Nexus Study — Housing and Homelessness Committee, May 23, 2022

ATTACHMENT 3

NEXUS STUDY

DRAFT Administrative Report
Nexus-Based Affordable
Housing Fee Analysis

Prepared for:

City of Riverside

Prepared by:

Economic & Planning Systems, Inc.

May 5, 2022

EPS #204046

Table of Contents
EXECUTIVE SUMMARY ...................................................................................................... 1

1. AFFORDABILITY GAP ANALYSIS ................................................................................... 7 Product Type .......................................................................................................... 7 Revenue Assumptions .............................................................................................. 9 Affordability Gap Results ........................................................................................ 11

2. DEMAND-BASED NEXUS FEE CALCULATION ................................................................... 12 Market-Rate Household Income Levels ..................................................................... 12 Demand for Income-Qualified Workers ..................................................................... 16 Fee Calculation ..................................................................................................... 18

APPENDIX A: Household Expenditures and Employment Generation Appendix B: Income Levels for Worker Households

List of Figures and Tables
Figure 1 Illustration of Nexus-Based Housing Fee Methodology ........................................... 2 Table 1 Supportable Nexus-Based Housing Fees or Unit Requirements ............................... 6 Table 2 Affordability Gap Analysis ................................................................................. 8 Table 3 Income Limits for Affordable Housing ............................................................... 10 Table 4 Required Income for Market-Rate Units ............................................................ 13 Table 5 Summary of Worker and Household Generation per 100 Market-Rate Units ............ 17 Table 6 Nexus-Based Housing Fee Calculations (For-Rent, Apartment Unit) ....................... 19 Table 7 Nexus-Based Housing Fee Calculations (For-Sale, Townhome) ............................ 19 Table 8 Nexus-Based Housing Fee Calculations (For-Sale, Single-Family Home) ............... 20

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EXECUTIVE SUMMARY
Economic & Planning Systems, Inc. (EPS) was retained by the City of Riverside (City) to conduct a nexus study analyzing the impact that development of market-rate for-sale and rental housing has on the demand for below-market-rate housing and, based on the results, to determine a nexus-based fee that could be charged to market-rate housing development.

The technical approach used herein quantifies the impacts that the introduction of market-rate units have on the local economy and the demand for additional affordable housing. As new households are added to the community, local employment also will grow to provide the goods and services required by the new households. To the extent that these new jobs do not pay adequate wages for the employees to afford market-rate housing in the community, the new households’ spending is creating a need for affordable housing. A nexus-based affordable housing fee is therefore based on the impact of the new market-rate homes on the demand for affordable housing. The fee calculated in this study represents the fee that may be charged to new market-rate housing units to mitigate their impacts on the affordable housing supply. Such fees may be used by the City to subsidize the production of new affordable units for moderate- and lower-income households not accommodated by market-rate projects.

Calculating the impact of market-rate development in the City on affordable housing needs, and the fees needed to mitigate those impacts, involves three main analytical steps:
• Step #1. Estimate the typical subsidy required to construct units affordable at various income levels (the “affordability gap”).
• Step #2. Determine the market-rate households’ demand for goods and services, the jobs created by that demand, and the affordable housing needs of workers in those jobs. • Step #3. Combine the affordability gap with the affordable housing demand projections to compute the supportable nexus-based affordable housing fees per market-rate unit.

These technical steps are illustrated in Figure 1 and detailed in the body of this Report and the attached Technical Appendices. The findings regarding each of these steps are presented below.

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Figure 1 Illustration of Nexus-Based Housing Fee Methodology

less

Household
Expenditures by
Category
Total Workers to
Provide Goods and
Services by
Expenditure
Category
Total Demand for
Affordable Units
for Workers
Supportable
Nexus-Based
Housing Fee
(per market rate unit)
Step #1
Affordability Gap Analysis
(Subsidy Required to Construct
Affordable Units)
Affordable
Unit Value
by Income
Level
Development
Costs
Affordability
Gap
Subsidy
Required
No Subsidy
Required
If negative
If positive
minus equals
Step #2
Affordable Housing
Demand
(Generated by Market Rate
Housing)
Market Rate
Home Price
Required
Household
Income Level
Step #3
Compute Impact
Fee per Market
Rate Unit
Affordability
Gap
(Subsidy Required)
multiplied
by
Demand for
Affordable Units for
Workers
(per market rate unit)
equals
Workers
Income
Levels and
Household
Formation
Step #2
Affordable Housing
Demand
(Generated by Market Rate
Housing)
Step #3
Compute Impact
Fee per Market
Rate Unit
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1. The costs to construct housing units affordable to many households exceed those units’ values based on what the households can afford to pay. The estimated subsidy required to construct affordable housing units in Riverside range from roughly $289,200 for Extremely Low-Income households to $42,000 for Moderate- Income households.

An “affordability gap analysis” evaluates whether or not the costs to construct affordable units exceed the values of units that are affordable to lower- and moderate-income households. For each affordable housing income level—households with incomes at up to 30, 50, 80, and 120 percent of Area Median Income (AMI)—this analysis estimates the subsidy required to construct affordable housing units.

The affordability gap analysis assumes that the average affordable unit for all income levels will be a 2-bedroom unit in a multifamily development in a three-story, stacked flats building with an average density of 32 dwelling units per acre.

The estimated costs to construct the prototypical affordable unit are based on EPS market research, including review of recent Riverside development projects and transactions along with other industry-standard development cost data sources, and have been vetted with locally active developers . The cost of land acquisition is included in the development cost calculations.

A household’s ability to pay is estimated based on standard percentages of income available for housing costs at each household income level. Income available for housing costs is then converted into a monthly affordable rent and a capitalized unit value or an affordable mortgage payment and supportable home price. This unit value is then compared to the costs of development to determine the subsidy required to make the unit affordable to each income level.

2. The demand for affordable housing generated by the expenditures of new households in City of Riverside increases along with the market-rate unit value (and related owner income). For example, a townhome unit selling for $400,000 is estimated to create demand for 0.106 affordable housing units, while a single- family home selling for $625,000 creates demand for 0.144 affordable units. The same relationship between expenditures and affordable housing demand also applies to market-rate rent prices (and related renter income).

Any justified nexus-based fee is based on the total demand for affordable housing units generated by construction of market-rate homes. The link (or nexus) between market-rate housing and increased demand for affordable housing is that residents of market-rate units demand goods and services that rely on wage earners (for example, retail sales clerks) some of whom typically cannot afford market-rate housing and thus require affordable housing.

Because more expensive housing units require owners to have higher incomes, and higher income households create more jobs through their spending, the nexus impacts and thus the justified fees for units vary in relation to the price and rents of the market-rate units. The price or rent of the unit is typically a function of its size, either by square footage or number of bedrooms.

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This analysis evaluates the demand for affordable housing generated by three prototypes that represent the typical development currently being built in the City of Riverside: (1) a for-rent, 2-bedroom, 850 square foot apartment unit; (2) a for-sale, 1,500 square foot attached single-family townhome; and a (3) for-sale, 2,500 square foot detached single- family house.

For each prototype, the demand-based nexus fee calculation involves the following steps:

A. Market-Rate Household Income Levels.

For-Rent Household Income Levels: The expected rental price of the unit is based on market data regarding the actual asking rents of apartments of various sizes. The required income levels of households occupying new market-rate housing are derived based on the rental rate, assuming standard housing cost expenses as a proportion of overall household income. For example, a typical household renting a market-rate two- bedroom, 850 square foot unit for $2,600 per month would have an income of roughly $112,600, if they spent 30 percent1 of their income on housing costs (rent and utilities).

For-Sale Household Income Levels: The required income levels of households occupying new for-sale market-rate housing are derived based on the unit’s mortgage, property taxes, HOA dues, insurance, and utilities, assuming standard housing cost expenses as a proportion of overall household income. For example, a typical household purchasing an average for-sale market-rate townhome for $400,000 would have an income of roughly $92,200, if they spend 35 percent2 of their income on housing costs. A typical household purchasing an average for-sale market-rate single family home for $625,000 would have an income of roughly $129,400.

B. Household Expenditures. Based on the household income computed in Step A, Consumer Expenditure Survey data is used to evaluate the typical spending patterns of the household. This analysis provides an estimate of how much the household spends on specific categories of expenditures, such as “Food at Home.” The survey consists of two components — the Interview Survey and the Diary Survey — each with its own sample representative of the broader population, including distinctions by income level. The surveys collect data on expenditures, income, and consumer unit characteristics. As the households’ income increases with the value of the market-rate units, the total spending on goods and services also increases. The Consumer Expenditure Survey also indicates that these relationships are not linear (e.g., a household with twice the income does not necessarily spend twice as much on food). While expenditures do increase with income, the relationship is not linear (i.e., household expenditures do not increase at the same proportion that incomes go up).

C. Job Creation and Worker Households. Having estimated the households’ spending on various items, that spending is then converted into an estimate of jobs created. For each

1 California Health and Safety Code Section 50053 specifies that affordable housing cost for rental units is 30 percent of gross income for all income categories. 2 California Health and Safety Code Section 50052.5 states that affordable housing cost for for-sale units should not exceed 35 percent of gross household income for all income levels.

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expenditure category, data regarding average worker wages and the ratio between gross business receipts and wages are used to translate these household expenditures into the total number of private-sector workers. Because each new worker does not represent an independent household (Riverside has an average of 2.00 workers per working household according to the US Census Bureau’s American Community Survey), the total number of new households created is somewhat less than the number of new jobs created. This analysis assumes that workers form households with others with similar wages. EPS has further adjusted the household formation rates to reflect the fact that a certain proportion of workers will not form their own households, particularly those of younger ages.3 D. Worker Households by Income Category. Each worker household generated is assigned to an income category—represented as a proportion of AMI ranging from 30 to 120 percent—based on its estimated gross wages. This provides the total number of households generated at each income level by construction of market-rate units at various price points. The results indicate that residents of smaller, lower-priced units generate fewer worker households requiring affordable housing than do residents of larger, higher-priced units.

These steps of the nexus-based fee calculation provide the total number of income-qualified workers required to meet the needs for goods and services generated by market-rate housing. The number of workers servicing market-rate housing (at each unit type) is then converted to total income qualified households and each such household is assumed to require one housing unit.

3. This analysis calculates the nexus-based fees that could fully mitigate the impact that new market-rate housing has on Riverside’s affordable housing demand at various representative housing types. These fees could range from about $11,700 for a rental unit or $13.72 per square foot, $9,600 for a for-sale townhome or $6.37 per square foot, or $13,400 for a for-sale single-family unit or $5.36 per square foot.

