Salinas City Council
November 19, 2024

City of Salinas
% of Total
Housing
% that is Rental
Housing
Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-7
City of Salinas
Rent Stabilization Analysis
Subsidized Affordable Housing Units (April 2024)
Item Address Type Year Built
Total
Units Studio
OneBedroomTwoBedroomsThreeBedroomsFour BedRooms
Apartment Units
Moon Gate Plaza 21 Soledad Street Apartments 2017 90 81 4 5 - - Haciendas 3 40, 50, 60 East Rossi Street Apartments 2016 50 - 19 16 15 - Gabilan Plaza 736 Williams Rd. Apartments 2013 200 - 36 74 90 - Harden Ranch Apts 1907 Dartmouth Way Apartments 2013 100 - 16 20 48 16 Haciendas Apartments II 275 Calle Cebu Apartments 2012 46 - 6 20 17 3 One Haciendas 233 Calle Cebu Apartments 2011 52 - 9 27 14 3 Salinas Gateway Apts 25 Lincoln Ave Apartments 2011 52 25 21 6 - - Tresor Apts 1041 Buckhorn Dr Apartments 2009 81 - - 24 41 16 La Gloria Senior Apts 539 E Market St Apartments 2009 23 - 23 - - - Sherwood Village 808 N Main St Apartments 2006 124 - 102 22 - - Jardines Del Monte Apartments 1259 Del Monte Ave Apartments 2004 28 - - - - - Salinas Pointe Apts 1260 John St Apartments 2003 219 3 91 61 8 - Salinas Bay Apts 920 Larkin St Apartments 2002 95 - - 25 60 10 Plaza Grande 50 E Market St Apartments 2002 92 91 1 - - - Montecito at Williams Ranch 1598 Mesquite Dr Apartments 2000 132 - 107 25 - - Steinbeck Commons Apts 10 Lincoln Ave Apartments 2000 100 - 99 - - - Nantucket Bay Apts 950 Nantucket Blvd Apartments 1999 160 - - 70 70 20 Plaza Club Apts 100 Harden Pkwy Apartments 1997 208 - 7 28 8 - Shadowbrook Apartments 1115-1118 Alamo Way Apartments 1988 88 - 20 38 30 - Vista De La Terraza 165-177 Carr Ave Apartments 1984 40 - - 15 10 15 Las Casas de Madera 510 E Market St Apartments 1982 75 - - 22 28 25 Lakeview 58 Natividad Rd Apartments 1982 50 - - 28 9 13 Parkside Manor 1112-1115 Parkside St Apartments 1971 48 - - - - - Tynan Village 323 Front St Apartments - 172 - 65 60 35 12 Santanna Apartments 1235 Garner Ave Apartments - 160 - - - - - Tesoros del Campos 42 La Posada Dr Apartments - 57 - - 8 43 6 Del Monte Plaza 1415 Del Monte Ave Apartments - 44 - - - - - Ocean View Apartments 44 Natividad Rd Apartments - 40 - 8 19 13 - Mariposa Apartments 300 Casentini St Apartments - 21 - - - - - - 775 Elkington Ave Apartments - 7 - - - - -
Subtotal Multifamily Units 2,654
Other Affordable
East Salinas Family Rad Scattered Sites Townhomes 2016 202 - 35 86 63 18 Los Abuelitos Senior Apts 528 E Market St Senior 2004 25 - 25 - - - Mountain View Townhomes 1580 Falcon Dr Townhomes 2000 68 - - 20 40 8 Addington Way Homes 288 Addington Ln Special Needs 1999 2 - - - 2 - Roosevelt Street Townhomes II 504 Roosevelt St Townhomes 1998 22 - - - 22 - Regency Court Senior 472 Regency Cir Senior 1997 119 - 96 24 - - Gabilan Hills Townhomes 1051-1057 Paseo Grande Townhomes 1995 100 - - 32 34 34 Roosevelt Townhomes 522 Roosevelt St Townhomes 1995 22 - - - - - Plaza Hotel 30 E Market St SRO 1992 27 - - - - -
Subtotal Other Units 587
Total 3,241 200 626 594 526 139
Source: Costar; HUD National Low Income Housing Tax Credit 1987-2022 Data; EPS.

City of Salinas
[1] Some properties do not include the number of rooms as Costar and the Department of Housing and Urban Development (HUD) do not provide this information.

The absence of data may occur due to various reasons, such as privacy policies, incomplete records, or the nature of the reporting systems of these organizations.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-8
City of Salinas
Rent Stabilization Analysis
Multifamily Housing Market Summary (2012-2024)
Item
Year
2000 $920 - 2.4%
2001 $963 4.7% 3.3%
2002 $955 (0.8%) 4.0%
2003 $947 (0.8%) 4.3%
2004 $948 0.1% 4.3%
2005 $979 3.3% 4.0%
2006 $1,015 3.7% 3.9%
2007 $1,046 3.1% 3.4%
2008 $1,068 2.1% 3.7%
2009 $1,027 (3.8%) 4.1%
2010 $1,041 1.4% 4.1%
2011 $1,050 0.9% 4.5%
2012 $1,070 1.9% 4.1%
2013 $1,099 2.7% 3.7%
2014 $1,143 4.0% 3.1%
2015 $1,274 11.5% 2.8%
2016 $1,375 7.9% 3.0%
2017 $1,480 7.6% 2.4%
2018 $1,554 5.0% 2.1%
2019 $1,592 2.4% 2.7%
2020 $1,702 6.9% 2.4%
2021 $1,920 12.8% 2.4%
2022 $1,859 (3.2%) 2.8%
2023 $1,978 6.4% 2.8%
2024 $1,994 0.8% 2.7%
Average/
Total Change $1,280 3.4% 3.3%
Source: CoStar; EPS.
[1] This data reflects market rate multifamily apartment units built before 1995 in the City of Salinas.

