Thousand Oaks City Council
February 28, 2023

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Procurement
Staten shall procure all materials and equipment needed for the installation of complete Systems under this Scope of Work.

Construction Services
The following services shall be provided by Staten as part of general construction activities:

1. Civil construction, including surveying, clearing, grubbing, tree removal, light pole removal, excavation, trenching, boring, backfill, and fencing

2. Structural construction, including foundations, concrete work, grouting, anchors, erection of PV racks, carport structures, and other support structures

3. Steel shall be fabricated and erected according to AISC Code of Standard Practices for Steel Buildings and Bridges (latest edition). Steel fabricators shall be certified according to AISC Quality Certification Program.

4. Electrical construction, including PV modules, combiners, inverters, transformers, disconnects, wiring, breakers, metering, data acquisition systems, telecom systems, and lighting systems as required for complete Systems

5. Safety services, including on-site safety equipment, personnel training, and safety monitoring of construction activities

6. Support services, including Staten’s trailers, shaded worker rest areas, restroom facilities, and security

7. Coordination with City’s staff for site access, laydown, and storage with minimal interference with facility operations

8. Restoration of landscape and hardscape to pre-construction condition, or in accordance with new design, as needed

9. Restoration of pavement and restriping of parking stalls only in areas disturbed during construction

10.Construction inspections, material verification, and testing as required

11.Lawful disposal of refuse, spoils, chemicals, and waste materials associated with construction activities

12.Testing and start-up services for electrical and control systems included in the Scope of Work. Testing shall include pre-operational functional tests, equipment calibration, and insulation resistance tests. All necessary test equipment and instrumentation shall be provided by Staten.

13.Furnishment and use of miscellaneous consumable materials required to erect the Systems

14.Coordination with City’s staff and representatives, including Inspector of Record for all inspections and submittals
Item No.14A

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15.Coordination with electric utility provider, Southern California Edison (SCE), on interconnection

16.Coordination of final inspection and SCE’s permission to operate

17.Any damage to existing underground utilities caused by Staten shall be repaired at no cost to City.

18.Removal of existing light poles in areas for the new canopy structures.

Under canopy lights shall be connected to existing lighting circuit.

Exhibit A-1 specifies light poles and trees to be removed.

Documentation Submittals
Staten shall prepare and submit designs, drawings, and specifications to the City for review and approval. City shall review the documents and provide any comments in writing to Staten within fourteen (14) business days after receipt of such documents. Staten will proceed with the assumption that City has approved the documents if no comments are received within fourteen (14) business days.

Any comments provided by City after fourteen (14) business days that result in re- work shall constitute a change order. City shall consolidate all comments for each review cycle such that Staten does not receive comments in separate submittals at different times from various City personnel. Any re-work as a result of receiving comments in separate submittals shall constitute a change order. To the extent consistent with applicable law and industry standards, Staten will incorporate City comments into the final designs, drawings, and specifications as applicable. Staten shall submit such revised documents to City for additional design review periods, which shall not extend longer than fourteen (14) business days, until City approves such revised documents subject to the terms of the Agreement.

The following list is not all-inclusive but defines the contract documents that are required to be submitted by Staten for review and approval by the City.

1. Architectural designs including:
a. Site plans: facility drawings with project improvements drawn to scale

2. Structural designs including:
a. Ground structural elements for carport systems
b. Roof structural elements for rooftop systems
c. Equipment foundations and enclosures

3. Electrical designs including:
a. Photovoltaic plans
b. Single line AC and DC diagrams
c. Communication, monitoring, and control schematics
d. Electrical circuit and conduit schedule
e. Electrical equipment installation plans
f. Underground conduit routing, trenching/boring details, and locations of all known existing utilities
Item No.14A

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g. Lighting and photometric plans for areas under carport structures h. Equipment data sheets

4. System energy production model outputs

5. Geotechnical reports including soil properties, if required

6. Professional Engineer wet stamps and signatures on final design documents:
a. Structural designs
b. Electrical designs

7. Approved Applicable Permits

8. Project schedule

9. Environment, health, and safety plan

10.System manual with specifications, startup, commissioning, and testing procedures for equipment

11.System operation and maintenance manual

12.As-built drawings

13.Interconnection agreement with SCE

14.Documentation for tariff changes with SCE
Workmanship Warranty
Commencing on the Final Completion date and for a period of one (1) year thereafter, Staten warrants that the Systems will be free from defects (“Workmanship Warranty”). If a System has a defect and City provides written notification of said defect within the one (1) year workmanship warranty period, Staten will, at its option, either repair or replace the portion of the System that is defective at no cost to City within forty-five (45) days of notification. The Workmanship Warranty shall not apply to the extent such defect is caused by any of the following:

1. Alterations or repairs made to the supporting structure of any System or associated wiring and parts without Staten’s prior written approval;

2. Failure of a System to perform caused by legislative, administrative, or executive regulation, order or requisition of the government, local utility or public utilities commission, or any state, provincial or municipal government or official;

3. Use of a System beyond the scope contemplated in its operating manuals or technical specifications;

4. Damage to a System not caused directly or indirectly by Staten or its subcontractors under any agreement between Staten and City;

5. Force majeure events;

6. A change in usage of that portion of the Site on which the System is located which may affect building or site permits and related requirements, without the written approval of Staten, or a change in ownership of building or Item No.14A

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property and the new owner has not signed an assumption agreement of the terms and conditions herein.

7. Any defect or deficiency to the extent the same results from a specific written direction from the City if, prior to implementing such written direction, Staten advised City that City’s written direction would so affect the warranty provided by Staten hereunder.

Manufacturer Warranties
Staten shall procure and assign to City warranties from the equipment manufacturers (the “Manufacturer Warranty”) to the extent said equipment is purchased and provided for the Systems by Staten. Solar energy equipment included in the Scope of Work for electricity generation (PV modules, inverters) shall have a minimum ten (10) year manufacturer performance warranty to protect against degradation of electrical generation output of more than 15 percent from their originally rated electrical output. Except as expressly provided in this Agreement, Staten’s obligations under this warranty do not apply to any defects whatsoever in the equipment purchased and provided by Staten for the Systems, provided Staten has procured and assigned to City the Manufacturer Warranty of such equipment. Staten makes no representation or warranty, and City shall seek no recourse from Staten, regarding the Manufacturer Warranties, including, without limitation, any degradation in electrical generation output of the PV modules.

Staten shall require that manufacturers provide the following warranties:

1. Inverters shall have a ten (10) year Manufacturer Warranty.

2. PV modules shall have the following standard Manufacturer Warranties:
a. Five (5) year material and workmanship warranty;
b. Ten (10) year power output warranty at ninety percent (90 percent) of rated nominal power output; and
c. Twenty-Five (25) year power output warranty at eighty percent (80 percent) rated nominal power output.

3. Meters shall have a one (1) year standard Manufacturer Warranty.

Performance Test
Staten is responsible for conducting the performance test of the complete Systems, including PV modules, inverters, metering, controls, and accessories.

Staten shall provide all test equipment and special instrumentation required for the tests.

Staten shall operate the Systems during the performance tests. City shall be entitled to be present during any performance test.

Upon completion of any performance test, Staten shall submit the relevant certificate containing the results of such performance test to City’s representative Item No.14A

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as soon as practicable, but in any event within five (5) business days. City’s representative shall promptly review such certificate and the results set forth therein and shall determine whether the performance test has been successfully completed within five (5) business days following receipt of such certificate.

If any System fails to satisfy any performance test, City’s representative shall execute the certificate including the performance test that failed. Staten shall repeat the performance test one or several times before Final Completion of the System. Staten shall take all corrective actions so that all Systems successfully complete the performance tests, without prejudice to City’s rights and remedies in accordance with this Agreement.

The performance test is the ability of the System to demonstrate Actual System Energy Output is consistent with the Nameplate Rated Capacity during the Test Period commencing immediately after Substantial Completion and permission to operate has been provided by the local utility.

The following additional definitions apply to the system performance test:

1. “Actual System Energy Output” means the AC kilowatt-hour output of the System measured at the revenue meter at the site adjusted for Standard Test Conditions (STC), ancillary loads, System losses, and ambient conditions.

2. “Nameplate Rated Capacity” means the total nameplate rated capacity (kW-DC-STC) as calculated by adding the nameplate ratings at STC of the PV modules in the System.

3. “Standard Test Conditions (STC)" are defined as the following:
a. Irradiance in the plane of the array (average module tilt angle and orientation of the System) of 1,000 W/m2
b. 25°C module cell operating temperature as measured at the back surface or cell of the module
c. Air Mass (AM) of 1.5

4. “Test Period” means a qualified period of time following Substantial Completion during which the Actual System Energy Output and ambient conditions are measured and recorded. The Test Period shall consist of at least five (5) valid days. A day is considered valid if a wide distribution of data is collected over the range of insolation values from 200 to 1000 W/m2.

Each day shall have an adequate number (320 minimum) of valid data points in both the morning and afternoon.

5. A successful test will demonstrate that the Actual System Energy Output equals or exceeds ninety-five percent (95 percent) of the Nameplate Rated Capacity. If the Actual System Energy Output does not meet these criteria, Staten shall investigate the System for defects, make any necessary corrections, and retest the System to achieve a successful Performance Test.

Item No.14A

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Project Closeout

1. Staten shall deliver to City owner’s manuals, operator’s manuals, field test results, commissioning reports with performance test results, and as-built drawings for the Systems no later than ninety (90) days after Substantial Completion occurs. For the avoidance of doubt, the as-built drawings shall be included in the punch list items.

2. At City’s request, Staten shall provide City’s personnel with no less than four hours of detailed and complete on-site operation training with respect to each of the six Systems.

Schedule
The tentative schedule for completion of the project is as follows:

Interconnection Agreement filing with SCE March 15, 2023 30 percent Design Completion April 2023
Materials procurement April 2023
100 percent Design Completion August 2023
Permits Obtained December 2023
Mobilization to Start Construction December 2023
Complete Construction May – September 2024
Permission to Operate July – Oct 2024
Project Completion December 2024
Operations and Maintenance January–December 2025
One Year Operations and Maintenance
The Developer shall provide one (1) year of Operations and Maintenance for completed Systems, from the date of the Notice of Completion.

Power Output Warranty: Developer agrees to repair or replace components of PV systems that fail to exhibit the manufacturer’s specified maximum power output upon installation or within the first year. In addition, Systems’ components shall be subject to workmanship and performance warranties as specified in Sections H and I.

At the end of the One Year period, Developer shall provide the City with a report detailing actual production in comparison with the projected annual production specified in the design. If the actual annual production is less than 90% of the projected production, Developer shall determine the cause of the low production taking in account the difference in weather parameters that were taken as base values during the simulation. If the generation is not up to 90% of the anticipated production after taking into account the actual weather parameters (irradiance and temperature), the Developer shall provide all labor, equipment and materials Item No.14A

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required to modify the system to reach the original anticipated production. In addition, the Developer shall pay the City the cost of the excess electricity purchased from the utility company (including all generation, demand, and delivery charges) to cover any shortfall in actual production below 90% of the projected amount.

Contingency for Equipment Failure. In lieu of lost electricity production data from the monitoring system, Developer shall utilize data from utility meter readings to model the electricity generated during the missing interval based on the prior and post months of available data.

Adjustment of Projected Production. If, and to the extent any of the following events result in a material change in the production of electricity by the system, projected production shall be adjusted for the period of such material change:

1. There is any failure of the system to perform caused by electrical grid instability or curtailment, district-imposed power outages, legislative, administrative or executive action, regulation, order or requisition of any federal, state or local government, local utility or public utility commission.

2. The Projected production shall be calculated based on the actual weather (solar irradiance, ambient temperature, wind pressure) at the end of the year.

3. There is an event of force majeure or vandalism that impairs the integrity of the System.

4. There is any change in usage of or structures on the site, or buildings on or near the site that directly impact the solar production.

City Responsibilities
Staten shall not be obligated to perform any work or activity beyond the Scope of Work and its other obligations under this Agreement. In particular, the following shall not be included in the Scope of Work and therefore shall be performed by City:

1. The City shall furnish, to the extent not already provided to Staten: (a) all surveys or other information in City’s possession that describe the physical characteristics, legal limitations, and utility locations in and around all sites; (b) any prior environmental review documentation and all known information in City’s possession concerning subsurface conditions, including without limitation the existence of any known hazardous materials, in or around the general area of the all sites where the work will be performed; (c) all relevant information in City’s possession, including any structural or other relevant as-built drawings and photographs, of prior construction undertaken in the general area where the work will be performed; (d) title reports less than one (1) year in age; and (e) any and all easements, zoning variances, planning approvals, including any resolution of any environmental impact Item No.14A

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issues, and any other legal authorization regarding utilization of the sites essential to the execution of the work.

2. City shall provide continuous access to all sites to perform the work according to the construction schedule;

3. City shall make water source available at all sites for construction water;

4. City shall obtain the City Permits;

5. City shall be responsible for hiring and paying for third party inspections.

6. City shall select its own personnel so that it is present at the date of Substantial Completion;

7. City shall pay for and provide communication access for system monitoring;

8. City shall pay for all taxes, fees, and costs required to obtain all City issued permits;

9. City shall provide access to, and allow Staten the use of, water lines, sewer lines, storm water lines, power lines, fuel lines, telephone and communication lines, pipelines, and drainage ditches; and

10.City shall be responsible for operating the System from and after utility’s Permission to Operate.

General Clarifications & Qualifications to Scope of Work

1. Agreement Amount assumes one (1) review cycle by City of the equipment layout drawings, one (1) review cycle by City of final design documentation, and one (1) final set of as-built drawings delivered to City in electronic format and hard copy.

2. Schedule and Agreement Amount assumes City will review and provide comments on drawings within fourteen (14) business days.

3. Agreement Amount is based on Code-approved conduit and wiring methods.

4. Agreement Amount assumes that Staten will not encounter any Rock during boring, trenching and excavating. Rock shall be defined as is defined as limestone, sandstone, granite or similar rocks in solid beds or masses in original or stratified position which can be removed only by continuous drilling, blasting or the use of pneumatic tools, and all boulders of 1 cubic yard in volume or larger. Material that can be loosened with a pick, frozen materials, soft laminated shale and hardpan, which for convenience or economy is loosened by drilling, blasting, wedging or the use of pneumatic tools, shall not be classified as “Rock”.

5. Agreement Amount assumes that Staten will not encounter any groundwater during boring, trenching, or excavating.

6. Wiring from PV panels to combiners is USE cable and not placed in raceways. Wiring shall be neat and organized.

7. Grounding as required by NEC.

8. Agreement Amount is based on site parking being available to all Staten and subcontractor employees.

Item No.14A

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9. Agreement Amount is based on straight time Monday to Friday (no holidays) work week, 40 hours per week between 7:00 AM and 5:00 PM.

10.Agreement Amount is based on utility (SCE) tie-in work, which will be performed after-hours at a premium time.

11.Agreement Amount and schedule assume that City will receive all necessary easements within 45 business days after the Effective Date.

12.Weekly meetings may be done via Microsoft Teams or Zoom.

13.Scope of Work assumes there are no existing encumbrances or easements on the site.

14.QA/QC will be on-site for inspection a maximum of once per week during on-site construction.

15.Structures are to be galvanized during fabrication. City is to inspect galvanization on site, and Staten is to touch up galvanization as needed.

Structures are to subsequently be painted on-site.

Scope of Work Exclusions
The Scope of Work excludes the following:

1. Plumbing, fire sprinklers, fire and life safety equipment and its components

2. Warranty, repair, and/or upgrade of the existing mechanical, plumbing, and electrical systems, air distribution and control systems found in disrepair or not compliant to code. Any and all systems and structure defects, repairs/replacements as a result of pre-existing condition.

3. Upgrade of the existing site electrical service capacity

4. Any upgrades to existing parking lots, sidewalks, etc. unless otherwise included in Scope

5. Drill hole casing, water mitigation, or Rock drilling

6. Grading and drainage concept plan. This project will not alter the existing drainage design of the site

7. Hazardous material abatement and/or removal of any kind

8. DSA plan check fees

9. Inspector of Record fees

10.Storm Water Pollution Prevention Plan (SWPPP)

11.Americans with Disabilities Act (ADA) improvements including curb cutting, truncated dome installation, repainting, restriping, or installation of new signs

12.Relocation and modification of underground utilities

13.Premium time, except for utility tie-in

14.Field painting — lot striping, conduit painting, etc. above and beyond any items altered during construction or otherwise specified in the Scope of Work.

15.Asphalt (fog, coating, and striping)

16.Operation and Maintenance services beyond one year
Item No.14A

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17.Other fees (plan check, utility permits, parking, etc.)

18.Overtime labor, except for shutdowns

19.Liquidated damages

20.Schedule phasing

21.Utility shutdown fees

22.U/L re-certification of equipment

23.Coordination study and arc flash study

24.Concrete encasement of conduits in trench

25.De-watering of trenches and equipment pad excavations

26.Hand digging near foundation and piles DD. Pre-saturation of grade/soil.

27.Special handling or drying of soil or material

28.Providing, installing, removing, or disposal of temporary or permanent BMPs, site stabilization, and erosion control measures

29.RMC elbows and sweeps

30.Lockable covers for pull-boxes and handholes

31.Dust control

32.Procuring and/or installing permanent fencing

33.Programing and/or coordinating settings for switchboard main breakers

34.Re-powering primary disconnecting device(s) at POCC (point of common coupling)’s after interconnection install has been completed

35.Pedestrian and vehicular traffic control

36.Responsibility for scheduling of and payment to third party inspections not hired or subcontracted by Staten

37.Height restriction signage

38.Payment of obtaining building and safety permits

39.Performance or production guarantee

40.Lighting for inverters.

41.Additional conduit, pull boxes, etc. for future upgrades and/or battery storage, EV chargers, etc.

42.Onsite trailer and full-time presence of site superintendent.

43.Any items not specified in this scope.

Staten will notify the City of any excluded work or repairs that are necessary to the function of the work as soon as Staten becomes aware of such, and before proceeding with related work.

Item No.14A

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EXHIBIT A-1
Array Layouts
Item No.14A

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Item No.14A

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Item No.14A

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Item No.14A

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EXHIBIT B

SCHEDULE OF FEES
The total compensation payable to Developer by City for the services under this Agreement SHALL NOT EXCEED the sum of $5,455,984. The project billing will be per the following schedule:

Payment Amount Per Site
Item
No.

Item
Description
Grant R.

Brimhall
Library
Goebel
Adult
Center
Teen
Center
Transportation
Center
Los
Robles
Greens
Golf
Course
Newbury
Park
Library
1 SCE
Interconnection $4,925 $4,925 $4,925 $4,925 $4,925 $4,925 2 Design &
Engineering $34,475 $34,475 $34,475 $34,475 $34,475 $9,850 3 Mobilization $14,775 $14,775 $14,775 $14,775 $14,775 $14,775 4 Offsite
Fabrication
(Materials +
Equipment)
$1,223,488 $227,671 $130,186 $146,627 $1,076,173 $240,044 5 Installation
(Labor) $598,706 $147,919 $65,031 $151,092 $761,373 $156,760 6 Startup,
Commissioning,
and Training
$34,475 $14,775 $14,775 $14,775 $34,475 $14,775
7 One Year
Operation and
Maintenance
$21,670 $7,388 $7,388 $7,388 $21,670 $7,388
8 Project
Closeout $4,925 $4,925 $4,925 $4,925 $4,923 $4,924
Site Total Payment $1,937,439 $456,853 $276,480 $378,982 $1,952,789 $453,441 Item No.14A

TO:Andrew P. Powers, City Manager
FROM:Ingrid Hardy, Assistant City Manager
DATE:February 28, 2023
SUBJECT: Navigation Center Exclusive Negotiation Agreement and Right of Entry Agreement
RECOMMENDATION:

1. Approve the Exclusive Negotiation Agreement between the City of Thousand Oaks and Many Mansions (Thousand Oaks, CA), Hope the Mission, dba Hope of the Valley Rescue Mission (Mission Hills, CA), and DignityMoves (San Francisco, CA) (collectively, "Proposer") for the development of a Navigation Center on the City-owned parcel at 1205 Lawrence Drive.

2. Approve the Right of Entry Agreement between the City of Thousand Oaks and Proposer for the development of a Navigation Center at 1205 Lawrence Drive.

3. Authorize the City to be identified as a co-applicant on the County of Ventura's grant application to the State of California for the Encampment Resolution Grant.

4. Authorize the City Manager to initiate the preparation of a lease agreement, operation and service agreements, and other ancillary documents ("Definitive Agreement") necessary to properly develop, construct, secure, operate, and maintain the Navigation Center.

5. Authorize the City Manager to execute the County of Ventura Agreement to Provide Financial Support for Permanent, Year-Round Shelter Serving Homeless Individuals and Families and sign additional limited modifications to the Agreement.

6. Find that this action is not a project as defined under the California Environmental Quality Act (CEQA).

Item No.16A

Navigation Center ENA and Right of Entry Agreement
February 28, 2023

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5 FINANCIAL IMPACT:

No Additional Funding Requested. Minimal staff time in preparation of this report is included in the Adopted FY 2022-23 General Fund Budget.

Estimated project costs for the Navigation Center at 1205 Lawrence Drive total $3.9 million for design and construction and $0.8 million annually for operations.

The City has requested financial support from the County of Ventura for both construction and operations. The City is a co-applicant with the County of Ventura for the State Encampment Grant. If awarded, the State Encampment Grant will fund the construction of the Navigation Center and two years of operating costs. Staff will return to City Council for a formal expenditure authorization request.

BACKGROUND:

In 2021, City Council prioritized identifying and advancing solutions for emergency sheltering and permanent supportive housing. In pursuit of this priority, City Council previously authorized staff to work with two different developer/operator teams to prepare for the second round of California's Project Homekey program.

Ultimately, the City, developer Shangri-La Industries, and operator Step Up on Second, successfully received a $26.7 million grant from the state to convert the former Quality Inn and Suites to permanent supportive housing.

After an unsuccessful attempt to identify a site for the co-location of permanent supportive housing with emergency shelter beds, the former Ad Hoc Homeless Committee (Committee) requested that City staff begin exploring other options to site an emergency shelter to meet the needs of its unhoused residents. An interdepartmental team of City staff examined numerous options to site a shelter based on various factors, including financial investment required, estimated timeline to completion, location, ownership, and other short-term and long-term benefits and trade-offs to the City, its residents, and businesses.

Due to the limited availability of existing buildings suitable for conversion into a navigation center and high real estate costs, the Committee asked staff to broaden the scope of its research to include other options. The modular home village model emerged as a financially prudent, dignified, and flexible alternative to the existing building acquisition and conversion approach. Modular homes require less financial commitment on a per-square-foot basis, and the timeline from start to completion is much shorter than tenant improvements or traditional new construction.

Item No.16A

Navigation Center ENA and Right of Entry Agreement
February 28, 2023

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5 After much discussion, the Committee recommended the City-owned parcel at 1205 Lawrence Drive to serve as the initial location for the City's emergency shelter, herein referred to as Navigation Center. The site will support 30 modular homes, an administration office and onsite clinic units, laundry and shower facilities, furnishings, storage, and other necessary equipment.

The proposed service-enriched Navigation Center will not be a drop-in shelter.

Instead, persons experiencing homelessness will be selected on a referral basis from local service providers, various County agencies, and by law enforcement.

Establishing a Navigation Center within Thousand Oaks will serve the City in three critical ways. First, it will provide immediate interim housing for residents experiencing homelessness. Second, its onsite support and housing navigation services will assist each person in either preparing to return to stable traditional housing or to transition into permanent supportive housing based on their unique individual circumstances and needs. Third, it will enhance the City's enforcement capabilities to preserve public safety and environmental quality.

On September 27, 2022, City Council authorized staff to issue a Request for Proposals/Qualifications (RFP/Q) for the construction and operation of a Navigation Center at 1205 Lawrence Drive; adopted Resolution 2022-049 declaring the Lawrence Drive property as Exempt Surplus Land pursuant to the Surplus Lands Act; and authorized the Mayor to sign a letter to County of Ventura requesting financial assistance to support the associated capital and operating costs.

City staff issued an RFP/Q on October 7, 2022. On December 6, 2022, City Council unanimously approved staff's recommendation to select the Proposer, DignityMoves (DM), Hope of the Valley Rescue Mission (HOTV), and Many Mansions (MM), to develop, lease, and operate a Navigation Center. DM will serve as the developer, HOTV will serve as the operator, and MM will serve as the consultant/leaseholder for the Navigation Center. Collectively, they demonstrated expertise and experience in designing, constructing, and operating interim housing and the capacity to complete the project successfully and in a timely manner.

City Council also authorized the City Manager to begin preparation of an Exclusive Negotiation Agreement (ENA) with the Proposer. Since the City Council's approval of the Proposer and authorization for the City Manager to initiate the preparation of an ENA, City staff and the Proposer have routinely met to negotiate the details of the ENA, which is before City Council for consideration and approval.

Item No.16A

Navigation Center ENA and Right of Entry Agreement
February 28, 2023

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5 DISCUSSION/ANALYSIS:

The purpose of the proposed ENA (Attachment #1) is to establish procedures and standards for negotiation by the City and the Proposer and to facilitate the due diligence necessary to develop the project fully. The ENA establishes a negotiating term of 270 calendar days, with the option for both parties to agree to two (2) forty- five (45) calendar day extensions for a potential negotiating period of 360 calendar days. The City Manager would have the authority to grant the extensions provided that the Proposer has demonstrated sufficient progress. This term should allow ample time for the City and the Proposer to negotiate reasonably and in good faith over a defined period. The following are critical elements of the proposed ENA:

•Definitive Agreement – During the negotiating period, the City and Proposer will negotiate the terms of several agreements, including terms and conditions for the City's lease of the Site to Proposer, the Proposer's design, financing, construction, and operation of the proposed project, inclusive of all operational, service, or other necessary agreements for the Navigation Center. The Definitive Agreement is subject to approval by the City Council.
•Financing Proposal – Within ninety (90) calendar days after the Effective Date, the Proposer, at its sole cost and expense, must provide the City with a detailed financial analysis including development costs, detailed development budget, operations budget, and other associated costs. •Good Faith Deposit Alternative – In lieu of and as an alternative to requiring a good faith deposit from the Proposer, and as consideration for the City's execution of the Agreement, each entity making up the Proposer team shall provide the City with copies of all reports, studies, analyses, correspondence, and similar documents prepared as part of the project analysis.
•Due Diligence – During the negotiating period, the Proposer must conduct due diligence activities and will require a separate Right of Entry Agreement (Attachment #2). This agreement will provide the Proposer with a non-exclusive right of entry to 1205 Lawrence Drive to conduct activities including, but not limited to, planning, establishing metes and bounds of the site, obtaining certified soils, and hazardous materials report.
•The ENA does not obligate any party to acquire or convey any interest in real property, does not grant Proposer the right to develop the site or construct the proposed project, and does not obligate the City or Proposer to any activities or costs to develop the proposed project. •CEQA and Surplus Lands Act – A thorough analysis under both CEQA and the Surplus Lands Act will be conducted as part of the project analysis Item No.16A

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5 and will be presented to City Council with any proposed agreements for consideration.
•Exclusivity – City cannot negotiate with any other party during the term of the ENA unless the agreement is terminated early.

Encampment Resolution Funding (ERF) Program
The State of California Interagency Council on Homelessness (Cal ICH) released a Notice of Funding Availability (NOFA) on December 1, 2022, to solicit proposals that resolve unsheltered homelessness for people residing in encampments. The Encampment Resolution Funding (ERF) Program was authorized in 2021 through Assembly Bill 140 with an allocation of $50 million, and Assembly Bill 178 allocated an additional $300 million for round 2. This funding aims to transition individuals from prioritized encampments into permanent housing.

The Ventura County Continuum of Care (VC CoC) Board has approved the Collaborative Applicant (County Executive Office) to develop an application in partnership with the County Health Care for the Homeless team. The VC CoC Board has also authorized the release of a Request for Proposals (RFP) to solicit new project proposals from local organizations that will transition individuals from prioritized encampments into permanent housing.

City staff expressed an interest in being a collaborative applicant with the County Executive Office and has worked with County staff to provide the necessary information and documents to apply for this funding. If successfully awarded, the grant would fund the construction of the project and operations costs for the first two years.

County of Ventura Cost Sharing Agreement
To further support the City in addressing homelessness, the County of Ventura finds that a year-round Navigation Center is necessary to meet the growing challenge of homelessness and that providing financial assistance serves a tremendous public purpose and helps to achieve the goal of reducing the number of persons experiencing homelessness. As such, the County is willing to enter into an agreement (Attachment #3) to share the capital and operating costs of the Navigation Center.

The City is responsible for selecting an operator who will provide a minimum of 30 beds, ensure that the operators are 24 hours a day, 365 days per year, use its best efforts to maintain occupancy of 70%, reduce the overall number of persons experiencing homelessness, connect 75% of occupants with stable housing or positive exits, and increase each occupant's income as appropriate.

In consideration of the City's efforts, the County will pay the City fifty percent of actual operating costs and fifty percent of development costs.

Item No.16A

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5 Environmental Review
Under CEQA Guideline Section 15378(b)(4) and (5), City Council's action approving the ENA is not a "Project" as defined under CEQA. City is acting on a negotiation agreement and recommendation to seek funding, neither of which commits the City to any specific project. Such actions will not have any direct or indirect effect on the environment. A CEQA analysis will be conducted as part of the site analysis for the proposed use during the negotiations of a lease and ancillary agreements and a CEQA determination will be presented as part of staff's recommended actions at a future date.

COUNCIL GOAL COMPLIANCE:

Meets the following City Council goals:

A. Create a more equitable, accessible, safe, welcoming, and inclusive government and community regardless of race, color, ethnicity, religion, sex, physical or mental ability, sexual orientation, gender identity and expression, age, language, education, and/or socio-economic status.

B. Provide municipal government leadership which is open and responsive to residents, and is characterized by ethical behavior, stability, promoting public trust, transparency, confidence in the future, and cooperative interaction among civic leaders, residents, business representatives, and staff, while recognizing and respecting legitimate differences of opinion on critical issues facing the City.

C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.

D. Maintain strong commitment to public safety (including Police, Fire, Emergency Medical Services, and Emergency Management) to ensure City remains one of the safest Cities in the United States with a population over 100,000.

Attachments:

Attachment #1 – Proposed Exclusive Negotiation Agreement Attachment #2 – Right of Entry Agreement
Attachment #3 – Agreement to Provide Financial Support for Permanent, Year-Round Shelter Serving Homeless Individuals and Families CMO:120-40\H:COMMON\Council Items\2023 Staff Reports\02 28 23\022823 Navigation Center Exclusive Negotiation Agreement and Right of Entry Agreement Staff Report.docx Item No.16A

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ATTACHMENT #1

EXCLUSIVE NEGOTIATION AGREEMENT

BY AND BETWEEN

THE CITY OF THOUSAND OAKS
AND
MANY MANSIONS, HOPE THE MISSION, dba HOPE OF THE VALLEY RESCUE

MISSION, AND DIGNITYMOVES (COLLECTIVELY,

PROPOSER)
This EXCLUSIVE NEGOTIATION AGREEMENT (“Agreement”) is entered into as of ____________________, 2023 (“Effective Date”), by and between the CITY OF THOUSAND OAKS, a municipal corporation of the State of California (“City”), and Many Mansions, Hope the Mission, dba Hope of the Valley Rescue Mission, and DignityMoves, (collectively, “Proposer”) (the City and Proposer may be referred to together as the “Parties,” which shall include each of the entities comprising of the Proposer, or individually as a “Party”), on the basis of the following facts:

RECITALS
A. The City is the fee title owner of certain improved real property located 1205 Lawrence Drive, Thousand Oaks, California, (APN:667-0-080-105), (“Property”). City Council has approved 1.05 acres of the Property may be used for a Navigation Center for Persons Experiencing Homelessness (“Navigation Center”).

B. On October 7, 2022, City issued a Request for Proposals/Qualifications (“RFP/Q”) seeking qualified proposals for the possible development, maintenance, and operation of a Navigation Center at the 1.05 acres of the Property (hereinafter, “Site”). After review of all proposals received, Proposer was selected as the top candidate for its proposal, dated November 3, 2022 (“Proposal”). On December 6, 2022, City Council authorized City staff to prepare a mutually acceptable Exclusive Negotiation Agreement with Proposer for the purpose of negotiating terms for the potential future development of the Site in accordance with the RFP/Q and the Proposal.

C. The City desires to cause the development of the Site with a Navigation Center initially consisting of thirty (30) small residential units and ancillary buildings such as, but not limited to, restroom facilities, dining hall, laundry, and an administration office consistent with the RFP/Q (Attachment #1) and the Proposal (“Project”). The proposed Project would be subject to compliance with any applicable requirements of the California Surplus Land Act and the California Environmental Quality Act (“CEQA”). The details and scope of the proposed Project are not yet determined or agreed upon and will continue to be reviewed and analyzed by the Parties during the Term of this Agreement, when the Parties may consider additional terms, including but not limited to the possible future expansion of residential units to a maximum limit of fifty (50), modifications to the Site plan, and the potential for ancillary buildings to be constructed at the Site.

D. The City and Proposer wish to negotiate to reach agreement on the terms and conditions for a lease of the Site, the development and construction of the Site, continued maintenance and security for the Site, as well as the operation of the Site for the purpose of Item No.16A

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providing interim housing for selected candidates in need along with supportive services with the goal of transitioning qualified individuals into permanent housing. The negotiated lease and any other necessary agreements would provide the terms and conditions for the City’s lease of the Site to Proposer, if specified preconditions are satisfied, and for Proposer’s design, financing, construction, operation, and maintenance of the proposed Project.

E. The purpose of this Agreement is to establish procedures and standards for the negotiation by the City and Proposer of a lease and ancillary documents. As more fully set forth in Section 3.1 of this Agreement, Proposer acknowledges and agrees that this Agreement in itself does not obligate, and shall not be construed to obligate, any party to acquire or convey any interest in real property, does not grant Proposer the right to develop the Site or construct the proposed Project, and does not obligate the City or Proposer to any activities or costs to develop the proposed Project except for Proposer to engage in the preliminary analysis, planning actions, and negotiations contemplated by this Agreement.

AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants and promises contained herein and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City and Proposer mutually agree as follows:

ARTICLE 1.

EXCLUSIVE NEGOTIATIONS
Section 1.1 Good Faith Negotiations.

A. Many Mansions, Hope the Mission, and DignityMoves, each separately, and collectively as the three entities that submitted the proposal for development of the Site (“Proposer”), agree to be bound by this Agreement with the City. The City and Proposer shall negotiate diligently and in good faith, during the Negotiating Period described in Section 1.2, below, the terms and conditions for the City’s lease of the Site to Proposer, if specified preconditions are satisfied, and for Proposer’s design, financing, construction, and operation of the proposed Project, inclusive of all operational, service, or other agreements necessary for the Project (collectively, the “Definitive Agreement”). The Definitive Agreement must be consistent with the description set forth in the Recitals above, including the RFP/Q, all of which, including the Recitals, are incorporated herein by this reference, subject to changes or revisions to the proposed Project that are needed in order to comply with applicable State and federal law and other changes or revisions that are mutually agreed to by the Parties. During the Negotiating Period, the Parties shall use good faith efforts to accomplish the respective tasks outlined in Article 2 to facilitate the negotiation of a mutually satisfactory lease.

B. Among the issues to be addressed in the negotiations for a Definitive Agreement are: (1) the lease of the Site by the City to Proposer; (2) the Site plan and associated architectural drawings detailing the project, including, but not limited, to the design and type of required structures to be constructed as part of the proposed Project; (3) the development schedule for the proposed Project; (4) a project budget that sets forth the costs and fees to design, build, Item No.16A

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operate, and maintain the Navigation Center (including timing of construction, minimum and maximum funding commitments by the City, funding obligations by the Parties for the operation and maintenance of the Navigation Center, and other funding sources and responsibilities) (“Project Budget”); (5) the operational procedures for providing interim housing for selected participants; (6) terms and conditions for the continued maintenance of the Site and operation of the Navigation Center; (7) obligations for Proposer to seek appropriate grants or other funds, both from public agencies and private contributors that financially support the continued operation of the Navigation Center; (8) the requisite environmental analysis under CEQA; and, (9) the requisite process for disposition of property or entering into any agreements related to the Project, including but not limited to compliance with the Surplus Lands Act.

C. Proposer agrees and acknowledges that any Definitive Agreement is subject to determination by the City that any such agreement complies with all legal requirements for the proposed Project. Any CEQA findings, including possible exemptions, reports or other analysis must be prepared and approved before the Parties enter into a Definitive Agreement.

Section 1.2 Negotiating Period/Term.

A. The negotiating period under this Agreement and term of this Agreement (“Negotiating Period” or “Term”, inclusive of any “Extension Term”) is a period of two-hundred seventy (270) calendar days, commencing on the Effective Date. The Negotiating Period may be extended by mutual written agreement of the Parties for up to two (2) additional forty-five (45) calendar day periods (“Extension Term”). An Extension Term may only be authorized on the City’s behalf by the City Manager of the City (“City Manager”) if, in the City Manager’s sole discretion and determination, sufficient progress toward a mutually acceptable lease has been made during the initial two-hundred seventy (270) day negotiating period to merit such an extension and upon such terms and conditions as the City Manager deems reasonably appropriate.

B. If a Definitive Agreement has not been approved by the City Council and executed by the City and Proposer by the expiration of the Negotiating Period, including any Extension Term pursuant to the preceding Paragraph A, then this Agreement shall automatically expire and terminate without any action of the Parties, neither Party shall have any further duties, obligations, rights, or liabilities under this Agreement, except for those rights and obligations that expressly survive expiration or termination of this Agreement, and Proposer will have no further rights regarding the subject matter of this Agreement or all or any part of the Site. City will be free to negotiate with other persons or entities with regard to all or any part of the Site. If a Definitive Agreement is approved by the City Council and executed by the City and Proposer by the expiration of the Negotiating Period, including any Extension Term, then, upon such execution of the Definitive Agreement by the Parties, this Agreement shall automatically expire and terminate without any action of the Parties, all rights and obligations of the Parties shall be as set forth in the executed lease, operations agreement, and ancillary agreements prepared in relation to the Project, and neither Party shall have any further duties, obligations, rights, or liabilities under this Agreement, except for those rights and obligations that expressly survive expiration or termination of this Agreement.

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Section 1.3 Exclusive Negotiations. During the Negotiating Period, the City shall not negotiate with any entity, other than Proposer, regarding development of the Site, or solicit or entertain bids or proposals to do so.

Section 1.4 Good Faith Deposit Alternative. In lieu of and as an alternate to requiring a good faith deposit from Proposer, and as consideration for the City’s execution of this Agreement, each entity making up the Proposer team shall provide the City with copies of all reports, studies, analyses, correspondence, and similar documents prepared or commissioned by Proposer with respect to this Agreement and the proposed Project, all as more fully set forth in Section 2.5, below. Each entity shall provide industry standard financial reports evidencing their respective financial solvency such as the most recent independent audit report, including management letters, bankruptcy history, or other industry standard documentation of financial stability.

ARTICLE 2.

NEGOTIATION TASKS
Section 2.1 Overview. To facilitate negotiation of the Definitive Agreement, the Parties shall use reasonably good faith efforts to accomplish the tasks set forth in this Article 2 in a timeframe that will support negotiation and execution of a mutually acceptable Definitive Agreement prior to the expiration of the Negotiating Period.

Section 2.2 Financing and Costs of Project; Lease Requirements.

A. Within ninety (90) calendar days after the Effective Date, Proposer shall, at its sole cost and expense, provide the City with a detailed financial analysis for the Project containing, among other matters, the development costs of the proposed Project, a detailed development budget, an operations budget, including but not limited to costs for maintenance, property management, and supportive services, and other costs that will be associated with the Navigation Center project (“Financing Proposal”). The Financing Proposal shall be refined by the Parties during the Negotiating Period, as appropriate, and will be used to evaluate the financial feasibility of the proposed Project, to assist in the negotiation of terms, and assist with finalizing a Project Budget. The Financing Proposal shall also include the terms, scope, and limits to annual financing from City, County of Ventura, or other public agencies, including the State and Federal Government, and any third-party financing, as well as a schedule of financing for the proposed Project.

B. The Definitive Agreement will provide that Proposer will be solely responsible for all development (including site development and demolition costs), continual maintenance of the site, and operational costs of the proposed Project, except insofar as Proposer receives funding from other sources as set forth in a Project Budget. Proposer acknowledges that the construction and future maintenance of the proposed Project may be subject to the State of California’s prevailing wage requirements and/or federal prevailing wage requirements. The Definitive Agreement will include a provision that establishes Proposer is solely responsible for compliance with all local, state, and federal laws.

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C. The negotiations for a Definitive Agreement will address, among other items, the terms; the form, amount, and financing considerations for the proposed Project; the scope and schedule of development; a right-of-entry agreement; the operation procedures for the Navigation Center; the scope and terms and conditions of supportive services at the Navigation Center; responsibilities of the Parties subject to the Definitive Agreement or related agreements; any ancillary documents; maintenance requirements; and, the selection process for individuals referred to or eligible for occupancy of the units at the Site. Any restrictions by the City for use of the Site will be senior in priority to any construction and permanent financing or other liens.

D. The Definitive Agreement will include a “Scope of Development” setting forth, without limitation, a minimum of thirty (30) residential units, the type and total square feet of ancillary facilities, the number of parking spaces, infrastructure plans, and the overall design parameters for the Site.

E. The Project Budget included in the Definitive Agreement will include a sources and uses budget, which will be based upon a financial pro forma, which shall be subject to the approval by the City and an agreement as to the method of any required financing, reasonably demonstrating the availability of all funds needed to complete the development of the proposed Project. The Definitive Agreement will require the confirmation of funding sources, whether through City payment, County of Ventura payment, or proposed loans, tax credits, grants, or donations. During the Term of this Agreement, Proposer agrees that it has a continuing and ongoing duty to fully disclose all material facts regarding the Financing Proposal, the Project Budget, and Proposer’s plans for financing the proposed Project.

F. The Proposer was selected based on a number of factors, including the reported and presented capabilities of the three entities that make up the Proposer’s team. If any of the three entities ceases to be part of the Proposer’s team, City has the right to terminate this Agreement and end further negotiations for the proposed project or review and approve new entities the Proposer seeks to add to the team to replace a prior entity.

G. The Definitive Agreement will be subject to the City’s insurance requirements and all other applicable and customary City policies. The Definitive Agreement may require appropriate performance and payment bonds (consistent with industry standards involving public-private projects) with regard to the construction of the proposed Project or another form of assurance that is acceptable to the City.

H. The Definitive Agreement will contain such other provisions as may be customary in City agreements and such other provisions as the City and Proposer determine to be necessary or appropriate to implement the proposed Project.

Section 2.3 Due Diligence. During the Negotiating Period, and subject to the terms and conditions of a Right of Entry Agreement to be entered into by and between the City and Proposer concurrently with this Agreement, Proposer shall conduct due diligence activities, including but not limited to, planning, establishing the metes and bounds of the Site, obtaining certified soils and Item No.16A

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hazardous materials report, conducting a financial feasibility analysis, and outlining operational needs to operate and manage a Navigation Center under the general description of the RFP/Q.

A. Proposer shall, at its sole cost and expense, determine whether the Site is suitable for development of the proposed Project, including conducting geotechnical and soils testing. In addition, after conducting such tests, Proposer shall take into account the geotechnical and soils conditions, the presence or absence of toxic or other hazardous materials, the massing of the proposed Project improvements, parking requirements and the other environmental and regulatory factors that Proposer deems relevant.

B. Proposer will be solely responsible for all necessary testing of the Site for hazardous materials pursuant to all applicable laws, statutes, rules, and regulations. All studies and reports generated by Proposer’s testing for geotechnical conditions and hazardous materials will be made available to the City.

C. Proposer will also be responsible for making the Site suitable and usable for the proposed Project as a result of any site conditions including, without limitation, flood zones, Alquist-Priolo Earthquake Fault Zoning Act, and similar matters. Proposer shall deliver to the City all reports within its possession or under its control regarding hazardous materials relating to the Site.

Section 2.4 Operations and Maintenance. In addition to a Definitive Agreement, the parties will negotiate the terms of an operations and maintenance agreement setting forth Proposers responsibility, whether individually or collectively, for the operation of the Navigation Center.

The Parties will negotiate in good faith the terms of such agreement including daily operations, minimum and maximum number of employees necessary to operate the facility, transportation requirements, reporting responsibilities, insurance requirements, maintenance obligations, security, and other duties reasonably associated with the operation of an interim emergency shelter at the Site.

Section 2.5 Development Documents. The Definitive Agreement must include a Site plan, design and planning drawings, grading documents, utility connections, parking locations and other documents that identify the development of the Site for the purpose of operating a Navigation Center.

A. Proposer shall, at its sole cost and expense, provide the City with true and correct copies of all reports, studies, analyses, correspondence, and similar documents prepared or commissioned by Proposer with respect to this Agreement and the proposed Project, promptly upon their completion.

B. The City will, without any representation or warranty, provide Proposer any existing information, studies, reports, site and construction plans or other documents in the City’s possession and control which the Proposer may reasonably request to facilitate the Project design and development.

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C. The City reserves the right, during the Term of this Agreement, to request reasonable additional information and data from Proposer that it considers necessary for review and evaluation of the Site and the proposed Project, which Proposer will provide in a timely manner provided that such information has been obtained by Proposer pursuant to this Agreement or is otherwise in Proposer’s possession and control.

Section 2.7 Environmental Review.

A. Proposer will be responsible for compliance with the requirements of the CEQA pursuant to California Public Resources Code Sections 21000 et seq. and California Code of Regulations Sections 15000 et seq., in connection with the proposed use of the Site and the development of the proposed Project. Nothing in this Agreement shall be construed to compel the City to approve or make any particular findings with respect to such CEQA documentation.

Proposer shall provide such information about the proposed Project as may be required to enable the City to consider any CEQA-required document and shall otherwise generally cooperate with the City to complete this task.

B. If the City, in its sole discretion, determines that the future approval of the Definitive Agreement requires non-feasible mitigation measures, or fails to yield benefits that outweigh significant unavoidable impacts, or the City otherwise determines, in its sole discretion, not to make any finding required by CEQA as a prerequisite to approval of the Definitive Agreement, the City may terminate this Agreement, without penalty. Upon such termination, neither Party shall have any further duties, obligations, rights, or liabilities under this Agreement, except for those rights and obligations that expressly survive termination of this Agreement.

C. The Parties intend this Agreement to reflect the basic understanding between them but agree that the Definitive Agreement contemplated herein shall be subject to, and contingent on, the City Council’s approval, in its sole discretion, of a final CEQA determination.

This Agreement does not constitute a legally binding commitment to a specific project, to the proposed Project, to the lease of the Site, or to the Definitive Agreement.

Section 2.8 Progress Reports. From time to time as reasonably requested by the City, the Proposer agrees to make oral and written progress reports advising the City on all matters related to the proposed Project, including financial feasibility analyses, construction cost estimates, marketing studies, and similar due diligence matters.

Section 2.9 Community Engagement. The City and Proposer shall confer and seek agreement on an appropriate strategy to obtain input from community members regarding the proposed Project.

Section 2.10 Planning Approvals. Proposer acknowledges that the proposed Project may require the City’s approval of various land use or other discretionary approvals and/or other entitlements (collectively, “Entitlements”). Proposer shall be responsible for submitting all site plans, preliminary designs, and plan and specifications for the proposed Project. Proposer will be required to obtain all discretionary approvals and Entitlements for the proposed Project. Planning Item No.16A

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documents may include the following: Special Use Permit (“SUP”) for the use as an emergency shelter; a development permit of the site; a protective tree permit; building, electrical, mechanical and plumbing permits; grading, paving and encroachment permits.

Section 2.11 Indemnity. Proposer agrees to defend, indemnify, and hold harmless City and its officers, agents, representatives, and employees (“Indemnified Parties”) from any and all losses, liabilities, damages, claims, costs, liens, causes of action, awards, judgments, costs and expenses, including, but not limited to reasonable attorney’s fees of counsel retained by the Indemnified Parties, expert fees, costs of staff time, and investigation costs, of whatever kind or nature, that are in any manner directly or indirectly caused, occasioned or contributed to in whole or in part, through any omission, fault or active negligence, of the Proposer or the Proposer’s officers, agents, employees, independent contractors or subcontractors of any tier, relating in any manner to the this Agreement, any work to be performed by the Proposer related to this Agreement, the Property or the Project, or any authority or obligation exercised or undertaken by the Proposer under this Agreement. Without limiting the generality of the foregoing, the Proposer’s obligation to indemnify the Indemnified Parties shall include injury or death to any person or persons, damage to any property, regardless of where located, including the property of the Indemnified Parties, claim or suit or any other matter arising from or connected with any goods or materials provided or services or labor performed regarding the proposed Project or the Property on behalf of the Proposer by any person or entity. The indemnity obligations in this paragraph shall not extend to losses, liabilities, charges, damages, claims, liens, causes of action, awards, judgments, costs, and expenses, including, but not limited to reasonable attorney’s fees of counsel retained by the Indemnified Parties, expert fees, costs of staff time, and investigation costs, which are caused by the sole negligence or willful misconduct of the City or its agents. This indemnity obligation shall survive the expiration or termination of this Agreement.

Section 2.12 California Surplus Land Act. Proposer acknowledges that a Definitive Agreement that includes a lease of the Site to Proposer for the proposed Project is subject to compliance with and shall be in conformance with all applicable laws, including, without limitation, the California Surplus Land Act (set forth in California Government Code Section 54220 et seq.), and may be subject to oversight and approval by the California Department of Housing and Community Development or other regulatory bodies.

ARTICLE 3.

GENERAL PROVISIONS
Section 3.1 Limitation on Effect of Agreement. This Agreement shall not obligate either the City or Proposer to enter into a Definitive Agreement. By execution of this Agreement, the City is not committing itself to, or agreeing to, undertake disposition of the Site or any other matter with respect to the Site. Execution of this Agreement by the City is merely an agreement to conduct a period of exclusive negotiations in accordance with the terms hereof, reserving for subsequent City Council action the final discretion and approval regarding a CEQA analysis, the execution of a Definitive Agreement, lease, right-of-entry agreement, an operations agreement, any related ancillary agreements, development plans and specifications, as well as all proceedings and decisions in connection therewith. Any Definitive Agreement resulting from negotiations Item No.16A

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pursuant to this Agreement shall become effective only if and after such Definitive Agreement has been considered and approved by the City Council following completion of all legally required procedures and processes and executed by duly authorized representatives of the City and Proposer. Until and unless a Definitive Agreement is signed by Proposer, approved by the City Council and executed by the City, no agreement drafts, actions, deliverables, or communications arising from the performance of this Agreement shall impose any legally binding obligation on either Party to enter into, or support entering into, a Definitive Agreement or be used as evidence of any oral or implied agreement by either Party to enter into any other legally binding document.

Each Party assumes the risk that, notwithstanding this Agreement and good faith negotiations, the City and Proposer might not enter into a Definitive Agreement due to their failure to agree upon essential terms of a transaction or a decision by the City Council not to authorize entering into and execution of the lease.

Section 3.2 Notices. Formal notices, demands and communications between the City and Proposer shall be sufficiently given if, and shall not be deemed given unless, dispatched by certified mail, postage prepaid, return receipt requested, or sent by express delivery or overnight courier service, to the office of the Parties shown as follows, or such other address as the Parties may designate in writing from time to time:

To City: City of Thousand Oaks
2100 E. Thousand Oaks Boulevard
Thousand Oaks, CA 91362
Attn: Andrew P. Powers, City Manager
With a Copy to: City of Thousand Oaks
2100 E. Thousand Oaks Boulevard
Thousand Oaks, CA 91362
Attn: Tracy Noonan, City Attorney
To Proposer: Many Mansions
1259 E. Thousand Oaks Blvd.

Thousand Oaks, CA 91362
Attn: Rick Schroeder, President
Hope the Mission
16641 Roscoe Place
North Hills, CA 91343
Attn: Ken R. Craft, CEO
DignityMoves
2406 Bust Street
San Francisco, CA 94115
Attn: Elizabeth Funk, CEO
Such written notices, demands and communications shall be effective on the date shown on the delivery receipt as the date delivered or the date on which delivery was refused. For purposes of Item No.16A

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obligations to be performed by the City or of calculation of noticing under this Agreement, a business day on which the City of Thousand Oaks City Hall is closed will not constitute a business day under this Agreement.

Section 3.3 Waiver of Lis Pendens. It is expressly understood and agreed by the Parties that no lis pendens may be filed against any portion of the Site with respect to this Agreement or any dispute or act arising from it.

Section 3.4 Right of Entry Agreement. The City and Proposer intend on entering into that certain Right of Entry Agreement (“Right of Entry Agreement”) concurrently with this Agreement, in which the City will grant Proposer a right of entry to enter the Site.

Section 3.5 Insurance. Proposer shall at all times during the Term of this Agreement keep in full force and effect all policies of insurance required under the Right of Entry Agreement described in Section 3.4, above.

