Agenda — Economic Development & Technology Committee, September 16, 2025

AGENDA

ECONOMIC DEVELOPMENT AND TECHNOLOGY COMMITTEE

REGULAR MEETING NOTICE
SEPTEMBER 16 , 2025
PUBLIC MEETING 5:00 P.M.

MEMBERS
Tyron Hampton, Chair District 1
Jessica Rivas, District 5
Steve Madison, District 6
Jason Lyon, District 7

STAFF
David Klug, Economic Development Director
Dion O’Connell, Assistant City Attorney
Tamer Sabha, Recording Secretary

MISSION STATEMENT
The City of Pasadena is dedicated to delivering exemplary municipal services , responsive to our entire community and consistent
with our history, culture and unique character.

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Items on the agenda may not be called in order listed.

Agendas and supporting documents are available on the Internet at https://www.cityofpasadena.net/commissions/city -council-economic-development-technology/

Materials related to an item on this Agenda submitted to the Economic Development and Technology Committee after distribution of the agenda packet will be posted online and listed as: “Supplemental Agenda Material Received after the Posting of the agenda”

PUBLIC COMMENT AT THE ECONOMIC DEVELOPMENT AND TECHNOLOGY

COMMITTEE MEETING FOR
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CITY OF PASADENA

NOTICE OF REGULAR MEETING OF THE

ECONOMIC DEVELOPMENT AND TECHNOLOGY COMMITTEE

SEPTEMBER 16 , 2025
PUBLIC MEETING 5:00 P.M.

PASADENA CITY HALL, COUNCIL CHAMBER
100 NORTH GARFIELD AVENUE, ROOM S249

NOTICE IS HEREBY GIVEN that the regular meeting of the Economic Development and Technology Committee, will be held on Tuesday, September 16, 2025, at 5:00 p.m., in the Council Chamber to discuss matters on the attached agenda.

_____________________
Tyron Hampton, Chair
Economic Development and
Technology Committee

I HEREBY CERTIFY that this agenda in its entirety, was posted on the Internet at https://www.cityofpasadena.net/commissions/city -council-economic -development -technology/ and on the Council Chamber Bulletin Board, Room S249, and the Bulletin Board in the rotunda area; City Hall, 100 North Garfield Avenue, this 1 1th day of Septemeber 2025 by 5: 30 p.m. and that copies hereof were emailed or delivered to each member of the City Council and to each local newspaper of general circulation, radio or television station requesting notice in writing, all of which recipients are identified on the distributio n herein below.

Katrine Panoyan
City Manager’s Office

DISTRIBUTION:

City Council Los Angeles Times
City Manager Pasadena Journal
City Attorney Pasadena Now
Public Information Officer Pasadena Star News
Pasadena Weekly La Opinion
Pasadena Independent

REGULAR MEETING
AGENDA

ECONOMIC DEVELOPMENT AND TECHNOLOGY COMMITTEE
SEPTEMBER 16 , 2025
Public Meeting: 5:00 P.M.

Council Chamber, Pasadena City Hall
100 North Garfield Avenue, Room S249

Teleconference Location:

The Georgetown Inn
Business Center
1310 Wisconsin Ave. NW
Washington, DC 20007

The City Council may take action on any item listed on this agenda as it deems appropriate following consideration and discussion of the matter.

PUBLIC MEETING – 5:00 P.M.

ROLL CALL

PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA
Public comment will be limited to a total of 20 minutes at the beginning of the meeting and will continue at the conclusion of the meeting, if necessary.

Please limit comments to 3 minutes each.

APPROVAL OF MINUTES

• AUGUST 19, 2025 – REGULAR MEETING*

NEW BUSINESS

1. FEASIBILITY STUDY ON INCLUSIONARY HOUSING ORDINANCE*

INFORMATION ONLY

2. UPDATE ON RECONNECTING PASADENA 710 MASTER PLAN PROCESS*

3. MEHKO (MICROENTERPRISE HOME KITCHEN OPERATIONS)*

4. ECONOMIC DEVELOPMENT UPDATE BY DAVID A. KLUG, ECONOMIC DEVELOPMENT DIRECTOR*

ADJOURN
*Attachment

APPROVAL OF MINUTES

• AUGUST 19, 2025 – REGULAR MEETING*

01 08/19/2025

CITY OF PASADENA

ECONOMIC DEVELOPMENT AND TECHNOLOGY COMMITTEE MINUTES
AUGUST 19, 2025 – 5:00 P.M.

MEETING

OPENING Acting Chair Rivas called the meeting of the Economic Development and Technology Committee to order at 5:09 p.m.

ROLL CALL:

Staff:

Councilmember Tyron Hampton, Chair (Absent)
Vice Mayor Jessica Rivas, Acting Chair
Councilmember Steve Madison (Arrived at 6:00 p.m.)
Councilmember Jason Lyon

Jeffrey Hernandez, Real Property Manager
Jim Wong, Housing Director
Teresa Garcia, Senior Project Manager
Deborah Membreno, Project Manager
Christopher Page, Project Manager
Dion O’Connell, Assistant City Attorney
Betty Gao, Recording Secretary

PUBLIC COMMENT No one appeared for public comment on matters not on the agenda.

APPROVAL OF MINUTES It was moved by Councilmember Lyon, seconded by Vice Mayor Rivas, to approve the minutes of June 17, 2025, and July 15, 2025, as submitted. (Motion unanimously approved) (Absent: Councilmember s Hampton, Madison)

INFORMATION ONLY ECONOMIC DEVELOPMENT BUSINESS SUPPORT AND INCENTIVES

Deborah Membreno, Project Manager, and Teresa Garcia, Senior Project Manager, jointly presented a PowerPoint on the item, including providing information on grants awarded to local businesses , marketing materials, the E conomic Development’s Data dashboard, business support, Dine Out Street Fest, and incentive programs; with both responding to questions.

Councilmember Rivas asked staff to provide information on individuals or restaurants that moved from Altadena to Pasadena due to the Eaton Fire; and to distribute the Procurement Training PowerPoint presentation and procurement programs to the Committee and the community.

The Committee thanked staff for their operational work, specifically the “dashboard”.

Following discussion, on the order of the Acting Chair, and by consensus of the Committee, the information was received and filed.

OPEN REWARDS

Christopher Page, Project Manager, presented a PowerPoint presentation on the Open Rewards, a digital shop-local platform , including providing 02 08/19/2025

information on pilot program design and timeline , rewards process, partners and vendors, and responded to questions.

The Committee expressed support and enthusiasm for the upcoming local rewards pilot program.

Following a brief discussion, on the order of the Acting Chair, and by consensus of the Committee, the information was received and filed.

POTENTIAL CITY -OWNED PR OPERTIES FOR AFFORDABLE

HOUSING PROJECTS

Jeffrey Hernandez, Real Property Manager, presented a PowerPoint presentation on the item, including providing information on possible affordable housing sites, non-suitable sites, and responded to questions.

Councilmember Lyon spoke in support of permanent supportive housing development at 302 N Garfield Ave. and 3026 E Orange Grove Blvd.

In response to Councilmember Lyon’s inquiry on potential properties for affordable housing projects, Jim Wong, Housing Director, highlighted the sites as opportunity for permanent supportive housing.

Councilmember Lyon advocated to situate properties presumed not suitable for affordable housing to better use, such as open spaces or other community benefits.

Following discussion, on the order of the Acting Chair, and by consensus of the Committee, the information was received and filed.

ECONOMIC DEVELOPMENT UPDATE

Councilmember Madison
arrived at 6:00 p.m.

Teresa Garcia, Senior Project Manager, summarized the staff memo as part of her oral presentation, including providing information on business developments, conferences and events, technology startups, and real estate; and responded to questions.

Following discussion, on the order of the Acting Chair, and by consensus of the Committee, the information was received and filed.

Councilmember Madison requested that staff provide an updated analysis of potential commercial office space in the City. In response, Jeffrey Hernandez, Real Property Manager , noted that an office space assessment report will be presented at an upcoming Committee meeting.

03 08/19/2025
ADJOURNMENT:

On the order of the Acting Chair, the meeting of the Economic Development and Technology Committee was adjourned at 6:06 p.m.

ATTEST:

____________________
Betty Gao
Recording Secretary

_________________________________
Councilmember Tyron Hampton, Chair
Economic Development and Technology Committee

NEW BUSINESS

1. FEASIBILITY STUDY ON INCLUSIONARY HOUSING ORDINANCE*

MEMORANDUM

TO: ECONOMIC DEVELOPMENT AND TECHNOLOGY COMMITTEE

FROM: JENNIFER PAIGE, DIRECTOR OF PLANNING AND COMMUNITY

DEVELOPMENT DEPARTMENT

DATE: SEPTEMBER 16, 2025

SUBJECT: FEASIBILITY ANALYSIS TO CONSIDER AN INCREASE TO THE

REQUIREMENTS OF THE INCLUSIONARY HOUSING ORDINANCE

RECOMMENDATION:

Receive the report, feasibility analysis and presentation to consider an increase to the requirements of the Inclusionary Housing Ordinance (IHO) and provide feedback to staff on what changes to study further and return to the Committee with.

INTRODUCTION:

The current IHO (Attachment A) was last updated in August 2019, when the City Council increased the set-aside affordable units from 15% to 20% of the units (before density bonus) for all projects with 10 residential units or more. Specifically:

• For rental projects, this 20% must consist, at minimum, of 5% of units covenanted for Very Low Income (VLI) households, 5% for Low Income (LI), and 10% for Moderate Income (MI).
• For for-sale projects, at minimum 20% of units must be set aside for Moderate Income households.

In both scenarios LI and MI units can be substituted for VLI and LI units, respectively, to increase overall affordability. Alternatives to constructing affordable units on-site include paying an in-lieu fee, constructing them off-site and donating land for the construction of inclusionary units. A feasibility study prepared by AECOM for the 2019 policy effort was the basis for the policy recommendations that the City Council adopted.

At the South Fair Oaks Specific Plan update hearing, the City Council requested staff to prepare a feasibility study to explore increasing the mandatory affordable set-aside percentage of the City’s IHO, in response to the increased densities permitted by the Specific Plans. In addition, Program #8 of the 2021-2029 General Plan Housing Element calls to continue to monitor the effectiveness of the City’s IHO.

Economic Development and Technology Committee September 16, 2025 Inclusionary Feasibility Analysis

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In order to inform the decision of potentially increasing the set-aside requirement, and to better understand the effects of any increase on market dynamics, the City again retained AECOM to prepare a market and feasibility analysis (AECOM Analysis, Attachment B).

The California Department of Housing and Community Development (HCD) has the authority to review an IHO if it requires more than 15% of the total units be affordable to VLI or LI households. However, this only applies if the City meets one of these criteria:

• Fails to meet at least 75% of its share of the regional housing need allocated for above- moderate income; or
• Fails to submit an annual housing element report two consecutive years.

The City of Pasadena has not met at least 75% of its allocated above moderate share identified in the 2021-2029 (6th Cycle) Regional Housing Needs Assessment (RHNA) but has submitted an annual housing element report every year. The City’s allocation of above moderate-income units is 3,455 units. As of 2024, the City has permitted 762 units or 22% of its above moderate- income units (Attachment C).

If HCD requests a review, the local agency must provide an economic feasibility study demonstrating that the increase in inclusionary does not unduly constrain the production of housing. The higher set-aside requirement would need to result in an increase in affordable housing production without having a negative impact on overall housing production.

EXECUTIVE SUMMARY:

AECOM prepared a market analysis of recent residential and mixed-use development trends in the City that included prototypical projects to test the financial feasibility of potential inclusionary requirements. The analysis testing, when the inclusionary requirement is increased, found the following conclusions:

• While projects in the highest density land use designations are generally feasible, projects in lower density designations become unfeasible, especially in rental projects. • An updated IHO could have an increased set aside to 25% for some project types in areas that permit high-density, located in the Specific Plans. However, this could deter investment in these high growth areas that have driven recent housing construction and push development to lower density areas.
• The feasibility of current for-rent projects is highly contingent on density bonus. Raising the inclusionary requirement will necessitate the maximization of density bonuses, increasing the overall density of projects.
• AECOM recommends either maintaining the current 20% requirement until market conditions change, or only a modest increase (e.g., an additional 5% or shift the required proportion of MI to LI, requiring deeper affordability in rental projects) for only the highest density areas. The current development pipeline indicates housing demand, but recent production has stalled due to elevated costs and risks for development at this time.

The analysis demonstrates that an increase in the inclusionary requirement percentage beyond 20% could potentially have a negative impact on housing production for most of the scenarios studied. Staff recommends maintaining the existing affordability requirements of the current IHO. As an alternative to increasing the mandatory set-aside, this report includes other opportunities to increase affordable housing and workforce housing Economic Development and Technology Committee September 16, 2025 Inclusionary Feasibility Analysis

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POLICY CONTEXT:

Since being adopted initially in 2001, Pasadena’s IHO has played an important role in supporting the City’s housing policy goals. The IHO functions within a policy context that includes the state RHNA, the city’s Housing and Land Use Elements and Specific Plans, and the State Density Bonus Law. These policies set housing development goals, provide guidelines for how housing can be developed, and offer incentives to encourage production of both market- rate and affordable housing. More information on the influence of these policies on the IHO is discussed on pages 6-10 of Attachment B.

Peer and Neighboring Jurisdictions
Compared to peer and neighboring jurisdictions, Pasadena has one of the highest inclusionary requirement percentages; only West Hollywood has an equal or higher requirement (varies by project size). See Table 1 below for a summary comparison:

Table 1 – IHO Survey of Other Cities
City
Min
Project
Size
Inclusionary
Requirement %
Sub-
Geographies Deed Restriction In-Lieu Fee Option
Pasadena 10 units
For Rent: 20% (5% VLI,
5% LI & 10% MI)
For Sale: 20% (MI)
No For Rent: Perpetuity
For Sale: 45 years
Yes, can also be
combined with
providing some
inclusionary units.

Burbank 5 units
For Rent: 15% (5% VLI
& 10% LI)
For Sale: 15% (LI or MI)
No For Rent: Perpetuity
For Sale: 55 years Yes
Glendale 8 units 15% (LI) No 55 years
Yes, can be combined
with providing some
inclusionary units.

Santa
Monica 2 units
2 to 19 units: 15% LI
20+ units: 15%
requirement is divided
equally between VLI, LI
and Moderate
No 55 years 2-5 unit projects only
West
Hollywood 2 units
2 to 10 units: 1 unit (LI
or MI)
11+ units: 20% (LI or
MI)
No Perpetuity 2 to 10-unit projects
only
Long
Beach 10 units
For Rent: 12% (LI or
VLI depending on
submarket)
For Sale: 10% (MI)
Yes -
Downtown
and Midtown
Submarkets
and resource
areas.
55 years
Yes, for all ownership
or rental 1 to 20 units
or if hardship is found
by City
Alhambra 5 units 15% (9% LI & 6% MI) No For Rent: Perpetuity For Sale: 45 years
5 to 6 Units: No units
required; in-lieu fee
required
7 to 20 Units or in-lieu
21+: Units required, in-
lieu not an option

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ANALYSIS:

To explore Pasadena’s recent development patterns, AECOM analyzed all residential development data for projects from December of 2019 (when the current IHO requirement became effective) through December 2023. There were a total of 14 completed projects within that time period. This produced 814 units, which included 386 affordable units.

Sub-Geographic Areas and Density Categories
AECOM considered if the inclusionary requirement could be increased selectively in specific sub-geographies in the city. To do this, AECOM sorted all the residential development data by specific plan area (SPA), transit-oriented development (TOD) area, and land use designations to gain insight into how development has related to these three geographical parameters.

The majority of the 14 completed projects are within an SPA (11 or 78%) or TOD (12 or 86%).

Since there is significant overlap between SPAs and TODs, most of the projects (9 or 64%) are within both. The SPAs and TODs represent well-defined geographic areas intended for residential growth.

To better analyze the housing market in the SPAs and TOD areas, as well as to inform land use designations with different densities, completed projects were further divided into three categories that broadly correspond with the City land use designations:
• High: 49-87 DU/AC;
• Medium: 33-48 DU/AC; and
• Low: 0-32 DU/AC.

A total of 10 projects (71%) were completed in the High-Density category, two (14%) in the Medium-Density category and one (7%) in the Low-Density category1.

The analysis concluded that defining sub-areas by density categories makes the most sense, since it produces a variation of housing projects with varying densities, use (multi-family, mixed- use) and costs (see page 13 of Attachment B for additional information). Most recent multifamily housing projects have been built in SPA and TOD areas, but those boundaries often overlap and are less useful for analysis than density-based categories.

Therefore, the prototypes created for proforma testing were based upon the patterns of development seen in the City’s recent historical and current development pipeline to establish courtyard and podium style buildings in the three density categories noted above.

Development Typologies and Prototypes
Based on recent residential development, AECOM developed two typologies to inform the creation of two prototypes for testing: a low-rise courtyard style building and a mid-rise podium building. For each typology, assumptions were set related to unit mix, size, and parking.

Additional information on the prototypes and assumptions used can be found in Attachment B, page 33. The prototypes were tested under three levels of housing density: Low, Medium, and High against various combinations of affordable housing set-asides and density bonuses.

1 13 out of 14 completed projects were sorted into density categories as one SRO-only project is designated in the GP as Low Commercial and does not have a DU/AC classification.

Economic Development and Technology Committee September 16, 2025 Inclusionary Feasibility Analysis

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Feasibility Analysis

Numerous scenarios with different density bonus assumptions, affordability levels, and affordability requirements are part of the testing. A subset of the results of the testing can be found on Tables 2 and 3. The testing also included high-level assumptions and potential future changes of up to 10% in both home prices (rent and sales) and construction costs and concluded that the outcomes would generally be the same. However, it is noted in the analysis that a standalone 10% construction cost increase yielded almost all scenarios infeasible, whereas a standalone 10% rent/home price increase yielded positive and generally feasible results. For the full increased price and construction cost results please see page 43 of Attachment B, and for the full feasibility results, please see page 67 of Attachment B.

For-Rent Feasibility Testing
Scenarios were tested which increased the required inclusionary requirement in two ways:

1. Increasing the share of higher affordability units (e.g., a higher proportion of VLI to LI); and

2. Increasing the overall percentage of affordable units (e.g., from 20% to greater than 20%). A mixed-use scenario was tested in the for-rent scenarios as the market typically dictates mixed-use rental units and not ownership.

The scenario testing shows that no scenarios are fully feasible with a 25% affordability requirement. To come closest to feasibility, a high percentage of density bonus must be applied.

This suggests that only larger projects with sufficient density can support a 25% affordability requirement, which will limit the viability of lower density housing types.

Table 2- For Rent Increased Affordability Scenario Feasibility Results Density Bonus and
% Affordable
Housing Only Project Mixed Use Project
Courtyard
(Low)
Courtyard-
Smaller
Units
(Medium)
Podium
(High) Courtyard
(High)
Podium
(High)
25% Affordable & No Bonus:
(Scenario 2-AR)
Very Low 5%
Low 10%
Moderate 10%
Not Feasible Feasible Not
Feasible

Feasible Not
Feasible
25% Affordable & 28% Bonus:
(Scenario 7-R)
Very Low 5%
Low 10%
Moderate 10%
Not Feasible Feasible Feasible Feasible Not
Feasible
25% Affordable & 89% Bonus:
(Scenario 6-R)
Very Low 15%
Low 0%
Moderate 10%
Feasible Feasible Feasible Not
Feasible Feasible
25% Affordable & 35% Bonus:
(Scenario 9-R)
Very Low 10%
Low 10%
Moderate 5%
Not Feasible Feasible Not
Feasible
Not
Feasible Feasible
Economic Development and Technology Committee September 16, 2025 Inclusionary Feasibility Analysis

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For-Sale Feasibility Testing
The analysis indicates that all for-sale scenarios are feasible with a 25% affordability requirement when all the units are provided at moderate prices. The moderate requirement is set at 25% because although developers have the option to provide a lower affordability, the moderate level provides the most return and is the minimum they must provide.

Table 3 - For Sale Increased Affordability Scenario Feasibility Results Density Bonus and
% Affordable
Courtyard
(Low)
Courtyard-
Smaller Units
(Medium)
Podium
(High)
25% Affordable & 0% Bonus:
(Scenario 2-AS)
Moderate 25%
Feasible Feasible Feasible
25% Affordable & 20% Bonus:
(Scenario 1-S)
Moderate 25%
Feasible Feasible Feasible

Developer Interviews
In November and December of 2023, City staff carried out several interviews with affordable housing and market rate developers to gain qualitative information and insights into the current environment in the housing market. Some general insights include:

• Costs to development have risen consistently over the past years, and current development conditions are not ideal. High rent and sales prices are a key reason that inclusionary housing can work in Pasadena, but as costs go up and rent/price stabilizes, there are risks. Unrestricted market units drive the ability to provide affordable housing. • Now is not the time to raise the inclusionary housing requirement given the high costs of construction and high interest rates/inflation. The market cycle will eventually turn, and the policy should reconsider raises when the time is right. • Pasadena has many desirable locations and there are good opportunities for development throughout the City, which must be balanced with a variety of housing types that are needed.

Overall, the interviews found that developers felt imposing higher/additional set-aside requirements may deter the production of both affordable and market-rate units.

Feasibility Analysis Conclusion

Based on the feasibility testing and results, AECOM recommends either maintaining the current ordinance until market conditions change, or only a modest increase in affordable housing requirements (additional 5% or shift from MI to LI) for only the highest density areas. The current development pipeline indicates demand for additional residential units, but recent production has stalled due to elevated costs and risks for development.

With all aspects of the analysis considered, Staff’s conclusion is that there is insufficient evidence to support an increased set-aside requirement. While an increase may result in additional affordable housing production from certain project types, there is potential for secondary impacts (e.g. larger, higher density bonuses, pushing housing outside specific plan and TOD areas). Also, the current uncertain economic climate increases the potential to have a negative impact on housing production.

Economic Development and Technology Committee September 16, 2025 Inclusionary Feasibility Analysis

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ALTERNATIVES:

Nationally, California has more state mandates for inclusionary housing and density bonus law than other states. Similarly, when comparing inclusionary incentives and programmatic features, Pasadena already provides many different options, leaving few new additional options. Staff considered several alternative opportunities to increase affordable housing that do not include increasing the mandatory set-aside amount. These options are preliminary concepts, and many would need additional analysis to determine feasibility. The alternative opportunities are listed below.

Strategies Inspired by Peer Cities
Pasadena can consider implementing changes based on policies other cities have adopted.

This includes:

• Lower unit threshold:
o The threshold could be lowered from the current 10-unit requirement to be subject to the inclusionary requirements to a lower number such as five (which is the minimum for Density Bonus eligibility). This would potentially result in a greater number of small residential projects being required to include affordable units or pay an in-lieu fee. Options could be to provide one unit for projects of 5-9 units or pay a lower in-lieu fee.
▪ Between 2019 and 2025, six projects consisting of 5-9 units were completed, for a total of 38 units. An additional five projects with 33 units in total are currently under review.
▪ Requiring one inclusionary unit for each of the six completed projects as well as the five projects in review would have resulted in 11 additional affordable units.
• Increase deed restriction in for-sale housing from 45 years to in perpetuity. o Since its inception in 2001, the inclusionary ordinance has resulted in 96 affordable for-sale units consisting of 50 moderate income, 38 low income, and 8 very low-income units. These units are deed restricted for 45 years.

Strategies Implementing Housing Element Program #12: Financial Assistance Objective The City’s Housing Element includes an implementation objective to identify the most effective means available to generate funds locally to support the construction of affordable housing.

Specifically, it emphasizes exploring the following options:
• Establish residential property vacancy tax:
o The tax would charge a fee for any residential units left vacant for a set length of time (exemptions can be determined for renovations, hospitalizations, etc.). • Establish real estate transaction fee:
o The fee would be for all real estate transactions and funds generated would be specifically directed towards the acquisition/production of affordable housing units.
• Establish a commercial development linkage fee:
o The purpose of the fee would be to mitigate the impacts of an increase in affordable housing demand from new worker households associated with new commercial development. Fees would be charged based on connection between the development of commercial projects by type (hotel, retail/restaurants/ services, office/R&D/medical office) and the demand for affordable housing units.

Economic Development and Technology Committee September 16, 2025 Inclusionary Feasibility Analysis

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Incentives
For projects that provide more affordable housing, above the 20% requirement, additional incentives could be provided including:
• Offer fee reductions:
o Inclusionary projects currently get a reduction in residential impact fees (Attachment E). Additional fee reductions could be offered, providing lower development costs for qualifying projects. Fees to study may include, but not limited to, residential impact, plan check, and permit processing fees. • Offer expedited permitting:
o An expedited review could be implemented offering accelerated permitting.

Expedited permitting is shown to offset developer cost.

Additional Compliance Options
Currently, in addition to building required inclusionary units, developers may alternatively pay an in-lieu fee, construct off-site units, or make a land donation to the City for the construction of inclusionary units. However, some cities provide additional compliance options that Pasadena could consider implementing to enhance the flexibility of its IHO, including:

• Option to convert existing off-site market-rate units to affordable units. • Option to extend the term of affordability of existing affordable units expiring within 3-5 years.

Apply Inclusionary Requirement to Total Units (Resulting from Density Bonus) The inclusionary requirement is calculated on the base density allowed. Any additional units gained through a density bonus are not included in this calculation. There has been discussion about including bonus units in the inclusionary requirements. For example, if the base number of units of a project was 100 and they received a 20% bonus, the inclusionary requirements would be calculated from 120 units (instead of 100 units). However, this approach is not allowed under state law. In April 2025, the State Attorney General clarified that applying inclusionary requirements to bonus units is not permitted, as it would conflict with the state’s formula for awarding density bonuses based on affordable units.

Workforce Housing
Across the State, there is no universal definition of “workforce housing”, although it typically falls in a range from 80 to 150% of Area Median Income (AMI). AMI is calculated on an annual basis by the U.S. Department of Housing and Urban Development (HUD) and represents the midpoint income for households in specific geographic areas. The 2025 AMI for Los Angeles County for a family of four is $106,600. (See Attachment D for AMI income limits). Workforce housing is sometimes referred to as middle-income housing which can help to distinguish it from the moderate category and uses more precise language than “workforce”.

In Pasadena, a residential impact fee (RIF) rebate is provided for “workforce housing” units between 121 to 180% of AMI. The amount of rebate given is defined in Pasadena Municipal Code Section 4.17.050.F: The current RIF is calculated by number of bedrooms in a project and ranges from $23,113 for a studio to $42,783 for 5 or more bedrooms. There is already a reduction given for inclusionary units and non-affordable units if affordable housing is built on site (See Attachment E for RIF details).

• If a new residential development project offers 15% of its units as workforce housing for rent or sale within the price range of 121 to 150% of AMI, the workforce housing units Economic Development and Technology Committee September 16, 2025 Inclusionary Feasibility Analysis

Page 9 of 9 ends

shall receive a 50% rebate on the RIF, after proving to the city's satisfaction that the workforce housing units are occupied by qualified individuals. • If a new residential development project offers 15% of its units as workforce housing for rent or sale within the price range of 151 to 180% of AMI, the workforce housing units shall receive a 35% rebate on the RIF, after proving to the city's satisfaction that the workforce housing units are occupied by qualified individuals.

Unless a developer is receiving a RIF workforce housing rebate, which requires a 15-year recorded covenant, there is no City oversight involved. The following are ideas for consideration that may incentivize the creation of additional workforce housing. Per State law, when creating incentives for workforce housing, incentives cannot compete with the incentives of State Density Bonus or make workforce housing more advantageous to provide than lower-income housing.

• Provide larger RIF rebate for workforce units:
o The rebate discussed above could be increased to a 75% (for 121 to 150% of AMI units) and 50% (for 151 to 180% of AMI units) rebate on the RIF to provide additional incentive.
• Exempt workforce units from inclusionary requirement:
o For example, if a project has 100 units and 20 of them are proposed to be workforce units, then the number of units used to calculate inclusionary units or in-lieu fee payments would be based 80 units.

CONCLUSION:

AECOM’s feasibility analysis provides valuable insights into the potential impacts of increased inclusionary housing requirements in the City. The analysis indicates that while projects in high- density areas remain feasible with an increased set-aside of 25%, increasing affordability requirements could have adverse effects on overall housing production, particularly in low- density and rental developments as well as the potential for development patterns to shift out of Specific Plan Areas and Transit-Oriented districts. Given the current market conditions and the challenges posed by elevated development costs and risks, the recommendation is to maintain the existing inclusionary housing requirement of 20% and look to other changes to increase the production of affordable units.

This report presents a range of potential alternative strategies that may enhance the production of affordable and workforce housing. These alternatives, while promising, will require further analysis and refinement to determine their feasibility, effectiveness and alignment with the City’s housing goals. As part of the City’s broader strategy, these alternatives may offer valuable opportunities for future exploration and should be carefully evaluated to strike the right balance between increasing affordability and sustaining housing production.

NEXT STEPS:

Receive EdTech’s recommendation and direction.

Attachments: (5)
Attachment A: Current Inclusionary Housing Ordinance
Attachment B: AECOM Feasibility Analysis
Attachment C: 6th Cycle Regional Housing Needs Allocation Attachment D: AMI Income Limits
Attachment E: Residential Impact Fee
Introduced by: Cbuncilmember McAustin
ORDINANCE NO. 7353
AN ORDINANCE OF THE CITY 'OF PASADENA AMENDING SECTION 17.42.040 AND ADDING SECTION 17.43.055 TO TITLE 17 (ZONING CODE) OF THE

PASADENA MUNICIPAL CODE TO INCREASE THE MINIMUM INCLUSIONARY

HOUSING UNIT REQUIREMENT, ELIMINATE INCLUSIONARY TRADE-DOWN

CREDITS , AND ESTABLISH AN AFFORDABLE HOUSING CONCESSION MENU WHEREAS, in recent years , there have been considerable discussions throughout the State of California regarding the housing shortage , which is associated with rising housing costs and lack of affordable housing options ; and WHEREAS , the rising housing costs and lack of affordable housing options has led to a rise in homelessness in the region, including within the City of Pasadena; and WHEREAS, the passage of Assembly Bill 1505 re-confirmed the ability of local jurisdictions to establish and enforce inclusionary housing requirements to ensure the construction of affordable housing alongside the development of market-rate housing; and
WHEREAS, State density bonus law has established incentives and procedures for including affordable housing within market-rate residential developments in exchange for increased allowable density , concessions , incentives , and waivers; and WHEREAS, projects have taken advantage of concessions and incentives pursuant to State density bonus law resulting in buildings with heights and massing that in certain cases has been out of scale with the context of existing neighborhood

ATTACHMENT A
character; and
WHEREAS, existing local inclusionary unit trade-down credit provisions have been used in conjunction with State density bonus law resulting in a lesser overall number of affordable housing units being produced; and
WHEREAS, it is the intent of the City Council to incentivize the construction of both market-rate and affordable housing in such a way that is consistent with the neighborhood scale that is anticipated in the City's General Plan; and WHEREAS, a market and financial feasibility analysis based on widely-accepted methodology has demonstrated that inclusionary requirements can be raised without making residential development financially infeasible , provided that various development incentives are offered to offset the additional cost of such inclusionary requirements; and
WHEREAS , the creation of an affordable housing concession menu is the mechanism through which these development incentives will be available to developers in exchange for providing a higher rate of inclusionary housing; and WHEREAS, the proposed ordinance is consistent with the General Plan Goals and Policies related to housing choices , development that is compatible , adequate and affordable housing, equitable distribution of affordable housing, new residential deve lopment, neighborhood character , housing diversity , housing incentives , entitlement process improvements , and inclusionary housing.

NOW THEREFORE, the People of the City of Pasadena ordain as follows :
. SECTION 1. This ordinance , due to its length and corresponding cost of publication , will be published by title and summary as permitted in Section 508 of the Pasadena City Charter. The approved summary of this ordinance is as follows:
"Summary
This proposed ordinance amends section 17.42.040 and adds section 17.43.055 .to Title 17 (Zoning Code) of the Pasadena Municipal Code to raise the inclusionary housing unit requirements , eliminate the trade down unit credit provisions , and ·establish ran affordable housing concession menu. The proposed ordinance raises the inclusionary housing unit requirement from 15% to 20% for all residential and mixed-use projects with 1 0 or more units, eliminates trade-down provisions that currently allow a lesser total number of units in exchange for units of deeper affordability, and creates a menu of concessions that can be granted to density bonus projects by-right, provided that the project provides inclusionary units on-site and limits their request to two of the concessions on the established menu .

Ordinance No. 7353 shall take effect 30 days from its publication ." SECTION 2. Pasadena Municipal Code, Title 17, Article 4, Chapter 17.42, Section 17.42.040, INCLUSIONARY UNIT REQUIREMENTS is amended as shown in Exhibit 1, attached hereto and incorporated by reference .

SECTION 3. Pasadena Municipal Code, Title 17, Article 4, Chapter 17.43, Section 17.43.055 , AFFORDABLE HOUSING CONCESSION MENU is added as shown in Exhibit 2, attached hereto and incorporated by this reference.

SECTION 4. The City Clerk shall certify the adoption of this ordinance and shall cause this ordinance to be published by title and summary .

SECTION 5. This ordinance shall take effect 30 days from its publication.

Signed and approved this 4th day of November ' 2019.

