gross Income $7,282,000
Vacancy & Collection Allowance 5% Gross Income (364,000) II. Effective Gross Income $6,918,000
III. Operating Expenses
General Operating Expenses 189 Units @ $4,500 /Unit $851,000 Property Taxes 3 189 Units @ $6,200 /Unit 1,177,000
Replacement Reserve Deposits 189 Units @ $150 /Unit 28,000 Total Operating Expenses 189 Units @ $10,878 /Unit ($2,056,000) IV. Stabilized Net Operating Income $4,862,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C VL Page 117 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT III - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 7% VERY LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX H - EXHIBIT III - TABLE 2 $4,862,000 Capitalization Rate 4.75%
Estimated Project Value $102,358,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX H - EXHIBIT III - TABLE 1 $75,470,000 Threshold Developer Profit 8% of Value 8,189,000
Total Project Cost ($83,659,000)
III. Estimated Residual Land Value 137,214 Sf of Land $136 /Sf of Land $18,699,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C VL Page 118 of 126
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COSTA MESA, CALIFORNIA
ATTACHMENT 4: APPENDIX H - EXHIBIT IV

PRO FORMA ANALYSIS
RECOMMENDED REQUIREMENT:
7% LOW INCOME UNITS + 3% VERY LOW INCOME UNITS
CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C L VL Page 119 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT IV - TABLE 1

ESTIMATED CONSTRUCTION COSTS
RECOMMENDED REQUIREMENT: 7% LOW INCOME UNITS + 3% VERY LOW INCOME UNITS CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 137,214 Sf of Land $20 /Sf of Land $2,744,000 Parking 2
At-Grade Spaces 0 Spaces $5,000 /Space 0
Above-Ground Parking Spaces 183 Spaces $20,000 /Space 3,660,000 1st Level Subterranean 148 Spaces $35,000 /Space 5,180,000 Building Costs 176,355 Sf of GLA $195 /Sf of GLA 34,389,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 9,195,000 Total Direct Costs 176,355 Sf of GLA $313 /Sf of GLA $55,168,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $3,310,000 Public Permits & Fees - All Converted to 5 189 Units $27,600 /Unit 5,216,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,103,000 Marketing 189 Units $2,500 /Unit 473,000
Developer Fee 5% Direct Costs 2,758,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 643,000 Total Indirect Costs $13,503,000
III. Financing Costs
Interest During Construction
Land Acquisition 4 $18,893,000 Cost 6.2% Avg Rate $1,757,000 Construction 5 $75,489,000 Cost 6.2% Avg Rate 4,212,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 849,000 Total Financing Costs $6,818,000
IV. Total Construction Cost 189 Units $399,000 /Unit $75,489,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 Based on an average of 1.75 per unit parking ratio.
3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C L VL Page 120 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
RECOMMENDED REQUIREMENT: 7% LOW INCOME UNITS + 3% VERY LOW INCOME UNITS CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 8 Units @ $2,410 /Unit/Month $231,000
One-Bedroom Units 85 Units @ $2,970 /Unit/Month 3,029,000 Two-Bedroom Units 69 Units @ $3,660 /Unit/Month 3,030,000 Three-Bedroom Units 8 Units @ $4,400 /Unit/Month 422,000 B. Low Income Units 2
Studio Units 1 Unit @ $1,698 /Unit/Month 20,000
One-Bedroom Units 7 Units @ $1,939 /Unit/Month 163,000
Two-Bedroom Units 5 Units @ $2,159 /Unit/Month 130,000
Three-Bedroom Units 1 Unit @ $2,382 /Unit/Month 29,000
B. Very Low Income Units 3
Studio Units 0 Units @ $1,027 /Unit/Month 0
One-Bedroom Units 3 Units @ $1,172 /Unit/Month 42,000
Two-Bedroom Units 2 Units @ $1,297 /Unit/Month 31,000
Three-Bedroom Units 0 Units @ $1,424 /Unit/Month 0
C. Miscellaneous Income 189 Units @ $75 /Unit/Month 170,000 Total Gross Income $7,297,000
Vacancy & Collection Allowance 5% Gross Income (365,000) II. Effective Gross Income $6,932,000
III. Operating Expenses
General Operating Expenses 189 Units @ $4,500 /Unit $851,000 Property Taxes 4 189 Units @ $6,200 /Unit 1,180,000
Replacement Reserve Deposits 189 Units @ $150 /Unit 28,000 Total Operating Expenses 189 Units @ $10,894 /Unit ($2,059,000) IV. Stabilized Net Operating Income $4,873,000
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. See ATTACHMENT 4: APPENDIX B. 3 4 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053. See ATTACHMENT 4: APPENDIX B.

Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C L VL Page 121 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT IV - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
RECOMMENDED REQUIREMENT: 7% LOW INCOME UNITS + 3% VERY LOW INCOME UNITS CORRIDORS: BASE ZONING
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX H - EXHIBIT IV - TABLE 2 $4,873,000 Capitalization Rate 4.75%
Estimated Project Value $102,589,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX H - EXHIBIT IV - TABLE 1 $75,489,000 Threshold Developer Profit 8% of Value 8,207,000
Total Project Cost ($83,696,000)
III. Estimated Residual Land Value 137,214 Sf of Land $138 /Sf of Land $18,893,000 Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Apt; PF C L VL Page 122 of 126
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ATTACHMENT 4: APPENDIX H - EXHIBIT V

PRO FORMA ANALYSIS
50% §65915 DENSITY BONUS
CORRIDORS:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX H - EXHIBIT V - TABLE 1