City of Salinas Multifamily Housing [1]
Monthly Effective
Rent
% Change, Rent
Asked Vacancy Rate
Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-9
City of SalinasRent Stabilization AnalysisHousehold Income by Range (2012 & 2022)Item 2012 [1] % 2022 % % Change 2012 [1] % 2022 % % Change Income Range
<$15,000 3,981 9.9% 2,550 5.9% (35.9%) 10,761 8.6% 6,915 5.3% (35.7%) $15,000 - $24,999 4,992 12.4% 2,718 6.3% (45.6%) 12,012 9.6% 6,667 5.1% (44.5%)$25,000 - $34,999 4,831 12.0% 2,589 6.0% (46.4%) 12,012 9.6% 8,369 6.4% (30.3%)$35,000 - $49,999 6,080 15.1% 4,355 10.1% (28.4%) 16,766 13.4% 12,560 9.6% (25.1%)$50,000 - $74,999 7,974 19.8% 7,111 16.5% (10.8%) 24,524 19.6% 19,240 14.7% (21.5%)$75,000 - $99,999 4,871 12.1% 6,638 15.4% 36.3% 15,891 12.7% 18,454 14.1% 16.1%$100,000 - $149,999 5,153 12.8% 8,963 20.8% 73.9% 19,394 15.5% 25,658 19.6% 32.3%$150,000 - $199,999 1,527 3.8% 3,924 9.1% 157.0% 6,882 5.5% 13,739 10.5% 99.6%$200,000+ 882 2.2% 4,225 9.8% 378.9% 6,882 5.5% 19,371 14.8% 181.5%Total 40,292 100.0% 43,073 100.0% 6.9% 125,123 100.0% 130,973 100.0% 4.7% Median Household Income in 2022$ $68,364 $84,250 23.2% $81,279 $91,043 12.0%Source: U.S. Census Bureau ACS 2012 & 2022, Table S1901; EPS.[1] The median household incomes reported by ACS are inflation-adjusted to constant dollars.

City of Salinas Monterey County
Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-10
City of SalinasRent Stabilization AnalysisHousehold Size and Tenure (2012 and 2022)Item Total % Total %Renter-Occupied Households 1-person 3,973 17.6% 3,821 16.8% (3.83%)2-person 3,721 16.4% 3,773 16.6% 1.40%3-person 3,750 16.6% 3,093 13.6% (17.52%)4+ -person 11,193 49.4% 12,107 53.1% 8.17% Total 22,637 100.0% 22,794 100.0% 0.69%
Owner-Occupied
1-person 2,648 15.0% 3,082 15.2% 16.39%2-person 4,645 26.3% 5,112 25.2% 10.05%3-person 3,011 17.1% 3,211 15.8% 6.64%4+ -person 7,351 41.6% 8,874 43.8% 20.72% Total 17,655 100.0% 20,279 100.0% 14.86%
Source: American Community Survey 5-Year Estimates Table B25009; EPS. 2012 2022 Change
(2012-2022)
City of Salinas
Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-11
City of SalinasRent Stabilization AnalysisYear Householder Moved into UnitItem Min Max Avg. Total % Total %Year Householder Moved Into Unit Moved in 2021 or later 0 - 1 0.5 5,141 20.4% 472 2.3%Moved in 2018 to 2020 2 - 4 3 7,406 29.3% 2,254 11.0% Moved in 2010 to 2017 5 - 12 8.5 7,775 30.8% 6,036 29.3% Moved in 2000 to 2009 13 - 22 17.5 3,641 14.4% 5,867 28.5%Moved in 1990 to 1999 23 - 32 27.5 918 3.6% 3,211 15.6%Moved in 1989 or earlier 33 + 33 358 1.4% 2,736 13.3% Total 25,239 100.0% 20,576 100.0%Weighted Average Years Lived in Unit 7.6 16.5
Source: ACS 2022 5-Year estimates Table B25038; EPS.