I HJ=REBY CERTIFY that the foregoing ordinance was adopted by the City Council of the City of Pasadena at its meeting held this 4th day of November 2019, by the following vote:

AYES: Councilmembers Gordo, Kennedy, Madison, Masuda, McAustin, Wilson, Vice Mayor Hampton, Mayor Tornek
NOES: None
ABSENT: None
ABSTAIN: None
Date Published: November 7, 2019
City Clerk
Approved as to form:
~-==-~
Theresa E. Fuentes
Assistant City Attorney

17.42.040- lnclusionary Unit Requirements
A. Minimum number of units required. A minimum of 20 percent of the total number of dwelling units in a residential project shall be developed, offered to, and sold or rented to households of very low, low, and moderate-income , at an affordable housing cost, as follows .

1. Units for sale. If the project consists of units for sale, a minimum of 20 percent of the total number of units in the project shall be sold to very low, low, or moderate-income households .

2. Rental units. If the residentia l project consists of rental units, a minimum of five percent of the units shall be rented to very low-income households , five percent of the units shall be rented to very low or low income households , and 10 percent of the units shall be. rented to very low, low, or moderate-income households .

B. Rounding of quantities in calculations. In calculating the required number of inclusionary units, fractional units of 0.75 or above shall be rounded-up to a whole unit if the residential project consists of 10 to 20 units; and fractional units of 0.50 or above shall be rounded-up to a whole unit if the project consists of 21 or more units. Notwithstanding the foregoing , the minimum requirement for any project shall not be less than one unit for very low, low or moderate-income househo lds and one unit for very low or low-income households .

Exhibit 2

17.43.055- Affordable Housing Concession Menu
A. Eligibility. An applicant who utilizes the density bonus provisions of this chapter and complies with the following shall not be subject to the application requirements , procedures, or findings set forth in Section

17.43.050- Concessions and Other Incentives:

1. The project complies with the minimum number of inclusionary units set forth in Section 17.42.040(A) by providing the units on-site; and

2. The applicant does not request any concession or incentive except for those specified within the affordable housing concession menu in this section.

B. Concession Menu. An eligible applicant shall be entitled to utilize no more than two of the following concessions:

1. Height. Increase in maximum allowable height of each building by up to 12 feet beyond otherwise applicable standard over no more than 60% of the proposed footprint of the respective building . This concession shall not be applicable to any other development standards relating to building scale and massing , including but not limited to, encroachment plane and view corridor preservation standards .
a. Height averaging. In areas where height averaging is allowed , the project may utilize either the height inprease in this concession , or the applicable height averaging standards , but not both. The additional height allowed under this
concession shall apply to the average height, and not the maximum height indicated in the height averaging standards .

2. Floor area ratio. Increase in maximum allowable floor area ratio by up to 0.5 beyond otherwise applicable standard. This increase shall apply to the floor area ratio itself , and not the resulting allowable gross floor area, as shown in the following examples :
a. Examples. For zones with a maximum floor area ratio of

1.5, this concession shall allow a floor area ratio of up to 2.0.

For zones with a maximum floor area ratio of up to 2.25, this concession shall allow a floor area ratio of up to 2.75.

3. Setbacks. Reduction of side or rear setback requirements by up to 50% from otherwise applicable standards . This concession applies Exhibit 2
only to setbacks from property lines, and shall not be applicable to setbacks from required gardens or any development standards relating to building separation, including but not limited to light and air separation .
a. Exceptions.

1. This concession shall not apply to any setback that is adjacent to any RS Zoning District or a Historic
Resource .

2. Setback reductions pursuant to this concession shall not result in the removal of a protected tree, nor shall they exempt a project from meeting the requirements
of Chapter 8.52- City Trees and Tree Protect ion
Ordinance .

4. Loading. Exempt ion from any of the requirements set forth in Section 17.46 .260- Number, Location , and Design of Off-Street Loading Spaces.

5. Parking. Reduction of the minimum number of off-street automobile parking space requiremen ts by up to 50% below otherwise applicable standards , provided that the project site is located within . the Central District Transit Oriented Development area (Figure 3-5), or any portion of the project site is located within a one-half mile radius of any Metro Gold Line Station , with the exception of the Sierr:a Madre Villa Station. The 50% reduction shall be in addition to any other applicable parking reduction, including but not limited to those included in Section 17.43.090- Alternative Parking Standards and Section 17.50 .340- Transit-Oriented Development (TOO).

Ordinance Fact Sheet
TO: CITY COUNCIL DATE: October 28, 2019
FROM: CITY ATTOR NEY
SUBJECT: ORDINANCE AMENDING THE ZONING CODE RELATED TO

INCLUSIONARY HOUSING AND AFFORDABLE HOUSING

CONCESSION MENU
·.

TITLE OF PROPOSED ORDINANCE
AN ORDINANCE OF THE CITY OF PASADENA AMENDING SECTION 17.42.040 AND ADDING SECTION 17.43.050 TO TITLE 17 (ZONING CODE) OF THE

PASADENA MUNICIPAL CODE TO INCREASE THE MINIMUM INCLUSIONARY

HOUSING UNIT REQUIREMENT , ELIMINATE INCLUSIONARY TRADE-DOWN

CREDITS, AND ESTABLISH AN AFFORDABLE HOUSING CONCESSION MENU

PURPOSE OF ORDINANCE
This ordinance will amend the Zoning Code to achieve the multiple goals of the City of increasing affordable housing production and minimize impacts resulting from density bonus concessions without unduly constraining the production of housing overall.

REASON WHY LEGISLATION IS NEEDED
This legislation is necessary to increase the production of affordable housing and also provide process streamlining options for developers building density bonus projects, and in turn will lead to projects that are more consistent with the scale and character of surrounding neighborhoods.
11/04/201 9
MEETING OF TOf2B/20+9=
AGENDA ITEM NO. -i-6 10

PROGRAMS , DEPARTMENTS OR GROUPS AFFECTED
The Planning & Community Development Department will implement the proposed ordinance.

FISCAL IMPACT
There will be no fiscal impact from this ordinance . As a separate matter , this ordinance was considered in conjunction with a proposal' to increase the inclusionary housing in lieu fee, which was approved on August 19, 2019.

ENVIRONM ENTAL DETERMINATION
On August 19, 2019, the City Council found that that these Zoning Code Amendments are exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 15305 (Class 5- Minor Alterations to Land Use Limitations) and that there are no features that distinguish this project from others in the exempt class, there are no unusual circumstances, and none of the exceptions to the exemptions apply.

Prepared by:

Theresa E. Fuentes
Assistant City Attorney
Concurred by:
~
Respectfully submitted ,
Michele Seal Bagner"
City Attorney
Introduced by: Cpuncilmembe r McAustin
ORDINANCE NO. 7353
AN ORDINANCE OF THE CITY OF PASADENA AMENDING SECTION 17.42.040 AND ADDING SECTION 17.43.055 TO TITLE 17 (ZONING CODE) OF THE

PASADENA MUNICIPAL CODE TO INCREASE THE MINIMUM INCLUSIONARY

HOUSING UNIT REQUIREMENT, ELIMINATE INCLUSIONARY TRADE-DOWN

CREDITS, AND ESTABLISH AN AFFORDABLE HOUSING CONCESSION MENU The People of the City of Pasadena ordain as follows:

SECTION 1. This ordinance , due to its length and corresponding cost of publicat ion, will be published by title and summary as permitted in Section 508 of the Pasadena City Charter. The approved summary of this ordinance is as follows:
"Summary
This proposed ordinance amends section 17.42.040 and adds section 17.43.055 to Title 17 (Zoning Code) of the Pasadena Municipal Code to raise the inclusionary housing unit requirements , eliminate the trade down unit credit provisions, and establish an affordable housing concessio n menu . The proposed ordinance raises the inclusionary housing unit requirement from 15% to 20% for all residential and mixed-use projects with 1 0 or more units, eliminates trade-down provisions that currently allow a lesser total number of units in exchange for units of deeper affordability, and creates a menu of concessions that can be granted to density bonus projects by-right, provided that the project provides inclusionary units on-site and limits their request to two of the concessions on the established menu .

Ordinance No. 7 3 53 shall take effect 30 days from its publication ." SECTION 2. The City Clerk shall certify the adoption of this ordinance and shall cause this ordinance to be published by title and summary.

SECTION 3. This ordinance shall take effect 30 days from its publication .

Signed and approved this · 4th day of November , 2019.

I HEREBY CERTIFY that the foregoing ordinance was adopted by the City Council of the City of Pasadena at its meeting held this 4th day of November 2019, by the following vote:

AYES : Councilmembers Gordo, Kennedy, Madison, Masuda, McAustin, Wilson, Vice Mayor Hampton, Mayor Tornek
NOES: None
ABSENT: None
ABSTAIN : None
Date Published: November 7, 2019
Approved as to form:
""2. ---~-
Theresa E. Fuentes
Assistant City Attorney

SEE ADOPTED
ORDINANCE NO. 7353
Introduced by: __________ _
ORDINANCE NO. __ _
AN ORDINANCE OF THE CITY OF PASADENA AMENDING CTION 17.42.040 AND ADDING SECTION 17.43.050 TO TITLE 17 (ZONING DE) OF THE PASADENA MUNICIPAL CODE TO INCREASE THE Ml UM INCLUSIONARY

HOUSING UNIT REQUIREMENT, ELIMINATE INCLUS NARY TRADE-DOWN CREDITS, AND ESTABLISH AN AFFORDABLE HO lNG CONCESSION MENU WHEREAS, in recent years, there have bee considerable discussions throughout the State of California regarding th ousing shortage, which is associated with rising housing costs and lack of afford le housing options; and WHEREAS , the rising housing c ts and lack of affordable housing options has led to a rise in homelessness in th egion, including within the City of Pasadena; and WHEREAS, the passag of Assembly Bill 1505 re-confirmed the ability of local jurisdictions to establish an enforce inclusionary housing requirements to ensure the housing alongside the development of market-rate housing; and
, State density bonus law has established incentives and procedures for includin affordable housing within market-rate residential developments in for increased allowable density, concessions, incentives, and waivers; and WHEREAS, projects have taken advantage of concessions and incentives ursuant to State density bonus law resulting in buildings with heights and massing that f
in certain cases has been out of scale with the context of existing neighborhood character; and
WHEREAS, existing local inclusionary unit trade-down credit been used in conjunction with State density bonus law resulting · a lesser overall number of affordable housing units being produced; and
WHEREAS, it is the intent of the City Council to i
both market-rate and affordable housing in such a w that is consistent with the neighborhood scale that is anticipated in the Cit ' General Plan; and WHEREAS, a market and financial fe ibility analysis based on widely-accepted methodology has demonstrated that incl ionary requirements can be raised without making residential development tina ially infeasible, provided that various development incentives are offer: t:l to offset the additional cost of such inclusionary requirements ; and
WHEREAS, the c ation of an affordable housing concession menu is the ich these development incentives will be available to developers in exchange for oviding a higher rate of inclusionary housing; and AS, the proposed ordinance is consistent with the General Plan Goals and Poli · s related to housing choices , development that is compatible, adequate and affor ~ ble housing, equitable distribution of affordable housing, new residential velopment , neighborhood character , housing diversity, housing incentives , entitlement process improvements , and inclusionary housing.

NOW THEREFORE, the People of the City of Pasadena ordain as follows :

SECTION 1. This ordinance, due to its length and corresponding co of publication, will be published by title and summary as permitted in Secti Pasadena City Charter. The approved summary of this ordinance i "Summary
This proposed ordinance amends section 17.42.040 d adds section 17.43.055 to Title 17 (Zoning Code) of the Pasadena Municipal Co to raise the inclusionary housing unit requirements, eliminate the trade down nit credit provisions, and establish an affordable housing concession menu. The pr osed ordinance raises the inclusionary housing unit requirement from Yo to 20% for all residential and mixed-use projects with 10 or more units, eliminate rade-down provisions that currently allow a lesser total number of units in excha e for units of deeper affordability, and creates a menu of concessions that can b granted to density bonus projects by-right, provided that the project provides incl ionary units on-site and limits their request to two of the ___ shall take effect 30 days from its publication."
. Pasadena Municipal Code, Title 17, Article 4, Chapter 17.42, Section 17.4 .040, INCLUSIONARY UNIT REQUIREMENTS is amended as shown in Exhibit 1 attached hereto and incorporated by reference.

SECTION 3. Pasadena Municipal Code, Title 17, Article 4, Chapter 17.43, Section 17.43.055, AFFORDABLE HOUSING CONCESSION MENU is added as shown in Exhibit 2, attached hereto and incorporated by this reference.

SECTION 4. The City Clerk shall certify the adoption of this ordinance a· cause this ordinance to be published by title and summary .

SECTION 5. This ordinance shall take effect 30 days from its pu Signed and approved this. _ __ day of _ ____ --~'
I HEREBY CERTIFY that the foregoing ordinance as adopted by the City Council of the City of Pasadena at its meeting held this _,_ _ _ day of ______ 2019 , by the following vote:

AYES :

NOES :

ABSENT:

ABSTAIN :

Date Published :

There E. Fuentes
Assis ant City Attorney
Mark Jomsky
City Clerk

17.42.040 -lnclusionary Unit Requirements
A. Minimum number of units required. A minimum of .:t-&20 percent of the total number of dwelling units in a residential project shall be developed , offered to, and sold or rented. to households of very low, low ..... and moderate-income , at a affordable housing cost, as follows .

1. Units for sale. If the project consists of units for sale, a minimu .:t-&20 percent of the total number of units in the project shall be old to very low. low,_or moderate-income households .

2. Rental units. If the residential project consists of rental minimum of five ercent of the units shall be rented to low-income households, 4-Gfive percent of the units shall be rent to very low or low-income households ..... and fi¥81 0 percent of the its shall be rented to very low, low ..... or moderate-income household
income units are pro'lided in lieu of required moderate income units, the project shall recei'le a credit of tv.~o units for each unit actually pro'lided .

3. Low income units in lieu of moEieFate income units. If low income units are provided in lieu of required moderate income units, the project shall receive a credit of 1.5 units for each unit actually provided. s . ...g.,_Rounding of quantities in calculations. In calculating the required nu of inclusionary units, fractional units of 0.75 or above shall be rounded- to a whole unit if the residential project consists of 10 to 20 units; and fra onal units of 0.50 or above shall be rounded-up to a whole unit if the pro· ct consists of 21 or more units. Notwithstandin the fore oin the re uirement for an ro·ect shall not be less than one unit for v households.

Strikethrough language removed
Underlined language adde
Exhibit 2

17.43.055- Affordable Housing Concession Menu

1. section.

Floor area ratio. Increase in maximum allowable floor area ratio by up to 0.5 beyond otherwise applicable standard . This increase shall apply to the floor area ratio itself . and not the resulting allowable gross floor area. as shown in the following examples :
a. Examples. For zones with a maximum floor area ratio of

1.5. this concession shall allow a floor area ratio of up to 2.0.

For zones with a maximum floor area ratio of up to 2.25. this concession shall allow a floor area ratio of up to 2.75.

3. Setbacks. Reduction of side or rear setback requirements by up to 50% from otherwise applicable standards . This concession applies Exhibit 2 - Page 1
#OJ14NF FZOEXS30v1
a. Exceptions.

1. 2.

4. Loadin . Exem tion from an
Section 17.46.260 - Number
Loading Spaces.

Exhibit 2 - Page 2
#OJ14NFFZOEXS30v1
Underlined language added
Exhibit 2

CORRESPONDENCE
(1 0/28/19 CITY COUNCIL MEETING)
To: Pasadena Mayor and City Council
From: Sean McMorris, San Gabriel, CA
Re: Item #18 on Pasadena City Council Agenda 10/28/2019

RECEIVED
2019 OCT 28 Af1fl: 58

CITY CLERK

CITY OF PASADENA
I am writing to thank City Hall for voting to raise the inclusionary housing thresho ld to 20%. The Council's courage to do so sends a strong message to surrounding cities that it's time to stop playing politics with housing and get serious with bold actions that will actually ensure more affordable housing now rather than simply hoping and waiting for a broken housing market to take care of itself.

I, along with others in the community, hope that City Hall will continue to improve upon its lnclusionary Housing Ordinance (IHO). There are other things that City Hall can do to increase affordable housing stock in Pasadena and protect low-income renters . I ask that the City Council direct staff to research the following policies:

1. Allow trade-downs for family units, which would greatly aid low-income families.

2. Lower the IHO qualifying threshold to include housing developments with 8 or more units and require projects with 3-7 units to pay an in-lieu fee.

3. Raise the minimum set-aside threshold to above 20%, which analysis suggests is possible with the current incentives offered to developers.

4. Establish a Community Land Trust to ensure that the City's IHO is administered properly for maximum effectiveness and benefit to low-income households.

Thank you again for your thoughtfulness and commitment to addressing the affordable housing crisis.

Your actions set a good precedent for the region, and your courage to act boldly in the face of pressure from moneyed interests gives us hope that democracy can rise above the forces that would have it kowtow it to monetary and selfish ends.

Sincerely,
Sean McMorris,
Community Member and Affordab le Housing Advocate
10/28/2019
Item 18
October 271\ 2019
MakiBI
Heuslna&
CemmunhJ
Happen

RECEIVED
2019 OCT 28 PH 3: 3 I

CITY CLERK

CITY OF PASADENA
Pasadena City Council and
Planning Staff
£d"c.•ttna a nd Emp:owerlnl
Concrec .auons for Ho"•'"' Juat lce
Jill Shook
Co-Founder
MHCH Executive Director
Pasadena,CA
Anthony Manousos
Co-Founder
Peace Activist
Pasadena, CA
Robert Baird
Chair
Urban Planner
Los Angeles , CA
Andre White
Treasurer
Affordable Housing Adv isor
Pasadena,CA
Margaret Lee
Secretary
Social Work Profe sso r
Pasadena .CA
Jerome L. Garclano
Lawyer
Boston . MA
Deborah Meyers
Pastor
Denver . CO
Dear Pasadena City Council and Planning Department,
We're writing to thank you for voting to increase the set-asides of affordable units in the lnclusionary Zoning Ordinance up to 20%. This is a huge boon for the affordability and livability of the city of Pasadena and should be commended .

However , the work isn't done yet. The IZO can continue to be finessed to make sure it's working optimally for everyone in the city. Councilmember Margaret McAustin had a series of suggest ions that we support and have encouraged the Planning Department to continue researching . They include:

1. Lowering the threshold of applicable developments below the current rate of 10. We recommend including any new building with 8 or more units in the full inclusionary policy and requiring buildings with 3-7 units to pay an in-lieu fee. This is not a novel idea. Currently 58 other cities within California have inclusionary policies with a lower threshold than 10 units for rental.

2. Pushing the set-aside amount closer to and above 25%. According to the analysis of the AECOM study done by Phil Burns , of the Arroyo Group , this is already feasible for developers with the current incentives. We recommend extending the menu, so that each additional incentive comes with a higher percentage of set-aside units.

3. Establish a Community Land Trust to administer the affordable units in the IZO. This has a series of benefits . One of the most pertinent is that it would allow other cities in the region (which may not have Housing Departments) to put their own affordable units under the care of the CL T and make them all permanently affordable. It also provides a single-entry point for applying for the IZ affordable units, providing a service for developers to partner with the CL T to help manage qualifying tenants with their income qualificat ions and monitoring the units.

Irvine has already implemented a similar , and successful , system .

4. Lastly, allow trade-downs for family units, specifically 3-or-more-bedroom units. Families often struggle to afford housing in California , and this could help make sure there are options for them .

We ask the City Counc il to support Councilmember McAustin's above suggestions as well as the following :
• Add a scalable free for developments from 3-8 units in size or one affordable unit. • End the over-concent ration policy.

Please direct the Planning Department to study the suggestions and report back with recommended implementat ion steps before the next reading of the ordinance.

Thank you for your time and your commitment to making Pasadena affordable.

Signed GPAHG and POP, pittS~ and Ed Washatka
POP!

PASADENANS

ORGANIZING

FOR PROGRE SS
Office / Text : (626) 675 • 1316 Jlll@mak lnghouslnghappen.com 1628 Garfield Ave. Pasadena , CA 91104 Web site: maklnghou sl nghappen .org
Don ate Online: https :/ /maklngho uslnghappen .wedl d.lt/ Send checks made out to ·social Good Fund" with " Making Housing and Community Happen· In memo line to: Social Good Fund , PO Box 5473 , Richmond, CA 94805-4021 10/28/2019
Item 18

EXECUTIVE COMMITTEE
Derek Leavitt , Modotive, Inc.

President
Barry Altshuler, Equity Residential
Vice President
Neils Cotter, Carmel Partners
Vice President
Derek Fraychineaud, C/M Group
Vice President
Larry Hoffman, Fossberg Contracting Corporation
Vice President
Ken Kahan, California Landmark
Vice President
Dave litt le, Pardee Homes
Vice President
Greg McWilliams, FivePaint
Vice President
Monica Mejia, LINC Housing
Vice President
Frank Su, Toll Brothers
Vice President
Tom Warren, Holland Partners.

Vice President
Henrik Nazarian, D & D Engineering, Inc.

Secretary, Treasurer
Kevin Harbiso n, Shea Homes
Immed iate Past-President

BOARD OF DIRECTQRS
Rocco Cordola, Gothic Landscape
Donna Oeutchman, Homes 4 Families
George Dickerson, All Promotions ftc.

Richard Dunbar, Oakridge Landscape, Inc.

Tommy Ec,kes, Richmond American Homes
Joseph Fillippelli, Wells Forgo
Mike Frasco, BioClean Environmental Services
Amy Freilich, Armbruster Goldsmith & Delvoc UP
Laurel Gillette, KTGY Architecture +Planning, Inc.

Ellen Golla, DB Companies
Peter Gutierrez, Latham & Watkins
Andy Henderson, The Henderson Low Firm
Marc Huffman, Brookfield Residential
Krysti Irving, Landscape Development, Inc.

Karl Mallick, David Evans & Associates,
Bill McReynolds, Wormington Group
Greg Medeiros, Tejon Ranch Company
Monica Mejia, LINC Housing
Eileen Merino, CDS Insurance
Greg McWilliams, Five Point
Brian Murtaugh, Loan Depot
John Musella, The Musella Group
Rogelio Navar, Fifteen Group
Adam Ochs, Reylenn
Scott Ouellette, Williams Homes
Erik pfahler, Borstein Enterprises
Harriet Rapista, Comstock Homes
Darrell Simien, Hobitot tor Humanity of Greater LA
Sara Soudani, Commonwealth Title Insurance
Harriet Rapista, Comstock Homes
Alyssa Trebil, Duct Testers, Inc.

Brett Trebil, Watt Communities
Rich Villaseftor, KB Home
Christine Villegas, Chelsea Investment Corp
Rick White , Lorrobure Framing
Loa Angeleslllentura Chaj)ler
November 1, 2019
Office of the Mayor and City Council
Pasadena City Hall
100 North Garfield Avenue, Room S228
Pasadena, CA 91101-7215
' ,.r • • ! · ~ .·.
'2019 NOV -4 ,AH 19: 140 ..
'

CITY CLERK

CITY OF PASADENA
Re: OPPOSE- ZONING CODE AMENDMENTS RELATING TO INCLUSIONARY HOUSING AND AFFORDABLE CONCESSION MENU AND ADJUSTMENTS TO INCLUSIONARY IN

LIEU FEE RATES
Honorable Mayor and City Council,
The Los Angeles/Ventura Chapter of the Building Industry AssoCiation of Southern California, Inc. (BIA) represents more than 1,100 companies employing over 100,000 people all affiliated with housing production . We are disappointed that the final draft proposed inclusionary zoning ordinance was passed without consideration of our suggested changes. The ordinance, as written , stands to reduce housing production , vio lates the City's Regional Housing Needs Assessment allocations, and intentionally violates the Housing Accountability Act .

Despite our urging, the City has not yet analyzed and fully disclosed the impacts of the proposed actions to housing production in the City or completed the legally required analysis and public commen t process requi red by the California Environmental Quality _Act (CEQA). This includes preparation of an Environmental Impact Report (EIR), prior to voting on the proposed actions within the ordinance. Below, we have outlined our unaddre ssed concerns which have remained in the ordinance:

Remaining Concerns:
l.lnclusionary Percentage: According to the City commissioned June 19, 2019 AECOM Study, it showed that a 20% inclusionary requirement is infeasible for all project types.

The study states that it is likely that this policy would result in the reduction of both the number and nature of dwelling units within the City. However, despite this cautioning, the 20% inclusionary percentage has been implemented in the City's curren t ordinance.

2. Impl ementation Timeline: As previously shared, if the City were to adopt a mandated inclusionary zoning policy and implement it immediate ly, this drastic change would negatively affect the market. Any policy that is adopted should be done so gradually, as a phased-in approach , over several years. This would ensure that there are no 350 South Bixel Street I Suite 100 I Los Angeles, CA 900171 Tel213.797.5994l www.bialav.onz .... ______ --·- .. "The Voice of Building and Development" ' 11/04/2019
' Item 10
Los AngelesNentura Chapter
disruptions to the current building progress. Unfortunately, the inclusionary zoning ordinance directs the effective date for 30 days from passage.

3. Grandfather Clause: We asked the City to develop a robust grandfathering clause for projects in the pipeline, however it appears that nothing has been done to protect projects already making their way through the production process. Homebuilders who have invested in the City before an unforeseen City-imposed policy in land value occurred should not be subject to an ordinance that would so drastically affect their ability to produce housing.

4. For-Sale Housing: The continued application of the inclusionary ordinance to for-sale housing is not financially feasible for homebuilders. A 2016 Study by Capitol Matrix found that a potential 15% inclusionary zoning mandate on for-sale housing would require an average increase of $67,000 dollars per market-priced unit. The costs to make for-sale housing financially feasible is added into the market rate units in order for builders to get the return on their investment needed for the financing of the project. This expense perpetuates the unattainability of homeownership for middle income earners by adding to the cost of homeownership, furthering the "missing middle" housing gap for those making just above moderate income. To make matters more challenging, the suggested incentives that could be offered by governing bodies, such as the ones in this ordinance, do not as easily apply to for-sale homes due to the lack of offsets that could make a substantial financial impact to a non-multifamily or non-infill project. As an example, the City of Glendale recognized these concerns and drafted their recently adopted inclusionary ordinance to exclude for-sale housing.

We encourage you to reconsider how expanding your City's inclusionary requirements will affect the production of affordable units within Pasadena. This inclusionary housing change could not only lead to less housing, but also less affordable housing- the opposite of what an inclusionary policy seeks to accomplish. Should you have any questions, please contact BIA-LAV Director of Government Affairs, Diana Coronado, at {213) 797-5965 or at [email protected].

Sincerely,
Tim Piasky
Chief Executive Officer
BIA-Los Angeles/Ventura
CC:

California Department of Housir;"~g and Community Development 350 South Bixel Street I Suite 100 I Los Angeles, CA 900171 Tel 213.797.5994 1 www.bialav.org "The Voice of Building and Development"
..1

THEPASADENA JOURNAL NEWS
1541 N. LAKE AVE., SUITE A
PASADENA, CA 91104
(626)798-3972

PROOF OF PUBLICATION
(2025.5 C.C.P.)
This space is for Clerk's filing Stamp
ORDINANCE NO. 7353

STATE OF CALIFORNIA
County of Los Angeles
I am a citizen of the United States and a resident
of the printer of the Pasadena Journal, a newspaper
of general circulation printed and published weekly
in the city of Pasadena, County of Los Angeles and
which newspaper has been adjudged a newspaper of
general circulation by the Superior Court of the County of Los Angeles, State of California, under the date of
April16, 1991, Case Number C013336, that the notice
of which is annexed is a printed copy (set in type not
smaller than nonpareil) has been published in each
regular and entire issue of said newspaper and not in any supplement thereof on the following dated to-wit
November 5, 2019.

I certify and declare under penalty perjury that the
Foregoing is true and correct.

Signature
Amber Hudson

PROOF OF PUBLICATION
[see attached]
IntrQducedby: ~\Ulcilmember McAustin
ORDINANCE NO. 7353

AN ORDINANCE OF THE

CITY OF PASADENA AMENDING
SECTION 17.42.040 AND ADDING
SECTION 17.43.055 TO TITLE
17 (ZONING CODE) . OF- THE

PASADENA MUNICIPAL CODE
'TO INCREASE THE MINIMUM.

INCLUSIONARY HOUSING UNIT

REQUIREMENT, ELIMINATE

INCLUSIONARY TRADE-DOWN

CREDITS, AND ESTABLISH
AN AFFORDABLE HOUSiNG
CONCESSION MENU . . .\
I
I
. The PebpleoftheCity ofPasadena ,
ordain -as foDows: ·, . • • I
I
SECTION 1. This crdiNnoc, due to its~
endccm:spon<tingccotofpublication, will bepublisbed
by tide endsmuna<Y aspenniitedin Section SOB of the
Pasadena City. Charter. The 8plifoved ·summary oftbis
I
. I
oo!ininoe is as follows' ·
I
This prOJ>O$ed ordi~ ~· Section .,.

17.42.040 end adds·secJ>.Oil 17.43 o.s.s to. Tide 1'7 • ~ Code) of the l'Wdem Mur)icipai,'.Colle to. \ nise the iliciUSionary housing unit 'requirements.· eliminate the trade ciOtom unit credit provisiOn$. ·end · establisli ail alrcrdable hOO$ing concession tiienu.':tbe . prq>OSCdOidinancenisestheinclusionaryho)isqo,llit
reqwcmentli: . om1.S%.to 20 % foraUresicje:nlial.end.

Jlixed.use projects witM O· ilr'mor:e units, eliminates . ~-~QnS :that ~Y all~ a ·lesser
• ; !'&lmmary
, ~ lUilber oC\uj~ in excbangC'fcr wils Of de.eper .
• e110rdability,andcrcatesamcnuoCconcessionstbal!"'l'
· begranled,tl>densit)lbmus~by-ril!J>t;proVided
tbat the poject provi<le$ inclusionary units oi>-site end limitS their request to two of the COIICO$Sions on the
estaWsli<d menu. . .

Ordinance No:-7353 sball talce effect 30 days
from its puliieation. • · · . · · ·
SECTION·l. The City Clerk sball certify the
adoplionofthisordirianceendsball c8use tbii~dinan<>e
to be published by till~ and sunmary.: ;:' : .
. SECTION 3. 'Ibis ordinance slw!' talce etrect
30 daYs from its publicaiion. ' . -
Sipedandopprovedthi.s4thdiayofNovember,
2019.

TeayTomek
Mayor of tile City of Pasadena
I HEREBY CERI'IFY that the foregoing
ordinance was adopted by the Cityeooncil of the City
of'Pasadenaatitsmeetingbeldthis4thdayoCNovember
2019, by the folio~ vote: •
AYES: C<lUncilmembersGordo,Kennedy,
Madisro, Masuda, McAustin, WJ!son,
Vice Mayor Hampton, Mayor Tomek
NOES: None
ABSENT: None
ABSTAIN:. None
M..XIomsky
Cily.Cierl<
Olte Publillhcd:Novcmbcr 7.2.019
Paadeo:. Jou:mal
AFFP
Introduced by: ouncilmember Me
Proof of Publication
(2015.5 C.C.P .)

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES
I am a citizen of the United States and a resident of the County aforesaid ; I am over the age of eighteen years, and not a party to or interested in the above entitled
matter. I am the principal clerk of the printer of the
Pasadena Weekly, a newspaper of general circulation,
printed and ·published weekly in the City of Pasadena,
County of Los Angeles , and which newspaper has been
adjudged a newspaper of general circulation by the
Superior Court of the County of Los Angeles, State of
California, under the date of February 19, 1988, Case
Number C 655 062; that the notice, of which the annexed is a printed copy (set in type no smaller than nonpareil), has published in each regular and entire issue of said
newspaper and not been in any supplement thereof on the following dates, to wit:

November 07, 2019
I certify (or declare) under penalty of perjury that the foregoing is true and correct.

Dated at Pasadena , California
This 7th day of November 201~
~
Ann Turrietta , Legal Clerk, Los Angeles County, California 00004996 00025712
Ruben Martinez
City of Pasadena - City Clerk's Office
100 N:Garfield Avenue, Room S228
Pasadena , CA 91109

PASADENA WEEKLY
50 S. De Lacey Ave., Suite 200
Pasadena, CA 91105
Introduced by:
<;:ouncilmember McAustin
ORDINANCE NO. 7353
AN ORDINANCE OF THE CITY OF PASADENA AMENDING SECTION 17.42.040 AND ADDING SECTION 17.43.055 TO TITLE 17 (ZONING CODE) OF THE

PASADENA MUNICIPAL CODE TO INCREASE THE MINIMUM INGLUSIONARY

HOUSING UNIT REQUIREMENT, ELIMINATE INCLUSIONARY TRADE-DOWN

CREDITS, AND ESTABLISH AN AFFORDABLE HOUSING CONCESSION MENU The People of the City of Pasadena ordain as follows:

SECTION 1. This ordinance, due to its length and corresponding cost of publication , will be published by title and summary as permitted in Section 508 of the Pasadena City Charter. The approved summary of this ordinance is as follows:
"Summary
This proposed ordinance amends section 17.42.040 and adds section 17.43.055 to Title 17 (Zoning Code) of the Pasadena Municipal Code to raise the inclusionary housing unit requirements, eliminate the trade down unit credit provisions, and' establish an affordable housing concession menu. The proposed ordinance raises the inclusionary housing unit requirement from 15% to 20% for all residential and mixed-use projects with 10 or more units, eliminates trade-down provisions that currently allow a lesser total number of units in exchange for units of deeper affordability , and creates a menu of concessions that can be granted to density bonus projects by-right, provided that the project provides inclusionary units on-site and limits their request to two of the concessions on the established menu.

Ordinance No. 7353 shall take effect 30 days from its publication ." SECTION 2. The City Clerk shall certify the adoption of this ordinance and shall cause this ordinance to be published by title and summary.

SECTION 3. This ordinance shall take effect 30 days from its publication .