ESTIMATED CONSTRUCTION COSTS
50% §65915 DENSITY BONUS
CORRIDORS:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Direct Costs 1
On-Site Improvements / Landscaping 137,214 Sf of Land $30 /Sf of Land $4,116,000 Parking 2
At-Grade Spaces 69 Spaces $5,000 /Space 345,000
Above-Ground Parking Spaces 0 Spaces $20,000 /Space 0
1st Level Subterranean 343 Spaces $35,000 /Space 12,005,000 Building Costs 265,110 Sf of GLA $205 /Sf of GLA 54,348,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 14,163,000 Total Direct Costs 265,110 Sf of GLA $321 /Sf of GLA $84,977,000 II. Indirect Costs
Architecture, Engineering & Consulting 6% Direct Costs $5,099,000 Public Permits & Fees - All Converted to 4 284 Units $27,600 /Unit 7,838,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,700,000 Marketing 284 Units $2,500 /Unit 710,000
Developer Fee 5% Direct Costs 4,249,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 980,000 Total Indirect Costs $20,576,000
III. Financing Costs
Interest During Construction
Land Acquisition 5 $23,255,000 Cost 6.2% Avg Rate $2,163,000 Construction 6 $115,404,000 Cost 6.2% Avg Rate 6,440,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,248,000 Total Financing Costs $9,851,000
IV. Total Construction Cost 284 Units $406,000 /Unit $115,404,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Based on an 18 month construction period following receipt of entitlements, and a 100% average outstanding loan balance. 6 Based on an 18 month construction period following receipt of entitlements, and a 60% average outstanding loan balance.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX H - EXHIBIT V - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
50% §65915 DENSITY BONUS
CORRIDORS:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
Studio Units 13 Units @ $2,410 /Unit/Month $376,000
One-Bedroom Units 127 Units @ $2,970 /Unit/Month 4,526,000 Two-Bedroom Units 102 Units @ $3,660 /Unit/Month 4,480,000 Three-Bedroom Units 13 Units @ $4,400 /Unit/Month 686,000 B. Density Bonus Very Low Income Units 2
Studio Units 1 Unit @ $1,027 /Unit/Month 12,000
One-Bedroom Units 15 Units @ $1,172 /Unit/Month 211,000 Two-Bedroom Units 12 Units @ $1,297 /Unit/Month 187,000 Three-Bedroom Units 1 Unit @ $1,424 /Unit/Month 17,000
C. Miscellaneous Income 284 Units @ $75 /Unit/Month 256,000 Total Gross Income $10,751,000
Vacancy & Collection Allowance 5% Gross Income (538,000) II. Effective Gross Income $10,213,000
III. Operating Expenses
General Operating Expenses 284 Units @ $4,500 /Unit $1,278,000 Property Taxes 3 284 Units @ $6,100 /Unit 1,733,000
Replacement Reserve Deposits 284 Units @ $150 /Unit 43,000 Total Operating Expenses 284 Units @ $10,754 /Unit ($3,054,000) IV. Stabilized Net Operating Income $7,159,000
1 2
3 The assessed value is estimated based on a 4.75% capitalization rate. The property tax rate is set at 1.15%.

Based in part on the rent survey presented in ATTACHMENT 4: APPENDIX A. The weighted average monthly rent equates to $3.52 per square foot of leasable area.

Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 4: APPENDIX H - EXHIBIT V - TABLE 3

ESTIMATED STABILIZED RETURN ON TOTAL INVESTMENT
50% §65915 DENSITY BONUS
CORRIDORS:

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Project Value
Stabilized Net Operating Income See ATTACHMENT 4: APPENDIX H - EXHIBIT V - TABLE 2 $7,159,000 Capitalization Rate 4.75%
Estimated Project Value $150,716,000
II. Total Project Cost
Total Construction Cost See ATTACHMENT 4: APPENDIX H - EXHIBIT V - TABLE 1 $115,404,000 Threshold Developer Profit 8% of Value 12,057,000
Total Project Cost ($127,461,000)
III. Estimated Residual Land Value 137,214 Sf of Land $169 /Sf of Land $23,255,000 Prepared by: Keyser Marston Associates, Inc.

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ATTACHMENT 5

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Att 5 Title Page 1 of 48
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ATTACHMENT 5: APPENDIX A

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA

HOME SALES SURVEY
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; App A HS Page 2 of 48
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ATTACHMENT 5: APPENDIX A
RESALE HOME SALES SURVEY 1

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Unit Size (SF) Total Per SF Year Built
2152 Harmony Way Costa Mesa 92627 1,715 $800,000 $466 2014 597 Seabright Cir Costa Mesa 92627 1,559 $875,000 $561 2014 2109 W Place Dr Costa Mesa 92627 1,653 $890,000 $538 2015 2097 W Place Dr Costa Mesa 92627 1,653 $940,000 $569 2015 2170 Harmony Way Costa Mesa 92627 1,730 $949,000 $549 2014 605 Seabright Cir Costa Mesa 92627 1,559 $975,000 $625 2015 2162 Harmony Way Costa Mesa 92627 1,731 $978,000 $565 2014 577 Donovan Ln Costa Mesa 92627 1,705 $1,000,000 $587 2017 1826 Coastal Way Costa Mesa 92627 1,785 $1,015,000 $569 2014 1686 Topanga #111 Costa Mesa 92627 1,972 $1,125,000 $570 2018 3061 Paragon Costa Mesa 92626 1,937 $1,175,625 $607 2016 1675 Grand Vw Costa Mesa 92627 2,243 $1,395,000 $622 2017 Minimum 1,559 $800,000 $466 2014
Maximum 2,243 $1,395,000 $625 2018
Average 1,770 $1,009,800 $570 2015
797 Wonder Ln Costa Mesa 92627 1,738 $965,000 $555 2016 2138 Palmilla Ct Costa Mesa 92627 1,653 $995,000 $602 2015 585 Victoria St Costa Mesa 92627 1,711 $1,005,000 $587 2016 307 Ford Rd Costa Mesa 92627 1,688 $1,100,000 $652 2020 1941 Vitae Pl Costa Mesa 92627 1,700 $1,135,000 $668 2017 693 W 17th St Costa Mesa 92627 1,904 $1,150,000 $604 2019 649 W 17th St Costa Mesa 92627 1904 $1,169,000 $614 2018 1000 Katama Bay Dr Costa Mesa 92627 1,820 $1,185,000 $651 2017 3063 Paragon Costa Mesa 92626 1,847 $1,200,000 $650 2015 2998 Lumiere Costa Mesa 92626 2061 $1,225,000 $594 2019 617 W 17th St Costa Mesa 92627 2,101 $1,275,000 $607 2015 1827 Coastal Way Costa Mesa 92627 1,611 $1,300,000 $807 2014 634 Port Dr Costa Mesa 92627 2,267 $1,360,000 $600 2015 1686 Grand Vw Costa Mesa 92627 2,057 $1,375,000 $668 2017 1809 Ocean Ct Costa Mesa 92627 1,873 $1,375,000 $734 2014 636 Channel Way Costa Mesa 92627 2,267 $1,398,000 $617 2016 690 Malibu Costa Mesa 92627 2,142 $1,448,000 $676 2019
1679 Topanga Costa Mesa 92627 2,057 $1,500,000 $729 2019 1676 Grand Vw Costa Mesa 92627 2,057 $1,535,000 $746 2018 1676 Pomona Ave Costa Mesa 92627 2,057 $1,565,000 $761 2019 301 Shadow Bay Dr Costa Mesa 92627 1913 $1,620,000 $847 2015 607 Trestles Costa Mesa 92627 2,366 $1,740,000 $735 2018 628 Cardiff Reef Costa Mesa 92627 2,380 $1,775,000 $746 2019 Minimum 1,611 $965,000 $555 2014
Maximum 2,380 $1,775,000 $847 2020
Average 1,964 $1,321,500 $673 2017
Sales Price
Address
Two-Bedroom Units
Three-Bedroom Units
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Own; Home Resales Page 3 of 48
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ATTACHMENT 5: APPENDIX A
RESALE HOME SALES SURVEY 1