Renter-Occupied
City of Salinas Households
Owner-Occupied
Years Lived
in Unit
Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-12
City of Salinas
Rent Stabilization Analysis
Units Permitted by Year (2000-2022)
Item 1-Unit 2-Unit
3- and 4-
Unit 5-Unit + Total
Year
1990 194 8 3 - 205
1991 160 8 3 - 171
1992 197 10 - 16 223
1993 275 - 7 27 309
1994 585 10 46 6 647
1995 431 4 9 98 542
1996 413 2 11 253 679
1997 628 - - 207 835
1998 500 - - - 500
1999 809 22 - 531 1,362
2000 579 4 18 50 651
2001 268 - - 160 428
2002 442 14 9 92 557
2003 257 - 14 273 544
2004 231 - 6 25 262
2005 224 - - 21 245
2006 119 - - - 119
2007 72 2 - 170 244
2008 24 2 8 58 92
2009 19 - - 18 37
2010 35 - 16 88 139
2011 7 - 8 10 25
2012 11 2 - - 13
2013 3 2 3 51 59
2014 30 - - 36 66
2015 46 2 - 46 94
2016 2 2 - 48 52
2017 26 - - - 26
2018 57 - - 106 163
2019 80 4 - 12 96
2020 96 - - 109 205
2021 64 4 - 130 198
2022 59 2 - - 61
Total 1990-2022 6,943 104 161 2,641 9,849
Average per Year (1990-2022) 217 3 5 83 308
Total 1995-2022 5,532 68 102 2,592 8,294
Average per Year (1995-2022) 205 3 4 96 307
City of Salinas
Source: United States Department of Housing and Urban Development State of the Cities Database; EPS.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-13
City of SalinasRent Stabilization AnalysisComparable Rent Stabilization Programs Staffing and FeesItemJURISDICTION Actively Enforced Rent Programs
East Palo Alto 2,500 2 1,250 0.80 $234 NA 50%Berkeley 20,000 22 909 1.10 $344 $212 50%Oakland 65,000 11 5,909 0.17 $101 NA 50% Richmond 18,000 13 1,385 0.72 $238 $135 0%Santa Monica 28,000 26 1,077 0.93 $228 NA 50% Total/Weighted Avg. 133,500 74 3,449 0.83 $185 - - Complaint Driven Rent Programs Mountain View 15,000 5 3,000 0.33 $120 NA NAWest Hollywood 17,000 9 2,000 0.50 $144 $144 50% San Jose 39,000 16 2,438 0.41 $106 $34 NA
San Francisco 173,000 31 5,581 0.18 $59 $59 50%Los Angeles 600,000 80 7,500 0.13 $39 NA 50% Total/Weighted Avg. 844,000 141 6,682 0.20 $50 - - Source: City of Mountain View Memorandum to the Rental Housing Committee, dated January 25, 2021; City Web Sites; EPS.

Portion of the Fee
Passed Through
to Tenants
Number of
Qualifying
Units
Staff per
1,000 Units
Number
of Units
per Staff
Staffing
FTEs
Fully Covered
Unit
Partially
Covered Unit
Current Rental Housing
Fees per Fully Covered Unit
Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-14
City of SalinasRent Stabilization AnalysisInflation Method ComparisonYear Total 60% CPI 80% CPI Total Change 2014 240.215 226.976
2015 243.015 0.70% 0.93% 226.12 -0.38%
2016 247.705 1.16% 1.54% 226.814 0.31%2017 254.738 1.70% 2.27% 230.467 1.61%2018 263.263 2.01% 2.68% 236.871 2.78%2019 270.350 1.62% 2.15% 240.92 1.71%2020 275.057 1.04% 1.39% 243.674 1.14%2021 287.494 2.71% 3.62% 257.523 5.68%2022 310.509 4.80% 6.40% 280.63 8.97%2023 323.834 2.57% 3.43% 288.792 2.91%2024 [2] 331.933 1.50% 2.00% 294.262 1.89% Total Change (2014-2024) 22.91% 30.55% 29.64%
Source: Bureau of Labor Statistics; and EPS. [1] Consumer Price Index for All Urban Consumers (CPI-U), West Region.[2] Values for 2024 indicate calendar year average through June.

CPI [1]
Annual Change CPI - Less Shelter
Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-15
City of SalinasRent Stabilization AnalysisHousehold Operations and Furnishings Price Index ChangeYear HIOC COICOP 05 CPI2014 -1.38% -1.45% -0.86%2015 -0.43% -0.74% 0.48%2016 -0.86% -1.16% -0.18%2017 -0.77% -0.90% -0.53%2018 0.72% 0.55% 1.25%2019 1.75% 1.75% 2.30%2020 1.50% 1.75% 3.08%2021 4.49% 4.41% 3.29%2022 9.03% 9.16% 8.82%2023 2.93% 2.63% 2.86%Total Change (2014-2023) 19.47% 18.38% 23.16%CAGR (2014-2023) 1.63% 1.55% 1.98%Source: Bureau of Labor Statistics; and EPS. [1] Consumer Price Index for All Urban Consumers (CPI-U), West Region.[2] Values for 2024 indicate calendar year average through June.