Signed and approved this 4th day of November, 2019.

Terry Tomek
Mayor of the City of Pasadena
I HEREBY CERTIFY that the foregoing ordinance was adopted by the City Council of
the City of Pasadena at its meeting held this 4th day of November 2019, by the following vote:

AYES: Councilmembers Gordo, Kennedy, Madison, Masuda , McAustin , Wilson, Vice Mayor Hampton, Mayor Tomek
NOES: None
ABSENT: None
ABSTAIN: None
Date Published: November 7, 2019
Pasadena Weekly
Mark Jomsky
City Clerk
Pasadena Inclusionary
Housing Ordinance Update
Feasibility Analysis
June 2025

ATTACHMENT B
Pasadena Inclusionary Housing Ordinace

2 AECOM

Prepared for:

Prepared by:

AECOM
One California Plaza
300 South Grand Avenue
Los Angeles, CA 90071

T: +1 (213) 593 8100
F: +1 (213) 593 8178
aecom.com

Copyright © 2025 by AECOM
All rights reserved. No part of this copyrighted work may be reproduced, distributed, or transmitted in any form or by any means without the prior written permission of AECOM.

Pasadena Inclusionary Housing Ordinace

3 AECOM

T able of Contents

1. Executive Summary .............................................................................................. 5

2. Introduction ........................................................................................................... 6 Overview ........................................................................................................................................................................ 6 Organization ................................................................................................................................................................... 6

3. Policy Context ....................................................................................................... 6 RHNA Allocation ............................................................................................................................................................. 7 Housing Element ............................................................................................................................................................ 7 Specific Plans................................................................................................................................................................. 8 State Density Bonus Law ............................................................................................................................................... 8 Pasadena Inclusionary Housing Ordinance ................................................................................................................. 10

4. Market Context ....................................................................................................11 Recent Development Patterns ..................................................................................................................................... 11 Projects by Transit-Oriented Development Areas......................................................................................................... 13 Projects by Specific Plan Areas ................................................................................................................................... 16 Projects by Land Use ................................................................................................................................................... 19 Projects by Density Cohort ........................................................................................................................................... 22 Affordable Unit Production ........................................................................................................................................... 25 Summary and Implications ........................................................................................................................................... 26 Recommendation ......................................................................................................................................................... 27

5. Interviews ........................................................................................................... 27

6. Model and Prototype Development .................................................................... 28 Methodology................................................................................................................................................................. 28 Proforma Feasibility Analysis ....................................................................................................................................... 28 Standard of Feasibility .................................................................................................................................................. 28 Geographical Areas ...................................................................................................................................................... 28 Land Costs ................................................................................................................................................................... 29 Scenarios ..................................................................................................................................................................... 30 Calculation of Set-Aside ............................................................................................................................................... 31 Model Assumptions ...................................................................................................................................................... 32 Typologies Tested ........................................................................................................................................................ 32 Parking ......................................................................................................................................................................... 34 Cost Assumptions ........................................................................................................................................................ 34 Revenue Assumptions ................................................................................................................................................. 34

7. Feasibility Analysis ............................................................................................. 39 Conclusions ................................................................................................................................................................. 45 Appendix A Proforma Models ........................................................................................ 47 Appendix B Fee Schedule ............................................................................................. 66 Appendix C Detailed Feasibility Results Tables ............................................................ 67 Appendix D Recent Development Details ..................................................................... 71

Pasadena Inclusionary Housing Ordinace

4 AECOM

Figures
Figure 1. Completed and Pipeline Multifamily Projects Since 2019 and TOD Areas ................................................... 14 Figure 2. Completed (since 2019) and Pipeline Multifamily Projects and TOD Areas ................................................. 14 Figure 3. Units by TOD Area ......................................................................................................................................... 15 Figure 4. Projects and SPA Areas ................................................................................................................................ 16 Figure 5. Projects by SPA Area .................................................................................................................................... 17 Figure 6. Units by SPA Area ......................................................................................................................................... 17 Figure 7. Units by SPA .................................................................................................................................................. 18 Figure 8. Completed (since 2019) and Pipeline Multifamily Projects by Land Use Designation (Residential Only) .... 19 Figure 9. Recent (since 2019) and Pipeline Multifamily Projects by Land Use Designation (Commercial Only) ......... 20 Figure 10: Recent (since 2019) and Pipeline Multifamily Projects by General Plan Land Use Designation ................ 21 Figure 11: Recent (since 2019) and Pipeline Multifamily Units by General Plan Land Use Designation ...................... 22 Figure 12. Recent (since 2019) and Pipeline Multifamily Projects by Density Category ............................................. 23 Figure 13. Recent (since 2019) and Pipeline Multifamily Units by Density Category .................................................. 23 Figure 14. Affordable Unit Production, Completed and Pipeline Since 2019 .............................................................. 25 Figure 15. Affordable Units by Income Category ........................................................................................................ 26 Figure 16. Map of Density Cohorts ............................................................................................................................... 29 Figure 17: Residential Typologies ................................................................................................................................ 32

T ables
T able 1. Sixth Cycle RNHA Requirements for Pasadena: 2021-2029 ............................................................................ 7 T able 2. State Density Bonus Law Standard Schedule.................................................................................................. 9 T able 3. Application of AB 1287 Density Bonus Schedule .......................................................................................... 10 Table 4. Pasadena and Peer Jurisdiction Residential Unit Production 2019-2023 ....................................................... 12 Table 5. Inclusionary Housing Requirements of Peer Jurisdictions .............................................................................. 12 Table 6. Pasadena Residential Project Pipeline by Project Status as of January 2024................................................ 13 Table 7. Average and Median As Rents by TOD/Non-TOD Area (Whole City) ............................................................. 15 Table 8. Asking Rents by TOD/Non-TOD Area (MF Projects Since 2010) .................................................................... 16 Table 9. Asking Rents by SPA/Non-SPA Area (Whole City) .......................................................................................... 18 Table 10. Asking Rents by SPA/Non-SPA Area (MF Since 2010) ................................................................................. 19 Table 11. Asking Rents by Density Tier (Whole City) .................................................................................................... 24 Table 12. Asking Rents by Density Tier (Recent Projects) ........................................................................................... 25 Table 13. Market Land Cost Assumptions .................................................................................................................... 30 Table 14. For-Rent Set-Aside Scenarios Tested ........................................................................................................... 31 Table 15. For-Sale Set-Aside Scenarios Tested ........................................................................................................... 31 Table 16. Key Typology and Assumptions: For Sale .................................................................................................... 33 Table 17: Typologies and Assumptions: For Rent ........................................................................................................ 33 Table 18. Market Rent Assumptions ............................................................................................................................. 35 Table 19. Market Sale Assumptions ............................................................................................................................. 35 Table 20. Affordable Rent Assumptions ........................................................................................................................ 36 T able 21. Affordable Sale Assumptions ....................................................................................................................... 37 Table 22: Proforma Feasibility Testing Results ............................................................................................................. 39 Table 23: Feasibility Results: Construction Cost Increase ............................................................................................ 41 Table 24: Feasibility Results: Rent/Price Increase ....................................................................................................... 42 Table 25: Feasibility Results: Rent/Price and Construction Costs Increases ............................................................... 43 Table 26: Additional Sensitivity Tests ............................................................................................................................ 44 Pasadena Inclusionary Housing Ordinance
5 AECOM

1. Executive Summary
The City of Pasadena (“The City”) engaged AECOM to prepare an analysis that explores the opportunity to increase the mandatory affordable housing set-aside requirement for new projects.

The current mandated minimum is a 20% affordable set-aside for all projects with 10 residential units or more. For rental projects, this 20% must consist, at minimum, of 5% of units covenanted for Very Low Income (VLI) households plus 5% for Low Income (LI) plus 10% for Moderate Income (MI). For for-sale projects, 20% of units must be set aside for Moderate Income households.

This study is intended to assess market support and financial feasibility to increase the minimum set-aside requirement or expand the set-aside proportion allocated to lower levels of income. This increase could apply to the level of affordability (e.g., increasing the minimum VLI portion of the total set-aside to 10% from 5%), to the level of total set-aside (e.g., from 20% to 25%), and potentially to selected sub-geographies in the city.

AECOM carried out a market analysis to highlight recent residential and mixed-use development trends in the City and develop representative prototypical projects and inputs into pro forma models that test the financial feasibility of a series of potential inclusionary set-aside requirements.

• Recent development has occurred throughout the City in low, medium, and high density land use designations. This indicates that there is a market for various residential prototypes. Market conditions and incentives are supporting residential products at a range of densities.

• For the feasibility testing, development in the City was categorized into Low, Medium, and High Densities, and prototypes were developed for 3 for-sale products and 5 for-rent products for final feasibility testing ranging in size from 28 to 165 units.
• Proforma feasibility testing yielded generally positive results for modest increases in affordable housing set-asides for the highest density prototypes. While projects in the highest density land use designations are generally feasible, the additional burden does not work in low density developments, especially for for- rent products. An updated IHO could have different requirements for projects in the areas of the City where high-density projects are allowable and feasible, but this could also deter investment in these high growth areas that have driven recent housing construction. The more significant increases were infeasible for both for-rent and for-sale typologies at all densities. • Increased requirements are likely to negatively impact development disproportionately in areas zoned for lower density or areas with lower market value relative to the City average. • The feasibility of current for-rent projects is highly contingent on the utilization of a density bonus, without which most projects will not clear financial hurdles. Raising the affordability requirement will necessitate the maximization of density bonuses, which may not be in line with residents’ preferences. • AECOM recommends either the maintenance of the current ordinance until market conditions change, or a modest increase in affordable housing requirements (additional 5% or shift from MI to LI) for the highest density areas. The current development pipeline indicates demand, but recent production has stalled due to elevated costs and risks for development.

Pasadena Inclusionary Housing Ordinace

6 AECOM

2. Introduction
Overview
The City has long prioritized production of affordable housing. The City was an early champion of inclusionary housing, and its Inclusionary Housing Ordinance (IHO), which was first adopted in 2001 and most recently updated in 2019, has supported production of over 500 units of affordable housing and collection of over $20 million in in- lieu fees.

Despite these production gains, affordability remains a critical issue as the market has priced housing beyond the reach of many Pasadena residents. The city’s 6th cycle RHNA allocation is for 9,429 units, of which 29% is for Extremely Low (less than 30% of Area Median Income (AMI) or Very-Low (less than 50% AMI) Income households and 18% is for Low Income households (less than 80% AMI). Consequently, the City continues to seek new resources and strategies for the provision of affordable housing.

While the current policy is applied equally city-wide, the in-lieu fee option, which allows project applicants to comply by paying a fee instead building affordable units on site, follows a schedule with fees differentiated by eight sub-areas (four for-rent, four for-sale) as well as by project size. At the city’s direction, the in-lieu fee sub-areas are not considered by this analysis.

One potential option available to the city is to raise the mandatory affordable set-aside percentage for new projects to a level above the current 20% requirement. T o be effective, the higher set-aside requirement would need to result in an increase in affordable housing production without having a negative impact on housing production in general. The increase could be applicable city-wide or in select sub-geographies (for example, in a selection of the City’s Specific Planning Areas).

Organization
This report is organized as follows:

1. Introduction. Project introduction and goals.

2. Policy Context. A review of state and municipal plans and documents that provide the legal and regulatory environment that informs how IHO is applied.

3. Market Assessment. A review of housing market performance in Pasadena from 2019, when the last update to the IHO was adopted. The Market assessment provides a basis for defining market area sub- geographies.

4. Interviews. A summary of key qualitative takeaways from the stakeholder engagement processes.

5. Prototype and Model Development. A discussion of key inputs and assumptions used in the analytical model.

6. Feasibility Analysis. T echnical analysis to determine market support for potential updates to the city IHO.

7. Summary. A summary of findings and implications.

8. Appendix. A technical appendix with backing analysis.

3. Policy Context
Since being adopted initially in 2001, Pasadena’s Inclusionary Housing Ordinance (IHO) has played an important role in supporting the City’s housing policy goals. The IHO functions within a policy context that includes the state Regional Housing Needs Assessment (RHNA), the city’s Housing Element and Specific Plans, and the State Density Pasadena Inclusionary Housing Ordinace

7 AECOM

Bonus Law. These policies set housing development goals, provide guidelines for how housing can be developed, and offer incentives to encourage production of both market-rate and affordable housing. The influence of these policies on IHO is briefly discussed below.

RHNA Allocation
Pasadena must abide by California’s Regional Housing Needs Assessment (RHNA) process, which allocates housing targets to local jurisdictions. For the 2021-2029 period, Pasadena’s RHNA allocation is 9,429 residential units, which reflects a large increase over the 1,332 units allocated for the 2021 to 2029 planning period.

The RHNA allocation breaks down into four affordability tiers, as follows.

Table 1. Sixth Cycle RNHA Requirements for Pasadena: 2021-2029

Source: Housing Element, City of Pasadena

T o meet the RHNA goal, Pasadena must produce an average of 1,179 units per year. For context, from late 2019 when the IHO was updated to late 2023, 814 units of housing was produced, a rate of little over 200 units per year or 17% of the required RHNA rate. This total includes all housing units developed in the City, including both those in developments subject to the IHO and those in in smaller developments. Even if the city’s pipeline of 28 projects and 2,005 units reaches the market over the next four years, the average rate of approximately 500 units per year is less than half required by the RNHA allocation. Pasadena must find ways to increase the rate of production if it is to meet the RHNA goals.

Housing Element
The City of Pasadena Housing Element was adopted in 2022 and covers the period from 2021 through 2029.

Several Housing Element initiatives provide guidelines for consideration by the IHO Feasibility Analysis. • Policy HE 2.2: Strategic Growth, specifies that new residential development should be directed into the “Central District, transit villages, neighborhood villages, and along key corridors-neighborhoods where people can live and work, shop, and benefit from access to a rail and bus.” Thus, for the IHO to support the strategic growth goal, it should prioritize residential development in the Central District and transit-adjacent areas.

• Policy HE 2.4: Affordable Housing facilitates a mix of household income and affordability levels in residential projects citywide, with an emphasis on ensuring integration of affordable housing into every neighborhood.

• Policy HE 2.6: Housing Incentives, stipulates that development of affordable housing should be “through regulatory concessions, financial assistance, density bonuses, the inclusionary housing program, and other City and outside agency programs.” This goal reminds that IHO is one of several tools that promote affordable housing. While IHO is an important contributor, it should not be counted as the only resource for encouraging affordable housing production.

• Policy HE 2.7: Missing Middle, addresses the growing need for “missing middle” housing – rental and ownership homes affordable to the moderate income workforce.

Affordability Tier RHNA Units %
Very Low Income 2,747 29%
Low Income 1,662 18%
Moderate Income 1,565 17%
Above Moderate Income 3,455 37%
Total 9,429 100%
Pasadena Inclusionary Housing Ordinace

8 AECOM

• Policy HE 2.10: Overconcentration of Affordable Housing, stipulates that affordable housing should be distributed throughout the city to “avoid overconcentration of affordable units.” From this, it can be surmised that the goals of focusing affordable housing growth in the Central District and transit areas, as articulated in HE 2.2, should be carefully balanced against the potential for overconcentration.

Specific Plans
Pasadena’s eight Specific Plans implement the goals of the General Plan by guiding and focusing growth. The city intends that most future residential growth should occur within Specific Plan areas. T o achieve this goal, the Specific Plans increase allowable development density as well as allow residential uses on some sites that previously allowed only commercial uses. T o date, four Specific Plan updates have been adopted (The Lincoln Avenue Specific Plan in 2021, the East Colorado Boulevard Specific Plan in 2022, the South Fair Oaks Specific Plan in 2022, and the Central District Specific Plan in 2023) with the remaining four (East Pasadena Specific Plan, Fair Oaks/Orange Grove Specific Plan, Lamanda Park Specific Plan, North Lake Specific Plan) expected to be adopted during 2024 or 2025.

State Density Bonus Law
The California State Density Bonus Law (SDBL)1, which was originally enacted in 1979, supports development of affordable housing in California jurisdictions by providing developer applicants bonus density and other incentives in exchange for the provision of covenanted affordable units. The available incentives are scheduled with density bonuses that increase with percentage of affordable units provided and the level of affordability.

Chapter 17.43 of the Pasadena Municipal Code implements the State Density Bonus Law. However, the section has not been updated to reflect the latest amendments to state law, and where Municipal Code and State Law conflict, State Law supersedes local law. Thus, the analysis in this report follows guidelines laid out by state law.

The standard SDBL schedule provides Up to a 50% increase in project densities for mixed-income projects and an 80% increase for 100% affordable projects. (See T able 2 for standard SDBL schedule of incentives.)

1 California Government Code Sections 65915 – 65918
Pasadena Inclusionary Housing Ordinace

9 AECOM

Table 2. State Density Bonus Law Standard Schedule

Source: State of California, AECOM

In addition to the standard SDBL schedule shown above, Assembly Bill 1287, which went into effect in January 2024, allows additional density bonus for Very Low Income and Middle Income units by “stacking” additional bonus over the existing schedule. T o be eligible for this additional bonus, a project must set aside a base of either 15% of units as VLI, 24% LI, or 44% MI, which in either scenario qualifies the applicant for a 50% density bonus. Beyond that, the applicant can qualify for additional density bonus by providing additional affordable units according to the following formulas (so long as total set-aside does not exceed 50%):

• 5% of additional VLI Units qualifies for 20% of additional density bonus; each 1% increment of additional VLI qualifies for an additional 3.75% increment of density bonus up to a total of 10% additional VLI for 38.75% of additional density bonus.

State Density Bonus Law

VLI LI MI
5% 20.00% - -
6% 22.50% - -
7% 25.00% - -
8% 27.50% - -
9% 30.00% - -
10% 32.50% 20.00% 5.00%
11% 35.00% 21.50% 6.00%
12% 38.75% 23.00% 7.00%
13% 42.50% 24.50% 8.00%
14% 46.25% 26.00% 9.00%
15% 50.00% 27.50% 10.00%
16% - 29.00% 11.00%
17% - 30.50% 12.00%
18% - 32.00% 13.00%
19% - 33.50% 14.00%
20% - 35.00% 15.00%
21% - 38.75% 16.00%
22% - 42.50% 17.00%
23% - 46.25% 18.00%
24% - 50.00% 19.00%
25% - - 20.00%
30% - - 25.00%
35% - - 30.00%
40% - - 35.00%
41% - - 38.75%
42% - - 42.50%
43% - - 46.25%
44% - - 50.00%
Set-asides at 25% through 40% show n in 5% increments for concision Affordable
Set-Aside
Density Bonus
Pasadena Inclusionary Housing Ordinace

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• 5% of additional MI Units qualifies for 20% of additional density bonus; each 1% increment of additional MI qualifies for an additional 2.5% increment of density bonus up to a total of 15% additional MI for 50% of additional density bonus.

The table below illustrates how AB 1287 is applied to the SDBL schedule to provide additional density bonus.

Table 3. Application of AB 1287 Density Bonus Schedule

Source: State of California, AECOM
In addition to density bonuses available under the State Density Bonus Law, applicants are eligible to receive additional incentives, concessions, and waivers, which feature lowered minimum development standards such as for building height, setbacks, and parking.

Pasadena Inclusionary Housing Ordinance
The Pasadena Inclusionary Housing Ordinance (IHO) is a policy enacted by the city to promote production of affordable housing.2 Originally enacted in 2001 and substantially amended in 2019, IHO mandates that all residential projects with 10 or more units must set aside at least 20% of all units as affordable, as follows:

2The IHO can be found in Chapter 17.42 of the city’s Zoning Code.

AB 1287
VLI LI MI VLI MI Base Add'l Total

70.0% DB / 20.0% VLI Set-Aside 15.00% - - 5.00% - 20.00% 50.00% 20.00% 70.00%

73.75% DB / 21.0% VLI Set-Aside 15.00% - - 6.00% - 21.00% 50.00% 23.75% 73.75%

77.50% DB / 22.0% VLI Set-Aside 15.00% - - 7.00% - 22.00% 50.00% 27.50% 77.50%

81.25% DB / 23.0% VLI Set-Aside 15.00% - - 8.00% - 23.00% 50.00% 31.25% 81.25%

85.0% DB / 24.0% VLI Set-Aside 15.00% - - 9.00% - 24.00% 50.00% 35.00% 85.00%

88.75% DB / 25.0% VLI Set-Aside 15.00% - - 10.00% - 25.00% 50.00% 38.75% 88.75%

70.0% DB / 5.0% VLI / 24.0% LI Set-Aside - 24.00% - 5.00% - 29.00% 50.00% 20.00% 70.00%

73.75% DB / 6.0% VLI / 24.0% LI Set-Aside - 24.00% - 6.00% - 30.00% 50.00% 23.75% 73.75%

77.50% DB / 7.0% VLI / 24.0% LI Set-Aside - 24.00% - 7.00% - 31.00% 50.00% 27.50% 77.50%

81.25% DB / 8.0% VLI / 24.0% LI Set-Aside - 24.00% - 8.00% - 32.00% 50.00% 31.25% 81.25%

85.0% DB / 9.0% VLI / 24.0% LI Set-Aside - 24.00% - 9.00% - 33.00% 50.00% 35.00% 85.00%

88.75% DB / 10.0% VLI / 24.0% LI Set-Aside - 24.00% - 10.00% - 34.00% 50.00% 38.75% 88.75%

70.0% DB / 5.0% VLI / 44.0% MI Set-Aside - - 44.00% 5.00% - 49.00% 50.00% 20.00% 70.00%

73.75% DB / 6.0% VLI / 44.0% MI Set-Aside - - 44.00% 6.00% - 50.00% 50.00% 23.75% 73.75%

70.0% DB / 15.0% VLI / 5.0% MI Set-Aside 15.00% - - - 5.00% 20.00% 50.00% 20.00% 70.00%

72.50% DB / 15.0% VLI / 6.0% MI Set-Aside 15.00% - - - 6.00% 21.00% 50.00% 22.50% 72.50%

75.0% DB / 15.0% VLI / 7.0% MI Set-Aside 15.00% - - - 7.00% 22.00% 50.00% 25.00% 75.00%

77.50% DB / 15.0% VLI / 8.0% MI Set-Aside 15.00% - - - 8.00% 23.00% 50.00% 27.50% 77.50%

80.0% DB / 15.0% VLI / 9.0% MI Set-Aside 15.00% - - - 9.00% 24.00% 50.00% 30.00% 80.00%

82.50% DB / 15.0% VLI / 10.0% MI Set-Aside 15.00% - - - 10.00% 25.00% 50.00% 32.50% 82.50%

85.0% DB / 15.0% VLI / 11.0% MI Set-Aside 15.00% - - - 11.00% 26.00% 50.00% 35.00% 85.00%

88.75% DB / 15.0% VLI / 12.0% MI Set-Aside 15.00% - - - 12.00% 27.00% 50.00% 38.75% 88.75%

92.50% DB / 15.0% VLI / 13.0% MI Set-Aside 15.00% - - - 13.00% 28.00% 50.00% 42.50% 92.50%

96.25% DB / 15.0% VLI / 14.0% MI Set-Aside 15.00% - - - 14.00% 29.00% 50.00% 46.25% 96.25% 100.0% DB / 15.0% VLI / 15.0% MI Set-Aside 15.00% - - - 15.00% 30.00% 50.00% 50.00% 100.00%

70.0% DB / 24.0% LI / 5.0% MI Set-Aside - 24.00% - - 5.00% 29.00% 50.00% 20.00% 70.00%

72.50% DB / 24.0% LI / 6.0% MI Set-Aside - 24.00% - - 6.00% 30.00% 50.00% 22.50% 72.50%

75.0% DB / 24.0% LI / 7.0% MI Set-Aside - 24.00% - - 7.00% 31.00% 50.00% 25.00% 75.00%

77.50% DB / 24.0% LI / 8.0% MI Set-Aside - 24.00% - - 8.00% 32.00% 50.00% 27.50% 77.50%

80.0% DB / 24.0% LI / 9.0% MI Set-Aside - 24.00% - - 9.00% 33.00% 50.00% 30.00% 80.00%

82.50% DB / 24.0% LI / 10.0% MI Set-Aside - 24.00% - - 10.00% 34.00% 50.00% 32.50% 82.50%

85.0% DB / 24.0% LI / 11.0% MI Set-Aside - 24.00% - - 11.00% 35.00% 50.00% 35.00% 85.00%

88.75% DB / 24.0% LI / 12.0% MI Set-Aside - 24.00% - - 12.00% 36.00% 50.00% 38.75% 88.75%

92.50% DB / 24.0% LI / 13.0% MI Set-Aside - 24.00% - - 13.00% 37.00% 50.00% 42.50% 92.50%

96.25% DB / 24.0% LI / 14.0% MI Set-Aside - 24.00% - - 14.00% 38.00% 50.00% 46.25% 96.25% 100.0% DB / 24.0% LI / 15.0% MI Set-Aside - 24.00% - - 15.00% 39.00% 50.00% 50.00% 100.00%

70.0% DB / 49.0% MI Set-Aside - - 44.00% - 5.00% 49.00% 50.00% 20.00% 70.00%

72.50% DB / 50.0% MI Set-Aside - - 44.00% - 6.00% 50.00% 50.00% 22.50% 72.50% Add'l Set-Aside % Total Set-
Aside %
Density BonusScenario Base Set-Aside %
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• Rental units. Minimum of five percent as covenanted affordable for very low-income (VLI) households, five percent for very low-income (VLI) or low-income (LI) households, and 10 percent for very low-income (VLI), low-income (LI), or moderate-income (MI) households.

• Sale units. Minimum of 20 percent as covenanted affordable for very low-income (VLI), low-income (LI), or moderate-income (MI) households.

Units set aside as affordable under IHO are also eligible for bonuses and concessions provided by state law. For example, the minimum mandated set-aside requirement for a rental project with more than 9 units of 5% VLI, 5% LI, and 10% MI qualifies the project under state law for a 20% density bonus and up to two concessions (which can include a range of incentives such as lowered parking, reduction in setbacks, and increases in allowable height and FAR).

IHO also provides alternatives for compliance to providing affordable units on site including:
• Constructing affordable units offsite (unless the project displaces existing affordable units) • Land donation.
• Paying an in-lieu fee, based on a schedule updated annually.

4. Market Context
Chapter 3 assesses residential market production in Pasadena since 2019, when the Inclusionary Housing Ordinance was last updated. The goal of the assessment is to understand recent patterns of residential production, define the types of units and types of projects driving this production, and test different approaches for market sub-areas that may provide an organizational basis for the feasibility testing.

Recent Development Patterns
T o explore recent development patterns, AECOM analyzed residential development data for completed and pipeline projects. The 14 projects completed between December of 2019 and 2023 produced 814 units, which includes 666 units from inclusionary housing projects (386 of which were affordable units). As noted in the RHNA section above, this current rate of production falls short of what’s required to meet the RHNA allocation goal for all levels of housing affordability.

Pasadena’s housing inventory has grown slower relative to several peer jurisdictions, including the County of Los Angeles and the cities of Burbank, Long Beach, Los Angeles, and Santa Monica. However, Pasadena’s residential growth outpaced the cities of Glendale and West Hollywood. According to the US Census, Pasadena’s compound annual growth rate (CAGR) of 0.21% lagged the weighted average of these peer jurisdictions (0.55%), from 2019 to 20223. The slower growth of the City relative to several peer jurisdictions indicates that there are potential constraints to housing production. Nonetheless, there are several comparable jurisdictions that have also experienced sluggish growth in recent years, indicating the potential constraints are faced by the wider residential market. The housing unit estimates and growth rates are shown in Table 4.

While the historical trend does not necessarily predict the future, it does suggest that the conditions (market, regulatory, political) in Pasadena have not been as conducive to development as in other jurisdictions. This slower

3 ACS 5-year estimates, which are only available up to 2022 are generally considered more accurate than ACS 1-year estimates.

ACC 5-year estimates are also available for jurisdictions with fewer than 65,000 residents (West Hollywood). Both West Hollywood and Glendale recorded negative growth from 2019 to 2022, which might reflect demolition prior to redevelopment that had not yet occurred.

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growth rate of all housing units (both for-sale and for-rent, market rate and affordable products) should be considered when assessing the impact of greater inclusionary housing requirements and any changes to the IHO that could create additional impediments to development should be considered in light of these factors.

Table 4. Pasadena and Peer Jurisdiction Residential Unit Production 2019-2023 2019 2022 CAGR
City of Pasadena 61,572 61,956 0.21%
City of West Hollywood 25,537 25,477 -0.08%
City of Santa Monica 51,124 52,277 0.75%
City of Burbank 43,884 46,662 2.07%
City of Glendale 78,962 78,407 -0.23%
City of Long Beach 175,869 180,015 0.78%
City of Los Angeles 1,493,108 1,518,992 0.57%
County of Los Angeles 3,542,800 3,599,961 0.53%

Source: ACS 5-Year Estimates for 2019-2022

All the peer jurisdictions referenced in Table 4 have mandatory inclusionary housing programs except for the City of Los Angeles4. Set aside requirements may by percentage required, project size, or location within the jurisdiction. Table 5 shows the inclusionary set-aside requirements, both For Sale and For Rent of the peer jurisdiction set. Relative to the set-aside requirements of the City, the peer jurisdictions’ inclusionary housing programs have higher requirements (i.e. West Hollywood), lower requirements (i.e. Burbank), or formulas with flexibility but target set aside requirements and AMI averages (i.e. County of Los Angeles). While a high set-aside requirement can be an impediment to residential development, inclusionary housing programs are one of myriad factors that impact development feasibility and the growth rate of housing units in a given jurisdiction.

Table 5. Inclusionary Housing Requirements of Peer Jurisdictions

4 The City of Los Angeles has a linkage fee for all new residential development used to fund the construction and maintenance of affordable housing.

5 The City of Long Beach recently adopted an update to their program in 2025. The formula in this table represents the phased in requirement from 2027 onward
Inclusionary % Burbank Glendale Long Beach5 LA County Santa Monica West Hollywood For Rent
5% Very Low Income
or 10% Low Income
15% Low Income 3 Submarkets:
1) 12% Low Income
2) 6% Low Income and
6% Very Low Income
3) 4% Low Income and
8% Very Low Income
5-15 Units: 5% at 40%
AMI (avg.) or 7% at
65% AMI or 10% at
80% AMI.
>15 Units: 10% at
40% AMI (avg.) or 15%
at 65% AMI or 20% at
80% AMI
2-19 Units: 15% Low
Income
19+ Units: 15% Total
Units must be
Affordable, divided
evenly between Very
Low Income, Low
Income, and Moderate
Income
2-10 Units: 1 Unit Low
Income or Moderate
Income
11+ Units: 20% Low
Income or Moderate
Income
For Sale
15% Low Income or
Moderate Income
11% Low Income or
Moderate Income
10% of Total Project
Units 100% Moderate
Income
5-15 Units: At 135%
avg. AMI between 0%
and 10% depeding on
sub-area.
>15 Units: At 135%
avg. AMI between 5%
and 20% depeding on
sub-area.
2-19 Units: 15% Low
Income
19+ Units: 15% Total
Units must be
Affordable, divided
evenly between Very
Low Income, Low
Income, and Moderate
Income
2-10 Units: 1 Unit Low
Income or Moderate
Income
11+ Units: 20% Low
Income or Moderate
Income
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As of January 2024, there were 28 pipeline projects, representing a proposed 2,005 units in the pipeline at various stages of development. Collectively these projects represent a larger quantity of units than all development that occurred between 2019 and the end of 2023. T able 6 shows the proportion of these projects in four stages of development, with fully 63% that have been approved by the City.

Table 6. Pasadena Residential Project Pipeline by Project Status as of January 2024

Source: City of Pasadena, AECOM

While it’s likely the program for some of proposed pipeline projects may change before project completion, and some proposed projects may not be completed at all, all are considered by the market assessment to provide a broad perspective of market-driven aspirations and goals for residential development in the city.

For the analysis, AECOM sorted the project set by planning area, TOD Area, and Land Use Designation to gain insight into how development has related to different geographical parameters.

Projects by Transit-Oriented Development Areas
The section below describes project distribution by TOD area. There are two categories of TOD area used by the city:

1. Regional TOD areas included the quarter-mile radius around the city’s six A-Line light rail platforms.

2. Local TOD areas include the quarter-mile radius along the right of way for Foothill T ransit Express Bus Line 187.

As shown in Figure 1, nearly all recently completed and pipeline multifamily projects in Pasadena are in TOD areas.

Status Share
Application Incomplete 15%
Application Complete 7%
In Review 15%
Approved 63%
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Figure 1. Completed and Pipeline Multifamily Projects Since 2019 and TOD Areas

Source: City of Pasadena, AECOM
Specifically, as indicated by Figure 2, only two out 14 completed projects (14%) and one out of 28 pipeline projects (4%) are located outside TOD areas.

Figure 2. Completed (since 2019) and Pipeline Multifamily Projects and TOD Areas

Source: City of Pasadena, AECOM
TOD emphasis is also reflected on the unit basis, as shown in Figure 3. Out of 814 units completed since 2019, 696 units are in TOD areas (86%). Of the 2,005 pipeline units planned, 1,973 units (98% of total) are in TOD areas. This 2 10
0 21
18 5 4
0 2
4 6
8 10
12 14
16 18
20 Non TOD Both Regional and
Local TOD
Regional TOD Only Local TOD Only
Projects by TOD Area
Completed Projects Pipeline Projects
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15 AECOM

suggests that most (if not all) near- and mid-term multifamily residential development in Pasadena is likely to occur in TOD areas.