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Unit Size (SF) Total Per SF Year Built
Sales Price
Address
2120 Palmilla Ct Costa Mesa 92627 1,763 $1,049,000 $595 2015 2108 Harper Way Costa Mesa 92627 2,019 $1,115,000 $552 2016 2633 Clarion Ln Costa Mesa 92626 2,230 $1,320,000 $592 2017 2988 Lumiere Dr Costa Mesa 92626 2,227 $1,335,000 $599 2018 1648 Topanga Costa Mesa 92627 2,142 $1,375,000 $642 2019 947 Tesla Ln Costa Mesa 92626 2,453 $1,400,000 $571 2019 1669 Grand Costa Mesa 92627 2,142 $1,435,000 $670 2018
174 Costa Mesa Costa Mesa 92627 1,942 $1,515,000 $780 2019 137 Woodflower Ln Costa Mesa 92627 2,361 $1,515,000 $642 2018 1034 Bridgewater Way Costa Mesa 92627 1,869 $1,625,000 $869 2018 393 Latitude Pl E Costa Mesa 92627 2,148 $1,775,000 $826 2016 1923 Church St Costa Mesa 92627 2,432 $1,860,000 $765 2022 309 Anderson Ln Costa Mesa 92627 2,344 $2,000,000 $853 2014 Minimum 1,763 $1,049,000 $552 2014
Maximum 2,453 $2,000,000 $869 2022
Average 2,159 $1,486,100 $688 2018
Source: Redfin; June 2023
1 Based on a search of the Redfin data base for sales occurring between May 2022 and June 2023. The survey is limited to homes constructed within the past 10 years with a sales price of $2 million or less.

Four-Bedroom Units
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Own; Home Resales Page 4 of 48
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ATTACHMENT 5: APPENDIX B

AFFORDABLE SALES PRICE CALCULATIONS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; App B ASP Page 5 of 48
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ATTACHMENT 5: APPENDIX B
AFFORDABLE SALES PRICE CALCULATIONS 1
2023 INCOME STANDARDS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Two-Bedroom
Units
Three-Bedroom
Units
Four-Bedroom
Units
General Assumptions
Area Median Income 2 $127,800 $138,000 $148,250
Annual Utilities Allowance 3 $2,904 $3,696 $4,572
HOA, Maintenance & Insurance 4 $4,200 $4,800 $5,400
I. Income Allotted to Housing Based on 110% AMI
Benchmark Annual Household Income $140,580 $151,800 $163,075 Income Allotted to Housing @ 35% of Income $49,200 $53,130 $57,080 II. Property Taxes @ 1.15% of Affordable Sales Price $5,430 $5,760 $6,070 III. Income Available for Mortgage Debt Service 5 $36,666 $38,874 $41,038 V. Affordable Sales Price
Supportable Mtg @ 7.24% Interest 6 $448,400 $475,400 $501,900 Home Buyer Down Payment @ 5% of ASP 23,600 25,000 26,400 Affordable Sales Price $472,000 $500,400 $528,300
1 2
3 4 Based in part on the HOA dues identified in the home sales survey.

Based on 2023 Orange County household incomes published by the California Department of Housing & Community Development (HCD). The Affordable Sales Price calculations are based on the California Health and Safety Code Section 50052.5 methodology.

Under the California Health & Safety Code Section 50052.5 calculation methodology, the benchmark household size is set at the number of bedrooms in the unit plus one. This benchmark is used solely for the purposes of calculating the Affordable Sales Price. It is neither an occupancy cap nor a floor.

Utilities allowances are based on the Orange County Housing Authority utilities allowance schedule effective as of October 1, 2022 Assumes: Electric Heating, Electric Cooking, Electric Water Heater, Basic Electric, Water, Sewer, and Trash.