Section 3.6 Assignment. Proposer understands the City is entering into this Agreement based on the experience and qualifications of Proposer and of the key individuals representing or employed by Proposer as of the date of this Agreement. Therefore, all entities that collectively make up the Proposer will not assign, sell, or otherwise transfer any or all of its rights under this Agreement, or interest herein, without the prior written approval of the City, which approval may be withheld in the City’s sole and absolute discretion. Further, no voluntary or involuntary successor in interest of Proposer, and each of them as a separate entity, will acquire any rights or powers under this Agreement except as expressly set forth herein. For the reasons cited herein, Proposer represents and agrees for itself and any successor in interest that prior to the expiration of the Term, and without the prior written approval of the City (which approval may be withheld in the City’s sole and absolute discretion), there will be no significant change in the management or control of Proposer or with respect to the identity of the parties in control of Many Mansions, Hope of the Mission, and Dignity Moves. Proposer will promptly notify the City of all changes whatsoever in the identity of the parties in control of or exercising the management of Proposer, or the degree of control or management, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by the City if there is any significant change (voluntary or involuntary) in membership, management, or control, of any of the entities that make up the Proposer team. For purposes of this paragraph, a significant change will mean any change in the identity of the Executive Director, CEO, or President (or similar person or persons having ultimate control over the day-to-day management of any of the three entities that make up the Proposer team, or the appointment of a receiver or trustee to operate or exercise direct or indirect control over any portion of or interest in any of the three entities. Periodic, routine changes in membership that cumulatively affect less than 50% of the membership of the Proposer’s board of directors will not be considered a “significant change”.

Section 3.7 Costs and Expenses. Each Party shall be responsible for its owns costs and expenses in connection with any activities and negotiations undertaken in connection with this Agreement, and the performance of each Party’s obligations under this Agreement.

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Section 3.8 Defaults and Remedies.

A. Default. If a Party defaults with regard to any of the provisions of this Agreement, then the non-defaulting Party shall give written notice of a default to the defaulting Party, specifying the nature of the default and the required action to cure the default. If a default remains uncured thirty (30) calendar days after receipt by the defaulting Party of such notice, the non-defaulting Party may immediately exercise the remedies set forth in Paragraph B, below.

B. Remedies. Except for a default or breach of Proposer with respect to Proposer’s indemnification, defense and hold harmless obligations set forth in this Agreement or any amendment thereto, for which the City shall have all remedies available at law or in equity, the non-defaulting Party’s sole and exclusive remedy in the event of an uncured default by the City or Proposer shall be to terminate this Agreement. Following such termination, no Party shall have any further duties, obligations, rights, or liabilities under this Agreement, except that Proposer’s indemnification, defense and hold harmless obligations set forth in this Agreement shall survive such termination and be enforceable against Proposer.

C. No Liability. Except as expressly provided in Paragraphs A and B, above, no Party shall have any liability to any other Party for damages or otherwise for any default or breach, nor shall any Party have any other claims with respect to performance under this Agreement. Each Party specifically waives and releases any such rights or claims it may otherwise have at law or in equity.

Section 3.9 Time is of Essence. Time is of the essence of every portion of this Agreement in which time is a material part.

Section 3.10 Nondiscrimination. Proposer covenants and agrees that it will not discriminate against any employees or applicants for employment because of race, color, religion, creed, national origin, ancestry, sex, sexual orientation, age, disability, medical condition, or marital status.

Section 3.11 Conflicts of Interest.

A. No member, official, officer or employee of the City may have any personal interest, direct or indirect, in this Agreement, nor may any such member, official, officer or employee participate in any decision relating to this Agreement which affects his/her personal interests or the interests of any corporation, partnership or association in which he/she is, directly or indirectly, interested.

B. Proposer warrants that it has not paid or given, and will not pay or give, directly or indirectly, any City member, official, officer or employee any money or other consideration at all, whether or not connected in any way with the subject matter of this Agreement.

Further, Proposer warrants that it has no knowledge of any financial interest of any City member, official, officer or employee in Proposer, directly or indirectly, or in any person or entity affiliated with Proposer, or in any transaction in which Proposer is or has been involved.

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EXCLUSIVE NEGOTIATION AGREEMENT
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C. Proposer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. The Parties understand and agree that Proposer has retained legal counsel and consultants in connection with the creation and implementation of this Agreement, and that such is not a violation of this Paragraph.

Section 3.12 Heading/Captions. The headings and captions of the various sections and paragraphs of this Agreement have been inserted only for the purpose of convenience and are not a part of this Agreement and will not be deemed in any manner to modify, explain, expand, or restrict any of the provisions of this Agreement.

Section 3.13 Severability. Every provision of this Agreement is intended to be severable.

If any provision of this Agreement or the application of any provision hereof to any Party or circumstance is declared to be illegal, invalid, or unenforceable for any reason whatsoever by statute or a court of competent jurisdiction, such invalidity will not affect the other terms and provisions hereof or the application of the provision in question to any other Party or circumstance, all of which will continue in full force and effect.

Section 3.14 Attorneys’ Fees. If an action or court proceeding is brought by a Party against the other Party under this Agreement, whether for interpretation, enforcement or otherwise, the prevailing Party in any such action or proceeding shall be entitled to recover attorneys’ fees and costs from the other Party.

Section 3.15 Governing Law. This Agreement and the legal relations between the Parties will be governed by, interpreted under, construed and enforced in accordance with, the internal laws of the State of California without reference to the rules governing the conflict of laws. This Agreement is made and entered into in the County of Ventura, California, and any legal actions or proceedings arising from or related to this Agreement will be brought in the County of Ventura.

Section 3.16 Jointly Prepared. This Agreement is in all respects intended by each Party hereto to be deemed and construed to have been jointly prepared by the Parties and the Parties hereby expressly agree that any uncertainty or ambiguity existing herein will not be interpreted against any of them. Except as expressly limited by this Section, all of the applicable rules of interpretation of contracts will govern the interpretation of any uncertainty or ambiguity of this Agreement.

Section 3.17 Signing Authority. All individuals signing this Agreement for a Party which is a corporation, limited liability company, partnership, or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the City that they have the necessary capacity and City to act for, sign and bind the respective entity or principal on whose behalf they are signing.

Section 3.18 Entire Agreement. This Agreement represents the entire agreement of the Parties hereto and integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements, oral or written, between the Parties with respect to acquisition and development of the Site or the proposed Project.

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EXCLUSIVE NEGOTIATION AGREEMENT
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Section 3.19 Waivers/Amendments. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of the Parties. Except as otherwise expressly provided in this Agreement, any failure or delay by any Party in asserting any of its rights or remedies as to any default will not operate as a waiver of said default or of any rights or remedies in connection therewith or of any subsequent default or any rights or remedies in connection therewith, or deprive such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

Section 3.20 Counterparts. This Agreement may be executed in counterparts, each of which when so executed will be deemed an original, and all of which, when taken together, will constitute but one and the same instrument.

Section 3.21 No Third-Party Beneficiaries. This Agreement is made and entered into solely for the benefit of the City and Proposer and no other person shall have any right or cause of action under or by reason of this Agreement.

Section 3.22 Project Images. Proposer hereby consents to the use by the City of images of the Project, its models, plans and other graphical representations of the proposed Project and its various elements (“Project Images”) in connection with marketing, public relations, and special events, websites, presentations, and other uses required by the City in connection with the Project.

Such right to use the Project Images will not be assignable by the City to any other party (including, without limitation, any private party) without Proposer’s prior written consent. Use by the City of Project Images, Proposer’s name or the names of their affiliates will be subject to prior approval, which will not be unreasonably withheld or delayed. For any Project Images provided to the City by Proposer, Proposer will use reasonable efforts to obtain any rights and/or consents from any third parties necessary to provide these Project Image use rights.

Section 3.23 Actions By the City. Whenever this Agreement calls for or permits the approval, consent, authorization or waiver of the City, the approval, consent, authorization, or waiver of the City Manager shall constitute the approval, consent, authorization or waiver of the City without further action of the City Council, unless such approval, consent, authorization, or waiver is otherwise required by applicable law to be made by the City Council or the City Manager otherwise determines such approval, consent, authorization, or waiver should be made by the City Council.
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Item No.16A

ENA-Navigation Center
1205 Lawrence Drive, Thousand Oaks
CMO:120-40\H:COMMON\Council Items\2023\02 28 23\ Attachment 1 Proposed Exclusive Negotiation Agreement
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above.
“CITY”

CITY OF THOUSAND OAKS
By: __________________________________
Kevin McNamee, Mayor
ATTEST:

By: __________________________________
Laura B. Maguire, City Clerk
APPROVED AS TO ADMINISTRATION:

By: __________________________________
Andrew P. Powers, City Manager
APPROVED AS TO FORM:

By: _________________________________
Tracy M. Noonan, City Attorney
“PROPOSER”

MANY MANSIONS
By: _________________________________
Rick Schroeder, President

HOPE THE MISSION
By: _________________________________
Ken R. Craft, CEO

DIGNITY MOVES
By: _________________________________
Elizabeth Funk, CEO
Item No.16A

ENA-Navigation Center
1205 Lawrence Drive, Thousand Oaks
CMO:120-40\H:COMMON\Council Items\2023\02 28 23\ Attachment 1 Proposed Exclusive Negotiation Agreement

Item No.16A

ATTACHMENT #2

RIGHT OF ENTRY AGREEMENT

BY AND BETWEEN

THE CITY OF THOUSAND OAKS
AND

MANY MANSIONS, HOPE THE MISSION, AND DIGNITYMOVES (COLLECTIVELY,

PROPOSER)
(1205 LAWRENCE DRIVE, THOUSAND OAKS, CA)
This RIGHT OF ENTRY AGREEMENT (“Agreement”) is entered into as of ____________________, 2023 (“Effective Date”) by and between the CITY OF THOUSAND OAKS, a municipal corporation of the State of California (“City”), and MANY MANSIONS, HOPE THE MISSION, dba, HOPE OF THE VALLEY RESCUE MISSION, AND DIGNITYMOVES, a California nonprofit public benefit corporation (“Proposer”), each a “Party” and collectively the “Parties”, on the basis of the following facts:

RECITALS
A. The City holds fee title to certain real property located at 1205 Lawrence Drive, Thousand Oaks, CA, APN: 667-0-080-105, (hereinafter defined as the “Site”) and Proposer desires to lease 1.05 acres of the Site, to develop and construct a Navigation Center consisting of 30 small residential units and other ancillary buildings such as, but not limited to, restroom facilities, dining hall, laundry, and an administration office, as well as operate the Navigation Center to provide interim housing and other services for qualified applicants (the “Project”).

B. The City and Proposer have entered into an Exclusive Negotiation Agreement dated _______________, 2023 (“ENA”) to negotiate, among other things, the terms of the City’s lease of the Site to Proposer as well as operation and service agreements necessary to properly develop, construct, maintain and operate the Navigation Center (“Definitive Agreement”).

C. The City and Proposer desire that Proposer have an opportunity to conduct due diligence on the Site, which may include performing physical tests, to determine the condition of the Site with regard to the proposed Project.

NOW THEREFORE, the Parties agree as follows:

1. Parties to this Agreement.
(a) The City is a municipal corporation of the State of California. The principal office of the City is 2100 E. Thousand Oaks Boulevard, Thousand Oaks, CA 91362, Attn:

Andrew P. Powers, City Manager, with a copy to City of Thousand Oaks, 2100 E.

Thousand Oaks Boulevard, Thousand Oaks, CA 91362, Attn: Patrick J. Hehir, Chief Assistant City Attorney, or such other location of which notice is given pursuant to this Agreement. “City” as used in this Agreement includes the City and any assignee of or successor to its rights, powers and responsibilities.

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(b) The Proposers are three California not-for-profit entities. The principal offices of each entity are: Many Mansions, 1259 E. Thousand Oaks Blvd., Thousand Oaks, CA 91362, Attn: Rick Schroeder, President; Hope the Mission, dba Hope of the Valley Rescue Mission, 16641 Roscoe Place, North Hills, CA 91343, Attn: Ken R. Craft, CEO; and DignityMoves, 2406 Bust Street, San Francisco, CA 94115, Attn: Elizabeth Funk, CEO. The parties may select other locations if proper notice is given pursuant to this Agreement.

2. Description of Site.

The City is the owner of certain real property located at 1205 Lawrence Drive, in the City of Thousand Oaks, Ventura County, California, (APN: 667-0-080-105). Proposer will have access to 1.05 acres of the City property as more particularly described in Exhibit A and illustrated by the site map in Exhibit B, which are attached to this Agreement and hereby incorporated by reference (the “Site”).

3. Grant of Right of Entry.
(a) Subject to and conditioned upon the terms and conditions of this Agreement, the City grants to Proposer and its authorized agents a non-exclusive right of entry (the “Right of Entry”) to perform the following acts on the Site: (1) obtain soil samples and make surveys and tests necessary to determine the suitability of the Site for the development of the proposed Project; and (2) conduct reasonable investigations on the method and feasibility of the Site to install necessary infrastructure such as water/wastewater connections, utility connections, foundations, walls, fencing and required structures, all for the purpose of meeting the obligations of serving qualified residents through the operation of the Navigation Center at the Site. (b) Proposer may not use the Site for any other purpose or business without obtaining the City’s prior written consent, which consent may be withheld in the City’s sole an absolute discretion.

4. Term.

This Agreement shall commence on the Effective Agreement and shall automatically expire, without need for further notice or action of any kind, upon the expiration or earlier termination of the ENA, unless otherwise mutually extended beforehand by the Parties in writing or earlier terminated in accordance with its terms (the “Term”); provided that, if the City Council disapproves the City’s entry into a Definitive Agreement with the Proposer, then this Agreement will automatically expire, without need for further notice or action of any kind, at 11:59 pm on the day the City Council disapproves entry into a Definitive Agreement.

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5. Compliance with Laws.

Proposer and Proposer’s agents, contractors, licensees, employees, and invitees, at Proposer’s expense, shall comply with all applicable federal, state, and local laws, ordinances, regulations, rules, and orders with respect to the Site and Proposer’s and/or Proposer’s agents, contractors, licensees, employees, and/or invitees’ actions or activities on or in connection with the Site. Proposer, its agents, contractors, licensees, employees, and invitees shall not permit to be placed upon the Site any gasoline or any hazardous, toxic or explosive material, waste or substance unless such items are used in the ordinary course of Proposer’s permitted activities under this Agreement. The term “hazardous” shall include any substance, material, waste pollutant, contaminant or matter now or hereafter regulated by any environmental law, rule or regulation. Proposer and Proposer’s agents, contractors, licensees, employees, and invitees shall conduct all of operations on the Site in connection with this Agreement at Proposer’s sole cost and expense.

6. Reports and Studies.

In consideration of the City’s granting of the Right of Entry, Proposer shall promptly provide the City with a copy of all reports and test results arising from this Agreement, without creating any liability for Proposer or the preparer of such reports.

7. Right of Entry Nonassignable.

This Agreement is personal to Proposer and shall not be assigned. Any attempt to assign this Agreement shall be void ab initio and shall be of no force or effect.

8. Relationship Between the City and Proposer
The City is granting the Right of Entry to Proposer as an accommodation. Nothing contained in this Agreement shall be deemed or construed to create the relationship of principal and agent or of owner and contractor or of partnership or of joint venture or of any association between the City and Proposer other than that of licensor and licensee.

No legal title or leasehold interest in the Site is created or vested in Proposer by the grant of the Right of Entry.

9. Nonexclusive Right of Entry.

The Right of Entry is revocable and nonexclusive. Nothing contained herein shall be construed to restrict or prevent the entry onto and use of the Site during the Term of this Agreement by the City or the City’s agents, contractors, licensees, employees, and invitees and/or its other licensees.

10. Surrender.

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On or before the termination date for this Agreement, Proposer shall remove all of its personal property from the Site and shall fill any excavations made by Proposer and shall surrender possession of the Site to the City in good order and repair to the satisfaction of the City, normal wear and tear excepted.

11. Removal of Liens.

Under no circumstance whatsoever shall any lien, including any mechanic’s lien, stop notice, materialmen’s lien, or any lien for goods, labor, material, services or work delivered or performed on the Site, attach to or encumber the Site. If any mechanic’s lien, stop notice, materialmen’s lien, or any other lien is filed for work done or claimed to have been done or for materials or services furnished or claimed to have been furnished, then such lien shall be discharged by Proposer at its sole cost and expense in a timely manner no later than ninety (90) days thereafter whether by payment, release, or posting of a bond or other similar assurance. The City may, in its sole and complete discretion, bond or discharge the same by paying the amount claimed to be due, and Proposer shall reimburse the City for all sums paid by the City under this Section, together with reasonable attorneys’ fees and costs, plus interest on those sums, fees, and costs from the date of payment at the highest rate allowed by law.

12. Release and Indemnity.

Proposer, as a material part of the consideration to be rendered to the City for the granting of the Right of Entry, for itself and its successors and assigns, hereby agrees:
(a) to indemnify, defend, protect, and hold the City and its officers, employees, attorneys, agents, and volunteers (collectively, the “Indemnified Parties” and each an “Indemnified Party”), free and harmless from any and all loss, liability, claims, damages and expenses (including, but not limited to, reasonable attorneys’ fees and costs) arising from the exercise of the Right of Entry or Proposer’s and/or Proposer’s agents, contractors, licensees, employees, and/or invitees actions or activities on or in connection with the Site, including, but not limited to:
(1) any and all risks of or exposure to any loss or liability arising from actions or activities conducted by Proposer and/or Proposer’s agents, contractors, licensees, employees, and/or invitees on the Site under this Agreement;
(2) any and all claims arising from or relating to the transportation, storage, handling or use of any material taken from the Site pursuant to this Agreement, or from any substance, known or unknown, emanating or derived therefrom; and
(3) any and all claims for damage to the Site, any improvements thereon, or to the property or person of any third party, alleged to have been Item No.16A

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caused by, or in any way connected with the physical properties of the Site or any material taken from the Site pursuant to this Agreement.

The foregoing undertaking of indemnity shall apply regardless of whether the loss, liability, claims, damages and expenses were in part contributed to by the acts or omissions of any Indemnified Party; provided, however, that nothing herein shall be interpreted as obligating Proposer to indemnify an Indemnified Party for an Indemnified Party’s gross negligence or willful misconduct. Such undertaking of indemnity shall survive the termination of this Agreement for any reason. Notwithstanding the foregoing, Proposer shall have no obligation to indemnify an Indemnified Party for loss, liability, claims, damages and expenses arising from Proposer’s mere discovery of hazardous substances already present on the Site prior to the commencement of this Agreement, so long as Proposer has not contributed to the placement, release or migration of such pre-existing hazardous substances.
(b) Except to the extent of an Indemnified Party’s gross negligence or willful misconduct, to fully and finally release the Indemnified Parties from any and all claims, demands, actions, or suits of any kind or nature arising out of Proposer’s and/or Proposer’s agents, contractors, licensees, employees, and/or invitees actions or activities on or in connection with the Site during the Term of this Agreement, including, but not limited to, rights or claims for implied contribution or indemnity, or any claim or liability based or asserted pursuant to any law or ordinance which seeks to impose any liability or damage whatsoever upon any Indemnified Party arising from the execution and/or performance of this Agreement, or from any of its terms.

In connection with the foregoing release, Proposer hereby acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code, section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT

TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE

RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY.

Proposer, being aware of such code section, agrees to expressly waive any rights it may have thereunder, as well as under any other statute or common law principles of similar effect.
________ Initials of Proposer’s authorized signatory
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13. Insurance.
(a) Proposer shall maintain liability insurance, to protect against loss from liability imposed by law for damages on account of personal injury, including death therefrom, suffered or alleged to be suffered by any person or persons whomsoever on or about the Site, resulting directly or indirectly from any acts or activities of Proposer, or any person acting for Proposer, or under its respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Site, or in connection with Proposer’s activities thereon, caused directly or indirectly by or from acts or activities of Proposer, or any person acting for Proposer, or under its control or direction. Such property damage and personal injury insurance shall also provide for and protect the City against incurring any legal cost in defending claims for alleged loss. Such personal injury and property damage insurance shall be maintained in full force and effect during the Term in the following amounts:

Commercial General Liability on a per occurrence basis of not less than Two Million Dollars ($2,000,000) and in a general aggregate amount of not less than Four Million Dollars ($4,000,000); and Commercial Automobile Liability of not less than One Million Dollars ($1,000,000) combined single limit, including owned, non-owned and hired automobile coverage. Proposer agrees that provisions of this paragraph as to maintenance of insurance shall not be construed as limiting in any way the extent to which Proposer may be held responsible for the indemnification of the City or the payment of damages to persons or property resulting from Proposer’s activities, or the activities of any other person or persons for which Proposer is otherwise responsible. (b) Proposer shall maintain workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers’ compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers’ compensation insurance shall cover all persons employed by Proposer in connection with the Site and shall cover liability within statutory limits for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any person incurring or suffering injury or death in connection with the Site or the operation thereof by Proposer. Notwithstanding the foregoing, Proposer may, in compliance with the laws of the State of California and in lieu of maintaining such insurance, self-insure for workers’ compensation in which event Proposer shall deliver to the City evidence that such self-insurance has been approved by the appropriate State authorities.
(c) Proposer shall cause all contractors and subcontractors performing work to maintain insurance of the types and in the amount described in this Section 13. Proposer shall cause any architects and engineers also to maintain Architects and Engineers Professional Liability (Errors and Omissions) insurance on a “claims made basis” in an amount of not less than One Million Dollars ($1,000,000). When coverage is provided on a “claims made basis”, Proposer shall cause all contractors and subcontractors to continue to renew the insurance for a period of five (5) years after this Agreement expires Item No.16A

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or is terminated. Such insurance must have the same coverage and limits as the policy that was in effect during the term of this Agreement and will cover Proposer for all claims made by the City arising out of any acts or omissions of Proposer, or its officers, employees or agents during the time this Agreement was in effect. (d) All policies, including the policies maintained by all contractors and subcontractors performing work, must name the City and its officers, employees, attorneys, agents, and volunteers as additional insureds and/or loss payees as its/their interests may appear. Policy endorsements providing the additional insureds/loss payees must be included with Certificates of Insurance. Proposer, and all contractors and subcontractors performing work, must require its/their insurer(s) to waive its/their subrogation rights against the City and its officers, employees, attorneys, agents, and volunteers as to all Commercial General Liability, Commercial Automobile Liability, and workers’ compensation insurance policies, and shall provide the City policy endorsements evidencing same with Certificates of Insurance.
(e) All insurance provided under this Section shall be for the benefit of Proposer and the City. Proposer agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. Proposer agrees to submit policies of all insurance required by this Section, or certificates evidencing the existence thereof and additional insured endorsements, to the City not less than fifteen (15) days prior to its commencement of any activities on the Site, indicating full coverage of the contractual liability imposed hereby. All insurance herein provided for shall be effected under policies issued by insurers of recognized responsibility, licensed and admitted to do business in the State of California (or if not admitted in California shall have a “General Policyholders Rating” of at least “A” as set forth in the most current issue of “Best’s Key Rating Guide”), reasonably approved by the City. All policies or certificates of insurance shall provide that such policies shall not be canceled or limited in any manner without at least thirty (30) days prior written notice to the City.
(f) The evidence of insurance required hereunder is a condition precedent to the right to enter upon the Site. If Proposer fails or refuses to procure or maintain (or cause to be procured and maintained) the insurance required by this Agreement, the Right of Entry granted by this Agreement shall automatically terminate and be of no further force or effect.

14. City’s Authorized Representative.

Unless otherwise specified or the context requires otherwise, all references to the City in this Agreement and its attachments shall mean the City’s City Manager or any officer or employee of the City to whom the City Manager or the City Council of the City delegates authority to perform, carry out and/or enforce this Agreement. Unless otherwise specified or the context requires otherwise, all references to the City’s City Manager shall mean the City Manager or his or her designee.

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15. Notices, Demands and Communications Between the Parties.

Formal notices, demands and communications between the City and Proposer shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the City and Proposer. Such written notices, demands and communications may be sent in the same manner to such other addresses as either Party may from time to time designate by mail. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by the recipient; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof.

16. Conflict of Interest.

To the extent prohibited by law, no member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested.

Proposer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement.

17. Non-liability of Officials and Employees.
(a) No member, official or employee of the City shall be personally liable to Proposer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to Proposer or on any obligations under the terms of this Agreement.
(b) No member, official or employee of Proposer shall be personally liable to the City, or any successor in interest, in the event of any default or breach by Proposer or for any amount which may become due to the City or its successor or on any obligations under the terms of this Agreement. This release shall not apply in the event of fraud, waste or intentional damage by Proposer or any agent, member, official, or employee of Proposer.

18. Interpretation of Agreement; Terminology; Application of Law.

This Agreement has been negotiated at arm’s length and between persons sophisticated and knowledgeable in the matters addressed herein. In addition, each Party has been given the opportunity to consult with experienced and knowledgeable Item No.16A

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legal counsel. Accordingly, any rule of law (including Civil Code section 1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the Party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effectuate the purpose and intent of the Parties to this Agreement. This Agreement shall be construed and enforced in accordance with the internal laws of California and not the principles regarding conflict of laws, except to the extent that Federal law preempts State law.

When the context so requires when used in this Agreement, the masculine gender shall be deemed to include the feminine and neuter gender and the neuter gender shall be deemed to include the masculine and feminine gender. When the context so requires when used in this Agreement, the singular shall be deemed to include the plural. The paragraph and section headings have been used for convenience only and shall not be used in the interpretation hereof.

19. Waivers.

A waiver by the City or Proposer of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. All waivers must be in writing and signed by the appropriate representatives of the City or Proposer, as applicable.

20. Time of the Essence.

Time is of the essence in this Agreement and each and all of its provisions in which performance is a factor.

21. Attorneys’ Fees and Costs.

If any action or proceeding is brought by any Party against any other Party under this Agreement, whether for interpretation, enforcement or otherwise, the prevailing Party shall be entitled to recover all costs and expenses, including the reasonable fees of its attorney and any expert witnesses in such action or proceeding. This provision shall also apply to any post-judgment action by either Party, including without limitation efforts to enforce a judgment.

22. Severability.

Any provision of this Agreement that shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other provisions shall remain in full force and effect.

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23. Entire Understanding of the Parties; Amendments.

This Agreement, including any document or instrument incorporated herein by reference, contains a complete and final expression of the agreement between the City and Proposer relating to this Agreement, and there are no promises, representations, agreements, warranties, or inducements either express or implied other than as are set forth in this Agreement. Any and all previous discussions or agreements between the City and Proposer with respect to this Agreement, whether oral or written, are superseded by this Agreement. No amendment, change, or addition to, or waiver of termination of, this Agreement or any part hereof shall be valid unless in writing and signed by the City and Proposer.

24. No Third-Party Beneficiaries.

The Parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of the City and Proposer, and not for the benefit, directly or indirectly, of any other person or entity, except as otherwise expressly provided herein.

25. Further Assurances.

Each of the Parties hereto shall execute and deliver any and all additional papers, documents and other assurances, and shall do any and all necessary acts and things in connection with the performance of their obligations hereunder and to carry out the intent and agreements of the Parties.

26. Execution in Counterparts.

This Agreement may be executed in several counterparts and all such executed counterparts shall constitute one agreement, binding on all of the Parties hereto, notwithstanding that all of the Parties hereto are not signatories to the original or to the same counterpart. This Agreement shall not be binding unless and until all Parties hereto have executed this Agreement.

27. Authority to Sign.

The individual executing this Agreement on behalf of Proposer hereby represents that he/she has full authority to do so and to bind Proposer to perform pursuant to the terms and conditions of this Agreement.
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RIGHT OF ENTRY
384 N. Erbes Road
Page S-1
CMO:120-40\H:COMMON\Council Items\2023 Staff Reports\02 28 23\Attachment 2 Right of Entry Agreement
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above.
“CITY”

CITY OF THOUSAND OAKS
By:
__________________________________
Kevin McNamee, Mayor
ATTEST:

By:
__________________________________
Laura B. Maguire, City Clerk
APPROVED AS TO ADMINISTRATION:

By: ______________________________
Andrew P. Powers, City Manager
APPROVED AS TO FORM:

By:________________________________
Tracy M. Noonan, City Attorney
“PROPOSER”

MANY MANSIONS
By:
_________________________________
Rick Schroeder, President

HOPE THE MISSION
By:
_________________________________
Ken R. Craft, CEO

DIGNITYMOVES
By:
_________________________________
Elizabeth Funk, CEO
Item No.16A

Item No.16A

RIGHT OF ENTRY
384 N. Erbes Road
Exhibit A – Legal Description

EXHIBIT A

LEGAL DESCRIPTION OF SITE
Item No.16A

EXHIBIT “B”

SITE MAP
Item No.16A

AGREEMENT TO PROVIDE FINANCIAL SUPPORT FOR PERMANENT, YEAR-ROUND SHELTER SERVING

HOMELESS INDIVIDUALS AND FAMILIES
T
his Agreement to Provide Financial Support for Permanent, Year -Round Shelter Serving Homeless Individuals and Families (“Agreement”), dated February 28, 2023, for reference purposes only, is hereby entered into by and between the City of Thousand Oaks (“City”) and the County of Ventura (“County”) (City and County each a “party” and collectively the “parties”), and is effective on the date of approval of both parties.

1. RECITALS
A. A
serious need exists for a permanent, year-round shelter for homeless individuals and families in Ventura County and particularly within the City of Thousand Oaks.

B.

City will establish and, through a contractor, will operate a permanent, year-round shelter for homeless individuals and families at 1205 Lawrence Drive, Thousand Oaks, California (“Shelter”). County will provide financial support toward City’s operation of the Shelter.

C
. C
ounty finds that the Shelter is necessary to meet the growing challenge of homelessness and that providing financial assistance to City to operate the Shelter serves the public purpose of providing temporary housing and services to the homeless population and achieving the goal of reducing the number of homeless individuals.

D.

The Shelter will provide access to a range of programs and supportive services to house homeless individuals. The Shelter shall meet the needs of the homeless population and will be operated by City, with County providing financial support. To ensure that the S helter will meet the needs of the community in serving the chronic and vulnerable homeless population, individuals will be admitted to the Shelter subject to minimal, “low-threshold” requirements so that chronic and vulnerable homeless people can easily enter and remain in the Shelter until they can find or transition to stable long-term housing.

2. DUTIES AND RESPONSIBILITIES
A. Both City and County
Th
e Shelter’s year of operation will be coterminous with a fiscal year running from July 1 to June

30. Before the start of each year of operation, staff of each party will meet and jointly determine the budget necessary to fund operation of the S helter for the upcoming year of operation (or o
ther period) and the portion of the budget to be paid by each party. Staff of each party will then recommend to its respective governing body that the governing body approve the budget and apportionment of the budget between the parties as prepared by staff. If the governing body of either party does not approve both the budget and the apportionment, then this Agreement shall automatically terminate and neither party will have any further obligations under this Agreement.

The budget and the apportionment of the budget for the construction and operation of the Shelter are set forth in Exhibit A of this Agreement, incorporated herein by this reference.

ATTACHMENT #3
Item No.16A

For each subsequent fiscal year, the operational budget may be adjusted for inflation utilizing the Los Angeles/Long Beach Consumer Price Index for all urban consumers. Such adjustment for inflation shall not require further amendment of this Agreement but may be agreed to by memorandum between City’s Representative and County’s Representative. Should any additional funding be desired, or new or additional programs offered, the same shall be subject to further amendment to this Agreement.

The City and County shall benefit equally from any additional revenues and funding obtained through non-entitlement grants, with the exception of that coming from each jurisdiction’s own budget, that are identified and dedicated to the costs of the Shelter facility or the on -going operation costs of the Shelter, whether that revenue is individually or jointly pursued or awarded.

For purposes of this Agreement, entitlement grants are considered funding awarded through the following programs: Community Development Block Grants and Public Local Housing Allocation.

Any other grant funding is considered “non-entitlement” grants. The City and County shall not be responsible for any costs incurred by the Shelter operator or any other service provider working with the Shelter that has not been expressly identified and agreed to by the parties.

B. City
(1) City shall select and enter into a contract with a provider to operate the shelter (“Operator” or “ Shelter Operator”) with a minimum of thirty (30) beds . City will be solely responsible for selecting and contracting with the Shelter Operator and for the operation of the Shelter. County will not be a party to the Shelter Operator contract. Notwithstanding the foregoing, in the Shelter Operator contract, City shall require the Operator to operate the Shelter consistent with the terms of this Agreement, including the Program Objectives detailed in section 3 below. (2) City will ensure that the Shelter is open and in operation 24 hours a day for each day of the year.
(3) City will use its best efforts to meet or exceed the following goals:
• Maintain an overall occupancy rate at the Shelter of 70% of the total available bed capacity. • Reduce t he overall number of individuals experiencing homelessness within the City of Thousand Oaks.
• Connect 75% of the Shelter occupants with stable h ousing or “positive” exits to other acceptable living arrangements such as residential treatment, transitional housing, reuniting with relatives, etc.
• Increase each Shelter occupant’s income as appropriate, including disability income and other public benefits.

/ / /
/ / /
Item No.16A

C. County

(1) In consideration for City's operation of the Shelter pursuant to the terms of this Agreement, County will pay City fifty percent (50%) of the actual costs to operate the Shelter as specified in Exhibit A, beginning on July 1, 2023. Payments shall be made by County to City quarterly, within 30 days from receipt of a written request for payment by the City that includes evidence of City’s payment of quarterly expenses to Shelter Operator and backup documentation of said expenses.

Nothing in this Agreement shall be construed to make either City or County responsible for any costs incurred by Shelter Operator that have not been expressly identified and agreed to by the parties.

(2) On or after July 1, 2023, County shall remit 50% of development costs within 30 days after receiving, no more frequently than quarterly, copies of invoices from the developer for site improvements and development. In no circumstance shall the County’s contribution exceed $2,000,000.

(3) Payments by County for any period after July 1 , 202 3, are contingent on approval by the governing body of each party of a budget for the upcoming year of operation and apportionment of the budget between the parties, as set forth in section 2.A above. If the governing body of each party approves the budget and the apportionment for the upcoming year of operation, County’s payments for that year of operation will be governed by this Agreement.

3. PROGRAM OBJECTIVES AND PERFORMANCE

City and County agree that the following are minimum standards, practices and principles that shall be part of the shelter.

A. Service Model

The Shelter will provide a safe place for homeless individuals to stay and stabilize while partnering with service providers to develop a plan for safe, secure and permanent housing. The primary purpose of the Shelter beyond emergency sheltering is to leverage community resources that will assist homeless individuals in quickly securing and moving into suitable permanent housing and in achieving long-term housing stability.

City will ensure that the Shelter Operator will participate in the Ventura County coordinated entry system, Pathways to Home, and will enter all Shelter occupants into the Ventura County Homeless Management Information System (VCHMIS).

City will ensure that the Shelter Operator shall operate and develop the appropriate individualized case plan for each Shelter occupant that is client-centered, culturally and linguistically appropriate, trauma-informed and sensitive to the wide ranges of needs of the Shelter occupants, with the goal to transition the Shelter occupant to stable and affordable housing.

Item No.16A

The following competencies are integral parts of the program design and operation of the Shelter:

• Low barrier access and services
• Housing first
• Harm reduction
• Trauma-informed care
• Client-centered

B. Program and Service Components

City shall establish, subject to County review, the policies, procedures, and protocols reasonable and necessary to operate the Shelter to achieve the goal of reducing the number of unsheltered persons in Ventura County.

Program objectives shall include:

• Managing program resources to achieve cost efficiencies and effectiveness and to facilitate services to as many Shelter occupants as feasible;
• Expanding the capacity to serve Shelter occupants by facilitating the delivery of services of multiple service providers; and
• Seeking additional resources to augment emergency Shelter and housing opportunities for Shelter occupants.

City shall ensure that each Shelter occupant has an individualized case plan and is provided the resources to achieve such a plan toward securing housing. To achieve these objectives , City will ensure that the Shelter Operator shall perform, at a minimum, the following services and functions:

• Connect Shelter occupants to needed resources (income, counseling, substance abuse, etc.); • Develop personalized housing plan;
• Support Shelter occupants in managing their own lives within the scope of their resources and abilities;
• Provide housing location and counseling services;
• Establish relationships with private and public property owners and rental agencies willing to provide permanent housing opportunities to Shelter occupants; • Assist with housing applications.

The case management services shall include the development of an individualized service plan based on needs, circumstances, and market conditions, focused on helping individuals find and keep stable housing and linkages to other community-based support services.

C. Reporting and Accountability Review

City and County shall review the performance of the Shelter at least quarterly to assess whether the following goals have been accomplished and/or maintained:

Item No.16A

• Maintain an overall occupancy rate at the Shelter of 70% of the total available bed capacity. • Reduce the overall number of individuals experiencing unsheltered homelessness within the City of Thousand Oaks.
• Connect 75% of the Shelter occupants with stable housing or “positive” exits to other acceptable living arrangements such as residential treatment, transitional housing, reuniting with relatives, etc.
• Increase each Shelter occupant’s income, including disability income and other public benefits for each participant.

4. TERM AND TERMINATION

A. The term of this Agreement shall commence upon approval by both parties and expire on June 30, 202 4. The term shall automatically renew and continue in full force and effect for one additional year on July 1, 2024, and for each annual anniversary date (July 1) thereafter, unless terminated as provided below or as provided in section 2.A above.

B. Either party may terminate the Agreement effective on the next anniversary date by giving at least 120 days’ written notice to the other party, with or without cause. Notwithstanding the preceding sentence, either party may terminate the Agreement effective on any date by giving at least 120 days’ written notice to the other party if: (a) the party determines, in its sole and absolute discretion, that the S helter is not financially sustainable, or (b) the party utilized the dispute resolution procedure set forth herein, at least 90 days have expired since the date of the written request for dispute resolution, and the parties have not agreed to a resolution of the dispute.

C. If this Agreement is terminated in accordance with the terms herein, and City continues to operate the Shelter thereafter, the costs incurred to operate the Shelter after the date of termination will be solely City’s responsibility. Termination of this Agreement will have no effect on the parties’ obligations under this Agreement prior to the date of termination nor on the parties’ obligations under any other agreement.

5. INSURANCE, INDEMNIFICATION AND HOLD HARMLESS PROVISIONS A. City, at its sole cost and expense, will obtain and maintain in full force during the term of this contract the following types of insurance:
1) General Liability "occurrence" coverage in the minimum amount of $2,000,000 combined single limit (CSL) bodily injury & property damage each occurrence and $4,000,000 aggregate, including personal injury, broad form property damage, products/completed operations, and broad form blanket contractual. 2) Automobile Liability coverage in the minimum amount of $1,000 ,000 CSL bodily injury & property damage, including owned, non- owned, and hired automobiles.

Item No.16A

Also, to include uninsured/underinsured motorists coverage in the minimum amount of $100,000 when there are owned vehicles.
3) Workers' Compensation coverage, in fu ll compliance with California statutory requirements, for all employees of contractor and Employer's Liability in the minimum amount of $1,000,000.

B. All insurance required will be primary coverage as respects County and any insurance or self-insurance maintained by County will be excess of City’s insurance coverage and will not contribute to it.

C. County is to be notified immediately if any aggregate insurance limit is exceeded. Additional coverage must be purchased to meet requirements.

D. The County of Ventura, its boards, agencies, departments, districts, officers, employees, agents, and volunteers are to be named as Additional Insured as respects work done by City under the terms of this contract on all policies required (except Workers' Compensation).

E. City agrees to waive all rights of subrogation against the County of Ventura, its boards, agencies, departments, officers, employees, agents and volunteers for losses arising from work performed by City under the terms of this contract as it pertains to Workers’ Compensation.

F. Policies will not be canceled, non -renewed or reduced in scope of coverage until after sixty (60) days written notice has been given to the County’s, Risk Management Division.

G. City agrees to provide County with the following insurance documents on or before the effective date of this contract:

1. Certificates of Insurance for all required coverage.

2. Additional Insured endorsements.

3. Waiver of Subrogation endorsements (a.k.a.: Waiver of Transfer Rights of Recovery Against Others, Waiver of Our Right to Recover from Others) as it pertains to Workers’ Compensation.

Failure to provide these documents will be grounds for immediate termination or suspension of this contract . The City’s obligation to provide evidence of insuran ce coverage may be wholly satisfied by providing a certificate of self- insurance in a form and amounts approved by the County.

H. The City of Thousand Oaks shall defend, indemnify and hold harmless The County of Ventura, its Board of Supervisors, officers, d irectors, districts, agents, employees and volunteers from and against all demands, claims, actions, liabilities, losses, damages, and costs, including reasonable attorney’s fees, arising out of or resulting from the performance of the Agreement, caused in Item No.16A

whole or in part by the negligent or intentional acts or omissions of the City of Thousand Oaks, its officers, directors, agents, employees, or subcontractors.

I. The County of Ventura shall defend, indemnify, and hold harmless The City of Thousand Oaks, its officers, directors, districts, agents, employees, and subcontractors from and against all demands, claims, actions, liabilities, losses, damages and costs, including reasonable attorney’s fees, arising out of or resulting from the performance of the Agr eement, caused in whole or in part by the negligent or intentional acts or omissions of The County of Ventura’s Board of Supervisors, officers, directors, agents, employees, or volunteers.

J. It is the intention of the County of Ventura and the City of Thous and Oaks that the provisions of this paragraph be interpreted to impose on each party responsibility to the other for the acts and omissions of their respective officers, directors, agents, employees, volunteers. It is also the intention of the County of Ventura and the City of Thousand Oaks that, where comparative fault is determined to have been contributory, principles of comparative fault will be followed and each party shall bear the proportionate cost of any damage attributable to the fault of that party, its officers, directors, agents, employees, volunteers.

6. LEGAL COMPLIANCE

City, in expending funds to operate and in operating the Shelter as contemplated in this Agreement, shall comply with all applicable federal, state and local laws, regulations and ordinances.

7. DISPUTE RESOLUTION

If the parties have a dispute that they are unable to resolve at the staff level, either party may escalate the dispute to the executive staff level (i.e., to the City Manager and the County Executive Officer) by submitting a signed and dated request for dispute resolution. If the City Manager and the County Executive Officer are unable to resolve the dispute, the item in dispute may be presented to the City Council and the County Board of Supervisors for resolution.

/ / /

/ / /

/ / /

/ / /

Item No.16A

8. ENTIRE AGREEMENT; AMENDMENT

This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. This Agreement can only be amended or modified in a writing signed by each of the parties.

WHEREFORE, City and County have executed this Agreement, .

COUNTY OF VENTURA

Date: ____________________ ___________________________________ Matt LaVere Chair, Board of Supervisors

COUNTY OF VENTURA
ATTEST: DR. SEVET JOHNSON
Clerk of the Board of Supervisors
County of Ventura, State of California

By: ___________________
Lori Key
Deputy Clerk

C ITY OF THOUSAND OAKS

Date: ____________________ ________________________________ Kevin McNamee, Mayor

Date: ____________________ ________________________________ Andrew P. Powers, City Manager

ATTEST:

By: ____________________________
Laura B. Maguire, City Clerk

APPROVED AS TO FORM:

By: ______________________________________
Patrick J. Hehir, Chief Assistant City Attorney

Item No.16A

EXHIBIT A

Estimated Construction Budget

Item No.16A

Estimated Operations Budget

Item No.16A

TO:Andrew P. Powers, City Manager
FROM:Jaime Boscarino, Finance Director
DATE:February 28, 2023
SUBJECT: Hillcrest Site (382 and 384 N. Erbes Road) Exclusive Negotiating Agreement
RECOMMENDATION:

1. Approve the Exclusive Negotiating Agreement between the City of Thousand Oaks and People’s Self-Help Housing Corporation, San Luis Obispo, CA, for the development of the City-owned parcel at 382 and 384 N. Erbes Road as a for-sale affordable housing project.

2. Approve the Right of Entry Agreement between the City of Thousand Oaks and People’s Self-Help Housing Corporation, San Luis Obispo, CA, for the development of the City-owned parcel at 382 and 384 N. Erbes Road as a for-sale affordable housing project.

3. Authorize City Manager to initiate preparation of a Disposition and Development Agreement between the City of Thousand Oaks and People’s Self-Help Housing Corporation.

4. Find that this action is not a project as defined under the California Environmental Quality Act.

FINANCIAL IMPACT:

No Additional Funding Requested. Minimal staff time to complete staff report, Exclusive Negotiating Agreement (ENA), and Right of Entry is included in the Adopted FY 2022-23 General Fund Budget. Future financial impact to the City, which may include the donation by the City of the subject site and deferral of development impact fees, will be included in the draft Disposition and Development Agreement to be considered by City Council at a future meeting.

Item No.16B

Hillcrest Site ENA
February 28, 2023

BACKGROUND:

On May 11, 2021, City Council authorized staff to begin negotiations with the property owner of 382 and 384 N. Erbes Road (Hillcrest Site) to acquire the site for the purpose of developing affordable housing. On August 31, 2021, City Council approved the sale and purchase agreement between the City and Hillcrest Christian School. The City subsequently secured a clean property title report and Phase 1 environmental due diligence was completed. Escrow closed and the City assumed title to the property on November 10, 2021.

On June 24, 2022, the City issued a Request for Proposals/Qualifications (RFP/Q) to more than 500 developers seeking project proposals for the property. The City received three (3) responsive proposals and conducted interviews with each of the proposers. In addition to the interviews, the City’s consultant conducted follow-up due diligence and evaluation of development pro-formas. People’s Self-Help Housing Corporation (PSHHC) was unanimously selected as the most qualified proposal.

On November 1, 2022, after a comprehensive evaluation process, City Council selected PSHHC to develop affordable housing at the Hillcrest Site (Project) and authorized the City Manager to initiate preparation of an ENA between the City and PSHHC.

DISCUSSION/ANALYSIS:

The purpose of the proposed ENA (Attachment #1) is to establish procedures and standards for negotiation by the City and PSHHC of a Disposition and Development Agreement (DDA) and facilitate the due diligence necessary to fully develop the Project. The ENA establishes a negotiating term of 180 calendar days, with the option for both parties to agree to three (3) 90 calendar-day extensions, for a potential negotiating period of 450 calendar days. The City Manager would have the authority to grant the extensions provided that PSHHC has demonstrated sufficient progress toward a mutually acceptable DDA. This term should allow ample time for the City and PSHHC to reasonably and in good faith negotiate the terms and conditions for a mutually acceptable DDA.

The proposed ENA requires PSHHC to provide the City with a detailed financial analysis for the Project within 90 days after the effective date of the ENA. This will include development costs of the Project, development budget, proposed housing affordability levels, and financing sources. The DDA will ultimately include a sources and uses budget, which will be based on the financial pro forma approved by the City in order to reasonably demonstrate the financial feasibility of the development of the Hillcrest Site.

Item No.16B

Hillcrest Site ENA
February 28, 2023

The proposed ENA provides that any and all costs associated with the development of the Project, including but not limited to, site development, demolition of existing structures, environmental costs, design, entitlements, construction, and operation and maintenance are the sole responsibility of PSHHC. PSHHC’s Project proposal, submitted in response to the City’s RFP/Q, requested a donation of the Hillcrest Site from the City to the Project. The proposed ENA contemplates that the City and PSHHC will seek to agree upon terms and conditions for the disposition of the Hillcrest Site.

The proposed ENA also contemplates the negotiation of a Scope of Development for the future DDA that sets forth the details of the Project, including, but not limited to, the number and size of the housing units (with a minimum of 78 units), square footage of ancillary facilities, number of parking spaces, and design of the Hillcrest Site. PSHHC will be required to adhere to the City’s planning process and the development of the Project may require City approval of various land use, discretionary approvals, and/or other entitlements. PSHHC will also be required, at its sole expense, to comply with the requirements of the California Environmental Quality Act (CEQA) in connection with development of the Project in the absence of a qualifying exemption.

To facilitate PSHHC’s due diligence for the Project, the ENA contemplates that the parties will also enter into a Right of Entry Agreement (Attachment #2). The proposed Right of Entry Agreement provides PSHHC a non-exclusive right of entry to the Hillcrest Site in order to conduct due diligence of the property, including physical tests, to determine the condition of the property with regards to the development of the Hillcrest Site. PSHHC may not use the Hillcrest Site for any other purpose without obtaining the City’s written consent. The proposed Right of Entry requires PSHHC, and any contractors performing work at the Hillcrest Site, to be adequately insured and indemnify the City from any losses associated with entry onto the Hillcrest Site.

The approval of the proposed ENA and Right of Entry does not obligate the City or PSHHC to ultimately execute a DDA, nor does it grant approval of any entitlements or specific project for the Hillcrest Site. If the City and PSHHC reach agreement on a mutually agreeable DDA, the proposed DDA will be brought forth for City Council consideration at the conclusion of negotiations between City staff and PSHHC. Staff recommends approval of the recommendations.

COUNCIL GOAL COMPLIANCE:

Meets the following City Council goals:

C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.

Item No.16B

Hillcrest Site ENA
February 28, 2023

J. Implement high quality revitalization projects within Thousand Oaks Boulevard and Newbury Road Areas; Develop a pedestrian-oriented, viable, and self- sustaining "Downtown;” and, continue to support production of long-term affordable housing.

Attachments:

Attachment #1 – Exclusive Negotiating Agreement
Attachment #2 – Right of Entry Agreement
FIN:430-10\jb\H:\COMMON\Council\2023\Adminstration\022823 Hillcrest Site (384 N. Erbes) Exclusive Negotiating Agreement Staff Report.docx
Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 EXCLUSIVE NEGOTIATION AGREEMENT

BY AND BETWEEN

THE CITY OF THOUSAND OAKS
AND
PEOPLE’S SELF-HELP HOUSING CORPORATION
(384 N. Erbes Road)
Th
is EXCLUSIVE NEGOTIATION AGREEMENT (“ Agreement”) is entered into as of ____________________, 2023 (“Effective Date”), by and between the CITY OF THOUSAND OAKS, a municipal corporation of the State of California (“ City”), and PEOPLE’S SELF -HELP HOUSING CORPORATION, a California nonprofit public benefit corporation (“ Developer”), each a “ Party” and collectively the “Parties”, on the basis of the following facts:

RE
CITALS
A. Th
e City is the fee title owner of certain improved real property located at 382 and 384 N.

Erbes Road, Thousand Oaks, California, consisting of two parcels known as APN: 670-0250-290 and 670- 0-250-210 (collectively, the “Site”). The Site is approximately 3.87 acres and has an existing approximately 26,500 square foot structure which was formerly used as a school.

B. Th
e City acquired the Site for the purpose of developing affordable housing. Towards that purpose, on June 24, 2022, the City issued t he Hillcrest Affordable Housing RFP/RFQ (“RFQ”). In response to the RFQ, Developer submitted a Proposal in August 2022, together with a subsequent addendum thereto (collectively, the “Proposal”), whereby Developer proposes to acquire the Site from the City and to develop the Site in accordance with the RFQ and the Proposal.

C. Th
e City desires to cause the development of the Site with a proposed affordable for-sale housing development with not less than 78 dwelling units consistent with the RFQ and the Proposal (“Project”). Certain requirements that will be imposed on the proposed Project, including but not limited to t he affordability restrictions, are intended to also comply with any applicable requirements of the California Surplus Land Act (set forth in California Government Code Section 54220 et seq .). The details and scope of the proposed Project, including, but not limited to, the total number of units (but not less than 78 units) and the affordability mix of the units, are not yet determined or agreed upon and will continue to be reviewed and analyzed by the Parties during the Term of this Agreement. The proposed Project will be subject to a regulatory agreement governing, in part, the affordability levels of the units.

D. A
fter careful review of all submittals, the City selected Developer for negotiations, on an exclusive basis, for the potential development of the Site with the proposed Project.

E. Th
e City and Developer wish to negotiate to reach agreement on the terms and conditions of a Disposition and Development Agreement (“DDA”) for the proposed Project. The DDA would provide the terms and conditions for the City’s disposition of the Site to Developer or Housing Trust Fund Ventura County, a California nonprofit public benefit corporation (“ HTFVC”), if specified preconditions are satisfied, and for Developer’s financing, construction, and operation of the proposed Project.

ATTACHMENT #1
Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 F. The purpose of this Agreement is to establish procedures and standards for the negotiation by the City and Developer of a DDA. As more fully set forth in Section 3.1 of this Agreement, Developer acknowledges and agrees that this Agreement in itself does not obligate, and shall not be construed to obligate, any party to acquire or convey any interest in real property, does not grant Developer the right to develop the Site or the proposed Project, and does not obligate the City or Developer to any activities or costs to develop the proposed Project except as expressly set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual co venants and promises contained herein and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City and Developer mutually agree as follows:

ARTICLE 1.

EXCLUSIVE NEGOTIATIONS

Section 1.1 Good Faith Negotiations.

A. The City and Developer shall negotiate diligently and in good faith, during the Negotiating Period described in Section 1.2, below, the terms of a DDA providing for the terms and conditions for the City’s disposition of the Site to Developer or HTFVC, if specified preconditions are satisfied, and for Developer’s financing, construction, and operation of the proposed Project. The proposed Project will be consistent with the description set forth in the Recitals above, including the RFQ and the Proposal, all of which, including the Recitals, are incorporated herein by this reference, subject to changes or revisions to the proposed Project that are needed in order to comply with applicable state and federal law and other changes or revisions that are mutually agreed to by the Parties. During the Negotiating Period, the Parties shall use good faith efforts to accomplish the respective tasks outlined in Article 2 to facilitate the negotiation of a mutually satisfactory DDA.