Figure 3. Units by TOD Area

Source: City of Pasadena, AECOM

Asking rents for existing multifamily projects differ minimally between TOD and Non-TOD areas, with average rents in TOD areas 1% higher than the city average and 4% higher than in Non-TOD areas, as shown in T able 7. The analysis of rent by geography (SPA, TOD, and Density) is based on the analysis of 301 market rate MFR developments with over five dwelling units for which there was sufficient data for rent and apartment square footage. As such, the data set is a sample of the total for-rent MFR in the City.

Table 7. Average and Median As Rents by TOD/Non-TOD Area (Whole City)

Source: CoStar, City of Pasadena, AECOM
For projects constructed since 2010, asking rents are much higher than the city average, with rents in the TOD areas 35% higher than the city average and 6% higher for projects in non-TOD areas, as shown in T able 8.5

5 Because the set of recently completed non-TOD projects totals 2 projects, these findings should be considered only as broadly indicative.
118
664
0 3232
1,118
392
463
0 200
400
600
800
1,000
1,200
Non TOD Both Regional and
Local TOD
Regional TOD Only Local TOD Only
Units by TOD Area
Completed Units Pipeline Units
Count Median Rent Average Rent
TOD 185 $2.61 $2.80
Non-TOD 116 $2.27 $2.71
Whole City1 301 $2.47 $2.77
(1) Whole city totals include data points unassigne dto any category MFR Rent per Square Foot by TOD/ Non-TOD (All Projects) Pasadena Inclusionary Housing Ordinace

16 AECOM

Table 8. Asking Rents by TOD/Non-TOD Area (MF Projects Since 2010)

Source: CoStar, City of Pasadena, AECOM
Projects by Specific Plan Areas
Most recent completed and proposed residential development has been conducted in the city’s Specific Plan areas. However, three of the SPAs (Lamanda Park, North Lake, and Lincoln Avenue) contribute no units, as shown on the map below.

Figure 4. Projects and SPA Areas

Source: City of Pasadena, AECOM

Of the 42 T otal projects in the set (14 completed, 28 pipeline), 31 occurred within SPAs (74%) and 11 Outside (26%). However, as shown on the map, all non-SPA projects are clustered near existing SPAs, which suggests that the marketable location and amenity benefits typical of SPAs extend beyond the actual SPA boundaries.

Count Median Rent Average Rent
TOD 9 $3.78 $3.73
Non-TOD 2 $3.52 $3.52
Whole City1 301 $2.47 $2.77
MFR Rent per Square Foot by TOD/ Non-TOD (Projects since 2010) (1) Whole city totals include data points unassigne dto any category

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Figure 5. Projects by SPA Area

Source: CoStar, City of Pasadena, AECOM

The 42 projects represent 2,819 T otal units (814 completed, 2,005 pipeline). Of these, 2,380 occurred within SPAs (84%) and 439 Outside (16%).

Figure 6. Units by SPA Area

Source: CoStar, City of Pasadena, AECOM
Unit distribution by SPA, as shown in Figure 7, indicates that among completed units, only the Central District (580 units for 83% of total) and Fair Oaks/Orange Grove (118 units for 17% of total) contributed new development. This pattern, particularly for the Central District, reflects its traditional role as the commercial heart of the city, providing amenities, employment, and a compact, walkable, and historical downtown area that isn’t equaled elsewhere in the city.

For the pipeline, Central District still dominates production with 1,139 units (68% of total), but projects in East Pasadena (281 units and 17% of total), East Colorado (186 units and 11% of total), and South Fair Oaks (76 units and 5% of total), expand participation by 3 additional SPAs. This diversification of location may be attributable to several factors, including Central District is quite built out; areas outside the Central District offer cheaper land; and 3 11
8 20
0 5
10 15
20 25
Outside SPA Within SPA
Projects by Specific Plan Area
Completed Projects Pipeline Projects
116
698
323
1,682
0 200
400
600
800
1,000
1,200
1,400
1,600
1,800
Outside SPA Within SPA
Units by Specific Plan Area
Completed Units Pipeline Units
Pasadena Inclusionary Housing Ordinace

18 AECOM

that the updated Specific Plan Areas (both adopted and soon to be adopted) have upzoned and re-zoned land on which multifamily uses were previously not permitted.

Figure 7. Units by SPA

Source: CoStar, City of Pasadena, AECOM

Between SPA and Non-SPA areas, asking rents for existing multifamily projects differ slightly, with average rents in SPA areas 5% higher than the city average and 8% higher than in Non-SPA areas, as shown in T able 9.

Table 9. Asking Rents by SPA/Non-SPA Area (Whole City)

Source: CoStar, City of Pasadena, AECOM
For recent projects constructed since 2010, asking rents are significantly higher than the city average, with rents in the SPA areas 38% higher than the city average and 2% higher than recent projects in non-SPA areas, as shown in T able 10.

580
0 0
118
0 0 0
1,139
186
281
0 0 0
76 0
200
400
600
800
1,000
1,200
Units by Specific Plan Area
Completed Projects Pipeline Projects
MFR Rent per Square Foot by SPA/Non-SPA (All Projects)
Count Median Rent Average Rent
SPA 113 $2.81 $2.91
Non-SPA 185 $2.38 $2.69
Whole City1 301 $2.47 $2.77
(1) Whole City totals include data points unassigned to any category Pasadena Inclusionary Housing Ordinace

19 AECOM

Table 10. Asking Rents by SPA/Non-SPA Area (MF Since 2010)

Source: CoStar, City of Pasadena, AECOM

Projects by Land Use
From a land use designation perspective, the project set includes projects in residential, mixed use, and commercial zones. The maps and table below show the project distribution by underlying residential and commercial zoning.

Figure 8. Completed (since 2019) and Pipeline Multifamily Projects by Land Use Designation (Residential Only)

Source: City of Pasadena, AECOM

MFR Rent per Square Foot by SPA/Non-SPA (Projects since 2010) Count Median Rent Average Rent
SPA 7 $3.84 $3.82
Non-SPA 3 $3.46 $3.73
Whole City1 301 $2.47 $2.77
(1) Whole City totals include data points unassigned to any category

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Figure 9. Recent (since 2019) and Pipeline Multifamily Projects by Land Use Designation (Commercial Only)

Source: City of Pasadena, AECOM

Pasadena Inclusionary Housing Ordinace

21 AECOM

As seen in Figure 10, most completed and pipeline projects occurred in mixed-use zones (including low, medium, and high mixed-use areas), with 11 completed (79% of total) and 19 proposed (68% of total).

Figure 10: Recent (since 2019) and Pipeline Multifamily Projects by General Plan Land Use Designation

Source: City of Pasadena, AECOM

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22 AECOM

On a unit basis, as shown in Figure 11, approximately 80% of completed and 80% of proposed units are in mixed- use zones (including low, medium, and high mixed-use areas).

Figure 11: Recent (since 2019) and Pipeline Multifamily Units by General Plan Land Use Designation

Source: City of Pasadena, AECOM

Projects by Density Cohort
This section considers development by Density Cohort, been aggregated into three categories that broadly correspond with City land use designations according to the corresponding General Plan land use designations where the developments have been built or proposed.

• High: >48 dwelling units per acre (DU/AC)
• Medium: 33-48 DU/AC
• Low: <33 DU/AC
• N/ A: Residential on commercial lot without designated DU/AC

As shown in Figure 12, the high-density cohort featuring projects at greater than 48 DU/AC contributed the largest number of completed projects with 10 (71%), followed by 2 for medium-density projects (14%) and 1 for low density projects (7%). For pipeline projects, the emphasis shifts slightly. High-density projects continue to

Pasadena Inclusionary Housing Ordinace

23 AECOM

contribute the most (17, 61%), but Low-Density projects (6, 21%) could make a major contribution going forward as well. (Note, this density-based analysis excludes 3 projects from the set for which density is not known.)

Figure 12. Recent (since 2019) and Pipeline Multifamily Projects by Density Category6

Source: City of Pasadena, AECOM

On a unit basis, as shown in Figure 13 the patterns are similar with the high-density cohort contributing 650 units (80% of total), followed by 48 units (6% of total) for both medium-density projects and low density projects. For pipeline projects, high-density projects contribute 1,459 units (73%) Low-Density projects 283 (14%), and Medium- Density projects 122 (6%). There are currently 141 units (7% of development pipeline) proposed on commercially zoned parcels without a set corresponding maximum density.

6 While there were 14 completed projects and 28 projects in the development pipeline when data was compiled for this report, one project was built and two more proposed on commercial land use parcels without corresponding density cohort.

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Figure 13. Recent (since 2019) and Pipeline Multifamily Units by Density Category

Source: City of Pasadena, AECOM

Asking rents for existing multifamily projects show that higher-density projects command significantly higher rents at 18% higher than the city average, whereas Medium and Low Density Rents are 6% and 3% lower than the city average respectively, as shown in T able 11.

Table 11. Asking Rents by Density Tier (Whole City)

Source: CoStar, AECOM
For recent projects constructed since 2010, asking rents are 34% higher than the city average for projects in the high-density tier, while medium and low density are similar at 26% and 25% higher respectively.

MFR Rent per Square Foot by Density (All Projects)
Count Median Rent Average Rent
Whole City1 301 $2.47 $2.77
Low (<33 DUAC) 176 $2.29 $2.69
Medium (33-48 DUAC) 66 $2.53 $2.61
High (>48 DUAC) 33 $3.37 $3.25
(1) Whole City totals include data points unassigned to any category Pasadena Inclusionary Housing Ordinace

25 AECOM

Table 12. Asking Rents by Density Tier (Recent Projects)

Source: CoStar, AECOM

Affordable Unit Production
As shown on Figure 14, of the 814 units produced since 2019, 428 have been market-rate units and 386 affordable for an effective affordability share of 47%. In the project pipeline, the 1,602 market-rate units and 403 pipeline units compute to an affordability share of 20%.

Figure 14. Affordable Unit Production, Completed and Pipeline Since 2019

Source: City of Pasadena, AECOM

While there are 789 total affordable units between the completed and proposed sets, there is income-level data for only 399. As shown in Figure 15, among units with known income-level data, LI make up 34%, VLI 29%, moderate 19%, and ELI 18%. (Note, set includes units from 100% affordable projects.)

MFR Rent per Square Foot by Density (Projects Since 2010) Count Median Rent Average Rent
Whole City1 301 $2.47 $2.77
Low (<33 DUAC) 1 $3.46 $3.46
Medium (33-48 DUAC) 2 $3.49 $3.49
High (>48 DUAC) 3 $3.84 $3.71
(1) Whole City totals include data points unassigned to any category 428
1,602
2,030
386 403
789
0 500
1,000
1,500
2,000
2,500
Completed Pipeline Total
Inclusionary Unit Production: Completed and Pipeline Since 2019 Market-Rate Inclusionary
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26 AECOM

Figure 15. Affordable Units by Income Category

Source: City of Pasadena, AECOM

Summary and Implications
Pasadena added 814 units housing since the IHO was updated in late 2019, but the city’s annual growth rate still lags that of the City and County of Los Angeles. Of these recently added units, 47% are covenanted affordable. The development pipeline is substantially larger however with 2,005 units, of which 20% are proposed as covenanted affordable. However, even if all pipeline units are constructed in the next four years, the city’s rate of production will be only half the rate required to meet the RHNA 2021-2029 requirement.

While the historical trend does not necessarily predict the future, it suggests that the conditions (market, regulatory, political) in Pasadena have not been as conducive to development as in other jurisdictions and any changes to IHO that could create additional impediments to development might further slow growth.

The analysis of residential production by TOD area, SPA area, and Density level yielded the following insights.

TOD Areas contributed 86% of completed units since 2019, and 98% of pipeline. T o an overwhelming degree, recent multifamily development in Pasadena has been synonymous with TOD development. And while recently constructed TOD units command slightly higher rents than non-TOD units, the data is too limited for a conclusive finding whether TOD proximity necessarily supports higher rents. What is clear, however, is that newer projects— TOD and non-TOD areas—generate significantly higher rents than older projects.

SPA Areas contributed 74% of all projects (both recently completed and pipeline) with nearly all other projects clustered near existing SPAs. This suggests that the marketable location and amenity benefits of the SPAs extend slightly beyond the actual SPA boundaries. However, distribution across SPAs is uneven with a disproportionately high share of all recently completed and pipeline units from the Central District. This reflects the Central District’s traditional role as the commercial heart of the city, which provides an historical downtown area with amenities unique in the city. The pipeline indicates that other SPAs may contribute an increasing share of growth as the Central District gets built out and other areas provide opportunities for future growth, especially as the updated Specific Plans are adopted and the upzoning comes into effect.

High, Medium, and Low-Density areas each contribute a significant share of completed and pipeline units. The highest density zones (with base allowable density up to 87 DU/AC) contribute the highest shares of units. However, both medium density areas (32-48 DU/AC) and lower density areas (below 32 DU/AC) are also meaningful 70 116
137
76 390
Inclusionary Units by Income Group
Extreme Low Income
Very Low Income
Low Income
Moderate
NA
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contributors, indicating that the market and incentive programs are supporting residential products at a range of densities. Rent distinctions between density cohorts for new projects provide clear indication of submarket variations with both existing and new highest density units commanding clear premiums over the lower density categories. There are several potential explanations for the rent premium, including location and amenities.

Recommendation
The findings above indicate that between boundaries defined as TOD, by SPA, and by density categories, density categories make the strongest case for submarket definition. The prototypes used for proforma testing are based upon the patterns of development seen in the City’s recent historical and current development pipeline to develop courtyard and podium style buildings at three levels of density, based on allowable Dwelling Units per Acre (DU/AC) in three zones: Low, Medium, and High.

5. Interviews
In November and December of 2023, City staff carried out several interviews with members of the development community (both affordable housing and market rate developers) to gain qualitative information and insights into the current environment in the housing market. Some general insights include:
• Costs to development have risen consistently over the past years, and current development conditions are not ideal. In particular, the costs of building materials and construction labor have experienced significant increases. Development impact fees have become a growing burden on development in the City and comparable jurisdictions. High Rent and Sales Prices are the only reasons that inclusionary housing can work in Pasadena, but as costs go up and rent/price stabilizes, there are risks. Unrestricted market units drive the ability to provide affordable housing. • The City has many desirable locations and there are good opportunities for development throughout the City. Pasadena needs all types of housing, including townhomes, starter condos, and affordable apartments. Most subareas of the city can support additional density. • Rent Control is punitive to developers, as is causing delays in maintenance as property managers lack funds to reinvest.
• Off-site development has been a useful compliance option for developers. The density bonus is crucial in making projects pencil. Reductions in parking requirements are not useful as market still necessitates the provision of adequate parking space. Podium parking and wrap have been preferable compared to subterranean.
• Now is not the time to raise the inclusionary housing requirement given the high costs of construction and high interest rates/inflation. The market cycle will turn and the policy should reconsider raises when the time is right. Rasing the current requirement would hamper development for both affordable and market rate units. There are certain developers working on entitlements but waiting to build until cost climate improves.

These insights helped inform the development of prototypes and frame the additional sensitivity testing to model how additional fluctuations in the rents, prices, costs, and fees would impact potential feasibility of new affordable housing requirements.

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6. Model and Prototype Development
Methodology
The market and policy contexts described in the previous sections frame the parameters for the most probable range of potential future residential development in the City. Recent historical and proposed residential projects were used to inform the development of prototypes used in proforma financial feasibility testing that simulate the economics of development with the current (base case) and proposed affordable housing set-asides and available density bonuses. The results of the proforma testing and subsequent sensitivity tests provide insight into the feasibility of developments under the City’s current and expanded inclusionary housing requirements.

Proforma Feasibility Analysis
The analysis of IHO economics uses proforma models to test the impacts of proposed density bonuses and affordable set-aside requirements on project returns. A proforma model is a representation of the development economics of a hypothetical real estate project. The proforma model includes assumptions about development costs, revenue rates, and return expectations intended to simulate the financial considerations made by a profit- seeking developer considering development. By varying model assumptions, the impacts and financial feasibility of different incentive scenarios can be explored.

This feasibility analysis employes a “static” proforma approach. A static proforma provides a snapshot of potential project value at an assumed point of project stabilization, e.g., when a rental project achieves stabilized occupancy and can be transacted to an investor seeking the stabilized cashflows it produces. Static proforma analysis is a commonly accepted approach to planning-level analysis, where comparisons between multiple projects and policy options are being contemplated.

Standard of Feasibility
The standard of feasibility used in the analysis is a determination of whether a tested scenario using the scheduled incentives and providing the required affordable set-aside units results in an estimated return that can recover typical development costs with a reasonable profit.

The measure of return used in the analysis is residual land value (RL V). Residual land value analysis is a common approach used in planning exercises to explore and compare financial outcomes of policy proposals. Residual land value is the amount that remains after estimated project cost is deducted from estimated project value and represents the amount a developer should be willing to pay for land.

This analysis measures RL V generated by IHO projects against observed market land values. If the scenario generates RL V that is equivalent to or greater than the market standard, it is considered feasible. The market standard is determined by the analysis of land costs from recent sales transactions at the various levels of density in the City.

Geographical Areas
As determined in the Chapter 3 assessment, three geographical sub-areas are considered by the analysis reflecting underlying allowable densities:

• High: >48 dwelling units per acre (DU/AC)
• Medium: 33-48 DU/AC
• Low: <33 DU/AC

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These areas broadly correspond to market variances, degrees of TOD proximity, and types of recent residential development activity. A map of the three market areas is shown in Figure 16 below. The low, medium, and high density areas determine which prototypes could be constructed in each sub-area and what the corresponding market price and land transaction costs are used to test development feasibility.

Figure 16. Map of Density Cohorts

Source: City of Pasadena, AECOM

Land Costs
Land cost assumptions are based on a market review of recent transactions and used to establish a basis for financial feasibility. Market land values are estimated for each of the three geographical areas.

The land transaction set, drawn from CoStar and Redfin, consists of 41 transactions that occurred in Pasadena between 2015 and April 2024, filtered to exclude transactions with incomplete data, transactions for sites smaller than 0.23 acres (10,000 square feet) and transactions for sites larger than 2.23 acres (100,000 square feet). The size filtering is intended to eliminate outliers, non-standard, and non-representative land transactions from the set.

This allows for a standardization of lot size for a consistent comparison across development scenarios. T o adjust the nominal value of transactions that took place in different years, AECOM normalized the dataset by applying County annual land value growth rates (based on Redfin’s market-level data for Los Angeles County).

T o assess scenario feasibility, the land value basis is set at the First Quartile measure, which is highlighted in bold in the table, from the transaction set, an approach that establishes the threshold for feasibility at below the measured median land cost. This is intended to reflect the wide range of observed land costs and to help generate findings

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that are broadly representative of the area assessed. First Quartile and Median land values are shown in the table below.

Table 13. Market Land Cost Assumptions

Scenarios
The analysis tests a set of 18 set-aside and density bonus scenarios for feasibility. The ten for-rent scenarios include one base case and ten alternatives, representing a range of set-aside options with various combinations of affordability tiers (VLI, LI, MI) for a total affordable set-aside between 20% and 29%. These scenarios allow for density bonuses that range from 20% to 88.75% according to the corresponding set-asides allowed in the State Density Bonus Law and AB 1287 that went into effect January 2024. The for-sale scenarios include one base case and 6 alternatives, that scale up the set-aside for the MI affordability tier and the corresponding density bonuses up to a 50% set-aside and a density bonus of 72.5%.

The base case scenarios reflect the minimum required under the current IHO (i.e., 5% VLI + 5% LI + 10% MI for rental projects, 20% MI for sale projects). While the current IHO allows the developer to choose more VLI or LI as long as the total set-aside remains 20%, the most common scenario complies with the minimum requirements for the lowest income tiers, which represent the lowest reduction in potential revenue. Thus, this analysis assumes the base case to be 0-R with the set-aside combination described above. Similarly, the base case for the for-sale prototypes assumes the developer will choose to maximize the MI affordability tier in the mandatory 20% set-aside rather than the VLI and LI affordability tiers. Thus the 0-S utilizes a 15% density bonus and complies with a 20% set-aside for MI. While other combinations are available, these base case scenarios are the most likely for future development in the City.

The alternative scenarios increase the required set-asides in two dimensions: by increasing the share of higher affordability units (e.g., a higher proportion of VLI to LI) and by increasing the overall percentage of affordable units (e.g., from 20% total to greater than 20%). Each scenario assumes application of the maximum available density bonus, including the base scenario7. A majority of residential development projects, both for sale and for rent have opted to use density bonuses since 2019. Smaller projects, low-density projects and those creating larger, luxury units often opt out of the density bonus and pay the in-lieu fees. The inclusionary housing scenarios tested in this analysis for for-rent developments are seen in Table 14, and the scenarios tested for for-sale developments are in Table 15.

7 The sensitivity testing explored in Section 5 analyzes additional scenarios, including those of the impact of set-asides without a density bonus with and without the application of an in-lieu fee.

Land Sales Since 2015
Count Min 1st Q Med Avg 3rd Q Max
Low Density Group 23 $6 $76 $115 $117 $134 $299
Medium Density Group 5 $104 $159 $168 $168 $189 $221
High Density Group 13 $88 $300 $340 $361 $435 $633
Source: CoStar, Redfin, AECOM
Note 1: All sale prices are adjusted based on Redfin's market-level data (Los Angeles County) of all residential units Note 2: Data used in the analysis exclude portfolio transctions, the transctions without sale prices, and the transctions' base zoning cannot be identified Note 3: Exclude lands less than 10,000sf or more than 100,000sf Pasadena Inclusionary Housing Ordinace

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Table 14. For-Rent Set-Aside Scenarios Tested

Source: City of Pasadena, AECOM
Table 15. For-Sale Set-Aside Scenarios Tested

Source: City of Pasadena, AECOM
Calculation of Set-Aside
The set-aside requirement is based on base project units exclusive of density bonus units. For example, for a project with 100 base units and a 50% density bonus requiring that 44% of units be set aside as Moderate Income (MI), there are 150 total units (50 density bonus units added to the 100 base) of which 44 (44% of 100) are set aside as MI.

All fractional calculations are rounded up. For example, the same density bonus applied to a project with a base of 76 units calculates to a set-aside requirement of 33.44 units, which would be rounded up to 34 units.

Density
Bonus
Scenario VLI LI MI Total
Base Case (Current Mandatory Minimum)
0-R 5% VLI, 5% LI, 10% MI, 20% Total Affordable / 20.00% DB 5% 5% 10% 20% 20.00% Other 20% Density Bonus: SDBL
1-R 5% VLI, 10% LI, 5% MI, 20% Total Affordable / 27.50% DB 5% 10% 5% 20% 27.50% 2-R 5% VLI, 15% LI, % MI, 20% Total Affordable / 35.00% DB 5% 15% 0% 20% 35.00% 3-R 14% VLI, % LI, 6% MI, 20% Total Affordable / 46.25% DB 14% 0% 6% 20% 46.25% 20-25% Scenarios: AB 1287 "stacking"
4-R 15% VLI, % LI, 5% MI, 20% Total Affordable / 70.00% DB 15% 0% 5% 20% 70.00% 5-R 15% VLI, % LI, 6% MI, 21% Total Affordable / 73.75% DB 15% 0% 6% 21% 73.75% 6-R 15% VLI, % LI, 10% MI, 25% Total Affordable / 88.75% DB 15% 0% 10% 25% 88.75% >25-29% Scenarios: Increase MI
7-R 5% VLI, 10% LI, 10% MI, 25% Total Affordable / 27.50% DB 5% 10% 10% 25% 27.50% 8-R 5% VLI, 19% LI, 5% MI, 29% Total Affordable / 50.00% DB 5% 19% 5% 29% 50.00% >25-29% Scenarios: Increase VLI
9-R 10% VLI, 10% LI, 5% MI, 25% Total Affordable / 35.00% DB 10% 10% 5% 25% 35.00% 10-R 14% VLI, 10% LI, 5% MI, 29% Total Affordable / 50.00% DB 14% 10% 5% 29% 50.00% Set-Aside
Density
Bonus
Scenario VLI LI MI Total
Base Case (Current Mandatory Minimum)
0-S 20% MI / 15.00% DB 0% 0% 20% 20% 15%
>20% Density Bonus Scenarios: SDBL
1-S 25% MI / 20.00% DB 0% 0% 25% 25% 20%
2-S 30% MI / 25.00% DB 0% 0% 30% 30% 25%
3-S 35% MI / 30.00% DB 0% 0% 35% 35% 30%
4-S 40% MI / 35.00% DB 0% 0% 40% 40% 35%
5-S 44% MI / 50.00% DB 0% 0% 44% 44% 50%
>20% Density Bonus Scenario: AB1287 Stacking
6-S 50% MI / 72.50% DB 0% 0% 50% 50% 72.5%
Set-Aside
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Model Assumptions
Typologies Tested
AECOM carried out a market analysis to assess recent historical and proposed residential developments and provide key inputs into the pro-forma financial modelling process. The details of these projects informed the development of prototypes that represent realistic residential development typologies in the near future for the City. Figure 17 provides a snapshot of the relevant residential typologies, both for sale and for rent, that provided the basis for the prototypes tested in the pro-forma modelling. The market assessment resulted in the development of courtyard and podium prototypes for both for rental apartments and for sale condominiums.

AECOM also developed both a courtyard and podium typology with ground floor retail to be tested for the higher density land uses.

Figure 17: Residential Typologies

Source: City of Pasadena, Costar, Redfin, AECOM

Drawing from a set of recent and proposed residential projects in Pasadena, AECOM identified the typical typologies that can be built under both the base case and density bonus scenarios tested in the analysis. Although entrepreneurial developers are likely to devise new typologies that exploit future market opportunities, AECOM has assumed recent development is a reasonable market-validated proxy for future development. The typologies tested and key assumptions are shown in Table 16 and Table 17. The market analysis resulted in the development of 3 prototypes for for-sale developments and 5 prototypes for for-rent developments to be tested across the inclusionary housing scenarios shown in Table 14 and Table 15.

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Table 16. Key Typology and Assumptions: For Sale

Source: City of Pasadena, Costar, Redfin, AECOM

Table 17: Typologies and Assumptions: For Rent

Source: City of Pasadena, Costar, Redfin, AECOM
Tenure Type
Prototype 1 2 3
Prototype Code CY-S CY-S(SU) P-S
Decription
3-4 Stories
All Residential
Courtyard
3-4 Stories
All Residential
Courtyard
with Smaller
Units
5-6 Stories
All Residential
Podium
Site Condition
Land Area (AC) 0.75 0.75 0.75
Land Area (SF) 32,670 32,670 32,670
Prototype
Density Capacity (DUAC) 35-48 48-87 88-110
Unit Mix 2BR, 3BR 1BR, 2BR 1BR, 2BR, 3BR
0BR
1BR 35% 50%
2BR 55% 65% 40%
3BR 45% 10%
Unit Size 1,365 1,006 1,058
0BR 575 575 575
1BR 925 925 925
2BR 1,050 1,050 1,050
3BR 1,750 1,750 1,750
Parking Underground Underground Underground
Parking Ratio (Space Per BR) 1.00 1.00 1.00
For Sale
Tenure Type
Prototype 5 6 7 8 9
Prototype Code CY-R CY-R(SU) CYM-R P-R PM-R
Decription
3-4 Stories
All Residential
Courtyard
3-4 Stories
All Residential
Courtyard
with Smaller
Units
4-Story
Mixed-Use
Courtyard
with Smaller
Units
5-6 Stories
All Residential
Podium
5-7 Stories
Mixed-Use
Podium
with Smaller
Units
Site Condition
Land Area (AC) 0.75 0.75 0.75 0.75 0.75
Land Area (SF) 32,670 32,670 32,670 32,670 32,670
Prototype
Density Capacity (DUAC) 35-53 54-87 72-87 88-117 88-165 Unit Mix 1BR, 2BR 0BR, 1BR, 2BR 0BR, 1BR, 2BR 0BR, 1BR, 2BR 0BR, 1BR, 2BR 0BR 15% 15% 15% 20%
1BR 50% 60% 60% 60% 60%
2BR 50% 25% 25% 25% 20%
3BR
Unit Size 1,050 913 913 913 770
0BR 600 600 600 600 600
1BR 850 850 850 850 750
2BR 1,250 1,250 1,250 1,250 1,000
3BR 1,700 1,700 1,700 1,700 1,700
Parking Underground Underground Underground Underground Underground Parking Ratio (Space Per BR) 1.00 1.00 1.00 1.00 1.00
For Rent
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In the density bonus scenarios, each typology is scaled up to reflect application of the bonus until a limiting threshold is reached, because each typology has a height and density level that reflects the intrinsic limitations of its design strategy. When the limiting threshold is met, the model “steps up” to a higher-density typology to accommodate the required density with an appropriate use type. The limiting thresholds used in the model have been derived from the project dataset to reflect the most common constructed densities for each typology.

Parking
Under state law, developer applicants can take advantage of incentives that allow parking to be reduced below required minimums. However, in general practice, developers do not typically take full advantage of incentives that dramatically reduce or altogether eliminate parking requirements because of concerns for the marketability of an under-parked project, particularly in the context of historically auto-centric development patterns of southern California. Consequently, AECOM has sought to reflect market-sourced parking rates in the analysis of the prototypes. Parking count assumptions have been determined by analyzing recent projects to determine a market- validated level of parking. While parking ratios can vary from project to project, the most consistent parking ratio provides one parking space per bedroom. This ratio was maintained throughout the prototypes for consistency and market validity.

Cost Assumptions
Hard Costs: Assumptions used in the scenario proforma models for vertical improvement costs were developed from several sources including RS Means (2023), developer interviews, recent completed comparable projects, and selected inputs from AECOM cost estimators.

Fees: Fees used in the analysis are calculated using City fee schedules for FY 2024. (See Appendix B for fee assumptions.)

Financing Costs: Assumptions for construction loan financing are as follows: 65% L TC, average balance of 50%, loan fees of 2.5 percent, a 5.5 percent interest rate, 2-year construction period.

Yield on Cost: The assumed threshold yield on cost used in the analysis is 12% of total costs before land or 10% of total costs after including land. While actual threshold return expectations may vary widely by project, by investor, by market, and by perceived risk, the 12% yield on cost is a common assumption used in planning-level analysis.

Revenue Assumptions
Market Rents: T o reflect the variety of underlying market conditions found in the City, the analysis is conducted using rent, sales price, and land cost assumptions corresponding to the low, medium, and high-density geographical areas described above. Market rents are based on analysis of a set of 12 multifamily projects constructed since 2010 in Pasadena sourced from CoStar. T o incorporate likely rent appreciation that will occur by the time the completed project starts leasing up, a 10% premium has been added to the market-based findings.

The assumed market rents by Density Group are shown in Table 18. The rent per square foot ranges from $4.00 to $4.33 depending on the density range (correlated to location with higher density land uses receiving a premium based on location and access to amenities.

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Table 18. Market Rent Assumptions

Source: Costar, AECOM, development websites

Market For-Sale Pricing: Market for-sale pricing is based on a set of 255 recent residential sales transactions drawn from Redfin/MLS. T o derive pricing assumptions, the comps were further categorized by Density Tier. T o incorporate likely sales price appreciation that will occur by the time the completed project starts leasing up, a 10% premium has been added to the market-based findings. The assumed market prices by Density Tier are shown in the T able 19. The sales price per square foot for the model inputs ranges from $818 to $972.

Table 19. Market Sale Assumptions

Source: Redfin, MLS, AECOM, development websites

Project Count Average Monthly Rent Per SF AECOM Assumptions Low Density Sites 3 $3.50 $4.00
Medium Density Sites 1 $3.70 $4.25
High Density Sites 8 $4.25 $4.33
All Sites 12 $4.02 $4.24
Low Density Sites Medium Density Sites High Density Sites Applicable prototypes: Courtyard, High-Density Courtyard, Mixed-Use Courtyard, Podium 0BR $2,400 $2,600 $2,600
1BR $3,400 $3,600 $3,700
2BR $5,000 $5,300 $5,400
3BR $6,800 $7,200 $7,400
Low Density Sites Medium Density Sites High Density Sites Applicable prototypes: High-Density Podium, Mixed-Use Podium 0BR $2,400 $2,600 $2,600
1BR $3,000 $3,200 $3,200
2BR $4,000 $4,300 $4,300
3BR $6,800 $7,200 $7,400
Transction Count Average Sale Price Per SF AECOM Assumptions Low Density Sites 77 $818 $900
Medium Density Sites 69 $861 $950
High Density Sites 109 $972 $1,075
All Sites 255 $896 $975
Low Density Sites Medium Density Sites High Density Sites Applicable prototypes: Courtyard, High-Density Courtyard, Podium, and High-Density Podium 0BR $520,000 $550,000 $620,000
1BR $830,000 $880,000 $990,000
2BR $950,000 $1,000,000 $1,130,000
3BR $1,580,000 $1,660,000 $1,880,000
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Affordable Rents: Assumed affordable rents are based on the city’s published schedule.8 While Pasadena’s HCD provides a utility allowance on a project-by-project basis, this analysis uses as a proxy the utility allowance schedule published by the Housing Authority of the City of Los Angeles (HACLA).9 The calculations for supportable affordable rents by income tier are shown in the table below.

Table 20. Affordable Rent Assumptions

Affordable For Sale Pricing: Assumed pricing for affordable for-sale prices are based on an estimated monthly household cost calculated using the city’s published schedules, an assumed utility allowance10, and AECOM estimates for HOA fees, homeowner insurance, and property tax. Supportable for-sale value is derived after assuming a 5% down payment, which is a typical required minimum for affordable units. State law makes density bonuses for Moderate Income (MI, 120%) set-asides available only for for-sale projects. The calculations for affordable for-sale pricing are shown in T able 21.