Prepared by: Keyser Marston Associates
File name: 7 11 23 CM Own; ASP Page 6 of 48
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COSTA MESA, CALIFORNIA
ATTACHMENT 5: APPENDIX C

PRO FORMA ANALYSES
NORTH COSTA MESA: 25 UNIT/ACRE TOWNHOMES &FLATS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Own; APP C Title NCM Page 7 of 48 -195-

COSTA MESA, CALIFORNIA
ATTACHMENT 5: APPENDIX C - EXHIBIT I

PRO FORMA ANALYSIS
NORTH COSTA MESA: 25 UNIT/ACRE TOWNHOMES &FLATS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV NCM Page 8 of 48
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ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTIONS COSTS
NORTH COSTA MESA: 25 UNIT/ACRE TOWNHOMES &FLATS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I Direct Costs 1
On-Site Improvements/Landscaping 148,104 Sf of Land $30 /Sf of Land $4,443,000 Parking 2 170 Spaces $0 /Space 0
Building Costs 137,750 Sf of GSA $200 /Sf of GSA 27,550,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 6,399,000 Total Direct Costs $38,392,000
II. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $2,304,000 Public Permits & Fees 4 85 Units $34,420 /Unit 2,926,000 Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 576,000 Marketing 85 Units $5,000 /Unit 425,000
Developer Fee 3.0% Gross Sales Revenue 2,690,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 446,000 Total Indirect Costs $9,367,000
III. Financing Costs
Interest During Construction 5 $7,059,000
Loan Origination Fees 60.0% Loan to Cost 1.5 P oints 617,000 Total Financing Costs $7,676,000
IV. Total Construction Cost 85 Units $652,000 /Unit $55,435,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5 Assumes a 7.0% interest cost for debt; an 18 month construction period after receipt of entitlements; an 14 month absorption period; 10% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Assumes that the required parking is provided in attached garages and that guest parking requirements are provided in surface parking spaces.

The costs for the surface parking spaces are included in the on-site improvement cost estimates.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV NCM Page 9 of 48
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ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 2

PROJECTED NET SALES REVENUE
NORTH COSTA MESA: 25 UNIT/ACRE TOWNHOMES &FLATS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Sales Revenue 1
Two-Bedroom Units 21 Units @ $890,000 /Unit $18,690,000 Three-Bedroom Units 51 Units @ $1,083,000 /Unit 55,233,000 Four-Bedroom Units 13 Units @ $1,211,000 /Unit 15,743,000 Total Gross Sales Revenue $89,666,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $2,690,000
Closing 2.0% Gross Sales Revenue 1,793,000
Warranty 0.5% Gross Sales Revenue 448,000
Total Cost of Sales ($4,931,000)
III. Net Revenue $84,735,000
1 Based in part on a survey of homes in Costa Mesa that were constructed after 2014 and resold between May 2022 and June 2023. See ATTACHMENT 5: APPENDIX A. The weighted average sales price equates to $651 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV NCM Page 10 of 48
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ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE
NORTH COSTA MESA: 25 UNIT/ACRE TOWNHOMES &FLATS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Net Revenue See ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 2 $84,735,000 II. Project Costs
Total Construction Cost See ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 1 $55,435,000 Threshold Developer Profit 10% Net Revenue 8,474,000
Total Project Costs $63,909,000
III. Estimated Residual Land Value 148,104 Sf of Land $141 /Sf of Land $20,826,000 Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV NCM Page 11 of 48
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ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 4

VALUE ENHANCEMENT ANALYSIS
NORTH COSTA MESA: 25 UNIT/ACRE TOWNHOMES &FLATS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
North Costa Mesa See ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 3 $20,826,000 Vacant Residential Land @ 20 Units/Acre1 148,104 Sf of Land $78 /Sf of Land 11,552,000 Estimated Value Enhancement $9,274,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $9,274,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $4,637,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV NCM Page 12 of 48
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ATTACHMENT 5: APPENDIX C - EXHIBIT II

SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS
NORTH COSTA MESA: 25 UNIT/ACRE TOWNHOMES &FLATS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Two-Bedroom
Units
Three-Bedroom
Units
Four-Bedroom
Units
I. Affordability Gap Calculation
Market Rate Sales Price 1 $890,000 $1,083,000 $1,211,000 Affordable Sales Price 2 472,000 500,400 528,300
Affordability Gap Per Inclusionary Unit $418,000 $582,600 $682,700 II. Number of Inclusionary Units
Unit Allocation 1 21 51 13
Supportable Inclusionary Housing Percentage 9.75% 9.75% 9.75% Total Number of Inclusionary Units 2.0 5.0 1.3
III. Total Affordability Gap by Bedroom Type $855,860 $2,896,980 $865,320 IV. Crosscheck
Value Enhancement Funds Available for Inclusionary Housing $4,637,000 Total Affordability Gap / Impact of The Inclusionary Requirement 3 4,618,160 Requirement is Lower than the Supportable Percentage $18,840 V. Supportable In-Lieu Fee
Value Enhancement Funds Available for Inclusionary Housing $4,637,000 Gross Saleable Area 4 137,750 Square Feet
Supportable In-Lieu Fee $34 /Sf of GSA
1 See ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 2.
2 See ATTACHMENT 5: APPENDIX B.
3 4 See ATTACHMENT 5: APPENDIX C - EXHIBIT I - TABLE 1
The Total Affordability Gap / Impact of The Inclusionary Requirement is equal to the sum of the Affordability Gap exhibited by each bedroom type.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; INC_ILF NCM Page 13 of 48
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COSTA MESA, CALIFORNIA
ATTACHMENT 5: APPENDIX D

PRO FORMA ANALYSES
HARBOR MIXED USE: 15 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Own; APP D Title HMU Page 14 of 48 -202-
ATTACHMENT 5: APPENDIX D - EXHIBIT I

PRO FORMA ANALYSIS
HARBOR MIXED USE: 15 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV HMU Page 15 of 48
-203-
ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTIONS COSTS
HARBOR MIXED USE: 15 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I Direct Costs 1
On-Site Improvements/Landscaping 23,087 Sf of Land $30 /Sf of Land $693,000 Parking 2 16 Spaces $0 /Space 0
Building Costs 14,800 Sf of GSA $165 /Sf of GSA 2,442,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 627,000 Total Direct Costs $3,762,000
II. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $226,000 Public Permits & Fees 4 8 Units $34,660 /Unit 277,000
Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 56,000 Marketing 8 Units $5,000 /Unit 40,000
Developer Fee 3.0% Gross Sales Revenue 301,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 45,000 Total Indirect Costs $945,000
III. Financing Costs
Interest During Construction 5 $669,000
Loan Origination Fees 60.0% Loan to Cost 1.5 P oints 72,000 Total Financing Costs $741,000
IV. Total Construction Cost 8 Units $681,000 /Unit $5,448,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5
Assumes that the required parking is provided in attached garages and that guest parking requirements are provided in surface parking spaces.