B. Among the issues to be addressed in the n egotiations for a DDA are: (1) the disposition of the Site by the City to Developer or HTFVC; (2) the design, type, and number of units to be constructed as part of the proposed Project (but not less than 78 units); (3) the development schedule for the proposed Project; (4) financing of the proposed Project (including timing of construction and permanent funding commitments); and (5) the level of housing affordability and the nature of affordability controls.

Section 1.2 Negotiating Period/Term.

A. The negotiating period under this Agreement and term of this Agreement (“Negotiating Period” or “Term”) is a period of one hundred eighty (180) calendar days, commencing on the Effective Date. The Negotiating Period may be extended , in each case, by mutual written agreement of the Parties, for up to three (3) additional ninety (90) calendar day periods, and on the City’s behalf by the City Manager of the City (“City Manager”) if, in the City Manager’s sole discretion and determination, sufficient progress toward a mutually acceptable DDA has been made during the initial one hundred eighty Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 (180) day negotiating period (and first or second ninety (90) day extended period, if applicable) to merit such an extension and upon such terms and conditions as the City Manager deems reasonably appropriate.

B. If a DDA has not been approved by the City Council of the City (“City Council”) and executed by the City and Developer by the expiration of the Negotiating Period, including any extension t hat may be granted by the City Manager pursuant to the preceding P aragraph A, then this Agreement shall automatically expire and terminate without any action of the Parties , neither Party shall have any further duties, obligations, rights, or liabilities under this Agreement, except for those rights and obligations that expressly survive expiration or termination of this Agreement, and Developer will have no further rights regarding the subject matter of this Agreement or all or any part of the Site and the City will be free to negotiate with other persons or entities with regard to all or any part of the Site. If a DDA is approved by the City Council and executed by the City and Developer by the expiration of the Negotiating Period, including any extension that may be granted by the City Manager pursuant to the preceding Paragraph A, then, upon such execution of the DDA by the Parti es, this Agreement shall automatically expire and terminate without any action of the Parties , all rights and obligations of the P arties shall be as set forth in the executed DDA , and neither Party shall have any further duties, obligations, rights, or liabilities under this Agreement, except for those rights and obligations that expressly survive expiration or termination of this Agreement.

Section 1.3 Exclusive Negotiations . During the Negotiating Period, including any extension granted pursuant to Section 1.2, Paragraph A, above, the City shall not negotiate with any entity, other than Developer, regarding development of the Site, or solicit or entertain bids or proposals to do so.

Section 1.4 Good Faith Deposit Alternative. In lieu of and as an alternate to requiring a good faith deposit from Developer, and as partial consideration for the City ’s execution of this Agreement, Developer, pursuant to t his Agreement, shall provide the City with copies of all non- proprietary reports, studies, analyses, correspondence , and similar documents prepared or commissioned by Developer with respect to the Site and the proposed Project, all as more fully set forth in Section 2.5, below.

ARTICLE 2.

NEGOTIATION TASKS

Section 2.1 Overview. To facilitate negotiation of the DDA, the P arties shall use reasonable good faith efforts to accomplish the tasks set forth in this Article 2 in a timeframe that will support negotiation and execution of a mutually acceptable DDA prior to the expiration of the Negotiating Period.

Section 2.2 Financing and Costs of Project; DDA Requirements.

A. Within ninety (90) calendar days after the Effective Date, Developer shall, at its sole cost and expense, provide the City with a detailed financial analysis for the Project containing, among other matters, the development costs of the proposed Project, a detailed development budget , and proposed housing affordability levels, including proposed income restrictions and applicable affordable sales prices supported by the budget (“Financing Proposal”). The financial analysis along with conceptual site plan discussed in Section 2.6, shall be refined by the Parties during the Negotiating Period, as appropriate based Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 on due diligence findings, and will be used to evaluate the financial feasibility of the proposed Project and to assi st in the negotiation of terms . The Financing Proposal shal l also include the terms, scope, and schedule of financing for the proposed Project.

B. The DDA will provide that Developer will be solely responsible for all development (including site development and demolition costs) and operational costs of the proposed Project. Developer acknowledges that neither the City nor any of its officers, officials, employees, representatives, or agents has provided any direct or indirect information which in any way would indicate that the proposed Project is or is not subject to the State of California’s prevailing wage requirements and/or federal prevailing wage requirements.

C. The negotiations for a DDA will address, among other items, the terms of the disposition of the property from City to Developer or HTFVC; the form, amount, and terms of financing for the proposed Project; the scope and schedule of development; Project sale and maintenance requirements; and the income and affordability restrictions to be placed on the Project, which restrictions of the City will be senior in priority to any construction and permanent financing or other liens.

D. The DDA will include a Scope of Development setting forth, without limitation, the number and size of the housing units, the total square feet of ancillary facilities, if any, the number of parking spaces, and the design parameters for the Site.

E. The DDA will include a sources and uses budget, which will be based upon a financial pro forma that has been approved by the City and a feasible method of financing, reasonably demonstrating the availability of all funds needed to complete the development of the proposed Project.

The DDA will require the submittal of documentation including but not limited to, all proposed loans, subsidies, grants, tax credits, and owner equity needed to carry out the proposed financing. Developer agrees to make continuing full disclosure of its proposed methods of financing the proposed Project.

F. The City will have the right to approve Developer’s selection of the general contractor, architect, construction lender, permanent lender, project manager, and other lenders, and service providers for the proposed Project. The City will also have the right to rev iew and approve any and all contracts and agreements with such entities for the proposed Project. Such approval shall not be unreasonably withheld, delayed or conditioned.

G. The DDA will be subject to the City ’s insurance requirements and all other applicable and customary City policies. The DDA may require appropriate performance and payment bonds (consistent with industry standards involving public-private projects) with regard to the construction of the proposed Project or another form of assurance that is acceptable to the City.

H. The DDA will contain such other provisions as may be customary in City agreements and such other provisions as the City and Developer determine to be necessary or appropriate to implement the proposed Project.

Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 Section 2.3 Disposition of the Site. Concurrent with Developer’s development of the Financing Proposal, the City and Developer shall seek to agree upon the terms and conditions for the disposition of the Site to Developer or HTFVC.

Section 2.4 Due Diligence. During the Negotiating Period, and subject to the terms and conditions of that certain Right of Entry Agreement to be entered into by and between the City and Developer concurrently with this Agreement, Developer shall , at its sole cost and expense, conduct due diligence activities, including but not limited to, planning, survey, soils report, hazardous materials report, financial feasibility, and title adequacy.

A. Developer shall, at its sole cost and expense, determine whether the Site is suitable for development of the proposed Project , taking into account the geotechnical and soils conditions, the presence or absence of toxic or other hazardous materials, the massing of the proposed Project improvements and the parking requirements and the other environmental and regulatory factors that Developer deems relevant.

B. Developer will be solely responsible for all necessary testing of the Site for hazardous materials pursuant to all applicable laws, statutes, rules and regulations. All studies and reports generated by Developer’s testing for hazardous materials will be made available to the City. For purposes of this Agreement, “hazardous materials” means asbestos; polychlorinated biphenyls (whether or not highly chlorinated); radon gas; radioactive materials; explosives; chemicals known to cause cancer or reproductive toxicity; hazardous waste, toxic substances or related materials; petroleum and petroleum product, including, but not limited to, gasoline and diesel fuel; those substances defined as a “Hazardous Substance”, as defined by Section 9601 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601, et seq., or as “Hazardous Waste” as defined by Section 6903 of the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq.; an “Extremely Hazardous Waste,” a “Hazardous Waste” or a “Restricted Hazardous Waste,” as defined by The Hazardous Waste Control Law under Section 25115, 25117 or 25122.7 of the California Health and Safety Code, or is listed or ide ntified pursuant to Section 25140 of the California Health and Safety Code; a “Hazardous Material”, “Hazardous Substance,” “Hazardous Waste” or “Toxic Air Contaminant” as defined by the California Hazardous Substance Account Act, laws pertaining to the und erground storage of hazardous substances, hazardous materials release response plans, or the California Clean Air Act under Sections 25316, 25281, 25501, 25501.1 or 39655 of the California Health and Safety Code; “Oil” or a “Hazardous Substance” listed or identified pursuant to 311 of the Federal Water Pollution Control Act, 33 U.S.C. 1321; a “Hazardous Waste,” “Extremely Hazardous Waste” or an “Acutely Hazardous Waste” listed or defined pursuant to Chapter 11 of Title 22 of the California Code of Regulations Sections 66261.1 through 66261.126; chemicals listed by the State of California under Proposition 65 Safe Drinking Water and Toxic Enforcement Act of 1986 as a chemical known by the State to cause cancer or reproductive toxicity pursuant to Section 2524 9.8 of the California Health and Safety Code; a material which due to its characteristics or interaction with one or more other substances, chemical compounds, or mixtures, materially damages or threatens to materially damage, health, safety, or the enviro nment, or is required by any law or public agency to be remediated, including remediation which such law or government agency requires in order for the Site to be put to the purpose proposed by this Agreement; any material whose presence would require remediation pursuant to the guidelines set forth in the State of California Leaking Underground Fuel Tank Field Manual, whether Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 or not the presence of such material resulted from a leaking underground fuel tank; pesticides regulated under the Federal Insectici de, Fungicide and Rodenticide Act, 7 U.S.C. 136 et seq .; asbestos, PCBs, and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.; any radioactive material including, without limitation, any “source material,” “special nuclear material,” “by -product material,” “low-level wastes,” “high-level radioactive waste,” “spent nuclear fuel” or “transuranic waste” and any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act, 42 U.S.C. 2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C. 10101 et seq., or pursuant to the California Radiation Control Law, California Health and Safety Code, Sections 25800 et seq .; hazardous substances regulated under the Occupational Safety and He alth Act, 29 U.S.C. 651 et seq ., or the California Occupational Safety and Health Act, California Labor Code, Sections 6300 et seq .; and/or regulated under the Clean Air Act, 42 U.S.C. 7401 et seq . or pursuant to The California Clean Air Act, Sections 3900 et seq. of the California Health and Safety Code.

C. Developer will also be responsible for making the Site suitable and usable for the proposed Project as a result of any site conditions including, without limitation, flood zones, Alquist-Priolo Earthquake Fault Zoning Act, and similar matters. Developer shall deliver to the City all reports within its possession or under its control regarding hazardous materials relating to the Site.

Section 2.5 Reports.

A. Developer shall, at its sole cost and expense, provide the City with true and correct copies of all reports, studies, analyses, correspondence, and similar documents prepared or commissioned by Developer with respect to this Agreement and the proposed Project, promptly upon their completion.

B. The City will, without any representation or warranty , provide Developer any existing information, studies, reports, site and construction plans or other documents in the City’s possession and control which the Developer may reasonably request to faci litate the Project design and development.

C. During the negotiations, Developer agrees, at its sole cost and expense, to make full disclosure to the City of all pertinent information in its possession or under its control concerning (i) Developer, (ii) any of Developer’s affiliates which are a part of the organizational structure of Developer or will be performing any of the obligations or services with respect to the Site and/or the proposed Project, (iii) the Site, and/or (iv) the Project . Upon the City ’s written request and to the extent in Developer’s possession, Developer will cooperate with the City by providing preliminary title reports, market studies, soils reports, surveys, phase I environmental report, and additional information and data relating to the Site, the proposed Project, the proposed financing, or Developer or its affiliates , as the City may reasonably request.

D. The City reserves the right, during the Term of this Agreement, to request reasonable additional information and data from Developer that it considers necessary for review and evaluation of the Site and the proposed Project, which Developer will provide in a timely manner provided that such information has been obtained by Developer pursuant to this Agreement or is otherwise in Developer’s possession and control.

Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 Section 2.6 Planning Approvals. Developer has submitted to the City, as part of the Proposal, the conceptual site plan for the proposed Project . Developer shall, at its sole cost and expense, be responsible for submitting all site plans, preliminary designs, and plan and specifications for the proposed Project, which shall be consistent with the conceptual site plan submitted to the City by Developer as part of the Proposal . Developer acknowledges that the proposed Proje ct may require the City’s approval of various land use or other discretionary approvals and/or other entitlements (collectively, “Entitlements”).

Developer, at its sole cost and expense, will be required to obtain all discretionary approvals and Entitlements for the proposed Project as a condition of disposition of the Site to Developer or HTFVC under the DDA. Nothing in this Agreement shall in any way impede or restrict the City’s authority to review and render determinations on such matters in its sole discretion.

Section 2.7 Environmental Review.

A. Developer, at its sole cost and expense, will be responsible for compliance with the requirements of the California Environmental Quality Act ( “CEQA”) pursuant to California Public Resources Code Sections 21000 et seq. and California Code of Regulations Sections 15000 et seq ., in connection with the proposed Project. Developer will be solely responsible for paying any and all costs and expenses associated with compliance with applicable CEQA requirements (including , without limitation, any required environmental documents). Nothing in this Agreement shall be construed to compel the City to approve or make any particular findings with respect to such CEQA documentation. Developer shall provide such information about the proposed Project as may be required to enable the City to consider any CEQA-required document in conjunction with the consideration of the proposed Project and shall otherwise generally cooperate with the City to complete this task.

B. If the City, in its sole discretion, determines that any approval of the proposed Project requires non-feasible mitigation measures, or fails to yield benefits that outweigh significant unavoidable impacts, or the City otherwise determines, in its sole discretion, not to make any finding required by CEQA as a prerequisite to approval of the proposed Project , the City may terminate th is Agreement, without penalty. Upon such termination, neither Party shall have any further duties, obligations, rights, or liabilities under this Agreement , except for those rights and obligations that expressly survive termination of this Agreement.

C. The proposed Project, and any disposition of the Site related thereto, shall be subject to, and contingent on, final CEQA review and approval by the appropriate body(ies) of the City . This Agreement does not constitute a legally binding commitment to a specific project, to the proposed Project, or to the disposition of the Site.

Section 2.8 Progress Reports . From time to time as reasonably requested by the City, the Developer agrees to make oral and written progress reports advising the City on all matters related to the development of the Project, including financial feasibility analyses, construction cost estimates, marketing studies, and similar due diligence matters.

Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 Section 2.9 Community Engagement. The City and Developer shall confer and seek agreement on an appropriate strategy to obtain input from community members regarding the proposed Project.

Section 2.10 Indemnity. Developer agrees to defend, indemnify , and hold harmless City and its officers, agents, representatives, and employees (each an "Indemnified Party") from any and all losses, liabilities, damages, claims or costs arising from Developer’s acts or omissions under or in connection with this Agreement ; provided, however, that nothing herein shall obligate Developer to indemnify an Indemnified Party for its gross negligence or willful misconduct . This indemnity obligation shall survive the expiration or termination of this Agreement.

Section 2.11 California Surplus Land Act . Developer acknowledges the City’s anticipated disposition of the Site to Developer or HTFVC for the proposed Project pursuant to a mutually negotiated DDA shall be in conformance with all applicable laws, including, without limitation, the California Surplus Land Act (set forth in California Government Code Section 54220 et seq.).

Section 2.12 City Cooperation. The City shall, at no cost or expense to City, reasonably cooperate with the submittal of Entitlement applications and financing source application in its role as owner of the Site.

ARTICLE 3.

GENERAL PROVISIONS

Section 3.1 Limitation on Effect of Agreement . This Agreement shall not obligate either the City or Developer to enter into a DDA or to enter into any particular DDA. This Agreement does not grant any approval of any Entitlements or approve of the proposed Project. By execution of this Agreement, the City is not committing itself to, or agreeing to, undertake disposition of the Site or any other matter with respect to the Site or the proposed Project. Execution of this Agreement by the City is merely an agreement to conduct a period of exclusive negotiations in accordance with the terms hereof, reserving for subsequent City Council or other staff or appropriate body action the final discretion and approval regarding approval of the proposed Project, the Entitlements, and the execution of a DDA and all proceedings and decisions in connection therewith. Any DDA resulting from negotiations pursuant to this Agreement shall become effective only if and after such DDA has been considered and approved by the City Council following conduct of all legally required procedures and processes, and executed by duly authorized representatives of the City and Developer. Until and unless a DDA is signed by Developer, approved by the City Council and executed by the City , no agreement drafts, actions, deliverables , or communications arising from the performance of this Agreement shall impose any legally binding obligation on either Party to enter into, or support entering into, a DDA or be used as evidence of any oral or implied agreement by either Party to enter into any other legally binding document. Each Party assumes the risk that, notwithstanding this Agreement and good faith negotiations, the City and Developer might not enter into the DDA due to their failure to agree upon essential terms of a transaction or a decision by the City Council not to authorize entering into and execution of the DDA.

Section 3.2 Notices. Formal notices, demands and communications between the Ci ty and Developer shall be sufficiently given if, and shall not be deemed given unless, dispatched by certified mail, Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 postage prepaid, return receipt requested, or sent by express delivery or overnight courier service, to the office of the Parties shown as follows, or such other address as the P arties may designate in writing from time to time:

To City: City of Thousand Oaks
2100 E. Thousand Oaks Boulevard
Thousand Oaks, CA 91362
Attn: Andrew P. Powers, City Manager

With a Copy to: City of Thousand Oaks
2100 E. Thousand Oaks Boulevard
Thousand Oaks, CA 91362
Attn: Noel Doran, Asst. City Attorney

To Developer: People’s Self-Help Housing Corporation
1060 Kendall Road
San Luis Obispo, CA 93401
Attn: Kenneth Trigueiro, CEO

With a Copy to: People’s Self-Help Housing Corporation
2901 N. Ventura Rd., Ste. 265
Oxnard, CA 93036
Attn: Veronica Z. Garcia, Chief Real Estate Development Officer

Such written notices, demands and communications shall be effective on the date shown on the delivery receipt as the date delivered or the date on which delivery was refused . For purposes of obligations to be performed by the City or of calculation of noticing under this Agreement, a business day on which the City of Thousand Oaks City Hall is closed will not constitute a business day under this Agreement.

Section 3.3 Waiver of Lis Pendens. It is expressly understood and agreed by the Parties that no lis pendens may be filed against any portion of the Site with respect to this Agreement or any dispute or act arising from it.

Section 3.4 Right of Entry Agreement. The City and Developer intend on entering into that certain Right of Entry Agreement (“ Right of Entry Agreement”) concurrently with this Agreement, in which the City will grant Developer a right of entry to enter the Site.

Section 3.5 Insurance. Developer shall at all times during the T erm of this Agreement keep in full force and effect all policies of insurance required unde r the Right of Entry Agreement described in Section 3.4, above.

Section 3.6 Assignment. Developer understands the City is entering into this Agreement based on the experience and qualifications of Developer and of the key individuals representing or employed by Developer as of the date of this Agreement. Therefore, Developer will not assign, sell, or otherwise transfer Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 any or all of its rights under this Agreement, or interest herein, without the prior written approval of the City, which approval may be withheld in the City’s reasonable discretion, except to a special purpose entity controlled by Developer and reasonably approved by the City . Further, no voluntary or involuntary successor in interest of Developer will acquire any rights or powers under this Agreement except as expressly set forth herein. For the reasons cited herein, Developer represents and agrees for itself and any successor in interest that prior to the expiration of the Term, and without the prior written approval of the City (which approval may be withheld in the City’s reasonable discretion), there will be no significant change in the management or control of Developer or with respect to the identity of the parties in control of Developer, by any method or means. Developer will promptly notify the City of all changes whatsoever in the identity of the parties in control of or exercising the management of Developer, or the degree of control or management, of which it or any of its officers have been notified or otherwise have k nowledge or information. This Agreement may be terminated by the City if there is any significant change (voluntary or involuntary) in membership, management or control, of Developer, or the persons in control of Developer. For purposes of this paragraph, a significant change will mean any change in the identity of the Executive Director, CEO, or President (or similar person or persons having ultimate control over the day to day management of Developer), or the appointment of a receiver or trustee to operate or exercise direct or indirect control over any portion of or interest in Developer. Periodic, routine changes in membership that cumulatively affect less than 50% of the membership of the Developer’s board of directors will not be considered a “significant change”. This Agreement may not be assigned by Developer without the express prior written consent of the City, which consent may be withheld in the City’s reasonable discretion except to a special purpose entity controlled by Developer and reasonably approved by the City . If there is an assignment of this Agreement, or change in the management or control of Developer which the City does not approve, the City may terminate this Agreement and exercise any other rights of the City .

Notwithstanding the foregoing, it is anticipated that, to effectuate the purposes of this Agreement and the DDA, Developer may form a limited partnership or other single purpose entity approved by the City , in which case, Developer may assign this Agreement to such limited partnership or single purpose entity. This Agreement may not be assigned by Developer to any other entity without the City’s prior written consent, which consent may be withheld in the City’s sole and absolute discretion.

Section 3.7 Costs and Expenses. Each Party shall be responsible for its owns costs and expenses in connection with any activities and negotiations undertaken in connection with this Agreement, and the performance of each Party’s obligations under this Agreement.

Section 3.8 No Commissions. The City shall not be liable for any real estate commissions or brokerage fees that may arise from this Agreement or any DDA resulting from this Agreement. The City represents that it has engaged no broker, agent or finder in connection with this transaction, and Developer shall indemnify, defend, protect, and hold the City harmless from any claims by any broker, agent or finder retained by Developer. This indemnity obligation shall survive the expiration or termination of this Agreement.

Section 3.9 Defaults and Remedies.

A. Default. If a Party defaults with regard to any of the provisions of this Agreement, then the non-defaulting Party shall give written notice of a default to the defaulting Party, specifying the nature of the default and the required action to cure the default. If a default remains uncured thirty (30) Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 calendar days after receipt by the defaulting Party of such notice, the non-defaulting Party may immediately exercise the remedies set forth in Paragraph B, below.

B. Remedies. Except for a default or breach of Developer with respect to Developer’s indemnification, defense and hold harmless obligations set forth in this Agreement or any amendment thereto, for which the City shall have all remedies available at law or in equity, the non-defaulting Party’s sole and exclusive remedy in the event of an uncured default by the City or Developer shall be to terminate this Agreement. Following such termination, no Party shall have any further duties, obligations, rights, or liabilities under this Agreement , except that Developer’ s indemnification , defense and hold harmless obligations set forth in this Agreement shall survive such termination and be enforceable against Developer.

C. No Liability. Except as expressly provided in Paragraphs A and B, above, no Party shall have any liability to any other Party for damages or otherwise for any default or breach, nor shall any Party have any other claims with respect to performance under this Agreement. Each Party specifically waives and releases any such rights or claims it may otherwise have at law or in equity.

Section 3.10 Time is of Essence. Time is of the essence of every portion of this Agreement in which time is a material part.

Section 3.11 Nondiscrimination. Developer covenants and agrees that it will not discriminate against any employees or applicants for employment because of race, color, religion, creed, national origin, ancestry, sex, sexual orientation, age, disability, medical condition, or marital status.

Section 3.12 Conflicts of Interest.

A. No member, official, officer or employee of the City may have any personal interest, direct or indirect, in this Agreement, nor may any such member, official, officer or employee participate in any decision relating to this Agreement which affects his/her personal interests or the interests of any corporation, partnership or association in which he/she is, directly or indirectly, interested.

B. Developer warrants that it has not paid or given, and will not pay or give, directly or indirectly, any City member, official, officer or employee any money or other consideration at all, whether or not connected in any way with the subject matter of this Agreement. Further, Developer warrants that it has no knowledge of any financial interest of any City member, o fficial, officer or employee in Developer, directly or indirectly, or in any person or entity affiliated with Developer, or in any transaction in which Developer is or has been involved.

C. Developer warrants that it has not paid or given, and will not p ay or give, any third party any money or other consideration for obtaining this Agreement. The Parties understand and agree that Developer has retained legal counsel and consultants in connection with the creation and implementation of this Agreement, and that such is not a violation of this Paragraph.

Section 3.13 Heading/Captions. The headings and captions of the various sections and paragraphs of this Agreement have been inserted only for the purpose of convenience and are not a part of Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 this Agreement and will not be deemed in any manner to modify, explain, expand or restrict any of the provisions of this Agreement.

Section 3.14 Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement or the application of any provision hereof to any Party or circumstance is declared to be illegal, invalid or unenforceable for any reason whatsoever by statute or a court of competent jurisdiction, such invalidity will not affect the other terms and provisions hereof or the application of the provision in question to any other Party or circumstance, all of which will continue in full force and effect.

Section 3.15 Attorneys’ Fees. If an action or court proceeding is brought by a Party against the other Party under this Agreement, whether for interpretation, enforcement or otherwise, the prevailing Party in any such action or proceeding shall be entitled to recover attorneys’ fees and costs from the other Party.

Section 3.16 Governing Law. This Agreement and the legal relations between the Parties will be governed by, interpreted under, construed and enforced in accordance with, the internal laws of the State of California without reference to the rules governing the conflict of laws. This Agreement is made and entered into in the County of Ventura , California, and any legal actions or proceedings arising from or related to this Agreement will be brought in the County of Ventura.

Section 3.17 Jointly Prepared. This Agreement is in all respects intended by each Party hereto to be deemed and construed to have been jointly prepared by the Parties and the Parties hereby expressly agree that any uncertainty or ambiguity existing herein will not be interpreted against any of them. Except as expressly limited by this Section, all of the applicable rules of interpretation of contracts will govern the interpretation of any uncertainty or ambiguity of this Agreement.

Section 3.18 Signing Authority. All individuals signing th is Agreement for a Party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the City that they have the necessary capacity and City to act for, sign and bind the respective entity or principal on whose behalf they are signing.

Section 3.19 Entire Agreement. This Agreement represents the entire agreement of the Parties hereto and integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements, oral or written, between the Parties with respect to acquisition and development of the Site or the proposed Project.

Section 3.20 Waivers/Amendments. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Party to be charged, and all amendments and modifications hereto must be in writing and signed by the appropriate authorities of the Parties. Except as otherwise expressly provided in this Agreement, any failure or delay by any Party in asserting any of its rights or remedies as to any default will not operate as a waiver of said default or of any rights or remedies in connection therewith or of any subsequent default or any rights or remedies in connection therewith, or deprive such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road

02.15.23 Section 3.21 Counterparts. This Agreement may be executed in counterparts, each of which when so executed will be deemed an original, and all of which, when taken together, will constitute but one and the same instrument.

Section 3.22 No Third-Party Beneficiaries. This Agreement is made and entered into solely for the benefit of the City and Developer and no other person shall have any right or cause of action under or by reason of this Agreement.

Section 3.23 Project Images . Developer hereby consents to use by the City of images of the Project, it s models, plans and other graphical representations of the Project and its various elements (“Project Images ”) in connection with marketing, public relations, and special events, websites, presentations, and other uses required by the City in connection wi th the Project. Such right to use the Project Images will not be assignable by the City to any other party (including, without limitation, any private party) without Developer’s prior written consent. Use by the City of Project Images, Developer’s name or the names of their affiliates will be subject to prior approval, which will not be unreasonably withheld or delayed. For any Project Images provided to the City by Developer, Developer will use reasonable efforts to obtain any rights and/or consents from any third parties necessary to provide these Project Image use rights.

Section 3.24 Actions By the City . Whenever this Agreement calls for or permits the approval, consent, authorization or waiver of the City , the approval, consent, authorization, or waiver of the City Manager or any officer or employee of the City to whom the City Manager or the City Council of the City delegates authority to perform, carry out and/or enforce this Agreement shall constitute the approval, consent, authorization or waiver of the City without further action of the City Council, unless such approval, consent, authorization, or waiver is otherwise required by applicable law to be made by the City Council or the City Manager otherwise determines such approval, consent, authorization, or waiver should be made by the City Council . Unless otherwise specified or the context requires otherwise, all references to the City’s City Manager shall mean the City Manager or his or her designee.

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[SIGNATURES ON FOLLOWING PAGE]
Item No.16B

EXCLUSIVE NEGOTIATION AGREEMENT
384 N. Erbes Road
Page S-1
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above.
“CITY”
CIT

Y OF THOUSAND OAKS
By: __________________________________

Kevin McNamee, Mayor
ATTEST:

By: ___________________________
Andrews P. Powers, City Manager
APPROVED AS TO FORM:

By: _________________________________
Tracy M. Noonan, City Attorney
APPROVED AS TO FORM:

By: _________________________________

KANE, BALLMER & BERKMAN
Susan Apy, City Special Counsel
“DEVELOPER”
PEOPLE’S SELF-HELP HOUSING
CORPORATION, a California nonprofit
public benefit corporation
*see notes below
By: _________________________________
N
ame: _______________________________
Title: ________________________________
By: _________________________________
N
ame: _______________________________
Title: ________________________________
*Notes: In accordance with California
Corporations Code Section 313, this document
must be executed by the Corporation’s Chief
Executive Officer, President or Vice- President,
on the one hand, and the Corporations’ Chief
Financial Officer, Treasurer, Assistant
Treasurer or Secretary on the other hand.

FIN:430-10\jb\H:\COMMON\Council\2023\Adminstration\Attachment 1 ENA.docx By: __________________________________
Laura B. Maguire, City Clerk
APPROVED AS TO FORM:

Item No.16B

RI

GHT OF ENTRY
384 N. Erbes Road

02.15.23 RIGHT OF ENTRY AGREEMENT

BY AND BETWEEN

THE CITY OF THOUSAND OAKS
AND
PEOPLE’S SELF-HELP HOUSING CORPORATION
(384 N. ERBES ROAD)
Th
is RIGHT OF ENTRY AGREEMENT (“ Agreement”) is entered into as of ____________________, 2023 (“Effective Date”) by and between the CITY OF THOUSAND OAKS, a municipal corporation of the State of California (“City”), and PEOPLE’S SELF-HELP HOUSING CORPORATION, a California nonprofit public benefit corporation (“Developer”), each a “Party” and collectively the “Parties”, on the basis of the following facts:

RECITALS
A. The City holds fee title to certain real property hereinafter defined as the “Site” and Developer desires to buy the Site from the City for the development and operation of a proposed affordable housing (the “Project”).

B. The City and Developer have entered into an Exclusive Negotiation Agreement dated as of _______________, 2023 (“ENA”) to negotiate, among other things, the terms of the City’s disposition of the Site to Developer.

C. The City and Developer desire that Developer have an opportunity to conduct due diligence on the Site, which may include performing physical tests , to determine the condition of the Site with regard to the proposed Project.

NOW THEREFORE, the Parties agree as follows:

1. Parties to this Agreement.
(a) Th e City is a municipal corporation of the State of California. The principal office of the City is 2100 E. Thousand Oaks Boulevard, Thousand Oaks, CA 91362, A ttn: Andrew P.

Powers, City Manager, with a copy to City of Thousand Oaks, 2100 E. Thousand Oaks Boulevard, Thousand Oaks, CA 91362, Attn: Noel Doran, Asst. City Attorney, or such other location of which notice is given pursuant to this Agreement. “City” as used in this Agreement includes the City and any assignee of or successor to its rights, powers and responsibilities. (b) The Developer is a California nonprofit public benefit corporation. The principal office of Developer is 1060 Kendall Road, San Luis Obispo, CA 93401, Attn: Kenneth Trigueiro, CEO, with a copy to 2901 N. Ventura Rd., Ste. 265, Oxnard, CA 93036, Attn: Veronica Z Garcia, Chief Real Estate Development Officer, or such other location of which notice is given pursuant to this Agreement.

ATTACHMENT #2
Item No.16B

RIGHT OF ENTRY
384 N. Erbes Road

02.15.23 2. Description of Site.

The City is the owner of certain improved real property located at 384 N. Erbes Road, in the City of Thousand Oaks, Ventura County, California, and more particularly described in Exhibit A and illustrated by the site map in Exhibit B, which are attached to this Agreement and hereby incorporated by reference (the “Site”).

3. Grant of Right of Entry.
(a) Subject to and conditioned upon the terms and conditions of this Agreement, the City grants to Developer and its authorized agents a non-exclusive right of entry (the “Right of Entry”) to perform the following acts on the Site: (1) obtain soil samples and make surveys and tests necessary to determine the suitability of the Site for the development of the proposed Project; (2) conduct a survey of the Site; and (3) conduct reasonable investigations on and beneath the Site and all improvements thereon to determine the presence of Hazardous Materials. As used herein, the phrase “Hazardous Materials” means any substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any governmental requirements is defined as “hazardous” or harmful to the environment.
(b) Developer may not use the Site for any other purpose or business without obtaining the City’s prior written consent, which consent may be withheld in the City’s reasonable discretion.

4. Term.

This Agreement shall commence on the Effective Date and shall automatically expire, without need for further notice or action of any kind, upon the expiration or earlier termination of the ENA , unless otherwise mutua lly extended beforehand by the P arties in writing or earlier terminated in accordance with its terms (the “Term ”); provided that, if the City Council of the City disapproves the City ’s entry into a Disposition and Development Agreement with the Developer, then this Agreement will automatically expire, without need for further notice or action of any kind, at 11:59 pm on the day the City Council disapproves entry into a Disposition and Development Agreement.

5. Compliance with Laws.

Developer and Developer’s agents, contractors, licensees, employees , and invitees, at Developer’s expense, shall comply with all applicable federal, state, and local laws, ordinanc es, regulations, rules, and orders with respect to the Site and Developer’s and/or Developer’s agents, contractors, licensees, employees , and/or invitees’ actions or activities on or in connection with the Site. Developer, its agents, contractors, licensees, employees , and invitees shall not permit to be placed upon the Site any gasoline or any hazardous, toxic or explosive material, waste or substance unless such items are used in the ordinary course of Developer’s permitted activities under this Agreement . The term “hazardous” shall include any substance, material, waste pollutant, contaminant or matter now or hereafter regulated by any environmental law, rule or regulation. Developer and Developer’s agents, contractors, licensees, employees, and invitees shall Item No.16B

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02.15.23 conduct all of operations on the Site in connection with this Agreement at Developer’s sole cost and expense.

6. Reports and Studies.

In consideration of the City’s granting of the Right of Entry , Developer shall promptly provide the City with a copy of all reports , surveys, and test results arising from this Agreement , without creating any liability for Developer or the preparer of such reports.

7. Right of Entry Nonassignable.

This Agreement is personal to Developer and shall not be assigned. Any attempt to assign this Agreement shall be void ab initio and shall be of no force or effect.

8. Relationship Between the City and Developer
The City is granting the Right of Entry to Developer as an accommodation. Nothing contained in this Agreement s hall be deemed or construed to create the relationship of principal and agent or of owner and contractor or of partnership or of joint venture or of any association between the City and Developer other than that of licensor and licensee. No legal title or leasehold interest in the Site is created or vested in Developer by the grant of the Right of Entry.

9. Nonexclusive Right of Entry.

The Right of Entry is revocable and nonexclusive. Nothing contained herein shall be construed to restrict or prevent the entry onto and use of the Site during the Term of this Agreement by the City or the City’s agents, contractors, licensees, employees, and invitees and/or its other licensees.

10. Surrender.

On or before the termination date for this Agreement , Developer shall remove all of its personal property from the Site and shall fill any excavations made by Developer and shall surrender possession of the Site to the City in good order and repair to the satisfaction of the City, normal wear and tear excepted.

11. Removal of Liens.

Under no circumstance whatsoever shall any lien, including any mechanic’s lien, stop notice, materialmen’s lien, or any lien for goods, labor, material, services or work delivered or performed on the Site, attach to or encumber the Site. If any mechanic’s lien, stop notice, materialmen’s lien, or any other lien is filed for work done or claimed to have been done or for materials or services furnished or claimed to have been furnished, then such lien shall be discharged by Developer at its sole cost and expense in a timely manner no later than ninety (90) days thereafter whether by payment, release, or posting of a bond or other similar assurance. The Item No.16B

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02.15.23 City may, in its sole and complete discretion, bond or discharge the same by paying the amount claimed to be due, and Developer shall reimburse the City for all sums paid by the City under this Section, together with reasonable attorneys’ fees and costs, plus interest on those sums, fees, and costs from the date of payment at the highest rate allowed by law.

12. Release and Indemnity.

Developer, as a material part of the consideration to be rendered to the City for the granting of the Right of Entry, for itself and its successors and assigns, hereby agrees:
(a) to indemnify, defend, protect , and hold the City and its officers, employees, attorneys, agents, and volunteers (collectively, the “Indemnified Parties ” and each an “Indemnified Party”), free and harmless from any and all loss, liability, claims, damages and expenses (including, but not limited to, reasonable attorneys’ fees and costs) arising from the exercise of the Right of Entry or Developer’s and/or Developer’s agents, contractors, licensees, employees, and/or invitees actions or activities on or in connection with the Site, including, but not limited to:
(1) any and all risks of or exposure to any loss or liability arising from actions or activities conducted by Developer and/or Devel oper’s agents, contractors, licensees, employees, and/or invitees on the Site under this Agreement;

(2) any and all claims arising from or relating to the transportation, storage, handling or use of any material taken from the Site pursuant to this Agreement, or from any substance, known or unknown, emanating or derived therefrom; and

(3) any and all claims for damage to the Site, any improvements thereon, or to the property or person of any third party, alleged to have been caused by, or in any way connected with the physical properties of the Site or any material taken from the Site pursuant to this Agreement.

The foregoing undertaking of indemnity shall apply regardless of whether the loss, liability, claims, damages and expenses were in part contributed to by the acts or omissions of any Indemnified Party; provided, however, that nothi ng herein shall be interpreted as obligating Developer to indemnify an Indemnified Party for an Inde mnified Party’s gross negligence or willful misconduct. Such undertaking of indemnity shall survive the termination of this Agreement for any reason. Notwithstanding the foregoing, Developer shall have no obligation to indemnify an Indemnified Party for loss, liability, claims, damages and expenses arising from Developer’s mere discovery of Hazardous Materials already present on the Site prior to the commencement of this Agreement, so long as Developer has not contributed to the placement, release or migration of such pre-existing Hazardous Materials.
(b) Except to the extent of an Indemnified Party’s gross negligence or willful misconduct, to fully and finally release the Indemnified Parties from any and all claims, demands, Item No.16B

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02.15.23 actions, or suits of any kind or nature arising out of Developer’s and/or Developer’s agents, contractors, licensees, employees, and/or invitees actions or activities on or in connection with the Site during the Term of this Agreement, including, but not limited to, rights or claims for implied contribution or indemnity, or any claim or liability based or asserted pursuant to any law or ordinance which seeks to impose any liability or damage whatsoever upon any Indemnified Party arising from the execution and/or performance of this Agreement, or from any of its terms.

In connection with the foregoing release, Developer hereby acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code, section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASIN G PARTY DOES NOT KNO W OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TI ME OF EXECUTING THE

RELEASE AND THAT, IF KNOWN BY HIM OR HER , WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMEN T WITH THE
DEBTOR OR RELEASED PARTY.

Developer, being aware of such code section, agrees to expressly waive any rights it may have thereunder, as well as under any other statute or common law principles of similar effect. ________ Initials of Developer’s authorized signatory

13. Insurance.
(a) Developer shall maintain liability insur ance, to protect against loss from liability imposed by law for damages on account of personal injury, including death therefrom, suffered or alleged to be suffered by any person or persons whomsoever on or about the Site, resulting directly or indirectly from any acts or activities of Developer, or any person acting for Developer, or under its respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Site, or in connection with Developer’s activities thereon, caused directly or indirectly by or from acts or activities of Developer, or any person acting for Developer, or under its control or direction. Such property damage and personal injury insurance shall also provide for and protect the City against incurring any legal cost in defend ing claims for alleged l oss. Such personal injury and property damage insurance shall be maintained in full force and effect during the Term in the following amounts:

Commercial General Liability on a per occurrence basis of not le ss than One Million Dollars ($1,000,000) and in a general aggregate amount of not less than Two Million Dollars ($2,000,000); and Commercial Automobile Liability of not less than One Million Dollars ($1,000,000) combined single limit, including owned, non-owned and hired automobile coverage. Developer agrees that provisions of this paragraph as to maintenance of insurance shall not be construed as limiting in any way the extent to which Developer may be held responsible for the indemnification of the City or the payment of damages to persons or property resulting from Developer’s activi ties, or the activities of any other person or persons for which Developer is otherwise responsible.

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02.15.23 (b) Developer shall maintain workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers’ compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such work ers’ compensation insurance shall cover all persons employed by Developer in connection with the Site and shall cover liability within statutory limits for compensation un der any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any person incurring or suffering injury or death in connection with the Site or the operation thereof by Developer.

Notwithstanding the foregoing, Develope r may, in compliance with the laws of the State of California and in lieu of maintaining such insurance, self- insure for workers’ compensation in which event Developer shall deliver to the City evidence that such self -insurance has been approved by the appropriate State authorities.
(c) Developer shall cause all contractors and subcontractors performing work to maintain insurance of the types and in the amount described in this Section 13. Developer shall cause any architects and engineers also to maintain Architects and Engineers Professional Liability (Errors and Omissions) insurance in an amount of not less than One Million Dollars ($1,000,000).

When coverage is provided on a “claims made basis”, Developer shall cause all contractors and subcontractors to continue to renew the insurance for a period of five (5) years after this Agreement expires or is terminated. Such insurance must have the same coverage and limits as the policy that was in effect during the term of this Agreement and will cover Developer for all claims made by the City arising out of any acts or omissions of Developer, or its officers, employees or agents during the time this Agreement was in effect.
(d) All policies, including the policies maintained by all contractors and subcontractors performing work, must name the City and its officers, employees, attorneys, agents, and volunteers as additional insureds and/or loss payee s as its/their interests may appear. Policy endorsements providing the additional insureds /loss payees must be included with Certificates of Insurance.

Developer, and all contractors and subcontractors performing work, must require its /their insurer(s) to w aive its /their subrogation rights against the City and its officers, employees, attorneys, agents, and volunteers as to all Commercial General Liability, Commercial Automobile Liability, and workers’ compensation insurance policies, and shall provide the C ity policy endorsements evidencing same with Certificates of Insurance. (e) All insurance provided under this Section shall be for the benefit of Developer and the City. Developer agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. Developer agrees to submit policies of all insurance required by this Section, or certificates evidencing the existence thereof and additional insured endorsements, to the City not less than fifteen (15) days prior to its commencement of any activities on the Site, indicating full coverage of the contractual liability imposed hereby. All insurance herein provided for shall be effected under policies issued by insurers of recognized responsibility, licensed and admitted to do business in the State of California (or if not admitted in California shal l have a “General Policyholders Rating” of at least “A” as set forth in the most current issue of “Best’s Key Rating Guide”), reasonably approved by the City. All policies or certificates of insurance shall Item No.16B

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02.15.23 provide that such policies shall not be canceled or limited in any manner without at least thirty (30) days prior written notice to the City.
(f) The evidence of insurance required hereunder is a condition precedent to the right to enter upon the Site. If Developer fails or refuses to procure or maintain (or cause to be procured and maintained) the insurance required by this Agreement, the Right of Entry granted by this Agreement shall automatically terminate and be of no further force or effect.

14. City’s Authorized Representative.

Whenever this Agreement and its attachments calls for or permits the approval, consent, authorization or waiver of the City, the approval, consent, authorization, or waiver of the City Manager or any officer or employee of the City to whom the City Manager or the City Council of the City delegates authority to perform, carry out and/or enforce this Agreement shall constitute the approval, consent, authorization or waiver of the City without further action of the City Council, unless such approval, consent, authorization, or waiver is otherwise required by applicable law to be made by the City Council or the City Manager otherwise determines such approval, consent, authorization, or waiver should be made by the City Council. Unless otherwise specified or the context requires otherwise, all references to the City’s City Manager shall mean the City Manager or his or her designee.

15. Notices, Demands and Communications Between the Parties.

Formal notices, demands and communications between the City and Developer shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the City and Developer. Such written notices, demands and communications may be sent in the same manner to such other addresses as either Party may from time to time designate by mail. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by the recipient; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof.

16. Conflict of Interest.

To the extent prohibited by law, no member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested.

Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement.

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02.15.23 17. Non-liability of Officials and Employees.
(a) No member, official or employee of the City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to Developer or on any obligations under the terms of this Agreement. (b) No member, official or employee of Developer shall be personally liable to the City, or any successor in interest, in the event of any default or breach by Developer or for any amount which may become due to the City or its successor or on any obligations under the terms of this Agreement. This release shall not apply in the event of fraud, waste or intentional damage by Developer or any agent, member, official, or employee of Developer.

18. Interpretation of Agreement; Terminology; Application of Law.

This Agreement has been negotiated at arm’s length and between persons sophisticated and knowledgeable in the matters addressed herein. In addition, each Party has been given the opportunity to consult with experienced and knowledgeable legal counsel. Acc ordingly, any rule of law (including Civil Code section 1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the Party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effectuate the purpose and intent of the P arties to this Agreement. This Agreement shall be construed and enforced in accordance with the internal laws of California and not the principles regarding conflict of laws, except to the extent that Federal law preempts State law.

When the context so requires when used in this Agreement, the masculine gender shall be deemed to include the feminine and neuter gender and the neuter gender shall be deemed to include the masculine and feminine gender. When the context so requires when used in this Agreement, the singular shall be deemed to include the plural. The paragraph and section headings have been used for convenience only and shall not be used in the interpretation hereof.

19. Waivers.

A waiver by the City or Developer of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. All waivers must be in writing and signed by the appropriate representatives of the City or Developer, as applicable.

20. Time of the Essence.

Time is of the essence in this Agreement and each and all of its provisions in which performance is a factor.

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02.15.23 21. Attorneys’ Fees and Costs.

If any action or proceeding is brought by any Party against any other Party under this Agreement, whether for interpretation, enforcement or otherwise, the prevailing Party shall be entitled to recover all costs and expenses, including the reasonable fees of its attorney and any expert witnesses in such action or proceeding. This provision shall also apply to any post-judgment action by either Party, including without limitation efforts to enforce a judgment.

22. Severability.

Any provision of this Agreement that shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other provisions shall remain in full force and effect.

23. Entire Understanding of the Parties; Amendments.

This Agreement, including any document or instrument incorporated herein by reference, contains a complete and final expression of the agreement between the City and Developer relating to this Agreement , and there are no promises, representations, agreemen ts, warranties, or inducements either express or implied other than as are set forth in this Agreement. Any and all previous discussions or agreements between the City and Developer with respect to this Agreement, whether oral or written, are superseded by this Agreement. No amendment, change, or addition to, or waiver of termination of, this Agreement or any part hereof shall be valid unless in writing and signed by the City and Developer.

24. No Third Party Beneficiaries.

The Parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of the City and Developer, and not for the benefit, directly or indirectly, of any other person or entity, except as otherwise expressly provided herein.

25. Further Assurances.

Each of the P arties hereto shall execute and deliver any and all additional papers, documents and other assurances, and shall do any and all necessary acts and things in connection with the performance of their obligations hereunder and to carry out the inte nt and agreements of the Parties.

26. Execution in Counterparts.

This Agreement may be executed in several counterparts and all such executed counterparts shall constitute one agreement, binding on all of the P arties hereto, notwithstanding that all of the Parties hereto are not signatories to the origin al or to the same counterpart. This Agreement shall not be binding unless and until all Parties hereto have executed this Agreement.

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02.15.23 27. Authority to Sign.

The individual executing this Agreement on behalf of Developer hereby represents that he/she has full authority to do so and to bind Developer to perform pursuant to the terms and conditions of this Agreement.

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[SIGNATURES ON FOLLOWING PAGE]
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Page S-1
IN WI
TNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above.
“CITY”
CITY O

F THOUSAND OAKS
By: __________________________________
K
evin McNamee, Mayor
ATTEST:

By: _____________________________
Andrews P. Powers, City Manager
APPROVED AS TO FORM:

By: _________________________________
Tracy M. Noonan, City Attorney
APPROVED AS TO FORM:

By: _________________________________

KANE, BALLMER & BERKMAN
Susan Apy, City Special Counsel
“DEVELOPER”
PEOPLE’S SELF-HELP HOUSING
CORPORATION, a California nonprofit
public benefit corporation
*see notes below
By: _________________________________
Na
me: _______________________________
Title: ________________________________
By: _________________________________
Na
me: _______________________________
Title: ________________________________
*Notes: In accordance with California
Corporations Code Section 313, this document
must be executed by the Corporation’s Chief
Executive Officer, President or Vice- President,
on the one hand, and the Corporations’ Chief
Financial Officer, Treasurer, Assistant
Treasurer or Secretary on the other hand.

FIN:430-10\jb\H:\COMMON\Council\2023\Adminstration\Attachment 1 Right of Entry.docx By: _________________________________
Laura B. Maguire, City Clerk
APPROVED AS TO FORM:

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Exhibit A – Legal Description

EXHIBIT A

LEGAL DESCRIPTION OF SITE

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Item No.16B

All that certain real property situated in the County of Ventura, State of California, described as follows:

PARCEL 1:

LOT 12 IN BLOCK 26 OF THOUSAND OAKS TRACT, IN THE CITY OF THOUSAND OAKS, COUNTY OF VENTURA, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 8, PAGE 73 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 2:

THAT PORTION OF LOT 11 IN BLOCK 26 OF THOUSAND OAKS TRACT, IN THE CITY OF THOUSAND OAKS, COUNTY OF VENTURA, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 8, PAGE 73 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID LOT 11, DISTANT THEREON SOUTH 19° 38' 30" WEST 75 FEET FROM THE MOST NORTHERLY CORNER OF SAID LOT 11, SAID POINT ALSO BEING THE MOST WESTERLY CORNER OF THE LAND DESCRIBED IN THE DEED TO ROBERT O.

SWARTOUT, ET UX., RECORDED MAY 1, 1960 AS INSTRUMENT NO. 22044 IN BOOK 1869, PAGE 433 OF OFFICIAL RECORDS; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LAND, 1ST: SOUTH 65° 13' 41" EAST 158.80 FEET TO THE MOST SOUTHERLY CORNER OF SAID LAND;

THENCE ALONG THE SOUTHEASTERLY LINE OF SAID LAND TO AND ALONG THE SOUTHEASTERLY LINE OF THE DESCRIBED IN THE DEED TO W. F. ERBES, RECORDED SEPTEMBER 1,1957 AS INSTRUMENT NO. 38363 IN BOOK 1546, PAGE 534 OF OFFICIAL RECORDS. 2ND: NORTH 19° 38' 30" EAST 65 FEET TO THE NORTHEASTERLY LINE OF SAID LOT 11; THENCE

ALONG SAID NORTHEASTERLY LINE,
3RD: SOUTH 61° 39’ 30" EAST 147.66 FEET TO THE MOST NORTHERLY CORNER OF THE LANDS DESCRIBED IN THE DEED TO THE COUNTY OF VENTURA, RECORDED MAY 6, 1958 AS INSTRUMENT NO. 9611 IN BOOK 1596, PAGE 112 OF OFFICIAL RECORDS; THENCE ALONG THE BOUNDARY OF

SAID LAND THE FOLLOWING THREE COURSES AND THE PROLONGATION THEREOF, 4TH: SOUTH 38° 20’ 30" WEST 110 FEET TO AN ANGLE POINT; THENCE, 5TH: SOUTH 62° 42’ 30" WEST 98.28 FEET; THENCE,
6TH: NORTH 67° 10' 18" WEST 208.51 FEET, MORE OR LESS, TO A POINT ON THE CURVED NORTHWESTERLY LINE OF SAID LOT 11, DISTANT THEREON 120 FEET NORTHEASTERLY FROM THE MOST WESTERLY CORNER OF SAID LOT 11; THENCE,
7TH: NORTHEASTERLY ALONG SAID NORTHWESTERLY LINE TO THE POINT OF BEGINNING. EXCEPT

ANY PORTION THEREOF LYING WITHIN THE BOUNDARY OF THE LAND DESCRIBED IN THE DEED TO LOUISE D. JENIFER, RECORDED OCTOBER 16, 1959 AS INSTRUMENT NO. 39508 IN BOOK 1788, PAGE 71 OF OFFICIAL RECORDS.

Item No.16B

PARCEL 3:

THAT PORTION OF LOT 11 IN BLOCK 26 OF THOUSAND OAKS TRACT, IN THE CITY OF THOUSAND OAKS, AS PER MAP RECORDED IN BOOK 8, PAGES 73 TO 78 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST NORTHERLY CORNER OF SAID LOT 11, THENCE SOUTH 61° 39’ 30" EAST ALONG THE NORTHEASTERLY LINE OF SAID LOT 160.00 FEET; THENCE SOUTH 19° 38' 30" WEST AND PARALLEL WITH THE NORTHWESTERLY LINE OF SAID LOT 65.00 FEET; THENCE NORTH 65° 13’ 41" WEST 158.80 FEET TO A POINT ON THE NORTHWESTERLY LINE OF SAID LOT, DISTANT 75.00 FEET FROM THE POINT OF BEGINNING; THENCE NORTH 19" 38' 30" EAST 75.00 FEET TO THE POINT OF BEGINNING.