Exit Capitalization Rates: The assumed capitalization rate for a rental project at stabilization ranges from 4% to

4.5%, based on sourcing from CBRE and CoStar.

8 https://www.cityofpasadena.net/housing/wp-content/uploads/sites/23/Inclusionary-Income-Rents-2023.pdf 9 https://www.hacla.org/sites/default/files/Section%208/S8%20Forms/2022- 25a%20Utility%20Allowance%20Schedule%20Forms.pdf
10 While Pasadena’s HCD provides a utility allowance on a project-by-project basis, this analysis uses as a proxy the utility allowance schedule published by the Housing Authority of the City of Los Angeles (HACLA):
https://www.hacla.org/sites/default/files/Section%208/S8%20Forms/2022-25a%20Utility%20Allowance%20Schedule%20Forms.pdf Supportable Affordable Rents (Monthly)
Very Low Low Moderate
50% AMI 80% AMI 120% AMI
Allocated Housing Cost 1
1-Person Household (Studio) $859 $1,375 $2,062
2-Person Household (1BR) $981 $1,571 $2,356
3-Person Household (2BR) $1,105 $1,768 $2,652
4-Person Household (3BR) $1,227 $1,964 $2,946
5-Person Household (4BR) $1,325 $2,121 $3,181
Utilities 2
1-Person Household (Studio) $200 $200 $200
2-Person Household (1BR) $234 $234 $234
3-Person Household (2BR) $269 $269 $269
4-Person Household (3BR) $316 $316 $316
5-Person Household (4BR) $373 $373 $373
Available for Rent Payment
1-Person Household (Studio) $659 $1,175 $1,862
2-Person Household (1BR) $747 $1,337 $2,122
3-Person Household (2BR) $836 $1,499 $2,383
4-Person Household (3BR) $911 $1,648 $2,630
5-Person Household (4BR) $952 $1,748 $2,808
(1) Source: City of Pasadena (published by California HCD, effective 6/6/2023), https://w w w .cityofpasadena.net/housing/w p- content/uploads/sites/23/Inclusionary-Income-Rents-2023.pdf (2) LACDA Utility Allow ance Schedule, Effective 07/01/2023, https://w w w .lacda.org/docs/librariesprovider25/public- documents/utility-allow ance/utility-allow nce-2022.pdf?sfvrsn=20242d03_2 Pasadena Inclusionary Housing Ordinance
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Table 21. Affordable Sale Assumptions
Supportable Affordable Sales Prices
Annual Moderate
120% AMI
Allocated Housing Cost1
1-Person Household (Studio) $28,875
2-Person Household (1BR) $33,005
3-Person Household (2BR) $37,118
4-Person Household (3BR) $41,248
Utilities2
1-Person Household (Studio) $2,400
2-Person Household (1BR) $2,808
3-Person Household (2BR) $3,228
4-Person Household (3BR) $3,792
HOA3
1-Person Household (Studio) $2,280
2-Person Household (1BR) $2,640
3-Person Household (2BR) $3,000
4-Person Household (3BR) $3,300
Home Owners Insurance4
1-Person Household (Studio) $1,007
2-Person Household (1BR) $1,150
3-Person Household (2BR) $1,330
4-Person Household (3BR) $1,853
Property Tax5
1-Person Household (Studio) $4,072
2-Person Household (1BR) $4,637
3-Person Household (2BR) $5,190
4-Person Household (3BR) $5,671
Available for Mortgage Payment
1-Person Household (Studio) $19,116
2-Person Household (1BR) $21,771
3-Person Household (2BR) $24,370
4-Person Household (3BR) $26,632
Supportable Mortgage6
1-Person Household (Studio) $322,291
2-Person Household (1BR) $367,041
3-Person Household (2BR) $410,855
4-Person Household (3BR) $448,996
Supportable Sales Price (rounded)
1-Person Household (Studio) $339,300
2-Person Household (1BR) $386,400
3-Person Household (2BR) $432,500
4-Person Household (3BR) $472,600
(1) Based on Area Median Income limits for Extremely Low, Very Low, Low income, and Moderate tiers from California Department of Housing and Community Development (HCD) (effective 06/06/2023). AMI is $98,200. (https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/income-limits- 2023.pdf)
(2) LACDA Utility Allowance Schedule, Effective 07/01/2023 (3) AECOM estimate assuming average HOA fees for markets by unit type (4) Calculated as 0.19% of market value of the unit (derived from medians for home value and insurance rates, 2021 California)
(5) 1.2% of sales price
(6) 30-year mortgage, 4.29% rate (based on average of weekly rates 3/27/14 to 3/21/24)
(7) A 5% down payment is a typical minimum for affordable for -sale units

Supportable Affordable Sales Prices
Annual Moderate
120% AMI
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Allocated Housing Cost1
1-Person Household (Studio) $28,875
2-Person Household (1BR) $33,005
3-Person Household (2BR) $37,118
4-Person Household (3BR) $41,248
Utilities2
1-Person Household (Studio) $2,400
2-Person Household (1BR) $2,808
3-Person Household (2BR) $3,228
4-Person Household (3BR) $3,792
HOA3
1-Person Household (Studio) $2,280
2-Person Household (1BR) $2,640
3-Person Household (2BR) $3,000
4-Person Household (3BR) $3,300
Home Owners Insurance4
1-Person Household (Studio) $1,007
2-Person Household (1BR) $1,150
3-Person Household (2BR) $1,330
4-Person Household (3BR) $1,853
Property Tax5
1-Person Household (Studio) $4,072
2-Person Household (1BR) $4,637
3-Person Household (2BR) $5,190
4-Person Household (3BR) $5,671
Available for Mortgage Payment
1-Person Household (Studio) $19,116
2-Person Household (1BR) $21,771
3-Person Household (2BR) $24,370
4-Person Household (3BR) $26,632
Supportable Mortgage6
1-Person Household (Studio) $322,291
2-Person Household (1BR) $367,041
3-Person Household (2BR) $410,855
4-Person Household (3BR) $448,996
Supportable Sales Price (rounded)
1-Person Household (Studio) $339,300
2-Person Household (1BR) $386,400
3-Person Household (2BR) $432,500
4-Person Household (3BR) $472,600
(1) Based on Area Median Income limits for Extremely Low, Very Low, Low income, and Moderate tiers from California Department of Housing and Community Development (HCD) (effective 06/06/2023). AMI is $98,200. (https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/income-limits- 2023.pdf)
(2) LACDA Utility Allowance Schedule, Effective 07/01/2023 (3) AECOM estimate assuming average HOA fees for markets by unit type (4) Calculated as 0.19% of market value of the unit (derived from medians for home value and insurance rates, 2021 California)
(5) 1.2% of sales price
(6) 30-year mortgage, 4.29% rate (based on average of weekly rates 3/27/14 to 3/21/24)
(7) A 5% down payment is a typical minimum for affordable for -sale units Pasadena Inclusionary

39 7. Feasibility Analysis
The following section contains the results of the pro forma financial analysis results for the prototypical developments under base case scenarios and three levels of housing density: Low, Medium, and High with the various combinations of affordable housing set-asides and density bonuses shown in T able 14 and T able 15.

Table 22 shows the results of the pro forma financial feasibility testing. For more detailed tables showing Residual Land Value, Density Bonus percentage, and Affordable Set-Asides, please see Appendix C.

Table 22: Proforma Feasibility Testing Results

Note: the model is designed to account for stepping-up prototypes. When a prototype's density capacity is reached, the model shifts to the next higher-density prototype. For example, a CY-R with a 70% density bonus will transition to CY-R(SU) to accommodate the increased density.

For the three for-sale prototypes, scenarios 0-S (Base case with current IHO) and 1-S (25% set-aside with 25% density bonus yield feasible results across the board, while scenario 2-S (30% set-aside with 30% density bonus is almost feasible for CY-S and feasible for both CY-S (SU) and P-S. While the podium prototype (P-S) continues to yield feasible results under scenario3-S, none of the additional scenarios yield RL Vs that fall within the feasible range. Once the set-aside requirement reaches 35%, projects become generally infeasible, as the additional density no longer offsets the set-aside completely.

1 2 3 4 5 6 7 8

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Low Med High Low Med High High High
Feasible Feasible Feasible Not Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Not Feasible Feasible Feasible Feasible Feasible Not Feasible Feasible Feasible Feasible Feasible Not Feasible Feasible Feasible Not Feasible Not Feasible Feasible Feasible Feasible Feasible Not Feasible Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Feasible Not Feasible Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Feasible Not Feasible Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Feasible Not Feasible Feasible Not Feasible Feasible Feasible Feasible Not Feasible
Not Feasible Feasible Not Feasible Not Feasible Not Feasible Not Feasible Feasible Not Feasible Not Feasible Feasible Not Feasible Feasible Not Feasible Not Feasible Not Feasible 9-R
10-R
7-R
8-R
5-S 5-R
6-S 6-R
3-S 3-R
4-S 4-R
1-S 1-R
2-S 2-R
0-S 0-R
Single-Use Residential For Sale Single-Use Residential For Rent Mixed-Use For Rent Feasibiity Testing Results
Pasadena Inclusionary

40 For the five for-rent prototypes, scenarios 0-R (Base Case with current IHO) and 1-R (20% set-aside with 28% density bonus) all yield feasible results except for the lowest density prototype (CY-R). Results are positive and feasible for the additional scenarios through 6-R as the large additional density bonuses offset increasing affordable housing requirements. Results are mostly infeasible for scenarios 7-R through 10-R except for CY-R.

The pattern throughout the feasibility results shows that a moderate increase in affordable housing set-asides is feasible under current market conditions for multifamily housing developments, as long as sufficient density bonuses are able to add revenues through additional market rate units. The denser products yield the most positive results, while less dense products are generally infeasible (for example townhome projects and MFR with fewer than 28 units were excluded from consideration). Scenarios 1 and 2 are the most likely development products seen in the recent historical and development pipeline, and thus the most likely to produce additional housing in the City.

Under current market conditions, CY-R is currently infeasible in the base case scenario. This indicates that only larger projects with sufficient density can support an inclusionary housing program. Scenarios 4-R, 5-R, and 6-R yield the most universally feasible results, largely as a result of the stacking of additional density allowable under AB 1287.

AECOM also carried out a sensitivity analysis that considered the impact of the continuation of current trends on the feasibility results of the proforma testing. The first impact to consider is an increase in direct construction costs, which have recently experienced significant year over year increases since the Covid-19 pandemic. CBRE projects that construction costs will increase approximately 5% in 2024, having experienced between 7-14% increases the past 3 years. T o assess the potential impact of an increase in construction costs, AECOM modelled a 10% increase (2–3 year continuation of current trends). The results are shown in Table 23. The increase in construction costs, with market rents and home prices remaining stable results in infeasible results for all prototypes except for P-S under 0-S and 1-S, and the MFR prototypes without retail for 4-R, 5-R, and 6-R. For more detailed tables showing Residual Land Value, Density Bonus percentage, and Affordable Set-Asides, please see Appendix C.

Pasadena Inclusionary

41 Table 23: Feasibility Results: Construction Cost Increase

Note: the model is designed to account for stepping -up prototypes. When a prototype's density capacity is reached, the model shifts to the next higher-density prototype. For example, a CY-R with a 70% density bonus will transition to CY-R(SU) to accommodate the increased density.

The second impact to consider is an increase in market rents and home sales prices. Home values have increased by approximately 3.5% year over year for the past 5 years. AEOCM tested a rent/home price increase of 10% to capture 2-3 years of additional growth. Results are shown in T able 24. The increase in rent/home sales prices with all other variables held constant yield positive and feasible results across the board. For more detailed tables showing Residual Land Value, Density Bonus percentage, and Affordable Set-Asides, please see Appendix C.

1 2 3 5 6 9 7 10

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Low Med High Low Med High High High
Not Feasible Not Feasible Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible 9-R
10-R
7-R
8-R
6-R
5-S 5-R
6-S
4-R
3-S 3-R
4-S
2-R
1-S 1-R
2-S
Mixed-Use For Rent
0-S 0-R
Single-Use Residential For Sale
Feasibiity Testing Results - Increased Costs (10%)
Single-Use Residential For Rent
Pasadena Inclusionary

42 Table 24: Feasibility Results: Rent/Price Increase

Note: the model is designed to account for stepping -up prototypes. When a prototype's density capacity is reached, the model shifts to the next higher-density prototype. For example, a CY-R with a 70% density bonus will transition to CY-R(SU) to accommodate the increased density.

The final sensitivity test in this series combines the raise in construction costs with that of rent and home sales prices.

Table 25 shows the results of this simultaneous increase in both the costs and revenues. This scenario represents a plausible future in which the market experiences both increases in prices and cost inputs. The results are comparable to the original scenario under current market conditions, but with scenarios 2-R, 3-R, and 4-R yielding feasible results for all for-rent prototypes tested. For more detailed tables showing Residual Land Value, Density Bonus percentage, and Affordable Set-Asides, please see Appendix C.
1 2 3 5 6 9 7 10

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Low Med High Low Med High High High
Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Not Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Not Feasible Not Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible
Feasible Feasible Feasible Feasible Feasible
Feasible Feasible Feasible Feasible Feasible
Feasible Feasible Feasible Feasible Feasible
9-R
10-R
7-R
8-R
5-S 5-R
6-S 6-R
3-S 3-R
4-S 4-R
1-S 1-R
2-S 2-R
0-S 0-R
Single-Use Residential For Sale Single-Use Residential For Rent Mixed-Use For Rent Feasibiity Testing Results - Increased Rent (10%)
Pasadena Inclusionary

43 Table 25: Feasibility Results: Rent/Price and Construction Costs Increases

Note: the model is designed to account for stepping -up prototypes. When a prototype's density capacity is reached, the model shifts to the next higher-density prototype. For example, a CY-R with a 70% density bonus will transition to CY-R(SU) to accommodate the increased density.

Up to this point, all the scenarios tested have utilized the maximum density bonus allowable according to state law and the current IHO. The assumption is that under the current affordable housing requirements, the development community would seek to comply with the ordinance by maximizing the allowable percentage of higher income units (for the affordable set-asides) and build as many market rate units as possible to increase project revenues.

However, it is possible for developers to forgo the density bonus, as target market and site-specific conditions indicate the preference for a different residential typology. Thus, AECOM carried out three additional sensitivity tests to consider the impact of the affordable set-aside scenarios on projects that do not utilize the density bonus, either by paying the in-lieu fee or incorporating the affordable units into the base density11. Table 26 shows the results comparing the base case to the two scenarios that do not utilize a density bonus. These scenarios compare the base case (0-S for sale, and 0-R for rent) scenarios with new alternative policies (AS (Alternative Sale) for sale and AR (Alternative Rent) for rent).

11 The City’s in-lieu fee schedule varies by sub-area. For this analysis, the fees for Sub-Area D were applied. The majority of recently completed residential projects from which the prototypes were derived were built in Sub-Area D, which also represents the highest of the 4 areas and therefore the upper threshold of additional costs that a project would incur. 1 2 3 5 6 9 7 10

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Low Med High Low Med High High High
Feasible Feasible Feasible Not Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Not Feasible Feasible Feasible Feasible Feasible Not Feasible Feasible Feasible Feasible Feasible Feasible Feasible Feasible Not Feasible Not Feasible Feasible Feasible Feasible Feasible Feasible Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Feasible Feasible Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Feasible Feasible Feasible Not Feasible Not Feasible Not Feasible Feasible Feasible Feasible Not Feasible Feasible Not Feasible Feasible Feasible Feasible Feasible
Not Feasible Feasible Feasible Not Feasible Feasible
Not Feasible Feasible Not Feasible Feasible Feasible
Not Feasible Feasible Not Feasible Not Feasible Not Feasible 7-R
8-R
9-R
10-R
Feasibiity Testing Results - Increased Rent & Costs (10%) 4-S 4-R
5-S 5-R
6-S 6-R
1-S 1-R
2-S 2-R
3-S 3-R
Single-Use Residential For Sale Single-Use Residential For Rent Mixed-Use Mixed-Use For Rent 0-S 0-R
Pasadena Inclusionary

44 Table 26: Additional Sensitivity Tests

Note: the model is designed to account for stepping -up prototypes. When a prototype's density capacity is reached, the model shifts to the next higher-density prototype. For example, a CY-R with a 70% density bonus will transition to CY-R(SU) to accommodate the increased density.

The additional sensitivity tests consider three scenarios in which the development does not use the density bonus.

The first set of additional scenarios considers the base case prototype (with a 20% MI for for-sale and 5% VLI, 5% LI, and 10% MI for for-rent) without paying the in-lieu fee. The second set adds additional affordable set-asides (25% MI for for-sale and 5% VLI, 10% LI, and 5% MI for for-rent) and again does incorporates the set-asides without paying an in-lieu fee. The final scenario forgoes the density bonus and opts to pay the in-lieu fee rather than incorporate the affordable set-asides. As the results indicate, the for-sale prototypes yield feasible results for all three scenarios, with the in-lieu fee option achieving the highest RLV of the set. This indicates that the for-sale market is robust and capable of producing affordable housing even in the absence of a density bonus. An increase from 20% MI to 25% MI still yields feasible results, but additional increases (as previously examined 30% and greater) push all three for-sale prototypes to infeasible results.

The results of the for-rent prototypes generally yield infeasible results for the scenarios that do not utilize the density bonus, except for the in-lieu fee option. This indicates that the for-rent market would not be able to produce affordable housing without the density bonus to offset the loss in revenues, with the exception of the scenario that applies the current in-lieu fee. In fact, the base case scenario for the CY-R prototype yields infeasible results but yields positive results for the in-lieu fee option that incorporates neither the density bonus nor the affordable units. The situation is reversed for the PM-R prototype that yields feasible results in the base case but is infeasible in the in-lieu fee scenario. This suggests that developments would opt to pay the fee at lower densities but build the units at higher densities. This outcome should be assessed when the City considers raising the inclusionary housing requirements.

The IHO essentially necessitates the maximization of density, which will impact both the residential typologies and geographical distribution of future development in the City.

Feasibility Testing Results - Additional Scenarios
For Sale For Sale For Sale For Rent For Rent For Rent For Rent For Rent 1 2 3 4 5 6 7 8

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Density>>> Low Med High Low Med High High High
Resulting Prototype 15% DB CY-S CY-S(SU) P-S 20% DB CY-R CY-R(SU) P-R CYM-R PM-R RLV Mandatory: 20% MI $122 $208 $551 Mandatory : 5% VLI, 5% LI, 10% MI $53 $217 $386 $281 $352 Feasible? No in-lieu fee Feasible Feasible Feasible No in-lieu fee Not Feasible Feasible Feasible Feasible Feasible Resulting Prototype No DB CY-S CY-S(SU) P-S No DB CY-R CY-R(SU) P-R CYM-R PM-R RLV Mandatory: 20% MI $104 $177 $492 Mandatory: 5% VLI, 5% LI, 10% MI $27 $167 $289 $281 $280 Feasible? No in-lieu fee Feasible Feasible Feasible No in-lieu fee Not Feasible Feasible Not Feasible Feasible Not Feasible Resulting Prototype No DB CY-S CY-S(SU) P-S No DB CY-R CY-R(SU) P-R CYM-R PM-R RLV 25% Set-Aside: 25% MI $88 $162 $402 25% Set-Aside: 5% VLI, 10% LI, 10% MI $14 $129 $250 $243 $247 Feasible? No in-lieu fee Feasible Feasible Feasible No in-lieu fee Not Feasible Not Feasible Not Feasible Not Feasible Not Feasible Resulting Prototype No DB CY-S CY-S(SU) P-S No DB CY-R CY-R(SU) P-R CYM-R PM-R RLV No affordable housing $152 $234 $527 No affordable housing $88 $170 $309 $335 $290 Feasible? In-lieu fee required Feasible Feasible Feasible In-lieu fee required Feasible Feasible Feasible Feasible Not Feasible 0-R
1-AR
2-AR
3-AR
0-S
1-AS
2-AS
3-AS
For Sale Scenarios
Single-Use Residential For Sale
For Rent Scenarios
Single-Use Residential For Rental Mixed-Use For Rental
Pasadena Inclusionary

45 Conclusions
• The City experienced a slower growth rate in housing units (CAGR of 0.21%) relative to a set of comparable or peer jurisdictions (0.55% average) from 2019 to 2022. The City grew faster than Glendale and West Hollywood (both registered negative growth rates), but slower than Burbank (2%), Long Beach (0.78%) and Santa Monica (0.75%). Additional constraints on housing construction, both market-rate and affordable, need to be highly sensitive to the implications for housing growth and RHNA obligations.

• Peer jurisdictions vary in their mandatory inclusionary housing requirements in targeted levels of feasibility, sub-areas, and project sizes. Several jurisdictions in the set of peer jurisdictions have more stringent requirements (larger set-asides, deeper levels of affordability, smaller project sizes). While more stringent requirements are generally associated with lower production rates, there are a number of market and physical factors that impact the growth rate of residential developments, including market demand and the availability of land to develop or redevelop.

• Since 2019, 86% of all new development occurred within TOD Areas, and 74% occurred within existing SPAs.

The current and proposed land use designations and regulations in these areas has been conducive to growth and will continue to drive new unit construction (as indicated by the current development pipeline). These areas enjoy preferential locations with access to amenities, jobs, retail, and transit. Geographic specific requirements could distort the current market and steer development outside of these key areas where residential development is envisioned.

• There are many units in the current development pipeline, poised to add more than 2,000 net new units to the City’s inventory in the next few years. Interviews with developers revealed that many projects are entitled, but construction has been delayed because of the high interest, high cost input climate. Once the market stabilizes, these projects are likely to be built.

• Recent development has occurred in low, medium, and high density land use designations. This indicates that there is a market for various residential prototypes and the City can benefit from a mix of housing from the least to most dense land uses. Market conditions and incentives are supporting residential products at a range of densities.

• Proforma feasibility testing yielded generally positive results for the modest increases in affordable housing set-asides, indicating feasibility for scenarios 0-S, 1-S, and 2-S for the for-sale developments. This indicates the potential to increase the current mandatory requirement for for-sale condominiums to 25% and 30% with additional density bonus. Other scenarios tested yielded infeasible results under current market conditions.

• Proforma feasibility testing yielded generally positive results indicating feasibility for scenarios 2-R through 6- R for the for-rent developments. Results for the lower density and mixed-use products were infeasible or almost feasible for 0-R and 1-R scenarios. This indicates the potential to expand the level of affordability or add an additional 5% set-aside requirement for several development types. These scenarios are accompanied by a generous density bonus that might not always be achievable based on the City’s zoning.

• The feasibility testing is highly sensitive to changes in construction costs and market prices. A 10% increase in either relative to other inputs greatly enhance or diminish feasibility. Current trends indicate that both are likely in next 5 years. A final scenario combines the increases in cost and price, yielding results similar to the opening scenario.

• The feasibility of current for-rent projects is highly contingent on the utilization of a density bonus, without which most projects will not clear financial hurdles. Raising the affordability requirement will necessitate the Pasadena Inclusionary

46 maximization of density bonuses, which may hinder development if the resulting residential typologies are not in line with preferences for residents and the development community.

• While the pro forma testing yielded positive feasibility results for several scenarios, the impacts were less positive for lower density and mixed-use development. A heightened requirement could distort the market and cause only projects at the densest and highest intensity to be viable. Any updated requirements should consider the impacts on lower and middle density products, which have contributed to inventory growth to date. An update to the IHO should also consider the lower growth rate of the City’s housing inventory relative to comparable jurisdictions. Any further burdens on the development of new housing units will slow the growth of both market rate and affordable housing.

• The City should consider the pros and cons of adding a modest increase in either the total set-aside or affordability tier. While projects in the highest density land use designations are generally feasible, the additional burden does not work in low density developments, especially for for-rent products. An updated IHO could have different requirements for projects in these areas, but this could also deter investment in these high growth areas that have driven recent housing construction.

• AECOM recommends either a modest increase in affordable housing requirements (additional 5% or shift from MI to LI) for the highest density areas, or the maintenance of the current ordinance until market conditions change. The City has one of the highest inclusionary requirements relative to peer jurisdictions, and additional requirements are likely to deter development in the short term and have an adverse impact on housing production in the City.

• Any additional affordable housing requirements create further impediments to growth by impacting the financial feasibility of development. The City’s current development pipeline indicates that market demand is strong, and many projects are likely to come online in the coming years. Higher density projects are better able to absorb the loss of revenue from affordable housing set-aside requirements.

• Increased requirements are likely to negatively impact development disproportionately in areas zoned for lower density or areas with lower market value. This could create additional impediments to naturally occurring affordable housing or housing for middle income households as policy parameters favor lower income and luxury dwelling units.

Pasadena Inclusionary

47 Appendix A Proforma Models
(Starting on Next Page)
For Sale
Prototype Code Protype Name
1 CY-S
2 CY-S(SU)
3 P-S
4 P-S(SU)

For Rent
Prototype Code Protype Name
5 CY-R
6 CY-R (SU)
7 CYM-R
8 P-R
9 PM-R

Pasadena Inclusionary

48 For Sale
Prototype 1
Prototype Code CY-S
Scenario # 0-S 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 0% of all units 0% of all units
Low 0% of all units 0% of all units
Moderate 20% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> CY-S CY-S
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 24.00 24.00
Realized DU/AC 32.0 32.0
Residential Areas
Gross sf 42,933 42,933
Net sf 32,200 32,200
Commerical NO No
Combined (Building)
GSF 42,933 42,933
Built FAR 1.3 1.3
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) CY-S Low Density Site CY-S CY-S
Studio $520,000 $57,300 $128,600 $235,800 $339,300 575 575 1-Bedroom $830,000 $64,500 $145,800 $268,200 $386,400 925 925 2-Bedroom $950,000 $70,900 $162,300 $299,900 $432,500 1,050 1,050 3-Bedroom $1,580,000 $70,300 $172,000 $324,900 $472,600 1,750 1,750 Unit Mix by Income and Type (Base, Without Bonus) CY-S Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2-Bedroom 55% 11.00 0.00 0.00 0.00 3.00 14.00 28.00
3-Bedroom 45% 8.00 0.00 0.00 0.00 2.00 10.00 30.00
Subtotal 19.00 0.00 0.00 0.00 5.00 24.00 58.0
Base Unit for Set Aside Cal>>> 24.00
Unit Mix by Income and Type (Scenario, With Bonus) CY-S Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2-Bedroom 55% 11.00 0.00 0.00 0.00 3.00 14.00 28.00
3-Bedroom 45% 8.00 0.00 0.00 0.00 2.00 10.00 30.00
Subtotal 100% 19.00 0.00 0.00 0.00 5.00 24.00 58.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee CY-S Unit Net SF 25,550 6,650 75.00% Unit Net SF 32,200
Unit Gross SF 34,067 8,867 Total Unit 24
10-49 units $59.73
Min Inclusionary Requirement Market SF 32,200 $32,200 50+ units $82.97 Rate $59.73
In-Lieu Fee $1,923,306
$80,138
Parking by Type (Spaces)
Total 58
Podium Parking L1 0
Podium Parking L2 0
Underground U1 40
Underground U2 18
Underground U3 0
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $0 $0 $0 $0 $0 $0
1-Bedroom $0 $0 $0 $0 $0 $0
2-Bedroom $10,450,000 $0 $0 $0 $1,297,500 $11,747,500
3-Bedroom $12,640,000 $0 $0 $0 $945,200 $13,585,200
Total $23,090,000 $0 $0 $0 $2,242,700 $25,332,700
Total Sale Values of Units $25,332,700
Consolidated
Combined Values $25,332,700
Less: Sale Commissions 2.0% ($506,654)
Total Capitalized Value $24,826,046
Value per gross sf $578
Value per unit $1,034,419
Pasadena Inclusionary

49 Costs Testing Prototype>>> CY-S (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $214 per gross sf $9,187,302
Parking Hard Costs
Podium Parking L1 $36,600 per space $0
Podium Parking L2 $36,600 per space $0
Underground U1 $48,150 per space $1,926,000
Underground U2 $48,150 per space $866,700
Underground U3 $48,150 per space $0
Underground U4 $48,150 per space $0
Contractor Fees 18% of all hard costs $2,153,673
Hard Cost Contingency 7% of all other direct costs $1,012,226 Total Direct Costs $15,472,601
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $928,356 Permits and Fees & Impact Fee $1,932,654
Legal, Insurance, Warranty 2% of all direct costs $309,452 Marketing $2,000 per unit $48,000
General and Administrative 1% of all other indirect costs $32,185 Developer Fee 5% of all direct costs $696,267
Soft Cost Contingency 5% of all other indirect costs $197,346 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $4,144,260
Financing Costs
Loan Amount 65% of all direct and indirect costs $12,750,959 Loan Fees 3% of loan amount $318,774
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $478,161 Total Financing Costs $796,935
Total Costs
Total Costs before return and land $20,413,796
Developer Return on Cost 5% of all total costs $1,020,690 Total Development Costs before land $21,434,485
Residual Land Value
Residual Land Value $3,391,561
Per Land SF $104
Per GBA SF $79
Per Unit $141,315
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $23,090,000 $1,215,263 19 $904 25,550
Affordable $2,242,700 $448,540 5 $337 6,650
Gap $3,833,616 $766,723 $566
Gap per market rate unit/SF $201,769 $150
Prototype Code CY-S
Return Metrics
Return Metrics Current Scenario
CY-S
Residual Land Value (RLV) per Land SF $104
Change from Base $259
Affordability Gap per Market Rate Unit $201,769
Change from Base $201,769
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

50 For Sale
Prototype 2
Prototype Code CY-S(SU)
Scenario # 0-S 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 0% of all units 0% of all units
Low 0% of all units 0% of all units
Moderate 20% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> CY-S(SU) CY-S(SU)
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 36.00 36.00
Realized DU/AC 48.0 48.0
Residential Areas
Gross sf 48,233 48,233
Net sf 36,175 36,175
Commerical NO No
Combined (Building)
GSF 48,233 48,233
Built FAR 1.5 1.5
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) CY-S(SU) Medium Density Site CY-S(SU) CY-S(SU)
Studio $550,000 $57,300 $128,600 $235,800 $339,300 575 575 1-Bedroom $880,000 $64,500 $145,800 $268,200 $386,400 925 925 2-Bedroom $1,000,000 $70,900 $162,300 $299,900 $432,500 1,050 1,050 3-Bedroom $1,660,000 $70,300 $172,000 $324,900 $472,600 1,750 1,750 Unit Mix by Income and Type (Base, Without Bonus) CY-S(SU) Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1-Bedroom 35% 10.00 0.00 0.00 0.00 3.00 13.00 13.00
2-Bedroom 65% 18.00 0.00 0.00 0.00 5.00 23.00 46.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 28.00 0.00 0.00 0.00 8.00 36.00 59.0
Base Unit for Set Aside Cal>>> 36.00
Unit Mix by Income and Type (Scenario, With Bonus) CY-S(SU) Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1-Bedroom 35% 10.00 0.00 0.00 0.00 3.00 13.00 13.00
2-Bedroom 65% 18.00 0.00 0.00 0.00 5.00 23.00 46.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 100% 28.00 0.00 0.00 0.00 8.00 36.00 59.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee CY-S(SU) Unit Net SF 28,150 8,025 75.00% Unit Net SF 36,175
Unit Gross SF 37,533 10,700 Total Unit 36
10-49 units $59.73
Min Inclusionary Requirement Market SF 36,175 $36,175 50+ units $82.97 Total Unit $59.73
In-Lieu Fee $2,160,733
$60,020
Parking by Type (Spaces)
Total 59
Podium Parking L1 0
Podium Parking L2 0
Underground U1 53
Underground U2 6
Underground U3 0
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $0 $0 $0 $0 $0 $0
1-Bedroom $8,800,000 $0 $0 $0 $1,159,200 $9,959,200
2-Bedroom $18,000,000 $0 $0 $0 $2,162,500 $20,162,500
3-Bedroom $0 $0 $0 $0 $0 $0
Total $26,800,000 $0 $0 $0 $3,321,700 $30,121,700
Total Sale Values of Units $30,121,700
Consolidated
Combined Values $30,121,700
Less: Sale Commissions 2.0% ($602,434)
Total Capitalized Value $29,519,266
Value per gross sf $612
Value per unit $819,980
Pasadena Inclusionary

51 Costs Testing Prototype>>> CY-S(SU) (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $214 per gross sf $10,321,449
Parking Hard Costs
Podium Parking L1 $36,600 per space $0
Podium Parking L2 $36,600 per space $0
Underground U1 $48,150 per space $2,551,950
Underground U2 $48,150 per space $288,900
Underground U3 $48,150 per space $0
Underground U4 $48,150 per space $0
Contractor Fees 18% of all hard costs $2,360,575
Hard Cost Contingency 7% of all other direct costs $1,109,470 Total Direct Costs $16,959,044
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $1,017,543 Permits and Fees & Impact Fee $2,301,302
Legal, Insurance, Warranty 2% of all direct costs $339,181 Marketing $2,000 per unit $72,000
General and Administrative 1% of all other indirect costs $37,300 Developer Fee 5% of all direct costs $763,157
Soft Cost Contingency 5% of all other indirect costs $226,524 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $4,757,007
Financing Costs
Loan Amount 65% of all direct and indirect costs $14,115,433 Loan Fees 3% of loan amount $352,886
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $529,329 Total Financing Costs $882,215
Total Costs
Total Costs before return and land $22,598,265
Developer Return on Cost 5% of all total costs $1,129,913 Total Development Costs before land $23,728,178
Residual Land Value
Residual Land Value $5,791,088
Per Land SF $177
Per GBA SF $120
Per Unit $160,864
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $26,800,000 $957,143 28 $952 28,150
Affordable $3,321,700 $415,213 8 $414 8,025
Gap $4,335,443 $541,930 $538
Gap per market rate unit/SF $154,837 $154
Prototype Code CY-S(SU)
Return Metrics
Return Metrics Current Scenario