The costs for the surface parking spaces are included in the on-site improvement cost estimates.

Assumes a 7.0% interest cost for debt; an 18 month construction period after receipt of entitlements; an 3 month absorption period; 10% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV HMU Page 16 of 48
-204-
ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 2

PROJECTED NET SALES REVENUE
HARBOR MIXED USE: 15 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Sales Revenue 1
Two-Bedroom Units 0 Units @ $0 /Unit $0
Three-Bedroom Units 6 Units @ $1,211,000 /Unit 7,266,000 Four-Bedroom Units 2 Units @ $1,376,000 /Unit 2,752,000 Total Gross Sales Revenue $10,018,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $301,000
Closing 2.0% Gross Sales Revenue 200,000
Warranty 0.5% Gross Sales Revenue 50,000
Total Cost of Sales ($551,000)
III. Net Revenue $9,467,000
1 Based in part on a survey of homes in Costa Mesa that were constructed after 2014 and resold between May 2022 and June 2023. See ATTACHMENT 5: APPENDIX A. The weighted average sales price equates to $677 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV HMU Page 17 of 48
-205-
ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE
HARBOR MIXED USE: 15 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Net Revenue See ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 2 $9,467,000 II. Project Costs
Total Construction Cost See ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 1 $5,448,000 Threshold Developer Profit 8% Net Revenue 757,000
Total Project Costs $6,205,000
III. Estimated Residual Land Value 23,087 Sf of Land $141 /Sf of Land $3,262,000 Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV HMU Page 18 of 48
-206-
ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 4

VALUE ENHANCEMENT ANALYSIS
HARBOR MIXED USE: 15 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
Harbor Mixed Use See ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 3 $3,262,000 Improved .39 FAR Industrial + Retail 1 23,087 Sf of Land $128 /Sf of Land 2,955,000 Estimated Value Enhancement $307,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $307,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $154,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV HMU Page 19 of 48
-207-
ATTACHMENT 5: APPENDIX D - EXHIBIT II

SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS
HARBOR MIXED USE: 15 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Two-Bedroom
Units
Three-Bedroom
Units
Four-Bedroom
Units
I. Affordability Gap Calculation
Market Rate Sales Price 1 $0 $1,211,000 $1,376,000
Affordable Sales Price 2 0 500,400 528,300
Affordability Gap Per Inclusionary Unit $0 $710,600 $847,700 II. Number of Inclusionary Units
Unit Allocation 1 0 6 2
Supportable Inclusionary Housing Percentage 2.5% 2.5% 2.5% Total Number of Inclusionary Units 0.0 0.2 0.1
III. Total Affordability Gap by Bedroom Type $0 $106,590 $42,390 IV. Crosscheck
Value Enhancement Funds Available for Inclusionary Housing $154,000 Total Affordability Gap / Impact of The Inclusionary Requirement 3 148,980 Requirement is Lower than the Supportable Percentage $5,020 V. Supportable In-Lieu Fee
Value Enhancement Funds Available for Inclusionary Housing $154,000 Gross Saleable Area 4 14,800 Square Feet
Supportable In-Lieu Fee $10 /Sf of GSA
1 See ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 2.
2 See ATTACHMENT 5: APPENDIX B.
3 4 See ATTACHMENT 5: APPENDIX D - EXHIBIT I - TABLE 1
The Total Affordability Gap / Impact of The Inclusionary Requirement is equal to the sum of the Affordability Gap exhibited by each bedroom type.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; INC_ILF HMU Page 20 of 48
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COSTA MESA, CALIFORNIA
ATTACHMENT 5: APPENDIX E

PRO FORMA ANALYSES
MESA WEST: 17 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Own; APP E Title MW Page 21 of 48 -209-
ATTACHMENT 5: APPENDIX E - EXHIBIT I

PRO FORMA ANALYSIS
MESA WEST: 17 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV MW RLV Page 22 of 48
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ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTIONS COSTS
MESA WEST: 17 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I Direct Costs 1
On-Site Improvements/Landscaping 51,401 Sf of Land $30 /Sf of Land $1,542,000 Parking 2 40 Spaces $0 /Space 0
Building Costs 35,200 Sf of GSA $175 /Sf of GSA 6,160,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 1,540,000 Total Direct Costs $9,242,000
II. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $555,000 Public Permits & Fees 4 20 Units $34,590 /Unit 692,000
Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 139,000 Marketing 20 Units $5,000 /Unit 100,000
Developer Fee 3.0% Gross Sales Revenue 716,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 110,000 Total Indirect Costs $2,312,000
III. Financing Costs
Interest During Construction 5 $1,625,000
Loan Origination Fees 60.0% Loan to Cost 1.5 P oints 169,000 Total Financing Costs $1,794,000
IV. Total Construction Cost 20 Units $667,000 /Unit $13,348,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5
Assumes that the required parking is provided in attached garages and that guest parking requirements are provided in surface parking spaces.

The costs for the surface parking spaces are included in the on-site improvement cost estimates.