The nexus fee is calculated by applying the number of affordable units needed by income qualified households to the affordability gap for each housing income category. This calculation is made for several different home values, as shown in Table 1. Should the City prefer to adopt a flat fee per square foot rather than a per unit fee, this analysis suggests that the nexus-based fee could be $13.72 per square foot for a rental apartment unit, $6.37 per square foot for a for-sale townhome, and $5.36 per square foot for a for-sale single family unit.

The City may also consider whether to allow developers to provide affordable units within their projects, rather than paying the nexus-based fee. Table 1 illustrates the proportions of affordable units that correspond to the fee calculation and demands created by the market- rate units. For instance, an apartment project with market-rate rents would effectively mitigate the demand being created by the market-rate units if it provided 0.126 affordable

3 BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only

1.9% of workers overall (this factor is applied to other industries). EPS has assumed that such young workers do not form their own households.

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units for each market-rate rental unit. Alternatively, to mitigate the demand being created by a market-rate for-sale townhome or single-family unit, the developer must provide 0.106 or

0.144 affordable units, respectively.

It is understood that a lower fee level below the nexus-based fee may be appropriate given a range of development feasibility and economic development considerations, and the City’s preference to incentivize rental housing.

Table 1 Summary of Supportable Nexus-Based Housing Fees or Unit Requirements

4. While a nexus-based relationship is not typically required for cities to adopt inclusionary housing standards, Table 1 shows that the City of Riverside could justify an inclusionary requirement of 12.6 percent for rental units, 10.6 percent for for-sale townhomes, and 14.4 percent for for-sale single-family units from a nexus perspective.

Inclusionary ordinances in California vary widely but commonly require 10 to 15 percent affordable units. California jurisdictions commonly adopt inclusionary standards based on policy preferences rather than nexus analysis such as this report, but this analysis indicates that the impact of new for-sale housing could justify an inclusionary requirement of 12.6 percent for rental units, 10.6 percent for for-sale townhomes, and 14.4 percent for for-sale single-family units. Table 1 also suggests that low-income units represent a large portion of the units demanded based on the spending of new rental and for-sale housing occupants, but again jurisdictions commonly adopt inclusionary housing income standards based on considerations other than the nexus-based impact.

Fee per Fee per ELI VLI Low Moderate Total
Unit Sq.Ft. [1] (<30% of AMI) (<50% of AMI) (<80% of AMI) (<120% of AMI) Rental
Apartment Unit $11,666 $13.72 0.0% 0.0% 8.0% 4.6% 12.6%

For-Sale
Townhome $9,558 $6.37 0.0% 0.0% 6.4% 4.3% 10.6%
Single-Family $13,405 $5.36 0.0% 0.0% 9.1% 5.3% 14.4%
[1] Based on square footage of prototypes used for the feasibility study (850 sq.ft. for apartment units, 1,500 sq.ft. for townhomes and 2,500 sq.ft. for single-family homes.

Source: Economic & Planning Systems, Inc.

Unit Requirements by Income LevelNexus-Based Fees
Unit Type
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1. AFFORDABILITY GAP ANALYSIS
For any nexus-based affordable housing fee calculation, it is necessary to estimate the subsidy required to construct affordable housing units. Table 2 shows the subsidy needed to produce housing that is affordable to extremely low-, very low-, low-, and moderate-income households (30 through 120 percent of AMI).

Product Type
While the nexus fees calculated herein are based on demands created by market-rate rental housing, the analysis assumes that new lower-income worker households would actually be housed in developments that contain all affordable units. The affordable units are assumed as apartments at 32 units per acre with surface parking, reflecting a typical density of multifamily projects developed in Riverside.

In order to determine the average household size of future affordable housing units, EPS looked at the American Community Survey (ACS) 2020 5-Year Estimate—the average household size for working households in Riverside is 2.44. Rounding this, EPS compared the estimated household wage with the income thresholds for a 3-person household to identify the income category into which each occupation would fall for new units.

California State law (California Health and Safety Code Section 50052.5) assumes that a 2-bedroom unit is occupied by a 3-person household, and this assumption is used in this analysis. Based on the feasibility analysis that EPS completed for the City, a 2-bedroom rental unit in Riverside has a gross size of about 978 square feet (accounting for shared lobbies, hallways, etc.) and a net size of 850 square feet. This analysis estimates the subsidy that would be required to build for-rent housing for the lower-income worker households (for-sale units are assumed to be larger).

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Table 2 Affordability Gap Analysis

Item
Extremely Low
Income
(30% AMI)
Very Low
Income
(50% AMI)
Low
Income
(70% AMI)
Moderate
Income
(110% AMI)
Development Program Assumptions
Density/Acre [1] 32 32 32 32
Gross Unit Size 978 978 978 978
N
et Unit Size 850 850 850 850
Number of Bedrooms 2 2 2 2
Number of Persons per 2-bedroom Unit [2] 3 3 3 3
Parking Spaces/Unit 1.00 1.00 1.00 1.00
Cost Assumptions
Land/Acre [3] $435,600 $435,600 $435, 600 $435,600
Land/Unit $13,613 $13,613 $13, 613 $13,613
Direct Costs
Direct Construction Costs/Net SF [4] $205 $205 $205 $205 Direct Construction Costs/Unit $200,000 $200,000 $200, 000 $200,000 Parking Construction Costs/Space $5,000 $5,000 $5, 000 $5,000 Parking Construction Costs/Unit $5,000 $5,000 $5, 000 $5,000 Subtotal, Direct Costs/Unit $205,000 $205,000 $205, 000 $205,000 Indirect Costs as a % of Direct Costs [5] 35% 35% 35% 35% Indirect Costs/Unit $71,750 $71,750 $71, 750 $71,750
Developer Fee (% of all costs) 14% 14% 14% 14%
Fee Amount $40,651 $40,651 $40, 651 $40,651
Total Cost/Unit (rounded) $331,000 $331,000 $331, 000 $331,000 Maximum Supported Home Price
Household Income [6] $21,960 $35,550 $49, 802 $76,725
Income Available for Housing Costs/Year [7] $6,588 $10,665 $14,941 $23,018 (less) Operating Expenses per Unit/Year [8] ($4,500) ($4,500) ($4,500) ($8,568) Net Operating Income $2,088 $6,165 $10,441 $14,450
Capitalization Rate [9] 5.0% 5.0% 5.0% 5.0%
Total Supportable Unit Value [10] $41,760 $123,300 $208,812 $288,990 Affordability Gap $289,240 $207,700 $122, 188 $42,010
and Safety Code Section 50052.5) indicates that a 2-bedroom unit should be assumed to be occupied by a 3-person household. Thus, EPS has assumed an average unit for income-qualified worker households would be 2-bedrooms. commissions, and general administration; financing and charges; insurance; developer fee and contingency. 80% of
AMI are assumed to be built as non-profit and are therefore exempt from property taxes. Property taxes are assumed to comprise a share of the operating expenses for the moderate income category.

Sources: City of Riverside; CA Department of Housing and Community Development; CoStar; and Economic & Planning Systems, Inc. 3-Story Multifamily Building With Surface Parking
[3] Per feasibility study for mid-density land costs.
wood-frame construction above podium parking.
typically a measure of estimated operating risk.
[10] The total supportable unit value is determined by dividing the net operating income by the capitalization rate. [1] Based on the mid-density assumption of 32 units per acre. [4] Includes on-site work, offsite work, vertical construction, general requirements, overhead and builder fees. The cost estimate reflects [5] Includes costs for architecture and engineering; entitlement and fees; project management; appraisal and market study; marketing, [6] Based on 2021 income limits for a three person household in Riverside County. [7] Assumes housing costs to be 30% of gross household income. [9] The capitalization rate is used to determine the current value of a property based on estimated future operating income, and is [2] An average of 3 persons is used for this analysis based on the multifamily prototype used in the feasibility study and State law (Health [8] Operating expenses are generally based on EPS feasibility studies in the region and are inclusive of utility costs; units at or below Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022
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Development Cost Assumptions
Affordable housing development costs include land costs, direct costs (e.g., labor and materials), indirect or “soft” costs (e.g., architecture, entitlement, marketing, etc.), and developer profit.

Operating costs, including property maintenance, common utilities, advertising, leasing, and property taxes (where applicable) also must be incorporated into the analysis. Data from recent Riverside developments and land transactions have been combined with EPS’s information from various market-rate and affordable housing developers to estimate appropriate development cost assumptions. These assumptions are shown in Table 2.

Revenue Assumptions
To calculate the values of the affordable units, assumptions must be made regarding the applicable income level and the percentage of income spent on housing costs. In addition, translating these assumptions into unit prices and values requires estimates of operating expenses, capital reserves, and capitalization rates. The following assumptions were used in these calculations:
• Income Levels—This analysis estimates the subsidy required to produce units for households earning 30, 50, 70, and 110 percent of Area Median Income (AMI) for a three-person household. In 2021, AMI for these households was $69,750 as shown in the California Department of Housing and Community Development’s (HCD’s) income limits chart as shown in Table 3.
• Percentage of Gross Household Income Available for Housing Costs—HCD standards on overpaying for rent indicate that households should pay no more than 30 percent of their gross income on rental housing costs. For this analysis, EPS has assumed that all households shall spend 30 percent of their gross income on rental housing costs. • Operating Costs for Rental Units—The analysis assumes that apartment operators incur annual operating costs of $4,500 per unit, which include the cost of utilities, for units affordable at 80 percent of AMI or below. EPS has assumed the units for moderate income households would have similar operating costs but would be built by for-profit builders and thus also subject to property taxes, increasing their annual operating cost to approximately $8,600 per unit.

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Table 3 Income Limits for Affordable Housing

Assumed % of Assumed Max. Income [1]
Affordability Category County Median 3-person household Extremely Low Income (ELI) 0% - 30% $21,960
Very Low Income (VLI) 50% $35,550
Low
Income (LI) 70% $49,802
Median Income 100% $69,750
Moderate Income (Mod) 110% $76,725
incomes to affordable housing categories and to compute supportable housing costs based on household income levels.

Sources: CA Department of Housing and Community Development; Economic & Planning Systems, Inc. [1] 2021 HCD maximum income thresholds are used to translate employment, wages and total worker household Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022
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Affordability Gap Results
Table 2 shows the estimated subsidies for construction of affordable rental units for extremely low-, very low-, low- and moderate-income households. As shown, an “Extremely Low Income” unit is expected to require a subsidy of $289,200. A “Very Low Income” unit is expected to require a subsidy of roughly $207,700. A “Low Income” unit would require a subsidy for $122,200, while a “Moderate Income” unit is expected to require a subsidy of $42,000.

These housing affordability gaps then were used to calculate the justified nexus-based fees by multiplying this required subsidy by the number of units required to house workers providing goods and services to new market-rate housing development. This methodology is discussed in more detail in the following chapter.