CY-S(SU)
Residual Land Value (RLV) per Land SF $177
Change from Base $333
Affordability Gap per Market Rate Unit $154,837
Change from Base $154,837
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

52 For Sale
Prototype 3
Prototype Code P-S
Scenario # 0-S 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 0% of all units 0% of all units
Low 0% of all units 0% of all units
Moderate 20% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> P-S P-S
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 65.00 65.00
Realized DU/AC 86.7 86.7
Residential Areas
Gross sf 91,100 91,100
Net sf 68,325 68,325
Commerical NO No
Combined (Building)
GSF 91,100 91,100
Built FAR 2.8 2.8
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) P-S High Density Site P-S P-S
Studio $580,000 $57,300 $128,600 $235,800 $339,300 575 575 1-Bedroom $930,000 $64,500 $145,800 $268,200 $386,400 925 925 2-Bedroom $1,050,000 $70,900 $162,300 $299,900 $432,500 1,050 1,050 3-Bedroom $1,750,000 $70,300 $172,000 $324,900 $472,600 1,750 1,750 Unit Mix by Income and Type (Base, Without Bonus) P-S Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1-Bedroom 50% 26.00 0.00 0.00 0.00 7.00 33.00 33.00
2-Bedroom 40% 20.00 0.00 0.00 0.00 6.00 26.00 52.00
3-Bedroom 10% 6.00 0.00 0.00 0.00 0.00 6.00 18.00
Subtotal 52.00 0.00 0.00 0.00 13.00 65.00 103.0
Base Unit for Set Aside Cal>>> 65.00
Unit Mix by Income and Type (Scenario, With Bonus) P-S Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1-Bedroom 50% 26.00 0.00 0.00 0.00 7.00 33.00 33.00
2-Bedroom 40% 20.00 0.00 0.00 0.00 6.00 26.00 52.00
3-Bedroom 10% 6.00 0.00 0.00 0.00 0.00 6.00 18.00
Subtotal 100% 52.00 0.00 0.00 0.00 13.00 65.00 103.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee P-S Unit Net SF 55,550 12,775 75.00% Unit Net SF 68,325
Unit Gross SF 74,067 17,033 Total Unit 65
10-49 units $59.73
Min Inclusionary Requirement Market SF 68,325 $68,325 50+ units $82.97 Total Unit $82.97
In-Lieu Fee $5,668,925
$87,214
Parking by Type (Spaces)
Total 103
Podium Parking L1 0
Podium Parking L2 0
Underground U1 49
Underground U2 49
Underground U3 5
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $0 $0 $0 $0 $0 $0
1-Bedroom $24,180,000 $0 $0 $0 $2,704,800 $26,884,800
2-Bedroom $21,000,000 $0 $0 $0 $2,595,000 $23,595,000
3-Bedroom $10,500,000 $0 $0 $0 $0 $10,500,000
Total $55,680,000 $0 $0 $0 $5,299,800 $60,979,800
Total Sale Values of Units $60,979,800
Consolidated
Combined Values $60,979,800
Less: Sale Commissions 2.0% ($1,219,596)
Total Capitalized Value $59,760,204
Value per gross sf $656
Value per unit $919,388
Pasadena Inclusionary

53 Costs Testing Prototype>>> P-S (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $220 per gross sf $20,042,000
Parking Hard Costs
Podium Parking L1 $35,450 per space $0
Podium Parking L2 $35,450 per space $0
Underground U1 $43,850 per space $2,148,650
Underground U2 $43,850 per space $2,148,650
Underground U3 $43,850 per space $219,250
Underground U4 $43,850 per space $0
Contractor Fees 18% of all hard costs $4,354,919
Hard Cost Contingency 7% of all other direct costs $2,046,812 Total Direct Costs $31,286,981
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $1,877,219 Permits and Fees & Impact Fee $4,182,883
Legal, Insurance, Warranty 2% of all direct costs $625,740 Marketing $2,000 per unit $130,000
General and Administrative 1% of all other indirect costs $68,158 Developer Fee 5% of all direct costs $1,407,914
Soft Cost Contingency 5% of all other indirect costs $414,596 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $8,706,510
Financing Costs
Loan Amount ######################### $25,995,769
Loan Fees 3% of loan amount $649,894
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $974,841 Total Financing Costs $1,624,736
Total Costs
Total Costs before return and land $41,618,226
Developer Return on Cost 5% of all total costs $2,080,911 Total Development Costs before land $43,699,137
Residual Land Value
Residual Land Value $16,061,067
Per Land SF $492
Per GBA SF $176
Per Unit $247,093
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $55,680,000 $1,070,769 52 $1,002 55,550
Affordable $5,299,800 $407,677 13 $415 12,775
Gap $8,620,200 $663,092 $587
Gap per market rate unit/SF $165,773 $155
Prototype Code P-S
Return Metrics
Return Metrics Current Scenario
P-S
Residual Land Value (RLV) per Land SF $492
Change from Base $647
Affordability Gap per Market Rate Unit $165,773
Change from Base $165,773
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

54 For Sale
Prototype 4
Prototype Code P-S(SU)
Scenario # 0-S 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 0% of all units 0% of all units
Low 0% of all units 0% of all units
Moderate 20% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> P-S(SU) P-S(SU)
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 65.00 65.00
Realized DU/AC 86.7 86.7
Residential Areas
Gross sf 83,733 83,733
Net sf 62,800 62,800
Commerical NO No
Combined (Building)
GSF 83,733 83,733
Built FAR 2.6 2.6
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) P-S(SU) High Density Site P-S(SU) P-S(SU)
Studio $580,000 $57,300 $128,600 $235,800 $339,300 575 575 1-Bedroom $930,000 $64,500 $145,800 $268,200 $386,400 925 925 2-Bedroom $1,050,000 $70,900 $162,300 $299,900 $432,500 1,050 1,050 3-Bedroom $1,750,000 $70,300 $172,000 $324,900 $472,600 1,750 1,750 Unit Mix by Income and Type (Base, Without Bonus) P-S(SU) Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 10% 5.00 0.00 0.00 0.00 2.00 7.00 7.00
1-Bedroom 25% 13.00 0.00 0.00 0.00 4.00 17.00 17.00
2-Bedroom 65% 34.00 0.00 0.00 0.00 7.00 41.00 82.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 52.00 0.00 0.00 0.00 13.00 65.00 106.0
Base Unit for Set Aside Cal>>> 65.00
Unit Mix by Income and Type (Scenario, With Bonus) P-S(SU) Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 10% 5.00 0.00 0.00 0.00 2.00 7.00 7.00
1-Bedroom 25% 13.00 0.00 0.00 0.00 4.00 17.00 17.00
2-Bedroom 65% 34.00 0.00 0.00 0.00 7.00 41.00 82.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 100% 52.00 0.00 0.00 0.00 13.00 65.00 106.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee P-S(SU) Unit Net SF 50,600 12,200 75.00% Unit Net SF 62,800
Unit Gross SF 67,467 16,267 Total Unit 65
10-49 units $59.73
Min Inclusionary Requirement Market SF 62,800 $62,800 50+ units $82.97 Total Unit $82.97
In-Lieu Fee $5,210,516
$80,162
Parking by Type (Spaces)
Total 106
Podium Parking L1 0
Podium Parking L2 0
Underground U1 53
Underground U2 53
Underground U3 0
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $2,900,000 $0 $0 $0 $678,600 $3,578,600
1-Bedroom $12,090,000 $0 $0 $0 $1,545,600 $13,635,600
2-Bedroom $35,700,000 $0 $0 $0 $3,027,500 $38,727,500
3-Bedroom $0 $0 $0 $0 $0 $0
Total $50,690,000 $0 $0 $0 $5,251,700 $55,941,700
Total Sale Values of Units $55,941,700
Consolidated
Combined Values $55,941,700
Less: Sale Commissions 2.0% ($1,118,834)
Total Capitalized Value $54,822,866
Value per gross sf $655
Value per unit $843,429
Pasadena Inclusionary

55 Costs Testing Prototype>>> P-S(SU) (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $220 per gross sf $18,421,333
Parking Hard Costs
Podium Parking L1 $35,450 per space $0
Podium Parking L2 $35,450 per space $0
Underground U1 $43,850 per space $2,324,050
Underground U2 $43,850 per space $2,324,050
Underground U3 $43,850 per space $0
Underground U4 $43,850 per space $0
Contractor Fees 18% of all hard costs $4,094,323
Hard Cost Contingency 7% of all other direct costs $1,924,332 Total Direct Costs $29,414,789
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $1,764,887 Permits and Fees & Impact Fee $3,998,710
Legal, Insurance, Warranty 2% of all direct costs $588,296 Marketing $2,000 per unit $130,000
General and Administrative 1% of all other indirect costs $64,819 Developer Fee 5% of all direct costs $1,323,665
Soft Cost Contingency 5% of all other indirect costs $393,519 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $8,263,896
Financing Costs
Loan Amount ######################### $24,491,145
Loan Fees 3% of loan amount $612,279
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $918,418 Total Financing Costs $1,530,697
Total Costs
Total Costs before return and land $39,209,381
Developer Return on Cost 5% of all total costs $1,960,469 Total Development Costs before land $41,169,850
Residual Land Value
Residual Land Value $13,653,016
Per Land SF $418
Per GBA SF $163
Per Unit $210,046
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $50,690,000 $974,808 52 $1,002 50,600
Affordable $5,251,700 $403,977 13 $430 12,200
Gap $7,420,800 $570,831 $571
Gap per market rate unit/SF $142,708 $147
Prototype Code P-S(SU)
Return Metrics
Return Metrics Current Scenario

P-S(SU)
Residual Land Value (RLV) per Land SF $418
Change from Base $574
Affordability Gap per Market Rate Unit $142,708
Change from Base $142,708
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

56 For Rent
Prototype 5
Prototype Code CY-R
Scenario # 0-R 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 5% of all units 0% of all units
Low 5% of all units 0% of all units
Moderate 10% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> CY-R CY-R
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 24.00 24.00
Realized DU/AC 32.0 32.0
Residential Areas
Gross sf 33,600 33,600
Net sf 25,200 25,200
Commerical
Ground Retail? No No
GSF - Retail (sf) 0 0
NSF - Retail (sf) 0 0
Combined (Building)
GSF 33,600 33,600
Built FAR 1.0 1.0
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) CY-R Low Density Site CY-R CY-R
Studio $2,400 NA $659 $1,175 $1,862 600 600
1-Bedroom $3,400 NA $747 $1,337 $2,122 850 850
2-Bedroom $5,000 NA $836 $1,499 $2,383 1,250 1,250
3-Bedroom $6,800 NA $911 $1,648 $2,630 1,700 1,700
Unit Mix by Income and Type (Base, Without Bonus) CY-R Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-R 80% 0% 5% 5% 10% 1.00 per BR
Studio 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1-Bedroom 50% 8.00 0.00 1.00 1.00 2.00 12.00 12.00
2-Bedroom 50% 9.00 0.00 1.00 1.00 1.00 12.00 24.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 17.00 0.00 2.00 2.00 3.00 24.00 36.0
Base Unit for Set Aside Cal>>> 24.00
Unit Mix by Income and Type (Scenario, With Bonus) CY-R Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1-Bedroom 50% 9.00 0.00 0.00 0.00 3.00 12.00 12.00
2-Bedroom 50% 10.00 0.00 0.00 0.00 2.00 12.00 24.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 100% 19.00 0.00 0.00 0.00 5.00 24.00 36.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee CY-R Unit Net SF 20,150 5,050 75.00% Unit Net SF 25,200
Unit Gross SF 26,867 6,733 Total Unit 24
10-49 units $58.02
Min Inclusionary Requirement Market SF 25,200 2520000.00% 50+ units $80.58 Total Unit $58.02
In-Lieu Fee $1,462,104
Retail CY-R $60,921
Retail Areas No
Gross sf
Net sf
Parking 0 spaces per 1,000 retail sf
Parking by Type (Spaces)
Total 36
Podium Parking L1 0
Podium Parking L2 0
Underground U1 32
Underground U2 4
Underground U3 0
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $0 $0 $0 $0 $0 $0
1-Bedroom $367,200 $0 $0 $0 $76,392 $443,592
2-Bedroom $600,000 $0 $0 $0 $57,192 $657,192
3-Bedroom $0 $0 $0 $0 $0 $0
Total $967,200 $0 $0 $0 $133,584 $1,100,784
Annual Resi Gross Revenues $1,100,784
Less: Vacancy 5.0% ($55,039)
Less: Operating Costs 25.0% ($275,196)
Annual Resi NOI $770,549
Commerical No
Total Retail Gross Revenue $0.00 $0
Less: Vacancy 2.0% $0
Less: Operating Costs 9.0% $0
Retail NOI $0
Consolidated
Combined NOI $770,549
Capitalized Value Before Commissions 4.0% $19,263,720
Less: Sale Commissions 2.0% ($385,274)
Total Capitalized Value $18,878,446
Value per gross sf $562
Value per unit $786,602
Pasadena Inclusionary

57 Costs Testing Prototype>>> CY-R (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $214 per gross sf $7,190,062
Parking Hard Costs
Podium Parking L1 $36,600 per space $0
Podium Parking L2 $36,600 per space $0
Underground U1 $48,150 per space $1,540,800
Underground U2 $48,150 per space $192,600
Underground U3 $48,150 per space $0
Underground U4 $48,150 per space $0
Contractor Fees 18% of all hard costs $1,618,778
Hard Cost Contingency 7% of all other direct costs $760,826 Total Direct Costs $11,629,767
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $697,786 Permits and Fees $1,568,811
Legal, Insurance, Warranty 2% of all direct costs $232,595 Marketing $2,000 per unit $48,000
General and Administrative 1% of all other indirect costs $25,472 Developer Fee 5% of all direct costs $523,339
Soft Cost Contingency 5% of all other indirect costs $154,800 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $3,250,804
Financing Costs
Loan Amount ######################### $9,672,371
Loan Fees 3% of loan amount $241,809
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $362,714 Total Financing Costs $604,523
Total Costs
Total Costs before return and land $15,485,094
Developer Return on Cost 5% of all total costs $774,255 Total Development Costs before land $16,259,348
Residual Land Value
Residual Land Value $2,619,097
Per Land SF $80
Per GBA SF $78
Per Unit $109,129
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $967,200 $50,905 19 $48 20,150
Affordable $133,584 $26,717 5 $26 5,050
Gap $120,942 $24,188 $22
Gap per market rate unit $6,365 $6
Prototype Code CY-R
Return Metrics
Return Metrics Current Scenario
CY-R
Residual Land Value (RLV) per Land SF $80
Change from Base $236
Affordability Gap per Market Rate Unit $6,365
Change from Base $6,365
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

58 For Rent
Prototype 6
Prototype Code CY-R(SU)
Scenario # 0-R 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 5% of all units 0% of all units
Low 5% of all units 0% of all units
Moderate 10% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> CY-R(SU) CY-R(SU)
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 36.00 36.00
Realized DU/AC 48.0 48.0
Residential Areas
Gross sf 43,067 43,067
Net sf 32,300 32,300
Commerical
Ground Retail? No No
GSF - Retail (sf) 0 0
NSF - Retail (sf) 0 0
Combined (Building)
GSF 43,067 43,067
Built FAR 1.3 1.3
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) CY-R(SU) Medium Density Site CY-R(SU) CY-R(SU)
Studio $2,600 NA $659 $1,175 $1,862 600 600
1-Bedroom $3,600 NA $747 $1,337 $2,122 850 850
2-Bedroom $5,300 NA $836 $1,499 $2,383 1,250 1,250
3-Bedroom $7,200 NA $911 $1,648 $2,630 1,700 1,700
Unit Mix by Income and Type (Base, Without Bonus) CY-R(SU) Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-R 80% 0% 5% 5% 10% 1.00 per BR
Studio 15% 3.00 0.00 1.00 1.00 1.00 6.00 6.00
1-Bedroom 60% 15.00 0.00 2.00 2.00 3.00 22.00 22.00
2-Bedroom 25% 10.00 0.00 -1.00 -1.00 0.00 8.00 16.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 28.00 0.00 2.00 2.00 4.00 36.00 44.0
Base Unit for Set Aside Cal>>> 36.00
Unit Mix by Income and Type (Scenario, With Bonus) CY-R(SU) Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 15% 4.00 0.00 0.00 0.00 2.00 6.00 6.00
1-Bedroom 60% 17.00 0.00 0.00 0.00 5.00 22.00 22.00
2-Bedroom 25% 7.00 0.00 0.00 0.00 1.00 8.00 16.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 100% 28.00 0.00 0.00 0.00 8.00 36.00 44.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee CY-R(SU) Unit Net SF 25,600 6,700 75.00% Unit Net SF 32,300
Unit Gross SF 34,133 8,933 Total Unit 36
10-49 units $58.02
Min Inclusionary Requirement Market SF 32,300 3230000.00% 50+ units $80.58 Total Unit $58.02
In-Lieu Fee $1,874,046
Retail CY-R(SU) $52,057
Retail Areas No
Gross sf
Net sf
Parking 0 spaces per 1,000 retail sf
Parking by Type (Spaces)
Total 44
Podium Parking L1 0
Podium Parking L2 0
Underground U1 5
Underground U2 39
Underground U3 0
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $124,800 $0 $0 $0 $44,688 $169,488
1-Bedroom $734,400 $0 $0 $0 $127,320 $861,720
2-Bedroom $445,200 $0 $0 $0 $28,596 $473,796
3-Bedroom $0 $0 $0 $0 $0 $0
Total $1,304,400 $0 $0 $0 $200,604 $1,505,004
Annual Resi Gross Revenues $1,505,004
Less: Vacancy 5.0% ($75,250)
Less: Operating Costs 25.0% ($376,251)
Annual Resi NOI $1,053,503
Commerical No
Total Retail Gross Revenue $0.00 $0
Less: Vacancy 2.0% $0
Less: Operating Costs 9.0% $0
Retail NOI $0
Consolidated
Combined NOI $1,053,503
Capitalized Value Before Commissions 4.0% $26,337,570
Less: Sale Commissions 2.0% ($526,751)
Total Capitalized Value $25,810,819
Value per gross sf $599
Value per unit $716,967
Pasadena Inclusionary

59 Costs Testing Prototype>>> CY-R(SU) (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $214 per gross sf $9,215,834
Parking Hard Costs
Podium Parking L1 $36,600 per space $0
Podium Parking L2 $36,600 per space $0
Underground U1 $48,150 per space $240,750
Underground U2 $48,150 per space $1,877,850
Underground U3 $48,150 per space $0
Underground U4 $48,150 per space $0
Contractor Fees 18% of all hard costs $2,040,698
Hard Cost Contingency 7% of all other direct costs $959,128 Total Direct Costs $14,660,961
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $879,658 Permits and Fees $2,075,547
Legal, Insurance, Warranty 2% of all direct costs $293,219 Marketing $2,000 per unit $72,000
General and Administrative 1% of all other indirect costs $33,204 Developer Fee 5% of all direct costs $659,743
Soft Cost Contingency 5% of all other indirect costs $200,669 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $4,214,040
Financing Costs
Loan Amount ######################### $12,268,751
Loan Fees 3% of loan amount $306,719
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $460,078 Total Financing Costs $766,797
Total Costs
Total Costs before return and land $19,641,798
Developer Return on Cost 5% of all total costs $982,090 Total Development Costs before land $20,623,888
Residual Land Value
Residual Land Value $5,186,931
Per Land SF $159
Per GBA SF $120
Per Unit $144,081
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $1,304,400 $46,586 28 $51 25,600
Affordable $200,604 $25,076 8 $30 6,700
Gap $172,082 $21,510 $21
Gap per market rate unit $6,146 $7
Prototype Code CY-R(SU)
Return Metrics
Return Metrics Current Scenario

CY-R(SU)
Residual Land Value (RLV) per Land SF $159
Change from Base $314
Affordability Gap per Market Rate Unit $6,146
Change from Base $6,146
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

60 For Rent
Prototype 7
Prototype Code CYM-R
Scenario # 0-R 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 5% of all units 0% of all units
Low 5% of all units 0% of all units
Moderate 10% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> CYM-R CYM-R
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 52.00 52.00
Realized DU/AC 69.3 69.3
Residential Areas
Gross sf 62,667 62,667
Net sf 47,000 47,000
Commerical
Ground Retail? Yes Yes
GSF - Retail (sf) 4,901 4,901
NSF - Retail (sf) 4,410 4,410
Combined (Building)
GSF 67,567 67,567
Built FAR 2.1 2.1
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) CYM-R High Density Site CYM-R CYM-R
Studio $2,600 NA $659 $1,175 $1,862 600 600
1-Bedroom $3,700 NA $747 $1,337 $2,122 850 850
2-Bedroom $5,400 NA $836 $1,499 $2,383 1,250 1,250
3-Bedroom $7,400 NA $911 $1,648 $2,630 1,700 1,700
Unit Mix by Income and Type (Base, Without Bonus) CYM-R Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-R 80% 0% 5% 5% 10% 1.00 per BR
Studio 15% 4.00 0.00 1.00 1.00 2.00 8.00 8.00
1-Bedroom 60% 21.00 0.00 3.00 3.00 5.00 32.00 32.00
2-Bedroom 25% 12.00 0.00 0.00 0.00 0.00 12.00 24.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 37.00 0.00 4.00 4.00 7.00 52.00 64.0
Base Unit for Set Aside Cal>>> 65.00
Unit Mix by Income and Type (Scenario, With Bonus) CYM-R Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 15% 6.00 0.00 0.00 0.00 2.00 8.00 8.00
1-Bedroom 60% 24.00 0.00 0.00 0.00 8.00 32.00 32.00
2-Bedroom 25% 9.00 0.00 0.00 0.00 3.00 12.00 24.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 100% 39.00 0.00 0.00 0.00 13.00 52.00 64.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee CYM-R Unit Net SF 35,250 11,750 75.00% Unit Net SF 47,000
Unit Gross SF 47,000 15,667 Total Unit 52
10-49 units $58.02
Min Inclusionary Requirement Market SF 47,000 4700000.00% 50+ units $80.58 Total Unit $80.58
In-Lieu Fee $3,787,260
Retail CYM-R $72,832
Retail Areas Yes
Gross sf 4,901
Net sf
Parking 3 spaces per 1,000 retail sf 15
Parking by Type (Spaces)
Total 79
Podium Parking L1 22
Podium Parking L2 0
Underground U1 49
Underground U2 8
Underground U3 0
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $187,200 $0 $0 $0 $44,688 $231,888
1-Bedroom $1,065,600 $0 $0 $0 $203,712 $1,269,312
2-Bedroom $583,200 $0 $0 $0 $85,788 $668,988
3-Bedroom $0 $0 $0 $0 $0 $0
Total $1,836,000 $0 $0 $0 $334,188 $2,170,188
Annual Resi Gross Revenues $2,170,188
Less: Vacancy 5.0% ($108,509)
Less: Operating Costs 25.0% ($542,547)
Annual Resi NOI $1,519,132
Commerical Yes
Total Retail Gross Revenue $40.00 $176,418
Less: Vacancy 15.0% ($26,463)
Less: Operating Costs 9.0% ($15,878)
Retail NOI $218,758
Consolidated
Combined NOI $1,737,890
Capitalized Value Before Commissions 4.0% $43,447,248
Less: Sale Commissions 2.0% ($868,945)
Total Capitalized Value $42,578,303
Value per gross sf $630
Value per unit $818,814
Pasadena Inclusionary

61 Costs Testing Prototype>>> CYM-R (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $214 per gross sf $14,458,695
Parking Hard Costs
Podium Parking L1 $36,600 per space $805,200
Podium Parking L2 $36,600 per space $0
Underground U1 $48,150 per space $2,359,350
Underground U2 $48,150 per space $385,200
Underground U3 $48,150 per space $0
Underground U4 $48,150 per space $0
Contractor Fees 18% of all hard costs $3,208,650
Hard Cost Contingency 7% of all other direct costs $1,508,066 Total Direct Costs $23,051,861
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $1,383,112 Permits and Fees $3,127,883
Legal, Insurance, Warranty 2% of all direct costs $461,037 Marketing $2,000 per unit $104,000
General and Administrative 1% of all other indirect costs $50,760 Developer Fee 5% of all direct costs $1,037,334
Soft Cost Contingency 5% of all other indirect costs $308,206 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $6,472,332
Financing Costs
Loan Amount ######################### $19,190,725
Loan Fees 3% of loan amount $479,768
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $719,652 Total Financing Costs $1,199,420
Total Costs
Total Costs before return and land $30,723,613
Developer Return on Cost 5% of all total costs $1,536,181 Total Development Costs before land $32,259,793
Residual Land Value
Residual Land Value $10,318,510
Per Land SF $316
Per GBA SF $153
Per Unit $198,433
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $1,836,000 $47,077 39 $52 35,250
Affordable $334,188 $25,707 13 $28 11,750
Gap $277,812 $21,370 $24
Gap per market rate unit $7,123 $8
Prototype Code CYM-R
Return Metrics
Return Metrics Current Scenario
CYM-R
Residual Land Value (RLV) per Land SF $316
Change from Base $472
Affordability Gap per Market Rate Unit $7,123
Change from Base $7,123
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

62 For Rent
Prototype 8
Prototype Code P-R
Scenario # 0-R 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 5% of all units 0% of all units
Low 5% of all units 0% of all units
Moderate 10% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> P-R P-R
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 65.00 65.00
Realized DU/AC 86.7 86.7
Residential Areas
Gross sf 78,867 78,867
Net sf 59,150 59,150
Commerical
Ground Retail? No No
GSF - Retail (sf) 0 0
NSF - Retail (sf) 0 0
Combined (Building)
GSF 78,867 78,867
Built FAR 2.4 2.4
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) P-R High Density Site P-R P-R
Studio $2,600 NA $659 $1,175 $1,862 600 600
1-Bedroom $3,700 NA $747 $1,337 $2,122 850 850
2-Bedroom $5,400 NA $836 $1,499 $2,383 1,250 1,250
3-Bedroom $7,400 NA $911 $1,648 $2,630 1,700 1,700
Unit Mix by Income and Type (Base, Without Bonus) P-R Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-R 80% 0% 5% 5% 10% 1.00 per BR
Studio 15% 6.00 0.00 1.00 1.00 2.00 10.00 10.00
1-Bedroom 60% 28.00 0.00 3.00 3.00 5.00 39.00 39.00
2-Bedroom 25% 16.00 0.00 0.00 0.00 0.00 16.00 32.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 50.00 0.00 4.00 4.00 7.00 65.00 81.0
Base Unit for Set Aside Cal>>> 65.00
Unit Mix by Income and Type (Scenario, With Bonus) P-R Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 15% 8.00 0.00 0.00 0.00 2.00 10.00 10.00
1-Bedroom 60% 31.00 0.00 0.00 0.00 8.00 39.00 39.00
2-Bedroom 25% 13.00 0.00 0.00 0.00 3.00 16.00 32.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 100% 52.00 0.00 0.00 0.00 13.00 65.00 81.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee P-R Unit Net SF 47,400 11,750 75.00% Unit Net SF 59,150
Unit Gross SF 63,200 15,667 Total Unit 65
10-49 units $58.02
Min Inclusionary Requirement Market SF 59,150 5915000.00% 50+ units $80.58 Total Unit $80.58
In-Lieu Fee $4,766,307
Retail P-R $73,328
Retail Areas No
Gross sf
Net sf
Parking 0 spaces per 1,000 retail sf
Parking by Type (Spaces)
Total 81
Podium Parking L1 0
Podium Parking L2 0
Underground U1 44
Underground U2 37
Underground U3 0
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $249,600 $0 $0 $0 $44,688 $294,288
1-Bedroom $1,376,400 $0 $0 $0 $203,712 $1,580,112
2-Bedroom $842,400 $0 $0 $0 $85,788 $928,188
3-Bedroom $0 $0 $0 $0 $0 $0
Total $2,468,400 $0 $0 $0 $334,188 $2,802,588
Annual Resi Gross Revenues $2,802,588
Less: Vacancy 5.0% ($140,129)
Less: Operating Costs 25.0% ($700,647)
Annual Resi NOI $1,961,812
Commerical No
Total Retail Gross Revenue $0.00 $0
Less: Vacancy 2.0% $0
Less: Operating Costs 9.0% $0
Retail NOI $0
Consolidated
Combined NOI $1,961,812
Capitalized Value Before Commissions 4.0% $49,045,290
Less: Sale Commissions 2.0% ($980,906)
Total Capitalized Value $48,064,384
Value per gross sf $609
Value per unit $739,452
Pasadena Inclusionary

63 Costs Testing Prototype>>> P-R (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $220 per gross sf $17,353,446
Parking Hard Costs
Podium Parking L1 $35,450 per space $0
Podium Parking L2 $35,450 per space $0
Underground U1 $43,850 per space $1,929,400
Underground U2 $43,850 per space $1,622,450
Underground U3 $43,850 per space $0
Underground U4 $43,850 per space $0
Contractor Fees 18% of all hard costs $3,715,599
Hard Cost Contingency 7% of all other direct costs $1,746,332 Total Direct Costs $26,693,927
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $1,601,636 Permits and Fees $3,732,351
Legal, Insurance, Warranty 2% of all direct costs $533,879 Marketing $2,000 per unit $130,000
General and Administrative 1% of all other indirect costs $59,979 Developer Fee 5% of all direct costs $1,201,227
Soft Cost Contingency 5% of all other indirect costs $362,954 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $7,622,024
Financing Costs
Loan Amount ######################### $22,305,368
Loan Fees 3% of loan amount $557,634
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $836,451 Total Financing Costs $1,394,085
Total Costs
Total Costs before return and land $35,710,036
Developer Return on Cost 5% of all total costs $1,785,502 Total Development Costs before land $37,495,538
Residual Land Value
Residual Land Value $10,568,846
Per Land SF $324
Per GBA SF $134
Per Unit $162,598
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $2,468,400 $47,469 52 $52 47,400
Affordable $334,188 $25,707 13 $28 11,750
Gap $282,912 $21,762 $24
Gap per market rate unit $5,441 $6
Prototype Code P-R
Return Metrics
Return Metrics Current Scenario
P-R
Residual Land Value (RLV) per Land SF $324
Change from Base $479
Affordability Gap per Market Rate Unit $5,441
Change from Base $5,441
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

64 For Rent
Prototype 9
Prototype Code PM-R
Scenario # 0-R 0-S
Density Bonus 0% 0%
Affordability Level (Set Aside%) 20% of all units 20% of all units Extremely Low 0% of all units 0% of all units
Very Low 5% of all units 0% of all units
Low 5% of all units 0% of all units
Moderate 10% of all units 20% of all units
Market-Rate 80% of all units 80% of all units
Development
Corresponding Prototype>>> PM-R PM-R
Site Base Base + DB
Site Area
In AC 0.75 0.75
In SF 32,670 32,670
Residential
Total Unit Counts 65.00 65.00
Realized DU/AC 86.7 86.7
Residential Areas
Gross sf 66,733 66,733
Net sf 50,050 50,050
Commerical
Ground Retail? Yes Yes
GSF - Retail (sf) 4,492 4,492
NSF - Retail (sf) 4,043 4,043
Combined (Building)
GSF 71,225 71,225
Built FAR 2.2 2.2
Rent by Income and Type DB Market Extremely Low Very Low Low Moderate Unit Size Unit Size (W DB) PM-R High Density Site PM-R PM-R
Studio $2,600 NA $659 $1,175 $1,862 600 600
1-Bedroom $3,200 NA $747 $1,337 $2,122 750 750
2-Bedroom $4,300 NA $836 $1,499 $2,383 1,000 1,000
3-Bedroom $7,400 NA $911 $1,648 $2,630 1,700 1,700
Unit Mix by Income and Type (Base, Without Bonus) PM-R Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-R 80% 0% 5% 5% 10% 1.00 per BR
Studio 20% 9.00 0.00 1.00 1.00 2.00 13.00 13.00
1-Bedroom 60% 28.00 0.00 3.00 3.00 5.00 39.00 39.00
2-Bedroom 20% 13.00 0.00 0.00 0.00 0.00 13.00 26.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 50.00 0.00 4.00 4.00 7.00 65.00 78.0
Base Unit for Set Aside Cal>>> 65.00
Unit Mix by Income and Type (Scenario, With Bonus) PM-R Market Extremely Low Very Low Low Moderate Subtotal Parking Scenario>>> 0-S 80% 0% 0% 0% 20% 1.00 per BR
Studio 20% 10.00 0.00 0.00 0.00 3.00 13.00 13.00
1-Bedroom 60% 31.00 0.00 0.00 0.00 8.00 39.00 39.00
2-Bedroom 20% 11.00 0.00 0.00 0.00 2.00 13.00 26.00
3-Bedroom 0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal 100% 52.00 0.00 0.00 0.00 13.00 65.00 78.0
In-Lieu Fee Calcuation Market Affordable In-Lieu Fee PM-R Unit Net SF 40,250 9,800 75.00% Unit Net SF 50,050
Unit Gross SF 53,667 13,067 Total Unit 65
10-49 units $58.02
Min Inclusionary Requirement Market SF 50,050 5005000.00% 50+ units $80.58 Total Unit $80.58
In-Lieu Fee $4,033,029
Retail PM-R $62,047
Retail Areas Yes
Gross sf 4,492
Net sf
Parking 3 spaces per 1,000 retail sf 14
Parking by Type (Spaces)
Total 92
Podium Parking L1 20
Podium Parking L2 0
Underground U1 44
Underground U2 28
Underground U3 0
Underground U4 0
Revenue
Residential
Total Sale Values of Units Market Extremely Low Very Low Low Moderate Subtotal Studio $312,000 $0 $0 $0 $67,032 $379,032
1-Bedroom $1,190,400 $0 $0 $0 $203,712 $1,394,112
2-Bedroom $567,600 $0 $0 $0 $57,192 $624,792
3-Bedroom $0 $0 $0 $0 $0 $0
Total $2,070,000 $0 $0 $0 $327,936 $2,397,936
Annual Resi Gross Revenues $2,397,936
Less: Vacancy 5.0% ($119,897)
Less: Operating Costs 25.0% ($599,484)
Annual Resi NOI $1,678,555
Commerical Yes
Total Retail Gross Revenue $40.00 $161,717
Less: Vacancy 15.0% ($24,257)
Less: Operating Costs 9.0% ($14,554)
Retail NOI $200,528
Consolidated
Combined NOI $1,879,084
Capitalized Value Before Commissions 4.0% $46,977,092
Less: Sale Commissions 2.0% ($939,542)
Total Capitalized Value $46,037,550
Value per gross sf $646
Value per unit $708,270
Pasadena Inclusionary