Assumes a 7.0% interest cost for debt; an 18 month construction period after receipt of entitlements; an 4 month absorption period; 10% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV MW RLV Page 23 of 48
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ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 2

PROJECTED NET SALES REVENUE
MESA WEST: 17 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Sales Revenue 1
Two-Bedroom Units 0 Units @ $0 /Unit $0
Three-Bedroom Units 14 Units @ $1,144,000 /Unit 16,016,000 Four-Bedroom Units 6 Units @ $1,308,000 /Unit 7,848,000 Total Gross Sales Revenue $23,864,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $716,000
Closing 2.0% Gross Sales Revenue 477,000
Warranty 0.5% Gross Sales Revenue 119,000
Total Cost of Sales ($1,312,000)
III. Net Revenue $22,552,000
1 Based in part on a survey of homes in Costa Mesa that were constructed after 2014 and resold between May 2022 and June 2023. See ATTACHMENT 5: APPENDIX A. The weighted average sales price equates to $678 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV MW RLV Page 24 of 48
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ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE
MESA WEST: 17 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Net Revenue See ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 2 $22,552,000 II. Project Costs
Total Construction Cost See ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 1 $13,348,000 Threshold Developer Profit 9% Net Revenue 2,030,000
Total Project Costs $15,378,000
III. Estimated Residual Land Value 51,401 Sf of Land $140 /Sf of Land $7,174,000 Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV MW RLV Page 25 of 48
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ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 4

VALUE ENHANCEMENT ANALYSIS
MESA WEST: 17 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
Mesa West See ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 3 $7,174,000 Improved Auto Property 1 51,401 Sf of Land $107 /Sf of Land 5,500,000 Estimated Value Enhancement $1,674,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $1,674,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $837,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV MW RLV Page 26 of 48
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ATTACHMENT 5: APPENDIX E - EXHIBIT II

SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS
MESA WEST: 17 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Two-Bedroom
Units
Three-Bedroom
Units
Four-Bedroom
Units
I. Affordability Gap Calculation
Market Rate Sales Price 1 $0 $1,144,000 $1,308,000
Affordable Sales Price 2 0 500,400 528,300
Affordability Gap Per Inclusionary Unit $0 $643,600 $779,700 II. Number of Inclusionary Units
Unit Allocation 1 0 14 6
Supportable Inclusionary Housing Percentage 6.1% 6.1% 6.1% Total Number of Inclusionary Units 0.0 0.9 0.4
III. Total Affordability Gap by Bedroom Type $0 $549,630 $285,370 IV. Crosscheck
Value Enhancement Funds Available for Inclusionary Housing $837,000 Total Affordability Gap / Impact of The Inclusionary Requirement 3 835,000 Requirement is Lower than the Supportable Percentage $2,000 V. Supportable In-Lieu Fee
Value Enhancement Funds Available for Inclusionary Housing $837,000 Gross Saleable Area 4 35,200 Square Feet
Supportable In-Lieu Fee $24 /Sf of GSA
1 See ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 2.
2 See ATTACHMENT 5: APPENDIX B.
3 4 See ATTACHMENT 5: APPENDIX E - EXHIBIT I - TABLE 1
The Total Affordability Gap / Impact of The Inclusionary Requirement is equal to the sum of the Affordability Gap exhibited by each bedroom type.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; INC_ILF MW Page 27 of 48
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COSTA MESA, CALIFORNIA
ATTACHMENT 5: APPENDIX F

PRO FORMA ANALYSES
19 WEST: 20 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Own; APP F Title 19W Page 28 of 48 -216-
ATTACHMENT 5: APPENDIX F - EXHIBIT I

PRO FORMA ANALYSIS
19 WEST: 20 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV 19W Page 29 of 48
-217-
ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTIONS COSTS
19 WEST: 20 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I Direct Costs 1
On-Site Improvements/Landscaping 87,120 Sf of Land $30 /Sf of Land $2,614,000 Parking 2 80 Spaces $0 /Space 0
Building Costs 67,200 Sf of GSA $185 /Sf of GSA 12,432,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 3,009,000 Total Direct Costs $18,055,000
II. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $1,083,000 Public Permits & Fees 4 40 Units $34,510 /Unit 1,380,000 Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 271,000 Marketing 40 Units $5,000 /Unit 200,000
Developer Fee 3.0% Gross Sales Revenue 1,324,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 213,000 Total Indirect Costs $4,471,000
III. Financing Costs
Interest During Construction 5 $3,150,000
Loan Origination Fees 60.0% Loan to Cost 1.5 P oints 310,000 Total Financing Costs $3,460,000
IV. Total Construction Cost 40 Units $650,000 /Unit $25,986,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5
Assumes that the required parking is provided in attached garages and that guest parking requirements are provided in surface parking spaces.

The costs for the surface parking spaces are included in the on-site improvement cost estimates.

Assumes a 7.0% interest cost for debt; an 18 month construction period after receipt of entitlements; an 7 month absorption period; 10% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV 19W Page 30 of 48
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ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 2

PROJECTED NET SALES REVENUE
19 WEST: 20 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Sales Revenue 1
Two-Bedroom Units 8 Units @ $913,000 /Unit $7,304,000
Three-Bedroom Units 24 Units @ $1,110,000 /Unit 26,640,000 Four-Bedroom Units 8 Units @ $1,273,000 /Unit 10,184,000 Total Gross Sales Revenue $44,128,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $1,324,000
Closing 2.0% Gross Sales Revenue 883,000
Warranty 0.5% Gross Sales Revenue 221,000
Total Cost of Sales ($2,428,000)
III. Net Revenue $41,700,000
1 Based in part on a survey of homes in Costa Mesa that were constructed after 2014 and resold between May 2022 and June 2023. See ATTACHMENT 5: APPENDIX A. The weighted average sales price equates to $657 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV 19W Page 31 of 48
-219-
ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE
19 WEST: 20 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Net Revenue See ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 2 $41,700,000 II. Project Costs
Total Construction Cost See ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 1 $25,986,000 Threshold Developer Profit 9% Net Revenue 3,753,000
Total Project Costs $29,739,000
III. Estimated Residual Land Value 87,120 Sf of Land $137 /Sf of Land $11,961,000 Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV 19W Page 32 of 48
-220-
ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 4