It is worth noting that the affordability gaps estimated in this analysis range as they might be using other also-valid assumptions. For example, the funding gaps for low-income units assume that prices are set at 70 percent of median income, while State law suggest low-income unit households may earn between 50 and 80 percent of median income. The assumed income level of 70 percent of AMI reflects common practice that affordable housing prices within a given nominal category – in in this case, “Low Income” – be set at a point below the absolute maximum level within the category. For example, State density bonus law sets prices for low- income rentals at 60 percent of AMI, and low-income for-sale housing at 70 percent of AMI.

Similarly, EPS follows State density bonus standards for moderate-income housing by setting the price at 110 percent of AMI rather than the categorical maximum of 120 percent of AMI.

Assuming affordable prices are set at the literal maximum income level in each nominal category would marginally reduce the subsidy required for such units, but would make those homes affordable to only those few households earning the highest possible income within each category.

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2. DEMAND-BASED NEXUS FEE CALCULATION
The supportable nexus-based fees are based on both the affordability gap and the estimated impact that new market-rate units have on the need for affordable units, as reflected in the number of income-qualified local workers required to support the residents of market-rate units and the total subsidy required to construct housing for those workers. This approach is based on the following logic: (a) residents of rental or for-sale market-rate housing have disposable incomes and require a variety of goods and services, (b) the provision of those goods and services will require some workers who make lower incomes and cannot afford market-rate housing, and (c) fees charged to market-rate projects can mitigate the impact of those projects on the increased need for affordable housing.

Market -Rate Household Income Levels
Households with larger incomes typically spend more on goods and services, therefore creating additional lower income jobs, which in turn generate a greater demand for affordable housing.

To assess the impact that market-rate units have on the need for affordable housing, EPS has estimated the household income required to rent a typical 2-bedroom apartment unit, purchase a 1,500 square foot townhome, or purchase a 2,500 square foot single family home as shown in Table 4.

For-Rent Household Income Levels: EPS looked at average rents for a typical 2-bedroom apartment unit based on projects recently developed in Riverside. The rents for the most recent apartment projects were used, rather than average rents for all apartments, because these newer apartments best represent the rents that can be expected with new market-rate apartment development. Assuming utility costs for a 2-bedroom unit based on the Housing Authority Utility Allowance for Riverside County, the minimum household income needed to rent each unit is then computed, predicated on the State and federal standard financing assumption that a household will spend 30 percent of their income on housing costs (rent and utility payments). As shown, required household income for an average apartment unit with a monthly rent of $2,600 is $112,600.

For-Sale Household Income Levels: The income required to purchase a particular unit is based on assumptions of the standard down payment, financing terms, property taxes, utility costs
4, and other costs related to owning a home. Per State and federal financing standards, these housing costs typically account for 35 percent of a household’s income, and therefore, by knowing these costs, the required income to purchase each unit can be estimated. As shown, required household incomes under recent market conditions are on average, approximately $92,200 for townhomes and $129,400 for single family homes. Changes to housing market and financing conditions can have a significant effect on the calculations in this study.

4 Based on the Housing Authority Utility Allowance for Riverside County effective July 2021.

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Rental
Avg. Monthly
Rent [1]
Monthly Utility
Costs [2]
Monthly Rent
and Utilities
Annual Rent
and Utilities
Min. Required
Income [3]
Apartment Unit $2,571 $245 $2,816 $33,792 $112,640
For-Sale Unit Price [4]
Mortgage
[5]
Mortgage
Payment [5]
Property
Taxes [6]
HOA Dues
[7]
Home
Insurance [8] Utilities [2]
Min. Required
Income [3]
Townhome $400,000 $360,000 $19,574 $4,480 $3,000 $1,500 $3,708 $92,176 Single Family $625,000 $562,500 $30,584 $7,000 $2,100 $1,500 $4,116 $129,428 [1] Average monthly rent based on the rent of the apartment prototype in the feasibility study. [2] Based on the Housing Authority of the County of Riverside Utility Allowance effective 7/1/2021 (assumes natural gas). [3] Assumes that housing costs is 30% of required income for rental units and 35% for for-sale units. [4] Based on for-sale prices of prototypes in the feasibility study. [7] HOA dues are based on the feasibility study at a monthly rate of $250 per townhome and $175 per single family home.

Sources: County of Riverside; Economic and Planning Systems, Inc. [5] Based on mortgage terms of a 10% down payment and 3.5% interest for 30 years per the assumptions of the feasibility study. [6] Based on a property tax rate of 1.1%
[8] Insurance fees are based on the feasibility study at a monthly rate of $125 per unit.

Annual Costs
Household Income EstimationResidential Type
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Household Expenditures and Job Creation by Income
Level
Having established the income requirements for purchasing units at various values, the fee calculation then requires an analysis of the household spending patterns at those required income levels. The Consumer Expenditure Survey from the United States Bureau of Labor Statistics provides data for households at a variety of income levels, detailing the amounts that typical households spend on things like Food at Home, Apparel and Services, and Vehicle Maintenance and Repairs.

Interestingly, household expenditures by category are not uniformly proportional to household income levels. For example, households earning around $92,200 (adequate to purchase an average 1,500 square foot townhome) spend roughly 12.8 percent of their income on food and drink (at home and eating out), while households earning $129,400 who can afford to purchase a $625,000 single-family unit will spend on 10.8 percent of their income on food and drink.

Because of these and other differences in proportionate spending, the expenditure profile varies at different income levels.

The homebuyer household’s typical expenditures were converted to the number of jobs created by their spending. The first step in this process is to determine how much of an industry’s gross receipts are used to pay wages and employee compensation. EPS relied on data from the Economic Census,
5 which provides employment, gross sales, and payroll data by industry for Riverside County. In certain instances, where local data was not available for every Economic Census industry, EPS relied on statewide Economic Census data for that industry.

To link the Economic Census data and the Consumer Expenditure Survey data, EPS made determinations as to the industries involved with expenditures in various categories. For example, purchases in the Consumer Expenditure Survey’s “Food at Home” category would likely involve the Economic Census’s “Food & Beverage Stores” industry, where gross receipts were more than ten times the employees’ wages. By contrast, purchases in the Consumer Expenditure Survey’s “Entertainment Fees and Admissions” category were attributed to the Economic Census’ “Arts, Entertainment, and Recreation” industry, where gross receipts are only about four times the employees’ wages. Where more than one Economic Census category was attributable to a Consumer Expenditure Survey category, EPS estimated the proportion of expenditures associated with each Economic Census category.

After determining the amount of the household’s expenditures that were used for employee wages, EPS estimated the number of employees those aggregate wages represent. EPS calculated the number of workers supported by that spending using the average wage per worker (also from the 2017 Economic Census). These wages ranged from a low of roughly $20,300 per year for workers in the food and drinking services industry (i.e., restaurants and

5 Note that the Consumer Expenditure Survey data is based on information current as of 2020. The latest data available for the Economic Census was published in 2017. EPS converted all numbers to 2022 dollars using the Consumer Price Index (CPI) for the San Francisco Metropolitan Statistical Area (MSA) from the Bureau of Labor Statistics.

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bars) to a high of approximately $79,900 a year for workers in architectural, engineering, and related services.

A range of occupations and incomes exist in a given industry sector. For instance, the methodology used to generate the tables in Appendix B distinguishes between the typical incomes of workers in different types of retail stores (e.g., “food and beverage stores” versus “general merchandise stores”), rather than assuming all retail sector workers earn the same income. However, the average wage is used for each sub-category of industry employment and represents a reasonable proxy for the range of incomes in that group: while some employees will have higher wages and require lower subsidies, others will have lower incomes and require higher subsidies. Using the average approximates the total housing subsidy needed by workers in that industry.

To calculate the number of households supported by the expenditures of market-rate housing units, EPS estimated the employees’ household formation rates. Importantly, employees generated from the increase in housing units do not all form households; some employees, in the retail and food services industries in particular, are young workers and do not form households.

Data from the Bureau of Labor Statistics indicates that 12.5 percent of retail/restaurant workers are age 16 to 19, but an average of only 1.9 percent of workers in the workforce overall. EPS applied these discounts to household formation by type of business to get a more accurate calculation of households formed by the employees and the average total incomes of those households.

To get the overall households’ income rather than the individual workers’, the wages of workers forming households were multiplied by the average of approximately 2.0 workers per working household in the City of Riverside.
6 This assumption implies the workers in a given household will have roughly equivalent compensation. While certainly there will often be some variation in wages per employee within a household, on average this assumption is reasonable because it implies comparable levels of education and training among all workers in a household. The average household incomes then are allocated to various income categories to estimate the number of affordable housing units demanded in each income category.

A simplified example of these calculations follows:

A. Number of Households (prototype project) 1,000
B. Average Household Income (in the project) $125,000
C. Aggregate Household Income (A x B) $125 million
D. Average Income Spent on Retail (Consumer Expenditure Survey) $40,000 E. Aggregate Retail Spending (A x D) $40 million
F. Retail Gross Receipts: Payroll Ratio (Economic Census) 9:1 G. Estimated Retail Payroll (E ÷ F) $4.44 million
H. Average Retail Wage (Economic Census) $28,500
I. Estimated Total Retail Jobs (G ÷ H) 156
J. Percent Age 20+ (Bureau of Labor Statistics) 87.5%

6 Workers per working household based on American Community Survey (ACS) Census data current as of 2020. Although ACS data reported is based on historical figures, these figures can vary somewhat based on ongoing revisions to the ACS data.

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K. Total Retail Workers Forming Households 136
J. Average Workers/Household (Census Data) 2.0
K. Estimated Households Created (K ÷ J) 68
L. Average Household Income (H x J) $57,000
M. Income Category Moderate-Income (80-120% of AMI)
In this simplified example, 1,000 new market-rate units sold to households earning $125,000 per year would create demand for 68 housing units for retail workers for moderate-income households. Actual calculations and impact distinctions by type of household expenditure for the three home types are shown in the series of tables presented in Appendix A.

Demand for Income -Qualified Workers
The total number of income-qualified households required to support the expenditures of new market-rate units were determined based on the affordable housing income limits from HCD for a 3-person household. The income limits used to categorize these worker households are based HCD limits for the 30, 50, 80, and 120 percent AMI levels. The number of income-qualified households required to provide goods and services to new housing units is detailed in Appendix B.

The nexus methodology used herein computes the total number of income-qualified households generated by market-rate units (as shown in Table 5) and calculates the impact fee based on the estimated cost to subsidize the production of units to meet that affordable housing demand.

This analysis assumes that the fees on residential development will fund required affordable housing for all new workers generated.

Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022
Economic & Planning Systems, Inc. 17Z:\Shared\Projects\LA\204000s\204046_Riverside Inclusionary\Reports\EPS 204046_NexusAdminDraft.docx Table 5 Summary of Worker and Household Generation per 100 Market-Rate Units

Unit Type Extremely Low
Income
Very Low
Income
Low
Income
Moderate
Income
For-Rent
Apartment Unit $112,640 31 14.1 12.6 0.0 0.0 8.0 4.6
For-Sale
Townhome $92,176 26 12.0 10.6 0.0 0.0 6.4 4.3
Single Family $129,428 35 16.2 14.4 0.0 0.0 9.1 5.3
[1] Total workers generated detailed by unit sale and rental price as assumed in the feasibility study. therefore exclude households earning above moderate income. Total may not sum due to rounding.

Source: Economic & Planning Systems, Inc.
[2] Total worker households derived assuming 2 workers per household. Includes a 12.5% discount for retail and 1.9% discount for other industries to account

[3] Total income qualified households reflects those households eligible for affordable housing based on total household income. Income qualified households for retail and 1.9% discount for other industries to account for workers under age 20.

Min. Required
Household Income
Total Income Qualified
Households [3]
Total Worker
Households [2]
Total Workers
Generated [1]
Income Qualified Households by Income Category
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Fee Calculation
The affordability gap analysis quantifies the subsidy required to construct affordable housing at various income levels. Analysis of consumer expenditures that rely on lower wage workers provides an estimate of the total number of income-qualified households generated by new for- sale units. For each category of market-rate units, the nexus-based fee is then calculated by applying the total number of income-qualified households generated to the affordability gap computed for each affordable household income level. The analysis provides the supportable nexus-based fees for new housing development in the City of Riverside.

Tables 6 through 8 show the impact fee calculation by rental units, for-sale attached single- family townhomes, and for-sale detached single-family homes. The total impact fees required for a representative project of 100 units is calculated by multiplying the number of affordable units required per income level by the cost of subsidizing such housing. All income-qualified households are assumed to be housed in multifamily rental units and the subsidies needed are calculated as the affordability gaps shown in Table 2. The resulting nexus-based fee for a market-rate rental unit is $11,700, while a nexus-based fee for a market-rate for-sale attached townhome product is $9,600. The nexus-based fee for a for-sale detached single-family home is $13,400.

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Table 7 Nexus-Based Housing Fee Calculations (For-Sale, Townhome)

Item
Per 100 Market-
Rate Units
Per Market-
Rate Unit
Per Sq. Ft.
[3]
(A) (B) (C = A * B) (D = C / 100) (E = D /
850)
Affordable Units - Extremely Low Income 0.0 $289,240 $0 A
ffordable Units - Very Low Income 0.0 $207,700 $0
Affordable Units - Low Income 8.0 $122,188 $972,958
Affordable Units - Moderate Income 4.6 $42,010 $193,646 Total 12.6 $1,166,604 $11,666 $13.72
[1] See Table 5
[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income category.

Source: Economic & Planning Systems, Inc.

Affordable Units
Required Per 100
Market-Rate Units [1]
Affordability
Gap per Affordable
Unit [2]
Total Nexus-Based Fee Supported
[3] Reflects the 850 square feet apartment prototype used in the feasibliity study.

Item
Per 100 Market-
Rate Units
Per Market-
Rate Unit
Per Sq. Ft.
[3]
(A) (B) (C = A * B) (D = C / 100) (E = D /
1,500)
Affordable Units - Extremely Low Income 0.0 $289,240 $0 A
ffordable Units - Very Low Income 0.0 $207,700 $0
Affordable Units - Low Income 6.4 $122,188 $776,754
Affordable Units - Moderate Income 4.3 $42,010 $179,093 Total 10.6 $955,848 $9,558 $6.37
[1] See Table 5
[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income category.

Source: Economic & Planning Systems, Inc.

Affordable Units
Required Per 100
Market-Rate Units [1]
Affordability
Gap per Affordable
Unit [2]
Total Nexus-Based Fee Supported
[3] Reflects the 1,500 square feet townhome prototype used in the feasibliity study.

Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022
Economic & Planning Systems, Inc. 20Z:\Shared\Projects\LA\204000s\204046_Riverside Inclusionary\Reports\EPS 204046_NexusAdminDraft.docx Table 8 Nexus-Based Housing Fee Calculations (For-Sale, Single-Family Home)

Item
Per 100 Market-
Rate Units
Per Market-
Rate Unit
Per Sq. Ft.
[3]
(A) (B) (C = A * B) (D = C / 100) (E = D /
2,500)
Affordable Units - Extremely Low Income 0.0 $289,240 $0 A
ffordable Units - Very Low Income 0.0 $207,700 $0
Affordable Units - Low Income 9.1 $122,188 $1,117,971
Affordable Units - Moderate Income 5.3 $42,010 $222,507 Total 14.4 $1,340,478 $13,405 $5.36
[1] See Table 5
[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income category.

Source: Economic & Planning Systems, Inc.

Affordable Units
Required Per 100
Market-Rate Units [1]
Affordability
Gap per Affordable
Unit [2]
Total Nexus-Based Fee Supported
[3] Reflects the 2,500 square feet single family prototype used in the feasibliity study.

Economic & Planning Systems, Inc. 21
Z:\Shared\Projects\LA\204000s\204046_Riverside Inclusionary\Reports\EPS 204046_NexusAdminDraft.docx APPENDICES:

Appendix A: Household Expenditures and
Employment Generation
Appendix B: Income Levels for Worker Households

Economic & Planning Systems, Inc. 22
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APPENDIX A:

Household Expenditures and
Employment Generation
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Table A-1 (1 of 3)
Household Expenditures and Employment Generation – For-Rent, Apartment Unit

% of Household
Income Spent per
Category [1]
% of Category
Expenditure per Type of
Business [2]
Expenditures
[3]
Expenditures
per 1,000 HHs
Gross Receipts
to Wages [4]
Total Wages
per 1,000
Households
2022 Avg.

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
Income
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $112,640
Food at Home 5.7% 100% $6,475
Food & Beverage Stores 100% $6,475 $6,475,361 10.11 $640,760 $33,572 19.1 87.5% 2.00 8.3 $67,213 Moderate Income Food Away From Home 5.1% 100% $5,714
Food Services and Drinking Places 100% $5,714 $5,713,554 3.40 $1,682,102 $20,251 83.1 87.5% 2.00 36.3 $40,543 LI Households Alcoholic Beverages 0.7% 100% $833
Food & Beverage Stores 50% $417 $416,547 10.11 $41,219 $33,572 1.2 87.5% 2.00 0.5 $67,213 Moderate Income Food Services and Drinking Places 50% $417 $416,547 3.40 $122,634 $20,251 6.1 87.5% 2.00 2.6 $40,543 LI Households Housing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $2,020 Personal and Household Goods Repair and Maintenance 45% $909 $909,221 3.50 $259,498 $25,120 10.3 98.1% 2.00 5.1 $50,291 LI Households Building Material and Garden Equipment and Supplies Dealer 45% $909 $909,221 9.06 $100,348 $34,319 2.9 87.5% 2.00 1.3 $68,707 Moderate Income Real Estate and Rental and Leasing 10% $202 $202,049 5.62 $35,969 $52,689 0.7 98.1% 2.00 0.3 $105,485 Above Mod Fuel oil and Other fuels [8] 4.5% 100% $5,111
Nonstore Retailers 100% $5,111 $5,111,343 13.81 $370,007 $50,225 7.4 87.5% 2.00 3.2 $100,551 Above Mod Water and Other Public Services [8] 1.0% 100% $1,094
Waste Management and Remediation Services 100% $1,094 $1,093,768 3.85 $284,338 $71,299 4.0 98.1% 2.00 2.0 $142,744 Above Mod Household Operations Personal Services 0.6% 100% $679
Nursing and Residential Care Facilities 40% $272 $271,527 2.40 $113,255 $34,764 3.3 98.1% 2.00 1.6 $69,599 Moderate Income Social Assistance 60% $407 $407,290 2.81 $144,763 $33,376 4.3 98.1% 2.00 2.1 $66,819 Moderate Income Household Operations Other Household Expenses 1.3% 100% $1,490 Services to Buildings and Dwellings 100% $1,490 $1,489,567 2.97 $500,803 $31,415 15.9 98.1% 2.00 7.8 $62,894 Moderate Income Housekeeping Supplies 0.9% 100% $1,011
Building Materials and Garden Equipment and Supplies Dealers 10% $101 $101,078 9.06 $11,156 $34,319 0.3 87.5% 2.00 0.1 $68,707 Moderate Income Food & Beverage Stores 35% $354 $353,772 10.11 $35,007 $33,572 1.0 87.5% 2.00 0.5 $67,213 Moderate Income General Merchandise 35% $354 $353,772 10.51 $33,675 $29,659 1.1 87.5% 2.00 0.5 $59,378 Moderate Income Miscellaneous Store Retailers 20% $202 $202,156 7.00 $28,892 $25,566 1.1 87.5% 2.00 0.5 $51,185 LI Households Household Furnishings and Equipment 2.8% 100% $3,161
Furniture and Home Furnishings Stores 40% $1,264 $1,264,430 9.10 $138,978 $31,969 4.3 87.5% 2.00 1.9 $64,003 Moderate Income Electronics and Appliance Stores 40% $1,264 $1,264,430 10.83 $116,798 $32,319 3.6 87.5% 2.00 1.6 $64,705 Moderate Income General Merchandise Stores 10% $316 $316,107 10.51 $30,089 $29,659 1.0 87.5% 2.00 0.4 $59,378 Moderate Income Miscellaneous Store Retailers 10% $316 $316,107 7.00 $45,178 $25,566 1.8 87.5% 2.00 0.8 $51,185 LI Households [1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

Source: 2020 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc. and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash [4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for Riverside County. Where data was unavailable, EPS used the 2017 Economic Census data for the State of California. [8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census. [3] Expenditures are based on the percent of household income spent per the 2020 U.S. Consumer Expenditure Survey. Household income is calculated per Table 4.

Item

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Table A-1 Continued (2 of 3)
Household Expenditures and Employment Generation – For-Rent, Apartment Unit

% of Household
Income Spent per
C
ategory [1]
% of Category
Expenditure per Type of
B
usiness [2]
Expenditures
[3]
Expenditures
per 1,000 HHs
Gross Receipts
to Wages [4]
Total Wages
per 1,000
H
ouseholds
2022 Avg.