APN: 670-0250-290, 670-0-250-210
Item No.16B

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Exhibit B – Site Map
EXHIBIT “B”

SITE MAP
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hind this page]
Item No.16B

Item No.16B

TO:Andrew P. Powers, City Manager
FROM:Kelvin Parker, Community Development Director
DATE:February 28, 2023
SUBJECT: Inclusionary Housing Program and Nonresidential Development Linkage Fee Update Policy
RECOMMENDATION:

1. Discuss the Inclusionary Housing Financial Evaluation and Nonresidential Development Linkage Fee Nexus Study results.

2. Provide direction on completing updates to the Inclusionary Housing Program and Nonresidential Development Linkage Fee ordinances.

3. Find that this action is not a Project as defined under the California Environmental Quality Act.

FINANCIAL IMPACT:

No Additional Funding Requested. Staff time required to prepare the report and $206,000 is included in the Adopted FY 2022-23 General Fund Budget for the Inclusionary Housing Program and Nonresidential Development Linkage Fee Update consultant contract.

BACKGROUND:

Inclusionary housing describes a local government requirement that a specified percentage of new housing units be reserved for, and affordable to, lower- and moderate-income households. The goal of inclusionary housing programs is to increase the supply of affordable housing commensurate with new market-rate development in a jurisdiction. This can result in improved regional jobs-housing balance and foster greater economic diversity within a community.

Nonresidential development linkage fees provide a mechanism for producing housing affordable to extremely low-, very low-, low-, and moderate-income households by requiring applicable nonresidential development to pay an impact Item No.16C

Inclusionary Hsg. Prog. & Nonresidential Development Linkage Fee Update Policy February 28, 2023

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9 fee to be used for the production, preservation, or rehabilitation of affordable housing units.

On November 1, 2022, City Council discussed and provided initial direction for an update to the Inclusionary Housing Program Update Parameters and Policy (Attachment #1). After City Council received a presentation on the general framework and policy considerations, Keyser Marston and Associates (KMA) facilitated City Council’s discussion and initial direction for an Inclusionary Housing Financial Evaluation (Attachment #2). During the meeting City Council considered the following:

1. What will be the minimum residential or mixed-use project sizes that will trigger the Inclusionary Housing requirements?

2. What target income and affordability standards are to be applied?

3. What are the allowable options for fulfilling the Inclusionary Housing requirements with at least one alternative other than on-site production of affordable housing?
a. Providing the Inclusionary Housing units within the market rate project that triggered the requirement.
b. Priority for production of Inclusionary Housing units within multi-family developments.
c. Production of the Inclusionary Housing units in an off-site location. d. A payment to the City in-lieu of producing required Inclusionary Housing units.
e. Dedication of land to the City for the subsequent development of the required Inclusionary Housing units.
f. The acquisition and rehabilitation of existing apartment units to be Inclusionary Housing units.

City Council provided comments generally summarized as follows:

Apartment Projects
•Require on-site production of lower income categories in residential developments;
•Explore a minimum inclusionary requirement of 10 percent or greater of total units in a project;
•Explore applicability of inclusionary housing to projects of five units or more; •Do not allow apartment developments the option for offsite production of affordable units;
•Explore allowing in-lieu fee as an option on a sliding scale; •Explore acquisition/rehabilitation of existing units; and •Do not allow land dedication as an option.

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9 Ownership Housing Projects
•Explore preference for on-site production;
•Explore a minimum inclusionary requirement of 10 percent of total units in a project;
•Test the financial feasibility for both low- and moderate-income categories; •Explore option for ownership housing project to include on-site parcel with apartment development;
•Explore option for off-site ownership or apartment development; •Explore in-lieu fee payment on sliding scale based on project size and ownership type; and
•Do not allow land dedication as an option.

On January 25, 2022, City Council adopted the 2021-2029 Housing Element, which includes implementation actions for facilitating the development of affordable housing. Program 6 of the Housing Element contains an implementation objective that requires an update to the Inclusionary Housing Program and Nonresidential Development Linkage Fees ordinances.

Nonresidential Development Linkage Fees History
In 2008, the City adopted an ordinance creating affordable Housing Programs including the Housing Trust Fund, Inclusionary Housing Program, Nonresidential Linkage Fee Program, and Density Bonus Program. The Nonresidential Development Linkage Fee Program established fees applied to nonresidential development in order to mitigate the demand for affordable housing in the City caused by new employment resulting from development (TOMC Section 9-10.401 et seq). This ordinance required payment of fees for developments of 7,500 square feet or more of new gross floor area. The fees were initially set at the following rates:
•Commercial/ Retail - $ 4.50/square foot building area (s. f.) •Office - $ 2.50/ s. f.
•Hotel/ Lodging - $ 2.50/ s. f.
•Industrial - $ 0.00/ s. f.
•Research & Development Flex Space - $ 0.00/ s. f.

In 2009, City Council set the in-lieu and linkage fees at zero based on the market conditions at the time. Therefore, new residential projects were not required to provide a specified number of affordable units and nonresidential developments were not required to pay a linkage fee.

Before local agencies can adopt an inclusionary housing in-lieu fee, a market analysis and feasibility study are necessary to inform the decision-making body what the market can feasibly accommodate and the appropriate amount to incentivize construction of affordable housing. As a development impact fee, a Item No.16C

Inclusionary Hsg. Prog. & Nonresidential Development Linkage Fee Update Policy February 28, 2023

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9 Linkage Fee may legally only be established when there is a demonstrated nexus (reasonable relationship) between the fee and the development’s impacts. In this case, the employment growth of a commercial development will have an impact/reasonable relationship with the unmet housing needs in a community.

DISCUSSION/ANALYSIS:

KMA completed a financial evaluation (Attachment #2) to identify the initial parameters for the update to the Inclusionary Housing Program. The report begins by explaining key legislation and the legal standards for Program considerations.

Then the report presents the various parameters to be considered and explains the methodology to determine feasible levels of those parameters. KMA then conducted analyses on both ownership and rental developments to create prototypes representative of development types in Thousand Oaks to recommend parameter levels.

KMA performed initial community outreach with stakeholders from the residential, business, and development community on Inclusionary Housing and Nonresidential Development Linkage Fees. While there was general support for the application of Inclusionary Housing requirements applied to new residential development, the feedback on the possibility of reintroducing a linkage fee for nonresidential development was generally not supported by the business community.

Inclusionary Housing Analysis and Recommendations
Based on the financial evaluation, KMA considered City Council’s initial parameter direction when performing the evaluation of those parameters in prototype scenarios. The recommendations for income and affordability standards are the following:

Applicability
•Apartment and Ownership projects consisting of 10 or more units Apartment Housing Development
•Affordable Housing Percentage Requirement
oRequire 10 percent of a project to be dedicated for Low-Income Households
•Fulfillment Options
oAllow an In-lieu fee payment for projects with 20 or fewer units oAllow the discretionary imposition of an In-lieu fee based on extreme hardship for apartments of more than 20 units
oNo off-site production
•Require affordability covenants for 55 years or more, as long as property Item No.16C

Inclusionary Hsg. Prog. & Nonresidential Development Linkage Fee Update Policy February 28, 2023

5 1
9 was residential use
Ownership Housing Development
•Affordable Housing Percentage Requirement
oRequire townhomes (Ownership) to provide 10 percent of the project to be affordable at a Moderate Income level
oRequire Detached Single Family Home Projects to provide 5 percent of the project to be affordable at a Moderate Income level •Fulfillment Options
oAllow an In-lieu fee by right for ownership development of any size
oAllow an option for ownership projects to meet their affordability requirement by providing affordable apartment housing
production in an off-site project
oAllow an option for ownership projects to provide on-site parcels that require concurrent construction of affordable apartment units •Require an affordability covenant for a 45-year cumulative period Nonresidential Development Linkage Fee Analysis and Recommendation KMA prepared two analyses for purposes of analyzing linkages between nonresidential development and the demand for additional affordable housing. To provide a recommendation regarding the Nonresidential Linkage Fee, the Nexus Study (Attachment # 3) identifies the maximum legally supportable amount for a linkage fee, and the Financial Feasibility Report provides a maximum financially supportable fee amount (Attachment # 4). KMA prepared pro forma analyses for five nonresidential development prototypes that might be developed in Thousand Oaks: retail/commercial; office; industrial; research and development; and hotel/lodging. These prototypes test the affordability gaps associated with providing housing at various income levels. The “affordability gap" measures the differences between what affordable households can afford to pay for housing and the cost of building rental and ownership housing.

Cities with linkage fees often establish them at an amount below the maximum justifiable level as a matter of policy to remain competitive in their marketplace and reduce the risk of legal challenges.

The Nexus Study identifies the reasonable relationship between the impact of a project and proposed fee which provides a legal basis for establishing a linkage fee for new nonresidential development. The Study identifies the legally supportable maximum fees range from $60 per square foot for industrial to $162 per square foot for office which would represent the full cost for creating the needed affordable housing. This fee analysis does not consider the impact on the financial feasibility of new development. However, in order to establish balance between Item No.16C

Inclusionary Hsg. Prog. & Nonresidential Development Linkage Fee Update Policy February 28, 2023

5 1
9 the policy objectives to produce affordable housing and the economic impact experienced by developers, a financial feasibility analysis assesses the impact of the proposed impact fee.

As part of the conclusions of the financial feasibility analyses, the industrial prototype was the only nonresidential development scenario that resulted in a financially feasible estimated return on investment with a linkage fee of $1 - $5 per square foot (Attachment #4). However, it is important to note that based on threshold return requirements established by KMA, the retail/commercial, office, research and development, and hotel prototypes did not demonstrate an ability to realize a return on investment even without the application of a linkage fee (Attachment #4 pages 2-4 Financial Feasibility Nonresidential Development Linkage Fees section).

KMA examined fees of neighboring jurisdictions and cities in California with similar business compositions in terms of fee amounts and the fees’ relative cost burden on new nonresidential development. When considering the real estate market and policy objectives towards producing affordable housing, KMA studied a possible fee range of $0 to $5 per square foot for each of the five nonresidential building types. However, staff recommends City Council apply the fee only to Industrial uses at this time due to the infeasible rate of return for the other use types.

Recommendation Summary
Staff recommends that City Council move forward with all recommendations in the analysis and recommendations sections above to update the Inclusionary Housing Program and Nonresidential Development Linkage Fee based on the following general applicability:
•Apartment and ownership projects consisting of 10 or more units •Industrial projects
Next Steps
Based on City Council direction for implementation of the Inclusionary Housing Program and Nonresidential Development Linkage Fee, staff will return with a proposed ordinance for City Council’s consideration at a future meeting.

COUNCIL GOAL COMPLIANCE:

Meets the following City Council goals:

A. Create a more equitable, accessible, safe, welcoming, and inclusive government and community regardless of race, color, ethnicity, religion, sex, physical or mental ability, sexual orientation, gender identity and expression, age, Item No.16C

Inclusionary Hsg. Prog. & Nonresidential Development Linkage Fee Update Policy February 28, 2023

5 1
9 language, education, and/or socio-economic status.

B. Provide municipal government leadership which is open and responsive to residents, and is characterized by ethical behavior, stability, promoting public trust, transparency, confidence in the future, and cooperative interaction among civic leaders, residents, business representatives, and staff, while recognizing and respecting legitimate differences of opinion on critical issues facing the City.

J. Implement high quality revitalization projects within Thousand Oaks Boulevard and Newbury Road Areas; Develop a pedestrian-oriented, viable, and self- sustaining "Downtown;” and, continue to support production of long-term affordable housing.

PREPARED BY: Iain Holt, Senior Planner
Attachments:

Attachment #1 – November 1, 2022, City Council Staff Report and Presentation
Attachment #2 – Inclusionary Housing Financial Evaluation Attachment #3 – Nonresidential Development Linkage Fee Nexus Study Attachment #4 – Financial Feasibility Analysis of Nonresidential Development Linkage Fees
CDD: 430-30/IAH/ H:\COMMON\Planning\Advanced Planning\Inclusionary Housing Plan and Linkage Fee Update\City Council Staff Report
Item No.16C

TO: Andrew P. Powers, City Manager
FROM: Kelvin Parker, Community Development Director
DATE: November 1, 2022
SUBJECT: Inclusionary Housing Plan Update Parameters and Policy Direction
RECOMMENDATION:

Discuss and provide direction on inclusionary housing parameters for further analysis in the Inclusionary Housing Plan Update Financial Evaluation and find that this action is not a project as defined under the California Environmental Quality Act.

FINANCIAL IMPACT:

No Additional Funding Requested. Minimal staff time required to prepare the report and $206,000 is included in the Adopted FY 2022-23 General Fund Budget for the inclusionary housing program and non-residential development linkage fee update consultant contract.

BACKGROUND:

On June 9, 2020, City Council directed staff and the Planning Commission to study and make recommendations to City Council on the inclusionary housing program and non-residential linkage fee ordinance updates.

On January 25, 2022, City Council adopted the 2021-2029 Housing Element, which includes many implementation actions, to address housing issues. To facilitate the development of affordable housing, Program 6 of the Housing Element contains an implementation objective that requires an update to the Inclusionary Housing Ordinance.

On April 26, 2022, City Council approved a Professional Services Agreement with Keyser Marston Associates, Inc., (KMA) for preparation of inclusionary housing program feasibility and non-residential linkage nexus analysis and fee studies in an amount of $206,000 with a term ending June 30, 2023. The contract not-to- exceed total includes $171,000 for base contract services and $35,000 for extra services.

ATTACHMENT #1
Item No.16C

Inclusionary Housing Plan Update Parameters and Policy Direction November 1, 2022

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1 Inclusionary Housing Ordinance History
Inclusionary housing describes a local government requirement that a specified percentage of new housing units be reserved for, and affordable to, lower and moderate-income households. The goal of inclusionary housing programs is to increase the supply of affordable housing commensurate with new market-rate development in a jurisdiction. This can result in improved regional jobs-housing balances and foster greater economic benefits and diversity within a community.

In 2008, the City adopted an inclusionary housing ordinance that requires a specified percentage of affordable units or payment of an in-lieu fee for certain residential development projects (Thousand Oaks Municipal Code Section 9-

10.301 et seq). This ordinance required that 10 percent of a for-sale, residential development of five or fewer dwelling units be available to moderate-income households or payment of specific fees.

In 2009, City Council set the in-lieu fee at zero, and therefore new projects are not required to provide a specified number of affordable units through this mechanism.

Before local agencies can adopt an in-lieu fee, a market analysis and feasibility study are necessary to inform the decision-making body what the market can feasibly accommodate and the appropriate amount to incentivize construction of affordable housing.

DISCUSSION/ANALYSIS:

The discussion before City Council is a step to understanding the parameters considered when updating the inclusionary housing plan and allows an opportunity for City Council to provide general policy direction for the preparation of the Inclusionary Housing Financial Evaluation analysis and recommendations. In preparation, staff solicits City Council to consider the legal landscape when providing direction to the consultant.

San Jose Case
The 2015 California Supreme Court ruling in the California Building Industry Association v. City of San Jose case found that Inclusionary Housing Programs are a planning tool and in-lieu optional fees are not subject to Nexus study under the Mitigation Fee Act. However, these programs must comply with the following criteria:

1. The requirements cannot be a physical taking or “Confiscatory”; and

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

Item No.16C

Inclusionary Housing Plan Update Parameters and Policy Direction November 1, 2022

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1 The court did not provide criteria under which jurisdictions can determine whether proposed price controls are confiscatory, and/or they deprive a property owner of a fair and reasonable return. As such, jurisdictions need to develop their own methodology that includes interests of property owners, developers, and the jurisdiction’s housing needs. Any restrictions must be reasonably related to the broad general welfare purposes for which the ordinance is being enacted to achieve.

California Government Code Section 65583 (a)
This Housing Element law requires the City to analyze potential and actual constraints being placed on the development of housing. If the City chooses to impose a greater than 15 percent affordability requirement and/or a deeper affordability standard than 80 percent of Area Median Income (Low Income) on apartment development, the State Department of Housing and Community Development (HCD) can require the City to demonstrate that the Inclusionary Housing requirement does not create a constraint to housing development.

In a technical guidance memorandum dated October 21, 2019, HCD reaffirmed its authority to review Inclusionary Housing ordinances as part of its review of a jurisdiction’s Housing Element. To that end, the requirements set forth within an Inclusionary Housing Program would only be anticipated to meet a small portion of the unmet need for affordable housing in Thousand Oaks. If the City were to adopt a program viewed as a constraint to housing, that could potentially extend and complicate the approval process for the City’s Sixth Cycle Housing Element.

Policy Issues for Consideration
As part of the presentation, City Council is requested to provide preferences related to the following:

1. What will be the minimum residential or mixed-use project size that will trigger the Inclusionary Housing requirements?
a. Applicability threshold possibilities:
i. Multi-Family Development: 5 units or more
ii. Townhomes and Condominiums: 10 units or more
iii. Single-Family Development: 20 units or more

2. What target income and affordability standards should be applied? a. Standard possibilities for discussion:
i. Low-income for rental development. Note that Very Low-income may be viewed as a constraint by HCD if not financially feasible. Density Bonus projects present the best opportunity for Very Low-income units. ii. Moderate-income for ownership.

Item No.16C

Inclusionary Housing Plan Update Parameters and Policy Direction November 1, 2022

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1 3. What options should be applied for the Inclusionary Housing requirements? In considering these options, there must be at least one alternative other than on-site production.
a. Providing the Inclusionary Units within the market rate project. b. Priority for production of affordable units within multi-family developments. c. Production of the Inclusionary Units in an off-site location. i. This option would require secure entitlements for the off-site affordable housing, which presents construction timing and financing issues. High land values and limited site availability make this difficult to achieve. ii. Challenge in providing units comparable to market rate project. iii. Affordable units should be in proximity to market rate project/higher resource areas and not be over concentrated in a neighborhood. d. A payment to the City in lieu of producing required Inclusionary Units.

Direction on applicability if a fee were to be adopted:
i. Multi-Family Development: Projects less than 10 units could have an in- lieu fee option due to smaller number of market rate units to cover affordability gap.
ii. Require projects of 10 units or more to construct inclusionary units.

Possibly allow an in-lieu fee that would be demonstrated through extreme economic hardship, which would be based on a definition and findings within future ordinance.
iii. Townhouse and Single-Family Development: Allows fee to be applied to very low- and low-income units.
e. Dedication of land to the City for the subsequent development of the required Inclusionary Units.
f. The acquisition and rehabilitation of existing apartment units.

KMA will present additional factors for City Council consideration when providing the direction on the basic parameters for financial feasibility evaluation. KMA will facilitate discussion of the parameters to be set, such as percentage affordable, level of affordability, in lieu fee amounts, etc., and describe the various ranges and implications for those parameters. As reference, a survey of other municipalities that have inclusionary ordinances is included (Attachment #1) to demonstrate the different parameters and ranges currently being implemented throughout the state, and this information will be discussed during the presentation. The goal of the discussion is for City Council to provide the preferred parameters for KMA to conduct a financial evaluation to test the feasibility of those levels.

Item No.16C

Inclusionary Housing Plan Update Parameters and Policy Direction November 1, 2022

4 3
1 COUNCIL GOAL COMPLIANCE:

Meets the following City Council goals:

A. Create a more equitable, accessible, safe, welcoming, and inclusive government and community regardless of race, color, ethnicity, religion, sex, physical or mental ability, sexual orientation, gender identity and expression, age, language, education, and/or socio-economic status.

B. Provide municipal government leadership which is open and responsive to residents, and is characterized by ethical behavior, stability, promoting public trust, transparency, confidence in the future, and cooperative interaction among civic leaders, residents, business representatives, and staff, while recognizing and respecting legitimate differences of opinion on critical issues facing the City.

J. Implement high quality revitalization projects within Thousand Oaks Boulevard and Newbury Road Areas; Develop a pedestrian-oriented, viable, and self- sustaining "Downtown;” and, continue to support production of long-term affordable housing.

PREPARED BY: Iain Holt, Interim Planning Division Manager Attachments:

Attachment #1 – Inclusionary Housing Program Surveys
cdd:430-30/IAH/ H:\COMMON\Planning\Advanced Planning\Inclusionary Housing Plan and Linkage Fee Update Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
I. Inclusionary Requirements: Both Rental and Ownership Projects Albany Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 15% Yes 5 Perpetual 5 Perpetual Agoura Hills
Create on-site units; pay an in-lieu fee for the required Low and/or Moderate Income Units. In-lieu fee cannot be paid to fulfill the very low income requirement.
15% N/A 10 7% @ VL + 4% @
Low + 4% @ mod 55 10 7% @ VL + 4% @
Low + 4% @ mod 45
Alhambra
Create on-site units; create off-site units; pay in-lieu fee; donate land
15% No 7 9% @ 120% + 6%
@ 80% 7 9% at 120% + 6%
at 80%
Avalon Create on-site units; create off-site units; pay in-lieu fee 20% No 4 Decided per project 55 4 Decided per
project 55
Brea Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land
10% No 20 Not defined 55 20 120% 45
Campbell Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land
15% No 10 6% @ VL + 9% @
Low 55 10 120% 45
Capitola Create on-site units; pay in-lieu fee 15% Yes 7 120% Life of Bldg Carlsbad Create units; pay in-lieu fee. City Council may approve additional alternative fulfillment options.
15% No 1 Low 55 1 Low 30
Chula Vista
Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land. Excludes area west of I-805 identified as "Area of Low/Moderate Income Concentration".
10% No 50 5% @ Low + 5% @
Mod Life of Bldg 50 5% @ Low + 5% @
Mod Life of Bldg
Colma Create on-site units; pay in-lieu fee 20% No 5 5% @ VL + 5% @ Low + 10% @ Mod 55 5 5% @ VL + 5% @
Low + 10% @ Mod 45
Concord Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee
10% Yes 5 55 5 45
Contra Costa County
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
15% No 5 3% @ VL + 12% @
Lower 5 3
Coronado Create units; pay in-lieu fee 20% No 2 Low 2 Mod Cupertino 1-7 units pays in-lieu fee. Create on-site units; create off-site units; pay impact/linkage fee; donate land 15% No 7 50% / 80% 99 7 50% /120% 99 Davis Create on-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 10% - 25% No 5-19 , 20+
5-19: 15% @ 80%
or 10% @ 50%.
20+: 25% @ 80%
or 10% @ 50%
Perpetual 5 120% Perpetual
Rental Development Ownership Development
Prepared by: Keyser Marston Associates, Inc.

File name: 10 22 22 Inclusionary Survey; Incl Survey Page 2 of 13 ATTACHMENT #1
(To the 11/1/2022 CC Report)
Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
Downey Create on-site units; create off-site units; pay in-lieu fee in the case of extreme hardship for apartments 11%/10% No 10 Mod >55 or as long as resid 10 Mod 45
Dublin Create on-site units; create off-site units; pay in-lieu fee; donate land 12.5% No 20
50% @ 120% +
20% @ 80% + 30%
@ 50%
55 20 5% @ 80% + 7.5%
@ 120% 55
Emeryville Create on-site units; pay impact/linkage fee 12%/20% No 4% @ VL + 8% @ Low 55 10 55
Encinitas Create on-site units; create off-site units; create ADU's; preserve at-risk units; pay in-lieu fee; donate land 10%/15% No 7 10% @ VL or 15% @ Low Perpetual 7 10% VL or 15% @
Low Perpetual
Fremont
Has a production option, but the in-lieu fee option is more cost effective
15% No 2 10% @ Low 2 5% @ Mod + 10%
@ Low
Fort Bragg Create on-site units 10% to 20% 5 80% / 120% 5 100% /120% 15 Goleta
Create on-site units; create off-site units; donate land, pay in- lieu fee; acquisition/rehabilitation. Income/Affordability trade off of extremley low and very low income units to low and moderate income units in demonstrated extreme
hardship.
25% -
reduced to
20% with
public
benefit
No 2

2.5% @ ELI + 2.5%
@ VL+ 5% @ Low
+ 5% @ Mod + 5%
at Above Mod
In general
45 to 55
years, but
not less
than 30
years
2 2.5% @ ELI + 2.5%
@ VL+ 5% @ Low
+ 5% @ Mod + 5%
at Above Mod
In general
45 to 55
years, but
not less
than 30
years
Hayward Create on-site units; create off-site units; pay in-lieu fee; pay impact/linkage fee; donate land
6% / 7.5% -
10% No 2 3% @ 50% + 3% @
60% 55 2 110% 45
Huntington Beach Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee
10% No 3 80% 55 3 120% 45
Irvine
Projects with fewer than 50 units can create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land. Projects with 50+ units must produce the affordable units on site.
15% No 50 50%, 80% & 120%
Defined credits 30 50 50%, 80% & 120%
Defined credits 30
La Habra Create on-site units; create off-site units; pay in-lieu fee; acquisition/rehabilitation.
15% No 10 9% @ Mod + 6%
@ VL & Low 55 10 110% 45
Long Beach Create on-site units; pay in-lieu fee; donate land 11%/10% No 10 50% >55 or as long as resid 10 110% >55 or as
long as resid
Prepared by: Keyser Marston Associates, Inc.

File name: 10 22 22 Inclusionary Survey; Incl Survey Page 3 of 13 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
Los Altos Create on-site units; create off-site units. Program requirements are only imposed in designated areas.

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

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

7.5% @ Low 30
Menlo Park Create on-site units; create off-site units; pay in-lieu fee 10% Yes 5 80% /120% 5 80% /120% Mill Valley Create on-site units 25% Yes 4 120% Perpetual 4 120% Perpetual Nevada County Create on-site units; create off-site units Program requirements are only applied in designated areas. No 20 30 20 30 Oceanside
Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land; purchase credits from another project.
10% No 3 Low (80%) 55 3 Mod (120%) 55
Oxnard Create on-site units; create off-site units; pay in-lieu fee in limited circumstances 10% No 10 5% @ VL + 5%
Low 55 10 Low 20
Pacifica Create on-site units; create off-site units; pay in-lieu fee; donate land 15% No 8
6% @ VL + 4.5% @
Low + 4.5% @
Mod
55 8 45
Palo Alto Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee 20% Yes 5
5% @ 35% + 10%
@ 50% + 5% @
60%
59 5 10% @ 80% + 10%
@ 120% 59
Pasadena Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 20% No 1 5% @ 50% + 5% @
80% + 10% @
120%
Perpetual 1 110% 45
Petaluma Create on-site units; pay in-lieu fee; donate land 15% No 5 7.5% @ VL; 7.5% @ Low 45 5 7.5% @ Low +

7.5% @ Mod 55
Pleasanton
Create on-site units; create off-site units; pay in-lieu fee; donate land; credit transfers; other alternate methods of compliance
15% Yes 15 50% to 80% 15 50% to 120% Perpetual
Pomona Create on-site units; create off-site units; pay in-lieu fee; donate land
13% / 7%-
11% Yes 3 120% Perpetual 3 120% 45
Redondo Beach Create on-site units; create off-site units; pay in-lieu fee up to nine units. Fractional unit obligations are rounded down 10%-15% /
9%-15% Yes 2 Moderate >75 or as
long as resid 2 Moderate 55
Redwood City Create on-site units; create off-site units; preserve or rehab units; pay impact/linkage fee; donate land 20% / 15% No 20 10% @ Mod + 5% @ Low + 5% @ VL 30 5 Moderate 30
Sacramento County Has a production option, but the in-lieu fee option is more cost effective
10% No 1 80% 1 80%
Prepared by: Keyser Marston Associates, Inc.

File name: 10 22 22 Inclusionary Survey; Incl Survey Page 4 of 13 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
San Bruno Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land. Excludes area 15% No 10 6% VL + 4.5% Low + 4.5% Mod 55 10 6% Low + 9% Mod 45
San Buenaventura
(Proposed Update)
Create on-site units; create off-site units; pay in-lieu fee; preserve or rehab existing housing; donate land 15% / 10% No 7 Low 55 7 Mod 45 San Diego
Create on-site units; create off-site units; rehabilitate existing units, SRO hotel rooms, or conversion of guest rooms; pay in- lieu fee; donate land. The amended requirements were
approved in 2020 and are being phased in over five years. 10% to 15% No 10 10% @ 60% 55 10 10% @ 100% or
15% 120% 15
San Francisco
Create on-site units; create off-site units; pay in-lieu fee. Full schedule goes into effect in 2023 for rental and 2025 for ownership.
15% to 20%
/ 15% to
26%
Yes 10 55% to 110% 10 80% to 130%
San Jose
Create on-site units; create off-site units; preserve or rehab units; in-lieu fee; donate land; credit transfers; reduction for deeper affordability
15% Yes 10 5% @50% + 5% @
60% + 5% @ 100% Perpetual 10 120% Perpetual
San Juan Capistrano Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land
10% No 2 55 2 55
SLO County
Multiple subareas and requirements. Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land
15% Yes
1, 2 or 11
depending
on subarea
Coastal: 15% at
Low or 15% at
Mod
55 1, 2 or 11
depending
on subarea
Coastal A: 5% VL +
5% Low + 5% Mod
+ 5% 120-150%.

Coastal: 15% Low.

Inland: 2% VL +
2% Low + 2% Mod
+ 2% 120-150%.

Coastal: 45
Inland:

Perpetuity
San Mateo County Create on-site units, pay in-lieu fee 20% Yes 5 10% @ ELI + 10% @ Low Life of Bldg 11 10% @ Low + 10%
@ Mod 45
San Rafael Create on-site units; pay in-lieu fee 10% No 2 2 120% Santa Ana
Only applies to changes in land use and zoning designations.

Create on-site units; off-site units; substantially rehab existing units; pay in-lieu fee
Rental: 5% -
15% & Own:
5%
No 5
15% @ Low or
10% @ VL or 5%
@ ELI or 5% Low +
3% VL +2% ELI
55 5 120% 55
Santa Barbara (City) Create on-site units; create off-site units; pay in-lieu fee for 1 to 9 & fractional units; donate land 10% / 15% No 5 Mod 90 1 120% to 200% 90 / restarts
on each
resale
Santa Cruz Create on-site units; create off-site units; pay in-lieu fee; donate land
15% Yes 2 80% Perpetual 2 120% Perpetual
Prepared by: Keyser Marston Associates, Inc.

File name: 10 22 22 Inclusionary Survey; Incl Survey Page 5 of 13 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
Santa Monica Create on-site units; create off-site units; pay in-lieu fee; donate land 5% to 30% Yes 2 50%, 80% & 120%
Defined credits 55 2 50%, 80% & 120%
Defined credits 55
Santa Paula Create on-site units; create off-site units; pay in-lieu fee 10% to 17% Yes 10 15% Low or 10% VL 55 10 15% Low or 10%
VL 45
Santa Rosa Has a production option, but the in-lieu fee option is more cost effective
5% to 8% /
10% No 1 5% @ 50% or 8%
@ 60% 2 110%
Sonoma Create on-site units 20% Yes 5 120% 55 5 120% 55 Sonoma County Create on-site units; create off-site units; pay in-lieu fee; donate land
10% or 15%
/ 20% Yes 1

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

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

10.5% @ Low 7

1.5% @ Low +

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

File name: 10 22 22 Inclusionary Survey; Incl Survey Page 6 of 13 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
II. Inclusionary Requirements: Ownership Projects Only
Alameda Create on-site units; create off-site units; pay in-lieu fee 15% No 5 4% @ VL + 4% @ Low + 7% @ Mod 59
Carpinteria Create on-site units; pay in-lieu fee in limited circumstances 12% No 5 200% 30 Danville Create on-site units; pay in-lieu fee 10% Yes 7 110% 20 Folsom Create on-site units; create off-site units; pay in-lieu fee; donate land; acq/rehab; other proposals 10% No 10 3% @ VL + 7% @ Low
Lafayette Create on-site units; create off-site units 15% No 2 9% @ Mod + 6% @ VL 45
Monterey Create on-site units; donate land 20% No 6 Perpetual Mountain View Create on-site units; pay in-lieu fee 15% No 3 100% 55 Rohnert Park Create on-site units; create off-site units; pay in-lieu fee 15% No 50 55 San Clemente
Create on-site units; create off-site units; pay in-lieu fee; donate land; or a combination recommended by the
Community Development Director.
4% No 6 50%
San Leandro Create on-site units; pay in-lieu fee 15% Yes 2 9% @ Mod + 6% @ Low 55
San Mateo County Create on-site units; create off-site units; pay in-lieu fee; donate land 20% No 5 10% @ Low + 10%
@ Mod 55
5-19: 1 Mod. 20+:

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

File name: 10 22 22 Inclusionary Survey; Incl Survey Page 7 of 13 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
III. Inclusionary for Ownership Projects & Impact Fee for Rental Projects Berkeley Create on-site units; pay in-lieu fee 20% No 5 10% @ 80% + 10% @ 50% Perpetual
San Carlos Create on-site units; create off-site units; pay impact/linkage fee 15% Yes 55 2 10% @ Mod + 5%
@ Low 45
Truckee
Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; pay impact/linkage fee; donate land. Requirements vary by zones, neighborhoods or districts.
15% No 7 Perpetual 7 Perpetual
IV. Mandatory Inclusionary for Ownership Projects & Voluntary Inclusionary for Rental Projects Pittsburg Create on-site units; pay in-lieu fee 15%/20% Yes 5 9% @ Mod + 6%
@ Low, or 20% @
Mod
Salinas Create on-site units; create off-site units; donate land 20% No 10 30 San Juan Bautista Create on-site units; pay impact/linkage fee 6% 6 80% San Luis Obispo Create on-site units; pay in-lieu fee; donate land 3% Yes 55 5 45 San Marcos Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land
15% No 55 120% 55
Solana Beach Create on-site units; create off-site units; preserve or rehab existing housing; pay impact/linkage fee
15% No 5 55 5 45
V. Rental Projects Only
Glendale Create on-site units; create off-site units; pay in-lieu fee; donate land
15% No 8 60% 55
Prepared by: Keyser Marston Associates, Inc.

File name: 10 22 22 Inclusionary Survey; Incl Survey Page 8 of 13 Item No.16C

APPENDIX B

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

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

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

Brea
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land
10% No 20 55 20 120% 10 Calculated per project. Based on the Affordability Gap
Carlsbad Create units; pay in-lieu fee 15% No 1 Low 1 Low Available up to 6 units. $8,515 for on SFH.
$15.00/SF for 2-6 unit projects.

Chula Vista
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land. Excludes
area west of I-805 identified as
"Area of Low/Moderate
Income Concentration".
10% No 50 5% @ Low +
5% @ Mod Life of Bldg 50 5% @ Low + 5% @
Mod Life of Bldg In-lieu fee is based on the median home price minus the affordable home price
Coronado Create units; pay in-lieu fee 20% No 2 Low 2 Mod In-lieu fee paid by right. $7,000 per market
rate unit
Downey Create on-site units; create off-
site units; pay in-lieu fee 11%/10% No 10 Mod >55 or as long as resid 10 Mod 45
Rental: $23.50/SF - only allowed under
extreme hardship. Ownership: $15.90/SF
payable based on City Council criteria
Encinitas
Create on-site units; create off-
site units; create ADU's;
preserve at-risk units; pay in-
lieu fee; donate land
10%/15% No 7 10% VL or
15% Low Perpetual 7 10% VL or 15%
Low Perpetual
In-lieu fee is calculated on a project-by-
project basis based on the affordability
gap.

Rental Development Ownership Development
Prepared by: Keyser Marston Associates, Inc.

File name: 10 22 22 Inclusionary Survey; VEN,SB,OC,LA,SD Page 9 of 13 Item No.16C

APPENDIX B

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

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
Goleta
Create on-site units; create off-
site units; donate land, pay in-
lieu fee;
acquisition/rehabilitation.

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

2.5% @ ELI +

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

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

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

Irvine
Projects with fewer than 50
units can create on-site units;
create off-site units; preserve
or rehab existing housing; pay
in-lieu fee; donate land.

Projects with 50+ units must
produce the affordable units
on site.
15% No 50
50%, 80% &
120%
Defined
credits
30 50 50%, 80% & 120%
Defined credits 30 Calculated per project. Based on an equivalent value calculation
La Habra
Create on-site units; create off-
site units; pay in-lieu fee;
acquisition/rehabilitation.
15% No 10
9% Mod + 6%
VL & Low 55 10 110% 45
Calculated per project. Based on the
estimated construction cost to produce the
unit.

Long Beach Create on-site units; pay in-
lieu fee; donate land 11%/10% No 10 50%
> of 55 yrs
or as long as
resid
10 120%
> of 55 yrs or
as long as
resid
Rental @ $38.00/SF; Ownership @
$29.10/SF
Prepared by: Keyser Marston Associates, Inc.

File name: 10 22 22 Inclusionary Survey; VEN,SB,OC,LA,SD Page 10 of 13 Item No.16C

APPENDIX B

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

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
Oceanside
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land; purchase
credits from another project.
10% No 3 Low 55 3 Mod 55 In-lieu fee paid by right. The fee is set at $8.82/SF.

Oxnard
Create on-site units; create off-
site units; pay in-lieu fee in
limited circumstances
10% No 10 5% @ VL +
5% Low 55 10 Low 20
Fee charged per total unit in the project. In
2022: SFH $36,000; MF Ownership $35,000;
Rental $28,000
Pasadena
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land
20% No 1
5% @50% +
5% @ 80% +
10% @ 120%
1 110% 45 Sliding scale by sub-area & project size.

Low at $34.19/SF & High at $73.52/SF
Pomona
Create on-site units; create off-
site units; pay in-lieu fee;
donate land
13% / 7%-
11% Yes 3 120% Perpetual 3 120% 45 Rental @ $9.30/SF; SFH @ $11.40/SF Condominiums @ $9.30/SF
Redondo Beach
Create on-site units; created
off-site units; pay in-lieu fee
up to nine units. Fractional
unit obligations are rounded
down
10%-15% /
9%-15% Yes 2 Moderate >75 or as
long as resid 2 Mod 55
Sliding scale for 2 to 9 unit projects: Rental:
extrapolated from $34.20/SF of total
project area. Ownership: extrapolated from
$43.20/SF of total project area.

San Buenaventura
(Proposed Update)
Create on-site units; create off-
site units; pay in-lieu fee;
preserve or rehab existing
housing; donate land
15% / 10% No 7 Low 55 7 Mod 45 Ownership @ $29.80 - $66.30/SF; Apartments @ $20.30 - $48.90/SF
San Diego
Create on-site units; create off-
site units; pay in-lieu fee;
donate land
10% to 15% No 10 50% or 80% 55 100% or 120% In 2024 the in-lieu fee will be set a $25/SF San Juan Capistrano
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land
10% No 2 55 2 55
Based on 90% of the Affordability Gap,
which is updated monthly based on
benchmark market prices
Prepared by: Keyser Marston Associates, Inc.

File name: 10 22 22 Inclusionary Survey; VEN,SB,OC,LA,SD Page 11 of 13 Item No.16C

APPENDIX B

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

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
Santa Ana
Only applies to changes in land
use and zoning designations.

Create on-site units; off-site
units; pay in-lieu fee
Rental: 5% -
15% & Own:
5%
No 5
15% @ Low
or 10% @ VL
or 5% @ ELI
or 5% Low +
3% VL +2%
ELI
55 5 120% 55
Fee charged per sf of habitable area: 5-9:
$6.00; 10-14: $9.00; 15-19: $12; 20+: $15.

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

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

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

File name: 10 22 22 Inclusionary Survey; VEN,SB,OC,LA,SD Page 12 of 13 Item No.16C

APPENDIX B

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

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
II. Inclusionary Requirements: Ownership Projects Only
Carpinteria
Create on-site units; pay in-
lieu fee in limited
circumstances
12% No 5 200% 30
In-lieu fee allowed if infeasibility can be
proved. The fee is based on the difference
between the median sales price of
condominiums and/or single family homes
and the affordable price at 121% of AMI
with 30% of income dedicated to housing
expenses
San Clemente
Create on-site units; create off-
site units; pay in-lieu fee;
donate land; or a combination
recommended by the
Community Development
Director.
4% No 6 50% Based on the Affordability Gap associated
with a prototype 1,100 SF unit.
5-19: 1 Mod. 20+:

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

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

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

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

File name: 10 22 22 Inclusionary Survey; VEN,SB,OC,LA,SD

cdd:430-30/IAH/ H:\COMMON\Planning\Advanced Planning\Inclusionary Housing Plan and Linkage Fee Update Item No.16C

11/1/2022
1 Inclusionary Housing Policy Issues
City of Thousand Oaks
PRESENTED BY: KEYSER MARSTON ASSOCIATES, INC.

NOVEMBER 1, 2022
Foundational Concepts
• Over 170 jurisdictions in California include an Inclusionary Housing
program as one component of their affordable
housing
strategy. However, Inclusionary Housing can only
be e
xpected to fulfill a small part of the unmet need.
• RHNA targets are a good starting point for establishing the income and af
fordability requirements to be imposed.

November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 2
1 2
Item No. 10B
Item No.16C

11/1/2022
2 Inclusionary
Housing
Program
Considerations
 The legal standards are:
◦ The requirements cannot be confiscatory; and
◦ The requirements cannot deprive an owner of a fair and r
easonable return on their investment.
 The strength of the real estate market needs to
be considered in formulating goals & objectives.
 The requirement should balance the interest of
property owners and developers against the
public benefit created by the production of
affordable housing units.

November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 3
Inclusionary Housing Program Survey
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 4
3 4
Item No.16C

11/1/2022
3 85 California
Jurisdictions
• Most Inclusionary Housing programs include a threshold project size:
• Common thresholds range from 3 to 10 units.
• The average and median threshold project sizes are 8 units and 5 units, respectively.
• Income and affordability requirements vary widely. Majority of the surveyed programs impose a 10% to 20% requirement:
• The thresholds tend to reflect the depth of the affordability standards being required.
• The requirements have a disproportionate impact on smaller projects, due to fewer market rate units available to spread the impacts. Sliding scale requirements are sometime used.
• The covenant periods are often set at 45 years for ownership projects and 55 years for apartment projects. Shorter and longer periods are applied in some jurisdictions.

November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 5
Southern
California
Jurisdictions
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 6
30 cities and counties are included in the survey.

Threshold project sizes of up to 50 units.  15 of the programs are set at 5 or fewer units.

Inclusionary Housing requirements range from 4% to 30%.  28 out of the 30 jurisdictions have requirements that range between 10% and 20%.

Income and affordability covenants fall
within the following ranges:

Ownership projects are focused on moderate
income.

Apartment projects are focused on very low
and low income.

Common covenant periods: Ownership – 45 to 55 years. Apartment –55 years, with an increasing number of jurisdictions applying apartment covenants that run for as long as the site is developed with a residential use.

The programs all include an in‐lieu fee option. The fee is generally tied to the affordability gap associated with the requirement. Programs measure several different ways – per market rate unit, per affordable unit, per square foot. 5 6
Item No.16C

11/1/2022
4 Program Parameters
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 7
Program
Standards for
the City Council
to Establish
• The minimum project size that will trigger the
requirements.
• Target income and affordability standards.
• Covenant periods.
• Alternative options to the requirement for on‐
site production of affordable housing units:
• In‐Lieu Fee Option
• Off‐Site Production Option
• Apartment units to fulfill ownership housing
re
quirements
• Land dedication
• Acquisition and substantial rehabilitation of existing apartmen
t units.

November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 8
7 8
Item No.16C

11/1/2022
5 Income and
Affordability
Considerations
• Inclusionary Housing programs tend to set the affordability level for ownership units at the moderate income level. This reflects the fact that higher income households are likely to have more discretionary income to devote to housing costs than lower income households.
• AB 1505, and subsequent HCD guidance, strongly recommend limiting the affordability level on apartment units to 80% of AMI:
• Stricter affordability requirements should not be applied to projects that fulfill the Inclusionary Housing requirements on site within the market rate project.
• Stricter standards can be applied to an off‐site production option.
• Developers who use the State density bonus will likely propose to fulfill the affordability requirements with very low income units.

November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 9
Fulfillment Alternatives
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 10
9 10
Item No.16C

11/1/2022
6 In‐Lieu Fee Payment Considerations
• Will in‐lieu fees be allowed by right, or only under defined circumstances? Considerations are:
• Program goals
• Ownership versus apartment projects
• Project size thresholds
• Community’s views on density
• City responsibility to implement the affordable housing development. • Establishing the in‐lieu fee payment amounts:
• Affordability gap methodology
• A discounted amount to encourage payment of the in‐lieu fee • A schedule that provides reduced in‐lieu fees for small projects.

November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 11
Other Fulfillment Options for Consideration
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 12
Parcelization to create
an affordable housing
site:
• Opportunity to
develop an
apartment project at
deeper affordability.
•P r o v i d e s   t h e
affordable units in
the same location as
the market rate
project.

Off‐site production of
affordable units:
• T enure decision –
apartment units as a
requirement?
• Unit comparability
• Proximity to the
market rate project?
Land dedication:
• Appropriate site for
fulfilling the
affordable housing
obligations.
• City responsibility for
developer selection.
• Proximity to the
market rate project?
Acquisition &
rehabilitation of
existing rental units:
• Difficulty in obtaining
RHNA credits for the
affordable units.
• Displacement of
existing tenants.
11 12
Item No.16C

11/1/2022
7 Evaluation Considerations
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 13
Financial
Evaluation
Parameters
•KMA is preparing pro forma analyses of prototype
residential developments.
•The prototype projects are being created using the
following resources:
◦ The draft Housing Element.
◦ Development plans that have been submitted to the
Planning Division.
◦ Pr
oject types identified in KMA’s market surveys.
•The prototypes do not represent actual projects.

They are a composite of many factors.

November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 14
13 14
Item No.16C

11/1/2022
8 §65915 Density Bonus
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 15
State density bonus can potentially mitigate the impacts of affordable housing requirements by allowing an increased number of units plus one to three incentives or concessions such as height and floor area ratio increases.

Projects that use the State density bonus cannot pay a fee in lieu of producing affordable housing units.

KMA is analyzing prototype density bonus apartment projects at and below the maximum bonus provided by §65915.

Issues for
Consideration
 Legal limits on Inclusionary Housing programs:
◦ The requirements cannot be confiscatory; and
◦ The requirements cannot deprive an owner of a fair and r
easonable return on their investment.
 Inclusionary Housing requirements provide the
City with flexibility to establish development
standards that the §65915 density bonus alone
does not provide.
 In‐Lieu Fees can be used for a wide array of
affordable housing activities including:
◦ Assistance to 100% affordable projects
◦ Contributions to homeless shelters
◦ Home buyer programs
◦ Rehabilitation loans
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 16
15 16
Item No.16C

11/1/2022
9 City Council Decisions
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 17
Selection of Parameters:

Ownership Housing Projects
Option
Permitted
(Yes / No)
(By Right / Discretionary)
Income Standard
(Very Low, Low or Mod)
Percentage
Requirement
Covenant
Period
(Years)
On‐Site Production
On‐Site: Parcel for Apartment Development
Off‐Site: Ownership or Apartment Development
Acquisition / Rehabilitation
Permitted
(By Right / Discretionary) Maximum Project Size
In‐Lieu Fee Payment
Permitted
(By Right / Discretionary)
Land Dedication
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 18
17 18
Item No.16C

11/1/2022
10 Selection of Parameters:

Apartment Projects
Option
Permitted
(Yes / No)
(By Right / Discretionary)
Income Standard
(Very Low, Low or Mod)
Percentage
Requirement
Covenant
Period
(Years)
On‐Site Production
Off‐Site Production
Acquisition / Rehabilitation
Permitted
(By Right / Discretionary) Maximum Project Size
In‐Lieu Fee Payment
Permitted
(By Right / Discretionary)
Land Dedication
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 19
Next Steps
November 1, 2022 KEYSER MARSTON ASSOCIATES, INC. 20
A financial evaluation will be undertaken to test the policy objectives established by the City Council, and to identify the supportable parameters.

The results of the financial evaluation will be presented to the City Council.

A policy memorandum will be prepared that includes the guidance provided by the City Council.

A draft Inclusionary Housing Ordinance will be prepared in conjunction with the City Attorney’s office for City Council consideration. 19 20
Item No.16C

INCLUSIONARY HOUSING:

FINANCIAL EVALUATION
Prepared for:

City of Thousand Oaks
Prepared by:

Keyser Marston Associates, Inc.

Ja
nuary 22, 2023
ATTACHMENT #2
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TABLE OF CONTENTS

I. EXECUTIVE SUMMARY ................................................................................................................. 1 A. BACKGROUND ................................................................................................................................... 1 B. PUBLIC POLICY OBJECTIVES .................................................................................................................. 1 C. INCLUSIONARY HOUSING PROGRAM DESIGN ............................................................................................ 1 D. FINANCIAL ANALYSES .......................................................................................................................... 2 E. FINDINGS ......................................................................................................................................... 3 F. NEXT STEPS .................................................................................................................................... 10 II. INCLUSIONARY HOUSING PROGRAM CHARACTERISTICS ........................................................... 11 A. SURVEY OF EXISTING INCLUSIONARY HOUSING PROGRAMS ........................................................................ 11 B. STATE DENSITY BONUS AND INCLUSIONARY HOUSING REQUIREMENTS ......................................................... 12 C. STRUCTURING ISSUES ........................................................................................................................ 13 III. METHODOLOGY ......................................................................................................................... 16 A. PARAMETERS .................................................................................................................................. 16 B. PROGRAM FOUNDATION .................................................................................................................... 17 C. FINANCIAL EVALUATION STRUCTURE .................................................................................................... 18 D. FINANCIAL ANALYSIS ORGANIZATION .................................................................................................... 18 IV. APARTMENT DEVELOPMENT ANALYSIS ................................................................................. 20 A. PRO FORMA ORGANIZATION AND ASSUMPTIONS .................................................................................... 20 B. ALTERNATIVES TESTING ..................................................................................................................... 22 C. SUPPORTABLE INCLUSIONARY HOUSING PRODUCTION REQUIREMENTS ........................................................ 27 V. OWNERSHIP HOUSING ANALYSES .............................................................................................. 30 A. PRO FORMA ORGANIZATION AND ASSUMPTIONS .................................................................................... 30 B. ALTERNATIVES TESTING ..................................................................................................................... 31 C. SUPPORTABLE INCLUSIONARY HOUSING PRODUCTION REQUIREMENTS ........................................................ 35 VI. IN-LIEU FEE ANALYSES............................................................................................................ 37 A. APARTMENT DEVELOPMENT ............................................................................................................... 37 B. OWNERSHIP HOUSING DEVELOPMENT .................................................................................................. 38 Item No.16C

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VII. FINDINGS / PRELIMINARY POLICY RECOMMENDATIONS ....................................................... 40 A. SUPPORTABLE INCLUSIONARY HOUSING PRODUCTION REQUIREMENTS ........................................................ 40 B. SUPPORTABLE IN-LIEU FEES ................................................................................................................ 41 C. PRELIMINARY POLICY RECOMMENDATIONS ............................................................................................ 42 D. NEXT STEPS .................................................................................................................................... 45

ATTACHMENTS

Attachment 1: Inclusionary Housing Program Surveys

Attachment 2: Affordable Housing Cost Calculation Methodologies Appendix A: Affordable Rent Calculation Methodology
Appendix B: Affordable Sales Price Calculation Methodology Attachment 3: Apartment Development
Appendix A: Rent Survey: 4 Star Properties
Appendix B: Affordable Rent Calculations
Appendix C: Pro Forma Analyses – Mall Property Prototypes Exhibit I Market Rate Alternative
Exhibit II Low Income Alternative
Exhibit III Very Low Income Alternative
Exhibit IV 50% Density Bonus Alternative
Appendix D: Pro Forma Analyses – Neighborhood Medium High Prototypes Exhibit I Market Rate Alternative
Exhibit II Low Income Alternative
Exhibit III Very Low Income Alternative
Exhibit IV 50% Density Bonus Alternative

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Attachment 3: Apartment Development (Continued)
Appendix E: Pro Forma Analyses – Mixed-Use Prototypes
Exhibit I Market Rate Alternative
Exhibit II Low Income Alternative
Exhibit III Very Low Income Alternative
Exhibit IV 27.5% Density Bonus Alternative
Attachment 4: Ownership Housing Development
Appendix A: Home Sales Surveys
Appendix B: Affordable Sales Price Calculations
Exhibit I Townhome Prototype
Exhibit II Detached Single Family Home Prototype
Appendix C: Pro Forma Analyses – Townhome Prototype
Exhibit I Market Rate Alternative
Exhibit II Moderate Income Alternative
Exhibit III Low Income Alternative
Appendix D: Pro Forma Analyses – Detached Single Family Home Prototype Exhibit I Market Rate Alternative
Exhibit II Moderate Income Alternative
Exhibit III Low Income Alternative

Attachment 5: In-Lieu Fee Analysis
Appendix A: Apartment Development
Appendix B: Ownership Housing Development

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I. EXECUTIVE SUMMARY

A. Background
Keyser Marston Associates, Inc. (KMA) was selected by the City of Thousand Oaks (City) to assist in reviewing the City’s existing Inclusionary Housing program and making recommendations for ways in which the program could potentially be modified. By way of background, the KMA Los Angeles office has assisted over 35 cities and counties with their Inclusionary Housing programs over the past 20 years. KMA’s analyses reflect a real world perspective based on the firm’s core experience in real estate development economics, real estate transactions, and developer negotiations services.