VALUE ENHANCEMENT ANALYSIS
19 WEST: 20 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
19 West See ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 3 $11,961,000 Improved .39 FAR Industrial + Retail 1 87,120 Sf of Land $128 /Sf of Land 11,151,000 Estimated Value Enhancement $810,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $810,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $405,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV 19W Page 33 of 48
-221-
ATTACHMENT 5: APPENDIX F - EXHIBIT II

SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS
19 WEST: 20 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Two-Bedroom
Units
Three-Bedroom
Units
Four-Bedroom
Units
I. Affordability Gap Calculation
Market Rate Sales Price 1 $913,000 $1,110,000 $1,273,000 Affordable Sales Price 2 472,000 500,400 528,300
Affordability Gap Per Inclusionary Unit $441,000 $609,600 $744,700 II. Number of Inclusionary Units
Unit Allocation 1 8 24 8
Supportable Inclusionary Housing Percentage 1.7% 1.7% 1.7% Total Number of Inclusionary Units 0.1 0.4 0.1
III. Total Affordability Gap by Bedroom Type $58,920 $244,330 $99,490 IV. Crosscheck
Value Enhancement Funds Available for Inclusionary Housing $405,000 Total Affordability Gap / Impact of The Inclusionary Requirement 3 402,740 Requirement is Lower than the Supportable Percentage $2,260 V. Supportable In-Lieu Fee
Value Enhancement Funds Available for Inclusionary Housing $405,000 Gross Saleable Area 4 67,200 Square Feet
Supportable In-Lieu Fee $6 /Sf of GSA
1 See ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 2.
2 See ATTACHMENT 5: APPENDIX B.
3 4 See ATTACHMENT 5: APPENDIX F - EXHIBIT I - TABLE 1
The Total Affordability Gap / Impact of The Inclusionary Requirement is equal to the sum of the Affordability Gap exhibited by each bedroom type.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; INC_ILF 19W Page 34 of 48
-222-

COSTA MESA, CALIFORNIA
ATTACHMENT 5: APPENDIX G

PRO FORMA ANALYSES
SOBECA: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Own; APP G Title SoB Page 35 of 48 -223-
ATTACHMENT 5: APPENDIX G - EXHIBIT I

PRO FORMA ANALYSIS
SOBECA: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV SoB Page 36 of 48
-224-
ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTIONS COSTS
SOBECA: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I Direct Costs 1
On-Site Improvements/Landscaping 29,185 Sf of Land $30 /Sf of Land $876,000 Parking 2 22 Spaces $0 /Space 0
Building Costs 19,850 Sf of GSA $170 /Sf of GSA 3,375,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 850,000 Total Direct Costs $5,101,000
II. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $306,000 Public Permits & Fees 4 11 Units $34,610 /Unit 381,000
Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 77,000 Marketing 11 Units $5,000 /Unit 55,000
Developer Fee 3.0% Gross Sales Revenue 403,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 61,000 Total Indirect Costs $1,283,000
III. Financing Costs
Interest During Construction 5 $909,000
Loan Origination Fees 60.0% Loan to Cost 1.5 P oints 96,000 Total Financing Costs $1,005,000
IV. Total Construction Cost 11 Units $672,000 /Unit $7,389,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5
Assumes that the required parking is provided in attached garages and that guest parking requirements are provided in surface parking spaces.

The costs for the surface parking spaces are included in the on-site improvement cost estimates.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV SoB Page 37 of 48
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ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 2

PROJECTED NET SALES REVENUE
SOBECA: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Sales Revenue 1
Two-Bedroom Units 0 Units @ $0 /Unit $0
Three-Bedroom Units 8 Units @ $1,177,000 /Unit 9,416,000 Four-Bedroom Units 3 Units @ $1,342,000 /Unit 4,026,000 Total Gross Sales Revenue $13,442,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $403,000
Closing 2.0% Gross Sales Revenue 269,000
Warranty 0.5% Gross Sales Revenue 67,000
Total Cost of Sales ($739,000)
III. Net Revenue $12,703,000
1 Based in part on a survey of homes in Costa Mesa that were constructed after 2014 and resold between May 2022 and June 2023. See ATTACHMENT 5: APPENDIX A. The weighted average sales price equates to $677 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV SoB Page 38 of 48
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ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE
SOBECA: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Net Revenue See ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 2 $12,703,000 II. Project Costs
Total Construction Cost See ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 1 $7,389,000 Threshold Developer Profit 8% Net Revenue 1,016,000
Total Project Costs $8,405,000
III. Estimated Residual Land Value 29,185 Sf of Land $147 /Sf of Land $4,298,000 Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV SoB Page 39 of 48
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ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 4

VALUE ENHANCEMENT ANALYSIS
SOBECA: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
SoBECA See ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 3 $4,298,000 Improved .42 FAR Industrial + Retail 1 29,185 Sf of Land $128 /Sf of Land 3,736,000 Estimated Value Enhancement $562,000
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement $562,000
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing $281,000 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV SoB Page 40 of 48
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ATTACHMENT 5: APPENDIX G - EXHIBIT II

SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS
SOBECA: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Two-Bedroom
Units
Three-Bedroom
Units
Four-Bedroom
Units
I. Affordability Gap Calculation
Market Rate Sales Price 1 $0 $1,177,000 $1,342,000
Affordable Sales Price 2 0 500,400 528,300
Affordability Gap Per Inclusionary Unit $0 $676,600 $813,700 II. Number of Inclusionary Units
Unit Allocation 1 0 8 3
Supportable Inclusionary Housing Percentage 3.5% 3.5% 3.5% Total Number of Inclusionary Units 0.0 0.3 0.1
III. Total Affordability Gap by Bedroom Type $0 $189,450 $85,440 IV. Crosscheck
Value Enhancement Funds Available for Inclusionary Housing $281,000 Total Affordability Gap / Impact of The Inclusionary Requirement 3 274,890 Requirement is Lower than the Supportable Percentage $6,110 V. Supportable In-Lieu Fee
Value Enhancement Funds Available for Inclusionary Housing $281,000 Gross Saleable Area 4 19,850 Square Feet
Supportable In-Lieu Fee $14 /Sf of GSA
1 See ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 2.
2 See ATTACHMENT 5: APPENDIX B.
3 4 See ATTACHMENT 5: APPENDIX G - EXHIBIT I - TABLE 1
The Total Affordability Gap / Impact of The Inclusionary Requirement is equal to the sum of the Affordability Gap exhibited by each bedroom type.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; INC_ILF SoB Page 41 of 48
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COSTA MESA, CALIFORNIA
ATTACHMENT 5: APPENDIX H

PRO FORMA ANALYSES
CORRIDORS: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION
Prepared by: Keyser Marston Associates, Inc.