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
I
ncome
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $112,640
Apparel and Services 2.4% 100% $2, 675
Clothing and Clothing Accessories Stores 40% $1,070 $1,069,935 8.88 $120,540 $21,307 5.7 87.5% 2.00 2.5 $42,658 LI Households General Merchandise 40% $1,070 $1,069,935 10.51 $101,844 $29,659 3.4 87.5% 2.00 1.5 $59,378 Moderate Income Miscellaneous Store Retailers 10% $267 $267,484 7.00 $38,229 $25,566 1.5 87.5% 2.00 0.7 $51,185 LI Households Personal and Household Goods Repair and Maintenance 5% $134 $133,742 3.50 $38,171 $25,120 1.5 87.5% 2.00 0.7 $50,291 LI Households Dry cleaning and Laundry Services 5% $134 $133,742 3.50 $38,171 $25,120 1.5 87.5% 2.00 0.7 $50,291 LI Households Vehicle Purchases (net outlay) 5.3% 100% $5, 943
Motor Vehicle and Parts Dealers 100% $5,943 $5,943,373 11.71 $507,522 $55,618 9.1 87.5% 2.00 4.0 $111,350 Above Mod Gasoline and motor oil 3.1% 100% $3,528
Gasoline Stations 100% $3,528 $3,528,146 31.26 $112,881 $25,416 4.4 87.5% 2.00 1.9 $50,884 LI Households Vehicle Maintenance and Repairs 1.2% 100% $1,297
Repair and Maintenance 100% $1,297 $1,296,987 3.60 $359,903 $33,841 10.6 98.1% 2.00 5.2 $67,751 Moderate Income

Medical Services 1.4% 100% $1, 602
Ambulatory Health Care Services 40% $641 $640,939 2.58 $248,714 $66,798 3.7 98.1% 2.00 1.8 $133,731 Above Mod General Medical and Surgical Hospitals 30% $481 $480,705 2.81 $171,152 $76,371 2.2 98.1% 2.00 1.1 $152,898 Above Mod Nursing and Residential Care Facilities 30% $481 $480,705 2.40 $200,504 $34,764 5.8 98.1% 2.00 2.8 $69,599 Moderate Income Drugs 0.6% 100% $648
Health and Personal Care Stores 100% $648 $647,962 9.47 $68,429 $39,198 1.7 87.5% 2.00 0.8 $78,475 Moderate Income Medical Supplies 0.2% 100% $242
Health and Personal Care Stores 100% $242 $241,523 9.47 $25,506 $39,198 0.7 87.5% 2.00 0.3 $78,475 Moderate Income Entertainment Fees and Admissions 1.1% 100% $1,281
Arts, Entertainment, & Recreation 100% $1,281 $1,281,028 3.92 $327,067 $31,232 10.5 87.5% 2.00 4.6 $62,527 Moderate Income Entertainment Audio and Visual Equipment and Services 1.1% 100% $1,281 Electronics and Appliance Stores 100% $1,281 $1,281,028 10.83 $118,331 $32,319 3.7 87.5% 2.00 1.6 $64,705 Moderate Income Entertainment Pets, Toys, Hobbies, and Playground Equip. 1.2% 100% $1,406 Sporting Goods, Hobby, and Musical Instrument Stores 40% $562 $562,205 7.74 $72,648 $20,865 3.5 87.5% 2.00 1.5 $41,772 LI Households Miscellaneous Store Retailers 40% $562 $562,205 7.00 $80,350 $25,566 3.1 87.5% 2.00 1.4 $51,185 LI Households Veterinary Services 20% $281 $281,103 2.97 $94,686 $52,998 1.8 98.1% 2.00 0.9 $106,104 Above Mod Other Entertainment Supplies, Equipment, and Services 1.1% 100% $1,262 Sporting Goods, Hobby, and Musical Instrument Stores 85% $1,073 $1,072,595 7.74 $138,599 $20,865 6.6 87.5% 2.00 2.9 $41,772 LI Households Photographic Services 15% $189 $189,281 4.27 $44,372 $35,855 1.2 98.1% 2.00 0.6 $71,782 Moderate Income [1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [
6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

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Table A-1 Continued (3 of 3)
Household Expenditures and Employment Generation – For-Rent, Apartment Unit

% of Household
Income Spent per
Cat
egory [1]
% of Category
Expenditure per Type of
Bu
siness [2]
Expenditures
[3]
Expenditures
per 1,000 HHs
Gross Receipts
to Wages [4]
Total Wages
per 1,000
Hous
eholds
2022 Avg.

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
Inc
ome
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $112,640
Personal Care Products and Services 1.1% 100% $1,225
U
nspecified Retail 50% $612 $612,318 7.00 $87,513 $25,566 3.4 87.5% 2.00 1.5 $51,185 LI Households Personal Care Services 50% $612 $612,318 2.99 $204,980 $22,554 9.1 98.1% 2.00 4.5 $45,154 LI Households Reading 0.1% 100% $149
Sporting Goods, Hobby, and Musical Instrument Stores 100% $149 $148,957 7.74 $19,248 $20,865 0.9 87.5% 2.00 0.4 $41,772 LI Households Education 1.9% 100% $2,173
Educational Services 100% $2,173 $2,172,640 3.17 $685,214 $22,275 30.8 98.1% 2.00 15.1 $44,596 LI Households Tobacco Products and Smoking Supplies 0.3% 100% $299
Unspecified Retail 100% $299 $298,977 7.00 $42,730 $25,566 1.7 87.5% 2.00 0.7 $51,185 LI Households Miscellaneous 1.1% 100% $1,240
Accounting 20% $248 $247,907 2.51 $98,934 $35,677 2.8 98.1% 2.00 1.4 $71,427 Moderate Income Architectural, Engineering, and Related 20% $248 $247,907 2.51 $98,886 $79,899 1.2 98.1% 2.00 0.6 $159,961 Above Mod Specialized Design Services 20% $248 $247,907 4.82 $51,436 $46,527 1.1 98.1% 2.00 0.5 $93,149 Above Mod Death Care Services 20% $248 $247,907 4.70 $52,783 $39,114 1.3 98.1% 2.00 0.7 $78,308 Moderate Income Legal Services 20% $248 $247,907 3.01 $82,339 $69,258 1.2 98.1% 2.00 0.6 $138,656 Above Mod Total per 1,000 Market Rate Households 308.5 140.7
[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [6]
BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

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Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022

Economic & Planning Systems, Inc. 26 Z:\Shared\Projects\LA\204000s\204046_Riverside Inclusionary\Reports\EPS 204046_NexusAdminDraft.docx
Table A-2 (1 of 3)
Household Expenditures and Employment Generation - For Sale, Townhome Unit

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
Income
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $92,176
Food at Home 7.2% 100% $6,611
Food & Beverage Stores 100% $6,611 $6,610,865 10.11 $654,169 $33,572 19.5 87.5% 2.00 8.5 $67,213 Moderate Income Food Away From Home 5.6% 100% $5,163
Food Services and Drinking Places 100% $5,163 $5,163,480 3.40 $1,520,157 $20,251 75.1 87.5% 2.00 32.8 $40,543 LI Households Alcoholic Beverages 0.9% 100% $875
Food & Beverage Stores 50% $438 $437,511 10.11 $43,293 $33,572 1.3 87.5% 2.00 0.6 $67,213 Moderate Income Food Services and Drinking Places 50% $438 $437,511 3.40 $128,806 $20,251 6.4 87.5% 2.00 2.8 $40,543 LI Households Housing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $1,640 Personal and Household Goods Repair and Maintenance 45% $738 $738,093 3.50 $210,657 $25,120 8.4 98.1% 2.00 4.1 $50,291 LI Households Building Material and Garden Equipment and Supplies Dealer 45% $738 $738,093 9.06 $81,461 $34,319 2.4 87.5% 2.00 1.0 $68,707 Moderate Income Real Estate and Rental and Leasing 10% $164 $164,021 5.62 $29,199 $52,689 0.6 98.1% 2.00 0.3 $105,485 Above Mod Fuel oil and Other fuels [8] 5.6% 100% $5,160
Nonstore Retailers 100% $5,160 $5,159,818 13.81 $373,516 $50,225 7.4 87.5% 2.00 3.3 $100,551 Above Mod Water and Other Public Services [8] 1.2% 100% $1,065
Waste Management and Remediation Services 100% $1,065 $1,065,402 3.85 $276,964 $71,299 3.9 98.1% 2.00 1.9 $142,744 Above Mod Household Operations Personal Services 0.8% 100% $735
Nursing and Residential Care Facilities 40% $294 $293,870 2.40 $122,575 $34,764 3.5 98.1% 2.00 1.7 $69,599 Moderate Income Social Assistance 60% $441 $440,806 2.81 $156,676 $33,376 4.7 98.1% 2.00 2.3 $66,819 Moderate Income Household Operations Other Household Expenses 1.3% 100% $1,219 Services to Buildings and Dwellings 100% $1,219 $1,218,951 2.97 $409,820 $31,415 13.0 98.1% 2.00 6.4 $62,894 Moderate Income Housekeeping Supplies 1.0% 100% $921
Building Materials and Garden Equipment and Supplies Dealers 10% $92 $92,140 9.06 $10,169 $34,319 0.3 87.5% 2.00 0.1 $68,707 Moderate Income Food & Beverage Stores 35% $322 $322,489 10.11 $31,911 $33,572 1.0 87.5% 2.00 0.4 $67,213 Moderate Income General Merchandise 35% $322 $322,489 10.51 $30,697 $29,659 1.0 87.5% 2.00 0.5 $59,378 Moderate Income Miscellaneous Store Retailers 20% $184 $184,279 7.00 $26,337 $25,566 1.0 87.5% 2.00 0.5 $51,185 LI Households Household Furnishings and Equipment 3.1% 100% $2,862
Furniture and Home Furnishings Stores 40% $1,145 $1,144,728 9.10 $125,821 $31,969 3.9 87.5% 2.00 1.7 $64,003 Moderate Income Electronics and Appliance Stores 40% $1,145 $1,144,728 10.83 $105,741 $32,319 3.3 87.5% 2.00 1.4 $64,705 Moderate Income General Merchandise Stores 10% $286 $286,182 10.51 $27,241 $29,659 0.9 87.5% 2.00 0.4 $59,378 Moderate Income Miscellaneous Store Retailers 10% $286 $286,182 7.00 $40,901 $25,566 1.6 87.5% 2.00 0.7 $51,185 LI Households [1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

Source: 2020 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc. and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash [3] Expenditures are based on the percent of household income spent per the 2020 U.S. Consumer Expenditure Survey. Household income is calculated per Table 4. [4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for Riverside County. Where data was unavailable, EPS used the 2017 Economic Census data for the State of California. [8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.