65 Costs Testing Prototype>>> PM-R (continued)
Direct Costs
Site Improvement Work $10 per site sf $326,700
Building Hard Costs $220 per gross sf $15,672,111
Parking Hard Costs
Podium Parking L1 $35,450 per space $709,000
Podium Parking L2 $35,450 per space $0
Underground U1 $43,850 per space $1,929,400
Underground U2 $43,850 per space $1,227,800
Underground U3 $43,850 per space $0
Underground U4 $43,850 per space $0
Contractor Fees 18% of all hard costs $3,476,377
Hard Cost Contingency 7% of all other direct costs $1,633,897 Total Direct Costs $24,975,285
Indirect Costs
Architecture and Engineering Fee 6% of all direct costs $1,498,517 Permits and Fees $3,548,690
Legal, Insurance, Warranty 2% of all direct costs $499,506 Marketing $2,000 per unit $130,000
General and Administrative 1% of all other indirect costs $56,767 Developer Fee 5% of all direct costs $1,123,888
Soft Cost Contingency 5% of all other indirect costs $342,868 In Lieu Fee No $0
Linkage Fee
Total Indirect Costs $7,200,236
Financing Costs
Loan Amount ######################### $20,914,089
Loan Fees 3% of loan amount $522,852
Period 18
Avg Balance 50%
Construction Period Interest 5.0% interest rate $784,278 Total Financing Costs $1,307,131
Total Costs
Total Costs before return and land $33,482,651
Developer Return on Cost 5% of all total costs $1,674,133 Total Development Costs before land $35,156,784
Residual Land Value
Residual Land Value $10,880,766
Per Land SF $333
Per GBA SF $153
Per Unit $167,396
Affordability Gap Total Per Unit Unit Per SF SF
Market Rate $2,070,000 $39,808 52 $51 40,250
Affordable $327,936 $25,226 13 $33 9,800
Gap $189,564 $14,582 $18
Gap per market rate unit $3,645 $5
Prototype Code PM-R
Return Metrics
Return Metrics Current Scenario
PM-R
Residual Land Value (RLV) per Land SF $333
Change from Base $489
Affordability Gap per Market Rate Unit $3,645
Change from Base $3,645
Return Metrics Base Scenario
Residual Land Value (RLV) per Land SF -$156
Change from Base 0%
Affordability Gap per Market Rate Unit $0
Change from Base $0
Return on Cost per Unit -100%
% Change from Base 0%
Pasadena Inclusionary

66 Appendix B Fee Schedule

Fee Description Fee Amount Fee Basis
Planning (Fiscal Year 2024 General Fee Schedule)
471 Preliminary Plan Check Residential 10 or more units 2,053.00$ Per Project 472 Preliminary Plan Check Commercial <24,000 sq.ft. 1,959.00$ Per Project AECOM est. base '19 CEQA Review (Class 32 Categorical Exemption - Air Quality, Noise, and Traffic) 27,000$ Per Project AECOM est. base '19 Financial Analysis (typical) 16,000$ Per Project FY24 Planning Fees Vesting Tentative Tract Map (Base fee) 6,367.00$ Per Project FY24 Planning Fees Vesting Tentative Tract Map (Each land and/or air parcel) 216.00$ Per Land and/or Air Parcel 1103 Final Tract Map or Parcel Map (with dedication) Processing $2,609 Per Project 221 GP Maintenance Fee 0.5% Building Permit Valuation
222 Technology Fee 0.5% Building Permit Valuation
223 AB 717 Training Fee 1% Building Permit Fee
224 Accessibility Review Fee
Building Permit Fee Basis 1% Building Permit Fee
Plan Check Fee Basis 1% Plan Check Fee
Subtotal
Permit Valuation Fee (Fiscal Year 2024 General Fee Schedule) 538 Base (Minimum of $100,000) 4.00$
536 Every $25,000 or fraction above $100,000 1.00$
537 Subtotal
Design Review (Fiscal Year 2024 General Fee Schedule)
Concept Design Review
508 Concept Design Review (<25k GBA) 3,173.00$ Per Project 509 Concept Design Review (25k GBA to 50k GBA) 5,692.00$ Per Project 510 Concept Design Review (50k GBA to 100k GBA) 9,635.00$ Per Project 511 Concept Design Review (100k GBA or more) 14,500.00$ Per Project Final Design Review
518 Staff 1,278.00$ Per Project
519 Commission 2,430.00$ Per Project
Subtotal
Building (Fiscal Year 2024 General Fee Schedule)
322 Plan Check Fee - Building (Valuation $100,0001 and over) 2,378.00$ First $100,000 Permit Value Basis 323 Plan Check Fee - Building (Valuation $100,0001 and over) 9.00$ Each additional $1,000 Permit Value Basis or fraction thereof 333 Plan Check Fee - Fire (Valuation $100,001 and over) 461.00$ First $100,000 Permit Value Basis 334 Plan Check Fee - Fire (Valuation $100,001 and over) 2.00$ Each additional $1,000 Permit Value Basis or fraction thereof 344 Plan Check Fee - Public Works (Valuation $100,001 and over) 294.00$ First $100,000 Permit Value Basis 345 Plan Check Fee - Public Works (Valuation $100,001 and over) 1.00$ Each additional $1,000 Permit Value Basis or fraction thereof 355 Plan Check Fee - Current Planning (Valuation $100,001 and over) 181.00$ First $100,000 Permit Value Basis 356 Plan Check Fee - Current Planning (Valuation $100,001 and over) 1.00$ Each additional $1,000 Permit Value Basis or fraction thereof 366 Plan Check Fee - Design and Historic Preservation (Valuation $100,001 and over) 36.00$ First $100,000 Permit Value Basis 367 Plan Check Fee - Design and Historic Preservation (Valuation $100,001 and over) 1.00$ Each additional $1,000 Permit Value Basis or fraction thereof 377 Plan Check Department of Transportation (Valuation $100,001 and over) 143.00$ First $100,000 Permit Value Basis 378 Plan Check Department of Transportation (Valuation $100,001 and over) 1.00$ Each additional $1,000 Permit Value Basis or fraction thereof 234 Building Permit Fee (Valuation $100,001 and over) 1,586.00$ First $100,000 Permit Value Basis 235 Building Permit Fee (Valuation $100,001 and over) 6.00$ Each additional $1,000 Permit Value Basis or fraction thereof Construction Tax 1.92% of Permit Valuation Basis
CA Building Standards Fee (Valuation $75k to $100k) 4.00$ First $100k Permit Value Basis CA Building Standards Fee (Every $25k or fraction thereof above $100k) 1.00$ Every $25k Permit Value Basis above $100k Affordable Housing Fee Waiver, Projects with <50% Affordable Units ($125,000 cap)* 305 Fee Waived for Very Low Income (2,024.00)$ Per Unit 306 Fee Waived for Low Income (1,515.00)$ Per Unit 307 Fee Waived for Moderate Income (1,010.00)$ Per Unit Affordable Housing Fee Waiver, Projects with >50% Affordable Units ($125,000 cap)* 308 Fee Waived for Very Low Income (2,224.00)$ Per Unit 309 Fee Waived for Low Income (1,670.00)$ Per Unit 310 Fee Waived for Moderate Income (1,108.00)$ Per Unit Subtotal
Transportation (Fiscal Year 2024 General Fee Schedule)
Traffic Reduction and Transportation Improvement Fee (Residential) 4,173.98$ Per MF Residential Unit Traffic Reduction and Transportation Improvement Fee (Retail) 13.05$ Per SF GBA Subtotal
Pasadena Unified School District (As of 2023)
Commercial New Development 0.36$ Per SF GBA Residential New Development $2.24 Per SF GBA
Subtotal
Public Works
Sewer Facility Charge
Muni code 4.53.030 Studio 619.00$ Per Unit ($6.19 * 100 gallons/day) Muni code 4.53.030 1 Bedroom 928.50$ Per Unit ($6.19 * 150 gallons/day) Muni code 4.53.030 2 Bedroom 1,238.00$ Per Unit ($6.19 * 200 gallons/day) Muni code 4.53.030 3 or more Bedroom 1,547.50$ Per Unit ($6.19 * 250 gallons/day) Subtotal
Public Art (Fiscal Year 2024 General Fee Schedule)
545 Within downtown, old pasadena, and northwest areas, mixed-use and multi-family buildings with building permit valuation over $500k0.25% of Building Permit Valuation Subtotal
Residential Impact Fee (Revised Schedule of Taxes, Fees, and Charges, FY 2024) Number of Bedrooms
Studio 22,362.31$ Per Unit
1 23,599.36$ Per Unit
2 26,209.96$ Per Unit
3 30,140.38$ Per Unit
Per unit for affordable housing 1,158.84$ Per Unit Reduced fee for non-affordable units if affordable is built on-site Studio 15,653.59$ Per Unit
1 16,519.55$ Per Unit
2 18,346.96$ Per Unit
3 21,098.24$ Per Unit
Subtotal
Records Management Maintenance Cost
FY24 Planning Fees Subtotal 3% Application Fee
TOTAL
Pasadena Inclusionary

67 Appendix C Detailed Feasibility Results
Tables

Feasibility Testing Results - Original Baseline
For Sale For Sale For Sale For Rent For Rent For Rent For Rent For Rent 1 2 3 4 5 6 7 8

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Density>>> Low Med High Low Med High High High
FAR>>> 2.25 3.00
Scenario Scenario
Resulting Prototype Density Bonus15% CY-S CY-S(SU) P-S Density Bonus20% CY-R CY-R(SU) P-R CYM-R PM-R RLV Very Low 0% $122 $208 $551 Very Low 5% $53 $217 $386 $281 $352 Feasible? Low 0% Feasible Feasible Feasible Low 5% Not Feasible Feasible Feasible Feasible Feasible Moderate 20% Moderate 10%
Resulting Prototype Density Bonus20% CY-S CY-S(SU) P-S Density Bonus28% CY-R CY-R(SU) P-R PM-R PM-R RLV Very Low 0% $96 $192 $474 Very Low 5% $61 $223 $408 $275 $366 Feasible? Low 0% Feasible Feasible Feasible Low 10% Not Feasible Feasible Feasible Feasible Feasible Moderate 25% Moderate 5%
Resulting Prototype Density Bonus25% CY-S CY-S(SU) P-S Density Bonus35% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $68 $161 $420 Very Low 5% $76 $208 $295 $253 $372 Feasible? Low 0% Not Feasible Feasible Feasible Low 15% Feasible Feasible Not Feasible Feasible Feasible Moderate 30% Moderate 0%
Resulting Prototype Density Bonus30% CY-S CY-S(SU) P-S(SU) Density Bonus46% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $44 $121 $312 Very Low 14% $97 $212 $332 $249 $384 Feasible? Low 0% Not FeasibleNot Feasible Feasible Low 0% Feasible Feasible Feasible Not Feasible Feasible Moderate 35% Moderate 6%
Resulting Prototype Density Bonus35% CY-S CY-S(SU) P-S(SU) Density Bonus70% CY-R(SU) CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $9 $90 $256 Very Low 15% $194 $292 $416 $249 $384 Feasible? Low 0% Not FeasibleNot FeasibleNot Feasible Low 0% Feasible Feasible Feasible Not Feasible Feasible Moderate 40% Moderate 5%
Resulting Prototype Density Bonus50% CY-S CY-S(SU) P-S(SU) Density Bonus74% CY-R(SU) CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% ($45) $81 $232 Very Low 15% $196 $280 $432 $249 $384 Feasible? Low 0% Not FeasibleNot FeasibleNot Feasible Low 0% Feasible Feasible Feasible Not Feasible Feasible Moderate 44% Moderate 6%
Resulting Prototype Density Bonus73% CY-S(SU) CY-S(SU) P-S(SU) Density Bonus89% CY-R(SU) P-R P-R(SU) PM-R PM-R RLV Very Low 0% $12 $38 $156 Very Low 15% $210 $329 $458 $231 $366 Feasible? Low 0% Not FeasibleNot FeasibleNot Feasible Low 0% Feasible Feasible Feasible Not Feasible Feasible Moderate 50% Moderate 10%
Resulting Prototype Density Bonus28% CY-R CY-R(SU) P-R PM-R PM-R RLV Very Low 5% $53 $195 $383 $257 $348
Feasible? Low 10% Not Feasible Feasible Feasible Feasible Not Feasible Moderate 10%
Resulting Prototype Density Bonus50% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 5% $65 $245 $287 $196 $331
Feasible? Low 19% Not Feasible Feasible Not Feasible Not FeasibleNot Feasible Moderate 5%
Resulting Prototype Density Bonus35% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 10% $57 $195 $274 $232 $351
Feasible? Low 10% Not Feasible Feasible Not Feasible Not Feasible Feasible Moderate 5%
Resulting Prototype Density Bonus50% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 14% $57 $190 $265 $173 $308
Feasible? Low 10% Not Feasible Feasible Not Feasible Not FeasibleNot Feasible Moderate 5%
9-R
10-R
7-R
8-R
5-S 5-R
6-S 6-R
0-S 0-R
3-S 3-R
4-S 4-R
1-S 1-R
2-S 2-R
Single-Use Residential For Sale Single-Use Residential For Rental Mixed-Use For Rental Pasadena Inclusionary

68 Feasibility Testing Results - With 10% Rent Premium
For Sale For Sale For Sale For Rent For Rent For Rent For Rent For Rent 1 2 3 5 6 9 7 10

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Density>>> Low Med High Low Med High High High
FAR>>> 2.25 3.00
Scenario Scenario
Resulting Prototype Density Bonus15% CY-S CY-S(SU) P-S Density Bonus20% CY-R CY-R(SU) P-R CYM-R PM-R RLV Very Low 0% $201 $300 $741 Very Low 5% $109 $307 $548 $394 $500 Feasible? Low 0% Feasible Feasible Feasible Low 5% Feasible Feasible Feasible Feasible Feasible Moderate 20% Moderate 10%
Resulting Prototype Density Bonus20% CY-S CY-S(SU) P-S Density Bonus28% CY-R CY-R(SU) P-R PM-R PM-R RLV Very Low 0% $173 $284 $657 Very Low 5% $122 $318 $582 $399 $524 Feasible? Low 0% Feasible Feasible Feasible Low 10% Feasible Feasible Feasible Feasible Feasible Moderate 25% Moderate 5%
Resulting Prototype Density Bonus25% CY-S CY-S(SU) P-S Density Bonus35% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $145 $250 $597 Very Low 5% $145 $306 $449 $377 $541 Feasible? Low 0% Feasible Feasible Feasible Low 15% Feasible Feasible Feasible Feasible Feasible Moderate 30% Moderate 0%
Resulting Prototype Density Bonus30% CY-S CY-S(SU) P-S(SU) Density Bonus46% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $118 $204 $469 Very Low 14% $174 $317 $501 $374 $559 Feasible? Low 0% Feasible Feasible Feasible Low 0% Feasible Feasible Feasible Feasible Feasible Moderate 35% Moderate 6%
Resulting Prototype Density Bonus35% CY-S CY-S(SU) P-S(SU) Density Bonus70% CY-R(SU) CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $80 $171 $408 Very Low 15% $281 $422 $616 $374 $559 Feasible? Low 0% Feasible Feasible Feasible Low 0% Feasible Feasible Feasible Feasible Feasible Moderate 40% Moderate 5%
Resulting Prototype Density Bonus50% CY-S CY-S(SU) P-S(SU) Density Bonus74% CY-R(SU) CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $24 $167 $390 Very Low 15% $283 $409 $638 $374 $559 Feasible? Low 0% Not Feasible Feasible Feasible Low 0% Feasible Feasible Feasible Feasible Feasible Moderate 44% Moderate 6%
Resulting Prototype Density Bonus73% CY-S(SU) CY-S(SU) P-S(SU) Density Bonus89% CY-R(SU) P-R P-R(SU) PM-R PM-R RLV Very Low 0% $70 $127 $319 Very Low 15% $305 $470 $674 $350 $535 Feasible? Low 0% Not FeasibleNot Feasible Feasible Low 0% Feasible Feasible Feasible Feasible Feasible Moderate 50% Moderate 10%
Resulting Prototype Density Bonus28% CY-R CY-R(SU) P-R PM-R PM-R RLV Very Low 5% $112 $285 $551 $375 $500
Feasible? Low 10% Feasible Feasible Feasible Feasible Feasible Moderate 10%
Resulting Prototype Density Bonus50% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 5% $137 $354 $446 $307 $492
Feasible? Low 19% Feasible Feasible Feasible Feasible Feasible Moderate 5%
Resulting Prototype Density Bonus35% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 10% $122 $291 $422 $351 $514
Feasible? Low 10% Feasible Feasible Feasible Feasible Feasible Moderate 5%
Resulting Prototype Density Bonus50% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 14% $129 $294 $423 $284 $469
Feasible? Low 10% Feasible Feasible Feasible Feasible Feasible Moderate 5%
9-R
10-R
7-R
8-R
5-S 5-R
6-S 6-R
0-S
3-S 3-R
4-S 4-R
1-S 1-R
2-S 2-R
0-R
Mixed-Use For RentalSingle-Use Residential For Sale Single-Use Residential For Rental Pasadena Inclusionary

69 Feasibility Testing Results - With 10% Construction Cost Increase For Sale For Sale For Sale For Rent For Rent For Rent For Rent For Rent 1 2 3 5 6 9 7 10

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Density>>> Low Med High Low Med High High High
FAR>>> 2.25 3.00
Scenario Scenario
Resulting Prototype Density Bonus15% CY-S CY-S(SU) P-S Density Bonus20% CY-R CY-R(SU) P-R CYM-R PM-R RLV Very Low 0% $53 $132 $408 Very Low 5% ($0) $148 $260 $190 $236 Feasible? Low 0% Not FeasibleNot Feasible Feasible Low 5% Not Feasible Not Feasible Not Feasible Not FeasibleNot Feasible Moderate 20% Moderate 10%
Resulting Prototype Density Bonus20% CY-S CY-S(SU) P-S Density Bonus28% CY-R CY-R(SU) P-R PM-R PM-R RLV Very Low 0% $25 $113 $326 Very Low 5% $4 $150 $274 $174 $243 Feasible? Low 0% Not FeasibleNot Feasible Feasible Low 10% Not Feasible Not Feasible Not Feasible Not FeasibleNot Feasible Moderate 25% Moderate 5%
Resulting Prototype Density Bonus25% CY-S CY-S(SU) P-S Density Bonus35% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% ($8) $77 $267 Very Low 5% $16 $131 $172 $152 $242 Feasible? Low 0% Not FeasibleNot FeasibleNot Feasible Low 15% Not Feasible Not Feasible Not Feasible Not FeasibleNot Feasible Moderate 30% Moderate 0%
Resulting Prototype Density Bonus30% CY-S CY-S(SU) P-S(SU) Density Bonus46% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% ($34) $37 $162 Very Low 14% $32 $129 $199 $149 $251 Feasible? Low 0% Not FeasibleNot FeasibleNot Feasible Low 0% Not Feasible Not Feasible Not Feasible Not FeasibleNot Feasible Moderate 35% Moderate 6%
Resulting Prototype Density Bonus35% CY-S CY-S(SU) P-S(SU) Density Bonus70% CY-R(SU) CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% ($73) $1 $99 Very Low 15% $129 $195 $263 $149 $251 Feasible? Low 0% Not FeasibleNot FeasibleNot Feasible Low 0% Feasible Feasible Not Feasible Not FeasibleNot Feasible Moderate 40% Moderate 5%
Resulting Prototype Density Bonus50% CY-S CY-S(SU) P-S(SU) Density Bonus74% CY-R(SU) CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% ($134) ($19) $59 Very Low 15% $131 $182 $275 $149 $251 Feasible? Low 0% Not FeasibleNot FeasibleNot Feasible Low 0% Feasible Feasible Not Feasible Not FeasibleNot Feasible Moderate 44% Moderate 6%
Resulting Prototype Density Bonus73% CY-S(SU) CY-S(SU) P-S(SU) Density Bonus89% CY-R(SU) P-R P-R(SU) PM-R PM-R RLV Very Low 0% ($63) ($76) ($43) Very Low 15% $137 $222 $290 $131 $233 Feasible? Low 0% Not FeasibleNot FeasibleNot Feasible Low 0% Feasible Feasible Not Feasible Not FeasibleNot Feasible Moderate 50% Moderate 10%
Resulting Prototype Density Bonus28% CY-R CY-R(SU) P-R PM-R PM-R RLV Very Low 5% ($4) $122 $250 $156 $225
Feasible? Low 10% Not Feasible Not Feasible Not Feasible Not FeasibleNot Feasible Moderate 10%
Resulting Prototype Density Bonus50% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 5% ($3) $159 $153 $95 $197
Feasible? Low 19% Not Feasible Feasible Not Feasible Not FeasibleNot Feasible Moderate 5%
Resulting Prototype Density Bonus35% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 10% ($3) $118 $151 $132 $221
Feasible? Low 10% Not Feasible Not Feasible Not Feasible Not FeasibleNot Feasible Moderate 5%
Resulting Prototype Density Bonus50% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 14% ($11) $104 $130 $73 $175
Feasible? Low 10% Not Feasible Not Feasible Not Feasible Not FeasibleNot Feasible Moderate 5%
9-R
10-R
7-R
8-R
6-R
5-S 5-R
6-S
4-R
3-S 3-R
4-S
2-R
1-S 1-R
2-S
0-S
Single-Use Residential For Sale Single-Use Residential For Rental Mixed-Use For Rental 0-R
Pasadena Inclusionary

70 Feasibility Testing Results - 10% Rent Growth + 10% Construction Cost Escalation For Sale For Sale For Sale For Rent For Rent For Rent For Rent For Rent 1 2 3 5 6 9 7 10

CY-S CY-S(SU) P-S CY-R CY-R(SU) P-R CYM-R PM-R
Low Med High Low Med High High High
Resulting Prototype Density Bonus15% CY-S CY-S(SU) P-S Density Bonus20% CY-R CY-R(SU) P-R CYM-R PM-R RLV Very Low 0% $132 $224 $599 Very Low 5% $56 $238 $422 $303 $384 Feasible? Low 0% Feasible Feasible Feasible Low 5% Not Feasible Feasible Feasible Feasible Feasible Moderate 20% Moderate 10%
Resulting Prototype Density Bonus20% CY-S CY-S(SU) P-S Density Bonus28% CY-R CY-R(SU) P-R PM-R PM-R RLV Very Low 0% $102 $204 $509 Very Low 5% $65 $245 $448 $299 $401 Feasible? Low 0% Feasible Feasible Feasible Low 10% Not Feasible Feasible Feasible Feasible Feasible Moderate 25% Moderate 5%
Resulting Prototype Density Bonus25% CY-S CY-S(SU) P-S Density Bonus35% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $69 $166 $444 Very Low 5% $84 $229 $326 $277 $411 Feasible? Low 0% Not Feasible Feasible Feasible Low 15% Feasible Feasible Feasible Feasible Feasible Moderate 30% Moderate 0%
Resulting Prototype Density Bonus30% CY-S CY-S(SU) P-S(SU) Density Bonus46% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% $40 $120 $319 Very Low 14% $108 $234 $368 $274 $425 Feasible? Low 0% Not Feasible Not Feasible Feasible Low 0% Feasible Feasible Feasible Feasible Feasible Moderate 35% Moderate 6%
Resulting Prototype Density Bonus35% CY-S CY-S(SU) P-S(SU) Density Bonus70% CY-R(SU) CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% ($1) $82 $251 Very Low 15% $215 $325 $463 $274 $425 Feasible? Low 0% Not Feasible Not Feasible Not Feasible Low 0% Feasible Feasible Feasible Feasible Feasible Moderate 40% Moderate 5%
Resulting Prototype Density Bonus50% CY-S CY-S(SU) P-S(SU) Density Bonus74% CY-R(SU) CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 0% ($64) $67 $217 Very Low 15% $218 $311 $481 $274 $425 Feasible? Low 0% Not Feasible Not Feasible Not Feasible Low 0% Feasible Feasible Feasible Feasible Feasible Moderate 44% Moderate 6%
Resulting Prototype Density Bonus73% CY-S(SU) CY-S(SU) P-S(SU) Density Bonus89% CY-R(SU) P-R P-R(SU) PM-R PM-R RLV Very Low 0% ($6) $13 $119 Very Low 15% $232 $363 $506 $250 $402 Feasible? Low 0% Not Feasible Not Feasible Not Feasible Low 0% Feasible Feasible Feasible Not Feasible Feasible Moderate 50% Moderate 10%
Resulting Prototype Density Bonus28% CY-R CY-R(SU) P-R PM-R PM-R RLV Very Low 5% $55 $212 $417 $275 $378
Feasible? Low 10% Not Feasible Feasible Feasible Feasible Feasible Moderate 10%
Resulting Prototype Density Bonus50% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 5% $69 $268 $311 $207 $358
Feasible? Low 19% Not Feasible Feasible Feasible Not Feasible Feasible Moderate 5%
Resulting Prototype Density Bonus35% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 10% $61 $214 $299 $250 $384
Feasible? Low 10% Not Feasible Feasible Not Feasible Feasible Feasible Moderate 5%
Resulting Prototype Density Bonus50% CY-R CY-R(SU) P-R(SU) PM-R PM-R RLV Very Low 14% $61 $208 $289 $184 $336
Feasible? Low 10% Not Feasible Feasible Not Feasible Not Feasible Not Feasible Moderate 5%
7-R
8-R
9-R
10-R
4-S 4-R
5-S 5-R
6-S 6-R
1-S 1-R
2-S 2-R
3-S 3-R
Single-Use Residential For Sale Single-Use Residential For Rental Mixed-Use Mixed-Use For Rental 0-S 0-R
Pasadena Inclusionary

71 Appendix D Recent Development Details

aecom.com

ATTACHMENT C
City of Pasadena Regional Housing Needs Allocation 2021-2029 (6th Cycle) Permitted Units Issued by Affordability

RHNA
Allocation
by
Income
Level
Projection
Period –
06/30/2021-
10/14/2021
2021 2022 2023 2024 Total
Units to
Date (all
years)
Total
Remaining
RHNA by
Income
Level
Very Low 2,747 75 2 22 99 2,648
Low 1,662 47 47 1,615
Moderate 1,565 28 198 216 28 470 1,095
Above
Moderate
3,455 5 6 253 447 762 2,693
Total RHNA 9,429
Total Units 33 279 267 283 516 1,378 8,051

ATTACHMENT D

ATTACHMENT E
Residential Impact Fee

CITY OF PASADENA
FISCAL YEAR 2025

REVISED SCHEDULE OF TAXES, FEES, AND CHARGES

INFORMATION ONLY

2. UPDATE ON RECONNECTING PASADENA 710 MASTER PLAN PROCESS*

1 Economic Development & Technology
Committee
710 Master Plan Preliminary Economic Analysis
September 16, 2025

2 Economics & Pro-forma
Testing
land value, revenue
generation, development
proformas against assumed
infrastructure cost.

Smaller parcels,
greenway park
+ replace
bridges
Res 75% /
Other 25%
Res 60% /
Other 40%
Traffic Impact Studies
Tests the land use emphasis,
e.g. greater mix = more
“internal trip capture.” Tests
number of new connections
needed, lanes on St. John
and Pasadena Avenue.Form Studies
$

GARDENS AND

TERRACES
larger parcels;
interior flexibility
+ keep bridges
Form Studies Res 75% /
Other 25%
Res 60% /
Other 40%
$
City Services & Sustainability
Base line water and power –
cost benefit mini-studies on
how to achieve lower
impact.

List of Assumptions
Balance revenue
generating uses
against costs /
Restorative Justice
Features
Reporting; policy
development,
recommendations
for Phase 3
Documentation,
adjustments to
concepts
September 13th
Engagement –
gather input

BOULEVARDS
AND
PASEOS
Information
Gathering
Updates to answer
questions
3 Economic Analysis
Draft
Step Description Status
1 Make assumptions about potential costs and revenues based on market data Done 2 Assess the preliminary feasibility findings Done
3 Determine if adjustments to key cost/revenue assumptions are justified In progress 4 Re-assess the feasibility findings, make refinements In progress 5 Explore other gap funding sources or financing strategies, if necessary Next step 6 Provide considerations for the final feasibility assessment Final step for this task 7 Issue recommendations in Vision Plan Final step for this project 8 Craft, publish, and execute a developer solicitation strategy Beyond current scope of work 9 Select development partner(s) and construct the project Beyond current scope of work • The economic analysis and future work phases are summarized below • Where we land in Steps 6 and 7 will help shape Steps 8 and 9 4 Recap of Market Analysis from Fall 2024
Use Type Evidence of
Market Demand
Alignment with
Planning + Policy
Goals
Composite
Priority Level
Multifamily
Residential High High High
Tech & Life
Sciences High High High
Medical Office
/ Healthcare High High High
Parks &
Recreation High High High
Dining &
Entertainment Moderate High Moderate/High
Hotel Moderate Moderate Moderate
Student Housing
/ Co-Living Moderate Moderate Moderate
General Office Moderate Moderate Moderate
Higher
Education Moderate Moderate Moderate
Industrial / Flex Moderate Low Low/Moderate
Traditional
Retail Low Low Low
• “High” priority uses demonstrate high market
demand and alignment with the City’s planning and
policy goals and could support a significant footprint
within the development scenarios.
• “Moderate” priority uses demonstrate moderate
market demand and alignment with goals, could
play a supporting role to the “high” priority uses, and would help to foster a vibrant, mixed-use
environment.
• “Low” priority uses demonstrate lower or uncertain
market demand, are not in alignment with planning
and policy goals, and should only be included if
specific tenants or strategic partnerships can be
identified.

B.1 and B.2

BOULEVARD & PASEOS
We have established a
baseline of gross
development areas &
“horizontal” roadway
infrastructure for high-level
costing and the purposes
of running initial financial,
traffic models.

A.1 and A.2

GARDENS AND TERRACES
6 Gateway Partnering Opportunity
Colorado Blvd./Civic Cultural
Commercial
Urban Village/Residential
Emphasis
Water, Learning and
Landscapes/Mixed
Institutional/Commercial
Relinquishment Area
Caltrans Property
Legend
Colorado Boulevard
W. Green Street
W. Del Mar Blvd
W. Union Street
Walnut Street
Maple Street
7 6. How much revenue could be
recaptured by the City while still
maintaining feasibility?

3. How much will each element roughly cost,
and what is the total cost for each Option?

4. How much of these costs could be
assigned to the “vertical” real estate
project, while still maintaining feasibility?

5. How much of these costs may need to be
covered by the City via an EIFD or some
other mechanism?

1. How feasible is the “vertical” real estate
development with no horizontal
infrastructure or acquisition costs?

2. How could financial feasibility be
improved via grants, tax credits, and
other funding sources?
“Vertical” Real Estate Baseline Feasibility
“Horizontal” Roadway Infrastructure Cost Sharing
Value Capture Opportunities
Economic Analysis
• AECOM is building a financial pro forma model to analyze the feasibility of the project’s current land use assumptions, including rough-order-of-magnitude cost estimates and revenues • This is a tool for planning-level decision-making rather than a definitive set of results, given the high degree of uncertainty
Draft
8 Economic Analysis
• Baseline pro forma model is from the real estate developer’s point of view • Baseline model assumes:
– $0 for land value payments from developer to City
– $0 for direct horizontal infrastructure cost reimbursements from developer to City – Why? We want to understand baseline feasibility first, then layer on additional financial commitments as feasibility allows
• Land value and horizontal infrastructure reimbursements are not the only way that the City, County, and State will capture revenue from the development – 100-year property tax estimates are upwards of $10 billion – Other tax revenues (income tax, sales tax, hotel tax, etc.) will also be significant – Fee revenue (permit fees, impact fees, planning fees, etc.) will also be significant and are included in the construction cost estimates
• Baseline model results reflect current market and will change over time Draft
9 Economic Analysis
• High construction materials costs + high labor costs + high interest rates = tough market • Evidenced by the significant decrease in new construction pipeline in recent years Draft
0 4,000
8,000
12,000
16,000
20,000
24,000
28,000
32,000
36,000
40,000
0 100
200
300
400
500
600
700
800
900
1,000
Los Angeles County
Pasadena
Multi-Family Residential Units Under Construction
Pasadena Los Angeles County
10 Economic Analysis
The model was been set up to reflect development variables: land uses, affordable housing provision, and parking ratios for purposes of comparison.