Index Change from Previous Year
Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx Table A-16
City of SalinasRent Stabilization AnalysisMedian Operating Expenses by Property Type (2011-2022)Item 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Mid Rise Administration $668 $647 $643 $602 $627 $720 $688 $813 $836 $785 $855 $887Repairs and Maintenance $1,067 $1,042 $1,031 $1,135 $1,106 $1,259 $1,263 $1,349 $1,480 $1,481 $1,741 $1,829Utilities $833 $782 $838 $923 $871 $919 $928 $927 $1,022 $1,103 $1,020 $1,202Payroll $1,298 $1,347 $1,360 $1,380 $1,299 $1,471 $1,429 $1,455 $1,553 $1,658 $1,655 $1,837Management Fee $485 $460 $491 $497 $422 $535 $523 $629 $708 $764 $778 $695Property Insurance $288 $298 $306 $286 $262 $239 $224 $332 $324 $421 $560 $739 Total Mid Rise [1] $4,639 $4,576 $4,669 $4,823 $4,587 $5,143 $5,055 $5,505 $5,923 $6,212 $6,609 $7,189 Low Rise
Administration $557 $620 $594 $580 $631 $612 $588 $711 $744 $755 $741 $852Repairs and Maintenance $839 $838 $917 $964 $974 $1,037 $1,075 $1,103 $1,236 $1,202 $1,308 $1,650Utilities $694 $725 $775 $811 $793 $804 $793 $844 $876 $946 $966 $1,043Payroll $1,075 $1,101 $1,132 $1,172 $1,239 $1,228 $1,274 $1,336 $1,423 $1,482 $1,489 $1,639Management Fee $392 $406 $421 $431 $420 $436 $443 $519 $589 $673 $707 $672Property Insurance $229 $250 $265 $275 $272 $281 $282 $311 $346 $395 $515 $528 Total Low Rise [1] $3,786 $3,940 $4,104 $4,233 $4,329 $4,398 $4,455 $4,824 $5,214 $5,453 $5,726 $6,384 Single-family. Duplex and Townhomes
Administration $505 $525 $575 $552 $595 $659 $657 $681 $769 $753 $737 $787Repairs and Maintenance $840 $908 $961 $1,000 $1,022 $1,119 $1,145 $1,131 $1,243 $1,253 $1,375 $1,554Utiiities $669 $694 $749 $758 $800 $780 $750 $891 $912 $995 $872 $972Payroll $1,006 $1,074 $1,116 $1,091 $1,280 $1,203 $1,376 $1,416 $1,473 $1,625 $1,461 $1,605Management Fee $364 $335 $330 $328 $454 $438 $481 $679 $729 $762 $705 $683Property Insurance $258 $293 $329 $309 $262 $258 $243 $265 $348 $318 $497 $542 Total Single-family. Duplex and Townhomes [1] $3,642 $3,829 $4,060 $4,038 $4,413 $4,457 $4,652 $5,063 $5,474 $5,706 $5,647 $6,143 Average All
Administration $577 $597 $604 $578 $618 $664 $644 $735 $783 $764 $778 $842Repairs and Maintenance $915 $929 $970 $1,033 $1,034 $1,138 $1,161 $1,194 $1,320 $1,312 $1,475 $1,678Utiiities $732 $734 $787 $831 $821 $834 $824 $887 $937 $1,015 $953 $1,072Payroll $1,126 $1,174 $1,203 $1,214 $1,273 $1,301 $1,360 $1,402 $1,483 $1,588 $1,535 $1,694Management Fee $414 $400 $414 $419 $432 $470 $482 $609 $675 $733 $730 $683Property Insurance $258 $280 $300 $290 $265 $259 $250 $303 $339 $378 $524 $603 Total Average All $4,022 $4,115 $4,278 $4,365 $4,443 $4,666 $4,721 $5,131 $5,537 $5,790 $5,994 $6,572 Year-Over-Year Change (Average All Types)
Administration 3.58% 1.12% (4.30%) 6.86% 7.45% (2.91%) 14.07% 6.53% (2.38%) 1.74% 8.27%Repairs and Maintenance 1.53% 4.34% 6.53% 0.10% 10.09% 1.99% 2.87% 10.49% (0.58%) 12.40% 13.77%Utiiities 0.23% 7.31% 5.50% (1.12%) 1.58% (1.28%) 7.73% 5.56% 8.33% (6.11%) 12.56%Payroll 4.23% 2.44% 0.97% 4.80% 2.20% 4.54% 3.14% 5.75% 7.10% (3.36%) 10.34%Management Fee (3.22%) 3.41% 1.13% 3.18% 8.72% 2.70% 26.26% 10.89% 8.54% (0.41%) (6.39%)Property Insurance 8.52% 7.02% (3.33%) (8.51%) (2.26%) (3.73%) 21.23% 12.11% 11.39% 38.62% 15.08% Total Year Over Year Change 2.30% 3.95% 2.03% 1.79% 5.02% 1.17% 8.69% 7.92% 4.58% 3.52% 9.64%Compound Annual Growth Rate (2014-2020) Administration 3.50%Repairs and Maintenance 5.66%Utiiities 3.53%Payroll 3.78%Management Fee 4.67%Property Insurance 8.01% Total 4.56%
Source: Novogradac, 2023. Low-Income Housing Tax Credit Income and Operating Expenses Report.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Rent_Stabilization_08-08-24.xlsx APPENDIX B:

Financial Analysis Support Tables
Table B-1 Rent Stabilized Annual Cash Flow Estimate—
Market Rate Base Case ................................................B-1 Table B-2 Rent Stabilized Annual Cash Flow Estimate—
100% of CPI ..............................................................B-2 Table B-3 Hypothetical Rent Stabilized Gross Rent Roll Estimate— 100% of CPI ..............................................................B-3 Table B-4 Rent Stabilized Annual Cash Flow Estimate—
100% of CPI ..............................................................B-4 Table B-5 Hypothetical Rent Stabilized Gross Rent Roll Estimate— 80% of CPI ................................................................B-5 Table B-6 Rent Stabilized Annual Cash Flow Estimate—
60% of CPI ................................................................B-6 Table B-7 Hypothetical Rent Stabilized Gross Rent Roll Estimate— 60% of CPI ................................................................B-7 Appendix Table B-1
City of Salinas
Rent Stabilization Analysis
Rent Stabilized Annual Cash Flow Estimate - Market Rate Base Case Item Assumptions Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Market Rent Increase 3.35%
Allowed Rent Increase (% of CPI) na
CPI (Inflation) 3.00%
Operating Expense Growth 3.00%
Gross Rental Revenue $2,388,000 $2,468,043 $2,550,768 $2,636,267 $2,724,631 $2,815,957 $3,320,609 Less Vacancy Loss @ 3.00% ($71,640) ($74,041) ($76,523) ($79,088) ($81,739) ($84,479) ($99,618) Net Rental Revenue - $2,316,360 $2,394,001 $2,474,245 $2,557,179 $2,642,892 $2,731,478 $3,220,991 Less Operations & Maintenance [1] @ 30.00% ($694,908) ($715,755) ($737,228) ($759,345) ($782,125) ($805,589) ($933,898) Net Operating Income (NOI) - $1,621,452 $1,678,246 $1,737,017 $1,797,834 $1,860,767 $1,925,890 $2,287,092 Capitalization Rate 6.00%
Building Value $27,024,200 $27,970,769 $28,950,289 $29,963,899 $31,012,782 $32,098,158 $38,118,207 Annual Change in Value 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 10-Year Average Annual
Appreciation Rate