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Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022

Economic & Planning Systems, Inc. 27 Z:\Shared\Projects\LA\204000s\204046_Riverside Inclusionary\Reports\EPS 204046_NexusAdminDraft.docx
Table A-2 Continued (2 of 3)
Household Expenditures and Employment Generation - For Sale, Townhome Unit

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
Income
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $92,176
Apparel and Services 2.9% 100% $2,638
Clothing and Clothing Accessories Stores 40% $1,055 $1,055,395 8.88 $118,902 $21,307 5.6 87.5% 2.00 2.4 $42,658 LI Households General Merchandise 40% $1,055 $1,055,395 10.51 $100,460 $29,659 3.4 87.5% 2.00 1.5 $59,378 Moderate Income Miscellaneous Store Retailers 10% $264 $263,849 7.00 $37,709 $25,566 1.5 87.5% 2.00 0.6 $51,185 LI Households Personal and Household Goods Repair and Maintenance 5% $132 $131,924 3.50 $37,652 $25,120 1.5 87.5% 2.00 0.7 $50,291 LI Households Dry cleaning and Laundry Services 5% $132 $131,924 3.50 $37,652 $25,120 1.5 87.5% 2.00 0.7 $50,291 LI Households Vehicle Purchases (net outlay) 5.2% 100% $4,822
Motor Vehicle and Parts Dealers 100% $4,822 $4,821,770 11.71 $411,745 $55,618 7.4 87.5% 2.00 3.2 $111,350 Above Mod Gasoline and motor oil 3.6% 100% $3,283
Gasoline Stations 100% $3,283 $3,282,855 31.26 $105,033 $25,416 4.1 87.5% 2.00 1.8 $50,884 LI Households Vehicle Maintenance and Repairs 1.4% 100% $1,303
Repair and Maintenance 100% $1,303 $1,303,379 3.60 $361,677 $33,841 10.7 98.1% 2.00 5.2 $67,751 Moderate Income

Medical Services 1.5% 100% $1,421
Ambulatory Health Care Services 40% $568 $568,215 2.58 $220,494 $66,798 3.3 98.1% 2.00 1.6 $133,731 Above Mod General Medical and Surgical Hospitals 30% $426 $426,161 2.81 $151,732 $76,371 2.0 98.1% 2.00 1.0 $152,898 Above Mod Nursing and Residential Care Facilities 30% $426 $426,161 2.40 $177,754 $34,764 5.1 98.1% 2.00 2.5 $69,599 Moderate Income Drugs 0.7% 100% $622
Health and Personal Care Stores 100% $622 $622,400 9.47 $65,729 $39,198 1.7 87.5% 2.00 0.7 $78,475 Moderate Income Medical Supplies 0.3% 100% $243
Health and Personal Care Stores 100% $243 $242,858 9.47 $25,647 $39,198 0.7 87.5% 2.00 0.3 $78,475 Moderate Income Entertainment Fees and Admissions 1.2% 100% $1,078
Arts, Entertainment, & Recreation 100% $1,078 $1,077,606 3.92 $275,130 $31,232 8.8 87.5% 2.00 3.9 $62,527 Moderate Income Entertainment Audio and Visual Equipment and Services 1.2% 100% $1,078 Electronics and Appliance Stores 100% $1,078 $1,077,606 10.83 $99,541 $32,319 3.1 87.5% 2.00 1.3 $64,705 Moderate Income Entertainment Pets, Toys, Hobbies, and Playground Equip. 1.3% 100% $1,205 Sporting Goods, Hobby, and Musical Instrument Stores 40% $482 $481,811 7.74 $62,259 $20,865 3.0 87.5% 2.00 1.3 $41,772 LI Households Miscellaneous Store Retailers 40% $482 $481,811 7.00 $68,860 $25,566 2.7 87.5% 2.00 1.2 $51,185 LI Households Veterinary Services 20% $241 $240,905 2.97 $81,146 $52,998 1.5 98.1% 2.00 0.8 $106,104 Above Mod Other Entertainment Supplies, Equipment, and Services 0.5% 100% $449 Sporting Goods, Hobby, and Musical Instrument Stores 85% $382 $381,739 7.74 $49,328 $20,865 2.4 87.5% 2.00 1.0 $41,772 LI Households Photographic Services 15% $67 $67,366 4.27 $15,792 $35,855 0.4 98.1% 2.00 0.2 $71,782 Moderate Income [1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

Source: 2020 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc. and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash [3] Expenditures are based on the percent of household income spent per the 2020 U.S. Consumer Expenditure Survey. Household income is calculated per Table 4. [4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for Riverside County. Where data was unavailable, EPS used the 2017 Economic Census data for the State of California. [8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.

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Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022

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Table A-2 Continued (3 of 3)
Household Expenditures and Employment Generation - For Sale, Townhome Unit

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
Income
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $92,176
Personal Care Products and Services 1.2% 100% $1,087
Unspecified Retail 50% $544 $543,685 7.00 $77,703 $25,566 3.0 87.5% 2.00 1.3 $51,185 LI Households Personal Care Services 50% $544 $543,685 2.99 $182,004 $22,554 8.1 98.1% 2.00 4.0 $45,154 LI Households R
eading 0.1% 100% $126
Sporting Goods, Hobby, and Musical Instrument Stores 100% $126 $125,700 7.74 $16,243 $20,865 0.8 87.5% 2.00 0.3 $41,772 LI Households Education 1.0% 100% $948
Educational Services 100% $948 $948,245 3.17 $299,061 $22,275 13.4 98.1% 2.00 6.6 $44,596 LI Households Tobacco Products and Smoking Supplies 0.4% 100% $331
Unspecified Retail 100% $331 $330,726 7.00 $47,267 $25,566 1.8 87.5% 2.00 0.8 $51,185 LI Households Miscellaneous 1.3% 100% $1,161
Accounting 20% $232 $232,119 2.51 $92,633 $35,677 2.6 98.1% 2.00 1.3 $71,427 Moderate Income Architectural, Engineering, and Related 20% $232 $232,119 2.51 $92,588 $79,899 1.2 98.1% 2.00 0.6 $159,961 Above Mod Specialized Design Services 20% $232 $232,119 4.82 $48,161 $46,527 1.0 98.1% 2.00 0.5 $93,149 Above Mod Death Care Services 20% $232 $232,119 4.70 $49,422 $39,114 1.3 98.1% 2.00 0.6 $78,308 Moderate Income Legal Services 20% $232 $232,119 3.01 $77,095 $69,258 1.1 98.1% 2.00 0.5 $138,656 Above Mod Total per 1,000 Market Rate Households 263.8 119.8
[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

Source: 2020 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc. and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash [3] Expenditures are based on the percent of household income spent per the 2020 U.S. Consumer Expenditure Survey. Household income is calculated per Table 4. [4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for Riverside County. Where data was unavailable, EPS used the 2017 Economic Census data for the State of California. [8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.

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Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022

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Table A-3 (1 of 3)
Household Expenditures and Employment Generation - For Sale, Single-Family Unit

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
Income
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $129,428
Food at Home 5.7% 100% $7,440
Food & Beverage Stores 100% $7,440 $7,440,469 10.11 $736,261 $33,572 21.9 87.5% 2.00 9.6 $67,213 Moderate Income Food Away From Home 5.1% 100% $6,565
Food Services and Drinking Places 100% $6,565 $6,565,119 3.40 $1,932,808 $20,251 95.4 87.5% 2.00 41.7 $40,543 LI Households Alcoholic Beverages 0.7% 100% $957
Food & Beverage Stores 50% $479 $478,630 10.11 $47,362 $33,572 1.4 87.5% 2.00 0.6 $67,213 Moderate Income Food Services and Drinking Places 50% $479 $478,630 3.40 $140,911 $20,251 7.0 87.5% 2.00 3.0 $40,543 LI Households Housing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $2,322 Personal and Household Goods Repair and Maintenance 45% $1,045 $1,044,734 3.50 $298,175 $25,120 11.9 98.1% 2.00 5.8 $50,291 LI Households Building Material and Garden Equipment and Supplies Dealer 45% $1,045 $1,044,734 9.06 $115,304 $34,319 3.4 87.5% 2.00 1.5 $68,707 Moderate Income Real Estate and Rental and Leasing 10% $232 $232,163 5.62 $41,330 $52,689 0.8 98.1% 2.00 0.4 $105,485 Above Mod Fuel oil and Other fuels [8] 4.5% 100% $5,873
Nonstore Retailers 100% $5,873 $5,873,153 13.81 $425,154 $50,225 8.5 87.5% 2.00 3.7 $100,551 Above Mod Water and Other Public Services [8] 1.0% 100% $1,257
Waste Management and Remediation Services 100% $1,257 $1,256,786 3.85 $326,717 $71,299 4.6 98.1% 2.00 2.2 $142,744 Above Mod Household Operations Personal Services 0.6% 100% $780
Nursing and Residential Care Facilities 40% $312 $311,996 2.40 $130,135 $34,764 3.7 98.1% 2.00 1.8 $69,599 Moderate Income Social Assistance 60% $468 $467,994 2.81 $166,339 $33,376 5.0 98.1% 2.00 2.4 $66,819 Moderate Income Household Operations Other Household Expenses 1.3% 100% $1,712 Services to Buildings and Dwellings 100% $1,712 $1,711,577 2.97 $575,444 $31,415 18.3 98.1% 2.00 9.0 $62,894 Moderate Income Housekeeping Supplies 0.9% 100% $1,161
Building Materials and Garden Equipment and Supplies Dealers 10% $116 $116,143 9.06 $12,818 $34,319 0.4 87.5% 2.00 0.2 $68,707 Moderate Income Food & Beverage Stores 35% $406 $406,499 10.11 $40,225 $33,572 1.2 87.5% 2.00 0.5 $67,213 Moderate Income General Merchandise 35% $406 $406,499 10.51 $38,694 $29,659 1.3 87.5% 2.00 0.6 $59,378 Moderate Income Miscellaneous Store Retailers 20% $232 $232,285 7.00 $33,198 $25,566 1.3 87.5% 2.00 0.6 $51,185 LI Households Household Furnishings and Equipment 2.8% 100% $3,632
Furniture and Home Furnishings Stores 40% $1,453 $1,452,884 9.10 $159,691 $31,969 5.0 87.5% 2.00 2.2 $64,003 Moderate Income Electronics and Appliance Stores 40% $1,453 $1,452,884 10.83 $134,206 $32,319 4.2 87.5% 2.00 1.8 $64,705 Moderate Income General Merchandise Stores 10% $363 $363,221 10.51 $34,574 $29,659 1.2 87.5% 2.00 0.5 $59,378 Moderate Income Miscellaneous Store Retailers 10% $363 $363,221 7.00 $51,912 $25,566 2.0 87.5% 2.00 0.9 $51,185 LI Households [1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

Source: 2020 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc. and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash [3] Expenditures are based on the percent of household income spent per the 2020 U.S. Consumer Expenditure Survey. Household income is calculated per Table 4. [4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for Riverside County. Where data was unavailable, EPS used the 2017 Economic Census data for the State of California. [8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.