KMA was engaged to prepare an Inclusionary Housing: Financial Evaluation (Financial Evaluation) to identify supportable Inclusionary Housing program requirements. The primary function of the Financial Evaluation is to identify Inclusionary Housing requirements that balance the interests of property owners and developers against the City’s need for affordable housing. The KMA evaluation methodology has been continually evolving over the past 20 years. Each study is tailored to reflect the specific characteristics of the jurisdiction being evaluated.

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

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

1. Inclusionary Housing requirements cannot be confiscatory; and

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

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

The first step in designing an Inclusionary Housing program is to identify the factors that will be considered in defining the program’s goals. The characteristics of the unmet need for affordable housing in the community are commonly assessed for this purpose. This Financial Evaluation uses information presented in the City’s Housing Element (Housing Element), which was approved by the City Council in January 2022, to assist in this assessment. 1 D. Financial Analyses
Each unit in a market rate project that is required to fulfill income and affordability restrictions creates an impact on the project economics. This is called the “Affordability Gap”, which is defined as difference between the achievable market rate rent or sales price and the allowable rent or sales price for each “Inclusionary Unit”. This Financial Evaluation uses pro forma analyses to estimate the Affordability Gaps generated at varying income and affordability levels.

Prototype apartment and ownership housing developments were created for analysis purposes.

Apartment development prototypes were created for three different zoning categories and ownership housing development prototypes were varied by housing product type. The prototypes can be generally described as follows:

Table I – 1
Development Prototypes
Apartment Development and Ownership Housing Development Apartment Development Ownership Housing Development
Mall Property Townhomes
Neighborhood Medium High Detached Single Family Homes
Mixed-Use

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

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The prototype projects were created using the following resources:

1. The Housing Element;

2. Development plans for residential projects that were submitted to the City’s Planning Division; and

3. Residential projects identified in KMA’s market surveys.

KMA used pro forma analyses to estimate the Affordability Gaps created by the Inclusionary Housing alternatives being tested. The results were then evaluated to identify requirements that balance the interests of the property owner, the developer, and the City’s unmet need for affordable housing.

E. Findings

SUPPORTABLE INCLUSIONARY HOUSING PRODUCTION REQUIREMENTS Apartment Development (Attachment 3)
Apartment development analyses have been prepared for Inclusionary Housing requirements set at the low income and very low income levels.

Rent Estimates
The rent estimates that were used as part of the Affordability Gap analyses are presented in the following tables:

Table I – 2
Projected Market Rate Rents
Apartment Development Prototypes
Number of
Bedrooms

Mall Property
Neighborhood
Medium High Mixed-Use
1 $2,740 $3,110 $3,110
2 $3,280 $3,800 $3,970
3 $3,990 $4,190 $4,190

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Table I - 3
Affordable Rents
Apartment Development Prototypes
Number of
Bedrooms

Low Income
Very Low
Income
1 $1,794 $1,102
2 $2,005 $1,226
3 $2,219 $1,354

Affordability Gap Estimates
The Affordability Gaps per Inclusionary Unit are estimated as follows for the apartment development prototypes:

Table 1 - 4
Estimated Affordability Gaps Per Inclusionary Unit
Apartment Development Prototypes
Mall Property $203,000
Neighborhood Medium High $288,000
Mixed-Use $274,000
Weighted Average
Affordability Gap Per
Inclusionary Unit

$260,000

Supportable Inclusionary Housing Requirements – Apartment Development Based on the results of the pro forma analyses, KMA concluded that the following Inclusionary Housing requirements can be supported by apartment development projects:

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Table I - 5
Supportable Inclusionary Housing Requirements 2
Apartment Development Projects

Income Level Mall Property
Neighborhood
Medium High Mixed-Use

Low 11% 8% 9%
Very Low 8% 5% 6%

Based on all the factors considered in the apartment development evaluation, KMA has concluded that a 10% low income Inclusionary Housing obligation can be supported. Given the conservative approach taken by KMA, it is reasonable to conclude that a requirement of this magnitude is not confiscatory and that it will not deprive a property owner of a fair and reasonable return on their investment.

It is important to consider that some developers may wish to mitigate the financial impact created by the imposition of Inclusionary Housing requirements by using the density bonus provided under California Government Code Section 65915 et seq. (Section 65915). Moreover, in many cases it will be advantageous for a developer to provide very low income units to fulfill the Density Bonus requirements. In those instances, the City’s low income Inclusionary Housing requirements would actually be fulfilled at a deeper affordability level.

Ownership Housing Development (Attachment 4)
Inclusionary Housing programs generally set the affordability requirements for ownership housing development at the moderate income level. This is done as a reflection of the fact that higher income households are likely to have more discretionary income to devote to the ongoing costs associated with home ownership than that of lower income households. The City Council also requested that the Financial Evaluation also consider the potential for imposing a low income requirement on ownership housing projects.

Sales Price Estimates
The sales price estimates that were used as part of the Affordability Gap analyses are presented in the following tables:

2 Measured against the number of units allowed by the development site’s base zoning standards.

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Table I - 6
Projected Market Rate Sales Prices
Ownership Housing Development Prototypes
Number of
Bedrooms

Townhomes
Detached Single
Family Homes
3 $765,000 $1,012,000
4 $840,000 $1,460,000
5 $2,160,000

Table I - 7
Affordable Sales Prices
Ownership Housing Development Prototypes
Number of
Bedrooms
Moderate
Income

Low Income
Townhome Prototype
3 $502,000 $228,300
4 $531,100 $235,600
Detached Single Family Home Prototype
3 $494,000 $220,200
4 $527,900 $232,300
5 $561,900 $244,500

Affordability Gap Estimates
The weighted average Affordability Gaps per Inclusionary Unit are estimated as follows for the ownership housing development prototypes:

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Table I - 8
Affordability Gap Estimates
Ownership Housing Development Projects

Townhomes
Detached
Single Family
Homes
Moderate Income
Weighted Average Affordability
Gap Per Inclusionary Unit
$274,400 $1,057,200
Low Income
Weighted Average Affordability
Gap Per Inclusionary Unit
$553,600 $1,356,100

Supportable Inclusionary Housing Requirements – Ownership Housing Development Based on the results of the pro forma analyses, KMA concluded that the following Inclusionary Housing requirements can be supported by ownership housing development projects:

Table I - 9
Supportable Inclusionary Housing Requirement
Ownership Housing Development Projects

Income Level Townhomes
Detached
Single Family
Homes
Moderate 10% 5%
Low 5% 3.5%

Given the magnitude of the Affordability Gaps associated with the provision of low income ownership housing units it is KMA’s opinion that the Inclusionary Housing requirement should be set at the moderate income level. This will maximize the number of affordable ownership housing units that are produced, while minimizing the Affordability Gaps between the market rate sales prices and the “Affordable Sales Prices”.

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SUPPORTABLE IN-LIEU FEES (ATTACHMENT 5)
KMA converted the Affordability Gaps associated with the supportable Inclusionary Housing obligations into the in-lieu fee payments that would be required to fulfill the affordable housing requirements on site within a proposed residential development. The resulting in lieu fee amounts are presented in the following tables.

Apartment Development
Table I - 10
Supportable In-Lieu Fee Payment Amounts: 10% Low Income Inclusionary Standard Apartment Development Prototypes

In-Lieu Fee Mall Property
Neighborhood
Medium High Mixed-Use
In-Lieu Fee Per Inclusionary Unit
Total In-Lieu Fee Obligation $1,827,000 $1,152,000 $8,220,000 Number of Inclusionary Units 9 4 30
In-Lieu Fee Per Inclusionary Unit $203,000 $288,000 $274,000 In-Lieu Fee Per Unit in the 100% Market Rate Project
Total In-Lieu Fee Obligation $1,827,000 $1,152,000 $8,220,000 Number of Units in the Project 90 40 300
In-Lieu Fee Per Market Rate Unit $20,300 $28,800 $27,400 In-Lieu Fee Per Square Foot of Leasable Area in the 100% Market Rate Project Total In-Lieu Fee Obligation $1,827,000 $1,152,000 $8,220,000 Square Feet of Leasable Area 80,250 42,900 312,600
In-Lieu Fee Per Square Foot of
Leasable Area
$22.80 $26.90 $26.30

KMA applied the weighted averages of the in-lieu fee amounts that were supported by the prototype apartment development scopes being tested. The resulting in-lieu fee amounts are presented in the following table:

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Table I – 11
Weighted Average Supportable In-Lieu Fee Payment Amounts 10% Low Income Inclusionary Standard
Apartment Development
Per Inclusionary Unit $260,400
Per Market Rate Unit in a 100% Market Rate Project $26,000 Per Square Foot of Leasable Area in a 100% Market Rate Project $25.70

Ownership Housing Development
Table I – 12
Supportable In-Lieu Fee Payment Amounts
Townhomes: 10% Moderate Income Inclusionary Standard
Detached Single Family Homes: 5% Moderate Income Inclusionary Standard Ownership Housing Development Prototypes

In-Lieu Fee Townhomes
Detached Single
Family Homes
In-Lieu Fee Per Inclusionary Unit
Total In-Lieu Fee Obligation $548,800 $3,171,600
Number of Inclusionary Units 2 3
In-Lieu Fee Per Inclusionary Unit $274,400 $1,057,200 In-Lieu Fee Per Unit in the 100% Market Rate Project
Total In-Lieu Fee Obligation $548,800 $3,171,600
Number of Units in the Project 20 60
In-Lieu Fee Per Market Rate Unit $27,440 $52,860
In-Lieu Fee Per Square Foot of Saleable Area in the 100% Market Rate Project Total In-Lieu Fee Obligation $548,800 $3,171,600
Square Feet of Saleable Area 37,500 188,850
In-Lieu Fee Per Square Foot of Saleable Area $14.60 $16.80 Item No.16C

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The supportable in-lieu fees for ownership housing projects are summarized in the following table:

Table I – 13
Weighted Average In-Lieu Fee Payment Analysis
Townhomes: 10% Moderate Income Inclusionary Standard
Detached Single Family Homes: 5% Moderate Income Inclusionary Standard Ownership Housing Development

Townhomes
Detached Single
Family Homes
Per Inclusionary Unit $274,400 $1,057,200
Per Market Rate Unit in a 100% Market
Rate Project
$27,440 $52,860
Per Square Foot of Saleable Area in a
100% Market Rate Project
$14.60 $16.80

Due to the fact that the in-lieu fee payment is an optional method of fulfilling the Inclusionary Housing obligation, the amount of the fee does not have to track with the Affordability Gaps associated with providing Inclusionary Units. The City may wish to consider applying a premium to the in-lieu fee payment amount to discourage its use, or they may wish to apply a discount to the in-lieu fee when the policy objective is to obtain funding sources for use in assisting dedicated affordable housing projects.

F. Next Steps
The Financial Evaluation is meant to provide the City with the context under which to update the Inclusionary Housing program in ways that are not confiscatory and that do not deprive property owners of a fair and reasonable return on their investment. At the conclusion of this Financial Evaluation KMA offers a set of preliminary policy recommendations for City Council consideration.

After receiving input from the City Council, KMA will prepare a report that provides recommendations for specific requirements to be imposed if the City chooses to move forward with an amendment to the Inclusionary Housing Ordinance.

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II. INCLUSIONARY HOUSING PROGRAM CHARACTERISTICS
(ATTACHMENT 1)
A. Survey of Existing Inclusionary Housing Programs
Over 170 jurisdictions in California currently include an Inclusionary Housing Program as a component in their overall affordable housing strategy. While the unifying foundation of these programs is the objective to attract affordable housing development, the characteristics of these programs vary widely from jurisdiction-to-jurisdiction.

To assist the City in evaluating options for creating an Inclusionary Housing Program it is useful to identify the elements that are typically included in Inclusionary Housing Programs being implemented in California jurisdictions. To that end, KMA compiled information on 93 Inclusionary Housing Programs being implemented throughout California. The survey information is presented in Attachment 1.

The survey results can be summarized as follows:

1. In California, the majority of Inclusionary Housing Programs include a threshold project size below which projects are not subject to the Inclusionary Housing requirements. Common thresholds found in the survey fall between three and 10 units, with a 5 unit median threshold and a seven unit average threshold.

2. The income and affordability standards imposed by Inclusionary Housing Programs vary widely throughout California. The majority of programs have established standards in the range of 10% to 20% of the units in projects that will be subject to the requirements. However, the following policy variations are commonly found:
a. The threshold standards are varied as a reflection of the depth of the affordability being required.
b. Inclusionary Housing requirements have a disproportionate impact on smaller projects, because there are fewer market rate units available to spread the impact created by the income and affordability standards. As shown in the survey, a sliding scale requirement is sometimes used to mitigate these impacts.
c. The length of the covenant period imposed on Inclusionary Units varies from jurisdiction-to-jurisdiction. California Health and Safety Code (H&SC) Section 33413 applies covenant periods of 45 years for ownership housing units and 55 years for Item No.16C

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apartment units. These standards are commonly used, but both shorter and longer covenant periods are imposed throughout Inclusionary Housing Programs in California.

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

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

2. Dedicated affordable housing projects have access to state and federal funding sources that are not available to market rate projects. These funding sources provide a more cost-efficient way to achieve deeper affordability than can be supported by an Inclusionary Housing requirement.

A representative sample of programs that are targeted to dedicated affordable housing projects are:
a. The Community Development Block Grant program funds that are awarded to the City by the United States Department of Housing and Urban Development (HUD); b. The funds allocated to the City by HCD under the Permanent Local Housing Allocation (PLHA) for Senate Bill 2 (Chapter 364, Statutes of 2017); c. The federal and state Low-Income Housing Tax Credits (Tax Credits) offered under Internal Revenue Code Section 42;
d. State funding sources such as the Infill Infrastructure Grant (IIG), the Multifamily Housing Program (MHP) and Affordable Housing and Sustainable Communities (AHSC) Program; and
e. The Area Housing Authority of the County of Ventura (AHACV) assistance programs.

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

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The City’s adopted ordinance is included in Chapter 10 of the Thousand Oaks Municipal Code (Chapter 10), and it was last amended in 2008. The City is currently in the process of amending the density bonus ordinance to reflect changes the State Legislature has made during the intervening period. Until the update is codified, State law will automatically prevail over any inconsistencies between State law and Chapter 10.

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

C. Structuring Issues
In structuring an Inclusionary Housing Program it is important to remember that the courts and the State Legislature have placed limitations on the price controls imposed Inclusionary Housing Programs:

SAN JOSE CASE
In the 2015 San Jose case, the California Supreme Court ruled that Inclusionary Housing Programs should be viewed as use restrictions that are a valid exercise of a jurisdiction’s zoning powers.

Specifically, the Court found that Inclusionary Housing requirements are a planning tool rather than an exaction. This is interpreted to mean that an in-lieu fee payment option that is included in an Inclusionary Housing Program, that includes an affordable housing production requirement, is not subject to the AB 1600 nexus requirements imposed by the “Mitigation Fee Act”. 4 While Inclusionary Housing Programs are not subject to the Mitigation Fee Act, these programs must comply with the following criteria:

1. The requirements cannot be “Confiscatory”; and

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

The court did not provide criteria under which jurisdictions can determine whether proposed price controls are confiscatory and/or they deprive a property owner of a fair and reasonable return. As a

3 Latinos Unidos del Valle de Napa y Solano v. County of Napa, 217 Cal. App. 4th 1160 (Napa). 4 The Mitigation Fee Act is codified in California Government Code §66000 et seq.

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result, each jurisdiction is left to create an evaluation methodology that balances the interests of property owners, developers and the jurisdiction’s need for affordable housing. It is KMA’s practice to take a conservative approach in establishing the price controls that comport with the court’s ruling.

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

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

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

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

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

CALIFORNIA GOVERNMENT CODE SECTION 65583 (A)
California Government Code Section 65583 (a) (Section 65583 (a)) requires the City to analyze potential and actual constraints being placed on the development of housing. If the City chooses to impose a greater than 15% affordability requirement and/or a deeper affordability standard than 80% of AMI on apartment development, HCD can require the City to demonstrate that the Inclusionary Housing requirement does not create a constraint to housing development. This can potentially extend and complicate the approval process for the City’s Sixth Cycle Housing Element.

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

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III. METHODOLOGY

The purpose of this Financial Evaluation is to evaluate the financial feasibility of imposing Inclusionary Housing requirements on residential development in Thousand Oaks. The financial feasibility analysis is comprised of the following steps:

A. Parameters
As the first step in the evaluation process, it is necessary to identify the parameters that will be applied in the analysis. One measurement is the RHNA, which is used as a tool in the Housing Element process.

The Sixth Cycle RHNA Allocation Plan covers the period between 2021 and 2029, and the Thousand Oaks allocations are detailed in the following table:

Table III - 1
Sixth Cycle RHNA Allocation
October 2021 through October 2029
Income Category Total Obligation % of Total
Extremely Low Income 368 14%
Very Low 367 14%
Low 494 19%
Moderate 532 20%
Above Moderate 860 33%
Totals 2,621 100%

Notable factors to be considered are:

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

2. Outside financial assistance sources are widely available to affordable housing projects targeted to extremely low and very low income households. There are numerous nonprofit housing organizations in the Thousand Oaks market area that have experience obtaining these funding sources.

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3. There are a limited number of outside funding available to assist low income units and effectively no outside funding sources available to assist moderate income units.

For these reasons it is KMA’s opinion that the Inclusionary Housing Program should focus on attracting development that serves households at the low and moderate income levels. As part of creating an Inclusionary Housing Program it is also important to evaluate the impact the restrictions will have on the developers of market rate housing projects to ensure that onerous requirements are not imposed.

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

Recognizing that the courts have not provided guidance for determining how these limitations should be measured, it is left to the City to create a methodology for testing the financial impacts created by proposed Inclusionary Housing requirements. The KMA approach is based on pro forma analyses of prototype projects that reflect the residential development types exhibited within the jurisdiction.

The KMA pro forma analyses test the following factors to assist in identifying Inclusionary Housing requirements that can reasonably be applied:

1. The reduction in property acquisition costs needed to offset the impact that is caused by the proposed requirements; and

2. The increase in market rate rents/sales prices would be needed to offset the proposed requirements.

KMA evaluates the results of each of these tests in order to develop a comprehensive perspective on the financial impacts created by Inclusionary Housing requirements. These analyses collaboratively inform the KMA conclusion as to the Inclusionary Housing requirements that can be supported.

The KMA methodology has been continually evolving over the past 20 years, and each financial evaluation is tailored to reflect the specific characteristics of the jurisdiction in which KMA is performing the evaluation. The development prototypes used in this Financial Evaluation are described in the following section of this report.

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DEVELOPMENT PROTOTYPES
The pro forma analyses that KMA has prepared are based on prototype residential developments. To assist in creating the development prototypes, KMA reviewed the following:

1. The Housing Element;

2. Development plans for residential projects that have recently received entitlements and/or been submitted to the City’s Planning Division for review; and

3. Apartment and ownership housing development projects identified in KMA’s market surveys.

It is important to understand that the prototypes used in the Financial Evaluation do not represent actual projects. Instead, the prototypes represent composites of projects that have recently been developed or proposed for development and the results of KMA market surveys.

C. Financial Evaluation Structure
The analysis structure applied by KMA can be described as follows:

1. KMA prepared financial analyses to assist in creating recommended Inclusionary Housing requirements that balance the interests of property owners and developers against the public benefit created by the production of affordable housing units.

2. In general terms, the financial impact associated with fulfilling Inclusionary Housing requirements within market rate projects is equal to the Affordability Gap between the achievable market rate rents or sales prices and the allowable rents or sales prices for the Inclusionary Units.

3. The KMA financial analyses identify the range of Inclusionary Housing production requirements that can be supported.

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

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Table III – 2
Financial Analysis Organization

Attachment 2: Affordable Housing Cost Calculation Methodology Appendix A Affordable Rent Calculation Methodology
Appendix B Affordable Sales Price Calculation Methodology Attachment 3: Apartment Development
Appendix A Rent Survey
Appendix B Affordable Rent Calculations
Appendix C Pro Forma Analyses: Mall Property Prototypes Appendix D Pro Forma Analyses: Neighborhood Medium High Prototypes Appendix E Pro Forma Analyses: Mixed-Use Prototypes
Attachment 4: Ownership Housing Development
Appendix A Home Sales Surveys
Appendix B Affordable Sales Price Calculations
Appendix C Pro Forma Analyses: Townhome Home Prototype
Appendix D Pro Forma Analyses: Detached Single Family Home Prototype Attachment 5: In-Lieu Fee Analyses
Appendix A Apartment Development
Appendix B Ownership Housing Development
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IV. APARTMENT DEVELOPMENT ANALYSIS
(ATTACHMENT 3)
KMA created three prototype apartment development scenarios in order to evaluate the impacts created by variations in site sizes and densities of the project types anticipated to be developed in Thousand Oaks. Prototypes were evaluated for apartment development based on the following zoning standards:

1. Mall Property;

2. Neighborhood Medium High; and

3. Mixed-use.

A. Pro Forma Organization and Assumptions

MARKET RATE SCENARIOS
The 100% market rate unit apartment development prototypes provide baselines against which to measure the impacts created by affordable housing requirements. The pro forma analyses for the 100% market rate unit scenarios are organized as follows:

Table IV - 1
Pro Forma Analysis - 100% Market Rate Scenario
Apartment Development Prototypes
Table 1: Estimated Development Costs
Table 2: Estimated Stabilized Net Operating Income
Table 3: Stabilized Return on Total Investment

The stabilized returns on investment generated by the 100% market rate scenarios are used as the benchmark returns for the purpose of estimating the impacts created by the imposition of Inclusionary Housing obligations. KMA measured the financial impacts created by the imposition of Inclusionary Housing requirements using the tools described previously in this Financial Evaluation. These tools were used to identify the income and affordability requirements that can be feasibly imposed on apartment developments.

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

1. A low income alternative;

2. A very low income alternative; and

3. A Section 65915 density bonus alternative.

The pro forma analyses for the affordable housing scenarios are organized as follows:

Table IV - 2
Pro Forma Analysis – Affordable Housing Alternatives
Apartment Development Prototypes
Table 1: Estimated Development Costs
Table 2: Estimated Stabilized Net Operating Income
Table 3: Financial Impacts: Inclusionary Housing Requirements

The “Affordable Rent” calculation methodology is described in Attachment 2: Appendix A and the Affordable Rent calculations are detailed in Attachment 3: Appendix B. The results are presented in the following table:

Table IV - 3
Affordable Rents
Apartment Development Prototypes
Number of
Bedrooms

Low Income
Very Low
Income
1 $1,794 $1,102
2 $2,005 $1,226
3 $2,219 $1,354

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B. Alternatives Testing

MALL PROPERTY APARTMENT DEVELOPMENT ANALYSIS
The characteristics of the Mall Property apartment development prototype are summarized in the following table:

Table IV - 4
Development Scope Summary
Mall Property Apartment Development Prototype
Site Area (Acres) 3.0 Unit Mix
Total Number of Units 90 One-Bedroom Units 40%
Density (Units/Acre) 30 Two-Bedroom Units 55%
Parking At- & Above -Grade Spaces Three-Bedroom Units 5%

The pro forma analyses for the Mall Property development prototype is provided in Attachment 3:

Appendix C. The results of the Mall Property apartment development analyses are presented in the following sections of this Financial Evaluation.

Estimated Development Costs:

Mall Property Prototype Apartment Development
The development costs for the Mall Property prototype apartment development are estimated at $43.7 million. This equates to $485,000 per unit, or $544 per square foot of leasable area.

Projected Market Rate Rents:

Mall Property Prototype Apartment Development
The market survey is presented in Attachment 3: Appendix A. The resulting market rents are summarized in the following table:

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Table IV - 5
Projected Market Rate Rents
Mall Property Apartment Development Prototype
One-Bedroom Units $2,740
Two-Bedroom Units $3,280
Three-Bedroom Units $3,990
Average Monthly Rent Per
Square Foot of Leasable Area
$3.49

Findings:

Mall Property Apartment Prototype Development
The results of the KMA analyses of the Mall Property apartment development prototype are summarized in the following table:

Table IV - 6
Supportable Inclusionary Housing Requirements /
Financial Impacts: Inclusionary Housing Requirements
Mall Property Apartment Development Prototype

Low Income
Very Low
Income
Supportable Inclusionary Housing Requirement 11% 7%
Property Acquisition Cost Reduction Needed to Offset
the Impact Created by the Affordability Requirements
27% 29%
Market Rent Increase Required to Offset the Impact 4.9% 5.3%

NEIGHBORHOOD MEDIUM HIGH APARTMENT DEVELOPMENT ANALYSIS The characteristics of the Neighborhood Medium High apartment development prototype are summarized in the following table:

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Table IV - 7
Development Scope Summary
Neighborhood Medium High Apartment Development Prototype Site Area (Acres) 2.0 Unit Mix
Total Number of Units 40 One-Bedroom Units 35%
Density (Units/Acre) 20 Two-Bedroom Units 50%
Parking Covered & Enclosed Spaces Three-Bedroom Units 15%

The pro forma analyses for the Neighborhood Medium High development prototype is provided in Attachment 3: Appendix D. The results of the Neighborhood Medium High apartment development analyses are presented in the following sections of this Financial Evaluation.

Estimated Development Costs:

Neighborhood Medium High Prototype Apartment Development The development costs for the Neighborhood Medium High prototype apartment development are estimated at $23.1 million. This equates to $578,000 per unit, or $539 per square foot of leasable area.

Projected Market Rate Rents:

Neighborhood Medium High Prototype Apartment Development The market rents applied in the Neighborhood Medium High analysis are based on the weighted average rents identified in the KMA market survey (Attachment 3: Appendix A). The resulting market rents are summarized in the following table:

Table IV - 8
Projected Market Rate Rents
Neighborhood Medium High Prototype
Apartment Development
One-Bedroom Units $3,110
Two-Bedroom Units $3,800
Three-Bedroom Units $4,190
Average Monthly Rent Per
Square Foot of Leasable Area
$3.37

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Findings:

Neighborhood Medium High Apartment Prototype Development The results of the KMA analyses of the Neighborhood Medium High apartment development prototype are summarized in the following table:

Table IV - 9
Supportable Inclusionary Housing Requirements /
Financial Impacts: Inclusionary Housing Requirements
Neighborhood Medium High Apartment Development Prototype

Low Income
Very Low
Income
Supportable Inclusionary Housing Requirement 8% 5%
Property Acquisition Cost Reduction Needed to Offset
the Impact Created by the Affordability Requirements
17% 16%
Market Rent Increase Required to Offset the Impact 4.3% 4.0%

MIXED USE APARTMENT DEVELOPMENT ANALYSIS
The characteristics of the Mixed Use apartment development prototype are summarized in the following table:

Table IV – 10
Development Scope Summary
Mixed Use Apartment Development Prototype
Site Area (Acres) 10 Unit Mix
Total Number of Units 300 One-Bedroom Units 50%
Density (Units/Acre) 30 Two-Bedroom Units 38%
Parking At-Grade Spaces & Three-Bedroom Units 12%
Semi-Subterranean Garage

The pro forma analyses for the Mixed Use development prototype is provided in Attachment 3:

Appendix E. The results of the Mixed-Use apartment development analyses are presented in the following sections of this Financial Evaluation.

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Estimated Development Costs:

Mixed Use Prototype Apartment Development
The development costs for the Mixed Use prototype apartment development are estimated at $137.6 million. This equates to $459,000 per unit, or $440 per square foot of leasable area.

Projected Market Rate Rents:

Mixed Use Prototype Apartment Development
The market rents applied in the Mixed Use analysis are based on the weighted average rents identified in the KMA market survey (Attachment 3: Appendix A). The resulting market rents are summarized in the following table:

Table IV - 11
Projected Market Rate Rents
Mixed-Use
Apartment Development Prototype
One-Bedroom Units $3,110
Two-Bedroom Units $3,970
Three-Bedroom Units $4,190
Average Monthly Rent Per
Square Foot of Leasable Area
$3.42

Findings:

Mixed Use Apartment Prototype Development
The results of the KMA analyses of the Mixed Use apartment development prototype are summarized in the following table:

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Table IV - 12
Supportable Inclusionary Housing Requirements /
Financial Impacts: Inclusionary Housing Requirements
Mixed Use Apartment Development Prototype

Low Income
Very Low
Income
Supportable Inclusionary Housing Requirement 9% 6%
Property Acquisition Cost Reduction Needed to Offset
the Impact Created by the Affordability Requirements
29% 28%
Market Rent Increase Required to Offset the Impact 5.0% 4.7%

C. Supportable Inclusionary Housing Production Requirements

BASE ZONING SCENARIOS
The results of the KMA apartment development analyses indicate that the following Inclusionary Housing requirements can be supported at the base zoning allowed by the City’s Municipal Code.

Table IV - 13
Supportable Inclusionary Housing Requirement
Apartment Development Projects

Income Level Mall Property
Neighborhood
Medium High Mixed Use

Low 11% 8% 9%
Very Low 8% 5% 6%

SECTION 65915 DENSITY BONUS SCENARIOS
KMA’s primary analysis is based on prototype apartment development projects that comport with the development site’s base zoning requirements. KMA also created Section 65915 density bonus prototypes that maximize the supportable Inclusionary Housing requirement, while minimizing the financial impact created by the requirement. The density bonus analyses are presented in Exhibit IV of Appendices C, D, and E of Attachment 3.

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For the purposes of this analysis, KMA tested the following concepts:

1. For the Mall Property and Neighborhood Medium High zoning standards, KMA tested prototypes that include a 15% very low income requirement. This entitles the project to obtain a 50% density bonus.

2. For the Mixed-Use zoning standards:
a. KMA tested a prototype that includes a 9% very low income requirement, which entitles the project to obtain a 30% density bonus.
b. KMA undertook an additional test to estimate how many additional low income units could be supported from an economic perspective.

3. The results can be summarized as follows:
a. The benefits associated with a 50% density bonus were deemed to be sufficient to support a requirement to set aside 15% of the units allowed by the site’s base zoning for very low income households.
b. The benefits associated with a 30% density bonus were estimated to support the following requirements:
i. A very low income requirement set at 9% of the units allowed by the site’s base zoning; plus
ii. A low income requirement set at 7% of the units allowed by the site’s bas zoning.

SUMMARY: SUPPORTABLE INCLUSIONARY HOUSING PRODUCTION REQUIREMENTS KMA’s analyses of prototype apartment development projects that comport with a site’s base zoning requirements supports Inclusionary Housing requirements that fall within the following ranges:

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Table IV - 14
Supportable Inclusionary Housing Production Requirements Apartment Development

Income Category
Inclusionary Housing
Requirement
Low 8% - 11%
Very Low 5% - 8%

The use of the Section 65915 density bonus for apartment development projects can potentially mitigate the impacts created by an Inclusionary Housing requirement that is set at up to a 15% very low income standard. However, it is also important to understand that a density bonus cannot be used efficiently on all development sites. This is particularly an issue for small development sites or for projects in which increased density would require a more expensive construction or parking type.

Based on all the factors considered in the apartment development projects evaluation, KMA concluded that a 10% low income Inclusionary Housing obligation can be supported. Given the conservative approach taken by KMA, it is reasonable to conclude that a requirement of this magnitude is not confiscatory and that it will not deprive a property owner of a fair and reasonable return on their investment.

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V. OWNERSHIP HOUSING ANALYSES
(ATTACHMENT 4)
Ownership housing development in Thousand Oaks is focused on detached single family homes and townhome developments. Stacked flat condominiums are not yet a factor in the ownership housing development inventory. In recognition of this, KMA created the following ownership housing development types:

1. Townhomes; and

2. Detached single family homes.

A. Pro Forma Organization and Assumptions
To assist in establishing the Inclusionary Housing production requirements that can be supported, KMA prepared the following pro forma analyses for each prototype ownership housing project:

1. A prototype in which 100% of the units are sold at unrestricted market rate sales prices;

2. A prototype that includes a moderate income component; and

3. A prototype that includes a low income component.

The 100% market rate unit ownership housing development scenarios provide baselines against which to measure the impacts created by affordable housing requirements. The pro forma analyses for the 100% market rate unit scenarios are organized as follows:

Table V - 1
Pro Forma Analysis – Market Rate Scenario
Ownership Housing Development Prototypes
Table 1: Estimated Development Costs
Table 2: Projected Net Sales Revenue
Table 3: Projected Developer Profit

The estimated developer profit for each of the 100% market rate scenarios is used as the benchmark profit percentage for the purpose of estimating the impacts created by the imposition of Inclusionary Housing obligations. The resulting financial gaps represent the impact created by the requirements being tested. The pro forma analyses for the affordable housing alternatives are organized as follows:

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Table V - 2
Pro Forma Analyses - Affordable Housing Alternatives
Ownership Housing Development Prototypes
Table 1: Estimated Development Costs
Table 2: Projected Net Sales Revenue
Table 3: Financial Impacts: Inclusionary Housing Requirements

KMA measured the financial impacts created by the imposition of Inclusionary Housing requirements using the tools described previously in this Financial Evaluation. These tools were used to identify the moderate income and low income requirements that can be feasibly imposed on ownership housing developments.

B. Alternatives Testing

TOWNHOME ANALYSIS
The characteristics of the townhome development prototype are summarized in the following table:

Table V - 3
Development Scope Summary
Townhome Development Prototype
Site Area (Acres) 1.0 Unit Mix
Total Number of Units 20 Three-Bedroom Units 75%
Density (Units/Acre) 20 Four-Bedroom Units 25%
Parking 2-Car Attached Garages

The pro forma analyses for the townhome development prototype are provided in Attachment 4:

Appendix C. The results of the townhome development analyses are summarized in the following sections of this Financial Evaluation.

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Estimated Development Costs:

Townhome Development Prototype
The total development cost for the Market Rate Alternative is estimated at $13.6 million. This equates to $680,000 per unit, or $363 per square foot of saleable area. 5 Projected Market Rate Sales Prices:

Townhome Development Prototype
To assist in projecting the achievable market rate sales prices, KMA compiled sales data for townhome projects located in the Thousand Oaks market area. Based in part on this survey, the market rate sales prices that were applied in the townhome development prototype analysis are as follows:

Table V - 4
Projected Market Rate Sales Prices
Townhome Development Prototype
Three-Bedroom Units $765,000
Four-Bedroom Units $840,000
Average Price per Square Foot of Saleable Area $418

Affordable Sales Price Calculations:

Townhome Development Prototype
Based on the Affordable Sales Price calculation methodology described in Attachment 2: Appendix B, and the calculations presented in Attachment 4: Appendix B – Exhibit I, the Affordable Sales Prices for the townhome development prototype are:

Table V - 5
Affordable Sales Price Estimates
Townhome Development Prototype
Moderate Income Low Income
Three-Bedroom Units $502,100 $228,300
Four-Bedroom Units $531,100 $235,600

5 The development costs for the affordable housing alternatives vary slightly from the costs for the Market Rate Alternative.

This is attributable to minor interest cost savings and is the case for both ownership housing development prototypes.

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Findings:

Townhome Development Prototype Analysis
The results of the KMA analyses of the townhome development prototype are summarized in the following table:

Table V - 6
Supportable Inclusionary Housing Requirements /
Financial Impacts: Inclusionary Housing Requirements
Townhome Development Prototype
Moderate
Income
Low
Income
Supportable Inclusionary Housing Requirement 10% 5%
Property Acquisition Cost Reduction Needed to Offset
the Impact Created by the Affordability Requirements
19% 18%
Market Price Increase Required to Offset the Impact 3.6% 3.2%

DETACHED SINGLE FAMILY HOME ANALYSIS
The characteristics of the detached single family home development prototype are summarized in the following table:

Table V - 7
Development Scope Summary
Detached Single Family Home Development Prototype
Site Area (Acres) 10 Unit Mix
Total Number of Units 60 Three-Bedroom Units 10%
Density (Units/Acre) 6 Four-Bedroom Units 65%
Parking 2-Car Attached Garages Five-Bedroom Units 25%

The pro forma analyses for the detached single family home development prototype are provided in Attachment 4: Appendix D. The results of the detached single family home development analyses are summarized in the following sections of this Financial Evaluation.

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Estimated Development Costs:

Detached Single Family Home Development Prototype
The total development cost for the Market Rate Alternative is estimated at $85.7 million. This equates to $1.42 million per unit, or $454 per square foot of saleable area.

Projected Market Rate Sales Prices:

Detached Single Family Home Development Prototype
To assist in projecting the market rate sales prices, KMA compiled sales data for detached single family homes located in the Thousand Oaks market area. Based in part on this survey, the market rate sales prices that were applied in the detached single family home prototype analysis are as follows:

Table V - 8
Projected Market Rate Sales Prices
Detached Single Family Home Development Prototype
Three-Bedroom Units $1,012,000
Four-Bedroom Units $1,460,000
Five-Bedroom Units $2,160,000
Average Price per Square Foot of Saleable Area $505

Affordable Sales Price Calculations:

Detached Single Family Home Development Prototype
Based on the Affordable Sales Price calculation methodology described in Attachment 2: Appendix B, and the calculations presented in Attachment 4: Appendix B – Exhibit II, the Affordable Sales Prices for the detached single family home development prototype are:

Table V - 9
Affordable Sales Price Estimates
Detached Single Family Home Development Prototype
Moderate Income Low Income
Three-Bedroom Units $494,000 $220,200
Four-Bedroom Units $527,900 $232,300
Five-Bedroom Units $561,900 $244,500
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Findings:

Detached Single Family Home Development Prototype Analysis The results of the KMA analyses of the detached single family home development prototype are summarized in the following table:

Table V – 10
Supportable Inclusionary Housing Requirements /
Financial Impacts: Inclusionary Housing Requirements
Detached Single Family Home Development Prototype
Moderate
Income
Low
Income
Supportable Inclusionary Housing Requirement 5% 3.5%
Property Acquisition Cost Reduction Needed to Offset the Impact Created by the Affordability Requirements
10% 8%
Market Price Increase Required to Offset the Impact 2.3% 1.9%

C. Supportable Inclusionary Housing Production Requirements The preceding section of this Financial Evaluation used pro forma analyses of prototype ownership housing development projects to assist in identifying the Inclusionary Housing production requirements that can currently be supported. The ownership housing development types that were evaluated are:

1. Townhomes; and

2. Detached single family homes.

The results of the KMA ownership housing development analyses indicate that the following Inclusionary Housing requirements can be supported for ownership housing development projects.

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Table V - 11
Supportable Inclusionary Housing Requirements
Ownership Housing Development Projects

Income Level Townhomes
Detached
Single Family
Homes

Moderate 10% 5%
Low 5% 3.5%

Given the magnitude of the Affordability Gaps associated with ownership housing development in Thousand Oaks, it is KMA’s opinion that imposing a moderate income requirement will maximize the number of affordable ownership housing units that are produced while minimizing the Affordability Gaps between the market rate sales prices and the Affordable Sales Prices.

As discussed previously, KMA takes a conservative approach in setting benchmark impact standards for evaluating the impact created by income and affordability controls. Based on our financial analyses, KMA has concluded that the following Inclusionary Housing production requirements can be supported:

Table V - 12
Supportable Inclusionary Housing Production Requirements Ownership Housing Development
Townhomes 10% Moderate Income
Detached Single Family Homes 5% Moderate Income

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VI. IN-LIEU FEE ANALYSES
(ATTACHMENT 5)
An option to pay a fee in lieu fee of producing affordable housing units is typically offered as part of an Inclusionary Housing program. Recognizing that paying an in-lieu fee is an option, not a requirement, KMA made the fundamental assumption that developers can be required to pay a premium over the in-lieu fee amounts generated by an Affordability Gap analysis. The results of this analysis can be used to create in-lieu fee schedules, or the format can be used to develop a methodology for calculating the in-lieu fee on a case by case basis.

A. Apartment Development
KMA based the in-lieu analysis for apartment development on a 10% low income requirement. The calculations are presented in Attachment 5: Appendix A, and are based on the following methodology:

1. The differences between the estimated achievable market rate rents and the defined Affordable Rents were calculated.

2. KMA assumed that the property taxes for projects that include designated affordable housing units would be based on a lower assessed value than a 100% market rate project due to the reduction in net operating income that would be generated by the project. KMA deducted this lower property tax expense from the estimated rent difference.

3. The “Net Annual Rent Difference Per Inclusionary Unit” is equal to the “Annual Rent Difference Per Inclusionary Unit” minus the property tax savings.

4. The “Affordability Gap Per Inclusionary Unit” is equal to Annual Rent Difference Per Inclusionary Unit capitalized at the benchmark returns derived from the pro forma analyses of the market rate scenarios.

5. The Affordability Gaps Per Inclusionary Unit were translated into in-lieu fees per square foot of leasable area.

The KMA in-lieu fee estimates for apartment development projects are summarized in the following table:

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Table VI - 1
In-Lieu Fee Payment Amounts: 10% Low Income Inclusionary Standard Apartment Development Prototypes

In-Lieu Fee Mall Property
Neighborhood
Medium High Mixed-Use
In-Lieu Fee Per Inclusionary Unit
Total In-Lieu Fee Obligation $1,827,000 $1,152,000 $8,220,000 Number of Inclusionary Units 9 4 30
In-Lieu Fee Per Inclusionary Unit $203,000 $288,000 $274,000 In-Lieu Fee Per Unit in the 100% Market Rate Project
Total In-Lieu Fee Obligation $1,827,000 $1,152,000 $8,220,000 Number of Units in the Project 90 40 300
In-Lieu Fee Per Market Rate Unit $20,300 $28,800 $27,400 In-Lieu Fee Per Square Foot of Leasable Area in the 100% Market Rate Project Total In-Lieu Fee Obligation $1,827,000 $1,152,000 $8,220,000 Square Feet of Leasable Area 80,250 42,900 312,600
In-Lieu Fee Per Square Foot of
Leasable Area
$22.80 $26.90 $26.30

B. Ownership Housing Development
The KMA in-lieu fee estimates for ownership housing development projects is based on a 10% moderate income requirement for townhome projects and a 5% moderate income requirement for ownership housing projects. The calculations are presented in Attachment 5: Appendix B, and summarized in the following table:

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Table VI - 2
In-Lieu Fee Payment Amounts
Townhomes: 10% Moderate Income Inclusionary Standard
Detached Single Family Homes: 5% Moderate Income Inclusionary Standard Ownership Housing Development Prototypes

In-Lieu Fee Townhomes
Detached Single
Family Homes
In-Lieu Fee Per Inclusionary Unit
Total In-Lieu Fee Obligation $548,800 $3,171,600
Number of Inclusionary Units 2 3
In-Lieu Fee Per Inclusionary Unit $274,400 $1,057,200 In-Lieu Fee Per Unit in the 100% Market Rate Project
Total In-Lieu Fee Obligation $548,800 $3,171,600
Number of Units in the Project 20 60
In-Lieu Fee Per Market Rate Unit $27,440 $52,860
In-Lieu Fee Per Square Foot of Saleable Area in the 100% Market Rate Project Total In-Lieu Fee Obligation $548,800 $3,171,600
Square Feet of Saleable Area 37,500 188,850
In-Lieu Fee Per Square Foot of Saleable Area $14.60 $16.80

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VII. FINDINGS / PRELIMINARY POLICY RECOMMENDATIONS

This section of the report summarizes the results of the Financial Evaluation. The analysis findings provide the first step towards developing a recommended package of requirements to be imposed by an Inclusionary Housing program.

A. Supportable Inclusionary Housing Production Requirements

APARTMENT DEVELOPMENT
KMA’s analyses of prototype apartment development projects that comport with a site’s base zoning requirements supports Inclusionary Housing requirements that fall within the following ranges:

Table VII - 1
Supportable Inclusionary Housing Production Requirements Apartment Development

Income Category
Inclusionary Housing
Requirement
Low 8% - 11%
Very Low 5% - 8%

Based on all the factors considered in the apartment development evaluation, KMA concluded that a 10% low income Inclusionary Housing obligation can be supported. Given the conservative approach taken by KMA, it is reasonable to conclude that a requirement of this magnitude is not confiscatory and that it will not deprive a property owner of a fair and reasonable return on their investment.

Some developers may wish to mitigate the financial impact created by the Inclusionary Housing requirements by using the density bonus provided by Section 65915. In many cases it will be advantageous for a developer to provide very low income units to fulfill the Density Bonus requirements. In those instances, the City’s low income requirements would actually be fulfilled at a deeper affordability level than required by the Inclusionary Housing program.

OWNERSHIP HOUSING DEVELOPMENT
The results of the KMA ownership housing analysis indicate that Inclusionary Housing requirements that fall within the following ranges can be supported:

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Table VII – 2
Supportable Inclusionary Housing Production Requirements Ownership Housing Development

Income Category

Townhomes
Detached Single
Family Homes
Moderate 10% 5.0%
Low 5% 3.5%

As discussed previously, KMA takes a conservative approach in setting benchmark impact standards for evaluating the impact created by income and affordability controls. Based on our financial analyses, KMA recommends that a 10% moderate income Inclusionary Housing requirement be imposed on townhome projects, and a 5% moderate income requirement be applied to detached single family home projects. This will maximize the number of affordable ownership housing units that are produced while minimizing the Affordability Gaps between the market rate sales prices and the Affordable Sales Prices.

B. Supportable In-Lieu Fees
In this Financial Evaluation, KMA calculated the in-lieu fee amount based on the following standards:

Table VII – 3
Inclusionary Housing Standards Used in the In-Lieu Fee Analysis Apartment Development and Ownership Housing Development Apartment Development 10% Low Income
Ownership Housing Development
Townhomes 10% Moderate Income
Detached Single Family Homes 5% Moderate Income

KMA applied the weighted averages of the in-lieu fee amounts that were supported by the prototypes being tested. The resulting in-lieu fee amounts are presented in the following tables:

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Table VII – 4
Weighted Average Supportable In-Lieu Fee Payment Amounts 10% Low Income Inclusionary Standard
Apartment Development
Per Inclusionary Unit $260,400
Per Market Rate Unit in a 100% Market Rate Project $26,000 Per Square Foot of Leasable Area in a 100% Market Rate Project $25.70

Table VII – 5
Weighted Average In-Lieu Fee Payment Analysis
Townhomes: 10% Moderate Income Inclusionary Standard
Detached Single Family Homes: 5% Moderate Income Inclusionary Standard Ownership Housing Development

Townhomes
Detached Single
Family Homes
Per Inclusionary Unit $274,400 $1,057,200
Per Market Rate Unit in a 100% Market
Rate Project
$27,400 $52,900
Per Square Foot of Saleable Area in a
100% Market Rate Project
$14.60 $16.80

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

THRESHOLD PROJECT SIZES
The KMA survey of Inclusionary Housing programs being implemented throughout California indicates that common thresholds fall between three and 10 units. Based on the supportable Inclusionary Housing production requirements identified in this Financial Evaluation, KMA recommends that the Item No.16C

Inclusionary Housing: Financial Evaluation Page 43
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City Council consider setting the threshold project size at 10 units. That is the first point at which a whole Inclusionary Unit would be supportable.6

TARGET INCOME AND AFFORDABILITY STANDARDS
Based on the results of the Financial Evaluation, KMA recommends that the income and affordability standards be set as follows:

Table VII – 6
Recommended Inclusionary Housing Production Requirements Apartment Development and Ownership Housing Development Apartment Development 10% Low Income
Ownership Housing Development
Townhomes 10% Moderate Income
Detached Single Family Homes 5% Moderate Income

COVENANT PERIODS
KMA recommends that the following covenant period requirements be considered:

1. Inclusionary Housing apartment units should be required to remain in place for as long as the property is developed with a residential use, but for not less than 55 years.

2. The covenant period for affordable ownership housing units be set at one cumulative 45-year period.

ALTERNATIVE MEANS OF FULFILLING INCLUSIONARY HOUSING OBLIGATIONS AB 1505, which was adopted by the State Legislature in 2017, includes a provision that requires jurisdictions to provide alternative means of complying with the income and affordability requirements imposed by an Inclusionary Housing program. AB 1505 identifies the following potential alternatives to the on-site production of affordable housing units:
7 6 A 10-unit threshold would result in a .5 Inclusionary Unit obligation for a detached single family home project. Depending on how the in-lieu fee option is ultimately structured, it would likely be more advantageous for a developer to pay the in- lieu fee for the fractional unit obligation.
7 AB 1505 only applies the restrictions imposed on apartment development. However, the provision of alternative means of compliance is a best practice and is commonly provided to ownership housing development as well.

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1. A payment to the City in lieu of producing the required Inclusionary Units.

2. Alternative means of producing Inclusionary Units.

3. Dedication of land to the City for the subsequent development of the required Inclusionary Units.

4. The acquisition and rehabilitation of existing apartment units.

KMA offers the following general recommendations for City Council consideration:

In-Lieu Fee Payment
Some form of an in-lieu fee payment option is offered in nearly all Inclusionary Housing programs.

KMA recommends that the following alternatives be considered:

1. An in-lieu fee should be allowed to be paid for any fractional Inclusionary Unit that is required to be produced.

2. The following in-lieu fee payment options should be offered to proposed apartment projects:
a. Inclusionary Housing requirements have a disproportionate impact on smaller projects, because there are fewer market rate units available to spread the impact created by the income and affordability standards. KMA recommends that an in-lieu fee payment be allowed by right for apartment projects with 20 or fewer units. b. As a baseline, apartment projects with more than 20 units should be required to produce the requisite number of Inclusionary Units. However, the City Council should be provided with the discretion to allow an in-lieu fee to be paid for apartment projects with more than 20 units if the obligation is deemed to create an extreme hardship circumstance.

3. Premium price ownership housing developments of any size should be provided with the option to pay a fee in lieu of producing affordable units.

Alternative Means of Producing Inclusionary Units

1. KMA does not recommend that an off-site production option be offered as a fulfillment alternative for apartment developments. It is our opinion that, from a public policy perspective, it is better to integrate market rate and affordable rental units into the same project.

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2. KMA recommends that the developers of ownership housing development projects be given the following options to produce affordable apartment units to fulfillment the Inclusionary Housing obligation:
a. The off-site production of affordable apartment units; or b. The creation of a parcel within an ownership housing development site on which affordable apartment units are constructed concurrently with the market rate ownership housing development project.

Land Dedication
The City Council should have the discretion, but not the requirement, to approve a developer’s proposal to dedicate property in lieu of producing Inclusionary Units. If a land dedication option is provided, it should be subject to a detailed list of requirements that maximize the potential for an affordable housing project to be developed in a timely fashion.

Acquisition and Rehabilitation of Existing Apartment Units Acquisition and rehabilitation projects must be identified in a jurisdiction’s Housing Element in order to receive RHNA credit. No projects were identified in the City’s Housing Element. As such, it will not be possible for the City to obtain RHNA credit for this type of project during the sixth cycle, which runs through 2029.

D. Next Steps
The Financial Evaluation is meant to provide the City with the context under which to update the Inclusionary Housing program in ways that are not confiscatory and that do not deprive property owners of a fair and reasonable return on their investment. After receiving input from the City Council, KMA will provide recommendations for specific requirements to be imposed if the City chooses to move forward with an amendment to the Inclusionary Housing Ordinance.

Item No.16C

ATTACHMENT 1

INCLUSIONARY HOUSING PROGRAM SURVEYS

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

File name: 1 22 23 Inclusionary Survey Page 1 of 14
Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

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

File name: 1 22 23 Inclusionary Survey; Incl Survey Page 2 of 14 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
Contra Costa County
Create on-site units; create off-site units; pay in-lieu fee; donate land. Program requirements are only applied in
designated areas.
15% No 5 3% @ VL + 12% @
Lower 5 3
Coronado Create units; pay in-lieu fee 20% No 2 Low 2 Mod Cupertino 1-7 units pays in-lieu fee. Create on-site units; create off-site units; pay impact/linkage fee; donate land 15% No 7 50% / 80% 99 7 50% /120% 99 Davis Create on-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 10% - 25% No 5-19 , 20+
5-19: 15% @ 80%
or 10% @ 50%.
20+: 25% @ 80%
or 10% @ 50%
Perpetual 5 120% Perpetual
Downey Create on-site units; create off-site units; pay in-lieu fee in the case of extreme hardship for apartments 11%/10% No Mod >55 or as long as resid Mod 45
Dublin Create on-site units; create off-site units; pay in-lieu fee; donate land 12.5% No 20
50% @ 120% +
20% @ 80% + 30%
@ 50%
55 20 5% @ 80% + 7.5%
@ 120% 55
Emeryville Create on-site units; pay impact/linkage fee 12%/20% No 4% @ VL + 8% @ Low 55 10 55
Encinitas Create on-site units; create off-site units; create ADU's; preserve at-risk units; pay in-lieu fee; donate land 10%/15% No 7 10% @ VL or 15% @ Low Perpetual 7 10% VL or 15% @
Low Perpetual
Fillmore Create on-site units; pay in-lieu fee; donate land 15% No 4 20+: 5% ELI or VL
& 10%; Low 17-19:
2 low + one ELI or
VL; 10-16: 2 low; 5-
9:: 1 low
55 4
20+: 5% ELI or VL
& 10%; Low 17-19:
2 low + one ELI or
VL; 10-16: 2 low; 5-
9:: 1 low
45 Fremont Has a production option, but the in-lieu fee option is more cost effective 15% No 2 10% @ Low 2 5% @ Mod + 10%
@ Low
Fort Bragg Create on-site units 10% to 20% 5 80% / 120% 5 100% /120% 15 Goleta
Create on-site units; create off-site units; donate land, pay in- lieu fee; acquisition/rehabilitation. Income/Affordability trade off of extremley low and very low income units to low and moderate income units in demonstrated extreme hardship. 25% -
reduced to
20% with
public
benefit
No 2

2.5% @ ELI + 2.5%
@ VL+ 5% @ Low
+ 5% @ Mod + 5%
at Above Mod
In general
45 to 55
years, but
not less
than 30
years
2 2.5% @ ELI + 2.5%
@ VL+ 5% @ Low
+ 5% @ Mod + 5%
at Above Mod
In general
45 to 55
years, but
not less
than 30
years
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; Incl Survey Page 3 of 14 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
Hayward Create on-site units; create off-site units; pay in-lieu fee; pay impact/linkage fee; donate land
6% / 7.5% -
10% No 2 3% @ 50% + 3% @
60% 55 2 110% 45
Huntington Beach Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee 10% No 3 80% 55 3 120% 45 Irvine
Projects with fewer than 50 units can create on-site units; create off-site units; preserve or rehab existing housing; pay in- lieu fee; donate land. Projects with 50+ units must produce the affordable units on site.
15% No 50 50%, 80% & 120%
Defined credits 30 50 50%, 80% & 120%
Defined credits 30
Laguna Woods Create on-site units; create off-site units; pay in-lieu fee; donate land
15% No 5 7.5% @ VL + 7.5%
@ Low 45 5 10% @ Low + 5%
@ Mod 45
La Habra Create on-site units; create off-site units; pay in-lieu fee; acquisition/rehabilitation. 15% No 10 9% @ Mod + 6%
@ VL & Low 55 10 110% 45
Long Beach Create on-site units; pay in-lieu fee; donate land 11%/10% No 10 50% >55 or as long as resid 10 110% >55 or as
long as resid
Los Altos Create on-site units; create off-site units. Program requirements are only imposed in designated areas.