3.50%
Return on Investment (ROI) 10-yr = 41.05% 3.50% 7.13% 10.88% 14.76% 18.78% 41.05% Hypothetical Acquisition
(Plus Acq. Cost)
@ 4.00% ($28,105,168)
Net Operating Income $1,678,246 $1,737,017 $1,797,834 $1,860,767 $1,925,890 $2,287,092 Reversion Value
(Less Marketing Cost)
@ 4.00% $36,593,478
Net Cash Flow ($28,105,168) $1,678,246 $1,737,017 $1,797,834 $1,860,767 $1,925,890 $38,880,571 Unleveraged IRR 8.84%
Leveraged IRR
Initial Equity Investment @ 30% -$8,431,550
Net Operating Income $1,678,246 $1,737,017 $1,797,834 $1,860,767 $1,925,890 $2,287,092 Debt Service - Principal (25-yr) @ 6.00% -$358,585 -$380,101 -$402,907 -$427,081 -$452,706 -$605,823 Debt Service - Interest (25-yr) @ 6.00% -$1,180,417 -$1,158,902 -$1,136,096 -$1,111,921 -$1,086,297 -$933,180 Reversion $36,593,478
Less Remaining Principal -$14,947,176
Net Proceeds to Developer Equity ($8,431,550) $139,244 $198,015 $258,831 $321,764 $386,887 $22,394,392 Leveraged IRR 12.88%
Source: CoStar; EPS.
[1] For market-rate base case example, op ex as percentage of rental income applied across all years.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Cash_Flow_06_19-24.xlsx Appendix Table B-2
City of Salinas
Rent Stabilization Analysis
Rent Stabilized Annual Cash Flow Estimate - 100% of CPI Item Assumptions Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Market Rent Increase 3.35%
Allowed Rent Increase (% of CPI) 100.00%
CPI (Inflation) 3.00%
Operating Expense Growth 3.00%
Gross Rental Revenue $2,388,000 $2,460,562 $2,536,178 $2,614,897 $2,696,778 $2,781,881 $3,258,336 Less Vacancy Loss @ 3.00% ($71,640) ($73,817) ($76,085) ($78,447) ($80,903) ($83,456) ($97,750) Net Rental Revenue - $2,316,360 $2,386,745 $2,460,092 $2,536,450 $2,615,874 $2,698,425 $3,160,586 Less Operations & Maintenance [1] Yr 0 @ 30.00% ($694,908) ($715,755) ($737,228) ($759,345) ($782,125) ($805,589) ($933,898) Net Operating Income (NOI) - $1,621,452 $1,670,990 $1,722,864 $1,777,106 $1,833,749 $1,892,836 $2,226,688 Capitalization Rate 6.00%
Building Value $27,024,200 $27,849,834 $28,714,406 $29,618,425 $30,562,487 $31,547,270 $37,111,462 Annual Change in Value 3.06% 3.10% 3.15% 3.19% 3.22% 3.35% 10-Year Average Annual
Appreciation Rate