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Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022

Economic & Planning Systems, Inc. 30 Z:\Shared\Projects\LA\204000s\204046_Riverside Inclusionary\Reports\EPS 204046_NexusAdminDraft.docx
Table A-3 Continued (2 of 3)
Household Expenditures and Employment Generation - For Sale, Single-Family Unit

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
Income
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $129,428
Apparel and Services 2.4% 100% $3,074
Clothing and Clothing Accessories Stores 40% $1,229 $1,229,401 8.88 $138,506 $21,307 6.5 87.5% 2.00 2.8 $42,658 LI Households General Merchandise 40% $1,229 $1,229,401 10.51 $117,023 $29,659 3.9 87.5% 2.00 1.7 $59,378 Moderate Income Miscellaneous Store Retailers 10% $307 $307,350 7.00 $43,927 $25,566 1.7 87.5% 2.00 0.8 $51,185 LI Households Personal and Household Goods Repair and Maintenance 5% $154 $153,675 3.50 $43,860 $25,120 1.7 87.5% 2.00 0.8 $50,291 LI Households Dry cleaning and Laundry Services 5% $154 $153,675 3.50 $43,860 $25,120 1.7 87.5% 2.00 0.8 $50,291 LI Households Vehicle Purchases (net outlay) 5.3% 100% $6,829
Motor Vehicle and Parts Dealers 100% $6,829 $6,829,191 11.71 $583,164 $55,618 10.5 87.5% 2.00 4.6 $111,350 Above Mod Gasoline and motor oil 3.1% 100% $4,054
Gasoline Stations 100% $4,054 $4,053,992 31.26 $129,705 $25,416 5.1 87.5% 2.00 2.2 $50,884 LI Households Vehicle Maintenance and Repairs 1.2% 100% $1,490
Repair and Maintenance 100% $1,490 $1,490,294 3.60 $413,544 $33,841 12.2 98.1% 2.00 6.0 $67,751 Moderate Income

Medical Services 1.4% 100% $1,841
Ambulatory Health Care Services 40% $736 $736,467 2.58 $285,783 $66,798 4.3 98.1% 2.00 2.1 $133,731 Above Mod General Medical and Surgical Hospitals 30% $552 $552,350 2.81 $196,661 $76,371 2.6 98.1% 2.00 1.3 $152,898 Above Mod Nursing and Residential Care Facilities 30% $552 $552,350 2.40 $230,388 $34,764 6.6 98.1% 2.00 3.2 $69,599 Moderate Income Drugs 0.6% 100% $745
Health and Personal Care Stores 100% $745 $744,536 9.47 $78,628 $39,198 2.0 87.5% 2.00 0.9 $78,475 Moderate Income Medical Supplies 0.2% 100% $278
Health and Personal Care Stores 100% $278 $277,520 9.47 $29,308 $39,198 0.7 87.5% 2.00 0.3 $78,475 Moderate Income Entertainment Fees and Admissions 1.1% 100% $1,472
Arts, Entertainment, & Recreation 100% $1,472 $1,471,956 3.92 $375,814 $31,232 12.0 87.5% 2.00 5.3 $62,527 Moderate Income Entertainment Audio and Visual Equipment and Services 1.1% 100% $1,472 Electronics and Appliance Stores 100% $1,472 $1,471,956 10.83 $135,968 $32,319 4.2 87.5% 2.00 1.8 $64,705 Moderate Income Entertainment Pets, Toys, Hobbies, and Playground Equip. 1.2% 100% $1,615 Sporting Goods, Hobby, and Musical Instrument Stores 40% $646 $645,998 7.74 $83,475 $20,865 4.0 87.5% 2.00 1.7 $41,772 LI Households Miscellaneous Store Retailers 40% $646 $645,998 7.00 $92,326 $25,566 3.6 87.5% 2.00 1.6 $51,185 LI Households Veterinary Services 20% $323 $322,999 2.97 $108,798 $52,998 2.1 98.1% 2.00 1.0 $106,104 Above Mod Other Entertainment Supplies, Equipment, and Services 1.1% 100% $1,450 Sporting Goods, Hobby, and Musical Instrument Stores 85% $1,232 $1,232,458 7.74 $159,257 $20,865 7.6 87.5% 2.00 3.3 $41,772 LI Households Photographic Services 15% $217 $217,493 4.27 $50,985 $35,855 1.4 98.1% 2.00 0.7 $71,782 Moderate Income [1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

Source: 2020 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc. and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash [3] Expenditures are based on the percent of household income spent per the 2020 U.S. Consumer Expenditure Survey. Household income is calculated per Table 4. [4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for Riverside County. Where data was unavailable, EPS used the 2017 Economic Census data for the State of California. [8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.

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Table A-3 Continued (3 of 3)
Household Expenditures and Employment Generation - For Sale, Single-Family Unit

% of Household
Income Spent per
C
ategory [1]
% of Category
Expenditure per Type of
B
usiness [2]
Expenditures
[3]
Expenditures
per 1,000 HHs
Gross Receipts
to Wages [4]
Total Wages
per 1,000
H
ouseholds
2022 Avg.

Wages [5]
# of New
Workers
% Forming
HH [6]
Workers/
HH [7]
Total
Worker HHs
Avg.

Worker HH
I
ncome
Income Category
Calculation a b c d = c * 1,000 e f = d / e g h = f / g i j k= h * i / j l = g * j Required Income: $129,428
Personal Care Products and Services 1.1% 100% $1, 407
Unspecified Retail 50% $704 $703,580 7.00 $100,556 $25,566 3.9 87.5% 2.00 1.7 $51,185 LI Households Personal Care Services 50% $704 $703,580 2.99 $235,531 $22,554 10.4 98.1% 2.00 5.1 $45,154 LI Households Reading 0.1% 100% $171
Sporting Goods, Hobby, and Musical Instrument Stores 100% $171 $171,158 7.74 $22,117 $20,865 1.1 87.5% 2.00 0.5 $41,772 LI Households Education 1.9% 100% $2,496
Educational Services 100% $2,496 $2,496,457 3.17 $787,341 $22,275 35.3 98.1% 2.00 17.3 $44,596 LI Households Tobacco Products and Smoking Supplies 0.3% 100% $344
Unspecified Retail 100% $344 $343,538 7.00 $49,098 $25,566 1.9 87.5% 2.00 0.8 $51,185 LI Households Miscellaneous 1.1% 100% $1,424
Accounting 20% $285 $284,855 2.51 $113,679 $35,677 3.2 98.1% 2.00 1.6 $71,427 Moderate Income Architectural, Engineering, and Related 20% $285 $284,855 2.51 $113,624 $79,899 1.4 98.1% 2.00 0.7 $159,961 Above Mod Specialized Design Services 20% $285 $284,855 4.82 $59,102 $46,527 1.3 98.1% 2.00 0.6 $93,149 Above Mod Death Care Services 20% $285 $284,855 4.70 $60,650 $39,114 1.6 98.1% 2.00 0.8 $78,308 Moderate Income Legal Services 20% $285 $284,855 3.01 $94,611 $69,258 1.4 98.1% 2.00 0.7 $138,656 Above Mod Total per 1,000 Market Rate Households 354.5 161.7
[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, contributions, and financing charges.
[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type. [5] Based on the 2017 average wage reported by the American Community Survey inflated to $2022 as provided by the Bureau of Labor Statistics (BLS). [
6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the latest American Community Survey data for 2020.

Source: 2020 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc. and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash [3] Expenditures are based on the percent of household income spent per the 2020 U.S. Consumer Expenditure Survey. Household income is calculated per Table 4. [4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for Riverside County. Where data was unavailable, EPS used the 2017 Economic Census data for the State of California. [8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.

Item

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APPENDIX B:

Income Levels for Worker Households

Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022

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Table B-1
Income Levels for Worker Households
Worker Household Generation per 1,000 Units – For-Rent, Apartment Unit

Industry
Total
Workers
Total Worker
Households
[1]
ELI
Households
VLI
Households
LI
Households
Median
Income
Ho
useholds
Moderate
Income
Ho
useholds
Above Moderate
Income
Ho
useholds
Retail
Unspecified Retail 5.1 2.2 0. 0 0.0 2.2 0.0 0.0 0.0
Food & Beverage Stores 21.4 9.3 0.0 0.0 0.0 0.0 9.3 0.0 Food Services and Drinking Places 89.1 38.9 0.0 0.0 38.9 0.0 0.0 0.0 Health and Personal Care Stores 2.4 1.0 0.0 0.0 0.0 0.0 1.0 0.0 General Merchandise 5.6 2.4 0.0 0.0 0.0 0.0 2.4 0.0
Furniture and Home Furnishings Stores 4.3 1.9 0.0 0.0 0.0 0.0 1.9 0.0 Building Material and Garden Equipment and Supplies Dealer 3.2 1.4 0.0 0. 0 0.0 0.0 1.4 0.0 Electronics and Appliance Stores 7.3 3.2 0.0 0.0 0.0 0.0 3.2 0.0 Clothing and Clothing Accessories Stores 5.7 2.5 0.0 0.0 2.5 0.0 0.0 0.0 Motor Vehicle and Parts Dealers 9.1 4.0 0.0 0.0 0.0 0.0 0.0 4.0 Gasoline Stations 4.4 1.9 0.0 0.0 1.9 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 11.0 4.8 0.0 0.0 4.8 0.0 0.0 0.0 Miscellaneous Store Retailers 7.5 3.3 0.0 0.0 3.3 0.0 0.0 0.0 Nonstore Retailers 7.4 3.2 0.0 0.0 0.0 0.0 0.0 3.2
Arts, Entertainment, & Recreation 10.5 4.6 0. 0 0.0 0.0 0.0 4.6 0.0 Medical/Health
Ambulatory Health Care Services 3.7 1.8 0. 0 0.0 0.0 0.0 0.0 1.8 General Medical and Surgical Hospitals 2.2 1.1 0.0 0.0 0.0 0.0 0.0 1.1 Nursing and Residential Care Facilities 9.0 4.4 0.0 0.0 0.0 0.0 4.4 0.0 Social Assistance 4.3 2.1 0.0 0.0 0.0 0.0 2.1 0.0
Services
Personal and Household Goods Repair and Maintenance 11.8 5.7 0. 0 0.0 5.7 0.0 0.0 0.0 Services to Buildings and Dwellings 15.9 7.8 0.0 0.0 0.0 0.0 7.8 0.0 Waste Management and Remediation Services 4.0 2.0 0.0 0.0 0.0 0.0 0.0 2.0 Real Estate and Rental and Leasing 0.7 0.3 0.0 0.0 0.0 0.0 0.0 0.3 Personal Care Services 9.1 4.5 0.0 0.0 4.5 0.0 0.0 0.0
Dry Cleaning and Laundry Services 1.5 0.7 0.0 0.0 0.7 0.0 0.0 0.0 Auto Repair and Maintenance 10.6 5.2 0.0 0.0 0.0 0.0 5.2 0.0 Veterinary Services 1.8 0.9 0.0 0.0 0.0 0.0 0.0 0.9
Photographic Services 1.2 0.6 0.0 0.0 0.0 0.0 0.6 0.0
Educational Services 30.8 15.1 0.0 0.0 15.1 0.0 0.0 0.0 Accounting 2.8 1.4 0.0 0.0 0.0 0.0 1.4 0.0
Architectural, Engineering, and Related 1.2 0.6 0.0 0.0 0.0 0.0 0.0 0.6 Specialized Design Services 1.1 0.5 0.0 0.0 0.0 0.0 0.0 0.5 Death Care Services 1.3 0.7 0.0 0.0 0.0 0.0 0.7 0.0
Legal Services 1.2 0.6 0.0 0.0 0.0 0.0 0.0 0.6
Total Workers and Households 308.5 140.7 0.0 0.0 79.6 0.0 46.1 15.0 Total Income-Qualified HH Generated Per 1,000 Market-Rate Units 125.7 0.0 0.0 79. 6 0.0 46.1 0.0 Total Income-Qualified HH Generated Per 100 Market-Rate Units 12.6 0.0 0.0 8. 0 0.0 4.6 0.0 industries to account for workers under age 20.