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

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

7.5% @ Low 30
Los Angeles County Create on-site units; create off-site units. Program requirements vary by subarea.
5%-20%
depending
on project
size &
income
standard
No 5
Averages:
<40% AMI: 10% or
5% - sm proj
<65% AMI: 15% or
7% - sm proj
<80% AMI: 20% or
10% sm proj
55 or
Perpetual 5
Mod/Middle Inc:

Avg 135% AMI:

Coastal SLA, SLA
(exc condos), &
ELA: 20% or 10% -
sm proj
SG Valley: 15% or
7% - sm proj
Santa Clarita &
Antelope Valleys
(exc condos): 5%
Equity share
on first sale
Menlo Park Create on-site units; create off-site units; pay in-lieu fee 10% Yes 5 80% /120% 5 80% /120% Mill Valley Create on-site units 25% Yes 4 120% Perpetual 4 120% Perpetual Nevada County Create on-site units; create off-site units Program requirements are only applied in designated areas. No 20 30 20 30 Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; Incl Survey Page 4 of 14 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
Oceanside
Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land; purchase credits from another project.
10% No 3 Low (80%) 55 3 Mod (120%) 55
Oxnard Create on-site units; create off-site units; pay in-lieu fee in limited circumstances 10% No 10 5% @ VL + 5%
Low 55 10 Low 20
Pacifica Create on-site units; create off-site units; pay in-lieu fee; donate land 15% No 8
6% @ VL + 4.5% @
Low + 4.5% @
Mod
55 8 45
Palo Alto Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee 20% Yes 5
5% @ 35% + 10%
@ 50% + 5% @
60%
59 5 10% @ 80% + 10%
@ 120% 59
Pasadena Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 20% No 1 5% @ 50% + 5% @
80% + 10% @
120%
Perpetual 1 110% 45
Petaluma Create on-site units; pay in-lieu fee; donate land 15% No 5 7.5% @ VL; 7.5% @ Low 45 5 7.5% @ Low +

7.5% @ Mod 55
Pleasanton
Create on-site units; create off-site units; pay in-lieu fee; donate land; credit transfers; other alternate methods of compliance
15% Yes 15 50% to 80% 15 50% to 120% Perpetual
Pomona Create on-site units; create off-site units; pay in-lieu fee; donate land
13% / 7%-
11% Yes 3 120% Perpetual 3 120% 45
Poway Create on-site units; create off-site units; pay in-lieu fee 15% / 15%- 20% No Very Low 55 15% @ Low or
20% @ Mod 45
Redondo Beach Create on-site units; create off-site units; pay in-lieu fee up to nine units. Fractional unit obligations are rounded down 10%-15% /
9%-15% Yes 2 Moderate >75 or as
long as resid 2 Moderate 55
Redwood City Create on-site units; create off-site units; preserve or rehab units; pay impact/linkage fee; donate land 20% / 15% No 20 10% @ Mod + 5% @ Low + 5% @ VL 30 5 Moderate 30
Sacramento County
Has a production option, but the in-lieu fee option is more cost effective
10% No 1 80% 1 80%
San Bruno Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land. Excludes area 15% No 10 6% VL + 4.5% Low + 4.5% Mod 55 10 6% Low + 9% Mod 45
San Buenaventura
(Proposed Update)
Create on-site units; create off-site units; pay in-lieu fee; preserve or rehab existing housing; donate land 15% / 10% No 7 Low 55 7 Mod 45 San Clemente
Create on-site units; create off-site units; pay in-lieu fee; donate land; or a combination recommended by the
Community Development Director.
2% No 6 Very Low 6 Very Low
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; Incl Survey Page 5 of 14 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
San Diego
Create on-site units; create off-site units; rehabilitate existing units, SRO hotel rooms, or conversion of guest rooms; pay in- lieu fee; donate land. The amended requirements were
approved in 2020 and are being phased in over five years. 10% to 15% No 10 10% @ 60% 55 10 10% @ 100% or
15% 120% 15
San Francisco
Create on-site units; create off-site units; pay in-lieu fee. Full schedule goes into effect in 2023 for rental and 2025 for ownership.
15% to 20%
/ 15% to
26%
Yes 10 55% to 110% 10 80% to 130%
San Jose
Create on-site units; create off-site units; preserve or rehab units; in-lieu fee; donate land; credit transfers; reduction for deeper affordability
15% Yes 10 5% @50% + 5% @
60% + 5% @ 100% Perpetual 10 120% Perpetual
San Juan Capistrano Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee; donate land 10% No 2 55 2 55 SLO County
Multiple subareas and requirements. Create on-site units; create off-site units; preserve or rehab existing housing; pay in- lieu fee; donate land
15% Yes
1, 2 or 11
depending
on subarea
Coastal: 15% at
Low or 15% at
Mod
55 1, 2 or 11
depending
on subarea
Coastal A: 5% VL +
5% Low + 5% Mod
+ 5% 120-150%.

Coastal: 15% Low.

Inland: 2% VL + 2%
Low + 2% Mod +
2% 120-150%.

Coastal: 45
Inland:

Perpetuity
San Mateo County Create on-site units, pay in-lieu fee 20% Yes 5 10% @ ELI + 10% @ Low Life of Bldg 11 10% @ Low + 10%
@ Mod 45
San Rafael Create on-site units; pay in-lieu fee 10% No 2 2 120% Santa Ana
Only applies to changes in land use and zoning designations.

Create on-site units; off-site units; substantially rehab existing units; pay in-lieu fee
Rental: 5% -
15% & Own:
5%
No 5
15% @ Low or
10% @ VL or 5%
@ ELI or 5% Low +
3% VL +2% ELI
55 5 120% 55
Santa Barbara (City) Create on-site units; create off-site units; pay in-lieu fee for 1 to 9 & fractional units; donate land 10% / 15% No 5 Mod 90 1 120% to 200% 90 / restarts
on each
resale
Santa Cruz Create on-site units; create off-site units; pay in-lieu fee; donate land 15% Yes 2 80% Perpetual 2 120% Perpetual
Santa Monica Create on-site units; create off-site units; pay in-lieu fee; donate land 5% to 30% Yes 2
50%, 80% & 120%
Defined credits 55 2 50%, 80% & 120%
Defined credits 55
Santa Paula Create on-site units; create off-site units; pay in-lieu fee 10% to 17% Yes 10 15% Low or 10% VL 55 10 15% Low or 10%
VL 45
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; Incl Survey Page 6 of 14 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period
Rental Development Ownership Development
Santa Rosa Has a production option, but the in-lieu fee option is more cost effective
5% to 8% /
10% No 1 5% @ 50% or 8%
@ 60% 2 110%
Sonoma Create on-site units 20% Yes 5 120% 55 5 120% 55 Sonoma County Create on-site units; create off-site units; pay in-lieu fee; donate land
10% or 15%
/ 20% Yes 1

7.5% @ VL + 7.5%
@ Low, or 5% @
ELI + 5% @ VL
55 1 10% @ Low + 10%
@ Mod 30
South San Francisco Create on-site units; create off-site units; preserve or rehab existing housing; pay in-lieu fee
20% No 4 55 4 55
Sunnyvale Create on-site units; create off-site units; pay in-lieu fee; donate land, unit conversion, other proposals 15.0% No 7 5% @ 50% + 10% @ 60% 55 7 100% 30
Tiburon Create on-site units; create off-site units; pay in-lieu fee 15% 3 5% @ Low + 10% @ Mod Perpetual 3 5% @ Low + 10%
@ Mod Perpetual
Union City Create on-site units; create off-site units; pay in-lieu fee 15% No 7 4.5% @ VL +

10.5% @ Low 7

1.5% @ Low +

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

File name: 1 22 23 Inclusionary Survey; Incl Survey Page 7 of 14 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

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

South Coast: 2.5%
VL + 2.5% Low +
5% Mod + 5%
Workforce
45 - restarts
up to 90
Santa Ynez: No
Workforce
Santa Maria &
Lompoc: 2.5% VL +

2.5 Low
Thousand Oaks Create on-site units; create off-site rental units; pay in-lieu fee 10% No 5 Mod 45 Santa Barbara County Create on-site units; create off-site units in the coastal zone; pay in-lieu fee for certain unit types 5% - 15% Yes 5
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; Incl Survey Page 8 of 14 Item No.16C

APPENDIX A

INCLUSIONARY HOUSING PROGRAM SURVEYS - CALIFORNIA
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

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

File name: 1 22 23 Inclusionary Survey; Incl Survey Page 9 of 14 Item No.16C

APPENDIX B

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

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

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

Brea
Create on-site units; pay in-lieu
fee
10% No 20 Not Defined 55 20 120% 10 Calculated per project. Based on the Affordability Gap
Carlsbad
Create units; pay in-lieu fee.

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

Chula Vista
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land. Excludes
area west of I-805 identified as
"Area of Low/Moderate
Income Concentration".
10% No 50 5% @ Low +
5% @ Mod Life of Bldg 50 5% @ Low + 5% @
Mod Life of Bldg In-lieu fee is based on the median home price minus the affordable home price
Coronado Create units; pay in-lieu fee 20% No 2 Low 2 Mod In-lieu fee paid by right. $7,000 per market rate unit
Downey Create on-site units; create off-
site units; pay in-lieu fee 11%/10% No 10 Mod >55 or as long as resid 10 Mod 45
Rental: $23.50/SF - only allowed under
extreme hardship. Ownership: $15.90/SF
payable based on City Council criteria
Encinitas
Create on-site units; create off-
site units; create ADU's;
preserve at-risk units; pay in-
lieu fee; donate land
10%/15% No 7 10% VL or
15% Low Perpetual 7 10% VL or 15%
Low 45
One to 6 unit projects pay an in-lieu fee
based on a sliding scale. 7+ unit projects
pay $20 per sf in-lieu fee.

Rental Development Ownership Development
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; LA Orange SD Ven SB Page 10 of 14 Item No.16C

APPENDIX B

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

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
Fillmore Create on-site units; pay in-lieu
fee; donate land 15% No 4
20+: 5% ELI
or VL & 10%;
Low 17-19: 2
low + one ELI
or VL; 10-16:
2 low; 5-9:: 1
low
55 4
20+: 5% ELI or VL
& 10%; Low 17-
19: 2 low + one ELI
or VL; 10-16: 2
low; 5-9:: 1 low
Goleta
Create on-site units; create off-
site units; donate land, pay in-
lieu fee;
acquisition/rehabilitation.

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

2.5% @ ELI +

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

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

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

Irvine
Projects with fewer than 50
units can create on-site units;
create off-site units; preserve
or rehab existing housing; pay
in-lieu fee; donate land.

Projects with 50+ units must
produce the affordable units
on site.
15% No 50
50%, 80% &
120%
Defined
credits
30 50
50%, 80% & 120%
Defined credits 30 Calculated per project. Based on an equivalent value calculation
La Habra
Create on-site units; create off-
site units; pay in-lieu fee;
acquisition/rehabilitation.
15% No 10
9% Mod + 6%
VL & Low 55 10 110% 45
Calculated per project. Based on the
estimated construction cost to produce the
unit.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; LA Orange SD Ven SB Page 11 of 14 Item No.16C

APPENDIX B

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

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
Long Beach Create on-site units; pay in-lieu
fee; donate land 11%/10% No 10 50%
> of 55 yrs
or as long as
resid
10 120%
> of 55 yrs or
as long as
resid
Rental @ $38.00/SF; Ownership @
$29.10/SF
Oceanside
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land; purchase
credits from another project.
10% No 3 Low 55 3 Mod 55
In-lieu fee paid by right. The fee was set at
$15/SF on 1/1/23 and will increase to
$20/SF on 1/1/24.

Oxnard
Create on-site units; create off-
site units; pay in-lieu fee in
limited circumstances
10% No 10 5% @ VL +
5% Low 55 10 Low 20
Fee charged per total unit in the project. In
2022: SFH $36,000; MF Ownership
$35,000; Rental $28,000
Pasadena
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land
20% No 1
5% @50% +
5% @ 80% +
10% @ 120%
1 110% 45 Sliding scale by sub-area & project size.

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

San Buenaventura
(Proposed Update)
Create on-site units; create off-
site units; pay in-lieu fee;
preserve or rehab existing
housing; donate land
15% / 10% No 7 Low 55 7 Mod 45 Ownership @ $29.80 - $66.30/SF; Apartments @ $20.30 - $48.90/SF
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; LA Orange SD Ven SB Page 12 of 14 Item No.16C

APPENDIX B

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

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
San Clemente
Create on-site units; create off-
site units; pay in-lieu fee;
donate land; or a combination
recommended by the
Community Development
Director.
2% No 6 Very Low 6 50% Very Low
Based on the greater of 1% of construction
costs as determined by the Building
Division or 2% of the affordability gap
determined by the formula in the Housing
Element.

San Diego
Create on-site units; create off-
site units; pay in-lieu fee;
donate land
10% to 15% No 10 50% or 80% 55 100% or 120% In 2024 the in-lieu fee will be set a $25/SF San Juan Capistrano
Create on-site units; create off-
site units; preserve or rehab
existing housing; pay in-lieu
fee; donate land
10% No 2 55 2 55
Based on 90% of the Affordability Gap,
which is updated monthly based on
benchmark market prices
Santa Ana
Only applies to changes in land
use and zoning designations.

Create on-site units; off-site
units; pay in-lieu fee
Rental: 5% -
15% & Own:
5%
No 5
15% @ Low
or 10% @ VL
or 5% @ ELI
or 5% Low +
3% VL +2%
ELI
55 5 120% 55
Fee charged per sf of habitable area: 5-9:
$6.00; 10-14: $9.00; 15-19: $12; 20+: $15.

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

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

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; LA Orange SD Ven SB Page 13 of 14 Item No.16C

APPENDIX B

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

THOUSAND OAKS, CALIFORNIA
Jurisdiction Compliance Options Set Aside %
On-site %
Varies
Threshold
Project Size % of AMI
Covenant
Period
Threshold
Project Size % of AMI
Covenant
Period In-Lieu Fee
Rental Development Ownership Development
West Hollywood
Create on-site units; create off-
site units; pay in-lieu fee for 2-
10 units projects
20% No 2 Low / Mod As long as
resid 2 Low / Mod As long as
resid
Sliding scale: 2 Units @ $13.63/SF - 10
Units @ $29.23/SF
II. Inclusionary Requirements: Ownership Projects Only
Carpinteria Create on-site units; pay in-lieu
fee in limited circumstances 12% No 5 200% 30
In-lieu fee allowed if infeasibility can be
proved. The fee is based on the difference
between the median sales price of
condominiums and/or single family homes
and the affordable price at 121% of AMI
with 30% of income dedicated to housing
expenses
5-19: 1 Mod. 20+:

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

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

Santa Ynez: No
Workforce
2020 Very Low & Low Fees: South Coast
$176,000; Santa Maria $96,600; Santa Ynez
$146,200; Lompoc $99,500
Santa Maria &
Lompoc: 2.5% VL
+ 2.5 Low
2020 Mod & Workforce Fees: South Coast
$658,000; Santa Maria $248,000; Santa
Ynez $431,600; Lompoc $227,600
III. Inclusionary Requirements: Rental Projects Only
Glendale
Create on-site units; create off-
site units; pay in-lieu fee;
donate land
15% No 8 60% 55 Sliding scale: 8 Units @ $28.71/SF - 21 Units @ $55/SF
Santa Barbara County
Create on-site units; create off-
site units in the coastal zone;
pay in-lieu fee for certain unit
types
5% - 15% Yes 5
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 Inclusionary Survey; LA Orange SD Ven SB Page 14 of 14 Item No.16C

ATTACHMENT 2

AFFORDABLE HOUSING COST CALCULATION METHODOLOGIES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA

Item No.16C

Affordable Housing Cost Calculation Methodologies Page 1 Inclusionary Housing: Financial Evaluation January 22, 2023

APPENDIX A

AFFORDABLE RENT CALCULATION METHODOLOGY
The Affordable Rent calculations are presented in Attachment 3 – Appendix A. The calculations are based on the following assumptions:

1. The household income information used in the calculations is based on 2022 income statistics for Ventura County as a whole. This information is published annually by the United States Department of Housing and Urban Development (HUD) and distributed by the California Department of Housing and Community Development (HCD).

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

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

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

5. The following monthly utilities allowances were applied in this analysis. 2 1 For example, the imputed household size for a two-bedroom unit is three persons. 2 Utilities allowances are based on utilities costs comprised of gas heating, cooking and water heating; and basic electric.

The allowances are based on the Housing Authority of the County of Ventura schedule effective as of June 1, 2022.

Item No.16C

Affordable Housing Cost Calculation Methodologies Page 2 Inclusionary Housing: Financial Evaluation January 22, 2023

Utilities Allowances
Apartment Development
Number of
Bedrooms
Monthly Utilities
Allowances
1 $52
2 $72
3 $89

Item No.16C

Affordable Housing Cost Calculation Methodologies Page 3 Inclusionary Housing: Financial Evaluation January 22, 2023

APPENDIX B

AFFORDABLE SALES PRICE CALCULATION METHODOLOGY
The Affordable Sales Price calculations are presented in Attachment 4 – Appendix A. The calculations are based on the following assumptions:

1. The household income information used in the calculations is based on 2022 income statistics for Ventura County as a whole:
a. The household incomes for low income households is produced by HUD and distributed by HCD.
b. The household incomes for moderate income households are produced and distributed annually by HCD.

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

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

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

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

Item No.16C

Affordable Housing Cost Calculation Methodologies Page 4 Inclusionary Housing: Financial Evaluation January 22, 2023

Income Category % of AMI
Moderate 110%
Low 70%

The identified benchmark percentages of AMI are not income caps. The household income qualification standards are based on 120% of AMI for moderate income households and 80% of AMI for low income households; both are based on the actual size of the home buyer’s household.

INCOME ALLOCATED TO HOUSING-RELATED EXPENSES
H&SC Section 50052.5 allocates the following percentages of the benchmark household incomes to the payment of housing-related expenses:

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

HOUSING-RELATED EXPENSES
Based on research undertaken by KMA, the variable housing related expense assumptions used in this analysis are presented in the following table:

Item No.16C

Affordable Housing Cost Calculation Methodologies Page 5 Inclusionary Housing: Financial Evaluation January 22, 2023

Variable Housing Related Expenses
Ownership Housing Development Prototypes

Monthly Utilities
Allowances 3
Monthly HOA,
Insurance &
Maintenance
Three-Bedroom Units $265 $350 / $400 4
Four-Bedroom Units $303 $430 / $450 5
Five-Bedroom Units $339 $500

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

SUPPORTABLE MORTGAGE AMOUNT
The mortgage amounts used in the Affordable Sales Price calculations are estimated using the income available after the other housing-related expenses are paid. The mortgage terms used in this Financial Evaluation were based on a 30-year fully amortizing loan at a 5.16% interest rate. 6

BENCHMARK DOWN PAYMENT
KMA set the benchmark down payment at 5% of the estimated Affordable Sales Price. A down payment of this magnitude is commonly allowed by affordable housing programs.

3Utilities allowances are based on utilities costs comprised of gas heating, cooking and water heating; basic electric; and water, sewer and trash services. The allowances are based on the Housing Authority of the County of Ventura schedule effective as of June 1, 2022.
4 The $350 HOA fee and maintenance costs are applied in the townhome analysis, and the $4oo insurance and maintenance costs are applied in the detached single family home analysis. 5 The $430 HOA and maintenance costs are applied in the townhome analysis, and the $450 insurance and maintenance costs are applied to the detached single family home analysis. 6 Based on a 100 basis points premium applied to the Freddie Mac monthly average, between September 2021 and August 2022, for a fixed-interest rate loan with a 30-year amortization period.

Item No.16C

ATTACHMENT 3

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; Att 3 Apt Page 1 of 57
Item No.16C

ATTACHMENT 3: APPENDIX A

RENT ANALYSES

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; App A RS Page 2 of 57
Item No.16C

ATTACHMENT 3: APPENDIX A
RENT SURVEY 4 STAR PROPERTIES

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Name # of Units
Unit Size
(SF) Total Per SF
Average Effective Rent
Address
77 North Apartments 77 N Conejo School Rd Thousand Oaks 91362 20 789 $2,721 $3.45 Park View Apartment Homes 256-268 Erbes Rd Thousand Oaks 91362 10 700 $2,593 $3.70 Retreat at Thousand Oaks 550 N Laurie Ln Thousand Oaks 91360 48 850 $2,595 $3.05 YOLO East Apartment Homes 1815 Los Feliz Dr Thousand Oaks 91362 12 748 $2,689 $3.59 Santal Thousand Oaks 299 E Thousand Oaks Blvd Thousand Oaks 91360 64 805 $3,338 $4.15 1710 on the BLVD 1710 E Thousand Oaks Blvd Thousand Oaks 91360 8 816 $2,490 $3.05 Westcreek Apartments 973 Westcreek Ln Westlake Village 91362 48 820 $3,055 $3.73 Andorra Apartments 341 Mike Loza Dr Camarillo 93012 228 782 $2,470 $3.16 Allure at Camarillo 390 Paseo Camarillo Camarillo 93010 92 761 $2,459 $3.23 Mission Hills 45 Rincon Dr Camarillo 93012 102 812 $2,690 $3.31 AMLI Spanish Hills 668 Spring Oak Rd Camarillo 93010 207 769 $2,562 $3.33 Las Positas 352 Townsite Promenade Camarillo 93010 53 831 $2,645 $3.18 Villas at the Park 313 Westpark Ct Camarillo 93012 19 849 $2,588 $3.05 Waterstone at Moorpark 4767 Moorpark Ave Moorpark 93021 120 681 $2,113 $3.10 Sofi at Wood Ranch 241 Country Club Dr Simi Valley 93065 252 684 $2,211 $3.23 Lumina Apartments 1196 Patricia Ave Simi Valley 93065 16 626 $2,166 $3.46 Shadlow Ridge Apt Homes 1987 Ridgegate Ln Simi Valley 93065 92 656 $2,473 $3.77 Minimum 626 $2,113 $3.05
Maximum 850 $3,338 $4.15
Weighted Average 751 $2,497 $3.32
77 North Apartments 77 N Conejo School Rd Thousand Oaks 91362 20 1,230 $3,226 $2.62 Park View Apartment Homes 256-268 Erbes Rd Thousand Oaks 91362 24 922 $2,755 $2.99 Retreat at Thousand Oaks 550 N Laurie Ln Thousand Oaks 91360 24 1,200 $3,181 $2.65 YOLO East Apartment Homes 1815 Los Feliz Dr Thousand Oaks 91362 33 1,068 $2,924 $2.74 YOLO Thousand Oaks Apts 51-81 Maegan Pl Thousand Oaks 91362 36 896 $2,761 $3.08 Santal Thousand Oaks 299 E Thousand Oaks Blvd Thousand Oaks 91360 44 1,014 $3,878 $3.82 1710 on the BLVD 1710 E Thousand Oaks Blvd Thousand Oaks 91360 26 1,012 $3,039 $3.00 Westcreek Apartments 973 Westcreek Ln Westlake Village 91362 78 1,032 $3,611 $3.50 Andorra Apartments 341 Mike Loza Dr Camarillo 93012 207 1,059 $2,898 $2.74 Allure at Camarillo 390 Paseo Camarillo Camarillo 93010 73 1,035 $3,039 $2.94 Mission Hills 45 Rincon Dr Camarillo 93012 140 921 $2,999 $3.26 AMLI Spanish Hills 668 Spring Oak Rd Camarillo 93010 157 1,095 $3,151 $2.88 Las Positas 352 Townsite Promenade Camarillo 93010 160 1,071 $2,957 $2.76 Villas at the Park 313 Westpark Ct Camarillo 93012 38 1,077 $2,843 $2.64 The Ranch at Moorpark 51 Magestic Ct Moorpark 93021 296 835 $2,675 $3.20 Waterstone at Moorpark 4767 Moorpark Ave Moorpark 93021 156 933 $3,193 $3.42 Sofi at Wood Ranch 241 Country Club Dr Simi Valley 93065 252 734 $2,659 $3.62 Lumina Apartments 1196 Patricia Ave Simi Valley 93065 49 850 $2,787 $3.28 Shadlow Ridge Apt Homes 1987 Ridgegate Ln Simi Valley 93065 218 873 $2,709 $3.10 Minimum 734 $2,659 $2.62
Maximum 1,230 $3,878 $3.82
One-Bedroom Units
Two-Bedroom Units
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Item No.16C

ATTACHMENT 3: APPENDIX A
RENT SURVEY 4 STAR PROPERTIES

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Name # of Units
Unit Size
(SF) Total Per SF
Average Effective Rent
Address
Weighted Average 941 $2,924 $3.14
Retreat at Thousand Oaks 550 N Laurie Ln Thousand Oaks 91360 70 1,593 $3,947 $2.48 1710 on the BLVD 1710 E Thousand Oaks Blvd Thousand Oaks 91360 2 1,503 $3,747 $2.49 Andorra Apartments 341 Mike Loza Dr Camarillo 93012 15 1,330 $3,867 $2.91 Mission Hills 45 Rincon Dr Camarillo 93012 86 1,245 $3,661 $2.94 AMLI Spanish Hills 668 Spring Oak Rd Camarillo 93010 20 1,395 $3,829 $2.74 The Ranch at Moorpark 51 Magestic Ct Moorpark 93021 82 1,100 $3,453 $3.14 Waterstone at Moorpark 4767 Moorpark Ave Moorpark 93021 36 1,201 $2,532 $2.11 Shadlow Ridge Apt Homes 1987 Ridgegate Ln Simi Valley 93065 22 1,078 $3,243 $3.01 Minimum 1,078 $2,532 $2.11
Maximum 1,593 $3,947 $3.14
Weighted Average 1,281 $3,540 $2.79
Source: CoStar, September 2022
Three-Bedroom Units
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt Page 4 of 57
Item No.16C

ATTACHMENT 3: APPENDIX B

AFFORDABLE RENT CALCULATIONS

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; App B Aff Rent Page 5 of 57
Item No.16C

ATTACHMENT 3: APPENDIX B

AFFORDABLE RENT CALCULATIONS
2022 INCOME STANDARDS

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
One-Bedroom Two-Bedroom Three-Bedroom
I. Household Income Assumptions
Area Median Income (AMI) 1 $92,300 $103,850 $115,400
Percentage of AMI Used for Rent Setting Purposes 2 80% 80% 80% Benchmark Annual Household Income $73,840 $83,080 $92,320 II. Percentage of Income Allotted to Housing Expenses 30% 30% 30% III. Gross Affordable Rent
Annual $22,152 $24,924 $27,696
Monthly $1,846 $2,077 $2,308
(Less) Monthly Utilities Allowance 3 ($52) ($72) ($89)
IV. Net Affordable Rent $1,794 $2,005 $2,219
I. Household Income Assumptions
Area Median Income (AMI) 1 $92,300 $103,850 $115,400
Percentage of AMI Used for Rent Setting Purposes 4 50% 50% 50% Benchmark Annual Household Income $46,150 $51,925 $57,700 II. Percentage of Income Allotted to Housing Expenses 30% 30% 30% III. Gross Affordable Rent
Annual $13,845 $15,578 $17,310
Monthly $1,154 $1,298 $1,443
(Less) Monthly Utilities Allowance 3 ($52) ($72) ($89)
IV. Net Affordable Rent $1,102 $1,226 $1,354
1 2 Based on 80% of AMI. This percentage of AMI is based on the standard identified in AB 1505. 3 4 Based on 50% of AMI. This percentage of AMI is based on the standard identified in California Health & Safety Code Section 50053.

Utilities allowances are based on the Area Housing Authority of the County of Ventura utility allowance schedule for apartment development effective as of 6/1/22. Assumes: Gas Heating, Gas Cooking, and Gas Water Heater; and Basic Electric.

Low Income
Very Low Income
Based on the median income for Ventura County published annually by the California Department of Housing & Community Development (HCD).

Prepared by: Keyser Marston Associates
File name: 1 22 23 TO Apt; Aff Rent Page 6 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C

PRO FORMA ANALYSES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA

MALL PROPERTY APARTMENT PROTOTYPES
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; App C Mall Page 7 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT I
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

MALL PROPERTY APARTMENT PROTOTYPE

THOUSAND OAKS, CALIFORNIA

PRO FORMA ANALYSIS

MARKET RATE ALTERNATIVE
Prepared by: Keyser Marston Associates, Inc.

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Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT I - TABLE 1

ESTIMATED DEVELOPMENT COSTS

MARKET RATE ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 130,680 Sf of Land $60 /Sf of Land $7,841,000 II. Direct Costs 2
On-Site Improvements/Landscaping 130,680 Sf of Land $20 /Sf of Land $2,614,000 Parking 3
At-Grade Spaces 45 Spaces $7,500 /Space 338,000
Above-Grade Spaces 120 Spaces $20,000 /Space 2,400,000
Building Costs 80,250 Sf of GLA $190 /Sf of GLA 15,248,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 4,120,000 Total Direct Costs 80,250 Sf of GLA $308 /Sf of GLA $24,720,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $1,978,000 Public Permits & Fees 5 90 Units $43,890 /Unit 3,950,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 494,000 Marketing 90 Units $5,000 /Unit 450,000
Developer Fee 5.0% Direct Costs 1,236,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 405,000 Total Indirect Costs $8,513,000
IV. Financing Costs
Interest During Construction
Land 6 $7,841,000 Cost 5.0% Avg Rate $588,000
Construction 7 $35,826,000 Cost 5.0% Avg Rate 1,612,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 393,000 Total Financing Costs $2,593,000
V. Total Construction Cost 90 Units $398,000 /Unit $35,826,000 Total Development Cost 90 Units $485,000 /Unit $43,667,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Based on an 18 month construction period, after receipt of entitlements, and a 100% average outstanding loan balance. 7 Based on an 18 month construction period, after receipt of entitlements, and a 60% average outstanding loan balance.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

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Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 35 Units @ $2,740 /Unit/Month $1,151,000 Two-Bedroom Units 50 Units @ $3,280 /Unit/Month 1,968,000 Three-Bedroom Units 5 Units @ $3,990 /Unit/Month 239,000 B. Laundry & Miscellaneous Income 90 Units @ $25 /Unit/Month 27,000 Total Gross Income $3,385,000
Vacancy & Collection Allowance 5% Gross Income (169,000) II. Effective Gross Income $3,216,000
III. Operating Expenses
General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes 2 90 Units @ $6,600 /Unit 596,000
Replacement Reserve Deposits 90 Units @ $150 /Unit 14,000 Total Operating Expenses ($1,015,000)
IV. Stabilized Net Operating Income $2,201,000
1 The weighted average monthly rent equates to $3.49 per square foot of leasable area. 2 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

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Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT I - TABLE 3

ESTIMATED DEVELOPER RETURN

MARKET RATE ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX C - EXHIBIT I - TABLE 2 $2,201,000 II. Total Development Cost See ATTACHMENT 3: APPENDIX C - EXHIBIT I - TABLE 1 $43,667,000 III. Stabilized Return on Total Investment 5.0%
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Item No.16C

THOUSAND OAKS, CALIFORNIA
ATTACHMENT 3: APPENDIX C - EXHIBIT II

PRO FORMA ANALYSIS

LOW INCOME ALTERNATIVE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

MALL PROPERTY APARTMENT PROTOTYPE
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF Mall Low Page 12 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT II - TABLE 1

ESTIMATED DEVELOPMENT COSTS

LOW INCOME ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 130,680 Sf of Land $60 /Sf of Land $7,841,000 II. Direct Costs 2
On-Site Improvements/Landscaping 130,680 Sf of Land $20 /Sf of Land $2,614,000 Parking 3
At-Grade Spaces 45 Spaces $7,500 /Space 338,000
Above-Grade Spaces 120 Spaces $20,000 /Space 2,400,000
Building Costs 80,250 Sf of GLA $190 /Sf of GLA 15,248,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 4,120,000 Total Direct Costs 80,250 Sf of GLA $308 /Sf of GLA $24,720,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $1,978,000 Public Permits & Fees 5 90 Units $43,890 /Unit 3,950,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 494,000 Marketing 90 Units $5,000 /Unit 450,000
Developer Fee 5% Direct Costs 1,236,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 405,000 Total Indirect Costs $8,513,000
IV. Financing Costs
Interest During Construction
Land 6 $7,682,700 Cost 5.0% Avg Rate $576,000
Construction 7 $35,815,000 Cost 5.0% Avg Rate 1,612,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 393,000 Total Financing Costs $2,581,000
V. Total Construction Cost 90 Units $398,000 /Unit $35,814,000 Total Development Cost 90 Units $485,000 /Unit $43,655,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on an 18 month construction period, after receipt of entitlements, and a 60% average outstanding loan balance.

Based on a 18 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $158,300 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF Mall Low Page 13 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

LOW INCOME ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 31 Units @ $2,740 /Unit/Month $1,019,000 Two-Bedroom Units 45 Units @ $3,280 /Unit/Month 1,771,000 Three-Bedroom Units 4 Units @ $3,990 /Unit/Month 192,000 B. Low Income Units 2
One-Bedroom Units 4 Units @ $1,794 /Unit/Month 86,000
Two-Bedroom Units 5 Units @ $2,005 /Unit/Month 120,000
Three-Bedroom Units 1 Unit @ $2,219 /Unit/Month 27,000
C. Laundry & Miscellaneous Income 90 Units @ $25 /Unit/Month 27,000 Total Gross Income $3,242,000
Vacancy & Collection Allowance 5% Gross Income (162,000) II. Effective Gross Income $3,080,000
III. Operating Expenses
General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes 3 90 Units @ $6,300 /Unit 567,000
Replacement Reserve Deposits 90 Units @ $150 /Unit 14,000 Total Operating Expenses 90 Units @ $10,956 /Unit ($986,000) IV. Stabilized Net Operating Income $2,094,000
1 The weighted average monthly rent equates to $3.49 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

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File name: 1 22 23 TO Apt; PF Mall Low Page 14 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT II - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

LOW INCOME ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX C - EXHIBIT II - T $2,094,000 Threshold Return on Total Investment 1 5.0%
Total Supportable Investment $41,544,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX C - EXHIBIT II - TABLE 1 $43,655,000 III. Total Financial Impact ($2,111,000)
Stabilized Return on Total Investment 4.8%
% Rent Increase to Offset Impact 4.9% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

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File name: 1 22 23 TO Apt; PF Mall Low Page 15 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT III

PRO FORMA ANALYSIS

VERY LOW INCOME ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF Mall VL Page 16 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT III - TABLE 1

ESTIMATED DEVELOPMENT COSTS

VERY LOW INCOME ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 130,680 Sf of Land $60 /Sf of Land $7,841,000 II. Direct Costs 2
On-Site Improvements/Landscaping 130,680 Sf of Land $20 /Sf of Land $2,614,000 Parking 3
At-Grade Spaces 45 Spaces $7,500 /Space 338,000
Above-Grade Spaces 120 Spaces $20,000 /Space 2,400,000
Building Costs 80,250 Sf of GLA $190 /Sf of GLA 15,248,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 4,120,000 Total Direct Costs 80,250 Sf of GLA $308 /Sf of GLA $24,720,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $1,978,000 Public Permits & Fees 5 90 Units $43,890 /Unit 3,950,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 494,000 Marketing 90 Units $5,000 /Unit 450,000
Developer Fee 5% Direct Costs 1,236,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 405,000 Total Indirect Costs $8,513,000
IV. Financing Costs
Interest During Construction
Land 6 $7,667,900 Cost 5.0% Avg Rate $575,000
Construction 7 $35,813,000 Cost 5.0% Avg Rate 1,612,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 393,000 Total Financing Costs $2,580,000
V. Total Construction Cost 90 Units $398,000 /Unit $35,813,000 Total Development Cost 90 Units $485,000 /Unit $43,654,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on a 18 month construction period and a 60% average outstanding loan balance.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

Based on a 18 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $173,100 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

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File name: 1 22 23 TO Apt; PF Mall VL Page 17 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

VERY LOW INCOME ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 32 Units @ $2,740 /Unit/Month $1,052,000 Two-Bedroom Units 46 Units @ $3,280 /Unit/Month 1,811,000 Three-Bedroom Units 5 Units @ $3,990 /Unit/Month 239,000 B. Very Low Income Units 2
One-Bedroom Units 3 Units @ $1,102 /Unit/Month 40,000
Two-Bedroom Units 4 Units @ $1,226 /Unit/Month 59,000
Three-Bedroom Units 0 Units @ $1,354 /Unit/Month 0
C. Laundry & Miscellaneous Income 90 Units @ $25 /Unit/Month 27,000 Total Gross Income $3,228,000
Vacancy & Collection Allowance 5% Gross Income (161,000) II. Effective Gross Income $3,067,000
III. Operating Expenses
General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes 3 90 Units @ $6,300 /Unit 564,000
Replacement Reserve Deposits 90 Units @ $150 /Unit 14,000 Total Operating Expenses 90 Units @ $10,922 /Unit ($983,000) IV. Stabilized Net Operating Income $2,084,000
1 The weighted average monthly rent equates to $3.48 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

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Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT III - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

VERY LOW INCOME ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX C - EXHIBIT III - $2,084,000 Threshold Return on Total Investment 1 5.0%
Total Supportable Investment $41,346,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX C - EXHIBIT III - TABLE 1 $43,654,000 III. Total Financial Impact ($2,308,000)
Stabilized Return on Total Investment 4.8%
% Rent Increase to Offset Impact 5.3% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

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Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT IV

PRO FORMA ANALYSIS
50% DENSITY BONUS ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

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Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT IV - TABLE 1

ESTIMATED DEVELOPMENT COSTS
50% DENSITY BONUS ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 130,680 Sf of Land $60 /Sf of Land $7,841,000 II. Direct Costs 2
On-Site Improvements/Landscaping 130,680 Sf of Land $20 /Sf of Land $2,614,000 Above-Grade Spaces 3 176 Spaces $20,000 /Space 3,520,000 Building Costs 119,900 Sf of GLA $205 /Sf of GLA 24,580,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 6,143,000 Total Direct Costs 119,900 Sf of GLA $307 /Sf of GLA $36,857,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $2,949,000 Public Permits & Fees 5 135 Units $43,890 /Unit 5,925,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 737,000 Marketing 135 Units $5,000 /Unit 675,000
Developer Fee 5% Direct Costs 1,843,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 606,000 Total Indirect Costs $12,735,000
IV. Financing Costs
Interest During Construction
Land 6 $7,803,800 Cost 5.0% Avg Rate $585,000
Construction 7 $53,116,000 Cost 5.0% Avg Rate 2,390,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 549,000 Total Financing Costs $3,524,000
V. Total Construction Cost 135 Units $393,000 /Unit $53,116,000 Total Development Cost 135 Units $452,000 /Unit $60,957,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on a 18 month construction period and a 60% average outstanding loan balance.

The parking ratio comport with the following Section 65915(p) density bonus requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; and three-bedroom units at 1.5 spaces per unit. No guest space requirement is applied.

Based on a 18 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $37,200 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF Mall DB Page 21 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
50% DENSITY BONUS ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 49 Units @ $2,740 /Unit/Month $1,611,000 Two-Bedroom Units 66 Units @ $3,280 /Unit/Month 2,598,000 Three-Bedroom Units 6 Units @ $3,990 /Unit/Month 287,000 B. Very Low Income Units 2
One-Bedroom Units 5 Units @ $1,102 /Unit/Month 66,000
Two-Bedroom Units 8 Units @ $1,226 /Unit/Month 118,000
Three-Bedroom Units 1 Unit @ $1,354 /Unit/Month 16,000
C. Laundry & Miscellaneous Income 135 Units @ $25 /Unit/Month 41,000 Total Gross Income $4,737,000
Vacancy & Collection Allowance 5% Gross Income (237,000) II. Effective Gross Income $4,500,000
III. Operating Expenses
General Operating Expenses 135 Units @ $4,500 /Unit $607,500 Property Taxes 3 135 Units @ $6,100 /Unit 825,000
Replacement Reserve Deposits 135 Units @ $150 /Unit 20,000 Total Operating Expenses 135 Units @ $10,759 /Unit ($1,452,500) IV. Stabilized Net Operating Income $3,047,500
1 The weighted average monthly rent equates to $3.49 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF Mall DB Page 22 of 57
Item No.16C

ATTACHMENT 3: APPENDIX C - EXHIBIT IV - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS
50% DENSITY BONUS ALTERNATIVE

MALL PROPERTY APARTMENT PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX C - EXHIBIT IV - $3,047,500 Threshold Return on Total Investment 1 5.0%
Total Supportable Investment $60,461,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX C - EXHIBIT IV - TABLE 1 $60,957,000 III. Total Financial Impact ($496,000)
Stabilized Return on Total Investment 5.0%
% Rent Increase to Offset Impact 0.8% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF Mall DB Page 23 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D

PRO FORMA ANALYSES

NEIGHBORHOOD MEDIUM HIGH PROTOTYPES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; App D MH Page 24 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT I

PRO FORMA ANALYSIS

MARKET RATE ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH Mkt Page 25 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT I - TABLE 1

ESTIMATED DEVELOPMENT COSTS

MARKET RATE ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 87,120 Sf of Land $60 /Sf of Land $5,227,000 II. Direct Costs 2
On-Site Improvements/Landscaping 87,120 Sf of Land $20 /Sf of Land $1,742,000 Covered & Enclosed Spaces 3 76 Spaces $15,000 /Space 1,140,000 Building Costs 42,900 Sf of GLA $175 /Sf of GLA 7,508,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 2,078,000 Total Direct Costs 42,900 Sf of GLA $291 /Sf of GLA $12,468,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $997,000 Public Permits & Fees 5 40 Units $43,890 /Unit 1,756,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 249,000 Marketing 40 Units $5,000 /Unit 200,000
Developer Fee 5.0% Direct Costs 623,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 191,000 Total Indirect Costs $4,016,000
IV. Financing Costs
Interest During Construction
Land 6 $5,227,000 Cost 5.0% Avg Rate $392,000
Construction 7 $17,889,000 Cost 5.0% Avg Rate 805,000
Loan Origination Fees 60% Loan to Cost 1.5 Points 208,000 Total Financing Costs $1,405,000
V. Total Construction Cost 40 Units $447,000 /Unit $17,889,000 Total Development Cost 40 Units $578,000 /Unit $23,116,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Based on an 18 month construction period, after receipt of entitlements, and a 100% average outstanding loan balance. 7 Based on an 18 month construction period, after receipt of entitlements, and a 60% average outstanding loan balance.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH Mkt Page 26 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 14 Units @ $3,110 /Unit/Month $522,000 Two-Bedroom Units 20 Units @ $3,800 /Unit/Month 912,000 Three-Bedroom Units 6 Units @ $4,190 /Unit/Month 302,000 B. Laundry & Miscellaneous Income 40 Units @ $25 /Unit/Month 12,000 Total Gross Income $1,748,000
Vacancy & Collection Allowance 5% Gross Income (87,000) II. Effective Gross Income $1,661,000
III. Operating Expenses
General Operating Expenses 40 Units @ $4,500 /Unit $180,000 Property Taxes 2 40 Units @ $7,900 /Unit 314,000
Replacement Reserve Deposits 40 Units @ $150 /Unit 6,000 Total Operating Expenses ($500,000)
IV. Stabilized Net Operating Income $1,161,000
1 The weighted average monthly rent equates to $3.37 per square foot of leasable area. 2 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH Mkt Page 27 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT I - TABLE 3

ESTIMATED DEVELOPER RETURN

MARKET RATE ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX D - EXHIBIT I - TABLE 2 $1,161,000 II. Total Development Cost See ATTACHMENT 3: APPENDIX D - EXHIBIT I - TABLE 1 $23,116,000 III. Stabilized Return on Total Investment 5.0%
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH Mkt Page 28 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT II

PRO FORMA ANALYSIS

LOW INCOME ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH Low Page 29 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT II - TABLE 1

ESTIMATED DEVELOPMENT COSTS

LOW INCOME ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 87,120 Sf of Land $60 /Sf of Land $5,227,000 II. Direct Costs 2
On-Site Improvements/Landscaping 87,120 Sf of Land $20 /Sf of Land $1,742,000 Covered & Enclosed Spaces 3 76 Spaces $15,000 /Space 1,140,000 Building Costs 42,900 Sf of GLA $175 /Sf of GLA 7,508,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 2,078,000 Total Direct Costs 42,900 Sf of GLA $291 /Sf of GLA $12,468,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $997,000 Public Permits & Fees 5 40 Units $43,890 /Unit 1,756,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 249,000 Marketing 40 Units $5,000 /Unit 200,000
Developer Fee 5% Direct Costs 623,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 191,000 Total Indirect Costs $4,016,000
IV. Financing Costs
Interest During Construction
Land 6 $5,161,700 Cost 5.0% Avg Rate $387,000
Construction 7 $17,884,000 Cost 5.0% Avg Rate 805,000
Loan Origination Fees 60% Loan to Cost 1.5 Points 208,000 Total Financing Costs $1,400,000
V. Total Construction Cost 40 Units $447,000 /Unit $17,884,000 Total Development Cost 40 Units $578,000 /Unit $23,111,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on an 18 month construction period, after receipt of entitlements, and a 60% average outstanding loan balance.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

Based on a 18 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $65,300 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH Low Page 30 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

LOW INCOME ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 13 Units @ $3,110 /Unit/Month $485,000 Two-Bedroom Units 18 Units @ $3,800 /Unit/Month 821,000 Three-Bedroom Units 6 Units @ $4,190 /Unit/Month 302,000 B. Low Income Units 2
One-Bedroom Units 1 Unit @ $1,794 /Unit/Month 22,000
Two-Bedroom Units 2 Units @ $2,005 /Unit/Month 48,000
Three-Bedroom Units 0 Units @ $2,219 /Unit/Month 0
C. Laundry & Miscellaneous Income 40 Units @ $25 /Unit/Month 12,000 Total Gross Income $1,690,000
Vacancy & Collection Allowance 5% Gross Income (85,000) II. Effective Gross Income $1,605,000
III. Operating Expenses
General Operating Expenses 40 Units @ $4,500 /Unit $180,000 Property Taxes 3 40 Units @ $7,600 /Unit 302,000
Replacement Reserve Deposits 40 Units @ $150 /Unit 6,000 Total Operating Expenses 40 Units @ $12,200 /Unit ($488,000) IV. Stabilized Net Operating Income $1,117,000
1 The weighted average monthly rent equates to $3.36 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH Low Page 31 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT II - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

LOW INCOME ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX D - EXHIBIT II - T $1,117,000 Threshold Return on Total Investment 1 5.0%
Total Supportable Investment $22,240,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX D - EXHIBIT II - TABLE 1 $23,111,000 III. Total Financial Impact ($871,000)
Stabilized Return on Total Investment 4.8%
% Rent Increase to Offset Impact 4.3% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH Low Page 32 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT III

PRO FORMA ANALYSIS

VERY LOW INCOME ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH VL Page 33 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT III - TABLE 1

ESTIMATED DEVELOPMENT COSTS

VERY LOW INCOME ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 87,120 Sf of Land $60 /Sf of Land $5,227,000 II. Direct Costs 2
On-Site Improvements/Landscaping 87,120 Sf of Land $20 /Sf of Land $1,742,000 Covered & Enclosed Spaces 3 76 Spaces $15,000 /Space 1,140,000 Building Costs 42,900 Sf of GLA $175 /Sf of GLA 7,508,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 2,078,000 Total Direct Costs 42,900 Sf of GLA $291 /Sf of GLA $12,468,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $997,000 Public Permits & Fees 5 40 Units $43,890 /Unit 1,756,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 249,000 Marketing 40 Units $5,000 /Unit 200,000
Developer Fee 5% Direct Costs 623,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 191,000 Total Indirect Costs $4,016,000
IV. Financing Costs
Interest During Construction
Land 6 $5,164,700 Cost 5.0% Avg Rate $387,000
Construction 7 $17,884,000 Cost 5.0% Avg Rate 805,000
Loan Origination Fees 60% Loan to Cost 1.5 Points 208,000 Total Financing Costs $1,400,000
V. Total Construction Cost 40 Units $447,000 /Unit $17,884,000 Total Development Cost 40 Units $578,000 /Unit $23,111,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on an 18 month construction period, after receipt of entitlements, and a 60% average outstanding loan balance.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

Based on a 18 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $62,300 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH VL Page 34 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

VERY LOW INCOME ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 13 Units @ $3,110 /Unit/Month $485,000 Two-Bedroom Units 19 Units @ $3,800 /Unit/Month 866,000 Three-Bedroom Units 6 Units @ $4,190 /Unit/Month 302,000 B. Very Low Income Units 2
One-Bedroom Units 1 Unit @ $1,102 /Unit/Month 13,000
Two-Bedroom Units 1 Unit @ $1,226 /Unit/Month 15,000
Three-Bedroom Units 0 Units @ $1,354 /Unit/Month 0
C. Laundry & Miscellaneous Income 40 Units @ $25 /Unit/Month 12,000 Total Gross Income $1,693,000
Vacancy & Collection Allowance 5% Gross Income (85,000) II. Effective Gross Income $1,608,000
III. Operating Expenses
General Operating Expenses 40 Units @ $4,500 /Unit $180,000 Property Taxes 3 40 Units @ $7,600 /Unit 303,000
Replacement Reserve Deposits 40 Units @ $150 /Unit 6,000 Total Operating Expenses 40 Units @ $12,225 /Unit ($489,000) IV. Stabilized Net Operating Income $1,119,000
1 The weighted average monthly rent equates to $3.36 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH VL Page 35 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT III - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

VERY LOW INCOME ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX D - EXHIBIT III - $1,119,000 Threshold Return on Total Investment 1 5.0%
Total Supportable Investment $22,280,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX D - EXHIBIT III - TABLE 1 $23,111,000 III. Total Financial Impact ($831,000)
Stabilized Return on Total Investment 4.8%
% Rent Increase to Offset Impact 4.0% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH VL Page 36 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT IV

PRO FORMA ANALYSIS
50% DENSITY BONUS ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH_DB Page 37 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT IV - TABLE 1

ESTIMATED DEVELOPMENT COSTS
50% DENSITY BONUS ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 87,120 Sf of Land $60 /Sf of Land $5,227,000 II. Direct Costs 2
On-Site Improvements/Landscaping 87,120 Sf of Land $20 /Sf of Land $1,742,000 Covered & Enclosed Spaces 3 80 Spaces $15,000 /Space 1,200,000 Building Costs 64,350 Sf of GLA $190 /Sf of GLA 12,227,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 3,034,000 Total Direct Costs 64,350 Sf of GLA $283 /Sf of GLA $18,203,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $1,456,000 Public Permits & Fees 5 60 Units $43,890 /Unit 2,633,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 364,000 Marketing 60 Units $5,000 /Unit 300,000
Developer Fee 5% Direct Costs 910,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 283,000 Total Indirect Costs $5,946,000
IV. Financing Costs
Interest During Construction
Land 6 $5,227,000 Cost 5.0% Avg Rate $392,000
Construction 7 $25,992,000 Cost 5.0% Avg Rate 1,170,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 281,000 Total Financing Costs $1,843,000
V. Total Construction Cost 60 Units $433,000 /Unit $25,992,000 Total Development Cost 60 Units $520,000 /Unit $31,219,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on a 18 month construction period and a 60% average outstanding loan balance.