3.22%
Return on Investment (ROI) 10-yr = 37.33% 3.06% 6.25% 9.60% 13.09% 16.74% 37.33% Hypothetical Acquisition
(Plus Acq. Cost)
@ 4.00% ($28,105,168)
Net Operating Income $1,670,990 $1,722,864 $1,777,106 $1,833,749 $1,892,836 $2,226,688 Reversion Value
(Less Marketing Cost)
@ 4.00% $35,627,003
Net Cash Flow ($28,105,168) $1,670,990 $1,722,864 $1,777,106 $1,833,749 $1,892,836 $37,853,691 Unleveraged IRR 8.54%
Leveraged IRR
Initial Equity Investment @ 30% -$8,431,550
Net Operating Income $1,670,990 $1,722,864 $1,777,106 $1,833,749 $1,892,836 $2,226,688 Debt Service - Principal (25-yr) @ 6.00% -$358,585 -$380,101 -$402,907 -$427,081 -$452,706 -$605,823 Debt Service - Interest (25-yr) @ 6.00% -$1,180,417 -$1,158,902 -$1,136,096 -$1,111,921 -$1,086,297 -$933,180 Reversion $35,627,003
Less Remaining Principal -$14,947,176
Net Proceeds to Developer Equity ($8,431,550) $131,987 $183,862 $238,103 $294,747 $353,834 $21,367,513 Leveraged IRR 12.20%
Source: CoStar; EPS.
[1] After Year 0 for rent stabilization examples, operations and maintenance expenses increase at the rate of CPI.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Cash_Flow_06_19-24.xlsx Appendix Table B-3
City of SalinasRent Stabilization AnalysisHypothetical Rent Stabilized Gross Rent Roll Estimate - 100% of CPIItem Assumptions Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Assumed Units 100
Year 0 Average Rent $1,990Year 0 Vacancy Decontrol Rent $1,990Average Number Years in Unit 9.11Turnover 11.0%Market Rent Increase 3.35%Allowed Rent Increase (% CPI) 100.00% CPI Inflation 3.00%Gross Units by Occupancy Date
Year 0 (or before) 100.0 89.0 79.3 70.6 62.8 55.9 49.8 44.3 39.5 35.1 31.3 Year 1 - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9 4.3 3.9Year 2 - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9 4.3Year 3 - - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9Year 4 - - - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 Year 5 - - - - - 11.0 9.8 8.7 7.7 6.9 6.1
Year 6 - - - - - - 11.0 9.8 8.7 7.7 6.9
Year 7 - - - - - - - 11.0 9.8 8.7 7.7
Year 8 - - - - - - - - 11.0 9.8 8.7
Year 9 - - - - - - - - - 11.0 9.8
Year 10 - - - - - - - - - - 11.0
Total Units 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Average Rent by Occupancy Date Year 0 (or before) $1,990 $2,050 $2,111 $2,175 $2,240 $2,307 $2,376 $2,447 $2,521 $2,596 $2,674 Year 1 - $2,057 $2,118 $2,182 $2,247 $2,315 $2,384 $2,456 $2,529 $2,605 $2,684Year 2 - - $2,126 $2,189 $2,255 $2,323 $2,392 $2,464 $2,538 $2,614 $2,693 Year 3 - - - $2,197 $2,263 $2,331 $2,401 $2,473 $2,547 $2,623 $2,702Year 4 - - - - $2,271 $2,339 $2,409 $2,481 $2,555 $2,632 $2,711 Year 5 - - - - - $2,347 $2,417 $2,490 $2,564 $2,641 $2,720 Year 6 - - - - - - $2,425 $2,498 $2,573 $2,650 $2,730
Year 7 - - - - - - - $2,507 $2,582 $2,659 $2,739
Year 8 - - - - - - - - $2,591 $2,668 $2,748
Year 9 - - - - - - - - - $2,677 $2,758
Year 10 - - - - - - - - - - $2,767
Gross Rent $2,388,000 $2,460,562 $2,536,178 $2,614,897 $2,696,778 $2,781,881 $2,870,277 $2,962,038 $3,057,244 $3,155,980 $3,258,336Source: US Census; Costar; EPS.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Cash_Flow_06_19-24.xlsx Appendix Table B-4
City of Salinas
Rent Stabilization Analysis
Rent Stabilized Annual Cash Flow Estimate - 80% of CPI
Item Assumptions Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Market Rent Increase 3.35%
Allowed Rent Increase (% of CPI) 80.00%
CPI (Inflation) 3.00%
Operating Expense Growth 3.00%
Gross Rental Revenue $2,388,000 $2,447,807 $2,511,406 $2,578,768 $2,649,874 $2,724,718 $3,155,573 Less Vacancy Loss @ 3.00% ($71,640) ($73,434) ($75,342) ($77,363) ($79,496) ($81,742) ($94,667) Net Rental Revenue - $2,316,360 $2,374,372 $2,436,064 $2,501,405 $2,570,377 $2,642,976 $3,060,905 Less Operations & Maintenance [1] Yr 0 @ 30.00% ($694,908) ($715,755) ($737,228) ($759,345) ($782,125) ($805,589) ($933,898) Net Operating Income (NOI) - $1,621,452 $1,658,617 $1,698,836 $1,742,060 $1,788,252 $1,837,387 $2,127,007 Capitalization Rate 6.00%
Building Value $27,024,200 $27,643,618 $28,313,934 $29,034,334 $29,804,206 $30,623,123 $35,450,120 Annual Change in Value 2.29% 2.42% 2.54% 2.65% 2.75% 3.09% 10-Year Average Annual
Appreciation Rate