File name: 7 11 23 CM Own; APP H Title C Page 42 of 48
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ATTACHMENT 5: APPENDIX H - EXHIBIT I

PRO FORMA ANALYSIS
CORRIDORS: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV C Page 43 of 48
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ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 1

ESTIMATED CONSTRUCTIONS COSTS
CORRIDORS: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I Direct Costs 1
On-Site Improvements/Landscaping 27,443 Sf of Land $30 /Sf of Land $823,000 Parking 2 20 Spaces $0 /Space 0
Building Costs 17,900 Sf of GSA $170 /Sf of GSA 3,043,000 Contractor/DC Contingency Allow 3 20% Other Direct Costs 773,000 Total Direct Costs $4,639,000
II. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $278,000 Public Permits & Fees 4 10 Units $34,620 /Unit 346,000
Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 70,000 Marketing 10 Units $5,000 /Unit 50,000
Developer Fee 3.0% Gross Sales Revenue 363,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 55,000 Total Indirect Costs $1,162,000
III. Financing Costs
Interest During Construction 5 $813,000
Loan Origination Fees 60.0% Loan to Cost 1.5 P oints 87,000 Total Financing Costs $900,000
IV. Total Construction Cost 10 Units $670,000 /Unit $6,701,000 1 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 2 3 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 4 5
Assumes that the required parking is provided in attached garages and that guest parking requirements are provided in surface parking spaces.

The costs for the surface parking spaces are included in the on-site improvement cost estimates.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV C Page 44 of 48
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ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 2

PROJECTED NET SALES REVENUE
CORRIDORS: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Gross Sales Revenue 1
Two-Bedroom Units 0 Units @ $0 /Unit $0
Three-Bedroom Units 8 Units @ $1,177,000 /Unit 9,416,000 Four-Bedroom Units 2 Units @ $1,342,000 /Unit 2,684,000 Total Gross Sales Revenue $12,100,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $363,000
Closing 2.0% Gross Sales Revenue 242,000
Warranty 0.5% Gross Sales Revenue 61,000
Total Cost of Sales ($666,000)
III. Net Revenue $11,434,000
1 Based in part on a survey of homes in Costa Mesa that were constructed after 2014 and resold between May 2022 and June 2023. See ATTACHMENT 5: APPENDIX A. The weighted average sales price equates to $676 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV C Page 45 of 48
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ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 3

ESTIMATED RESIDUAL LAND VALUE
CORRIDORS: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Net Revenue See ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 2 $11,434,000 II. Project Costs
Total Construction Cost See ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 1 $6,701,000 Threshold Developer Profit 8% Net Revenue 915,000
Total Project Costs $7,616,000
III. Estimated Residual Land Value 27,443 Sf of Land $139 /Sf of Land $3,818,000 Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV C Page 46 of 48
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ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 4

VALUE ENHANCEMENT ANALYSIS
CORRIDORS: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
I. Estimated Land Value
Corridors See ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 3 $3,818,000 31 Room Motel 1 27,443 Sf of Land $237 /Sf of Land 6,504,000 Estimated Value Enhancement ($2,686,000)
II. Value Enhancement Funds Available for Inclusionary Housing Estimated Value Enhancement ($2,686,000)
Share Allocated to Inclusionary Housing 50%
Value Enhancement Funds Available for Inclusionary Housing ($1,343,000) 1 See ATTACHMENT 2: PROPERTY SALES SURVEYS.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; Pf RLV C Page 47 of 48
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ATTACHMENT 5: APPENDIX H - EXHIBIT II

SUPPORTABLE INCLUSIONARY HOUSING REQUIREMENTS
CORRIDORS: 16 UNIT/ACRE TOWNHOMES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

COSTA MESA, CALIFORNIA
Two-Bedroom
Units
Three-Bedroom
Units
Four-Bedroom
Units
I. Affordability Gap Calculation
Market Rate Sales Price 1 $0 $1,177,000 $1,342,000
Affordable Sales Price 2 0 500,400 528,300
Affordability Gap Per Inclusionary Unit $0 $676,600 $813,700 II. Number of Inclusionary Units
Unit Allocation 1 0 8 2
Supportable Inclusionary Housing Percentage 0.0% 0.0% 0.0% Total Number of Inclusionary Units 0.0 0.0 0.0
III. Total Affordability Gap by Bedroom Type $0 $0 $0
IV. Crosscheck
Value Enhancement Funds Available for Inclusionary Housing ($1,343,000) Total Affordability Gap / Impact of The Inclusionary Requirement 3 0 Requirement is Higher than the Supportable Percentage ($1,343,000) V. Supportable In-Lieu Fee
Value Enhancement Funds Available for Inclusionary Housing ($1,343,000) Gross Saleable Area 4 17,900 Square Feet
Supportable In-Lieu Fee ($75) /Sf of GSA
1 See ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 2.
2 See ATTACHMENT 5: APPENDIX B.
3 4 See ATTACHMENT 5: APPENDIX H - EXHIBIT I - TABLE 1
The Total Affordability Gap / Impact of The Inclusionary Requirement is equal to the sum of the Affordability Gap exhibited by each bedroom type.

Prepared by: Keyser Marston Associates, Inc.

File Name: 7 11 23 CM Own; INC_ILF C Page 48 of 48
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Costa Mesa City CouncilJuly 26, 2023

Costa Mesa City Council
July 26, 2023