Development Program Option A.1
Gardens & Terraces
75% Residential
Option A.2
Gardens & Terraces
60% Residential
Option B.1
Boulevard & Paseos
75% Residential
Option B.2
Boulevard & Paseos
60% Residential
Residential Square Feet 2.6 million SF 2.1 million SF 2.4 million SF 1.9 million SF Total Residential Units 2,380 units 1,907 units 2,176 units 1,757 units Affordable Units (%) 20% 20% 20% 20%
Commercial Square Feet 874,000 SF 1.4 million SF 800,000 SF 1.3 million SF Retail 45,000 SF 120,000 SF 17,000 SF 41,000 SF
Restaurant 45,000 SF 110,000 SF 24,000 SF 41,000 SF
Office 67,000 SF 447,000 SF 0 SF 45,000 SF
Life Science/Medical 717,000 SF 717,000 SF 759,000 SF 1.1 million SF Parking Square Feet 1.3 million SF 1.3 million SF 1.2 million SF 1.2 million SF TOTAL 4.8 million SF 4.8 million SF 4.4 million SF 4.4 million SF Draft
* Estimates do not include hotel/hospitality at this time. All land uses are conceptual for purposes of comparative costing, model development and to inform development strategies. All land uses and cost model assumptions are subject to change. 11 Economic Analysis
• “Feasibility” clarifies the relationship between the cost of developing the project and the revenues generated by the project upon completion
• As costs increase, feasibility worsens
• As revenues increase, feasibility improves
Draft
Not Feasible
Costs are too High
Revenues are too Low
Developers will not Build
Feasible
Costs & Revenues are Balanced
Developers will Build
Highly Feasible
Costs are Low
Revenues are High
City should ask for More
Costs
Revenue
Costs Revenue
Costs
Revenue
12 Economic Analysis
• The following table summarizes key feasibility assessment categories and their implications • Numbers represent a “snapshot in time” and will continue to change Draft
Feasibility Assessment Description Implications
Highly Feasible Project exceeds feasibility thresholds among all return metrics
Project can support horizontal cost sharing and/or ground lease payments
Feasible Project meets feasibility thresholds among
most return metrics
Project is likely to be able to support horizontal cost sharing and/or ground lease payments
Potentially Feasible Project meets feasibility thresholds among some return metrics
Project is unlikely to be able to support horizontal cost sharing and/or ground lease payments
Not Feasible Project does not meet feasibility thresholds Project cannot support horizontal cost sharing and/or ground lease payments
13 Option A.1
Gardens & Terraces
75% Residential
Option A.2
Gardens & Terraces
60% Residential
Option B.1
Boulevard & Paseos
75% Residential
Option B.2
Boulevard & Paseos
60% Residential
Estimated Total Development Cost (TDC) $2.4 billion $2.4 billion $2.3 billion $2.3 billion Levered Internal Rate of Return 8.2% 7.7% 8.4% 7.0%
Nominal Yield on Cost 5.2% 5.7% 5.3% 4.9%
Preliminary Feasibility Assessment Potentially Feasible Potentially Feasible Potentially Feasible Potentially Feasible Question 1: How feasible is the “vertical” real estate development with no horizontal infrastructure or acquisition costs? • Overall, our preliminary findings suggest that all options are “potentially feasible” with currently modeled assumptions
• Options with more residential development are slightly more feasible than options with more commercial development
• Feasibility was assessed based on various return metrics including levered and unlevered internal rate of return, equity multiples, net present values, and nominal yield-on-project-cost Draft
Recall from the previous slide that “Potentially Feasible” means that the project meets feasibility thresholds among some return metrics, but is unlikely to be able to support too many additional financial burdens such as horizontal costs and/or ground lease payments 14 Question 1: How feasible is the “vertical” real estate development with no horizontal infrastructure or acquisition costs? • Feasibility is influenced by several cost and revenue-related assumptions • Some of the most important assumptions include:
• Construction Costs – high in the current market
• Market Rate Rents – increasing, but not as fast as costs • Affordable Housing – standard inclusionary (20% at 90% AMI) assumed in baseline model • Financing Costs – high in the current market
• Additional Gap Funding – none assumed in the baseline model • The pro forma tool enables the City and consultant team to refine assumptions and reevaluate feasibility as new information emerges
Draft
15 Question 1: How feasible is the “vertical” real estate development with no horizontal infrastructure or acquisition costs? • Cost assumptions are based on AECOM’s analysis of cost data from comparable, recent projects obtained from internal AECOM projects, Cumming Group, RSMeans, and RLB • Key cost assumptions are summarized below
Draft
Construction (Hard) Cost Assumptions
Life Science/Medical $600 per SF
Office $400 per SF
Retail $350 per SF
Restaurant $375 per SF
Residential $425 per SF
Open/Green Spaces $25 per SF
Structured Parking $50k per space
Soft Cost Assumptions
Project Mgmt. & Construction Admin. 7% of hard costs
Professional Fees 7% of hard costs
Permits & Inspection & Other Fees 3% of hard costs
Contingency Inc. in Hard Costs
Escalation Inc. in Hard Costs
16 Question 1: How feasible is the “vertical” real estate development with no horizontal infrastructure or acquisition costs? • Revenue estimates are based on data obtained from CoStar for comparable properties • Key revenue assumptions are summarized below
Residential Assumptions
Market Rate Studio Rental Rate $2,700 / unit / month
Market Rate 1-Bed Rental Rate $3,100 / unit / month
Market Rate 2-Bed Rental Rate $4,100 / unit / month
Market Rate 3-Bed Rental Rate $5,300 / unit / month
Affordable Housing Units 20% of total units
Affordable Studio Rental Rate (90% AMI) $2,385 / unit / month Affordable 1-Bed Rental Rate (90% AMI) $2,556 / unit / month Affordable 2-Bed Rental Rate (90% AMI) $3,066 / unit / month Affordable 3-Bed Rental Rate (90% AMI) $3,544 / unit / month Commercial Assumptions
Commercial Lease Type NNN
Retail & Restaurant Rental Rate $40 per SF
Office Rental Rate $45 per SF
Medical Office Rental Rate $50 per SF
Parking Assumptions
Parking Revenue $150 per spot per month
Parking Spaces Per Resi Unit 1.25
Parking Spaces Per 1k Comm SF 1.0
Draft
17 Question 1: How feasible is the “vertical” real estate development with no horizontal infrastructure or acquisition costs? • Financing and development assumptions are based on market data and standard rules of thumb in the industry
• Key assumptions are summarized below
Financing Assumptions
Construction Loan Interest Rate 6%
Permanent Loan Interest Rate 5%
Equity Contribution 35%
Loan-to-Cost Ratio 65%
Draft
Development Assumptions
Construction Period 16 months
Absorption Period 6-12 months
Holding Period 15 years
Exit Cap Rate 5.0%
Land Value $0 as baseline, potential to increase
depending on feasibility findings
Horizontal
Infrastructure Costs
$0 as baseline, potential to increase
depending on feasibility findings
18 Next step: compiling and researching gap funding sources that may help to achieve feasibility, starting point includes…
Question 2: How could financial feasibility be improved via grants, tax credits, and other funding sources? Draft
• Enhanced Infrastructure Financing Districts (EIFDs)
• Special Assessment Districts
• Community Facility Districts
• General Obligation Bonds
• Revenue Bonds
• Parcel Taxes
• TOD Housing Program
• Transportation Grants
• Low-Income Housing Tax Credits (LIHTC)
• Infill Infrastructure Grant (IIG)
• Affordable Housing and Sustainable Communities (AHSC) • Transformative Climate Communities (TCC)
• Tax-Exempt Private Activity Bonds
• New Markets Tax Credits (NMTCs)
• Opportunity Zone Equity
• Infrastructure Investment and Jobs Act (IIJA)
• Transportation Infrastructure Finance and Innovation Act (TIFIA)
• Measure H or similar LA County funds
• Philanthropic Capital
Is there anything missing from this list that you’d like us to add? 19 Question 3: How much will each element cost, and what is the total cost for each Option? Question 4: How much of these costs can be assigned to the “vertical” real estate project, while still maintaining feasibility? Question 5: How much of these costs will need to be covered by the City via an EIFD or some other mechanism? • AECOM prepared a rough-order-of-magnitude cost estimate for “horizontal” roadway infrastructure
• Our preliminary modeling suggests that most of these costs would need to be covered by the City via an EIFD or some other mechanism in order for the vertical development to be feasible “Horizontal” Roadway Infrastructure Cost Estimates* Options A.1 and A.2 Gardens & Terraces
Options B.1 and B.2
Boulevard & Paseos
Filled Slab on Deck
Low Range $127 million $235 million $339 million
Estimated Probable Cost $132 million $247 million $355 million High Range $147 million $272 million $392 million
• These estimates reflect early-stage planning assumptions and are intended to provide a preliminary understanding of potential costs.

The figures presented should be considered approximate, depending on future design development, permitting requirements, and market conditions.
• These estimates include all roadway infrastructure within the public right-of-way (streets, sidewalks, curbs, landscaping, light poles, etc.), but does not include major water or utility-related costs, as there is not enough information at this stage to cost those elements Draft
20 Question 6: How much revenue could be recaptured by the City while still maintaining feasibility? • Our preliminary modeling suggests that the vertical real estate development is not likely to be able to accommodate any land acquisition/lease payments or direct horizontal cost reimbursement to the City, while maintaining feasibility • The primary value capture mechanism would be the incremental property taxes generated by the project, which are estimated below,
• The project would also generate significant sales tax, income tax, and other tax/fee revenue at the local, state, and federal level
Option A.1
Gardens & Terraces
75% Residential
Option A.2
Gardens & Terraces
60% Residential
Option B.1
Boulevard & Paseos
75% Residential
Option B.2
Boulevard & Paseos
60% Residential
100-Year Property Tax Proceeds $12.1 billion $11.4 billion $11.0 billion $10.3 billion Estimated City Share (20%) $2.4 billion $2.3 billion $2.2 billion $2.1 billion Land Acquisition / Lease Revenue $0 $0 $0 $0
Horizontal Cost Reimbursement $0 $0 $0 $0
Draft
21 22
Economics & Pro-forma
Testing
land value, revenue
generation, development
proformas against assumed
infrastructure cost.

GARDENS AND

GREENWAY
We are
here

23 • Build from April 12th comments + Land
Uses Committee meetings
• Land use intensity informed by Central
District Plan – testing average of 3.5 FAR
across the blocks.
• Extent of, and forms for public open
space
• Land/Values and Cost infrastructure;
preliminary coordination with delivery
models
Areas
Areas
24 Land Use – High Residential
Land Use – Mixed use
Summary Parcel B-J
GFA ~3.4M SF
Average density 3.5 FAR
Units ~1,907 vs. (2400)
Development area 60% of total
Circulation/ROW 16% of total
Park (Colorado, South & Terrace) 24% of total
Gateway (Parcel A)
GFA ~600,00 sf (assumed office)
Street Level Mobility Only (Holly street extension varies)

Block (B-J)
Caltrans (A)
Residential 2.6M GSF
Non-Residential 874K GSF
Residential 2M GSF
Medical Office/Office 1.36 M GSF
Restaurant 40kG SF
Retail 40k GSF
* Traffic Impact Study/Costing
/Water/Energy Baselines
7/7/2025 Land Use Assumptions
*Parking Assumed at 1.25 per unit,
applicable commercial, varies.

A.1 and A.2: GARDENS AND TERRACES
Response to public meetings
emphasis on residential/what is
bookend?
Response to public meetings
introduce services and employment
uses,
25 Land Use – High Residential
Land Use – Mixed use

Summary Parcel B-J
GFA ~3.2M SF
Average density 3.5 FAR
Units ~1650 vs.(~2400)
Development area 55% of total
Circulation/ROW 25% of total
Park (West Side and South end) 20% of total
Gateway (Parcel A)
GFA ~600,00 sf (Assumes office)
Enables Multilevel Mobility Hub

*Traffic Impact Study/Costing
/Water/Energy Baselines
7/7/2025 Land Use Assumptions
*Parking Assumed at 1.25 per unit,
applicable commercial, varies.

Block (B-J)
Caltrans (A)
B.1 and B.2: BOULEVARD & PASEOS
Response to public meetings
emphasis on residential/what is
bookend?
Response to public meetings
introduce services and employment
uses,
Residential 2.6 M SF
Non-residential 880K GSF
Residential 1.8M GSF
Non-residential 1.4M GSF
26 Options test the menu of roadway infrastructure;
from least intervention to highest intervention.

Colorado Boulevard (110’)
W. Green Street (65’)
*W. Del Mar Street (100’)
W. Union Street (55’)

TEST FOR
ADAPTING ($)

OR REBUILDING
($$) THESE
BRIDGES?
Walnut Street
Maple Street
27 Colorado Boulevard (110’)
W. Green Street (65’)
*W. Del Mar Street (60’)
W. Union Street (55’)
Walnut Street
Maple Street
Freeway to Freeway (Regional)
Freeway to Local Streets
Impacted existing arterial
Signature Streets (Colorado Blvd.)
Local One-Way Couplet
Local Complete Streets
Relinquishment Area
New Intersection
New Street
Street Classification
Roadways still being refined.

OPTION A.1 AND A.2
28 Walnut Street
Maple Street
Colorado Boulevard (110’)
W. Green Street (65’)
*W. Del Mar Street (100’)
W. Union Street (55’)
• A1. Pasadena Ave – 68’ wide, 3,573’ long – Reconfigured on grade • A2. St John Ave (north) – 68’ wide, 2,220’ long – Reconfigured on grade
• A3. St John Ave (south) – 68’ wide, 1,767’ long – Regraded, new build • A4. Union St – 55’ wide, 494’ long – Maintain bridge
• A5. Colorado Blvd – 110’ wide, 493’ long – Maintain bridge • A6. Green St – 65’ wide, 496’ long – Maintain bridge
• A7.Valley St – 50’ wide, 501’ long – New street on deck • A8. Del Mar Blvd – 60’ wide, 505’ long – New street on deck • A9. Maple St – 45’ wide, 1,410’ long
• A10. Freeway to Surface Streets
Reconfigured on grade
Reconfigured bridge
New build (Regraded)
New build (2 Alternates)
Maintain bridge
New street on deck
Open Space
Relinquishment Area
Legend
OPTION A.1 AND A.2
29 Roadways still being refined.

Colorado Boulevard (110’)
W. Green Street (65’)
*W. Del Mar Street (60’)
W. Union Street (55’)
Walnut Street
Maple Street
Freeway to Freeway (Regional)
Freeway to Local Streets
Impacted existing arterial
Signature Streets (Colorado Blvd.)
Local One-Way Couplet
Local Complete Streets
Relinquishment Area
New Intersection
New Street
Street Classification
OPTION B.1 AND B.2
30 Colorado Boulevard (110’)
W. Green Street (65’)
*W. Del Mar Street (60’)
W. Union Street (55’)
Walnut Street
Maple Street
• B1. Pasadena Ave – 68’ wide, 3,573’ long – Reconfigured on grade • B2. St John Ave – 68’ wide, 2,220’ long – Reconfigured on grade • B3. New Boulevard (north) – 72’ wide, 2,220’ long – New build, 2 alternates
• B4. New Boulevard (south) – 72’ wide, 1,767’ long – Regraded, new build
• B5. Union St – 55’ wide, 494’ long – New street on deck • B6. Colorado Blvd – 110’ wide, 493’ long – New street on deck • B7. Green St – 65’ wide, 496’ long – New street on deck • B8.Valley St – 50’ wide, 501’ long – New street on deck • B9. Del Mar Blvd – 60’ wide, 505’ long – New street on deck • B10. Bellevue St – 50’ wide, 335’ long – New street on deck Reconfigured on grade
Reconfigured bridge
New build (Regraded)
New build (2 Alternates)
Maintain bridge
New street on deck
Open Space
Relinquishment Area
Legend
OPTION B.1 AND B.2
31 St John Ave
S. Pasadena Ave
Future
Development
Area
Future
Development
Area
Future
Development
Area

ENLARGED SECTIONS
St John Ave
S. Pasadena Ave
St John Ave
S. Pasadena Ave
St John & New Blvd
+ Service Below

GARDENS & TERRACES
Widen St. John to 2- way
St John & New BlvdSt John (widened)

BOULEVARD & PASEOS
Adds new blvd & green space

BOULEVARD & PASEOS

RESILIENCY
Adds new blvd, service
roadway & green space
Infiltration
32 Circulation frameworks offer different phasing and delivery strategies Further discussion:

Core public responsibilities; e.g.
• Core horizontal infrastructure and
access (roads, bridges, access
requirements)
• Systems (stormwater pump removal
and replacement, potable water,
stormwater conveyance
approaches, energy)
• Entitlements, development standards
Private responsibilities to be defined, and
may vary…
• Single Developer or Multiple
Developers?
• Consistency with City standards
• Timely or upfront enabling
• Funding/Financing
• Diversity of product
• Expertise
• Experience
33 TRANSFORMING A FREEWAY INTO…
Single Developer; Multiple Developers, Enable some smaller sites? Linear park and Boulevard delivered as one
project to enable development. Southern
stormwater and park delivered early or
concurrently.
*explore garage access and layout below- enable shared
parking b/w Green and Delmar.

Linear park/greenspace
Enable shared parking
below?
Easements deliver public paseos/ semi public courtyards Public Streets (new or adapted bridges)
Private Courtyards/gardens
Designates a potential phase or development/
Parcel.

Outside of relinquishment boundary
Site + Area
Stormwater systems
TBD
Green
DelMar
Colorado
34 TRANSFORMING A FREEWAY INTO…
Easements deliver public paseos/ semi public courtyards Public Streets (new or adapted bridges)
Private Courtyards/gardens
N-S gardens/terrace path delivered over time
E-W Street, Stormwater treatments and
greenspaces by City must be planned
early/attached as development requirements.
*explore garage access and layout below- enable shared
parking b/w Green and Delmar.

Pathway
Designates a potential phase or development/
Parcel.

Outside of relinquishment boundary
Site + Area
Stormwater systems
TBD
Enable
shared
parking
below?
Single Developer; Multiple Developers, Enable some smaller sites? Green
DelMar
Colorado

3. MEHKO (MICROENTERPRISE HOME KITCHEN OPERATIONS)*

Public Health Department
Micro-Enterprise Home Kitchen Operations
(MEHKOs)
Economic Development & Technology Committee
September 16, 2025
Public Health Department
Background
• In 2019, state of California amended CA
Health & Safety Code 114367
> Allows Microenterprise Home Kitchen Operation
(MEHKO), a new type of retail food facility
> Cities and counties with their own local health
jurisdiction have the option to authorize MEHKOs
> Authorization by ordinance or resolution is required
> If authorized, the MEHKO program would apply to all
areas of the City
Public Health Department
MEHKO Summary
• A MEHKO is a small-scale restaurant operated
in a home using their private kitchen
> Requires a health permit to operate
> Operated only by a resident in their own home
> Only one MEHKO per residence
> Food must be made and served on the same day
> Food can only be sold directly to a customer for onsite consumption, pickup, or delivery
Public Health Department
MEHKO Summary
• Ordering: place orders onsite, through an internet
website, or a mobile app approved by the State
• Delivery: delivered by MEHKO employees
> No third-party apps (Doordash, Uber Eats, Grub Hub,
etc.) are allowed except when the delivery is for an
individual who has a disability
• Up to 1.0 Full-Time Equivalent (FTE) Employee
> Requires a Food Handler Card to work with food, food
equipment, utensils, or food contact surfaces
Public Health Department
MEHKO Summary
• What can be sold?
> Full meals (from appetizers to dessert) are allowed
> Alcohol can be served, with a Department of Alcoholic Beverage Control (ABC) license
> No production, service, or sale of raw milk products
> No raw bottled juice, oysters, or specialized food
preparation processes
Public Health Department
MEHKO Summary
*Max gross sales amount adjusts annually by inflation using the Consumer Price Index Max
Meals
per Day
Max
Meals per
Week
Max Annual
Gross Sales
(as of 1/1/25)*
Additional Notes
MEHKO only 30 90 $107,121
MEHKO that
also serves as
a commissary
80 200 $160,682 May store up to two
food carts onsite
Public Health Department
MEHKO Summary
• State restrictions on cities where MEHKOs are
authorized
> Any residential dwelling in a city can operate a MEHKO > Cities can not require rezoning, levy of any zoning related fees, or impose any other restrictions on MEHKO
operations, such as regulating hours of operation
> No change in occupancy for purposes of State Housing
Law, State Uniform Building Standards Code, or local
building and fire codes
Public Health Department
Potential Benefits
• Provide a regulatory pathway to compliance
for unpermitted food vendors
• Lower barriers to entrepreneurship
• Opportunity to increase household income
• Stimulate local economy and job creation
• Support food security and access
• Act as an incubator for larger food businesses
• Diversify local food scene
Public Health Department
Potential Challenges
• Health and safety
> MEHKO public health inspections are by appointment only > Public health standards are lower in 25 specific areas compared to other food facilities
> Household fire risk
• Neighborhood impacts
> Increased traffic, parking issues, noise, litter, waste disposal, and other changes to character of neighborhoods
• Competition with traditional businesses
Public Health Department
Role of City Departments
• Public Health
> Food facility permitting and inspections
• Planning/Code Compliance
> Noise and other municipal regulations
> Litter and Fat/Oils/Grease disposal
• Public Works
> Sidewalk vending enforcement
• Transportation
> Traffic enforcement
• Finance
> Business license
Public Health Department
Unpermitted Home Restaurant Complaints
• Pasadena Public Health Department received an
average of two complaints per year since 2021
• Nature of complaints
> 6 complaints: Unpermitted home-based food sales
(selling from home window, driveway, sidewalk, or
catering)
> 1 complaint: Report of foodborne illness
> 1 complaint: Report of alcohol sales
Public Health Department
Cost of Additional City Services
• Public Health
> Permit fee amounts would be set to ensure full-cost
recovery for regulatory activity
> First year administrative costs of $125K and increasing annually based on personnel and overhead costs
• Other city departments
> Costs are unknown but can be expected to increase
as service needs emerge for MEHKOs related concerns
• General Fund support would be needed
Public Health Department
Feasibility Study
• A feasibility study may be beneficial
> Engage stakeholders to assess concerns and interest
> Review lessons learned by other cities and counties
> Evaluate city service needs and related costs
> Estimate potential cost recovery
• $20K in state funding is available to complete a
feasibility study before November 25, 2025
> Grant is unlikely to cover the full costs of a study so General Fund support would be needed
Public Health Department
Options for Next Steps
Option 1: Request the City Manager take no action
Option 2: Request staff complete a feasibility study
and return to the EDTECH committee
Option 3: Request a presentation on MEHKOs to the
City Council so policy direction can be provided to
city staff
Option 4: Request staff pursue an alternative option
not provided in this presentation

4. ECONOMIC DEVELOPMENT UPDATE BY DAVID A. KLUG, ECONOMIC DEVELOPMENT DIRECTOR*

MEMORANDUM

Date: September 16, 2025

To: Economic Development and Technology Committee

From: David A. Klug, Economic Development Director

Subject: Economic Development Update

The Economic Development Division is committed to supporting a thriving local economy. This memo provides an update on market conditions and the Division’s efforts.

1. Business Development
a. Notable Openings &
Successes
i. One Colorado
, a prominent
shopping, dining and
entertainment destination in
the heart of Old Pasadena,
recently announce d
it will add
four new tenants : rag & bone,
Sundays , Monarch Athletic
Club and Thaim. All four are
expected to open by early 2026. They will join Javier's , an elevated Mexican restaurant scheduled to open this fall.
ii. The Italian Deli Co. has officially opened in Pasadena at 1615 E.

Washington Blvd. The deli/restaurant is inspired by New York’s Little Italy, blending traditional trattoria style with modern elements. It offers espresso, imported meats and cheeses, and freshly prepared dishes for breakfast, lunch, or dinner.
iii. Salted Butter Company opened its first storefront at 1 W California Blvd., Suite 412 across from Huntington Hospital . The bakery began its soft opening on August 27. The bakery offers hand- rolled croissants made with its signature salted butter, along with sweet and savory pastries, custom cakes, and beverages including coffee and matcha drinks.

2. Conferences & Workforce Development
a. LA Metro Meet the Certifiers
On July 15, Metro hosted a Meet the Certifiers event connecting agencies, certifiers, industry leaders, and small businesses. The event highlighted the certification process, upcoming contracting opportunities, and regional resources. Exhibitors included the U.S. Small Business Administration, City of Los Angeles Bureau of Contract Administration, LAUSD, LADWP, and the Metropolitan Water District. Pasadena Economic Development staff joined Antonio Watson from the Finance Department to share information with businesses interested in contracting with the City.

b. FWDB Career and Resource Fair
On August 14, Economic Development staff participated in a career fair at Robinson Park Recreation Center, hosted by Councilmember Justin Jones in partnership with City departments and the Foothill Workforce Development Board. The event connected job seekers with employers from medical, hospitality, retail, transportation, construction, and government sectors, with many conducting onsite interviews.

c. Meeting of the Minds 2025: Fearless Forward
From September 2–4 staff attended Meeting of the Minds in Monterey (MMM), California’s leading workforce development conference hosted by the California Workforce Association. Under the theme Fearless Forward: Turning Uncertainty into Opportunity , the conference brought together workforce, education, and community leaders to explore innovative solutions for building inclusive regional economies. Through workshops and networking sessions, attendees gained tools to navigate change, and lead with confidence in a rapidly evolving workforce landscape.

d. International Life Sciences Real Estate Conference
On September 10-11 staff attended Bisnow’s Third Annual International Life Sciences & Biotech Conference in San Diego, a two-day gathering of global leaders from biotech, real estate, investment, and research. The event focused on financing growth, innovative lab design, AI -driven laboratories, and the role of universities as catalysts for innovation. Staff also engaged in networking sessions with industry leaders such as Alexandria Real Estate Equities, BioMed Realty, Genentech, Johnson & Johnson, and UCLA, gathering insights that will help position Pasadena as a competitive hub for life sciences growth and innovation.

e. 2028 Games Regional Transportation Summit
In preparation for the LA28 Games, staff attended Metro’s 2028 Games Regional Transportation Summit on September 4 at the Los Angeles Convention Center. The summit brought together transportation practitioners, local jurisdictions, and transit agency partn ers to discuss mobility strategies, safety and security planning, and equity -focused initiatives related to the games. Staff participated in sessions on transportation planning and operations, fan zones, open streets, and wayfinding. At the fan zone session, staff learned about Paris 2024’s use of public spaces for watch parties and will share these lessons with the Mayor’s office, which is exploring similar opportunities in Pasadena. Following the summit, staff will meet with the City of Los Angeles Major Events team to learn more about Olympic Houses and opportunities to host a country during the games. In addition, staff learned about LA Metro’s Open and Slow Streets Grant Program - a $10 million initiative supporting arts, culture, and recreation events such as street closures, with a focus on the 2026 FIFA World Cup and the 2028 Olympic and Paralympic Games.

Economic Development staff will collaborate with Pasadena’s Department of Transportation to explore applying for this funding.

3. Business Support and Networking
a. LAEDC Economic Impact Fund – Fire Recovery & Resilience The Los Angeles County Economic Development Corporation (LAEDC) has launched the Fire Recovery & Resilience Initiative , the first program under its new Economic Impact Fund . This initiative provides direct relief to small businesses and community -based organizations (CBOs) impacted by the January 2025 Palisades and Eaton wildfires , with priority given to businesses that have not received other major disaster aid. LAEDC will award $5,000 grants to approximately 80 small businesses and $25,000 grants to four CBOs delivering recovery assistance. Grant funds may be used for recovery needs such as infrastructure rebuilding, rehiring, marketing, debt payments, or digital transitions. Awardees will also receive one-on-one technical support from LAEDC staff. Applications are due September 26, 2025, with funds expected to be disbursed in October.

b. Paris Hilton Grantee Mixer (Pasadena Women’s Business Center) On July 16, the Pasadena City College Women’s Business Center, 11:11 Media Impact, and GoFundMe.org
awarded $25,000 recovery grants
to 50 women-owned businesses
impacted by the Eaton Fire. The
celebration and mixer at the
Pasadena Museum of History
featured keynote remarks from
Paris Hilton and GoFundMe.org
Executive Director Amanda Brown
Lierman. Economic Development
staff joined in recognizing local
entrepreneurs and their recovery
efforts.

c. $1 Million Grant Program Supports Fire-Affected Small Businesses Small businesses impacted by the Eaton and Palisades fires can apply for emergency grants through a $1 million grant program
launched by Steadfast
LA and Banc of California, providing up to $50,000 per business for rebuilding and reopening. Eligible businesses must have operated before October 1, 2024, be located in Altadena or Palisades area, have fewer than 100 employees, annual sales under $6 million, and operate from commercial storefronts. The initiative aims to help Los Angeles- area businesses recover quickly, providing direct economic support to communities affected by recent wildfires.

d. Procurement 101
On August 4, Economic Development staff hosted a Procurement 101 workshop to help small businesses prepare for upcoming contracting opportunities. Businesses learned about procurement strategies, tips to increase competitiveness, certifications, and how to craft effective capability statements. Speakers and panelists included CMG Alliance, a business development organization; Senior Project Manager Antonio Watson, who provided insights on doing business with the City of Pasadena; Lizzy Okoro Executive Director of the Pasadena Women’s Business Center; and Samona Caldwell, Director of Business Connect, the small business program established to promote supplier diversity for Super Bowl LXI.

4. Tech. Startups & Science
a. Motiv Space Systems Awarded NASA Contract
Motiv Space Systems
, based in Pasadena, has received a NASA SBIR
Phase III contract to develop and operate an advanced in -space robotic

payload under the Fly Foundational Robots initiative. The company will deliver a mobile robotic arm capable of dexterous manipulation, autonomous tool use, and walking across spacecraft surfaces in microgravity. Motiv will lead the development and operations of the payload with technical support from NASA’s Goddard Space Flight Center. Motiv builds on its previous work delivering flight -proven robotic systems, including the Mars 2020 Perseverance rover arm and on-orbit robotic platforms.

b. Arrowhead Pharmaceuticals Earns $100 Million in Drug Trial Milestone Pasadena-based Arrowhead Pharmaceuticals
has secured a $100 million
payment from Sarepta Therapeutics for hitting a key milestone in its early - stage trial of a potential treatment for a rare form of muscular dystrophy.

Arrowhead is also set to receive $250 million over the next five years and is eligible for up to $300 million in short -term bonuses, including the $100 million already earned. Beyond this, Arrowhead could earn hundreds of millions more in development and sales incentives for each drug the company advances under the arrangement.

c. Huntington Health ranked among the top hospitals in California Huntington Health placed tenth in California and fifth in Los Angeles by U.S.

News & World Report for 2025. Huntington received ‘high performing’ ratings in eight adult specialties, including cancer, diabetes and endocrinology, gastroenterology and GI surgery, geriatrics, neurology and neurosurgery, orthopedics, pulmonology and lung surgery, and urology. It also earned hi gh- performing ratings in 17 procedures and conditions, including heart attack, stroke, cancer surgeries, diabetes, and joint replacements, based on an analysis of over 800 million patient care records. This designation recognizes Huntington Hea lth as a leading provider of advanced medical services in the region.

5. Education & Community Engagement
ArtCenter College of Design is launching its fall season with expanded programming and student orientation across its Pasadena campuses. On September 28, the Hillside Campus will host the Design Invitational, an outdoor exhibition showcasing transportation concepts, iconic vehicles, and alumni work, bringing industry leaders and visitors to Pasadena. With three campus sites in Pasadena, ArtCenter’s public programming and academic activities continue to support the city’s cultural profile and local economy.

6. Consumer Economic Trends
a. In July, the Consumer Price Index (CPI), rose 2.7% nationally compared to 2024 and remained unchanged from June 2025 according to the Bureau of Labor Statistics. Core CPI, which excludes food and energy, increased 3.1 % annually, the fastest pace since February 2023, with household furnishings, apparel, and toys showing the largest price gains. Monthly declines in grocery and gasoline prices helped offset some of this inflationary pressure.

Economists note that tariffs on imports and reduced labor supply in sectors reliant on immigrant workers, such as personal care services, are contributing to rising costs. The full impact of these factors is expected to emerge gradually over the coming months as businesses adjust prices and continue to sell existing inventory. Overall, core goods inflation reached its highest annual rate in over two years, indicating sustained upward pressure on consumer prices.

b. Retail sales
in the United States rose 6% year over year in July reaching $258.2 billion across core segments tracked by the U.S. Department of Commerce, excluding food, auto, and fuel. E -commerce sales increased

8.3%, while apparel sales were up 7.4% , sporting goods rose 2.3%, and general merchandise climbed 3.1% . Electronics sales declined 1.7%, and department store sales fell 0.2%. Analysts noted that summer promotions and consumers pulling purchases forward ahead of tariffs contributed to the growth, though overall momentum appears to be slowing. The National Retail Federation confirmed a nearly 6% year-over-year increase in July retail sales, excluding restaurants, gas stations, and auto dealers.

7. Real Estate
a. Pasadena Towers Sale
Harbor Associates and the
Roxborough Group purchased
Pasadena Towers
, a two-building
office complex at 800 East Colorado
Boulevard and 55 South Lake
Avenue, for $120 million. The property
spans 477,000 square feet and
includes a fitness center, conference
facilities, landscaped plazas, and a
seven-level parking structure.

b. 790 East Colorado Blvd
The nine -story office building at 790 East
Colorado Blvd s old for $31.5 million in an
off-market transaction that closed on
August 18. Buyer Arash Danialifar, CEO
of GD Realty Group and a current board
member of the Playhouse Village
Association, purchased the 146,000-
square-foot property. The building is
approximately 70% leased and features a
fitness center, full -service kitchen, outdoor
terraces, conference facilities,
underground parking, and 24- hour
security.

Economic Development & Technology CommitteeSeptember 16, 2025

Economic Development & Technology Committee
September 16, 2025