2.75%
Return on Investment (ROI) 10-yr = 31.18% 2.29% 4.77% 7.44% 10.29% 13.32% 31.18% Hypothetical Acquisition
(Plus Acq. Cost)
@ 4.00% ($28,105,168)
Net Operating Income $1,658,617 $1,698,836 $1,742,060 $1,788,252 $1,837,387 $2,127,007 Reversion Value
(Less Marketing Cost)
@ 4.00% $34,032,115
Net Cash Flow ($28,105,168) $1,658,617 $1,698,836 $1,742,060 $1,788,252 $1,837,387 $36,159,122 Unleveraged IRR 8.01%
Leveraged IRR
Initial Equity Investment @ 30% -$8,431,550
Net Operating Income $1,658,617 $1,698,836 $1,742,060 $1,788,252 $1,837,387 $2,127,007 Debt Service - Principal (25-yr) @ 6.00% -$358,585 -$380,101 -$402,907 -$427,081 -$452,706 -$605,823 Debt Service - Interest (25-yr) @ 6.00% -$1,180,417 -$1,158,902 -$1,136,096 -$1,111,921 -$1,086,297 -$933,180 Reversion $34,032,115
Less Remaining Principal -$14,947,176
Net Proceeds to Developer Equity ($8,431,550) $119,615 $159,833 $203,057 $249,250 $298,385 $19,672,944 Leveraged IRR 11.02%
Source: CoStar; EPS.
[1] After Year 0 for rent stabilization examples, operations and maintenance expenses increase at the rate of CPI.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Cash_Flow_06_19-24.xlsx Appendix Table B-5
City of SalinasRent Stabilization AnalysisHypothetical Rent Stabilized Gross Rent Roll Estimate - 80% of CPIItem Assumptions Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Assumed Units 100
Year 0 Average Rent $1,990Year 0 Vacancy Decontrol Rent $1,990Average Number Years in Unit 9.11Turnover 11.0%Market Rent Increase 3.35%Allowed Rent Increase (% CPI) 80.00% CPI Inflation 3.00%Gross Units by Occupancy Date
Year 0 (or before) 100.0 89.0 79.3 70.6 62.8 55.9 49.8 44.3 39.5 35.1 31.3 Year 1 - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9 4.3 3.9Year 2 - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9 4.3 Year 3 - - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9
Year 4 - - - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5
Year 5 - - - - - 11.0 9.8 8.7 7.7 6.9 6.1
Year 6 - - - - - - 11.0 9.8 8.7 7.7 6.9
Year 7 - - - - - - - 11.0 9.8 8.7 7.7
Year 8 - - - - - - - - 11.0 9.8 8.7
Year 9 - - - - - - - - - 11.0 9.8
Year 10 - - - - - - - - - - 11.0
Total Units 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Average Rent by Occupancy Date Year 0 (or before) $1,990 $2,038 $2,087 $2,137 $2,188 $2,241 $2,294 $2,349 $2,406 $2,464 $2,523 Year 1 - $2,057 $2,106 $2,157 $2,208 $2,261 $2,316 $2,371 $2,428 $2,486 $2,546Year 2 - - $2,126 $2,177 $2,229 $2,282 $2,337 $2,393 $2,451 $2,510 $2,570 Year 3 - - - $2,197 $2,250 $2,304 $2,359 $2,416 $2,473 $2,533 $2,594Year 4 - - - - $2,271 $2,325 $2,381 $2,438 $2,496 $2,556 $2,618 Year 5 - - - - - $2,347 $2,403 $2,461 $2,520 $2,580 $2,642 Year 6 - - - - - - $2,425 $2,483 $2,543 $2,604 $2,667
Year 7 - - - - - - - $2,507 $2,567 $2,628 $2,691
Year 8 - - - - - - - - $2,591 $2,653 $2,716
Year 9 - - - - - - - - - $2,677 $2,742
Year 10 - - - - - - - - - - $2,767
Gross Rent $2,388,000 $2,447,807 $2,511,406 $2,578,768 $2,649,874 $2,724,718 $2,803,306 $2,885,654 $2,971,789 $3,061,747 $3,155,573Source: US Census; Costar; EPS.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Cash_Flow_06_19-24.xlsx Appendix Table B-6
City of Salinas
Rent Stabilization Analysis
Rent Stabilized Annual Cash Flow Estimate - 60% of CPI
Item Assumptions Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Market Rent Increase 3.35%
Allowed Rent Increase (% of CPI) 60.00%
CPI (Inflation) 3.00%
Operating Expense Growth 3.00%
Gross Rental Revenue $2,388,000 $2,435,051 $2,486,771 $2,543,027 $2,603,707 $2,668,724 $3,056,973 Less Vacancy Loss @ 3.00% ($71,640) ($73,052) ($74,603) ($76,291) ($78,111) ($80,062) ($91,709) Net Rental Revenue - $2,316,360 $2,361,999 $2,412,168 $2,466,736 $2,525,596 $2,588,662 $2,965,264 Less Operations & Maintenance [1] Yr 0 @ 30.00% ($694,908) ($715,755) ($737,228) ($759,345) ($782,125) ($805,589) ($933,898) Net Operating Income (NOI) - $1,621,452 $1,646,244 $1,674,940 $1,707,391 $1,743,471 $1,783,073 $2,031,366 Capitalization Rate 6.00%
Building Value $27,024,200 $27,437,403 $27,915,664 $28,456,517 $29,057,852 $29,717,886 $33,856,095 Annual Change in Value 1.53% 1.74% 1.94% 2.11% 2.27% 2.85% 10-Year Average Annual
Appreciation Rate