Source: Economic & Planning Systems, Inc.
[1] Assumes 2.0 workers per worker household in the City of Riverside based on the 2020 American Community Survey. Includes a 12.5% discount for retail and 1.9% discount for other

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Table B-2
Income Levels for Worker Households
Worker Household Generation per 1,000 Units - For Sale, Townhome Unit

Industry
Total
Workers
Total Worker
Households
[1]
ELI
Households
VLI
Households
LI
Households
Median
Income
Households
Moderate
Income
Households
Above Moderate
Income
Households
Retail
Unspecified Retail 4.9 2.1 0.0 0.0 2.1 0.0 0.0 0.0
Food & Beverage Stores 21.7 9.5 0.0 0.0 0.0 0.0 9.5 0.0 Food Services and Drinking Places 81.4 35.6 0.0 0.0 35.6 0.0 0.0 0.0 Health and Personal Care Stores 2.3 1.0 0.0 0.0 0.0 0.0 1.0 0.0 General Merchandise 5.3 2.3 0.0 0.0 0.0 0.0 2.3 0.0
Furniture and Home Furnishings Stores 3.9 1.7 0.0 0.0 0.0 0.0 1.7 0.0 Building Material and Garden Equipment and Supplies Dealer 2.7 1.2 0.0 0.0 0.0 0.0 1.2 0.0 Electronics and Appliance Stores 6.4 2.8 0.0 0.0 0.0 0.0 2.8 0.0 Clothing and Clothing Accessories Stores 5.6 2.4 0.0 0.0 2.4 0.0 0.0 0.0 Motor Vehicle and Parts Dealers 7.4 3.2 0.0 0.0 0.0 0.0 0.0 3.2 Gasoline Stations 4.1 1.8 0.0 0.0 1.8 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 6.1 2.7 0.0 0.0 2.7 0.0 0.0 0.0 Miscellaneous Store Retailers 6.8 3.0 0.0 0.0 3.0 0.0 0.0 0.0 Nonstore Retailers 7.4 3.3 0.0 0.0 0.0 0.0 0.0 3.3
Arts, Entertainment, & Recreation 8.8 3.9 0.0 0.0 0.0 0.0 3.9 0.0 Medical/Health
Ambulatory Health Care Services 3.3 1.6 0.0 0.0 0.0 0.0 0.0 1.6 General Medical and Surgical Hospitals 2.0 1.0 0.0 0.0 0.0 0.0 0.0 1.0 Nursing and Residential Care Facilities 8.6 4.2 0.0 0.0 0.0 0.0 4.2 0.0 Social Assistance 4.7 2.3 0.0 0.0 0.0 0.0 2.3 0.0
Services
Personal and Household Goods Repair and Maintenance 9.9 4.8 0.0 0.0 4.8 0.0 0.0 0.0 Services to Buildings and Dwellings 13.0 6.4 0.0 0.0 0.0 0.0 6.4 0.0 Waste Management and Remediation Services 3.9 1.9 0.0 0.0 0.0 0.0 0.0 1.9 Real Estate and Rental and Leasing 0.6 0.3 0.0 0.0 0.0 0.0 0.0 0.3 Personal Care Services 8.1 4.0 0.0 0.0 4.0 0.0 0.0 0.0
Dry Cleaning and Laundry Services 1.5 0.7 0.0 0.0 0.7 0.0 0.0 0.0 Auto Repair and Maintenance 10.7 5.2 0.0 0.0 0.0 0.0 5.2 0.0 Veterinary Services 1.5 0.8 0.0 0.0 0.0 0.0 0.0 0.8
Photographic Services 0.4 0.2 0.0 0.0 0.0 0.0 0.2 0.0
Educational Services 13.4 6.6 0.0 0.0 6.6 0.0 0.0 0.0
Accounting 2.6 1.3 0.0 0.0 0.0 0.0 1.3 0.0
Architectural, Engineering, and Related 1.2 0.6 0.0 0.0 0.0 0.0 0.0 0.6 Specialized Design Services 1.0 0.5 0.0 0.0 0.0 0.0 0.0 0.5 Death Care Services 1.3 0.6 0.0 0.0 0.0 0.0 0.6 0.0
Legal Services 1.1 0.5 0.0 0.0 0.0 0.0 0.0 0.5
Total Workers and Households 263.8 119.8 0.0 0.0 63.6 0.0 42.6 13.6 Total Income-Qualified HH Generated Per 1,000 Market-Rate Units 106.2 0.0 0.0 63.6 0.0 42.6 0.0 Total Income-Qualified HH Generated Per 100 Market-Rate Units 10.6 0.0 0.0 6.4 0.0 4.3 0.0 industries to account for workers under age 20.

Nexus-Based Affordable Housing Fee Analysis for For-Sale and For-Rent Housing DRAFT Administrative Report 05/05/2022

Economic & Planning Systems, Inc. 35 Z:\Shared\Projects\LA\204000s\204046_Riverside Inclusionary\Reports\EPS 204046_NexusAdminDraft.docx
Table B-3
Income Levels for Worker Households
Worker Household Generation per 1,000 Units - For Sale, Single-Family Unit

Industry
Total
Workers
Total Worker
Households
[1]
ELI
Households
VLI
Households
LI
Households
Median
Income
Households
Moderate
Income
Households
Above Moderate
Income
Households
Retail
Unspecified Retail 5.9 2.6 0.0 0.0 2.6 0.0 0.0 0.0
Food & Beverage Stores 24.5 10.7 0.0 0.0 0.0 0.0 10.7 0.0 Food Services and Drinking Places 102.4 44.8 0.0 0.0 44.8 0.0 0.0 0.0 Health and Personal Care Stores 2.8 1.2 0.0 0.0 0.0 0.0 1.2 0.0 General Merchandise 6.4 2.8 0.0 0.0 0.0 0.0 2.8 0.0
Furniture and Home Furnishings Stores 5.0 2.2 0.0 0.0 0.0 0.0 2.2 0.0 Building Material and Garden Equipment and Supplies Dealer 3.7 1.6 0.0 0.0 0.0 0.0 1.6 0.0 Electronics and Appliance Stores 8.4 3.7 0.0 0.0 0.0 0.0 3.7 0.0 Clothing and Clothing Accessories Stores 6.5 2.8 0.0 0.0 2.8 0.0 0.0 0.0 Motor Vehicle and Parts Dealers 10.5 4.6 0.0 0.0 0.0 0.0 0.0 4.6 Gasoline Stations 5.1 2.2 0.0 0.0 2.2 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 12.7 5.5 0.0 0.0 5.5 0.0 0.0 0.0 Miscellaneous Store Retailers 8.7 3.8 0.0 0.0 3.8 0.0 0.0 0.0 Nonstore Retailers 8.5 3.7 0.0 0.0 0.0 0.0 0.0 3.7
Arts, Entertainment, & Recreation 12.0 5.3 0.0 0.0 0.0 0.0 5.3 0.0 Medical/Health
Ambulatory Health Care Services 4.3 2.1 0.0 0.0 0.0 0.0 0.0 2.1 General Medical and Surgical Hospitals 2.6 1.3 0.0 0.0 0.0 0.0 0.0 1.3 Nursing and Residential Care Facilities 10.4 5.1 0.0 0.0 0.0 0.0 5.1 0.0 Social Assistance 5.0 2.4 0.0 0.0 0.0 0.0 2.4 0.0
Services
Personal and Household Goods Repair and Maintenance 13.6 6.6 0.0 0.0 6.6 0.0 0.0 0.0 Services to Buildings and Dwellings 18.3 9.0 0.0 0.0 0.0 0.0 9.0 0.0 Waste Management and Remediation Services 4.6 2.2 0.0 0.0 0.0 0.0 0.0 2.2 Real Estate and Rental and Leasing 0.8 0.4 0.0 0.0 0.0 0.0 0.0 0.4 Personal Care Services 10.4 5.1 0.0 0.0 5.1 0.0 0.0 0.0 Dry Cleaning and Laundry Services 1.7 0.8 0.0 0.0 0.8 0.0 0.0 0.0 Auto Repair and Maintenance 12.2 6.0 0.0 0.0 0.0 0.0 6.0 0.0 Veterinary Services 2.1 1.0 0.0 0.0 0.0 0.0 0.0 1.0
Photographic Services 1.4 0.7 0.0 0.0 0.0 0.0 0.7 0.0
Educational Services 35.3 17.3 0.0 0.0 17.3 0.0 0.0 0.0 Accounting 3.2 1.6 0.0 0.0 0.0 0.0 1.6 0.0
Architectural, Engineering, and Related 1.4 0.7 0.0 0.0 0.0 0.0 0.0 0.7 Specialized Design Services 1.3 0.6 0.0 0.0 0.0 0.0 0.0 0.6 Death Care Services 1.6 0.8 0.0 0.0 0.0 0.0 0.8 0.0
Legal Services 1.4 0.7 0.0 0.0 0.0 0.0 0.0 0.7
Total Workers and Households 354.5 161.7 0.0 0.0 91.5 0.0 53.0 17.3 Total Income-Qualified HH Generated Per 1,000 Market-Rate Units 144.5 0.0 0.0 91.5 0.0 53.0 0.0 Total Income-Qualified HH Generated Per 100 Market-Rate Units 14.4 0.0 0.0 9.1 0.0 5.3 0.0 industries to account for workers under age 20.

Housing and Homelessness CommitteeMay 23, 2022

Housing and Homelessness Committee
May 23, 2022