The parking ratio comport with the following Section 65915(p) density bonus requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; and three-bedroom units at 1.5 spaces per unit. No guest space requirement is applied.

Based on a 18 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $0 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH_DB Page 38 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME
50% DENSITY BONUS ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 19 Units @ $3,110 /Unit/Month $709,000 Two-Bedroom Units 27 Units @ $3,800 /Unit/Month 1,231,000 Three-Bedroom Units 8 Units @ $4,190 /Unit/Month 402,000 B. Very Low Income Units 2
One-Bedroom Units 2 Units @ $1,102 /Unit/Month 26,000
Two-Bedroom Units 3 Units @ $1,226 /Unit/Month 44,000
Three-Bedroom Units 1 Unit @ $1,354 /Unit/Month 16,000
C. Laundry & Miscellaneous Income 60 Units @ $25 /Unit/Month 18,000 Total Gross Income $2,446,000
Vacancy & Collection Allowance 5% Gross Income (122,000) II. Effective Gross Income $2,324,000
III. Operating Expenses
General Operating Expenses 60 Units @ $4,500 /Unit $270,000 Property Taxes 3 60 Units @ $7,300 /Unit 436,000
Replacement Reserve Deposits 60 Units @ $150 /Unit 9,000 Total Operating Expenses 60 Units @ $11,917 /Unit ($715,000) IV. Stabilized Net Operating Income $1,609,000
1 The weighted average monthly rent equates to $3.37 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH_DB Page 39 of 57
Item No.16C

ATTACHMENT 3: APPENDIX D - EXHIBIT IV - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS
50% DENSITY BONUS ALTERNATIVE

NEIGHBORHOOD MEDIUM HIGH PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX D - EXHIBIT IV - $1,609,000 Threshold Return on Total Investment 1 5.0%
Total Supportable Investment $32,036,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX D - EXHIBIT IV - TABLE 1 $31,219,000 III. Total Financial Impact $817,000
Stabilized Return on Total Investment 5.2%
% Rent Increase to Offset Impact 0.0% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MH_DB Page 40 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E

PRO FORMA ANALYSES

MIXED-USE PROTOTYPES
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; App E MU Page 41 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT I

PRO FORMA ANALYSIS

MARKET RATE ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU Mkt Page 42 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT I - TABLE 1

ESTIMATED DEVELOPMENT COSTS

MARKET RATE ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 435,600 Sf of Land $60 /Sf of Land $26,136,000 II. Direct Costs 2
On-Site Improvements/Landscaping 435,600 Sf of Land $20 /Sf of Land $8,712,000 Parking 3
At-Grade Spaces 150 Spaces $7,500 /Space 1,125,000
Semi-Subterranean Spaces 393 Spaces $30,000 /Space 11,790,000 Building Costs 312,600 Sf of GLA $190 /Sf of GLA 59,394,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 16,204,000 Total Direct Costs 312,600 Sf of GLA $311 /Sf of GLA $97,225,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $7,778,000 Public Permits & Fees 5 300 Units $43,890 /Unit 13,167,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,945,000 Marketing 300 Units $5,000 /Unit 1,500,000
Developer Fee 5.0% Direct Costs 4,861,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 1,463,000 Total Indirect Costs $30,714,000
IV. Financing Costs
Interest During Construction
Land 6 $26,136,000 Cost 5.0% Avg Rate $1,960,000
Construction 7 $137,562,000 Cost 5.0% Avg Rate 6,190,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,473,000 Total Financing Costs $9,623,000
V. Total Construction Cost 300 Units $459,000 /Unit $137,562,000 Total Development Cost 300 Units $546,000 /Unit $163,698,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Based on an 18 month construction period, after receipt of entitlements, and a 100% average outstanding loan balance. 7 Based on an 18 month construction period, after receipt of entitlements, and a 60% average outstanding loan balance.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU Mkt Page 43 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT I - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

MARKET RATE ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 150 Units @ $3,110 /Unit/Month $5,598,000 Two-Bedroom Units 114 Units @ $3,970 /Unit/Month 5,431,000 Three-Bedroom Units 36 Units @ $4,190 /Unit/Month 1,810,000 B. Laundry & Miscellaneous Income 300 Units @ $25 /Unit/Month 90,000 Total Gross Income $12,929,000
Vacancy & Collection Allowance 5% Gross Income (646,000) II. Effective Gross Income $12,283,000
III. Operating Expenses
General Operating Expenses 300 Units @ $4,500 /Unit $1,350,000 Property Taxes 2 300 Units @ $7,700 /Unit 2,319,000
Replacement Reserve Deposits 300 Units @ $150 /Unit 45,000 Total Operating Expenses ($3,714,000)
IV. Stabilized Net Operating Income $8,569,000
1 The weighted average monthly rent equates to $3.42 per square foot of leasable area. 2 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU Mkt Page 44 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT I - TABLE 3

ESTIMATED DEVELOPER RETURN

MARKET RATE ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX E - EXHIBIT I - TABLE 2 $8,569,000 II. Total Development Cost See ATTACHMENT 3: APPENDIX E - EXHIBIT I - TABLE 1 $163,698,000 III. Stabilized Return on Total Investment 5.2%
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU Mkt Page 45 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT II

PRO FORMA ANALYSIS

LOW INCOME ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU Low Page 46 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT II - TABLE 1

ESTIMATED DEVELOPMENT COSTS

LOW INCOME ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 435,600 Sf of Land $60 /Sf of Land $26,136,000 II. Direct Costs 2
On-Site Improvements/Landscaping 435,600 Sf of Land $20 /Sf of Land $8,712,000 Parking 3
At-Grade Spaces 150 Spaces $7,500 /Space 1,125,000
Semi-Subterranean Spaces 393 Spaces $30,000 /Space 11,790,000 Building Costs 312,600 Sf of GLA $190 /Sf of GLA 59,394,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 16,204,000 Total Direct Costs 312,600 Sf of GLA $311 /Sf of GLA $97,225,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $7,778,000 Public Permits & Fees 5 300 Units $43,890 /Unit 13,167,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,945,000 Marketing 300 Units $5,000 /Unit 1,500,000
Developer Fee 5% Direct Costs 4,861,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 1,463,000 Total Indirect Costs $30,714,000
IV. Financing Costs
Interest During Construction
Land 6 $25,574,800 Cost 5.0% Avg Rate $1,918,000
Construction 7 $137,518,000 Cost 5.0% Avg Rate 6,188,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,473,000 Total Financing Costs $9,579,000
V. Total Construction Cost 300 Units $458,000 /Unit $137,518,000 Total Development Cost 300 Units $546,000 /Unit $163,654,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on an 18 month construction period, after receipt of entitlements, and a 60% average outstanding loan balance.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

Based on a 18 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $561,200 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU Low Page 47 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT II - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

LOW INCOME ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 136 Units @ $3,110 /Unit/Month $5,076,000 Two-Bedroom Units 104 Units @ $3,970 /Unit/Month 4,955,000 Three-Bedroom Units 33 Units @ $4,190 /Unit/Month 1,659,000 B. Low Income Units 2
One-Bedroom Units 14 Units @ $1,794 /Unit/Month 301,000 Two-Bedroom Units 10 Units @ $2,005 /Unit/Month 241,000 Three-Bedroom Units 3 Units @ $2,219 /Unit/Month 80,000 C. Laundry & Miscellaneous Income 300 Units @ $25 /Unit/Month 90,000 Total Gross Income $12,402,000
Vacancy & Collection Allowance 5% Gross Income (620,000) II. Effective Gross Income $11,782,000
III. Operating Expenses
General Operating Expenses 300 Units @ $4,500 /Unit $1,350,000 Property Taxes 3 300 Units @ $7,400 /Unit 2,212,000
Replacement Reserve Deposits 300 Units @ $150 /Unit 45,000 Total Operating Expenses 300 Units @ $12,023 /Unit ($3,607,000) IV. Stabilized Net Operating Income $8,175,000
1 The weighted average monthly rent equates to $3.42 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU Low Page 48 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT II - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

LOW INCOME ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX E - EXHIBIT II - T $8,175,000 Threshold Return on Total Investment 1 5.2%
Total Supportable Investment $156,171,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX E - EXHIBIT II - TABLE 1 $163,654,000 III. Total Financial Impact ($7,483,000)
Stabilized Return on Total Investment 5.0%
% Rent Increase to Offset Impact 5.0% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU Low Page 49 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT III

PRO FORMA ANALYSIS

VERY LOW INCOME ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU VL Page 50 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT III - TABLE 1

ESTIMATED DEVELOPMENT COSTS

VERY LOW INCOME ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 435,600 Sf of Land $60 /Sf of Land $26,136,000 II. Direct Costs 2
On-Site Improvements/Landscaping 435,600 Sf of Land $20 /Sf of Land $8,712,000 Parking 3
At-Grade Spaces 150 Spaces $7,500 /Space 1,125,000
Semi-Subterranean Spaces 393 Spaces $30,000 /Space 11,790,000 Building Costs 312,600 Sf of GLA $190 /Sf of GLA 59,394,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 16,204,000 Total Direct Costs 312,600 Sf of GLA $311 /Sf of GLA $97,225,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $7,778,000 Public Permits & Fees 5 300 Units $43,890 /Unit 13,167,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 1,945,000 Marketing 300 Units $5,000 /Unit 1,500,000
Developer Fee 5% Direct Costs 4,861,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 1,463,000 Total Indirect Costs $30,714,000
IV. Financing Costs
Interest During Construction
Land 6 $25,586,200 Cost 5.0% Avg Rate $1,919,000
Construction 7 $137,519,000 Cost 5.0% Avg Rate 6,188,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,473,000 Total Financing Costs $9,580,000
V. Total Construction Cost 300 Units $458,000 /Unit $137,519,000 Total Development Cost 300 Units $546,000 /Unit $163,655,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on an 18 month construction period, after receipt of entitlements, and a 60% average outstanding loan balance.

The parking ratios comport with the following Municipal Code requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; three-bedroom units at 2.0 spaces; and guest spaces at 0.50 spaces per unit.

Based on a 18 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $549,800 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU VL Page 51 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT III - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

VERY LOW INCOME ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 141 Units @ $3,110 /Unit/Month $5,262,000 Two-Bedroom Units 107 Units @ $3,970 /Unit/Month 5,097,000 Three-Bedroom Units 34 Units @ $4,190 /Unit/Month 1,710,000 B. Low Income Units 2
One-Bedroom Units 9 Units @ $1,102 /Unit/Month 119,000
Two-Bedroom Units 7 Units @ $1,226 /Unit/Month 103,000
Three-Bedroom Units 2 Units @ $1,354 /Unit/Month 32,000 C. Laundry & Miscellaneous Income 300 Units @ $25 /Unit/Month 90,000 Total Gross Income $12,413,000
Vacancy & Collection Allowance 5% Gross Income (621,000) II. Effective Gross Income $11,792,000
III. Operating Expenses
General Operating Expenses 300 Units @ $4,500 /Unit $1,350,000 Property Taxes 3 300 Units @ $7,400 /Unit 2,214,000
Replacement Reserve Deposits 300 Units @ $150 /Unit 45,000 Total Operating Expenses 300 Units @ $12,030 /Unit ($3,609,000) IV. Stabilized Net Operating Income $8,183,000
1 The weighted average monthly rent equates to $3.42 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU VL Page 52 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT III - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

VERY LOW INCOME ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX E - EXHIBIT III - $8,183,000 Threshold Return on Total Investment 1 5.2%
Total Supportable Investment $156,324,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX E - EXHIBIT III - TABLE 1 $163,655,000 III. Total Financial Impact ($7,331,000)
Stabilized Return on Total Investment 5.0%
% Rent Increase to Offset Impact 4.7% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU VL Page 53 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT IV

PRO FORMA ANALYSIS

30.0% DENSITY BONUS ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU DB Page 54 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT IV - TABLE 1

ESTIMATED DEVELOPMENT COSTS

30.0% DENSITY BONUS ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition Costs 1 435,600 Sf of Land $60 /Sf of Land $26,136,000 II. Direct Costs 2
On-Site Improvements/Landscaping 435,600 Sf of Land $20 /Sf of Land $8,712,000 Semi-Subterranean Spaces 3 488 Spaces $30,000 /Space 14,640,000 Building Costs 406,450 Sf of GLA $200 /Sf of GLA 81,290,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 20,928,000 Total Direct Costs 406,450 Sf of GLA $309 /Sf of GLA $125,570,000 III. Indirect Costs
Architecture, Engineering & Consulting 8% Direct Costs $10,046,000 Public Permits & Fees 5 390 Units $43,890 /Unit 17,117,000 Taxes, Insurance, Legal & Accounting 2% Direct Costs 2,511,000 Marketing 390 Units $5,000 /Unit 1,950,000
Developer Fee 5% Direct Costs 6,279,000
Soft Cost Contingency Allowance 5% Other Indirect Costs 1,895,000 Total Indirect Costs $39,798,000
IV. Financing Costs
Interest During Construction
Land 6 $25,670,100 Cost 5.0% Avg Rate $1,925,000
Construction 7 $177,091,000 Cost 5.0% Avg Rate 7,969,000 Loan Origination Fees 60% Loan to Cost 1.5 Points 1,829,000 Total Financing Costs $11,723,000
V. Total Construction Cost 390 Units $454,000 /Unit $177,091,000 Total Development Cost 390 Units $521,000 /Unit $203,227,000 1 Estimated in part based on a sales survey of properties located in the Thousand Oaks market area. 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 4 Includes contractors' fees, general requirements, profit and builder's risk insurance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 7 Based on a 18 month construction period and a 60% average outstanding loan balance.

The parking ratio comport with the following Section 65915(p) density bonus requirements: one-bedroom units at 1.0 space; two-bedroom units at 1.5 spaces; and three-bedroom units at 1.5 spaces per unit. No guest space requirement is applied.

Based on a 0 month construction period after receipt of entitlements and a 100% average outstanding loan balance. Includes a $465,900 offset to reflect the carrying cost savings associated with the estimated property acquisition cost reduction.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU DB Page 55 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT IV - TABLE 2

ESTIMATED STABILIZED NET OPERATING INCOME

30.0% DENSITY BONUS ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Income
A. Market Rate Units 1
One-Bedroom Units 173 Units @ $3,110 /Unit/Month $6,456,000 Two-Bedroom Units 131 Units @ $3,970 /Unit/Month 6,241,000 Three-Bedroom Units 41 Units @ $4,190 /Unit/Month 2,061,000 B. Very Low Income Units 2
One-Bedroom Units 12 Units @ $1,102 /Unit/Month 159,000 Two-Bedroom Units 9 Units @ $1,226 /Unit/Month 132,000
Three-Bedroom Units 3 Units @ $1,354 /Unit/Month 49,000 C. Low Income Inclusionary Units 2
One-Bedroom Units 10 Units @ $1,794 /Unit/Month 215,000 Two-Bedroom Units 8 Units @ $2,005 /Unit/Month 192,000
Three-Bedroom Units 3 Units @ $2,219 /Unit/Month 80,000 D. Laundry & Miscellaneous Income 390 Units @ $25 /Unit/Month 117,000 Total Gross Income $15,702,000
Vacancy & Collection Allowance 5% Gross Income (785,000) II. Effective Gross Income $14,917,000
III. Operating Expenses
General Operating Expenses 390 Units @ $4,500 /Unit $1,755,000 Property Taxes 3 390 Units @ $7,200 /Unit 2,790,000
Replacement Reserve Deposits 390 Units @ $150 /Unit 59,000 Total Operating Expenses 390 Units @ $11,805 /Unit ($4,604,000) IV. Stabilized Net Operating Income $10,313,000
1 The weighted average monthly rent equates to $3.42 per square foot of leasable area. 2 See ATTACHMENT 3: APPENDIX B.
3 The assessed value is estimated based on a 4.3% capitalization rate. The property tax rate is set at 1.15%.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU DB Page 56 of 57
Item No.16C

ATTACHMENT 3: APPENDIX E - EXHIBIT IV - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

30.0% DENSITY BONUS ALTERNATIVE

MIXED-USE PROTOTYPE
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Supportable Investment
Stabilized Net Operating Income See ATTACHMENT 3: APPENDIX E - EXHIBIT IV - $10,313,000 Threshold Return on Total Investment 1 5.2%
Total Supportable Investment $197,015,000
II. Total Development Cost See ATTACHMENT 3: APPENDIX E - EXHIBIT IV - TABLE 1 $203,227,000 III. Total Financial Impact ($6,212,000)
Stabilized Return on Total Investment 5.1%
% Rent Increase to Offset Impact 3.3% Market Rate Units 1 Based on the Developer Return estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; PF MU DB Page 57 of 57
Item No.16C

ATTACHMENT 4

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Att 4 Title Page 1 of 35
Item No.16C

ATTACHMENT 4: APPENDIX A

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA

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

File Name: 1 22 23 TO Own; App A HS Page 2 of 35
Item No.16C

ATTACHMENT 4: APPENDIX A - EXHIBIT I
RESALE HOME SALES SURVEY 1

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Unit Size (SF) Total Per SF Year Built
I. Townhomes and Condominiums
64 Secret Hollow Ln Thousand Oaks 91320 1,562 $540,000 $346 2015 2407 Chiquita Ln Thousand Oaks 91362 1,703 $585,000 $344 2007 374 E Hilltop Way Thousand Oaks 91362 1,762 $600,000 $341 2011 73 Jensen Ct Thousand Oaks 91360 1,496 $627,500 $419 2017 1188 Vista Canyon Ln #14 Thousand Oaks 91320 1,384 $643,500 $465 2013 780 Tennis Club Ln Thousand Oaks 91360 1,847 $645,000 $349 2011 1586 Silver Shadow Dr Thousand Oaks 91320 1,562 $645,000 $413 2013 3236 Royal Oaks Dr #2 Thousand Oaks 91362 1,887 $660,000 $350 2019 43 Jensen Ct Thousand Oaks 91360 1,496 $683,000 $457 2017 750 Tennis Club Ln Thousand Oaks 91360 1,847 $699,999 $379 2011 3236 Royal Oaks Dr #5 Thousand Oaks 91362 1,806 $700,000 $388 2019 726 Tennis Club Ln Thousand Oaks 91360 2,426 $710,000 $293 2011 3215 Royal Oaks Dr #7 Thousand Oaks 91362 1,553 $710,000 $457 2005 399 E Hilltop Way Thousand Oaks 91362 1,762 $715,000 $406 2011 372 E Hilltop Way Thousand Oaks 91362 1,762 $715,000 $406 2011 782 Tennis Club Ln Thousand Oaks 91360 2,018 $740,000 $367 2011 363 E Hilltop Way Thousand Oaks 91362 1,846 $740,000 $401 2011 83 Jensen Ct Thousand Oaks 91360 1,496 $742,000 $496 2017 1572 Silver Shadow Dr Thousand Oaks 91320 1,562 $775,000 $496 2009 916 Warwick Ave Thousand Oaks 91360 2,171 $799,500 $368 2021 936 Warwick Ave Thousand Oaks 91360 2,171 $799,500 $368 2021 946 Warwick Ave Thousand Oaks 91360 2,171 $810,000 $373 2021 902 Warwick Ave Thousand Oaks 91360 2,172 $978,500 $451 2021 Minimum 1,384 $540,000 $293 2005
Maximum 2,426 $978,500 $496 2021
Average 1,803 $707,100 $392 2014
914 Warwick Ave Thousand Oaks 91360 2,127 $759,500 $357 2021 2367 Chiquita Ln Thousand Oaks 91362 2,206 $760,000 $345 2006 942 Warwick Ave Thousand Oaks 91360 2,127 $765,500 $360 2021 934 Warwick Ave Thousand Oaks 91360 2,150 $790,500 $368 2021 918 Warwick Ave Thousand Oaks 91360 2,199 $809,500 $368 2021 938 Warwick Ave Thousand Oaks 91360 2,127 $850,000 $400 2021 655 Clearwater Creek Dr Thousand Oaks 91320 2,703 $860,000 $318 2007 Minimum 2,127 $759,500 $318 2006
Maximum 2,703 $860,000 $400 2021
Average 2,234 $799,300 $358 2017
Sales Price
Address
Three-Bedroom Units
Four-Bedroom Units
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Own; Home Resales Page 3 of 35
Item No.16C

ATTACHMENT 4: APPENDIX A - EXHIBIT I
RESALE HOME SALES SURVEY 1

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Unit Size (SF) Total Per SF Year Built
Sales Price
Address
II. Single Family Homes
341 Blake Ridge Ct Thousand Oaks 91361 3,047 $1,250,000 $410 2005 107 Mayflower St Thousand Oaks 91360 2,892 $1,370,000 $474 2016 66 Mayflower Ct Thousand Oaks 91360 2,909 $1,531,000 $526 2016 90 Mayflower St Thousand Oaks 91360 3,010 $1,820,000 $605 2015 Minimum 2,892 $1,250,000 $410 2005
Maximum 3,047 $1,820,000 $605 2016
Average 2,965 $1,492,800 $504 2013
530 Houston Dr Thousand Oaks 91360 2,053 $749,000 $365 2007 526 Houston Dr Thousand Oaks 91360 2,053 $800,000 $390 2007 642 Astera Ct Thousand Oaks 91320 2,427 $825,000 $340 2007 162 Houston Dr Thousand Oaks 91360 1,820 $840,000 $462 2018 1575 E Avenida De Las Flores Thousand Oaks 91362 3,200 $910,000 $284 2007 1595 E Avenida De Las Flores Thousand Oaks 91362 2,979 $935,000 $314 2007 3543 Whitman Ct Thousand Oaks 91360 2,816 $950,000 $337 2005 42 W Avenida De Los Arboles Thousand Oaks 91360 2,369 $970,000 $409 2013 229 Houston Dr Thousand Oaks 91360 2,186 $1,090,000 $499 2022 217 Houston Dr Thousand Oaks 91360 2,186 $1,090,000 $499 2022 221 Houston Dr Thousand Oaks 91360 2,186 $1,101,000 $504 2021 237 Houston Dr Thousand Oaks 91360 2,186 $1,136,000 $520 2022 786 Calle Contento Thousand Oaks 91360 2,311 $1,150,000 $498 2009 309 Virgo Ct Thousand Oaks 91360 3,545 $1,215,000 $343 2016 1408 Plymouth Cir Thousand Oaks 91360 3,742 $1,260,000 $337 2020 305 Virgo Ct Thousand Oaks 91360 3,545 $1,320,000 $372 2016 138 Mayflower St Thousand Oaks 91360 4,147 $1,375,000 $332 2017 156 Mayflower St Thousand Oaks 91360 4,108 $1,380,000 $336 2017 98 Mayflower St Thousand Oaks 91360 4,154 $1,410,000 $339 2015 446 Rancho Rd Thousand Oaks 91362 4,603 $1,490,000 $324 2008 857 Calle Laredo Thousand Oaks 91360 4,572 $2,200,000 $481 2009 2195 Lonestar Way Thousand Oaks 91362 3,842 $2,325,000 $605 2018 Minimum 1,820 $749,000 $284 2005
Maximum 4,603 $2,325,000 $605 2022
Average 3,047 $1,205,500 $396 2014
Three-Bedroom Units
Four-Bedroom Units
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Own; Home Resales Page 4 of 35
Item No.16C

ATTACHMENT 4: APPENDIX A - EXHIBIT I
RESALE HOME SALES SURVEY 1

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Unit Size (SF) Total Per SF Year Built
Sales Price
Address
1116 Turtle Creek Ln Thousand Oaks 91320 3,782 $1,500,000 $397 2005 1245 Calle Arroyo Thousand Oaks 91360 5,374 $2,035,000 $379 2009 430 Conejo Bluff Ct Thousand Oaks 91362 3,796 $2,300,000 $606 2016 738 Camino Durango Thousand Oaks 91360 3,594 $2,365,000 $658 2016 1148 Arroyo View St Thousand Oaks 91320 4,341 $2,400,000 $553 2017 1216 Arroyo View St Thousand Oaks 91320 4,624 $2,600,000 $562 2016 1323 Arroyo View St Thousand Oaks 91320 4,774 $2,700,000 $566 2016 896 Tamlei Ave Thousand Oaks 91362 5,574 $3,300,000 $592 2018 Minimum 3,594 $1,500,000 $379 2005
Maximum 5,574 $3,300,000 $658 2018
Average 4,482 $2,400,000 $535 2014
1 Based on a search of the Redfin data base for sales occurring between September 2020 and September 2022. Premium priced custom homes were excluded from the survey.

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

File name: 1 22 23 TO Own; Home Resales Page 5 of 35
Item No.16C

ATTACHMENT 4: APPENDIX A - EXHIBIT II
NEW HOME SALES SURVEY 1

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I.

A. City Simi Valley
B. Developer Lennar
C. Total Number of Units 53
D. Project Characteristics
Number of Bedrooms Unit Size (SF) Total Per SF
3 Bedrooms / 3.5 Bathrooms 1,652 $784,990 $475
3 Bedrooms / 3.5 Bathrooms 1,831 $789,990 $431
4 Bedrooms / 3.5 Bathrooms 1,760 $799,990 $455
Average 1,748 $791,657 $454
II.

A. City Simi Valley
B. Developer Lennar
C. Total Number of Units 53
D. Project Characteristics
Number of Bedrooms Unit Size (SF) Total Per SF
3 Bedrooms / 2.5 Bathrooms 1,830 $889,990 $486
3 Bedrooms / 2.5 Bathrooms 2,075 $949,990 $458
4 Bedrooms / 3.5 Bathrooms 2,271 $974,990 $429
Average 2,059 $938,323 $458
III.

A. City Simi Valley
B. Developer Lennar
C. Total Number of Units 58
D. Project Characteristics
Number of Bedrooms Unit Size (SF) Total Per SF
2 Bedrooms / 2.5 Bathrooms 1,362 $707,990 $520
3 Bedrooms / 2.5 Bathrooms 1,849 $764,990 $414
4 Bedrooms / 3.5 Bathrooms 1,819 $764,990 $421
4 Bedrooms / 3.5 Bathrooms 1,819 $764,990 $421
4 Bedrooms / 3.5 Bathrooms 1,819 $769,990 $423
Average 1,734 $754,590 $440
1 Based on a Zonda report prepared by Meyers Research in Summer 2022.

Total
Sycamore Grove / Acacia - Detached Homes
Sales Price
Sycamore Grove / Cypress - Detached Homes
Total
Sycamore Grove / Sorrell - Attached Homes
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Own; New Home Sales Page 6 of 35
Item No.16C

ATTACHMENT 4: APPENDIX B

AFFORDABLE SALES PRICE CALCULATIONS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; App B ASP Page 7 of 35
Item No.16C

ATTACHMENT 4: APPENDIX B - EXHIBIT I
AFFORDABLE SALES PRICE CALCULATIONS 1

TOWNHOME PROTOTYPE
2022 INCOME STANDARDS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Three-Bedroom
Units
Four-Bedroom
Units
General Assumptions
Estimated Market Rate Sales Price
2 $1,012,000 $1,460,000
Area Median Income 3 $115,400 $124,650
Annual Utilities Allowance 4 $3,180 $3,636
HOA, Maintenance & Insurance 5 $4,200 $5,160
I.

A. Income Allotted to Housing Based on 110% AMI
Benchmark Annual Household Income $126,940 $137,115
Income Allotted to Housing @ 35% of Income $44,430 $47,990 B. Property Taxes @ 1.15% of Affordable Sales Price $5,770 $6,110 C. Income Available for Mortgage Debt Service 6 $31,280 $33,084 D. Affordable Sales Price
Supportable Mtg @ 5.16% Interest 7 $477,000 $504,500
Home Buyer Down Payment @ 5% of ASP 25,100 26,600
Affordable Sales Price $502,100 $531,100
II.

A. Income Allotted to Housing Based on 70% AMI
Benchmark Annual Household Income $80,780 $87,255
Income Allotted to Housing @ 30% of Income $24,230 $26,180 B. Property Taxes @ 1.15% of Affordable Sales Price $2,630 $2,710 C. Income Available for Mortgage Debt Service 6 $14,220 $14,674 D. Affordable Sales Price
Supportable Mtg @ 5.16% Interest 7 $216,900 $223,800
Home Buyer Down Payment @ 5% of ASP 11,400 11,800
Affordable Sales Price $228,300 $235,600
1 2 Based in part on the results of the home sales survey. 3 4
5 Based in part on the HOA dues identified in the home sales survey. 6 7
Based on 2022 Ventura County household incomes published by the California Department of Housing & Community Development (HCD). The Affordable Sales Price calculations are based on the California Health and Safety Code Section 50052.5 methodology.

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

Utilities allowances are based on the Area Housing Authority of the County of Ventura utility allowance schedule for detached homes effective as of 6/1/22. Assumes: Gas Heating, Gas Cooking, Gas Water Heater, Basic Electric, Water, Sewer, and Trash.

Based on the Income Allotted to Housing minus the following: Annual Utilities Allowance; HOA, Maintenance & Insurance; and Property Taxes @ 1.15% of Affordable Sales Price.

Based on a 100 basis points premium applied to the Freddie Mac monthly average, between September 2021 and August 2022, for a fixed-interest rate loan with a 30-year amortization period.

Moderate Income Units
Low Income Units
Prepared by: Keyser Marston Associates
File name: 1 22 23 TO Own; ASP Page 8 of 35
Item No.16C

ATTACHMENT 4: APPENDIX B - EXHIBIT II
AFFORDABLE SALES PRICE CALCULATIONS 1

DETACHED SINGLE FAMILY HOME PROTOTYPE
2022 INCOME STANDARDS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Three-Bedroom
Units
Four-Bedroom
Units
Five-Bedroom
Units
General Assumptions
Estimated Market Rate Sales Price 2 $0 $765,000 $840,000 Area Median Income 3 $115,400 $124,650 $133,850
Annual Utilities Allowance 4 $3,180 $3,636 $4,068
Maintenance & Insurance 5 $4,800 $5,400 $6,000
I.

A. Income Allotted to Housing Based on 110% AMI
Benchmark Annual Household Income $126,940 $137,115 $147,235 Income Allotted to Housing @ 35% of Income $44,430 $47,990 $51,530 B. Property Taxes @ 1.15% of Affordable Sales Price $5,680 $6,070 $6,460 C. Income Available for Mortgage Debt Service 6 $30,770 $32,884 $35,002 D. Affordable Sales Price
Supportable Mtg @ 5.16% Interest 7 $469,300 $501,500 $533,800 Home Buyer Down Payment @ 5% of ASP 24,700 26,400 28,100 Affordable Sales Price $494,000 $527,900 $561,900
II.

A. Income Allotted to Housing Based on 70% AMI
Benchmark Annual Household Income $80,780 $87,255 $93,695 Income Allotted to Housing @ 30% of Income $24,230 $26,180 $28,110 B. Property Taxes @ 1.15% of Affordable Sales Price $2,530 $2,670 $2,810 C. Income Available for Mortgage Debt Service 6 $13,720 $14,474 $15,232 D. Affordable Sales Price
Supportable Mtg @ 5.16% Interest 7 $209,200 $220,700 $232,300 Home Buyer Down Payment @ 5% of ASP 11,000 11,600 12,200 Affordable Sales Price $220,200 $232,300 $244,500
1 2 Based in part on the results of the home sales survey. 3 4
5 Based in part on the HOA dues identified in the home sales survey. 6 7
Based on 2022 Ventura County household incomes published by the California Department of Housing & Community Development (HCD). The Affordable Sales Price calculations are based on the California Health and Safety Code Section 50052.5 methodology.

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

Utilities allowances are based on the Area Housing Authority of the County of Ventura utility allowance schedule for detached homes effective as of 6/1/22. Assumes: Gas Heating, Gas Cooking, Gas Water Heater, Basic Electric, Water, Sewer, and Trash.

Based on the Income Allotted to Housing minus the following: Annual Utilities Allowance; HOA, Maintenance & Insurance; and Property Taxes @ 1.15% of Affordable Sales Price.

Based on a 100 basis points premium applied to the Freddie Mac monthly average, between September 2021 and August 2022, for a fixed-interest rate loan with a 30-year amortization period.

Moderate Income Units
Low Income Units
Prepared by: Keyser Marston Associates
File name: 1 22 23 TO Own; ASP Page 9 of 35
Item No.16C

THOUSAND OAKS, CALIFORNIA
ATTACHMENT 4: APPENDIX C

PRO FORMA ANALYSES

TOWNHOME PROTOTYPE

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

File name: 1 22 23 TO Own; APP C TH Page 10 of 35
Item No.16C

THOUSAND OAKS, CALIFORNIA
ATTACHMENT 4: APPENDIX C - EXHIBIT I

PRO FORMA ANALYSIS

MARKET RATE ALTERNATIVE

TOWNHOME PROTOTYPE

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

File Name: 1 22 23 TO Own; Pf TH Mkt Page 11 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 1

ESTIMATED DEVELOPMENT COSTS

MARKET RATE ALTERNATIVE

TOWNHOME PROTOTYPE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition & Infrastructure Costs 1 43,560 Sf of Land $60 /Sf of Land $2,614,000 II. Direct Costs 2
On-Site Improvements/Landscaping 43,560 Sf of Land $20 /Sf of Land $871,000 Parking 3 40 Spaces $0 /Space 0
Building Costs 37,500 Sf of GBA $155 /Sf of GBA 5,813,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 1,337,000 Total Direct Costs $8,021,000
III. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $481,000 Public Permits & Fees 5 20 Units $57,150 /Unit 1,143,000 Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 120,000 Marketing 20 Units $2,500 /Unit 50,000
Developer Fee 3.0% Gross Sales Revenue 470,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 113,000 Total Indirect Costs $2,377,000
IV. Financing Costs
Interest During Construction 6 $465,000
Loan Origination Fees 60.0% Loan to Cost 1.5 Points 117,000 Total Financing Costs $582,000
V. Total Construction Cost 20 Units $549,000 /Unit $10,980,000 Total Development Cost 20 Units $680,000 /Unit $13,594,000 1 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 Assumes that the required parking is provided in attached garages. 4 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Assumes a 5.0% interest cost for debt; an 18 month construction period after receipt of entitlements; a 4 month absorption period; 30% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Estimated in part based on a survey of residential land sales in Thousand Oaks, Simi Valley, Moorpark and Camarillo. The sales survey was undertaken by KMA in September 2022.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Mkt Page 12 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 2

PROJECTED NET SALES REVENUE

MARKET RATE ALTERNATIVE

TOWNHOME PROTOTYPE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Sales Revenue 1
Three-Bedroom Units 15 Units @ $765,000 /Unit $11,475,000 Four-Bedroom Units 5 Units @ $840,000 /Unit 4,200,000
Total Gross Sales Revenue $15,675,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $470,000
Closing 2.0% Gross Sales Revenue 314,000
Warranty 0.5% Gross Sales Revenue 78,000
Total Cost of Sales ($862,000)
III. Net Revenue $14,813,000
1 Based in part on a survey of home resales in Thousand Oaks and new home sales in Simi Valley. The sales survey was undertaken by KMA in September 2022. See ATTACHMENT 4: APPENDIX A. The weighted average sales price equates to $418 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Mkt Page 13 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 3

PROJECTED DEVELOPER PROFIT

MARKET RATE ALTERNATIVE

TOWNHOME PROTOTYPE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Net Revenue See ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 2 $14,813,000 II. Total Development Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT I - TABLE 1 $13,594,000 III. Developer Profit 9.0% Total Development Cost $1,219,000 Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Mkt Page 14 of 35
Item No.16C

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
ATTACHMENT 4: APPENDIX C - EXHIBIT II

PRO FORMA ANALYSIS

MODERATE INCOME ALTERNATIVE

TOWNHOME PROTOTYPE

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

File Name: 1 22 23 TO Own; Pf TH Mod Page 15 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 1

ESTIMATED DEVELOPMENT COSTS

TOWNHOME PROTOTYPE

MODERATE INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition & Infrastructure Costs 1 43,560 Sf of Land $60 /Sf of Land $2,614,000 II. Direct Costs 2
On-Site Improvements/Landscaping 43,560 Sf of Land $20 /Sf of Land $871,000 Parking 3 40 Spaces $0 /Space 0
Building Costs 37,500 Sf of GBA $155 /Sf of GBA 5,813,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 1,337,000 Total Direct Costs $8,021,000
III. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $481,000 Public Permits & Fees 5 20 Units $57,150 /Unit 1,143,000 Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 120,000 Marketing 20 Units $2,500 /Unit 50,000
Developer Fee 6 20 Units $23,500 /Unit 470,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 113,000 Total Indirect Costs $2,377,000
IV. Financing Costs
Interest During Construction 7 $437,000
Loan Origination Fees 60.0% Loan to Cost 1.5 Points 113,000 Total Financing Costs $550,000
V. Total Construction Cost 20 Units $547,000 /Unit $10,948,000 Total Development Cost 20 Units $678,000 /Unit $13,562,000 1 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 Assumes that the required parking is provided in attached garages. 4 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Based on the Developer Fee per unit generated by the MARKET RATE ALTERNATIVE 7 Assumes a 5.0% interest cost for debt; an 18 month construction period after receipt of entitlements; a 4 month absorption period; 30% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Estimated in part based on a survey of residential land sales in Thousand Oaks, Simi Valley, Moorpark and Camarillo. The sales survey was undertaken by KMA in September 2022.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Mod Page 16 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 2

PROJECTED NET SALES REVENUE

TOWNHOME PROTOTYPE

MODERATE INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Sales Revenue
Market Rate Units 1
Three-Bedroom Units 14 Units @ $765,000 /Unit $10,710,000 Four-Bedroom Units 4 Units @ $840,000 /Unit 3,360,000
Moderate Income Units 2
Three-Bedroom Units 1 Unit @ $502,100 /Unit 502,000
Four-Bedroom Units 1 Unit @ $531,100 /Unit 531,000
Total Gross Sales Revenue $15,103,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $453,000
Closing 2.0% Gross Sales Revenue 302,000
Warranty 0.5% Gross Sales Revenue 76,000
Total Cost of Sales ($831,000)
III. Net Revenue $14,272,000
1 2 See ATTACHMENT 4: APPENDIX B.

Based in part on a survey of home resales in Thousand Oaks and new home sales in Simi Valley. The sales survey was undertaken by KMA in September 2022. See ATTACHMENT 4: APPENDIX A. The weighted average sales price equates to $419 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Mod Page 17 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

TOWNHOME PROTOTYPE

MODERATE INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Funds Available for Development Costs
Net Revenue See ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 2 $14,272,000 (Less) Threshold Developer Profit 1 9.0% Total Development Cost ($1,216,000) Total Funds Available for Development Costs $13,056,000 II. Total Development Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 1 $13,562,000 III. Total Financial Impact ($506,000)
Developer Profit 5.2% Total Development Cost
% Price Increase to Offset Impact 3.6% Market Rate Units 1 Based on the profit as a percentage of Total Development Cost estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Mod Page 18 of 35
Item No.16C

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
ATTACHMENT 4: APPENDIX C - EXHIBIT II

PRO FORMA ANALYSIS

LOW INCOME ALTERNATIVE

TOWNHOME PROTOTYPE

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

File Name: 1 22 23 TO Own; Pf TH Low Page 19 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 1

ESTIMATED DEVELOPMENT COSTS

TOWNHOME PROTOTYPE

LOW INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition & Infrastructure Costs 1 43,560 Sf of Land $60 /Sf of Land $2,614,000 II. Direct Costs 2
On-Site Improvements/Landscaping 43,560 Sf of Land $20 /Sf of Land $871,000 Parking 3 40 Spaces $0 /Space 0
Building Costs 37,500 Sf of GBA $155 /Sf of GBA 5,813,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 1,337,000 Total Direct Costs $8,021,000
III. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $481,000 Public Permits & Fees 5 20 Units $57,150 /Unit 1,143,000 Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 120,000 Marketing 20 Units $2,500 /Unit 50,000
Developer Fee 6 20 Units $23,500 /Unit 470,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 113,000 Total Indirect Costs $2,377,000
IV. Financing Costs
Interest During Construction 7 $438,000
Loan Origination Fees 60.0% Loan to Cost 1.5 Points 113,000 Total Financing Costs $551,000
V. Total Construction Cost 20 Units $547,000 /Unit $10,949,000 Total Development Cost 20 Units $678,000 /Unit $13,563,000 1 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 Assumes that the required parking is provided in attached garages. 4 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Based on the Developer Fee per unit generated by the MARKET RATE ALTERNATIVE 7 Assumes a 5.0% interest cost for debt; an 18 month construction period after receipt of entitlements; a 4 month absorption period; 30% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Estimated in part based on a survey of residential land sales in Thousand Oaks, Simi Valley, Moorpark and Camarillo. The sales survey was undertaken by KMA in September 2022.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Low Page 20 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 2

PROJECTED NET SALES REVENUE

TOWNHOME PROTOTYPE

LOW INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Sales Revenue
Market Rate Units 1
Three-Bedroom Units 14 Units @ $765,000 /Unit $10,710,000 Four-Bedroom Units 5 Units @ $840,000 /Unit 4,200,000
Low Income Units 2
Three-Bedroom Units 1 Unit @ $228,300 /Unit 228,000
Four-Bedroom Units 0 Units @ $235,600 /Unit 0
Total Gross Sales Revenue $15,138,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $454,000
Closing 2.0% Gross Sales Revenue 303,000
Warranty 0.5% Gross Sales Revenue 76,000
Total Cost of Sales ($833,000)
III. Net Revenue $14,305,000
1 2 See ATTACHMENT 4: APPENDIX B.

Based in part on a survey of home resales in Thousand Oaks and new home sales in Simi Valley. The sales survey was undertaken by KMA in September 2022. See ATTACHMENT 4: APPENDIX A. The weighted average sales price equates to $418 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Low Page 21 of 35
Item No.16C

ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

TOWNHOME PROTOTYPE

LOW INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Funds Available for Development Costs
Net Revenue See ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 2 $14,305,000 (Less) Threshold Developer Profit 1 9.0% Total Development Cost ($1,216,000) Total Funds Available for Development Costs $13,089,000 II. Total Development Cost See ATTACHMENT 4: APPENDIX C - EXHIBIT II - TABLE 1 $13,563,000 III. Total Financial Impact ($474,000)
Developer Profit 5.5% Total Development Cost
% Price Increase to Offset Impact 3.2% Market Rate Units 1 Based on the profit as a percentage of Total Development Cost estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf TH Low Page 22 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D

PRO FORMA ANALYSES

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA

DETACHED SINGLE FAMILY HOME PROTOTYPE
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Own; App D SFH Page 23 of 35
Item No.16C

THOUSAND OAKS, CALIFORNIA
ATTACHMENT 4: APPENDIX D - EXHIBIT I

MARKET RATE ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

PRO FORMA ANALYSIS

DETACHED SINGLE FAMILY HOME PROTOTYPE
Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Mkt Page 24 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 1

ESTIMATED DEVELOPMENT COSTS

MARKET RATE ALTERNATIVE

DETACHED SINGLE FAMILY HOME PROTOTYPE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition & Infrastructure Costs 1 435,600 Sf of Land $50 /Sf of Land $21,780,000 II. Direct Costs 2
On-Site Improvements/Landscaping 435,600 Sf of Land $30 /Sf of Land $13,068,000 Parking 3 120 Spaces $0 /Space 0
Building Costs 188,850 Sf of GBA $145 /Sf of GBA 27,383,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 8,090,000 Total Direct Costs $48,541,000
III. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $2,912,000 Public Permits & Fees 5 60 Units $64,240 /Unit 3,854,000 Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 728,000 Marketing 60 Units $5,000 /Unit 300,000
Developer Fee 3.0% Gross Sales Revenue 2,862,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 533,000 Total Indirect Costs $11,189,000
IV. Financing Costs
Interest During Construction 6 $3,484,000
Loan Origination Fees 60.0% Loan to Cost 1.5 Points 734,000 Total Financing Costs $4,218,000
V. Total Construction Cost 60 Units $1,066,000 /Unit $63,948,000 Total Development Cost 60 Units $1,429,000 /Unit $85,728,000 1 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 Assumes that the required parking is provided in attached garages. 4 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Assumes a 5.0% interest cost for debt; an 18 month construction period after receipt of entitlements; a 8 month absorption period; 30% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Estimated in part based on a survey of residential land sales in Thousand Oaks, Simi Valley, Moorpark and Camarillo. The sales survey was undertaken by KMA in September 2022.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Mkt Page 25 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 2

PROJECTED NET SALES REVENUE

MARKET RATE ALTERNATIVE

DETACHED SINGLE FAMILY HOME PROTOTYPE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Sales Revenue 1
Three-Bedroom Units 6 Units @ $1,012,000 /Unit $6,072,000 Four-Bedroom Units 39 Units @ $1,460,000 /Unit 56,940,000 Five-Bedroom Units 15 Units @ $2,160,000 /Unit 32,400,000 Total Gross Sales Revenue $95,412,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $2,862,000
Closing 2.0% Gross Sales Revenue 1,908,000
Warranty 0.5% Gross Sales Revenue 477,000
Total Cost of Sales ($5,247,000)
III. Net Revenue $90,165,000
1 Based in part on a survey of home resales in Thousand Oaks and new home sales in Simi Valley. The sales survey was undertaken by KMA in September 2022. See ATTACHMENT 4: APPENDIX A. The weighted average sales price equates to $505 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Mkt Page 26 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 3

PROJECTED DEVELOPER PROFIT

MARKET RATE ALTERNATIVE

DETACHED SINGLE FAMILY HOME PROTOTYPE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Net Revenue See ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 2 $90,165,000 II. Total Development Cost See ATTACHMENT 4: APPENDIX D - EXHIBIT I - TABLE 1 $85,728,000 III. Developer Profit 5.2% Total Development Cost $4,437,000 Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Mkt Page 27 of 35
Item No.16C

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
ATTACHMENT 4: APPENDIX D - EXHIBIT II

PRO FORMA ANALYSIS

DETACHED SINGLE FAMILY HOME PROTOTYPE

OWNERSHIP HOUSING DEVELOPMENT

MODERATE INCOME ALTERNATIVE
Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Mod Page 28 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 1

ESTIMATED DEVELOPMENT COSTS

DETACHED SINGLE FAMILY HOME PROTOTYPE

MODERATE INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition & Infrastructure Costs 1 435,600 Sf of Land $50 /Sf of Land $21,780,000 II. Direct Costs 2
On-Site Improvements/Landscaping 435,600 Sf of Land $30 /Sf of Land $13,068,000 Parking 3 120 Spaces $0 /Space 0
Building Costs 188,850 Sf of GBA $145 /Sf of GBA 27,383,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 8,090,000 Total Direct Costs $48,541,000
III. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $2,912,000 Public Permits & Fees 5 60 Units $64,240 /Unit 3,854,000 Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 728,000 Marketing 60 Units $5,000 /Unit 300,000
Developer Fee 6 60 Units $47,700 /Unit 2,862,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 533,000 Total Indirect Costs $11,189,000
IV. Financing Costs
Interest During Construction 7 $3,331,000
Loan Origination Fees 60.0% Loan to Cost 1.5 Points 714,000 Total Financing Costs $4,045,000
V. Total Construction Cost 60 Units $1,063,000 /Unit $63,775,000 Total Development Cost 60 Units $1,426,000 /Unit $85,555,000 1 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 Assumes that the required parking is provided in attached garages. 4 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Based on the Developer Fee per unit generated by the MARKET RATE ALTERNATIVE 7 Assumes a 5.0% interest cost for debt; an 18 month construction period after receipt of entitlements; a 8 month absorption period; 30% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Estimated in part based on a survey of residential land sales in Thousand Oaks, Simi Valley, Moorpark and Camarillo. The sales survey was undertaken by KMA in September 2022.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Mod Page 29 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 2

PROJECTED NET SALES REVENUE

DETACHED SINGLE FAMILY HOME PROTOTYPE

MODERATE INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Sales Revenue
Market Rate Units 1
Three-Bedroom Units 5 Units @ $1,012,000 /Unit $5,060,000 Four-Bedroom Units 37 Units @ $1,460,000 /Unit 54,020,000 Five-Bedroom Units 15 Units @ $2,160,000 /Unit 32,400,000 Moderate Income Units 2
Three-Bedroom Units 1 Unit @ $494,000 /Unit 494,000
Four-Bedroom Units 2 Units @ $527,900 /Unit 1,056,000
Five-Bedroom Units 0 Units @ $561,900 /Unit 0
Total Gross Sales Revenue $93,030,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $2,791,000
Closing 2.0% Gross Sales Revenue 1,861,000
Warranty 0.5% Gross Sales Revenue 465,000
Total Cost of Sales ($5,117,000)
III. Net Revenue $87,913,000
1 2 See ATTACHMENT 4: APPENDIX B.

Based in part on a survey of home resales in Thousand Oaks and new home sales in Simi Valley. The sales survey was undertaken by KMA in September 2022. See ATTACHMENT 4: APPENDIX A. The weighted average sales price equates to $506 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Mod Page 30 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

DETACHED SINGLE FAMILY HOME PROTOTYPE

MODERATE INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Funds Available for Development Costs
Net Revenue See ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 2 $87,913,000 (Less) Threshold Developer Profit 1 5.2% Total Development Cost ($4,428,000) Total Funds Available for Development Costs $83,485,000 II. Total Development Cost See ATTACHMENT 4: APPENDIX D - EXHIBIT II - TABLE 1 $85,555,000 III. Total Financial Impact ($2,070,000)
Developer Profit 2.8% Total Development Cost
% Price Increase to Offset Impact 2.3% Market Rate Units 1 Based on the profit as a percentage of Total Development Cost estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Mod Page 31 of 35
Item No.16C

INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
ATTACHMENT 4: APPENDIX D - EXHIBIT III

PRO FORMA ANALYSIS

LOW INCOME ALTERNATIVE

DETACHED SINGLE FAMILY HOME PROTOTYPE

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

File Name: 1 22 23 TO Own; Pf SFH Low Page 32 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 1

ESTIMATED DEVELOPMENT COSTS

DETACHED SINGLE FAMILY HOME PROTOTYPE

LOW INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Land Acquisition & Infrastructure Costs 1 435,600 Sf of Land $50 /Sf of Land $21,780,000 II. Direct Costs 2
On-Site Improvements/Landscaping 435,600 Sf of Land $30 /Sf of Land $13,068,000 Parking 3 120 Spaces $0 /Space 0
Building Costs 188,850 Sf of GBA $145 /Sf of GBA 27,383,000 Contractor/DC Contingency Allow 4 20% Other Direct Costs 8,090,000 Total Direct Costs $48,541,000
III. Indirect Costs
Architecture, Engineering & Consulting 6.0% Direct Costs $2,912,000 Public Permits & Fees 5 60 Units $64,240 /Unit 3,854,000 Taxes, Insurance, Legal & Accounting 1.5% Direct Costs 728,000 Marketing 60 Units $5,000 /Unit 300,000
Developer Fee 6 60 Units $47,700 /Unit 2,862,000
Soft Cost Contingency Allowance 5.0% Other Indirect Costs 533,000 Total Indirect Costs $11,189,000
IV. Financing Costs
Interest During Construction 7 $3,378,000
Loan Origination Fees 60.0% Loan to Cost 1.5 Points 718,000 Total Financing Costs $4,096,000
V. Total Construction Cost 60 Units $1,064,000 /Unit $63,826,000 Total Development Cost 60 Units $1,427,000 /Unit $85,606,000 1 2 Direct costs assume that prevailing wage requirements will NOT be imposed on the Project. 3 Assumes that the required parking is provided in attached garages. 4 Includes contractors' fees, general requirements, builder's risk insurance and a direct cost contingency allowance. 5 Based on estimates presented in the January 2022 draft Housing Element. 6 Based on the Developer Fee per unit generated by the MARKET RATE ALTERNATIVE 7 Assumes a 5.0% interest cost for debt; an 18 month construction period after receipt of entitlements; a 8 month absorption period; 30% of the units are presold and close during first month after completion; and 1.5 points for loan origination fees.

Estimated in part based on a survey of residential land sales in Thousand Oaks, Simi Valley, Moorpark and Camarillo. The sales survey was undertaken by KMA in September 2022.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Low Page 33 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 2

PROJECTED NET SALES REVENUE

DETACHED SINGLE FAMILY HOME PROTOTYPE

LOW INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Gross Sales Revenue
Market Rate Units 1
Three-Bedroom Units 5 Units @ $1,012,000 /Unit $5,060,000 Four-Bedroom Units 38 Units @ $1,460,000 /Unit 55,480,000 Five-Bedroom Units 15 Units @ $2,160,000 /Unit 32,400,000 Low Income Units 2
Three-Bedroom Units 1 Unit @ $220,200 /Unit 220,000
Four-Bedroom Units 1 Unit @ $232,300 /Unit 232,000
Five-Bedroom Units 0 Units @ $244,500 /Unit 0
Total Gross Sales Revenue $93,392,000
II. Cost of Sales
Commissions 3.0% Gross Sales Revenue $2,802,000
Closing 2.0% Gross Sales Revenue 1,868,000
Warranty 0.5% Gross Sales Revenue 467,000
Total Cost of Sales ($5,137,000)
III. Net Revenue $88,255,000
1 2 See ATTACHMENT 4: APPENDIX B.