2.28%
Return on Investment (ROI) 10-yr = 25.28% 1.53% 3.30% 5.30% 7.53% 9.97% 25.28% Hypothetical Acquisition
(Plus Acq. Cost)
@ 4.00% ($28,105,168)
Net Operating Income $1,646,244 $1,674,940 $1,707,391 $1,743,471 $1,783,073 $2,031,366 Reversion Value
(Less Marketing Cost)
@ 4.00% $32,501,852
Net Cash Flow ($28,105,168) $1,646,244 $1,674,940 $1,707,391 $1,743,471 $1,783,073 $34,533,217 Unleveraged IRR 7.49%
Leveraged IRR
Initial Equity Investment @ 30% -$8,431,550
Net Operating Income $1,646,244 $1,674,940 $1,707,391 $1,743,471 $1,783,073 $2,031,366 Debt Service - Principal (25-yr) @ 6.00% -$358,585 -$380,101 -$402,907 -$427,081 -$452,706 -$605,823 Debt Service - Interest (25-yr) @ 6.00% -$1,180,417 -$1,158,902 -$1,136,096 -$1,111,921 -$1,086,297 -$933,180 Reversion $32,501,852
Less Remaining Principal -$14,947,176
Net Proceeds to Developer Equity ($8,431,550) $107,242 $135,937 $168,388 $204,469 $244,071 $18,047,039 Leveraged IRR 9.79%
Source: CoStar; EPS.
[1] After Year 0 for rent stabilization examples, operations and maintenance expenses increase at the rate of CPI.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Cash_Flow_06_19-24.xlsx Appendix Table B-7
City of SalinasRent Stabilization AnalysisHypothetical Rent Stabilized Gross Rent Roll Estimate - 60% of CPIItem Assumptions Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Assumed Units 100
Year 0 Average Rent $1,990Year 0 Vacancy Decontrol Rent $1,990Average Number Years in Unit 9.11Turnover 11.0%Market Rent Increase 3.35%Allowed Rent Increase (% CPI) 60.00% CPI Inflation 3.00%Gross Units by Occupancy Date
Year 0 (or before) 100.0 89.0 79.3 70.6 62.8 55.9 49.8 44.3 39.5 35.1 31.3 Year 1 - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9 4.3 3.9Year 2 - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9 4.3 Year 3 - - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5 4.9
Year 4 - - - - 11.0 9.8 8.7 7.7 6.9 6.1 5.5
Year 5 - - - - - 11.0 9.8 8.7 7.7 6.9 6.1
Year 6 - - - - - - 11.0 9.8 8.7 7.7 6.9
Year 7 - - - - - - - 11.0 9.8 8.7 7.7
Year 8 - - - - - - - - 11.0 9.8 8.7
Year 9 - - - - - - - - - 11.0 9.8
Year 10 - - - - - - - - - - 11.0
Total Units 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Average Rent by Occupancy Date Year 0 (or before) $1,990 $2,026 $2,062 $2,099 $2,137 $2,176 $2,215 $2,255 $2,295 $2,337 $2,379 Year 1 - $2,057 $2,094 $2,131 $2,170 $2,209 $2,249 $2,289 $2,330 $2,372 $2,415Year 2 - - $2,126 $2,164 $2,203 $2,243 $2,283 $2,324 $2,366 $2,408 $2,452 Year 3 - - - $2,197 $2,236 $2,277 $2,318 $2,359 $2,402 $2,445 $2,489Year 4 - - - - $2,271 $2,311 $2,353 $2,395 $2,438 $2,482 $2,527 Year 5 - - - - - $2,347 $2,389 $2,432 $2,476 $2,520 $2,566 Year 6 - - - - - - $2,425 $2,469 $2,513 $2,559 $2,605
Year 7 - - - - - - - $2,507 $2,552 $2,598 $2,644
Year 8 - - - - - - - - $2,591 $2,637 $2,685
Year 9 - - - - - - - - - $2,677 $2,726
Year 10 - - - - - - - - - - $2,767
Gross Rent $2,388,000 $2,435,051 $2,486,771 $2,543,027 $2,603,707 $2,668,724 $2,738,005 $2,811,499 $2,889,170 $2,970,997 $3,056,973Source: US Census; Costar; EPS.

Prepared by EPS 9/4/2024 Z:\Shared\Projects\SAC\242000\242050 Salinas Rent Stablization\Model\242050_Salinas_Cash_Flow_06_19-24.xlsx Rental Registration
and Rent
Stabilization
Implementation
November 19, 2024
Community Development,
City Attorney’s Office,
Finance, & Human Resources
Introduction
 The City Council adopted a Rental Registration Program (April 2023) and Rent Stabilization Program (September 2024).
 City Council action is needed to:
 establish program registration fees
 create a FY 24-25 budget
 hire additional administrative staff
 authorize a loan transfer from the General Fund for start-up costs Proposed Program Staffing

0.2 FTE Planning Manager

1.0 FTE Community Development Analyst (Limited Term)

1.0 FTE Admin Analyst (Limited Term)

1.0 FTE Admin Aide (Limited Term)

3.2 FTE
FY 2024-2025 Program Budget
Salaries and Benefits $142,250
Software $200,000
Supportive Services $300,000
(Hearing Officer, Education/Outreach)
Indirect Costs/Overhead $13,000
$655,250
Program Fees Summary
Initial Proposed Fees
 $28.00 per rental unit (Residential Registration Ordinance)  $115.00 per rental unit (Rent Stabilization Ordinance)  80% collection rate required for cost neutrality
Current Recommended Fees
 $45.00 per rental unit (Residential Registration Ordinance)  $170.00 per rental unit (Rent Stabilization Ordinance)  50% collection rate required for cost neutrality, starting in year 3 Strategic
Alignment
City of Salinas Strategic Plan
2022-2025
Consideration of the proposed actions furthers the City Council’s goal of promoting and preserving Housing and
Affordable Housing.

Motion
Summary
 Establish a Rent Program Fee for the Rent Stabilization Ordinance (Ordinance No. 2681 N.C.S.)
 Amend Residential Registration Fees established by Ordinance Number 2663 (N.C.S.)
 Establish the FY 24-25 Residential Rental Registration and Rent Stabilization Program revenue and expense budget ($655,250)  Authorize the appropriation of $205,203 to the program in the form of a General Fund loan transfer
 Approve an amended Workforce Allocation for two limited term administrative positions to staff the program
Questions?