Based in part on a survey of home resales in Thousand Oaks and new home sales in Simi Valley. The sales survey was undertaken by KMA in September 2022. See ATTACHMENT 4: APPENDIX A. The weighted average sales price equates to $506 per square foot of saleable area.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Low Page 34 of 35
Item No.16C

ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 3
FINANCIAL IMPACTS: INCLUSIONARY HOUSING REQUIREMENTS

DETACHED SINGLE FAMILY HOME PROTOTYPE

LOW INCOME ALTERNATIVE

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
I. Funds Available for Development Costs
Net Revenue See ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 2 $88,255,000 (Less) Threshold Developer Profit 1 5.2% Total Development Cost ($4,431,000) Total Funds Available for Development Costs $83,824,000 II. Total Development Cost See ATTACHMENT 4: APPENDIX D - EXHIBIT III - TABLE 1 $85,606,000 III. Total Financial Impact ($1,782,000)
Developer Profit 3.1% Based on Estimated Current Property Acquisition Costs % Price Increase to Offset Impact 1.9% Market Rate Units 1 Based on the profit as a percentage of Total Development Cost estimated to be generated by the MARKET RATE ALTERNATIVE.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; Pf SFH Low Page 35 of 35
Item No.16C

ATTACHMENT 5

IN-LIEU FEE CALCULATIONS
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; Att 5 ILF Page 1 of 5
Item No.16C

ATTACHMENT 5: APPENDIX A
IN-LIEU FEE CALCULATIONS (10% LOW INCOME STANDARD)

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Apt; App A ILF Page 2 of 5
Item No.16C

ATTACHMENT 5: APPENDIX A
IN-LIEU FEE CALCULATIONS (10% LOW INCOME STANDARD)

APARTMENT DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Base Zoning Alternative:

Mall Property Apartment
Prototype
Base Zoning Alternative:

Neighborhood Medium
High Prototype
Base Zoning Alternative:

Mixed-Use Prototype
I. Rent Difference
A. One-Bedroom Units
Market Rents 1 $2,740 $3,110 $3,110
Affordable Rent 2 1,794 1,794 1,794
Difference $946 $1,316 $1,316
B. Two-Bedroom Units
Market Rents 1 $3,280 $3,800 $3,970
Affordable Rent 2 2,005 2,005 2,005
Difference $1,275 $1,795 $1,965
C. Three-Bedroom Units
Market Rents 1 $3,990 $4,190 $4,190
Affordable Rent 2 2,219 2,219 2,219
Difference $1,771 $1,971 $1,971
II. Distribution of Total Units 3
One-Bedroom Units 40% 35% 50%
Two-Bedroom Units 55% 50% 38%
Three-Bedroom Units 5% 15% 12%
III. Annual Rent Difference Per Inclusionary Unit $14,018 $19,845 $19,695 Less: Property Tax Difference 4 (3,790) (5,370) (5,330) Net Annual Rent Difference Per Inclusionary Unit $10,228 $14,475 $14,365 IV. Assumptions
Total Units 90 40 300
Total Leasable Area 80,250 42,900 312,600
Weighted Avg Unit Size (Sf) 892 1,073 1,042
Inclusionary Housing Percentage 10% 10% 10%
Inclusionary Units 9 4 30
Affordability Gap Per Inclusionary Unit 5 $203,000 $288,000 $274,000 V. In-Lieu Fee
Total In-Lieu Fee $1,827,000 $1,152,000 $8,220,000
Per Total Unit in the Project $20,300 $28,800 $27,400
Per Square Foot of Total Leasable Area $22.80 $26.90 $26.30 1 The market rents are drawn from the pro forma analyses. 2 See ATTACHMENT 3: APPENDIX B.
3 Based on the unit mix distribution applied in the pro forma analysis. 4 Based on the rent differential capitalized at a 4.3% rate to establish the value, and a 1.15% property tax rate. 5 Based on the Annual Affordability Gap Per Inclusionary Unit capitalized at the Threshold Return on Total Investment generated by each prototype.

Prepared by: Keyser Marston Associates
File name: 1 22 23 TO Apt; ILF 10 Page 3 of 5
Item No.16C

ATTACHMENT 5: APPENDIX B

IN-LIEU FEE CALCULATIONS

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Prepared by: Keyser Marston Associates, Inc.

File name: 1 22 23 TO Own; App B ILF Page 4 of 5
Item No.16C

ATTACHMENT 5: APPENDIX B
IN-LIEU FEE CALCULATIONS (10% STANDARD)

OWNERSHIP HOUSING DEVELOPMENT
INCLUSIONARY HOUSING: FINANCIAL EVALUATION

THOUSAND OAKS, CALIFORNIA
Townhome Prototype
Detached Single
Family Home
Prototype
I. Sales Price Difference
A. Three-Bedroom Units
Market Rate Sales Price 1 $765,000 $1,012,000
Affordable Sales Price
2 502,100 494,000
Difference $262,900 $518,000
B. Four-Bedroom Units
Market Rate Sales Price 1 $840,000 $1,460,000
Affordable Sales Price 2 531,100 527,900
Difference $308,900 $932,100
C. Five-Bedroom Units
Market Rate Sales Price 1 $2,160,000
Affordable Sales Price 2 561,900
Difference $1,598,100
II. Distribution of Total Units 3
Three-Bedroom Units 75% 10%
Four-Bedroom Units 25% 65%
Five-Bedroom Units 25%
III. Assumptions
Total Units 20 60
Total Saleable Area 37,500 188,850
Weighted Avg Unit Size (Sf) 1,880 3,150
Inclusionary Housing Percentage 10% 5%
Inclusionary Units 2 3
Affordability Gap Per Inclusionary Unit 4 $274,400 $1,057,200 IV. In-Lieu Fee
Total In-Lieu Fee $548,800 $3,171,600
Per Total Unit in the Project $27,440 $52,860
Per Sf of Total Saleable Area $14.60 $16.80
1 The market rate sales prices are drawn from the pro forma analyses. 2 See ATTACHMENT 5: APPENDIX B.
3 Based on the unit mix distribution applied in the pro forma analyses. 4 Based on the weighted average difference between the Market Rate Sales Price and the Affordable Sales Price.

Prepared by: Keyser Marston Associates, Inc.

File Name: 1 22 23 TO Own; ILF Page 5 of 5
cdd:430-30/IAH/H:COMMON/Planning/Advanced Planning/Inclusionary Housing Plan and Linkage Fee Update/Attachment 2 Inclusionary Housing Financial Evaluation
Item No.16C

NONRESIDENTIAL DEVELOPMENT

LINKAGE FEE NEXUS STUDY
Prepared for:

City of T housand Oaks
Prepared by:

Keyser Marston Associates, Inc.

January 1 9, 2023
ATTACHMENT #3
Item No.16C

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY ................................................................................................................1 A. Nonresidential Nexus Study ................................................................................................. 1 B. Building Types and Affordability Levels ............................................................................... 1 C. Maximum Nexus Costs ......................................................................................................... 2 D. Financially Feasible Nonresidential Linkage Fees ................................................................ 2 E. Recommended Nonresidential Linkage Fees....................................................................... 4 II. INTRODUCTION AND OVERVIEW ................................................................................................. 5 A. Benefits of Affordable Housing to Nonresidential Development ........................................ 6 B. Analysis Organization ........................................................................................................... 7 C. Data Sources and Qualifications .......................................................................................... 7 III. THE NONRESIDENTIAL NEXUS STUDY ..........................................................................................8 A. The Nexus Concept .............................................................................................................. 8 B. Nonresidential Nexus Analysis ........................................................................................... 12 C. Maximum Nexus Costs ....................................................................................................... 27 IV. RECOMMENDED NONRESIDENTIAL LINKAGE FEE LEVELS ........................................................... 29 A. Fee-Setting Context ........................................................................................................... 29 B. Financial Feasibility Analysis .............................................................................................. 30 C. Fees in Other Jurisdictions ................................................................................................. 33 D. Recommended Fee Levels ................................................................................................. 34 E. Potential Indices for Annual Updates to Nonresidential Linkage Fees ............................. 34 V. ADDENDUM: FACTORS RELATING TO THE NEXUS CONCEPT ....................................................... 36 VI. MITIGATION FEE ACT FINDINGS ................................................................................................ 40

Item No.16C

APPENDICES

Appendix A: Nonresidential Nexus Study Tables
Appendix B: Retail / Commercial Land Use Tables
Appendix C: Office Land Use Tables
Appendix D: Industrial Land Use Tables
Appendix E: Research and Development Land Use Tables
Appendix F: Hotel / Lodging Land Use Tables
Appendix G: Worker Household Distribution
Appendix H: Affordability Gap Analysis

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Keyser Marston Associates, Inc. Page 1
2209012v2.TRB January 19, 2023

I. EXECUTIVE SUMMARY
The following report summarizes an analysis of the linkages between nonresidential development in Thousand Oaks and the demand for additional affordable housing. The analysis, which demonstrates support for a “Nonresidential Development Linkage Fee,” has been prepared by Keyser Marston Associates, Inc. (KMA) for the City of Thousand Oaks (City) in accordance with a contractual agreement.

A. Nonresidential Nexus Study
The purpose of a nexus analysis is to quantify and document the linkages among the construction of new nonresidential projects (e.g. retail/commercial, office, industrial, research and development, and hotel/lodging), the employees that work in them, and the increased demand for affordable housing. Since the jobs in these types of projects cover a range in compensation levels, and the households of the workers range in size, housing needs are generated at all affordability levels. This analysis quantifies the need for affordable housing created by each type of workplace building.

This analysis is conducted to meet the requirements imposed by several United States Supreme Court decisions, and by California Government Code Section 66000 et seq., which is sometimes referred to as “the Mitigation Fee Act.” These analyses are commonly referred to as linkage or nexus analyses.

B. Building Types and Affordability Levels
This analysis evaluates a cross section of nonresidential development types that have occurred in Thousand Oaks in recent years, and/or that may be built in the near-term future. For the purposes of the analysis, the following building types were identified:
• Retail / Commercial
• Office
• Industrial
• Research and Development (R&D)
• Hotel / Lodging
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2209012v2.TRB January 19, 2023

The household income categories addressed in the analysis include: Extremely Low Income, Very Low Income, Low Income, and Moderate Income.

C. Maximum Nexus Costs
The following table identifies the maximum legally supportable nexus costs derived from the Nonresidential Nexus Study. These nexus costs represent the maximum legally supportable Nonresidential Development Linkage Fee amounts:

Table 1: Maximum Legally Supportable Nonresidential
Development Linkage Fees Per Square Foot1
Retail / Commercial $158
Office $162
Industrial $60
Research and Development $65
Hotel / Lodging $63

D. Financially Feasible Nonresidential Development Linkage Fees As indicated in the previous section, the nexus analysis establishes the maximum legally supportable Nonresidential Development Linkage Fee levels. These amounts reflect the full cost associated with fulfilling the need for affordable housing created by the new nonresidential development. However, this does not take into account the impact the Nonresidential Development Linkage Fee will have on the financial feasibility of new development. It is important to establish a balance between the City’s public policy objectives to produce affordable housing and the economic impact that will be experienced by property owners and developers.

To that end, KMA prepared a financial feasibility analysis (See “Financial Feasibility Analysis of Nonresidential Development Linkage Fees”) to assess the impact of proposed Nonresidential Development Linkage Fee amounts on each nonresidential land use.

The most common approach to establishing fee levels is based on comparing the Nonresidential Development Linkage Fee against the development costs associated with each land use. This

1 Fee amounts are rounded down to whole numbers.

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2209012v2.TRB January 19, 2023

approach facilitates an evaluation of whether the amount is likely to affect development decisions.

As such, KMA first prepared a base pro forma analysis of each land use prototype that does not include a Nonresidential Development Linkage Fee. Next, KMA estimated a range of potential Nonresidential Development Linkage Fees based on a percentage of total development costs ranging from 0.5% to 5% of total development costs.

Table 2: Nonresidential Development Linkage Fee Per SF as a Percentage of Development Costs (Base Scenario)
% Of Development Costs
Retail /
Commercial
Prototype
Office
Prototype
Industrial
Prototype
Research and
Development
Prototype
Hotel /
Lodging
Prototype

0.5% of Development Costs $2.41 $2.14 $0.71 $0.66 $2.24

1.0% of Development Costs $4.83 $4.27 $1.43 $1.32 $4.48

2.0% of Development Costs $9.65 $8.54 $2.85 $2.65 $8.95

3.0% of Development Costs $14.48 $12.82 $4.28 $3.97 $13.43

4.0% of Development Costs $19.30 $17.09 $5.71 $5.29 $17.90

5.0% of Development Costs $24.13 $21.36 $7.13 $6.61 $22.38

Based on these estimates, KMA analyzed the impact on each development prototype’s financial feasibility for the following Nonresidential Development Linkage Fee amounts: $1 per square foot, $3 per square foot, and $5 per square foot.

For reference, to evaluate the financial feasibility of each fee amount, KMA set the threshold return requirements for each development prototype as follows:

Table 3: Threshold Return Requirements

Retail /
Commercial
Prototype
Office
Prototype
Industrial
Prototype
Research and
Development
Prototype
Hotel /
Lodging
Prototype

Feasible Range (Green) ≥ 8.00% ≥ 9.00% ≥ 6.50% ≥ 8.00% ≥ 9.00% Marginally Feasible Range (Yellow) 7.00% - 7.99% 8.00% - 8.99% 6.00% - 6.49% 7.50% - 7.99% 8.50% - 8.99% Infeasible Range (Red) ≤ 6.99% ≤ 7.99% ≤ 5.99% ≤ 7.49% ≤ 8.49%

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2209012v2.TRB January 19, 2023

The following table summarizes the results of the financial feasibility analysis:

Table 4: Estimated Returns on Investment By Nonresidential Development Linkage Fee Amount

Retail /
Commercial
Prototype
Office
Prototype
Industrial
Prototype
Research and
Development
Prototype
Hotel /
Lodging
Prototype

Base: No Linkage Fee 6.75% 5.08% 7.79% 6.99% 5.55%

Linkage Fee @ $1/SF 6.74% 5.07% 7.73% 6.94% 5.53%

Linkage Fee @ $3/SF 6.70% 5.04% 7.62% 6.82% 5.50%

Linkage Fee @ $5/SF 6.67% 5.02% 7.50% 6.71% 5.47%

E. Recommended Nonresidential Linkage Fees
In summary, the following factors were considered in establishing recommended Nonresidential Development Linkage Fee amounts:

1. The strength of the local real estate market for the building types that will pay the fee2; and

2. The City’s desired public policy objectives to produce affordable housing.

Based on the preceding factors, KMA recommends that the City set the Nonresidential Development Linkage Fee amounts within the following ranges:

Table 5: Recommended Nonresidential Linkage
Fees Per Square Foot
Retail / Commercial $0 - $5
Office $0 - $5
Industrial $0 - $5
Research and Development $0 - $5
Hotel / Lodging $0 - $5

2 See Financial Feasibility Analysis of Nonresidential Development Linkage Fees.

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It is important to note that this recommendation does not take into account any other public fees that may be under review by the City. Any changes in other fee levels may impact this recommendation.

II. INTRODUCTION AND OVERVIEW
A. Background
In 2008, the City completed a nexus study and financial feasibility analysis that resulted in the adoption of the following Nonresidential Development Linkage Fees:
• Retail / Commercial: $4.50 per square foot of building area • Office: $2.50 per square foot of building area
• Industrial: $0 per square foot of building area
• Research and Development Flex Space (R&D): $0 per square foot of building area • Hotel / Lodging: $2.50 per square foot of building area However, due to economic uncertainties associated with the Great Recession, the City Council reduced all of the Nonresidential Development Linkage Fees to $0 in 2009. This Nonresidential Development Linkage Fee elimination was extended on an annual basis through Fiscal Year 2013/2014. At that time, the City Council set the Nonresidential Development Linkage Fee amounts at $0 indefinitely until further action is taken by the City Council.

B. Current Direction
As the region continues to recover from the global coronavirus pandemic, it is expected that nonresidential development will continue to escalate. This nonresidential development supports additional jobs within Thousand Oaks, which generates a need for additional housing accessible to all income levels.

Similarly, the recovery from the pandemic has resulted in a rapid escalation of residential rents and sales prices in Thousand Oaks. However, as rents and sales prices increase, it becomes exponentially more difficult to achieve the Regional Housing Needs Assessment (RHNA) goals for extremely low, very low, low and moderate income units.

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Typically, outside affordable housing resources are utilized to assist in the development of affordable units. Recently, the State of California (State) and the Federal government have increased the amount of financial resources available for affordable housing. However, the need for affordable housing continues to outpace the outside financial resources available to the City. As such, the City has begun exploring the options for generating additional revenue to be utilized for the creation of additional affordable housing.

To that end, the City Council directed City staff to re-visit the City’s Nonresidential Development Linkage Fee Program. KMA was engaged to prepare a nexus study and financial feasibility analysis to assist the City in evaluating possible modifications to the City’s current Nonresidential Development Linkage Fees.

As such, the purpose of this Nonresidential Nexus Study is to provide the City with a legal basis to levy Nonresidential Development Linkage Fees on nonresidential development. It is a fundamental assumption that a nonresidential development linkage fee program would be one piece of the City’s comprehensive affordable housing program.

C. Benefits of Affordable Housing to Nonresidential Development The primary objective for implementing a Nonresidential Development Linkage Fee on nonresidential development is to increase the amount of affordable housing within Thousand Oaks. This increase in affordable housing benefits nonresidential development by strengthening the local jobs-housing balance, which benefits both employers and workers. With a larger and more diverse pool of Thousand Oaks residents to draw upon, employers will have increased ability to fill job openings.

A lack of local affordable housing can result in overcrowded living conditions, or workers that must endure long commutes. Both of these conditions affect a worker’s quality of life, which may ultimately force a worker to quit their job. Giving workers access to affordable housing opportunities close to their place of employment can result in greater workplace stability, and less worker turnover for the employer. It has been estimated that it can cost between 15% and 30% of a worker’s annual salary to replace that worker (costs of on-boarding, training, etc.). As such, limiting worker turnover with the development of affordable housing can produce meaningful cost savings for employers.

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D. Analysis Organization
The nonresidential uses that are the subject of this analysis represent a cross section of typical nonresidential development that has occurred in Thousand Oaks in recent years and/or may built in the near-term future. For the purposes of the analysis, the following building types were identified:
• Retail / Commercial
• Office
• Industrial
• Research and Development
• Hotel / Lodging
The household income categories addressed in the analysis include: Extremely Low Income, Very Low Income, Low Income and Moderate Income.

E. Data Sources and Qualifications
The analyses in this report have been prepared using the best and most recent data available.

Local and current data was used whenever possible. Sources such as the 2010 United States Census (Census), the 2016-2020 American Community Survey of the Census (ACS), California Employment Development Department (EDD) and the United States Bureau of Labor Statistics (BLS) data were used extensively. Other sources and analyses are noted when used in the text and footnotes. The data sources and uses are those that provide a reasonable basis to support the nexus between jobs and housing.

While we believe all sources utilized are sufficiently accurate for the purposes of the analyses, we cannot guarantee their accuracy. KMA assumes no liability for information from these and other sources.

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III. THE NONRESIDENTIAL NEXUS STUDY
A. The Nexus Concept
Introduction
This section outlines the nexus concept and some of the key issues surrounding the linking of new nonresidential development to the demand for affordable residential units in Thousand Oaks. The nexus analysis and discussion focus on the relationships among development growth, employment, income of workers and demand for affordable housing. The analysis connects the new construction of the types of buildings in which there are workers to the need for additional affordable housing. This connection is quantified both in terms of number of units, and the amount of subsidy assistance needed to make the units affordable.

The Legal Basis and Context
The first jobs-housing linkage programs were adopted in the cities of San Francisco and Boston in the mid-1980s. To support the linkage between nonresidential development and the demand for affordable housing, the City of San Francisco commissioned an analysis to show the relationships, or what might now be characterized as an early version of a nexus analysis. Since that time there have been several court cases and California statutes that affect what local jurisdictions must demonstrate when imposing impact fees on development projects.

The most important United States Supreme Court cases are Nollan v. California Coastal Commission and Dolan v. City of Tigard (Oregon). The rulings on these cases, and others, help clarify what governments must find in the way of the nature of the relationship between the problem to be mitigated and the action contributing to the problem. Here, the problem is the shortage of affordable housing, and the action contributing to the problem is building workspaces that create more jobs and worker households needing affordable housing.

Following the Nollan decision in 1987, the California legislature enacted AB 1600, which requires local agencies proposing an impact fee on a development project to identify the purpose of the fee, the use of the fee, and to determine that there is a reasonable relationship between the fee’s use and the development project on which the fee is imposed. The local agency must also demonstrate that there is a reasonable relationship between the fee amount and the cost of mitigating the problem that the fee addresses. Studies by local governments designed to fulfill the requirements of AB 1600 are often referred to as “AB 1600” or “Nexus” studies.

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One court case that involved housing linkage fees was Commercial Builders of Northern California v. City of Sacramento. The commercial builders of Sacramento sued the City of Sacramento following the City’s adoption of a housing linkage fee. Both the United States District Court and the Ninth Circuit Court of Appeals upheld the City of Sacramento, and rejected the builders’ petition. The United States Supreme Court denied a petition to hear the case, letting stand the lower court’s opinion.

Since the Sacramento case in 1991, there have been several additional court rulings reaffirming and clarifying the ability of California cities to adopt impact fees. Notable cases can be described as follows:

1. In 2004, in San Remo Hotel v. the City and County of San Francisco, the court upheld the impact fee levied by the City and County of San Francisco on the conversion of residence hotels to tourist hotels and other uses. The court found that a suitable nexus, or deleterious impact, had been demonstrated.

2. In 2009, in Building Industry Association of Central California v. the City of Patterson, the Court invalidated the City of Patterson’s fee because a valid nexus linking the impact of the proposed project to the fee had not been demonstrated.

3. In 2010, a court ruling upheld most of the impact fees levied by the City of Lemoore, in Southern California. Of particular note is the judges’ opinion that a “fee” may be “established for a broad class of projects by legislation of general applicability….the fact that specific construction plans are not in place does not render the fee unreasonable.” In other words, cities do not have to identify specific affordable housing projects to be constructed at the time of adoption of an impact fee.

In summary, the case law at this time appears to be fully supportive of the imposition of nonresidential development linkage fees.

The Nexus Methodology
An overview of the basic nexus concept and methodology is helpful to understand the discussion and concepts presented in this section. This overview consists of a quick “walk through” of the major steps of the analysis. The nexus analysis links new nonresidential buildings with new workers in Thousand Oaks; these workers demand additional housing in proximity to the jobs, a portion of which needs to be affordable to the workers in lower income households.

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The methodology utilized in this analysis is a “micro” analysis that examines individual buildings. The micro nexus analysis readily lends itself to quantification that serves as a basis for the nexus cost, or the maximum fee amount for each building type.

To illustrate the micro nexus analysis, very simply, we can walk through the major calculations of the analysis. We begin by assuming a prototypical building of a defined size, and then we make the following calculations:

1. We estimate the total number of employees working in the building based on average employment density data.

2. We use occupation and income information for typical job types in the building to calculate how many of those jobs pay compensation at the levels addressed in the nexus analysis.
a. Compensation data is provided by EDD, and is specific to the Oxnard-Thousand Oaks-Ventura Metropolitan Statistical Area (MSA) as of 2022. b. Worker occupations by building type are derived from the 2021 Occupational Employment Survey (OES) prepared by the BLS.

3. We know from the Census that many workers are members of households where more than one person is employed, and there is also a range of household sizes. We use factors derived from the Census to translate the number of workers into households of various sizes represented in each income category.

4. Then, we calculate how many of the Extremely Low, Very Low, Low, and Moderate Income households are associated with the building and divide by the building size to arrive at coefficients of housing units per square foot of building area.

5. In the last step, we multiply the identified number of households times the cost of delivering housing units affordable to these income groups.

The Relationship Between Construction and Job Growth
Many factors underlie the reasons for employment growth in a given region; these factors are complex, interrelated, and often associated with forces at the national and international levels.

The nexus argument does not make the case that the construction of new buildings is solely responsible for employment growth. However, new construction is uniquely important in the Item No.16C

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equation, first, as one of the factors contributing to growth, and second, as a unique and essential condition precedent to growth.

As to the first, construction itself encourages growth. When the state economy is growing, the areas that experience the most rapid growth are those where new construction activity is vigorous and acts as a vital industry. In regions such as Ventura County, where multiple forces of growth exist, the development industry frequently serves as a proactive force inducing growth to occur, or to be attracted to specific areas, by providing new workspaces, particularly those of a speculative nature.

Second, the development of workplace buildings bears a direct relationship to job growth, because job growth does not occur in modern service economies without buildings to house new workers. Unlike other growth factors, new buildings play a unique role in that employment growth cannot occur without them for a sustained period of time. Conversely, it is well established that the inability to construct new workplace buildings will constrain, or even halt, job growth.

Discount for Changing Industries
The local economy, like that of the United States as a whole, is constantly evolving. In Ventura County, over the past 20 years, employment in various sectors of the economy has declined.

However, jobs lost over the last decade in these declining sectors were replaced by job growth in other industry sectors.

Long-term declines in employment experienced in some sectors of the economy mean that some of the jobs created in burgeoning industries are being filled by workers that have been displaced from another industry and who are presumed to already be housed locally.

Recognizing that jobs added in the community are not necessarily net new jobs, this step in the analysis makes an adjustment to take these declines, changes and shifts within all sectors of the economy into account.

To assist in making the adjustment, KMA analyzed data published by the EDD annually for Ventura County for the 10 year period between 2010 and 2019. Over this period, approximately 5,100 jobs were lost in declining industry sectors while growing and stable industries added 41,400 jobs over the same period. The decline was largely focused in the financing and insurance sector. The figures are used to establish the ratio between jobs lost in declining Item No.16C

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industries to jobs gained in growing and stable industries at 15%.3 In effect, this adjustment assumes that 15% of new jobs are filled by a worker downsized from a declining industry and who already lives locally. As the objective is to identify longer-term declines, the declines in employment that occurred after March 2020 due to the coronavirus pandemic were not used as the basis for this adjustment as many of the jobs lost have been or are expected to be restored as the economy recovers from damage caused by the pandemic.

The discount for changing industries represents a conservative assumption because many displaced workers may exit the workforce entirely by retiring. Development of new workspace buildings will typically occur only to the extent that there is positive net demand after re- occupancy of buildings vacated by businesses in declining sectors of the economy. To the extent buildings are re-occupied, the discount for changing industries is unnecessary because new buildings would represent net new growth in employment. The 15% adjustment is conservative in that it is mainly necessary to cover a special case in which buildings vacated by declining industries cannot be readily occupied by other uses due to their special purpose nature, because of obsolescence, or because they are torn down or converted to a residential use.

Other Factors and Assumptions
The “Addendum” (Section V) at the end of this report provides a discussion of other specific nexus concepts that must also be considered. These factors include:

1. Addressing the housing needs of a new population versus the existing population;

2. Substitution factor, indirect employment and multiplier effects;

3. Changes in labor force participation;

4. Commuting; and

5. Economic cycles.

B. Nonresidential Nexus Analysis
This section presents a summary of the analysis of the linkage between the five types of workplace buildings, and the estimated number of worker households in the income categories

3 The 15% ratio is calculated as 5,100 jobs lost in declining sectors divided by 41,400 jobs gained in growing and stable sectors = 12% (rounded up to 15%).

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that will, on average, be employed within those buildings. This section should not be read or reproduced without the narrative presented in the previous sections of this study.

Analysis Approach and Framework
The analysis establishes the jobs-housing linkages for individual building types or land use activities. In turn, this is used to quantify the connection between employment growth in Thousand Oaks and the resulting demand for affordable housing.

The analysis approach is to examine the employment associated with the development of workplace building prototypes. Then, through a series of linkage steps, the number of employees is converted to households and housing units by affordability level. The findings are expressed in terms of numbers of households related to building area. In the final step, we convert the number of households for an entire building to the number of households per square foot of building area. For ease of understanding, KMA conducts the analysis on 100,000 square foot building modules. The building size is used solely to facilitate understanding of the analysis by being able to avoid cumbersome fractions.

The prototypes are meant to cover a wide variety of building types. Together, the five categories are designed to encompass most new nonresidential buildings to be constructed by the private sector in Thousand Oaks. The categories under analysis are:

1. The Retail/Commercial category includes retail, restaurants, dry cleaners, health clubs and other personal care and service uses that commonly occupy retail/commercial space.

2. The Office category is designed to represent the range of office tenants locating in Thousand Oaks, from small professional offices to larger corporate and medical offices.

3. The Industrial category encompasses a broad range of uses occupying industrial buildings as well as auto repair and service, warehouse uses, and other uses of a semi- industrial character.

4. The Research and Development category covers facilities for scientific or medical research, product design, prototype production, development and testing.

5. The Hotel/Lodging category includes hotels, motels and extended stay hotels, if any.

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Household Income Limits
When workers form households, their income, either alone or in combination with other workers, produces the household income. In addition, of course, there may be children and/or other household members who are not employed. The nexus analysis estimates demand for affordable housing focusing on the following household income categories:
• Extremely Low Income
• Very Low Income
• Low Income
• Moderate Income
Household income criteria for these affordability categories are based on the Ventura County area median income (Median) as published by the California Department of Housing and Community Development (HCD). The income categories presented in the following table are applied for most housing programs administered by HCD and by the United States Department of Housing and Urban Development (HUD). For a four-person household, the maximum qualifying income levels for 2022 are:

Table 6: Summary of Affordability Categories
Income Category Percent of Median
Income Range
(Four-Person Household)
Extremely Low Income 0% to 30% of Median $0 to $37,600
Very Low Income Above 30% to 50% of Median $37,601 to $62,700 Low Income Above 50% to 80% of Median $62,701 to $100,350 Moderate Income Above 80% to 120% of Median $100,351 to $138,500

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Analysis Steps
The analysis is conducted using a model that KMA has developed for application in many jurisdictions for which the firm has conducted similar analyses. The model inputs are comprised of local data to the extent possible, and are fully documented.

Table 1 in Appendix A summarizes the nexus analysis steps for the five building types. Following is a description of each step in the analysis:

Step 1 – Estimate of Total New Employees
Appendix A - Table 1 estimates the total number of employees who will work in the companies that occupy the building types being analyzed. This is done by dividing the building size by the average square feet of space provided to each employee. As the amount of space allocated to each employee is reduced, the supportable nexus cost is increased. The employment densities used in the analysis can be described as follows:

1. Retail/Commercial at 500 square feet per employee. This employment density estimate reflects consideration of a range of sources including the Institute of Transportation Engineers (ITE) Trip Generation Manual, restaurant employment densities derived from National Association of Restaurants data, and the City’s parking requirements for commercial/retail uses. The density range within this category is wide, with some types of retail such as restaurant space as much as five times as dense as other types such as furniture or building material supply stores. The estimate used is at the upper end of the range of sources considered and will tend to understate the number of employees relative to many types of retail.

2. Office at 300 square feet per employee. For the purposes of this figure, KMA reviewed employment density estimates from the ITE Trip Generation Manual as well as the City’s parking requirements for office uses. The employment densities cited in these studies ranged from approximately 200 square feet per employee to 330 square feet per employee. The 300 square foot figure utilized by KMA in the nexus analysis is at the upper end of this range.

3. Industrial at 1,000 square feet per employee. This represents an average density that covers flex space, light industrial, manufacturing and warehouse activities. Light industrial and manufacturing uses typically have higher employment densities than logistics/storage (warehouse) uses. KMA consulted a number of sources to arrive at this Item No.16C

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estimate including: the ITE Trip Generation Manual, a Portland Metro Employment Density Study, the United States Department of Energy, and the City’s parking requirements.

4. Research and Development at 500 square feet per employee. KMA reviewed the City’s parking requirement for this use, as well as the ITE Trip Generation Manual

5. Hotel/Lodging at 1,200 square feet per employee. This estimate reflects limited-service hotel developments, and is likely at the upper end of the applicable range.

The density factors used in this analysis represent averages, and individual uses can be expected to be fairly divergent from the average from time to time. Specific projects may have more or fewer employees than the employment densities assumed in this analysis. In these instances, the City may wish to include a provision in the ordinance that provides a waiver or a custom impact fee to adjust for employment densities that vary greatly from the averages used in this analysis. That is, projects with much lower employment densities may be allowed to pay a lower impact fee, and projects with much greater employment densities may be required to pay a higher fee.

As discussed above, KMA conducted the analysis on 100,000 square foot prototype buildings.

The prototypes facilitate the presentation of the nexus findings, as it allows us to count jobs and housing units in whole numbers that can be readily communicated and understood. At the conclusion of the analysis, the findings are divided by the 100,000 square foot building size to express the linkages per square foot, which are very small fractions of housing units.

The following table summarizes the employment estimates used in the nexus analysis:

Table 7: Employment Estimate for Prototypical 100,000 Square Foot Buildings Building Type
Employment
Density Number of Employees
Retail / Commercial 500 200
Office 300 333
Industrial 1,000 100
Research and Development 500 200
Hotel / Lodging 1,200 83

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Potential Impacts of Coronavirus Pandemic
This Nonresidential Nexus Study is being prepared as the region continues to recover from the coronavirus pandemic, which could have implications regarding the density of employment in workplace buildings. Potential impacts can be separated into short-term (during the pandemic) and longer-term (post-pandemic). As the nexus analysis determines mitigation costs over the life of new buildings, long-term effects are pertinent while short-term or temporary changes in response to the pandemic would not warrant an adjustment.

The experience adapting to remote work during the coronavirus pandemic has led some businesses to plan for remote work as a larger part of their operations post-pandemic. A trend toward remote work would be expected to reduce demand for new nonresidential buildings overall, but does not necessarily reduce the impacts of nonresidential buildings that are built. A second potential long-term adjustment resulting from the pandemic is reduced employment density, as employers make modifications to office layouts that increase the distance and physical separation between employees. This potential effect is likely most relevant for office building users that have transitioned to higher employment density office configurations. Office employment density estimates used in this analysis are more representative of traditional office layouts that have a mix of private offices and cubicles than higher employment density layouts like “benching” where employees work side-by-side with no partitions or cubicles separating them. Since high employment density office configurations are not assumed, a downward adjustment in consideration of a possible reversal of trends toward lower density of employment within offices is not warranted.

Step 2 – Adjustment for Changing Industries
This step is an adjustment to take into account any declines, changes and shifts within all sectors of the economy and to recognize that new space is not always 100% equivalent to net new employees. As discussed previously, a 15% adjustment is utilized to recognize the long- term shifts in employment occurring in the Ventura County region and the likelihood of continuing changes to the local economy.

For demolition of existing structures, the City may wish to provide a credit or offset to the fee when demolition of existing structures occurs as part of a project. Typically, the fee would only be charged against net new space added by a project.

The following table summarizes the net new jobs after adjusting for declining industries:

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Table 8: Net New Jobs
Building Type
Number of
Employees
Net New Employees
after 15% Declining
Industries Adjustment
Retail / Commercial 200 170
Office 333 283
Industrial 100 85
Research and Development 200 170
Hotel / Lodging 83 71

Step 3 – Adjustment from Employees to Employee Households This step, as shown in Appendix A - Table 1, converts the number of employees to the number of employee households that will work at or in the building type being analyzed. This step recognizes that there is, on average, more than one worker per household, and thus the number of housing units in demand for new workers must be reduced to reflect this fact.

The workers per household characteristic provides the link between the number of employees and the number of households associated with the net new employees. Worker households are defined as those households with one or more persons with work-related income, including the self-employed, as reported in the 2016-2020 ACS. In other words, worker households are distinguished from total households in that the universe of worker households does not include elderly or other households in which members are retired or do not work for other reasons.

Student households and unemployed households on public assistance are also excluded from the definition of worker households. If the overall average number of workers per household were used, it would have produced a greater demand for housing units.

The number of workers per household in a given geographic area is a function of household size, labor force participation rate and employment availability, as well as other factors.

According to the 2016-2020 ACS, the average number of workers per worker household in Ventura County was 1.94. Since workers employed in Thousand Oaks live all over Ventura County and beyond, the County average is used in the analysis.

The following table summarizes the number of housing units needed:

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Table 9: Number of Housing Units Needed
Building Type
Net New Jobs
(Table 8)
Housing Units Needed
(1.94 workers per unit)
Retail / Commercial 170 87.6
Office 283 146.0
Industrial 85 43.8
Research and Development 170 87.6
Hotel / Lodging 71 36.5

Step 4 – Occupational Distribution of Employees
Estimating the occupational breakdown of employees is the first step to arriving at estimated income levels. The occupational make up of jobs by building type is estimated by combining two data sources: BLS data on the distribution of occupations by industry category and data on employment by industry for Ventura County from the Quarterly Census of Employment and Wages (QCEW).4 Industry categories are weighted to reflect the mix of employers in Ventura County. The occupations that reflect the expected mix of activities in the new buildings are presented in Appendices B - F.

1. For Retail/Commercial buildings, a wide range of retail categories are included, as well as restaurants and personal services.

2. For Office buildings, the mix of industries reflects a wide range of financial, professional service, technology and medical offices.

3. The Industrial category encompasses a range of light industrial, wholesale, manufacturing, warehouse and storage, automotive, and maintenance and repair services.

4. The Research and Development category reflects the industry category for research and development in the physical, engineering and life sciences.

5. The Hotel/Lodging category reflects the industry category for travel accommodations.

4 QCEW data was not available for the City.

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Step 4 estimates are presented in Appendix A - Table 1 and Appendices B – F. The following table summarizes the percentage distribution of jobs by occupation:

Table 10: Percent of Jobs by Occupation

Retail /
Commercial Office Industrial R&D
Hotel /
Lodging
Management Occupations 3.8% 10.8% 7.5% 18.4% 7.0%
Business and Financial 1.1% 15.8% 5.2% 11.2% 2.2%
Computer and Mathematical 0.2% 8.6% 3.2% 15.3% 0.2%
Architecture and Engineering 0.0% 4.9% 6.9% 13.6% 0.1% Sciences 0.0% 1.5% 0.9% 23.7% 0.0%
Community & Social Services 0.0% 1.0% 0.0% 0.1% 0.0%
Legal 0.0% 2.4% 0.1% 0.6% 0.0%
Education, and Library 0.1% 0.3% 0.0% 0.2% 0.1%
Arts, Design, Entertainment 1.6% 1.8% 0.7% 1.1% 0.2%
Healthcare Practitioners 1.6% 9.5% 0.1% 2.3% 0.0%
Healthcare Support 0.3% 5.2% 0.0% 0.5% 0.4%
Protective Service 0.4% 0.5% 0.1% 0.3% 2.0%
Food Prep and Serving 37.6% 0.5% 0.2% 0.1% 17.1%
Building and Grounds. 1.2% 0.7% 0.4% 0.2% 31.2%
Personal Care and Service 4.4% 0.8% 0.0% 0.2% 3.0%
Sales and Related 28.1% 6.6% 7.5% 2.0% 2.4%
Office and Admin Support 5.4% 24.5% 10.9% 6.0% 23.7%
Farming, Fishing, Forestry 0.1% 0.0% 0.0% 0.3% 0.0%
Construction and Extraction 0.2% 0.6% 0.9% 0.2% 0.2%
Installation, Maint. and Repair 3.1% 2.5% 9.1% 1.0% 7.2% Production 1.8% 0.9% 33.5% 2.1% 2.5%
Transportation 8.9% 1.0% 12.9% 0.5% 0.8%
Totals 100% 100% 100% 100% 100%

To determine the distribution of worker households by occupation category, the percentage distribution of workers’ occupations identified in Table 10 above is multiplied by the total number of worker households in Table 9. The result is the distribution in the number of worker households by worker occupation category as shown in the table below:

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Table 11: Number of Worker Households by Worker Occupation Category

Retail /
Commercial Office Industrial R&D
Hotel /
Lodging
Management Occupations 3.3 15.7 3.3 16.2 2.6
Business and Financial 0.9 23.1 2.3 9.8 0.8
Computer and Mathematical 0.2 12.5 1.4 13.4 0.1
Architecture and Engineering 0.0 7.2 3.0 11.9 0.0
Sciences 0.0 2.1 0.4 20.8 0.0
Community & Social Services 0.0 1.5 0.0 0.1 0.0
Legal 0.0 3.5 0.0 0.5 0.0
Education, and Library 0.1 0.4 0.0 0.2 0.0
Arts, Design, Entertainment 1.4 2.6 0.3 1.0 0.1
Healthcare Practitioners 1.4 13.8 0.0 2.1 0.0
Healthcare Support 0.2 7.6 0.0 0.5 0.1
Protective Service 0.3 0.7 0.0 0.3 0.7
Food Prep and Serving 32.9 0.7 0.1 0.0 6.2
Building and Grounds. 1.0 1.1 0.2 0.2 11.4
Personal Care and Service 3.9 1.1 0.0 0.2 1.1
Sales and Related 24.6 9.6 3.3 1.7 0.9
Office and Admin Support 4.8 35.7 4.8 5.3 8.6
Farming, Fishing, Forestry 0.1 0.0 0.0 0.2 0.0
Construction and Extraction 0.2 0.9 0.4 0.2 0.1
Installation, Maint. and Repair 2.7 3.6 4.0 0.9 2.6 Production 1.6 1.2 14.7 1.8 0.9
Transportation 7.8 1.4 5.6 0.5 0.3
Totals 87.6 146.0 43.8 87.6 36.5

Step 5 – Estimate Of Employee Household Income
In this step, occupations are translated to incomes based on recent Ventura County wage and salary information published by EDD for the first quarter of 2022 for the occupations associated with each building type. This step in the analysis calculates the number of employee households that fall into each income category.

For each occupational category shown in Tables 10 and 11, the OES data provides a distribution of specific occupations within the category. For example, within the Food Preparation and Serving Category, there are Supervisors, Cooks, Servers, Dishwashers, etc. Each of these individual categories has a different distribution of wages which was obtained from EDD and is Item No.16C

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specific to workers in Ventura County as of 2022. Worker compensations used in the analysis assume full-time employment (40 hours per week) based on EDD’s convention for reporting annual compensation. Compensations are adjusted where applicable to reflect the current $15 per hour State minimum wage for businesses with 26 or more employees, which results in a minimum annual income of $31,200 assuming full-time employment.

The following is a summary of the worker compensation levels for the top two occupation groups by building type. The percentages refer to the share of employment within the building in the occupation group. Appendices B – F show the more detailed wage and salary information that were used as the income inputs to the model.

Table 12: Ventura County Worker Compensation by Building Type (2022) Building Type Major Occupation Group
% of
Employment
in Building
Average Annual
Worker
Compensation5
Retail/Commercial Food Preparation and Serving 38% $36,000 Sales and Related Occupations 28% $38,100
Office Office and Administrative Support 25% $48,600
Business and Financial Operations 16% $86,600
Industrial Production Occupations 34% $47,400
Transportation and Material
Moving Occupations
13% $42,000
Research and
Development
Life, Physical and Social Science
Occupations
24% $91,000
Management Occupations 18% $152,300
Hotel / Lodging Building and Grounds Cleaning and
Maintenance Occupations
31% $39,900
Office and Administrative Support 24% $39,200
Source: California Employment Development Department, 2021 Occupational Employment Statistics Survey, Wages First Quarter 2022

5 Compensation is based on the full-time equivalent of 40 hours per week.

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Employee income is then translated into an estimate of household income using ratios between individual employee income and household income derived from Census data. Ratios reflect an analysis of data for the workforce in Ventura County with annual household incomes under $250,000. Households with income of $250,000 or more are not included to avoid a disproportionate influence on averages by a small percentage of households with incomes well over levels addressed in this analysis.

Table 13: Ratio of Household Income to Individual Worker Income Individual Worker Income
One Worker
Households
Two Worker
Households
Three or More
Workers
$25,000 to $30,000 1.35 2.99 3.90
$30,000 to $40,000 1.27 2.53 3.24
$40,000 to $50,000 1.19 2.24 2.75
$50,000 to $60,000 1.15 2.06 2.48
$60,000 to $80,000 1.11 1.90 2.15
$80,000 to $100,000 1.11 1.75 1.87
$100,000 to $125,000 1.08 1.61 1.74
$125,000 to $150,000 1.06 1.51 1.59
$150,000 to $250,000 1.06 1.38 1.46
$250,000 and above 1.03

1.21 1.23
Source: KMA analysis of 2015 – 2019 American Community Survey PUMS data for Ventura County

A ratio of 1.0 in Table 13 indicates that the household has no additional income beyond that of the individual worker. A ratio of 2.0 means that total household income is twice what the individual worker earns. With a two-earner household, a ratio of 2.0 indicates each worker in the household earns about the same amount. A ratio above 2.0 would indicate the other worker in the household earns more, on average, while a ratio less than 2.0 indicates the other worker earned less. The ratio between worker income and overall household income decreases as worker pay increases. This is because workers with higher pay are more likely to represent the largest source of household income
The ratios adjust employee incomes upward even for households with only one worker. This is in consideration of non-wage/salary income sources such as child support, disability, social security income, investment income and others. Ratios for one-worker households at the lower end of the compensation range tend to be larger, an indication that these workers are more Item No.16C

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likely to derive a share of household income from non-employment sources such as social security.

Household income estimates for workers within each detailed occupation category are summarized in Appendix G. A separate estimate is provided for households with one, two, and three or more workers. Estimates are compared to HUD income criteria summarized in the following table to estimate the percent of worker households that would fall into each income category. This is done for each potential combination of household size and number of workers in the household.

Table 14: 2022 Household Income Limits for Ventura County Household Size (Persons)
Household Income Category 1 2 3 4 5 6 +
Extremely Low (Under 30% AMI) $26,350 $30,100 $33,850 $37,600 $40,650 $43,650 Very Low (30%-50% AMI) $43,900 $50,200 $56,450 $62,700 $67,750 $72,750 Low (50%-80% AMI) $70,250 $80,300 $90,350 $100,350 $108,400 $116,450 Moderate (80%-120% AMI) $96,950 $110,800 $124,650 $138,500 $149,600 $160,650

Median (100% of Median) $80,800 $92,300 $103,850 $115,400 $124,650 $133,850 Source: California Department of Housing and Community Development.

At the end of Step 5, the nexus analysis has established the matrix indicating the percentages of households that would qualify in each of the affordable income tiers for each occupation category and each potential combination of household size and number of workers in the household.

Step 6 – Estimate of Household Size Distribution
In this step, household size distribution is estimated using 2016 – 2020 ACS data for Ventura County. Data for the County is used since workers are more representative of the larger area in which workers live (the County) than the City of Thousand Oaks. In addition to the distribution of household sizes, the data also accounts for a range in the number of workers in households of various sizes. The following table indicates the percentage distribution utilized in the analysis. Application of these percentage factors accounts for the following:

1. Households have a range in size and a range in number of workers.

2. Larger households generally have more workers than smaller households.

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Table 15: Percent of Households by Size and No. of Workers No. of Persons
in Household
No. of Workers in
Household
Percent of Total
Households
1 1 13.04%
2 1 14.51%
2 14.45%
3 1 7.26%
2 9.37%
3+ 3.35%
4 1 4.78%
2 7.87%
3+ 5.61%
5 1 2.52%
2 4.15%
3+ 2.95%
6 1 2.65%
2 4.37%
3+ 3.12%
Total 100%
Source: 2016-2020 American Community Survey for
Ventura County

The result of Step 6 is a distribution of working households by number of workers and household size.

Step 7 – Estimate of Households that meet HCD Size and Income Criteria Step 7 calculates the number of employee households that fall into each income category for each size household. This calculation is based on combining the household income distribution (Step 5) with the worker household size distribution (Step 6) to arrive at a distribution of worker households by income category. These analyses are presented in Appendix A – Tables 2A – 2D, and summarized in Appendix A – Table 3.

Housing Demand by Income Level
Appendix A - Table 3 illustrates the results of the analysis for the four income categories and the five prototypical buildings being analyzed in this study. The table presents the estimated number of households in each affordability category, the total number up to 120% of the Median, and the remaining households earning over 120% of Median.

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Table 16: Number of Households by Income Category Per 100,000 Square Feet of Building

Retail /
Commercial Office Industrial R&D
Hotel /
Lodging

Extremely Low 9.8 2.3 1.4 0.4 3.1
Very Low Income 33.3 22.3 10.4 4.7 12.9
Low Income 22.2 35.9 12.7 15.1 9.9
Moderate Income 7.7 30.6 7.5 21.1 4.1

Subtotal 73.0 91.2 32.0 41.4 30.0

Above 120% AMI 14.6 54.8 11.8 46.2 6.5
Total 87.6 146.0 43.8 87.6 36.5

Appendix A - Table 3 also presents the percentages of total new worker households that fall into each income category. As indicated, approximately 80% of Retail/Commercial and Hotel/Lodging worker households earn less than 120% of the Median. In addition, approximately 60% of Office, 75% of Industrial and 50% of R&D worker households earn less than 120% of the Median.

Table 17: Percentage of Households by Income Category

Retail /
Commercial Office Industrial R&D
Hotel /
Lodging
Extremely Low 11.2% 1.6% 3.1% 0.5% 8.5%
Very Low Income 38.1% 15.3% 23.7% 5.4% 35.2%
Low Income 25.3% 24.6% 29.0% 17.3% 27.2%
Moderate Income 8.7% 21.0% 17.2% 24.1% 11.1%

Subtotal 83.3% 62.5% 73.1% 47.2% 82.1%

Above 120% AMI 16.7% 37.5% 26.9% 52.8% 17.9%
Total 100% 100% 100% 100% 100%

Housing Demand by Square Foot Building Area
The analysis thus far has worked with 100,000 square foot prototypical buildings. In this step, the conclusions are translated to a per-square-foot level and expressed as coefficients. These Item No.16C

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coefficients state the portion of a household, or housing unit, by affordability level for which each square foot of building area is associated (see Appendix A - Table 4).

This is the summary of the affordable housing nexus analysis, or the linkage of buildings to employment growth to housing demand disaggregated by income level. We believe that our analysis provides a conservative approximation (understates at the low end) of the households by income and affordability levels associated with these building types.

Table 14: New Worker Households Per Square Foot

Retail /
Commercial Office Industrial R&D
Hotel /
Lodging
Extremely Low 0.0000979 0.0000231 0.0000137 0.0000041 0.0000312 Very Low Income 0.0003334 0.0002231 0.0001039 0.0000473 0.0001286 Low Income 0.0002220 0.0003595 0.0001269 0.0001514 0.0000994 Moderate Income 0.0000765 0.0003062 0.0000755 0.0002109 0.0000405 Total 0.0007298 0.0009119 0.0003200 0.0004137 0.0002997

C. Maximum Nexus Costs
This section takes the conclusions from the previous section on the number of households in the Extremely Low, Very Low, Low, and Moderate Income categories associated with each building type, and estimates the total cost of assistance required to make housing affordable.

This section puts a cost on the units at each income level to produce the “total affordable housing nexus cost.”
Affordability Gaps
A key component of the analysis is the size of the gap between what households can afford and the cost of producing additional housing in Thousand Oaks; this is known as the “affordability gap.” The assumption is that the City will assist in the development of affordable units at development cost levels based on similar development projects and the City’s recent experience.

KMA conducted a series of affordability gap analyses, which are presented in Appendix H. For the Extremely Low Income and Very Low Income tiers it is assumed that Tax-Exempt Multifamily Bonds and 4% Tax Credits will be available (leveraged projects). However, it is important to note that allocations of Tax-Exempt Multifamily Bonds and 4% Tax Credits have Item No.16C

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become increasingly competitive within the last several years. If KMA did not include Tax- Exempt Multifamily Bonds and 4% Tax Credits in the affordability gap analyses, the affordability gaps for the Extremely Low Income and Very Low Income tiers would be significantly higher, which would increase the maximum legally supportable Nonresidential Development Linkage Fee amounts. As such, assuming the Extremely Low Income and Very Low Income tiers are financially leveraged represents a conservative approach.

For the Low Income tier, KMA analyzed both a leveraged project assuming rents set at 60% AMI and an unleveraged project with rents set at 80% AMI. The unleveraged project (at 80% AMI) had a lower affordability gap than the leveraged project, which is used in this analysis. Since 4% Tax Credits are not available to units above 80% AMI, the Moderate Income tier is structured as an unleveraged rental project.

While many affordable housing developments are required to pay State of California prevailing wages and/or Federal Davis Bacon wages, there is no set requirement for all affordable housing developments. As such, for the purposes of the affordability gap analyses, California prevailing wage and/or Federal Davis Bacon wage requirements were not assumed. If prevailing wage requirements were assumed, the affordability gaps would be significantly greater, which in turn, would increase the maximum legally supportable Nonresidential Development Linkage Fee amounts.

The resulting affordability gaps per unit are presented in the following table:

Table 19: Affordability Gaps
Extremely Low Income (0% to 30% Median) ($314,300)
Very Low Income (Above 30% to 50% Median) ($233,100)
Low Income (Above 50% to 80% Median) ($183,700)
Moderate Income (Above 80% to 120% Median) ($119,900)